What are the Danish accounting standards companies must follow?

In Denmark, a company’s financial reporting obligations depend on its legal form, size, and whether it is publicly listed. The primary legal framework is the Danish Financial Statements Act (Årsregnskabsloven), commonly referred to as Danish GAAP, while IFRS (International Financial Reporting Standards) applies in specific cases.

Danish GAAP (Årsregnskabsloven)

The Danish Financial Statements Act constitutes Denmark’s Generally Accepted Accounting Principles (GAAP). It governs how companies prepare and present their financial statements, including:

• Balance sheet

• Income statement

• Notes and disclosures

• Management commentary (where applicable)

All commercial companies in Denmark fall under the Act unless explicitly exempt (for example, very small businesses or entities in regulated sectors such as banking).

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

• Smaller companies have simpler reporting obligations

• Larger companies must provide more detailed disclosures

Even companies that apply IFRS must still comply with certain base requirements of the Act when filing in Denmark.

Reporting Classes Under Danish GAAP

Danish GAAP divides companies into four reporting classes (A–D) based on size and public interest. Disclosure requirements increase with each class.

Class A

• Applies to the smallest businesses, such as small sole proprietorships and simple partnerships

• Minimal reporting requirements

• No obligation to submit annual reports to the Danish Business Authority

Class B

• Applies mainly to small incorporated companies

• Typically includes most ApS (private limited companies) and small A/S (public limited companies) below statutory size thresholds

• Annual reports must be prepared and filed, but with simplified disclosure requirements

Class C

• Applies to medium-sized and large companies that are not publicly listed

• Often divided into:

  • Class C (medium)

  • Class C (large)

• Includes larger ApS and A/S companies, as well as certain large cooperatives or foundations

• Subject to more extensive reporting and disclosure requirements

Class D

• Applies to publicly traded companies (listed A/S companies)

• Classification is based on listing status, not company size

• IFRS is mandatory for Class D companies

IFRS in Denmark

Under EU regulations:

• Publicly traded companies in Denmark are required to apply IFRS (as adopted by the EU) for their consolidated financial statements

Voluntary Use of IFRS

Denmark allows flexibility for non-listed companies:

• Non-listed companies may voluntarily apply IFRS

• This applies to both consolidated and individual financial statements

In practice:

• Most private companies use Danish GAAP

• Larger private groups or companies with international investors may choose IFRS for transparency, comparability, or group alignment