In December 2025, the Syariah Accounting Standards Board in Indonesia issued an Exposure Draft of the accounting standard ‘PSAK 408: Syariah Insurance Accounting’. PSAK 408 is an updated standard that will supersede PSAK 108, the Indonesian equivalent to International Financial Reporting Standard (IFRS) 4. Specifically, PSAK 408 proposes changes to the accounting treatment of Syariah insurance contracts in Indonesia for a greater alignment with PSAK 117, the Indonesian equivalent to the global IFRS 17, which has been in effect for conventional insurers since January 2025. PSAK 408’s proposed effective date is 1 January 2028.

While the Exposure Draft adopts similar concepts to PSAK 117, such as grouping of contracts and fulfillment cash flows, there are also areas where it differs materially from PSAK 117. This e-Alert discusses and highlights the key nuances in the requirements of the Exposure Draft. We also compare and contrast some key requirements of PSAK 408 against PSAK 117 for conventional companies, and as a regional reference point, against MFRS 17, the equivalent to the global IFRS 17 for Takaful operators in Malaysia.

Key discussion points include the following.

• Summary of requirements: Commentary on the exposure draft PSAK requirement for topics such as separation of components, measurement model, and contract boundary.
• Comparison to PSAK 117 and MFRS 17: Notes on Indonesia conventional, Malaysia Takaful, and Indonesia Syariah frameworks for items such as contractual service margin, risk adjustment, and discount rate.
• Implications: Critical areas where the exact implementation requirements of PSAK 408 are unclear, and unique challenges due to the differences between PSAK 408 and PSAK 117.