THE IMPACT OF PSAK 71 IMPLEMENTATION: FINANCIAL INSTRUMENTS ON ALLOWANCE FOR IMPAIRMENT LOSSES (CKPN) AND TAX TEMPORARY DIFFERENCE (A CASE STUDY IN PT BANK X)

Indonesian Financial Accounting Standards (“PSAK”) 71 is a convergence of International Financial Reporting Standards (“IFRS”) 9, which had been effectively implemented on January 1, 2020. Based on PSAK 71. Banks are required to make an allowance for impairment losses (from now on, referred to as CKPN) based on PSAK71 using the new method called Expected Credit Loss (ECL). This study case aims to evaluate the impact of PSAK 71 implementation on Allowance for Impairment Losses (CKPN) and temporary differences in taxation from CKPN at PT Bank X. This study also discusses the impact of the COVID-19 pandemic on the formation of Allowance for Impairment Losses. This research uses a case study approach at PT Bank X by analyzing descriptive data on financial statements and other company information and analysis of interview results. This study found a significant increase in Impairment Losses Reserve (CKPN) in 2020, which affected profit, but the decline in profits also occurred due to the COVID-19 Pandemic 2020. This study also found an increase indeferred tax assets related to CKPN as a result of the implementation of PSAK 71. This study also found that in PSAK 71 implementation, PT Bank X didn’t find any problems because PT Bank X had prepared the implementation before 2020 and used consultants to assist its implementation