Accounting and bookkeepingDownload PDF version
Danish accounting regulation is closely aligned with the international accounting principles such as the International Accounting Standards (IAS) and the International Financial Reporting Standards (IFRS). Therefore, significant adaptation is not required in order to comply with Danish regulation as the international accounting standards are familiar. The regulation applies to all business enterprises with a few notable exemptions.
Business enterprises in Denmark are covered by the Danish Financial Statements Act (“the Act”). The Act is based on present value accounting, as opposed to historic cost, and takes such international accounting standards as the IAS, the IFRS, the FAS, etc. into consideration.
Under the Act, most Danish limited liability enterprises are required to file an annual report with the Danish Business Authority. The types of business enterprises obligated to file an annual report include the following:
- Public limited companies (in Danish: A/S)
Private limited companies (in Danish: ApS)
Limited partership companies (in Danish: P/S)
Partnerships in which all partners are public limited companies, private limited companies or limited partnership companies.
Limited partnerships in which all general partners are public limited companies, private limited companies or limited partnership companies.
In addition to the filing requirement, annual reports must generally be audited by an external and independent state-authorised or registered public auditor. Certain small enterprises are exempted from this obligation.
The annual report must also be approved by the company’s general meeting in due time for the annual report to be received by the Danish Business Authority no later than five months after the end of a financial year. Generally, a financial year must cover a period of 12 months.
The five-month period only applies to non-listed companies, whereas for listed companies, the annual report must be received by the Danish Business Authority four months after the end of a financial year.
Partnerships, where at least one partner is not a limited liability entity, and limited partnerships, where at least one general partner is not a limited liability entity, are not obligated to file an annual report. For example, it is common to see Danish law firms established as partnerships or limited partnerships where at least one partner or general partner is not a limited liability entity.
A Danish branch of a foreign company is not required to file an annual report itself. Instead, an annual report for the relevant foreign company must be filed with the Danish Business Authority.
Danish Bookkeeping Regulation
Bookkeeping is regulated by the Danish Bookkeeping Act which states that bookkeeping material must be kept for a period of five years. The bookkeeping material must generally be kept in Denmark, unless an exemption is granted. However, such material may be kept abroad for a short period of time provided that certain conditions are met. This is useful if bookkeeping is carried out centrally within a group of companies.
The above does not constitute legal counseling and Moalem Weitemeyer Bendtsen does not warrant the accuracy of the information. With the above text, Moalem Weitemeyer Bendtsen has not assumed responsibility of any kind as a consequence of a reader’s use of the above as a basis of decisions of considerations.