Page 29 - SUSTAINABILITY ISSUES & COVID-19

2.2 Basis of Accounting Treatment for a Business Merger
2.2.1 PSAK Number 22 Revised 2010 concerning Business Combinations
In accounting, business combination transactions are regulated in PSAK 22 (Revised 2010) concerning Business
Combinations which aims to regulate the acquirer, among others:
a. Determine the acquirer;
b. When the acquisition is recorded;
c. Recognizing and measuring assets and liabilities acquired or taken over and non-controlling interests;
d. Recognizes and measures the goodwill earned or gains from discounted purchases;
e. Reveal in the report.

2.3 Taxation Provisions for Business Merger
2.3.1 Value Added Tax (VAT)
In 2010 based on Article 1A paragraph (2) letter d Law Number 42 of 2009:
”What is not included in the definition of delivery of Taxable Goods is: transfer of Taxable Goods in the context of
merging, consolidating, expanding, splitting, and taking over the business on condition that the party making the
transfer and receiving the transfer is a Taxable Entrepreneur”

So for the delivery of Taxable Goods (BKP) in the context of merger, consolidation, expansion, Law Number 11
of 1994 is re-enforced on the treatment of VAT where if the person who transfers and receives the transfer of
property is a Taxable Entrepreneur (PKP), he will not be subject to VAT.

Treatment of Taxable Entrepreneurs (PKP) who have not credited Input Tax on the transfer of assets (in Article 9
paragraph 14 letter b of the VAT Law) states:
”Input Tax on Taxable Goods transferred and which has not been credited by the old Taxable Entrepreneur can be
credited by the new Taxable Entrepreneur, as long as the Tax Invoice is received after a change in business form or
business merger or transfer of all company assets occurs.”

Then it can be credited before being charged as an expense and after the transfer of assets. The new tax invoice is
received by the PKP. So that the transferor company that receives the transfer of assets or assets can credit it as VAT
Issued, while for acquiring companies it is subject to Input VAT.

2.3.2 Final Income Tax 4 paragraph 2
In this study, the tax issue that will arise is the transfer of land and/or buildings if the permit to use the book value
submitted by the company is not approved in the context of business merger/consolidation that will be carried out
by the company. The transfer of land and/or buildings will be subject to Final Income Tax on the income received or
obtained by an individual or entity from the transfer of rights to land and/or buildings. However, if the permit to use
the proposed book value is approved by the DGT, Income Tax Article 4 paragraph (2) will not be payable as stipulated
in Article 6 letter (e) Government Regulation Number 34 of 2016

2.4 Book Value
Book value per share shows the net assets (net assets) owned by shareholders by owning one share. Since net assets are
equal to total shareholder equity, the book value per share is total equity divided by the number of shares outstanding.
(Jogiyanto 2003: 82) According to Ang (1997) in Novitasari (2013) Price to Book Value (PBV) is a market ratio used to
measure the performance of the stock market price against its book value. This ratio shows how far a company can
afford it. creates firm value against the amount of capital invested.

28 International Conference on Sustainability
(5 Sustainability Practitioner Conference)
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