EVALUATION ON THE IMPLEMENTATION OF PSAK NO 34 (REVISED 2010) IN CONSTRUCTION COMPANY: CASE STUDY OF PT XYZ

Abstract

Revenue is important for every company, as well as for the construction company because revenue is one of the ways to measure the success of the company. PSAK No 34 (Revised 2010) is the standards that prescribe the accounting treatment of revenue and costs associated with construction contracts. The objective of this research in to know the implementation of PSAK No 34 (Revised 2010) in construction company, the method to recognize revenue and expense, and evaluate the application of the disclosure of PSAK No. 34 (Revised 2010) in the financial statement of PT XYZ. Type of this research is descriptive research using qualitativeapproach and case study method. Primary data is obtained from PT XYZ. The secondary data obtained through literature review.Primary data is obtained by using types of evidence instruments such as inquiry of the client, observations, recalculation and documentation. The result is PT XYZ has implemented PSAK No 34 (Revised 2010). PT XYZ is using the percentage of completion method to recognize the revenue and expense. To measure the stage of completion, PT XYZ uses physical approach. All points on disclosures specified by PSAK No 34 (revised 2010) has disclosed by PT XYZ in the financial statements and notes to the financial statements. There is an alternative way to measure the percentage of completion by using cost-to-cost method. In the measurement of the percentage of completion, management should consider using the percentage of completion method with cost approach for recognizing revenue and expenses on contracts construction. By using the cost-to-cost basis, it will get the actual amount of cost assignment and the percentage of progression is more real and represents the performance of company.