The annual report shall reveal information regarding the location and the nature of the business, as well as information on any branches.
The annual report must at least provide information on the status and future development of the business in question. In addition, information regarding research and development activities must be given.
With regard to the prospect of future business activities, the following information is required:
1. If continued business is a precondition for the contents of the annual accounts, the justification of continued business must be confirmed.
2. If in doubt about continued business, the report must reflect the uncertainty.
3. If the board is required by law to react following the loss of the company's equity (own capital), the annual report must indicate if correcting actions are employed, or if steps to liquidate the company has been initiated.
4. It the company in all likelihood will be liquidated, the annual report must explain how the real value of the assets at the time of liquidation will be calculated. Alternatively, this matter may be explained in a note to the accounts.
Further information that needs to be discussed:
Considerations on going concern.
Working environment. Businesses with more than 5 employees shall provide information on absence due to illness.
Equal opportunity matters. The status and the future development regarding this matter must be elaborated upon.
The impact the business activities may have on the external environment, e.g. pollution, noise, etc.
Information that provide a basis for assessing the future development of the business.
Allocation of profit or coverage of loss (if this information is not stated in the annual accounts).
Small businesses that prepare the consolidated accounts also need to provide information regarding the group as a whole in the annual report.
Additional requirements for businesses not classified as small businesses (large businesses):
An extensive review of the annual accounts and the basis for the financial information provided. Information regarding any extraordinary conditions that may have affected the profit and loss account. If any event that has occurred subsequent to the end of the financial year is of importance to the financial position and result, such an event must be discussed.
Information that provide a basis for assessing the future development of the business.
A well balanced and extensive review of the position and the result, including a description of the most important risk factors the business is facing. For instance, financial performance indicators, environmental factors and working environment can be discussed.
The business’ exposure to grave financial risk, market risk, credit risk and liquidity risk need to be discussed.
Businesses obliged to accounting that prepare the consolidated accounts also need to provide information regarding the group as a whole in the annual report. The annual report needs to be signed by all members of the board as well as by the general manager. For businesses that have neither a board, nor a general manager, the partners (owners) or members must sign.