The Implementation of PSAK 71 and Its Impact on the Quality of Financial Reporting and Financial Performance in Indonesia

Abstract

Introduction/Objective: This paper is a literature review of several previous articles analyzing the impact of PSAK 71 on the quality of financial reporting by Indonesian companies. This standard replaces PSAK 55 to improve the classification, measurement, and impairment of financial assets using the Expected Credit Loss (ECL) model. Problem Background: This study examines how PSAK 71 affects credit loss reserves (CKPN) and key financial ratios in various sectors through the results of previous studies. Method: This study reviewed 10 scientific articles on the topic of PSAK 71 implementation. Findings: PSAK 71 increases CKPN and affects profitability, liquidity, and capital adequacy while improving transparency and risk recognition. Conclusion: This implementation improves financial reliability but increases reserve costs, indicating the need for better risk management and accounting systems.