Get notified when there's news

Want to stay up-to-date? Sign up for our infoupdate. You'll be notified directly when we publish new content that's relevant to you.

I accept


Home page // Changes in the Financial Statements Act
The Danish Parliament has adopted a number of amendments to the Annual Accounts Act. Here you can see the ...
May 11, 2024

Changes in the Financial Statements Act

The Danish Parliament has adopted a number of amendments to the Danish Financial Statements Act. Here you can see the most important changes, which include changes to the size limits for the accounting classes, changes for properties that have previously revalued through equity, and changes to the management report and notes to the various accounting classes.

The bill also affects the sustainability reporting requirements for the largest companies (ESG), which you can read more about here.

Increasing the size limits of accounting classes

Effective for fiscal years beginning January 1, 2023: The increase of the size limits in the accounting classes is outlined below. The company cannot exceed two of the three limits for two consecutive years.

Applicable size limits New size limits
Accounting class B - micro
Balance, t.kr. 2.700 3.500
Net sales, t.kr. 5.400 7.000
Number of employees 50 10
Accounting class B
Balance, t.kr. 44.000 55.000
Net sales, t.kr. 89.000 111.000
Number of employees 50 50
Accounting class C - medium
Balance, t.kr. 156.000 195.000
Net sales, t.kr. 313.000 391.000
Number of employees 250 250

As the new size thresholds are effective for financial years beginning January 1, 2023, companies that are in the process of reporting for 2023 can already now use the increased size thresholds when assessing which reporting class they should use for their financial statements.

For companies that move from reporting class C (large) to reporting class C (medium), this can lead to major relaxations in relation to note disclosure requirements, such as segment information, etc. There will also be no requirement for the management report to contain CSR reporting, information on gender composition in management and data ethics.

Companies moving from accounting class C to accounting class B will also experience relief. Groups whose consolidated figures no longer exceed the limits for reporting class B for two consecutive years may not prepare consolidated financial statements for 2023. Therefore, it is a good idea to consider now whether the company will prepare its 2023 financial statements according to more lenient regulations if it moves down one reporting class.

Cancellation of fair value adjustment of investment properties through equity - all accounting classes

Effective for annual periods beginning January 1, 2024: It will no longer be possible to write up investment properties to fair value through equity. Fair value adjustments must be made by recognizing the adjustment in the income statement. The change is not expected to affect many companies as this is already common practice.

Breakdown of the disclosure requirement for contingent liabilities - reporting class B

Effect for annual periods beginning January 1, 2024: Contingent liabilities - also known as financial liabilities or contractual obligations - could previously be disclosed in aggregate, regardless of type.

In the future, the company must separately disclose surety and guarantee obligations and other obligations, including leasing.
This change is not expected to affect many companies either, as it is already common practice.

Average number of full-time employees - all accounting classes B (except B, Micro)

If the average number of full-time employees is less than 1, this must be disclosed.

Removal of disclosure requirements for knowledge resources and impact on the external environment - reporting class C (medium-sized)

Effect for financial years beginning on or after June 1, 2024: In the management report, companies in reporting class C (medium-sized) are no longer required to disclose information about knowledge resources that are particularly important for future earnings and the company's impact on the external environment, including measures to prevent, reduce and mitigate this damage.

Removal of the requirement to disclose related parties with a controlling influence on the company - accounting class C (medium-sized)

Effect for financial years beginning on or after January 1, 2024: The requirement for entities to disclose the related parties that control the entity is repealed. The previous provision required disclosures to include name, residence, registered office and the basis of control.

Disclosure requirements for key intangible assets - accounting class C (large)

Effect for financial years beginning January 1, 2025: Companies in reporting class C (large) must disclose key intangible resources and basically explain how the company's business model depends on them. The explanatory notes mention, for example, pharmaceutical companies where employees' knowledge is a crucial resource for the company's development projects.

As this resource does not meet the criteria for recognition on the balance sheet, its value will not be reflected in the balance sheet, which will show a lower value than the company's fair value. Furthermore, the existing requirements for companies to recognize intangible resources mean that these resources are recognized at cost, but the fair value will often be significantly higher.

In addition, the Minister of Business and Industry states that - in the current requirements for reporting on the company's business model - key intangible resources are not disclosed in practice, and this provision is intended to address this.  

See the adopted bill on the Danish Parliament's website.

Contact us

Partner, State Authorized Public Accountant
Kenny Madsen
Mail: kem@inforevision.dk

Newest Oldest Most read
New
Tax, VAT and duties
April 28th.
Approx. 2 minutes

Remember deductions for shares in your annual tax return

Remember to deduct shares in your annual tax return...

Did you know that you may still be able to deduct old stock losses - even from bankruptcies many years ago?

Tax, VAT and duties
New
Tax return and advance tax return
Tax, VAT and duties
Mileage deduction
April 28th.
Approx. 3 minutes

Do you use your own car for work? How to get tax-free mileage allowance

Do you use your own car for work? Here's how to get...

Do you use your private car for work? Then you may be eligible for tax-free mileage allowance from your employer.

Tax return and advance tax return
Tax, VAT and duties
Mileage deduction
New
Tax, VAT and duties
Generational change
April 27th
Approx. 5 minutes

New Generational Succession Act adopted: Tax relief for generational changes in companies - also for rental properties

New Generation-Skipping Act passed: Tax relief...

A new law, passed on April 8, 2025, provides significant tax relief for transfers to close family members. You can now ...

Tax, VAT and duties
Generational change
New
Audit and accounting
March 18th
Approx. 1 minute

Lower capital requirements for ApS from 2025

Lower capital requirements for ApS from 2025...

The capital requirement for founding a private limited company (ApS) has been reduced from DKK 40,000 to DKK 20,000....

Audit and accounting
New
Audit and accounting
March 18th
Approx. 3 minutes

Capital owner loan news: What you need to know in 2025

Capital owner loan news: What you need to know in 20...

From 2025, it will be easier to borrow money from your own company. The previous, complicated rules on shareholder loans will now be...

Audit and accounting
New
Tax, VAT and duties
Properties and investments
March 18th
Approx. 1 minute

Rental of real estate: Remember separate VAT registration

Rental of real estate: Remember separate VAT.

Once your rental property is VAT registered, you need a separate VAT registration for each property...

Tax, VAT and duties
Properties and investments
New
Tax return and advance tax return
Tax, VAT and duties
March 16th
Approx. 2 minutes

Do you know about the special travel deduction?

Do you know about the special travel deduction?

In 2024, you can deduct DKK 143.50 per day for small necessities - even if you've had the expenses covered after the...

Tax return and advance tax return
Tax, VAT and duties

Read more current news here