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14.1. Books and Records

The obligation to preserve accounting documents applies as follows:

  • Accounting source documents – for seven years from the end of the financial year during which the source document was recorded in the accounts;
  • Accounting ledgers, journals, contracts, financial statements, reports and other business documents which are necessary for reconstructing business transactions during audits – for seven years as of the end of the corresponding financial year;
  • Business documents relating to long-term rights or obligations – for seven years after the expiry of their term of validity;
  • Accounting rules and procedures – for seven years after the amendment or replacement thereof;
  • Accounting registers created electronically should be preserved electronically. The legibility of the data should be ensured within the preservation period.

Financial statements should be prepared in accordance with either accounting principles generally accepted in Estonia or IFRS as adopted by the EU. Listed companies and financial institutions are required to prepare financial statements in accordance with IFRS as adopted by the EU. Estonian GAAP is written by the Estonian Accounting Standards Board (EASB).

Estonian GAAP effective from 2013 is based on IFRS for Small and Medium-Sized Entities (IFRS for SMEs) with limited differences from IFRS for SMEs with regard to accounting policies as well as disclosure requirements.

Differences in accounting policies arise mainly due to the fact that in some areas Estonian GAAP allows a choice of alternatives, one of the alternatives being the only policy accepted under IFRS for SMEs. In areas not specifically covered by Estonian GAAP, the treatment in IFRS for SMEs is recommended, but not mandatory. Each Estonian GAAP standard contains a brief comparison with the respective section of IFRS for SMEs.

The Estonian Accounting Act can be accessed here, and the draft guidelines issued by the EASB are available here.