kassaperuste

Kassaperuste, or cash basis, is an accounting method in which income is recognized when cash is received and expenses are recognized when cash is paid. It contrasts with accrual accounting, where revenue is recognized when earned and expenses when incurred, regardless of cash movements. The method is commonly used by small businesses, sole traders, freelancers, and some nonprofit organizations because of its simplicity and direct reflection of cash flow.

Key characteristics include recording only actual cash transactions, with minimal use of accounts receivable or payable. Financial statements prepared on kassaperuste primarily show the cash position and may provide a less complete view of a company’s financial performance and obligations than accrual-based statements. Revenue timing can depend on when payments are received, and expenses on when payments are made, not when goods or services are delivered.

Usage and regulatory context vary by country. In many jurisdictions kassaperuste is permitted for small businesses or for tax purposes under specific thresholds, while larger entities or those required to follow standardized financial reporting may be obligated to use accrual accounting. Businesses using kassaperuste should consider how VAT, payroll, and inventory rules interact with cash-based records, since some areas treat these differently under cash basis.

Advantages of kassaperuste include simplicity, a direct link to actual cash flow, and potentially smoother tax timing. Disadvantages include less insight into true profitability, potential timing mismatches between revenue and expenses, and reduced comparability with entities using accrual accounting.