| Appreciation of Tangible Fixed Assets - The Swedish Adjustment to International Standards | |
| Writer: | Åsa Berglund |
| Karin Rosén | |
| 19th January 1999 |
Summary
Harmonisation of accounting standards is important since the world is increasingly internationalised. The harmonisation development has been pushed forward by big international accounting organisations such as the IASC and FASB. In Sweden the RR is the recommending authority.
Accounting conventions are the theoretical background of accounting. The conventions are interpreted in different ways in different countries, however, which leads to differences in regulations from country to country. There are also two main accounting traditions, the Anglo-Saxon and the Continental tradition. The tendency in accounting standards in Sweden over the last decades has been a movement towards the Anglo-Saxon tradition.
In 1995 the Fourth Directive was implemented in Swedish legislation and the compensating adjustment had to give way to appreciation. Appreciation is acceptable under current Swedish law but with strict conditions. In January 2000 the RR will issue a new recommendation on tangible fixed assets and appreciation will be further regulated by it. Only companies with limited liability have the possibility to appreciate their fixed assets, and the higher value has to be significant and lasting. Not many companies in Sweden use appreciation. One reason for this might be the tough rules but there are also other possibilities.
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