The difference in IFRS and FAS accounting systems and their effects on financial ratios
Tuomela, Henri Matias (2024-05-09)
Tuomela, Henri Matias
09.05.2024
Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi-fe2024050928664
https://urn.fi/URN:NBN:fi-fe2024050928664
Tiivistelmä
Investing has become easier and closer to every consumer. In order to invest, you no longer need to personally walk to a bank branch, wait days for the transaction to take place and pay large brokerage fees. Investing can be done effortlessly and in real time from your own mobile device and can be done almost unlimitedly regardless of time and place. Investment is also possible across country borders. However, international investing brings with it challenges. The differing accounting practices of different countries create situations where a comparison between two companies can be almost impossible. Uniform accounting practices have indeed developed significantly since the beginning of the millennium. The IFRS standards that guide the harmonization of accounting practices were created in 2016. However, IFRS is a standard for listed companies and therefore not all companies follow it.
This thesis compares the internationally used IFRS accounting practice and the Finnish FAS accounting practice. Based on previous studies, the study focuses on goodwill, share-based payments, benefit-based pension plans and leasing liabilities, which were found to be the biggest differences. The differences are made visible through key figure analysis, which aims to investigate whether the observed differences in accounting practices are essentially significant. Profitability, liquidity and financial stability have been selected as key ratios to be checked, which have been seen to have the greatest impact on the returns and value of the share. The research is carried out using quantitative methods for the largest companies on the Helsinki Stock Exchange.
This thesis compares the internationally used IFRS accounting practice and the Finnish FAS accounting practice. Based on previous studies, the study focuses on goodwill, share-based payments, benefit-based pension plans and leasing liabilities, which were found to be the biggest differences. The differences are made visible through key figure analysis, which aims to investigate whether the observed differences in accounting practices are essentially significant. Profitability, liquidity and financial stability have been selected as key ratios to be checked, which have been seen to have the greatest impact on the returns and value of the share. The research is carried out using quantitative methods for the largest companies on the Helsinki Stock Exchange.