Accounting

This legal obligation to keep accounts implies, among other things, that enterprises must register transactions that are of importance to the magnitude and composition of their assets, liabilities, income and expenses in an accounting system.

The registration must comprise all information that is of importance to the preparation of the annual accounts and other financial reporting that follows from acts and regulations (statutory reporting).
The accounting system must itemise all registered information that forms the basis for the amounts stated in statutory reporting.

Accounting records, including annual accounts, the board of directors' report, the auditor's report, vouchers, time sheets, business agreements, correspondence etc. must be stored in Norway for 10 years subsequent to the end of the financial year.
Many businesses use external accountants. The accountant must have the required authorization or be a registered accountant.

Apart from the bookkeeping and the yearly financial statement (balance sheet), the accountant may also assist with filling in and transfer of the periodic VAT returns, PAYE and payroll taxes.

The actual legal basis is found in the Accounting Act and corresponding regulations. Contact the Tax Office (tel. 800 80 000) for information on the accounting regulations.

According to the Act, self-employed businesses/sole proprietors (having a balance sheet total of up to NOK 20 million and up to 20 employees) and liable companies (having a turnover of up to NOK 5 million and less than 5 employees) do not have to produce a financial statement as defined in the Act.

When so requested by the tax authorities, the books shall be made available for control.

Bookkeeping obligation
All businesses with a statutory obligation to keep accounts pursuant to the Accounting Act also have a bookkeeping obligation pursuant to the Bookkeeping Act of 19 November 2004. The purpose of the bookkeeping regulations is to ensure the preparation of reliable and punctual financial statements and enable subsequent control of these statements. External control requirements are thus a primary concern of the bookkeeping regulations, however, up-to-date and adequate bookkeeping will always be a precondition for financial management and control.

Required documentation
The Bookkeeping Act does not explicitly express what books should be kept in order to document the transactions done in the business. Rather, the act states what records are expected and for how long the documentation shall be retained. In fact, the Act has replaced the term "bookkeeping" by "registration".

The minimum requirement consists of the following:
" Outgoing invoices
" Incoming invoices and completed documentation of expenses
" Cash register for registration of cash sales
" Ledger for cash payments
" Ledger for personal usage of goods and/or sales to the shareholders
" Register appointments (e.g. if you run a studio or medical centre)
" Register orders
" Register time spent on assignments or projects
" Register changes in the stock
" Register transactions with respect to project/assignment
" Perform the annual stock counting and produce the stock overview.

The use of computers for bookkeeping is regulated by the Act.
Registration of transactions may be carried out abroad, but documentation must be kept in Norway after the financial year's statements have been prepared.

Accounting principles
The Norwegian Bookkeeping Act is harmonized with the accounting directives of the European Union. The expressed and governing principle is that the financial statements shall be in accordance with generally accepted accounting principles.
The standards are issues by the Norwegian Accounting Standards Board (Norsk RegnskapsStiftelse).

The bookkeeping requires that all income and expense be entered in the books when it occurs. In most instances, the date on the invoice is the date used.

It is important that the bookkeeping is carried out continuously, making the books a jour at all times. Cash income and withdrawals are entered on a daily basis, and all the books should be revised and updated at least every second month.

All transfers between customer and supplier, including cash buys and sales between businesses are entered in the debtors' and creditors' ledger (reskontro).

Documentation of expenses and income
All records in the income statement must be documented by receipts (vouchers). It is recommended that the file be organised as follows:

Outgoing invoices (sales)           ->  Numbered
Incoming invoices (buys)            ->  By date or alphabetic
Cash sales receipts                   ->  By date
Bank transactions                      ->  By date
Uncategorized vouchers/receipts ->  By date

Note that all expenses and buys must be documented by receipts in their original.

When goods are sold to other business enterprises, the documentation consists of a numbered and dated sales document (invoice). The invoice has the following contents:

" The name and address of the supplier of the good or service
" The business organisation number followed by the letters MVA
" Name and address of the person or organisation that receives the good or service
" An unambiguous description of the delivered good or service
" The quantity of the goods or extent of the service
" The price
" The place of delivery

The cash sales receipts must, on a daily basis, be checked against the actual contents of the cash register. The result is dated and signed before it is filed.

Should you withdraw cash or goods for your own or your family's personal use or for gifts, all withdrawals must be recorded at the standard price. The record must be dated and contain a description of the good.

Annual report
The financial year follows the calendar year. Based on the recorded transactions as described and the stocktaking, the enterprise shall produce an annual report consisting of income statement, balance sheet and cash flow statement.
The annual report and financial statement must be produced in Norwegian language.

Contact the Tax Office (tel. 800 80 000) for explanation of the rules governing the stocktaking and assessment of the value of the stock.

Storage of records
The general rule is that the records must be filed in Norway for a period of 10 years after the end of the financial year. The records must include all transactions documenting the business, such as annual accounts, directors' report, auditor's report, vouchers, time sheets, business agreements, correspondence etc.

Legislation
" The Bookkeeping Act of 19 November 2004 no 73.
" The Accounting Act of 17 July 1998 no 56.
" The Assessment Act of 13 June 1980 no 24.
" The Act on Payment and Collecting of Taxes of 21 November 1952 no 2.
" The Act on Auditing and Auditors of 15 January 1999 no 2.