Annual accounts and annual report

A financial year is the annual period for which a company is required to prepare annual accounts or an annual report.

Businesses which start up after 1 July may have an extended first financial year (up to 18 months), such as 1 July 2007 - 31 December 2008.

Sole traders and trading partnerships in which no partner is a legal person may only have the calendar year as their financial year.

Limited companies and economic associations may choose either the calendar year or a split financial year.

Annual accounts

The annual accounts are a compilation and closure of the financial year's accrual accounting. The compilation takes the form of a profit and loss account and a balance sheet.

The profit and loss account must show correct details of income and expenditure for the period, i.e. the financial year. The balance sheet is a summary of the company's wealth, assets, liabilities and equity at the balance sheet date.

Annual report

An annual report consists of a profit and loss account, a balance sheet and a directors' report. The auditor, if the company has one, then examines the annual report and submits an audit report. The profit and loss account must show correct details of income and expenditure for the period, i.e. the financial year. The balance sheet is a summary of the company's wealth, assets, liabilities and equity at the balance sheet date.

Unlike the annual accounts, the annual report is a public document. The Swedish Companies Registration Office is the authority where companies' annual reports are filed and registered. On payment of a fee, you can obtain annual reports and other public information from the authority's Trade and Industry Register.

Sole traders are required to prepare annual accounts at the end of the financial year. Partnerships with an annual turnover which does not exceed SEK 3 million are permitted to submit simplified annual accounts.

Trading partnerships in which the partners are all natural persons are required to prepare annual accounts at the end of the financial year. Trading partnerships with an annual turnover which does not exceed SEK 3 million are permitted to submit simplified annual accounts.

Trading partnerships in which one or more legal persons are partners are always required to prepare an annual report which is submitted to the Swedish Companies Registration Office. In some cases they must engage an approved or authorised public accountant to serve as auditor.

Limited companies must always engage an approved or authorised public accountant to serve as auditor, and are required to prepare an annual report which is submitted to the Swedish Companies' Registration Office. However, small companies may choose not to have an auditor.

Economic associations must always engage an auditor, and are required to prepare an annual report. The auditor shall possess the knowledge and experience of accounting and finance which are required for the performance of the engagement. The annual report shall be submitted to the Swedish Companies Registration Office if the authority so requests.