What accounting standards must companies follow in Norway?

In Norway, financial reporting requirements depend on a company's legal form, size, and whether it is publicly listed. Most companies follow Norwegian GAAP (NGAAP), while certain companies are required or permitted to apply IFRS.

Norwegian GAAP (Regnskapsloven)

The Norwegian Accounting Act constitutes Norway’s Generally Accepted Accounting Principles (NGAAP). It governs how companies prepare and present their financial statements, including:

• Balance sheet
• Profit and loss statement
• Notes and disclosures
• Directors’ report (management report), where required

All accounting entities in Norway must apply the Act unless they are required or permitted to apply IFRS.

The Act is designed to scale reporting requirements according to company size, ensuring that:

• Smaller companies benefit from simplified reporting obligations
• Larger companies must provide more comprehensive disclosures

Even companies applying IFRS must still comply with certain Norwegian legal filing requirements.

Company size categories under Norwegian GAAP

Unlike Denmark’s A–D reporting classes, Norway mainly classifies companies according to size categories.

Small entities (Små foretak)

Applies to companies below certain thresholds based on:

• Revenue
• Balance sheet total
• Number of employees

Key features include:

• Simplified accounting and disclosure requirements
• Reduced note disclosures
• Simplified valuation rules in certain areas

Most small private limited companies (AS) fall within this category.

Medium-sized and large entities

Companies exceeding the thresholds for small entities must comply with the full requirements of Norwegian GAAP.

Key features include:

• More detailed disclosures in the notes
• Stricter recognition and measurement rules
• Mandatory preparation of a directors’ report

Public interest entities (PIEs)

These include:

• Listed companies
• Banks and financial institutions
• Insurance companies

These entities are subject to stricter reporting and transparency requirements and are generally required to apply IFRS.

IFRS in Norway

Under EU/EEA regulations (which Norway applies through the EEA Agreement):

• Listed companies are required to apply IFRS (as adopted by the EU) for their consolidated financial statements

Voluntary application of IFRS

Norway allows flexibility for non-listed companies:

• Non-listed companies may voluntarily apply IFRS
• This may apply to:
  • Consolidated financial statements
  • Individual financial statements (in certain cases)

In practice:

• Most private companies use Norwegian GAAP
• Larger corporate groups or companies with international investors often choose IFRS for:
  • Comparability
  • Transparency
  • Alignment with parent companies or investors

Simplified IFRS (IFRS for SMEs – not adopted)

Norway has not officially adopted IFRS for SMEs as a separate accounting standard. However:

• A simplified framework, often referred to as “simplified IFRS”, exists
• It is mainly used for individual financial statements within IFRS groups
• It allows reduced disclosures while maintaining IFRS measurement principles

Notes on accounting and financial reporting

• Annual financial statements must be submitted to the Brønnøysund Register Centre

• Language: usually Norwegian, in some cases English is also accepted

• Currency: Norwegian Krone (NOK)

• Small companies may qualify for an audit exemption