IFRS Handbook for SMEs in Finland
Farley, Andre (2016)
Farley, Andre
Haaga-Helia ammattikorkeakoulu
2016
All rights reserved
Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-2016120118481
https://urn.fi/URN:NBN:fi:amk-2016120118481
Tiivistelmä
Globalisation has led to greater competition among businesses the world over to attract stakeholders who can positively affect their business on international and global markets. To facilitate competition financial statements should be understandable and comparable to similar businesses. IFRS has become the de facto financial reporting stan-dard of the world. Finnish SMEs involved in international trade are not using IFRS, though a simple version exist for SMEs the switch from Finnish Accounting Standard seems cumbersome and costly. This thesis edifies Finnish SMEs about IFRS and aims to guide them in their transition to IFRS for SMEs.
The thesis was divided into six parts; researching publications about IFRS, IFRS for SMEs in Finland, producing sample financial statements according to IFRS for SMEs, comparing them and their components to financial statements produced under FAS, identifying IFRS standards not covered and finally preparing a IFRS handbook for SMEs in Finland.
FAS is based on historical cost accounting, it give users more flexibility when applying accounting treatments while, IFRS was more precise when recognising and measuring assets, liabilities equity, revenue, expenses and cost of goods sold.
Finnish SMEs switching to IFRS should be cautious of the treatments of impairments of assets IAS (36), inventories (IAS 2) leases (IAS 17), financial instruments, (IAS 39) and property plant and equipment (IAS 16) as differences in the standards could lead to significant changes in the financial statements.
To transition to IFRS SMEs should recognise all assets and liabilities as required by the IFRS for SMEs. Disclose the nature of the change in accounting policy; reconcile equity and profit and loss of the two standards for the latest period in the entity’s most recent annual financial statements.
The thesis was divided into six parts; researching publications about IFRS, IFRS for SMEs in Finland, producing sample financial statements according to IFRS for SMEs, comparing them and their components to financial statements produced under FAS, identifying IFRS standards not covered and finally preparing a IFRS handbook for SMEs in Finland.
FAS is based on historical cost accounting, it give users more flexibility when applying accounting treatments while, IFRS was more precise when recognising and measuring assets, liabilities equity, revenue, expenses and cost of goods sold.
Finnish SMEs switching to IFRS should be cautious of the treatments of impairments of assets IAS (36), inventories (IAS 2) leases (IAS 17), financial instruments, (IAS 39) and property plant and equipment (IAS 16) as differences in the standards could lead to significant changes in the financial statements.
To transition to IFRS SMEs should recognise all assets and liabilities as required by the IFRS for SMEs. Disclose the nature of the change in accounting policy; reconcile equity and profit and loss of the two standards for the latest period in the entity’s most recent annual financial statements.