Accounting

The accounting area is regulated by The Danish Financial Statements Act which, in its most recent editions, is aligned with the latest international standards, i.e. IAS, IFRS and FAS. The Danish Financial Statements Act is based on present value accounting principles, as opposed to historic cost.

All business associations are covered by the Danish Financial Statements Act, although not all are obliged to file an annual report to the Danish Commerce and Companies Agency (DCCA). Most notably, limited partnerships and partnerships in which not all limited partners or partners respectively are public limited companies, Danish private limited companies, limited partnership companies or companies with a similar legal identity, are exempt from filing annual reports. However, if a business association exempted from the filing obligation chooses to prepare a financial report for external use, the financial report must conform to the Danish Financial Statements Act.

Branches of foreign business associations located in Denmark must file an annual report of their respective foreign business association or group to the DCCA. The branch itself, however, is not obliged to file an annual report to the DCCA.

The annual report must give a fair and true view of the company’s financial situation and must be audited by an external and independent auditor. Only certain small business associations are exempt from the obligation to have their annual report audited.

To ensure that the annual report gives a fair and true view, the content must be presented in such a way that it supports the typical user of the report in their financial decisions. To achieve this, the report must reflect the actual market value of the company’s assets and liabilities.