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The content concerns Finnish legislation.

Contents of the Financial Statements and the Annual Report

Financial statements shall include:

  • a balance sheet reflecting the financial standing as per the date of the financial statements;

  • a profit and loss statement describing formation of the operating result;

  • a cash flow statement, describing the acquisition and disposal of funds during the accounting period. A cash flow statement must be prepared only in public limited liability companies, as well as in private limited liability companies not regarded as so-called small accountable entities (see above [5.1.6.1 Financial Statements in General]; and

  • supplementary information on the balance sheet, profit and loss account and financial statements (notes).

According to the Accounting Act, the financial statement shall include true and adequate information on the operating result and financial standing of the accountable entity. Supplementary information necessary for this purpose shall be included in the notes. There is no need to include separate notes, if the balance sheet, the profit and loss account and the cash flow statement include such information that should otherwise be disclosed in the notes. The notes may include information that is supplementary to the profit and loss account and the balance sheet, or further specification thereof.

Corresponding information relating to the previous financial period must be presented with respect to each item of the balance sheet, the profit and loss account and the cash flow statement (reference data).

The Companies Act requires, however, all limited liability companies to provide the following information, either as notes to financial statements or separate Annual Accounts:

  • proposal of the Board of Directors concerning distribution of profits, and, if appropriate, for distribution of other unrestricted equity;

  • the number of outstanding shares per share class, as well as the main provisions of the Articles of Association applicable to each share class;

  • as regards capital loans, the main terms of the loan and the accruing interest not included in the accounts as a cost;

  • information regarding foreign branches, if any;

  • loans, liability and commitments to related parties and the main terms thereof, if the aggregate amount thereof exceeds 20,000 euros, or five per cent of the company’s equity, as expressed on the balance sheet;

  • information regarding corporate structure and finance, such as decisions or authorizations relating to issues of shares or option rights;

  • aggregate number of shares in the company and its parent company held by, or pledged to, the company or its subsidiaries, as well as the number of such shares acquired or accepted as pledges during the financial period, including information relating to the manner of acquisition and consideration paid for such shares, and possible transactions with related parties.

The annual report referred to in the Accounting Act is a separate attachment to the financial statements, that is mandatory for publicly listed companies and larger private limited liability companies that do not fulfill the criteria for so-called small accountable entities (see above). According to the Accounting Act, the annual report must include the following information, to the extent it is relevant for the accountable entity:

  • substantial events that have occurred during the financial period and thereafter;

  • evaluation of likely future developments;

  • description of the extent of research and development activities;

  • evaluation of the most significant risks and uncertainties and other factors that may affect the development of the business operations:

  • evaluation of financial standing and operating result;

  • key figures relating to financial standing and operating result;

  • key figures relating to personnel and environmental factors; and

  • possible supplementary information and further clarification regarding the presented figures.

For further description of the liability for neglecting the duties relating to financial statements, see [1.6.5 Liability of the Board of Directors and the Managing Director].