Did Expected Credit Loss Fair for Indonesian Banks in COVID-19?

In this paper, we explore the impact of the COVID-19 crisis on the accounting practices associated with the Expected Credit Loss (ECL) approach by Peryataan Standar Akuntasi Keuangan (PSAK) 71. Given the complexity of the pandemic, the neutral application of existing accounting standards is of more importance than ever as it ensures objective decision-useful information that serves comparability, maintenance of a level playing field and transparency. Worldwide interventions by banking regulators, however, have considerable potential to interfere with these fundamental contributions of financial statements. The result is that for banks under PSAK 71 it is not even entirely clear what assessments banks can and will use in their calculations estimating the effects of COVID-19.