Annual accounts

The annual accounts must be completed within 6 months from the end of the financial year. No later than 1 month after it has been approved by the general meeting, the annual accounts must be sent to the Register of Company Accounts.

The purpose of the annual accounts is to give useful and relevant information about the enterprise’s financial development and position. The annual accounts must be prepared according to the provisions in the Accounting Act including its regulations and generally accepted bookkeeping practices.

Complete annual accounts must contain the following:

  • income statement (operating revenues, operating expenses, financial income and financial expenses)
  • balance sheet (assets, debts and equity)
  • notes (explaining the different items of the statement)
  • if relevant, a cash flow statement (overview of the enterprise’s cash flows)

Audits

Small limited companies can chose to not be audited.

To be exempt from the obligation to audit, a limited company must fulfil the following three conditions:

  • The company's operating revenues must amount to less than NOK 7 million.
  • The company's balance sheet total must be less than NOK 27 million.
  • The work performed by the company's employees must not correspond to more than 10 full-time equivalents.

Authorising the board of directors

If a private limited company wishes to opt out of audits, the board of directors must be given authorisation by the general meeting to make such a decision. The company must notify the Register of Business Enterprises when the board of directors has decided to opt out of audits.

Norwegian-registered foreign enterprises (NUFs) with limited liability are deemed equivalent

Norwegian private limited companies and NUFs are deemed equivalent with regard to audit requirements. If a taxpayer’s annual accounts are not prepared in compliance with the Accounting Act or the Bookkeeping Act, or with recommended accounting or bookkeeping practice, the Tax Administration can order that one or more years of annual accounts be audited by a registered or government-authorised auditor.

Assets

Fixed assets

Fixed assets are assets intended for the enterprise's permanent possession and usage.

Examples of fixed assets can be production equipment, machinery, cars and buildings. Fixed assets must be valued at the cost of acquisition.

The value of fixed assets must be stated in the first item under assets on the enterprise’s balance sheet.

Current assets

Current assets are assets not intended for permanent possession and usage by the enterprise.

Examples of such assets are cash, bank deposits, outstanding claims and stock inventories. Current assets must be valued at the cost of acquisition or the actual value, whichever is the lowest.

Current assets form a part of the enterprise’s balance and must be listed below the fixed assets in the assets section.

Debt

Short-term debt

Short-term debts are the enterprise's short-term financial obligations that fall due within one year.

Examples of short-term debt are accounts payable, debts to financial institutions, outstanding public duties (for example, employer’s national insurance contributions and value added tax) or tax.

Short-term debt forms part of the balance in the enterprise’s annual financial statement and must be listed in the balance sheet below long-term debt.

Long-term debt

Long-term debts are the enterprise’s long-term financial obligations that fall due in more than one year.

Examples of long-term debts are deferred tax, bonds, debts to financial institutions, provisions for obligations or debts to a company within the same corporate group. In the annual accounts, long-term debt is listed before short term debt.

Deferred tax

Deferred tax is a tax liability amounting to 22 percent of temporary differences in the enterprise.

Temporary differences arise because enterprises apply different valuation rules to their financial accounts and their tax accounts.

Equity

Share capital

The share capital is part of the enterprise's equity. Today the minimum capital of an enterprise amounts to NOK 30,000.

The share capital is divided into restricted and unrestricted equity. The restricted equity is the share deposit. This cannot be withdrawn from the enterprise as dividend. Under certain conditions, unrestricted capital can be withdrawn as dividends to the owners of the enterprise. The sum of equities and liabilities must be equal to the enterprise’s assets.

Annual profit or loss statement

The enterprise's annual profit or loss equals the sum of operating revenues and financial income, minus operating expenses and financial expenses.

When the total income exceeds the total expenses, we describe it as “annual profit”. If the total income is less than the total expenses, we describe it as “annual loss”. A profit generated by the enterprise is added to the enterprise's unrestricted equity if the surplus is not distributed as a dividend to the owners of the enterprise.

More about annual accounts

Read more about annual accounts at the Brønnøysund Register Centre (in Norwegian only).