New Bookkeeping Act – changes already from July 1, 2022
On May 19, 2022, the Danish Parliament passed a new Bookkeeping Act. The new law will, in the long term, affect all companies in Denmark.
Most companies are already affected from July 1, 2022 by the new law.
Below we have listed the most important changes for companies in accounting classes B and C.
The companies placed in the two accountingclasses include companies with limited liability – e.g., private limited companies (ApS) and limited liability companies (A/S) and which for two consecutive years do not exceed two of the following limits:
| Class B | Class C – medium | Class C – large | |
| Turnover | DKK 0-89 million | DKK 89-313 million | dkk >313 million. |
| Balance sheet total | 0-44 million dkk | DKK 44-156 million | >156 million DKK |
| Number of employees | 0-50 | 50-250 | >250 |
The main changes are:
1. The definition of accounting material has been expanded so that documentation of information must now be stored for the notes to and the management’s review in the annual report. An example of this may be information on the average number of employees. The same applies to accounting estimates, such as impairment of debtors or depreciation periods and scrap values for fixed assets. The information must be stored digitally for at least five years.
2. According to the new law, companies must prepare descriptions of systems and processes for the execution of the bookkeeping. The descriptions shall include:
- the company’s procedures to ensure that all the company’s transactions are recorded on an ongoing basis
- the company’s procedures to ensure that the company’s accounting records are kept in a safely manner
- information about the staff who is responsible for the procedures
The descriptions must be kept for a minimum of five years, as they are part of the company’s accounting material.
3. Requirements are introduced for the preparation of reconciliations of the bookkeeping, to ensure a continuously sufficiently updated bookkeeping for use in relation to reporting of VAT, taxes, duties, and annual reports etc.
No later than the expiry of the deadline for reporting e.g., VAT, it is now a requirement that necessary reconciliations of the bookkeeping must have been prepared.
Necessary reconciliations include reconciliation of bank accounts, debtors, creditors, etc.
4. From January 1, 2024 at the earliest, the company must use a bookkeeping system that meets the requirements for digital bookkeeping systems in the new Danish Bookkeeping Act and which is registered with the Danish Business Authority.
It also introduces a requirement that vouchers/invoices must be stored digitally in the bookkeeping system.
Own developed bookkeeping systems can be used without any registration, provided that the system meets the requirements of the Danish Bookkeeping Act. If a self-developed system is used, it is the company’s own responsibility to ensure that the bookkeeping system meets the requirements in the law.
Please note that the company’s records and attachments must be stored digitally on a server of a provider or of a third party. Alternatively, a full backup copy must be kept with a third party. Thus, it is not sufficient for the company to keep digital records and digital documents on its own.
At present, it is uncertain whether the law will have effect for companies with year-end as of June 30, 2022 or it will only take effect for financial years starting January 1, 2023 and later.
The Danish Business Authority is expected to provide further guidance in relation to this as soon as possible.
We will continuously keep you updated in relation to the new requirements that the new Bookkeeping Act entails.
If you have questions about the new Bookkeeping Act, please contact your daily accountant for further information.
