
4. Recapitulation
The differences between financial accounting based on
the Finnish expenditure-revenue accounting and the
American GAAP are the difference in the going-concern
convention, and using the cash account as the central
reference account instead of owners' equity. Consequently,
the monetary measurement convention is even more
pronounced in expenditure-revenue accounting than in
a financial accounting based on GAAP. The balance sheet
considered a secondary, auxiliary account connecting the
successive accounting periods. A circular reasoning is
used in expenditure-revenue accounting with regard to
relationship between annual profits and the total profit.
The time value of money is ignored.
The difference of the Finnish and GAAP thinking is most
pronounced in teaching introductory accounting, because
the former is focused on income determination and is
geared around the income statement. On the other hand,
the financial accounting practices are not significantly
different between the Finnish and the GAAP view.
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