Finnish GAAP (FAS): accounting rules for companies in Finland

Karma Accounts · Published 3 November 2026

Finnish GAAP, often called FAS (Finnish Accounting Standards), is the set of rules a company in Finland follows to keep its books and prepare its financial statements: the Accounting Act (kirjanpitolaki 1336/1997), the Accounting Ordinance (kirjanpitoasetus 1339/1997), the decree on the financial statements of small and micro companies (PMA 1753/2015) and the guidance of the Accounting Board (KILA). A company whose securities trade on a regulated market must prepare its consolidated statements under IFRS; any other company may use IFRS only if it is audited. In practice, a Finnish subsidiary of a foreign group typically keeps its statutory books under FAS and reports to its parent through a separate IFRS or US GAAP package.

What Finnish GAAP is made of

The name "FAS" is not in the law. The Accounting Act requires good accounting practice (hyvä kirjanpitotapa, KPL 1:3), and the rules come in four layers:

The Accounting Act (KPL): who keeps books, what the financial statements contain, valuation and accruals, consolidation and the use of IFRS.
The Accounting Ordinance (KPA): schedules and notes for companies that are not small or micro.
The PMA decree: schedules and notes for small and micro companies.
The Accounting Board (kirjanpitolautakunta, KILA): set up by the Ministry of Economic Affairs and Employment, it issues general guidance and statements on applying the Act (KPL 8:1 and 8:2), most recently on planned depreciation on 6 October 2026. It does not rule on IFRS.

The financial statements are a balance sheet, an income statement and notes, plus a cash flow statement for large companies and public-interest entities (KPL 3:1). They must give a true and fair view (KPL 3:2).

Size classes: micro, small, medium and large

A company is micro or small when, in both the financial year just ended and the one before, it exceeded no more than one of the limits below on its balance sheet date (KPL 1:4 a and 1:4 b). It is large when it exceeded at least two of the large-company limits in both years (KPL 1:4 c).

Size class	Balance sheet total, turnover, average staff	Test in both of the last two years
Micro (mikroyritys)	450 000 €, 900 000 €, 10	no more than one limit exceeded
Small (pienyritys)	7 500 000 €, 15 000 000 €, 50	no more than one limit exceeded
Large (suuryritys)	25 000 000 €, 50 000 000 €, 250	at least two limits exceeded
Medium (keskikokoinen)	not micro or small	no more than one large limit exceeded

These limits were raised by Act 605/2024 for financial years beginning on 1 January 2025 or later. Micro and small companies use the shorter schedules and notes of the PMA decree, and a private limited company (Oy) that is micro or small prepares no management report, unless it is a public-interest entity (KPL 3:1). The audit duty is a separate test with much lower limits: see audit requirements in Finland.

Who uses IFRS and who uses FAS

Under the EU's IAS Regulation (EC) No 1606/2002, a company governed by an EU Member State's law must prepare its consolidated accounts under IFRS if its securities are admitted to trading on a regulated market (Article 4); each Member State decides on everyone else (Article 5). Finland's choices are in chapter 7 a of the Accounting Act:

a company with securities on a regulated market in the European Economic Area prepares its consolidated statements under IFRS, and its own statements too if it is not required to prepare consolidated statements (KPL 7 a:2);
any other company may use IFRS for its own or its consolidated statements, but only if its books, financial statements, management report and administration are audited under the Auditing Act (KPL 7 a:3).

Statutory IFRS statements filed in Finland are still in Finnish or Swedish and in euros: the IFRS chapter does not switch off the language rule (KPL 3:5 and 7 a:4). A reporting package in the parent's language and currency is a separate, non-statutory document.

Finnish tax follows the books. Under the Business Income Tax Act (EVL 54 §), depreciation cannot be deducted beyond what the company has booked, and reserves are deductible only if booked. The FAS schedules have room for this on their own lines.

FAS and IFRS: the differences a group notices

Item	FAS	IFRS (as adopted in the EU)
Leases, as lessee	rent is an expense, commitments go in the notes; finance leases may be capitalised only if done for all of them (KPL 5:5 b)	right-of-use asset and lease liability, except short-term and low-value leases if elected (IFRS 16, 5 and 22)
Goodwill	may be capitalised and depreciated over its useful life, within ten years if that cannot be estimated reliably (KPL 5:9)	not depreciated; tested for impairment every year (IAS 36, 10; IFRS 3, B63)
Development costs	may be capitalised and depreciated over their useful life, within ten years if that cannot be estimated reliably (KPL 5:8)	must be capitalised when the criteria are met; research is an expense in both (IAS 38, 54 and 57)
Deferred taxes	optional (KPL 5:18); a medium or large company discloses material unrecognised ones (KPA 2:6)	recognised for all taxable temporary differences, with listed exceptions (IAS 12, 15)
Above-plan depreciation, tax reserves	separate appropriations lines	no such items
Format	fixed Finnish schedules (kaavat)	IFRS presentation rules
Statutory statements' language and currency	Finnish or Swedish, in euros (KPL 3:5)	the same for IFRS statements filed in Finland (KPL 7 a:4)

In a limited company, development costs carried on the balance sheet are also deducted from the amount it may distribute to shareholders (Companies Act, OYL 13:5).

The depreciation difference (poistoero)

This is where a foreign controller usually stops and asks. A Finnish company may book depreciation above its plan when there is a tax reason (KPL 5:12), and may make tax-based reserves (KPL 5:15). Because the tax deduction cannot exceed the amount booked, the extra depreciation runs through the income statement as "change in depreciation difference" (poistoeron muutos), and the total sits between equity and liabilities as "accumulated appropriations" (tilinpäätössiirtojen kertymä).

KILA's guidance on deferred taxes explains that this total contains an equity-like part and a tax liability, which cannot be separated in the company's own balance sheet but may be split in the notes. Finnish consolidated statements must split it into equity and deferred tax liability (KPL 6:7), and an IFRS package does the same.

An illustrative example

The figures are invented. Sub Oy makes 180 000 euros before appropriations and taxes, books 20 000 euros of depreciation above plan, and pays 20 % tax on the remaining 160 000 euros, that is 32 000 euros. Its FAS profit is 128 000 euros. For the group's IFRS package:

Line	Euros	Why
FAS profit for the year	128 000	after the 20 000 appropriation and 32 000 tax
Reverse the increase in depreciation difference	+20 000	no appropriations under IFRS
Reverse depreciation of goodwill from an earlier asset deal (business transfer)	+15 000	impairment test instead; none assumed
Office lease: rent 60 000 out, depreciation 54 000 and interest 9 000 in	−3 000	IFRS 16
Deferred tax at 20 % on the 32 000 of adjustments	−6 400	IAS 12
Profit in the IFRS package	153 600

On the balance sheet, the accumulated appropriations move into equity and deferred tax liability, and the lease adds a right-of-use asset and a lease liability.

What a foreign parent needs from its Finnish subsidiary

The statutory side. The subsidiary keeps FAS books and prepares its financial statements within four months of the year end (KPL 3:6). An Oy files the adopted statements with the Trade Register at the Finnish Patent and Registration Office (PRH) within eight months, online at ytj.fi in Finnish or Swedish, free of charge within those eight months. The tax return follows the same books. The dates are in our article on financial statements deadlines.

What the Finnish statements already show. A small subsidiary's notes name the parent of the nearest group that prepares consolidated statements (PMA 3:8), list guarantees given for other group companies (PMA 3:7) and disclose material related-party transactions not made on normal commercial terms (PMA 3:10).

The group side. This is common practice, not law: the Finnish chart of accounts is mapped to the group's chart, the subsidiary sends a monthly or quarterly package in the group's GAAP and currency, the FAS-to-group adjustments are kept as a written reconciliation, and intercompany balances are agreed before each close. Pricing those intercompany charges is a tax question of its own: see transfer pricing for small groups. If the Finnish company owns companies itself, see consolidated financial statements in Finland.

Records. Financial statements and ledgers are kept for at least ten years from the end of the financial year, and vouchers for at least six years from the end of the calendar year in which the financial year ended (KPL 2:10), so that an authority or auditor can review them from Finland without undue delay (KPL 2:9). That matters when the books run in a group system abroad. Still choosing the structure? See branch or subsidiary.

Frequently asked questions

What is Finnish GAAP?

The Accounting Act 1336/1997, the Accounting Ordinance, the PMA decree and the Accounting Board's guidance, together. The law itself calls it good accounting practice.

Can a Finnish company use IFRS instead of FAS?

Yes, if its books, financial statements, management report and administration are audited under the Auditing Act (KPL 7 a:3). A company with securities on a regulated market must use IFRS for its consolidated statements.

Can a Finnish subsidiary keep its books in English?

The Act's language rule covers the financial statements and the management report: Finnish or Swedish, in euros (KPL 3:5). It has no matching sentence for the ledger, but the material must be reviewable from Finland (KPL 2:9). An English version of the statements for the parent is an extra document.

Is goodwill amortised under Finnish GAAP?

Yes, over its useful life, within ten years if that cannot be estimated reliably (KPL 5:9). Under IFRS it is tested for impairment instead.

What we do

We keep the statutory books of Finnish limited companies, including subsidiaries of foreign groups, under Finnish GAAP, in English when needed, prepare the financial statements and filings, and agree with you how the figures reach your group reporting. We are not an audit firm. See limited company accounting or request a quote.

Sources

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.

Finnish VAT for a foreign company?

We register foreign companies for VAT in Finland and file their VAT returns and EC Sales Lists, quoted per scope. See Finnish VAT services for foreign companies. For VAT firms and accounting firms: working with us as a Finnish VAT partner.

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