finantstulemus

Finantstulemus is a term used in Estonian accounting to describe the financial result of an entity over a defined period. It is the bottom-line figure that shows whether the company earned more revenue than it spent, after accounting for all sources of income and all costs. The finantstulemus is usually reported in the income statement as net profit or net loss for the period. It can be influenced by both operating activities and financial activities, and includes the impact of income tax.

The calculation typically starts with revenue from sales of goods and services, other operating income, and financial income such as interest and dividends. From this, the entity subtracts the cost of goods sold, operating expenses (selling, general and administrative), depreciation and amortization, impairment, and finance costs (interest expense, foreign exchange differences, etc.). The resulting figure may then be adjusted for extraordinary items or changes in accounting estimates, depending on the accounting framework. After accounting for income tax, the final finantstulemus for the period is obtained.

The finantstulemus is a key indicator of profitability and financial performance, used by managers, investors and creditors. It is important to distinguish it from cash flow, since it is an accrual-based measure and may differ from actual cash generated. In Estonia, as in many jurisdictions, it is prepared in accordance with local accounting standards or international standards such as IFRS.