Financial statements provide information on your company's profit or loss and assets. Whether or not it is mandatory for you depends on your company’s size, company type and industry. Financial statements consist of at least a profit and loss statement, a balance sheet, notes on the accounts, and a list of accounting and materials. The financial statement information recorded in the trade register is public.
The profits and losses, and assets of your company are detailed in the financial statements, which are produced for each accounting period. The statements are based on your company’s accounting during the financial year. Different size companies have different rules governing the financial statements, depending on the form of enterprise and the industry. Even if your company’s financial statements were drawn up by a professional, as the entrepreneur, you are responsible for the correctness of the statements.
If you have a limited liability company, a limited partnership, an open partnership or a cooperative, you must prepare financial statements for each financial year.
If you are a private trader, you must prepare financial statements if your company meets two of the following conditions during the concluded financial year and the financial year before that:
- your company’s turnover is over EUR 700,000
- your company’s balance sheet total is over EUR 350,000
- your company employs over 10 people on average
Even if you are not obligated to prepare financial statements, you must draw up calculations of your company’s profits and losses and net assets for tax purposes. Therefore, it may also be wise to draw up financial statements at the same time for submission to financiers and different authorities.
Compile your company’s financial statements based on the following documents:
- a profit and loss statement, which provides information on your company’s profit or loss
- a balance sheet that shows your company's financial standing on the date the financial statements are drawn up
- cash flow statement – not mandatory if your company is small
- notes on the accounts, whose extent and requirements for content depend on your company’s size and company type
- annual report – not mandatory if your company is small
- list of accounting and materials describing your company’s accounts, voucher types and their retention methods
- the auditor’s note to the financial statements – not mandatory if your company is small.
Make sure that all of the documents in the financial statements are prepared in accordance with the provisions that concern your company. Familiarise yourself with the provisions independently or ask your accountant or local business development company for help.
Store the financial statement and accounting documents for at least ten years after the conclusion of the financial year. You must keep vouchers and any other material substantiating transactions for at least six years from the end of the year during which the financial period ended.
The notes on the accounts supplement the information in the financial statements presented as calculations. The scope of the notes on the accounts and the requirements for their content depend on your company’s size and company type.
Describe the method of presenting the financial statements and the principles for preparing them, and specify the items in the profit and loss statement and balance sheet. Also provide other information not apparent in the calculations. Such information may include the number of staff in your company, depreciations, changes in equity capital, and guarantees provided by your company.
If your company is small, also provide such information in the notes on the accounts that a larger company would include in its annual report. Such information includes essential events after the financial year, procurement and disposal of shares, and other such information that is necessary for forming an accurate and sufficient picture of your company’s operations.
Prepare the financial statements on paper or electronically within four months since the end of the financial year. Provide the financial statements in Finnish or Swedish, and euro as the currency unit. Follow the accrual basis in the financial statements, in which case the date of delivery of the product will determine for which financial year each item is recorded.
In the financial statements, provide comparative data from the previous year’s profit and loss statement, balance statement and possible cash flow statement. Also prepare balance sheet analysis that itemises the content of the accounts based on your financial statements. For instance, the analysis of the accounts payable explains which invoices submitted by your company have not been paid by the time of preparing the financial statements.
Include the date and your signature, and a possible annual report. The balance sheet analysis is signed by the person who has prepared it.
If you have a limited liability company, get the financial statements approved by the general meeting. If your company is a limited partnership or a general partnership, its financial statements are approved by the general partners. Hold a meeting approving the financial statements within six months since preparing the financial statements.
Financial statements are public information; anyone can order them against payment from the trade register. The balance sheet analysis is an exception.
If you have a limited liability company or a cooperative, you must report the financial statement information to the Tax Administration when submitting your tax return. The Tax Administration will submit the information to the trade register. Submit the information even if your company is not active. If you neglect providing the information, the Finnish Patent and Registration Office may remove your company from the trade register even if your company is still active. Make sure that the information is provided to the trade register within two months since the approval of the annual financial statements.
If you are a private trader or have a limited partnership or a general partnership, you do not typically have to submit the information on the financial statements. However, you should submit the information to the Finnish Patent and Registration Office within six months since the end of the financial year if your company has met two of the following criteria during the concluded financial year or the financial year before that:
- your company’s turnover is over EUR 12,000,000
- your company’s balance sheet total is over EUR 6,000,000
- your company employs over 50 people on average