Abstract
In Denmark Directive 2013/34/EU has been transposed into one Act: The Financial Statements Act. The Financial Statements Act is structured as a building block system with four accounting classes A, B, C, and D with a number of important recognition and measurement simplifications and exemptions for micro-sized and small companies in accounting class B and medium-sized companies in accounting class C. Denmark has a long tradition of exploiting the size limits in the Accounting Directive for micro, small, medium, and large undertakings to the maximum. There is no official standard setter in Denmark, but occasionally the Danish Business Authority issues interpretations and guidelines that clarify the accounting issues that arise in relation to the provisions of the Financial Statements Act. IFRS standards play a decisive role and have strong legitimacy in Denmark for completing the national rules, and even non-listed companies have the option to apply (full) IFRS in the consolidated, individual or both sets of financial statements instead of using the provisions of the Financial Statements Act. The Financial Statements Act clearly demonstrates that the Danish legislators are not opposed to the use of fair values; fair value is often mandatory for financial assets and an optional measurement basis for many other financial and even non-financial assets. Denmark has a progressive attitude to CSR/ESG reporting in the annual report. New provisions have been added to the Financial Statements Act before EU regulations required such information, and whenever the EU has caught up, Denmark has often decided on an expanded scope.
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Notes
- 1.
Annual reports on an individual basis are available free of charge from the Central Business Register: https://datacvr.virk.dk/ (search by company name or by use of the company number available on the companies’ websites). The Danish word for financial report is “regnskab.”
- 2.
- 3.
- 4.
The additional note disclosures are (1) a specification of the changes from the beginning to the end of the financial statement year for fixed assets, (2) information about the closest undertaking that includes the company as a subsidiary in its consolidated financial statements, (3) the nature and business purpose of the company’s significant arrangements that are not included in the balance sheet, (4) events after the balance sheet date, and (5) and transactions with related parties.
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Thinggaard, F. (2023). Denmark. In: Incollingo, A., Lionzo, A. (eds) The European Harmonization of National Accounting Rules. SIDREA Series in Accounting and Business Administration. Springer, Cham. https://doi.org/10.1007/978-3-031-42931-6_7
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