The Swedish Financial Accounting Standards Council (standards for listed entities)

The Swedish Financial Accounting Standards Council (SFASC) has issued two new accounting standards, which will be effective for financial years beginning on or after January 1, 2003.

• SFASC 22 - Presentation of Financial Statements (based on IAS 1, Presentation of Financial Statements).
• SFASC 24 - Investment property (based on IAS 40, Investment Property).

The major differences between the above standards and IAS are:

SFASC 22

• SFASC 22 requires additional disclosures if the financial statements are not prepared under the going concern assumption. IAS 1 does not include such disclosure requirement.
• According to the Swedish standard, assets must be classified in current and fixed assets, while IAS 1 permits the company to classify assets in other groups, mainly based on liquidity.

The Swedish Annual Account Act prescribes that all debts maturing later than five years after the balance sheet date must be disclosed in the notes. This disclosure requirement is incorporated in the SFASC.

• IAS 1 permits consolidated financial statements to be prepared in accordance with IAS and the individual financial statements of the parent company in accordance with local standards. SFASC 22 states that the Standard shall be applied for both the consolidated financial statements and the individual financial statements of the parent company.
• IAS 1 allows companies to use different accounting methods for certain assets, however this is not permitted by the Swedish Annual Account Act and therefore not permitted by SFASC 22. In those cases where different rules can be applied in the parent company and the consolidated financial statements, this is specified in the respective Standard.

SFASC 24

• According to IAS 40, a company can choose to value investment property at fair value or historical cost, while SFASC 24 only permits historical cost.
• IAS 40 replaces parts of IAS 25, Accounting for Investments. As SFASC has not issued any Standard based on IAS 25, there are no references to such Standard.
• SFASC has also issued the following two new exposure drafts:
• SFASC Exposure Draft - Inventory (based on IAS 2, Inventories).
• SFASC Exposure Draft - Government Grants (based on IAS 20, Accounting for Government Grants and Disclosure of Government Assistance).

The exposure drafts are proposed to be effective for financial years beginning on or after January 1, 2003.

The Swedish Accounting Standards Board (standards for non-listed entities)

There are no new Standards issued by the Swedish Accounting Standards Board (SASB). However the SASB is currently reviewing two new areas in order to issue general advice and guidance on:

• Changes in accounting principles.
• Sole ownership.

In addition the SASB has made a proposal to the Swedish Ministry of Justice regarding the possibility to make retroactive changes to issued financial statements. In the proposal, the SASB suggests a clarification to the accounting legislation that retroactive changes in financial statements are not permitted. In addition SASB suggests that the legislation should include how identified errors in issued financial statements should be corrected.