What are the Accounting Regulations?
The Accounting Regulations are the central regulations that regulate how Norwegian businesses must keep accounts . The regulations set out detailed requirements for bookkeeping, journal entries , storage and accounting standards to ensure transparent and correct accounting .
What are the Accounting Regulations?
The Accounting Regulations (FOR-2004-12-01-1558) are regulations issued under the authority of the Accounting Act and the Accounting Act. They expand and clarify the requirements in these acts and provide practical guidelines for how businesses should:
- Organize and structure accounting
- Document all business events with vouchers
- Store accounting records in a proper manner
- Reporting financial information to authorities
- Ensure traceability and control capabilities
Purpose of the Regulation
The accounting regulations have several main purposes :
- Standardize accounting practices across businesses
- Ensure that the accounts provide a true and fair view of the business's financial situation
- Facilitate effective tax collection and supervision
- Protect creditors, investors and other stakeholders
- Promoting transparency and trust in business
Bookkeeping Obligation and Scope
Who has an obligation to keep records?
The accounting regulations apply to everyone who is required to keep accounts under the Accounting Act:
| Business type | Accounting obligation | Special requirements |
|---|---|---|
| Joint stock company | Yes | Complete accounting |
| Sole proprietorship | Yes (above 5G turnover) | Simplified possible |
| Responsible company | Yes | Complete accounting |
| Limited partnership | Yes | Complete accounting |
| Foundations | Yes | Special reporting requirements |
| Associations | Yes (above 5G turnover) | Simplified possible |
| Public enterprises | Yes | Own regulations |
Exceptions from Bookkeeping Obligations
The following businesses are exempt from bookkeeping obligations:
- Sole proprietorships with turnover below 5G (approx. 560,000 NOK)
- Non-profit organizations without economic activity
- Housing associations and condominiums (own rules)
- Public authorities (follow their own regulations)
Accounting Requirements
Basic Principles
The accounting regulations are based on several basic principles :
1. The principle of completeness
- All business events must be registered
- No transactions should be omitted.
- Systematic recording of all financial events
2. The principle of accuracy
- Correct amounts and dates
- Correct accounting and classification
- Documented basis for all postings
3. The timeliness principle
- Ongoing recording of transactions
- Correct accrual of income and expenses
- Monthly reconciliation
4. The traceability principle
- Clear connection between vouchers and accounting
- Unique reference system
- Possible to follow transactions from vouchers to accounting
Accounting System Requirements
The accounting regulations impose specific requirements on the accounting system:
- Chronological recording of all transactions
- Systematic chart of accounts based on the Norwegian Standard Chart of Accounts
- Secure storage and backup of accounting data
- Access control and user rights
- Audit trail for all changes
Supporting Documents and Documentation
Mandatory Attachments
All accounting entries must be documented with approved vouchers:
External Attachments
- Invoices from suppliers
- Receipts and sales slips
- Bank statements
- Payslips and tax deductions
- Customs documents and waybills
Internal Attachments
- Payroll journal and vacation pay provision
- Depreciation and impairment
- Accruals and provisions
- Internal transfers
- Correction entries
Requirements for Attachment Content
All documents must contain the following minimum information :
| Enlightenment | Claim | Example |
|---|---|---|
| Date | Transaction date | 15.03.2024 |
| Amount | Incl. VAT specification | 12,500 kr (10,000 + 2,500 VAT) |
| Counterparty | Name and company number | Supplier AS (123456789) |
| Description | What has been bought/sold? | Office supplies March 2024 |
| Approval | Signature/attestation | Signed by purchasing manager |
Storage rules
Retention periods
The Accounting Regulations set strict requirements for the retention of accounting records:
| Document type | Storage period | Special requirements |
|---|---|---|
| Accounting documents | 5 years | Originals or certified copies |
| Annual accounts | 10 years | Signed copies |
| Audit report | 10 years | Original document |
| Pay slip | 5 years | Including tax deductions and fees |
| VAT tasks | 10 years | Including supporting documentation |
| Correspondence | 3 years | Relevant for the accounts |
Storage Requirements
Documents can be stored in various forms :
Physical Storage
- Original documents in fireproof archives
- Systematic organization and labeling
- Access control and security
Digital Storage
- Approved scanning and archiving systems
- Immutable file formats (PDF/A)
- Backup and recovery routines
- Availability throughout the entire retention period
Storage location
Accounting records must be kept:
- In Norway (general rule)
- Available to Norwegian authorities
- Organized so that it can be found easily
- Protected against destruction and unauthorized access
Accounting Standards and Principles
Applicable Standards
The accounting regulations refer to recognized accounting standards :
For Large Enterprises
- IFRS (International Financial Reporting Standards)
- Norwegian Accounting Standard (NRS) as an alternative
- Special requirements for consolidated accounts
For Small Businesses
- Simplified IFRS for small entities
- Good accounting practices as a basis
- Simplified reporting requirements
Key Accounting Principles
The transaction principle
- Registration upon actual implementation
- Documented basis for all postings
- Objective valuation
The accrual principle
- Revenue is recognized when earned .
- Costs are recognized when incurred.
- Accrual of income and expenses
The principle of comparison
- Costs are matched against related revenues
- Same period for related records
- Correct performance measurement
The precautionary principle
- Conservative valuation of assets
- Immediate expense recognition of losses
- Cautious revenue recognition
Control and Supervision
Internal control
The accounting regulations require the establishment of internal controls:
Control environment
- Management's attitude towards accounting quality
- Competence and division of responsibilities
- Ethical guidelines
Risk assessment
- Identification of accounting risk
- Assessment of probability and consequence
- Risk management measures
Control activities
- Monthly bank reconciliation
- Periodic reconciliation of all accounts
- Approval procedures for transactions
- Segregation of tasks
Public Supervision
Several authorities supervise compliance with the accounting regulations:
| Authority | Supervisory area | Sanctions |
|---|---|---|
| The Tax Administration | Tax accounting | Additional tax, fees |
| Brønnøysund registers | Annual financial reporting | Coercive fine |
| Financial Supervisory Authority | Listed companies | Administrative sanctions |
| Auditor | Accounting quality | Observations in the audit report |
Sanctions and Consequences
Administrative Sanctions
Violation of accounting regulations can lead to serious consequences :
Economic Sanctions
- Additional tax of up to 60% of the tax
- Late payment interest on outstanding amounts
- Fees for failure to report
- Penalty for late submissions
Administrative Consequences
- Tightened supervision from tax authorities
- Requirement for external accountant
- Revocation of authorizations
- Disclosure of violations
Criminal Consequences
Serious violations may result in criminal liability :
- Accounting offense (§ 392 of the Criminal Code)
- Serious accounting violation (Section 393 of the Penal Code)
- Tax evasion by deliberate misreporting
- Fraud by manipulation of accounts
Digitization and Modern Requirements
Electronic Accounting
The accounting regulations are adapted to modern technology:
Requirements for Accounting Systems
- Approved accounting programs
- Secure data storage and backup
- Audit trail for all changes
- Access control and user rights
Electronic Documents
- Digital invoices (EHF format)
- Electronic receipts and vouchers
- Automatic receipt of documents
- Integrated payment solutions
Automation and AI
Modern accounting uses advanced technology :
- Automatic posting of standard transactions
- Machine learning for voucher recognition
- Robotized processes for routine tasks
- Real-time reporting and dashboards
Best Practices and Recommendations
Establishing Good Routines
To ensure compliance with accounting regulations:
Daily Routines
- Ongoing recording of all transactions
- Systematic journal entry
- Daily backup of accounting data
- Control of bank transactions
Monthly Routines
- Complete bank reconciliation
- Reconciliation of all balance sheet items
- Review of open records
- Accrual of costs and revenues
Annual Routines
- Complete review of all accounts
- Updating accounting principles
- Assessment of internal control systems
- Skills development for accounting personnel
Competence requirements
The accounting regulations require sufficient expertise :
| Role | Competence requirements | Certification |
|---|---|---|
| Accountant | Authorization from the Norwegian Financial Supervisory Authority | Mandatory |
| Accounting clerk | Relevant education/experience | Recommended |
| General Manager | Basic accounting understanding | Necessary |
| Board members | Financial literacy | Required |
Future Developments
Technological Changes
Accounting regulations must be adapted to new technologies:
- Blockchain technology for immutable accounting
- Artificial intelligence for automatic accounting analysis
- Real-time reporting to authorities
- Integrated systems across businesses
Regulatory Changes
Expected changes in regulations:
- Stricter cybersecurity requirements
- Expanded sustainability reporting requirements
- Harmonization with EU regulations
- Simplification for small businesses
Conclusion
The Accounting Regulations are the foundation for Norwegian accounting and ensure quality , transparency and trust in business. By following the requirements of the regulations, businesses can:
- Fulfill all legal obligations
- Ensure correct and reliable accounting information
- Minimize the risk of sanctions and regulatory responses
- Building trust with stakeholders and authorities
- Laying the foundation for good business management
Regularly updating knowledge of accounting regulations and investing in competent resources is crucial to successful accounting in an increasingly complex and digitalized world.
For businesses that want to ensure full compliance with accounting regulations, it is recommended to establish robust routines, invest in modern accounting systems and ensure sufficient expertise in the organization.