Finantskahjud

Finantskahjud is a term that refers to a specific financial instrument in Estonian jurisprudence. It is a type of accounting entry that is used to record financial transactions between a company and its parent or subsidiary companies.

In the context of financial reporting, finantskahjud are treated as intercompany transactions between affiliated entities. These transactions are usually settled in cash, but they can also be settled in kind, meaning that the company receives goods or services from its parent or subsidiary company.

Finantskahjud are subject to specific regulations in Estonian law, particularly in the context of value-added tax (VAT) and corporate income tax. According to the Estonian Accounting Act, finantskahjud must be recorded in the financial statements of the company that initiates the transaction.

One of the key characteristics of finantskahjud is that they can be used to manipulate the financial results of a company. Companies that engage in finantskahjud may be able to artificially inflate their profits or hide losses. To prevent this, Estonian law requires that finantskahjud be properly disclosed in the financial statements of the involved companies.

Finantskahjud are an important aspect of financial reporting in Estonian companies, particularly in large conglomerates with complex ownership structures. Understanding the rules and regulations surrounding finantskahjud is essential for companies that engage in intercompany transactions and for financial analysts who need to evaluate the financial performance of these companies.