Finnish GAAP (FAS): Statements, PRH Filing, and Audit Thresholds

Finnish GAAP, known locally as FAS, is the statutory financial reporting framework that governs how most companies in Finland prepare and file their accounts. Its authority comes from the Accounting Act (Kirjanpitolaki 1336/1997) and the Accounting Decree (1339/1997), both administered by the Ministry of Economic Affairs and Employment.¹ Listed companies use IFRS for their consolidated statements, but the overwhelming majority of Finnish entities report under FAS, and the tax authorities accept those figures directly.

Who Reports Under FAS

The Accounting Act applies to every entity that carries on business or professional activities in Finland. That includes the limited liability company (Osakeyhtiö, or Oy), cooperatives, foundations, general and limited partnerships, and sole traders using double-entry bookkeeping. Branches of foreign companies registered in the Finnish Trade Register must also file financial statements.²

Companies whose securities trade on a regulated market in Finland must apply IFRS (as adopted by the EU) for their consolidated accounts.³ Listed companies with no subsidiaries must also use IFRS for their separate statements. Other listed companies may apply IFRS to their separate accounts by choice. Non-listed SMEs can elect IFRS if they undergo an independent audit, but most stay with FAS because the compliance burden is lighter.

Size Categories and What Each Must Produce

Finnish law sorts entities into three size bands, and the reporting burden scales with the band. Classification depends on whether an entity exceeds at least two of three thresholds in both the current and preceding financial period.

Micro-Entities

A micro-entity stays below at least two of: a balance sheet total of €350,000, net turnover of €700,000, and an average of 10 employees. Micro-entities may prepare an abbreviated balance sheet and profit-and-loss account, skip the management report entirely, and replace formal notes with a handful of disclosures placed at the foot of the balance sheet.

Small Entities

A small entity does not exceed at least two of: €7.5 million in total assets, €15 million in net turnover, and an average of 50 employees.⁴ Small entities still produce a balance sheet, profit-and-loss account, and notes, but their disclosures follow the simplified regime in Government Decree 1753/2015. They are also exempt from preparing a management report unless they are a public limited company or a public-interest entity.

Large Entities

An entity is large if it exceeds at least two of: €25 million in total assets, €50 million in net turnover, and 250 employees on average. Large entities and public-interest entities face the full slate of obligations: complete notes, a management report (toimintakertomus), and a cash flow statement (rahoituslaskelma). They also carry the first wave of sustainability reporting requirements for financial periods starting on or after January 1, 2026.

Core Principles

The Accounting Act rests on a handful of foundational principles that shape every entry. They track broader European accounting concepts, though FAS leans harder on conservatism than most peer jurisdictions.

Accrual basis. Transactions are recognized when the economic event occurs, not when cash moves.²
Going concern. Statements assume the entity will continue operating for the foreseeable future.
Consistency. Presentation and valuation methods stay the same from year to year so figures compare cleanly.
Matching. Expenses incurred to generate specific revenue are recognized in the same period as that revenue.
Prudence. Probable losses are recognized as soon as they become probable; gains are recorded only once realized. This conservative bias is one of the defining features of FAS and one of the main sources of difference when converting figures to IFRS or US GAAP.

Applied together, the principles must deliver a “true and fair view” (oikea ja riittävä kuva) of the entity’s position and results.¹ If a strict rule would produce misleading figures, the entity is expected to depart from it and explain the departure in the notes.

Required Financial Statements

A complete set of statements under the Accounting Decree includes several documents, though not every entity prepares all of them. The baseline package is three items:p>

Balance sheet (tase). A snapshot of assets, liabilities, and equity at the end of the financial period.
Profit and loss account (tuloslaskelma). Revenue, expenses, and the resulting profit or loss for the period. The Decree prescribes specific line-item formats, so layouts are largely standardized.
Notes (liitetiedot). Additional context, breakdowns, and disclosures. Depth scales with entity size.

Large entities and public-interest entities add a management report and a cash flow statement.⁴ Small entities that are not public limited companies or public-interest entities can omit both.

Statements must be presented in Finnish or Swedish and denominated in euros.² An entity may additionally publish a version in another currency, but if it does, the exchange rate used must be disclosed. There is no option to file exclusively in English; the Finnish or Swedish original is the legally binding document.

Financial Year

The standard financial year runs 12 months and does not have to match the calendar year. When a business is first set up or changes its year-end, the transitional financial year may be shorter or longer than 12 months, but it can never exceed 18 months. All branches of the same reporting entity must share the same financial year. Sole traders who do not use double-entry bookkeeping must use the calendar year.

Filing With the PRH

Financial statements are filed with the Finnish Patent and Registration Office (PRH), which maintains the Trade Register. Limited liability companies and cooperatives must file within eight months of the end of the financial period.⁵ Branches, savings banks, and certain other entities have a shorter six-month deadline. Filing through the online service at ytj.fi is free of charge when done on time.⁶

iXBRL From February 2026

From February 2026, the PRH accepts financial statements from limited liability companies in iXBRL (Inline eXtensible Business Reporting Language) format, which embeds structured XBRL data within an HTML document.⁷ Companies submit these through accounting software configured to connect with the PRH’s API; the PRH does not provide its own filing tool. The iXBRL files are treated as copies, and the signed original financial statements stay with the company.

Late Filing Fees

Missing the deadline triggers a tiered fee:

Up to 2 months late: €150
2 to 4 months late: €300
More than 4 months late or not filed at all: €600

The fee doubles for public limited companies and European companies. It also doubles when a company has failed to file for two or more consecutive financial periods.⁸ If statements remain unfiled a full year after the period ends, the company may be removed from the Trade Register or ordered into liquidation.⁵

Valuation and Depreciation

Assets and liabilities are generally recorded at historical cost. From there, systematic depreciation and amortization reduce the carrying value of tangible and intangible assets over their useful lives. The Finnish Tax Administration sets maximum annual rates that most companies follow for both accounting and tax purposes:

Office and residential buildings: up to 4% per year
Commercial and industrial buildings (shops, factories, warehouses): up to 7% per year
Machinery and equipment: up to 25% per year (declining-balance method)

These are ceilings, not requirements.⁹ A company can depreciate more slowly if the asset’s actual useful life is longer, but it cannot exceed the ceiling without specific justification.

Goodwill may be capitalized, but if it is, it must be amortized over its useful life under a predetermined plan. Where the useful life cannot be reliably estimated, the maximum amortization period is ten years.² This mandatory amortization is one of the sharper differences from IFRS, where goodwill is tested for impairment rather than amortized.

Inventory is valued at the lower of acquisition cost or market value. Research and development costs may be capitalized where the entity can demonstrate they will generate future income, but immediate expensing is the more common choice, consistent with prudence.

Consolidation and the Small-Group Exemption

A parent company that controls one or more subsidiaries must generally prepare consolidated financial statements. The Accounting Act carves out an exemption for small groups. A group qualifies as small if it exceeds at most one of the following on a combined basis: €6 million in total assets, €12 million in net turnover, and an average of 50 employees. A small group is exempt from consolidation as long as none of its members is a public-interest entity.

Groups that must consolidate eliminate all transactions between group companies, so consolidated figures reflect only dealings with outside parties. Minority interests are identified and reported separately in both the consolidated balance sheet and income statement.

Audit Thresholds

Finland sets its audit thresholds unusually low. An entity must appoint an auditor if it exceeds at least two of the following during both the most recent financial period and the one before it:

Balance sheet total: €100,000
Net turnover: €200,000
Average employees: 3

These figures come from the Auditing Act and have not changed in recent years.⁴ Most limited liability companies with any real commercial activity cross at least two of those lines, so an audit is effectively mandatory for all but the smallest shell or dormant entities.

Record Retention

The Accounting Act sets two retention tiers. Financial statements, the management report, ledgers, the chart of accounts, and the list of accounting materials must be kept for at least ten years from the end of the financial year. Transaction vouchers, business correspondence, and other accounting material must be retained for at least six years after the end of the calendar year in which the financial year closed. Other legislation may require longer periods for specific document types, so this is a floor rather than a ceiling.

KILA and Interpretive Guidance

The Finnish Accounting Board (Kirjanpitolautakunta, or KILA) operates under the Ministry of Economic Affairs and Employment and is the primary interpretive authority on the Accounting Act. KILA issues opinions and general instructions on how to apply the law, responds to requests from authorities, business organizations, and individual entities, and can grant case-by-case exemptions from certain provisions where those exemptions stay within EU accounting directives.¹⁰ For borderline reporting questions, KILA’s published opinions are often the most practical reference available.

A Note for US Shareholders

US persons who own 10% or more of the voting power or value of a Finnish corporation, or who control more than 50%, generally must file Form 5471 with their US federal return.¹¹ The IRS allows use of audited local-country GAAP as “alternative information” under Revenue Procedure 2019-40 when US GAAP statements are not available, which is almost always the case for Finnish companies.¹² Because FAS recognizes losses earlier and defers gains relative to US GAAP, converting FAS figures for earnings-and-profits and other US tax concepts requires line-by-line adjustments, and penalties for failing to file Form 5471 can reach $10,000 per form per year.

1
Ministry of Economic Affairs and Employment. Accounting
2
Finlex. Finland Code – Accounting Act
3
IFRS Foundation. IFRS Standards Jurisdiction Profile – Finland
4
Finnish Patent and Registration Office. Financial Statement Documents
5
Finnish Patent and Registration Office. Financial Statements
6
Finnish Patent and Registration Office. Filing Financial Statements Along With Tax Returns
7
Finnish Patent and Registration Office. Application Programming Interface for Software Companies
8
Finnish Patent and Registration Office. New Fee for Late Submission – File Your Financial Statements on Time
9
Finnish Tax Administration. Depreciation Expenses
10
Ministry of Economic Affairs and Employment. Accounting Board
11
Internal Revenue Service. Instructions for Form 5471
12
Internal Revenue Service. Revenue Procedure 2019-40