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Consolidated financial statements in Finland: who needs them

Karma Accounts · Published 7 October 2026

When one Finnish company controls another, the two form a group (konserni), and a parent limited company (Oy) must include consolidated financial statements (konsernitilinpäätös) in its own financial statements. A small group is exempt, as long as none of its companies is a public-interest entity. Most owner-run groups are small, so the real work is keeping the intercompany invoices and balances matched in both sets of books.

What makes a group

Under the Accounting Act (kirjanpitolaki, KPL) 1:5, a company has control (määräysvalta) over another if it:

• has more than half of the votes of all the shares, based on ownership, the articles of association or another agreement,
• has the right, on the same basis, to appoint or dismiss a majority of the other company's board, or
• otherwise actually exercises control over it.

The controlling company is the parent (emoyritys), the other its subsidiary (tytäryritys), and together they form a group (KPL 1:6). Control through a subsidiary counts too, so a subsidiary's subsidiary is in the group.

The definition is about one company controlling another. Two companies you own personally, side by side, are not a group under the Accounting Act; a group starts when one company owns the other, such as a holding company that owns your operating company.

When the parent must consolidate

A parent that is a limited company or a cooperative must prepare consolidated financial statements and include them in its own, and so must any other parent that carries on business, except a sole trader (KPL 6:1).

The parent of a small group (pienkonserni) need not, provided that none of the group companies is a public-interest entity (KPL 6:1). In Finland those are a company whose securities trade on a regulated market, a credit institution and an insurance company (KPL 1:9). One such company anywhere in the group and the exemption is lost.

A group is small when no more than one of the small-company limits is exceeded. They are checked on the parent's balance sheet date, either from consolidated figures after eliminations, or by adding the companies' own figures together, in which case the balance sheet and turnover limits are 20 % higher (KPL 1:4 a and 1:6 a):

These limits apply to financial years beginning on 1 January 2025 or later. There are narrower exemptions too, for example when the subsidiaries are not material to a true and fair view of the group, alone or together, in the latest and the previous financial year (KPL 6:1).

What consolidation involves

Consolidated statements combine the group companies' balance sheets, income statements and notes as if the group were one company, for the same date as the parent's own statements (KPL 6:2 and 6:7). The companies' figures are first put on the same accounting policies, and a Finnish subsidiary must have the parent's financial year (KPL 6:4 and 6:5). Then everything that happened inside the group is removed (KPL 6:7):

• intercompany sales, purchases and other internal income and expenses,
• internal distributions of profit, such as a dividend from the subsidiary to the parent,
• receivables and debts between the group companies,
• internal margins still in the group's assets, such as profit on goods one company sold the other that are still in stock at the year end.

The parent's investment is eliminated against the subsidiary's equity (KPL 6:8): the cost of the shares is set off against the matching share of the subsidiary's equity at the acquisition date. If the parent paid more, the difference is allocated to the subsidiary's assets where possible, and the rest is consolidated goodwill (konserniliikearvo), depreciated over its useful life, or within at most ten years if that cannot be estimated reliably.

If the parent owns less than 100 %, the other owners' share of the subsidiary's profit and equity is shown on its own line, as the minority interest (vähemmistöosuus). Eliminations may be left out where they are not needed for a true and fair view (KPL 6:7), and the consolidation workings are kept for ten years (KPL 6:19 and 2:10).

An illustrative example

The companies and figures are invented. Parent Oy founded Sub Oy and paid 10 000 euros for all its shares, which became Sub's share capital. During the year Parent sells 300 000 euros to outside customers and invoices Sub 50 000 euros for management services. Sub sells 200 000 euros to outside customers and still owes Parent 10 000 euros at the year end.

The group's profit does not change: the same 50 000 euros leaves both turnover and expenses. But this only works if both companies booked the same amounts. If Parent invoiced 50 000 and Sub booked 45 000, the missing 5 000 has to be found first.

What an exempt parent still shows

Under the decree on the financial statements of small and micro companies (PMA 1753/2015):

• the balance sheet has separate lines for holdings in group companies, receivables from them and debts to them, and holdings in group companies may not be merged into other lines (PMA 2:4, 2:7 and annex V); a micro company may use a shorter balance sheet (PMA 4:2),
• guarantees given on behalf of other group companies are shown separately in the notes (PMA 3:7),
• transactions with group companies are disclosed if they are material and not on normal commercial terms, because a company in a control relationship counts as a related party (PMA 3:10).

A subsidiary, for its part, names the parent of the nearest group that prepares consolidated statements (PMA 3:8).

Filing with the Trade Register

Consolidated statements are part of the parent's financial statements, so they go to the Finnish Patent and Registration Office (PRH) in the parent's own filing, with the auditor's report on them where there is one. Every group company that is a limited company files its own statements as well. The dates are in our article on financial statements deadlines.

The audit is a separate question

The audit duty is decided company by company, with much lower limits (Auditing Act 1141/2015, 2:2). A company may go without an auditor only if, in both the latest and the previous financial year, no more than one of these applied: a balance sheet total over 100 000 euros, turnover over 200 000 euros, more than three employees on average. A company whose main business is owning and managing securities, and which has significant influence over another company's business or finances (KPL 1:8), must always have one. So a holding company can need an auditor even when the group is far too small to consolidate.

Keeping a small group easy

• Book each intercompany invoice in both companies in the same month, at the same amount, on intercompany accounts.
• At each month end, check that one company's receivable equals the other's debt, and fix differences then.
• Put recurring charges such as management fees, rent and loans in a written agreement, and book dividends and loans between the companies in both sets of books with the decisions behind them.
• Once a year, check the group against the limits above, using the same matched figures.

With matched balances, the exemption check is a short calculation and consolidation a routine step. How those intercompany charges should be priced for tax is a separate question: see transfer pricing for small groups. The same matching is part of a month-end close.

What we do

For groups, we keep the intercompany invoices and balances matched every month, and prepare the eliminations and group financial statements when the group needs them. The price is a written quote once we have seen the structure. See limited company accounting, what moves the price, or request a quote.

Sources

• Finlex: Accounting Act 1336/1997, chapter 1 sections 4 a, 5, 6, 6 a, 8 and 9, chapter 2 section 10 and chapter 6 (in Finnish)
• Finlex: Act amending the Accounting Act 605/2024, entry into force and application (in Finnish)
• Finlex: Government Decree on the financial statements of small and micro undertakings 1753/2015, chapters 2, 3 and 4 and annex V (in Finnish)
• Finlex: Auditing Act 1141/2015, chapter 2 section 2 (in Finnish)
• Finnish Patent and Registration Office: financial statement documents to be filed with the Trade Register
• Finnish Patent and Registration Office: how limited liability companies file financial statements

Please note: this is general information about Finnish rules, not advice for your own situation, and the rules change. Ask us before you act on it.

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