Denmark is a northern European country, part of Scandinavia, with a highly developed economy, a high standard of living and a favourable environment for starting a business. The financial statements of Danish companies are published annually. Small companies are entitled to an exemption from the annual audit.
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As a member of the European Union (EU), Denmark complies with the accounting, audit and financial reporting requirements set out in EU decrees and directives incorporated into national laws and decrees. In terms of accounting and audit Denmark has brought its legal framework to complete conformity with the EU requirements.
Requirements regarding accounting and financial reporting are regulated by the Danish Companies Act (Selskabsloven).
All Danish companies must file annual financial statements with the Danish Commerce and Companies Agency (DCCA); this information will be available to the public.
The following types of legal entities must file financial statements:
In accordance with the requirements of the EU incorporated into the Danish Financial Statements Act 2002, listed companies in Denmark must apply EU-approved International Financial Reporting Standards in their consolidated financial statements and in separate financial statements for listed companies that are not in a group and do not prepare consolidated financial statements. Other companies must comply with the Danish Financial Statements Act. They can choose to apply the International Financial Reporting Standards or the Danish accounting standards (Danish GAAP) developed by the Danish Accounting Standards Committee (DASC) FSR - Danske Revisorer.
Financial year corresponds to calendar year: from 1 January to 31 December; the deadline for filing an annual report is 31 May.
Companies must file their annual report with the Danish Business Authority. An annual report must be received by the Danish Business Authority not later than 5 months after the end of the financial year.
For listed companies and national joint stock companies, the deadline is 4 months after the end of the financial year.
Tax year is a calendar year or another 12-month period if the taxpayer has informed the Tax Agency of it.
In the case of failure to comply with the time limit for filing of accounts, each member of the board will be imposed with a fine of up to 3,000 DKK. In the case of further delay, it may result in a compulsory dissolution of the company.
Companies incorporated in Denmark must annually file audited financial statements with the Registrar of Companies. Small companies, however, in accordance with the Companies Act, have the right to be exempted from audit if during two straight years the company exceeds the limits:
This exemption applies until the company approves otherwise at an annual general meeting of shareholders.
Audit exemption is only possible for future financial statements. Hence, previous reporting periods cannot be exempted from compulsory audit.
Audit exemption do not apply to commercial foundations and investment companies with employees even if they meet the criteria.
Audit exemption is lost if the company, affiliated person or sole owner of the company receives a fixed penalty notice or is convicted of violation of companies legislation, accounting legislation or taxes and duties legislation. In such cases the company’s financial statements for the subsequent reporting year is subject to audit.
A company’s directors are responsible for preparation of consolidated financial statements of the company that gives truthful and objective representation in accordance with the International Financial Reporting Standards and additional requirements of the Danish Financial Statements Act, and audit conducted in accordance with the International Standards on Auditing and additional requirements applicable in Denmark.
Companies of Denmark that have subsidiaries must prepare and file consolidated financial statements and a consolidated management report.
A subsidiary is a company that is more than 50% owned by another company. There are cases when a company that is 50% or less than 50% owned by another company is considered a subsidiary if it is controlled by the company. A company controls a subsidiary if the following conditions are met:
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