Financial statement planning in the presence of tax constraints

We present a mathematical model of financial statement planning in the case when there is a strong interdependence between taxation and the books. This is the case in Finnish accounting and taxation legislation, making the planning of the financial statements quite complicated for Finnish companies. We present a general model for the planning process and use this model to describe different kinds of situations that companies can find themselves in when developing their financial statements at the end of the year. We also shortly describe how this model is implemented in an expert system for financial statement planning.