Annual accounts for groups
A parent company and one or more subsidiaries constitutes a group. In order to be considered a parent company, you must have a controlling influence in another company, either as the owner of shares or holdings or through another agreement.
Group accounting obligation
If you are a parent company in a group, you must also prepare consolidated accounts in addition to the company's annual accounts. These can be prepared by combining the accounts for the parent company and the subsidiaries. The aim is to show the group's position as a single financial entity. When preparing consolidated accounts, all transactions between the parent company and the subsidiary must be removed (eliminated) from the accounts.
Exceptions from the obligation to prepare consolidated accounts
Enterprises which are covered by the Accounting Act's definition of a small enterprise do not generally need to prepare consolidated accounts. It is the group collectively which must be covered by the definition of a small enterprise to utilise this exception.
A parent company will also not be obliged to prepare consolidated accounts if:
- The subsidiaries, both individually and collectively, are o of immaterial importance to the enterprise.
- The subsidiaries are acquired with the aim of temporary ownership and are held pending a sale
- It is particularly difficult and disproportionately costly to collect information about the subsidiary within a reasonable timeframe
The exception also applies where there are severe and longstanding limitations that are of significant hinderance to the parent company in exercising its rights.
In addition, the obligation to prepare consolidated accounts also does not normally apply to enterprises which are subject to the accounting obligation which are themselves a subsidiary. It is a condition that the parent company is granted a dispensation from the requirement of preparing consolidated accounts if the parent company is not domiciled in an EEA State.
What must be submitted?
When the enterprise is a parent company in a group and subject to the obligation to prepare consolidated accounts, you must enclose the following documents with the annual accounts for the enterprise:
- Consolidated income statement
- Consolidated balance sheet
- Notes to the consolidated accounts
- Consolidated cash flow statment
- Audit report for the group (if required to have an auditor)
- Consolidated annual report
- Decision on exemption from the Norwegian Directorate of Taxes if the annual financial statements are not in Norwegian.
