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Norway

Accounts

Updated 06/2012

Legal requirements

Accounting rules

In Norway there is a distinction between bookkeeping and accounting obligations.

Annual accounts

Businesses required to keep accounts must draw up annual financial statements, which must at least include an income statement, balance-sheet and notes, and produce an annual report. This accounting information has to be accessible to the public. If a business is required to keep accounts, it will always be under a bookkeeping obligation.

Bookkeeping

All commercial enterprises are obliged to keep accounts under to the provisions of the Bookkeeping Act, while the accounting obligation is dependent on the legal structure of the organisation.

The bookkeeping obligation entails a requirement for bookkeeping, specification, documentation and retention of accounting information, and the rules for this are contained in the Bookkeeping Act and the Bookkeeping Regulation.

The duty of ongoing bookkeeping means recording transactions and other accounting movements that directly affect the income statement and/or the balance-sheet. The bookkeeping rules are designed to ensure satisfactory recording and documentation of these transactions and movements, and hence to provide the different users of the accounts with reliable information. It must be possible to double-check this information, and the bookkeeping rules, including retention requirements, are therefore vital to the activities of the tax and social security authorities.

What information has to be recorded as part of the bookkeeping process is determined by the requirements for mandatory financial reporting (annual financial statements, VAT returns, etc.), and the requirements laid down in the Bookkeeping Act and Regulation for specifications of recorded information.

Auditing

All enterprises under an obligation to keep accounts are automatically obliged to be audited according to the Auditors Act, Section 2-1.

Some companies that are obliged to keep accounts are exempt from the auditing requirement where their total operating revenue does not exceed NOK 5 million. This exception does not apply to private and public limited companies, but it does apply to the following legal structures:

  • Sole traders.
  • Unlimited liability partnerships etc, with up to five partners, provided that not all partners are legal persons where none of them bears any personal liability for the commitments.
  • Foreign companies (NUF).

Individual limited companies may however opt to dispense with audits. In order to dispense with audits, the following conditions must be met:

  • Operating income under NOK 5 million
  • Balance-sheet total under NOK 20 million
  • Average number of employees not exceeding 10 FTEs

A limited company that is the parent of a group, cf. Limited Companies Act, must always be audited whatever their size.

Invoicing

The Bookkeeping Regulation contains several provisions governing the date of issue of sale documents (invoices):

  • Invoices for goods and services generally have to be issued as soon as possible and no later than 30 days after delivery.
  • Deliveries billed on a monthly basis may be invoiced within 15 working days in the month following the month of delivery.
  • Services provided on an ongoing basis must be invoiced no later than one month after the end of the normal VAT period.
  • Services provided on the basis of actual measured usage (electricity, telephones, etc.) may be invoiced over longer periods, up to a maximum of one year.
  • For some types of good and services, it is permissible to issue one invoice including VAT for deliveries over a period of up to one year. This applies e.g. to passenger transport, catering and subscriptions.

An invoice must be issued in at least two copies, one of which should be retained by the seller.

 

Administrative procedures

Bookkeeping

The following information must be recorded:

  • document date (date the invoice etc. was issued)
  • amount
  • document reference (voucher number)
  • account code (account number)
  • other relevant processing codes (e.g. VAT number)
  • any codes identifying the buyer and seller (customer/supplier IDs)

All economic operators are under a bookkeeping obligation, while the accounting obligation covers a great many businesses. An overview can be found on 'Altinn/Start and run a business'.

Bookkeeping must be updated within the time limits for mandatory financial reporting, and at least every four months. For businesses that have to supply 2-monthly sales figures, this means that the books must be updated every other month.

In addition to the requirement for every transaction or movement to be documented on an ongoing basis, there is also a requirement for all balance-sheet items in the annual financial statements and/or income statement to be documented unless they are insignificant. This will apply, for example, to bank deposits, stocks, fixed assets and loans.

Stocks

Stocks must be counted at year-end. Enterprises that maintain adequate stock records may also perform stock-takes during the year, provided that goods received and dispatched from the date of the stock-take to the end of the financial year can be documented in a satisfactory manner.

The stock-take should be documented using the inventory list, either manually or electronically. This should contain an itemised list of:

  • the type of goods
  • quantity (with unit of measure)
  • value of each item
  • a total column for the specific values

This should show both the book value and the taxable value of the stocks. The documentation must be dated and should indicate who performed the stock-check.

Annual financial statements

According to the Accounting Act, the following types of enterprise are subject to an accounting obligation:

  • Norwegian private and public limited companies.
  • Unlimited (ANS and DA) and limited liability partnerships with an income of more than NOK 5 million from sales or more than five partners or employees.
  • Unlimited liability partnerships (ANS and DA) where all the partners are legal persons with limited liability (AS or ASA).
  • Sole traders with total assets worth over NOK 20 million over the year or an average number of employees exceeding 20 full-time equivalents.
  • Foreign companies doing business in Norway or on the Norwegian continental shelf and liable to pay taxes to Norway (NUF).

Companies subject to an accounting obligation must draw up annual financial statements based in the information recorded in the accounts throughout the year.

The financial statements and the management report must be published no later than six months after the end of the financial year, and sent to the Register of Company Accounts within a month of approval by the shareholders' meeting or similar body.

The annual accounts must be drawn up according to the rules in the Accounting Act and associated regulations, and good accounting practice.

For enterprises not subject to the accounting obligation, the 'annual results' are reported simply by submitting an income statement as an attachment to their tax return.

Retention of accounting material

Accounting material that is required to be retained must be stored in an orderly manner and adequately protected against destruction, loss or modification. It must be possible to present this accounting material to public monitoring authorities for the whole of the retention period in a form that allows checking.

Primary documentation, including documentation of recorded information (invoices etc.) and documentation of the balance-sheet, must be retained for 10 years, while secondary documentation (agreements, outgoing packing slips etc.) has to be retained for 3.5 years. The documents must be stored in Norway. It is also possible to apply to the Directorate of Taxes for dispensation to store accounting materials abroad.

Auditing and publication

The auditors' report must be sent to the Register of Company Accounts together with the annual report and accounts.

Invoicing

An invoice must be issued in at least two copies, one of which should be retained by the seller.

The law lays down strict requirements for documenting the recorded information. This applies, for example, to purchase and sale transactions, salaries and other accounting movements. For sale transactions, the following requirements apply to the contents of the sale documents (invoices etc.):

  • number and date of issue of the documentation
  • details of the parties
  • type and scope of service
  • date and place of provision of the service
  • payment and due date
  • VAT, where applicable

Some specific requirements are laid down for businesses that make cash sales, including requirements for point of sale machines.

Resources

Altinn contains information and electronic forms for things like VAT, statistics, tax returns, annual accounts and more.

Altinn/Start and run a business, tel. +47 800 33 840, is a toll-free national information service for people establishing and running companies. The aim is to make it easier to launch and run businesses in Norway.

Help & advice

Help & advice

E-mail a business organisation near you

The EU runs a network (Enterprise Europe Network) of local business organisations in most European countries that may be able to help you.

Choose your country and town and enter your enquiry below.

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