Finnish bookkeeping act will be reformed according to the requirements set by EU directive 2013/34. Finnish entrepreneurs will be required to carry out the necessary changes in their bookkeeping at the beginning of 1.1.2016. The EU directive placed requirements for EU member states to change their national bookkeeping acts to be more suited towards small and micro sized companies. The requirements of the directive were based on the Small business act, “think small first” principle. The structure of the new legislation begins from bottom, where common rules have been set, and these rules become more demanding as the company size grows.
Looking at the Europe’s company structure, around 93% of companies are considered small sized companies and from that figure around 92% are considered as micro sized. Due to this reason, the EU directive aims to reform national bookkeeping laws to be more suited towards smaller companies instead of being more suited towards larger companies. In practice the reformed law should ease the administration load of smaller companies, by lessening the information requirements of attachments, financial statement and annual report. In the bookkeeping act reform, these demands have been applied as precisely as possible. For example, in future, micro sized institutions can base their accounting and financial statement by payment basis rather that accrual basis.
Please note that, even after the reliefs applied by the reformed bookkeeping law, information provided in financial statement should still be based on truth and in the case of small companies, should still provide correct and truthful information on companies’ financial status. For example: even though small companies are no longer required to provide their annual report, they are still required to provide it as an attachment if it is required for giving out correct and truthful information on the companies’ financial status.