Think of the Chart of Accounts as a chest of labeled drawers. If one drawer mixes shirts and socks, you do not need a new chest — you just need to separate the contents. The right question is not “must the COA change?” but “can every account be mapped to the right category?”
1. What PSAK 118 Actually Requires
PSAK 118 requires income and expenses to be classified into five categories: operating, investing, financing, income taxes, and discontinued operations. This classification can happen at the report layer, as long as the account data is clear enough.
So the real requirement is not a “new COA,” but:
- mapping each account to one category;
- splitting only accounts that mix several categories; and
- consistency from period to period.
2. Three Levels of Change
| Level | When to use | Risk |
|---|---|---|
| 1. No COA change | Accounts are detailed enough; just adjust/map report lines | Low |
| 2. Add sub-accounts | One account mixes categories (e.g., interest, FX) | Medium |
| 3. Restructure the COA | The old structure is genuinely inadequate | High |
Most companies only need level 1 or 2. A full restructuring is rarely necessary — and the most expensive.
3. Accounts That Usually Need Splitting
- Interest income — from investments (investing) vs from customer receivables where that is the main activity.
- Interest expense — borrowings, trade payables, and lease liabilities. All financing, but detailed in the notes.
- Foreign exchange differences — must follow the category of the underlying item: operating, investing, or financing.
- Impairment — trade receivables (operating) vs investment assets (follow their category).
- Other expenses — an oversized label is exactly what PSAK 118 targets.
- Discontinued operations — needs a marker for separate presentation.
4. A Real Example: An Oversized “Other” Label
PSAK 118 gives a very practical example:
- A company presents “Other expenses Rp60 billion.” On review, all of it is office facility costs. A more informative label: “Office Facility Expenses.”
- Another company presents “Other expenses Rp90 billion.” Because the amount is large, the notes should break it down: promotion Rp17 billion, distribution Rp14 billion, utilities Rp12 billion, maintenance Rp12 billion, with the remainder immaterial individually.
Note: no complicated new accounts. What changes is how items are grouped and labeled.
5. Mapping in Odoo
Odoo groups accounts by account type: income, income_other, expense, expense_other, expense_direct_cost, expense_depreciation, and so on. There is no dedicated “investing” or “financing” type. Therefore:
- Map account types to the five PSAK 118 categories.
- Add sub-accounts only where it is ambiguous (interest, FX, impairment).
- Adjust report lines (
account.report.line) so categories and subtotals follow PSAK 118. - Avoid changing the account type of accounts with long histories without planning — it can shift historical reports.
Safe principle: do not change the COA if the information is already captured. Change it only when a category is genuinely mixed.
6. A Practical Sequence
- Export the account list and balances.
- Add a “PSAK 118 category” column for each account.
- Flag accounts that receive more than one category.
- Split only the flagged accounts.
- Test the report with 2026 data.
- Document the mapping and its rationale.
7. When Is Custom Development Needed?
Standard configuration is usually enough for single-entity reporting. A custom module or dedicated report makes more sense when you need:
- automatic FX split by category;
- multi-entity consolidated reporting;
- automated MPM reconciliation; or
- a highly specific, recurring report format.
Start with configuration. Custom development should be the last option, not the first.
Closing
PSAK 118 does not require you to dismantle the COA. It requires clarity: every account must be explainable as belonging to a category. Small, precise changes are usually far more effective — and far cheaper — than a rushed, large restructuring.
Want to assess your COA readiness? Talk to the Sinergi Data Totalindo (SDT) Team.
Note: this article refers to the official PSAK 118 text and illustrations. Account mapping decisions still require accounting judgment and review by practitioners/auditors. Written by Sinergi Data Totalindo, PT.