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Publication of financial statements in Denmark

Publication of financial statements in Denmark. By Chief Special Advisor Jan-Christian Nilsen – Danish Commerce and Companies Agency. Legal background. Before 1981 – only Danish legislation From 1981 – EU’s 4.th. directive and later on also 7.th. directive

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Publication of financial statements in Denmark

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  1. Publication of financial statements in Denmark By Chief Special Advisor Jan-Christian Nilsen – Danish Commerce and Companies Agency

  2. Legal background • Before 1981 – only Danish legislation • From 1981 – EU’s 4.th. directive and later on also 7.th. directive • Regulated by Danish Annual Accounts Act, which can be found on: • http://www.eogs.dk/graphics/Regnskab/Regnskabslov_en.html • The act covers all economic entities except financial companies like banks and insurance companies

  3. EU-regulation – sufficient? • Regulation requiring publication • No regulation on deadlines for filing • Result: no harmonization of deadlines • No specific sanctions required • Are all countries using sanctions? • Efficient internal market without harmonization?

  4. What is subject to publication? • Annual report, which contains: • Managements report • Auditors report • Financial statements including: • Profit and loss • Balance sheet • Notes • Consolidated financial statements (if prepared) • Approved by the general meeting

  5. Which companies? • All companies with limited liability • Also required to prepare financial statements in accordance with Danish GAAP • Other entities are not required to - or even able to - have their statements made public in the DCCA • Not required to prepare financial statements – only tax-statements

  6. Where? • All annual reports are available at the DCCA • Can be ordered via internet • Deliverance via e-mail within minutes • Payment by credit card or invoice • Also possible to buy other information about the company • The address is www.cvr.dk

  7. Sanctions • ”Charge” on each member of the board if the annual report is filed too late • From 70-400 EUR, depending on the period • Personal ”charge” • The company may be dissolved by the court

  8. Why? • Limited liability is a privilege! • Cost of privilege: more transparency • No supervisory authority – everyone must take care of themselves! • Protection of: • Suppliers • Customers • Future employees

  9. Current approach • An old annual report are like yesterdays newspapers • Maybe interesting for historians, but no use for anybody else • More important with timely annual report than a 100% correct annual reports • More important to file them, than to wait until all uncertainties are solved

  10. Change in 2001 • Filing within 5 months after the date of the balance sheet (before 2001: 6 months) • 4 months for listed companies • Shorter notice before a company is sent to court in order to be dissolved • Shortest period for filing in EU? • Only companies which are required to file their financial statements for publication are required to prepare financial statements

  11. Example • Balance sheet date is 31. December • Due date for filing is 31. May • A reminder is sent to the companies in late April • In the start of June a final warning is sent to the companies • In mid August the companies are sent to court in order to be dissolved

  12. Experiences

  13. The future • Electronic annual reports • XBRL? • Easier to exchange information rapidly • Internal market • Language? • One stop for ordering financial statements?

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