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Sweden

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Financial reporting framework in Sweden

Adoption of IFRSs in Europe effective in 2005

In June 2002, the European Union adopted an IAS Regulation requiring European companies listed in an EU securities market, including banks and insurance companies, to prepare their consolidated financial statements in accordance with IFRSs starting with financial statements for financial year 2005 onwards. EU countries have the option to:

  • Require or permit IFRSs for unlisted companies.
  • Require or permit IFRSs in parent company (unconsolidated) financial statements.
  • Permit companies whose only listed securities are debt securities to delay IFRS adoption until 2007.
  • Permit companies that are listed on exchanges outside of the EU and that currently prepare their primary financial statements using a non-EU GAAP (in most cases this would be US GAAP) to delay IFRS adoption until 2007.

The European IAS regulation applies not only to the 28 EU Member States but also to the three members of the European Economic Area (EEA) - Iceland, Liechtenstein, and Norway.

Sweden is an EU Member State. Consequently, Swedish companies listed in an EU/EEA securities market follow IFRSs since 2005. The European Commission (EC) periodically issues a document which summarises the use of options of the IAS Regulation by European Union Member States. For information on each country's plans, click to access:

The European Commission has adopted the following wording for use in the notes to the accounts and in the audit reports of companies subject to EU Regulation 1606/2002/EC (the 'IAS regulation'):

  • "in accordance with International Financial Reporting Standards as adopted by the EU" or
  • "in accordance with IFRSs as adopted by the EU".

Companies may also state, in a footnote, compliance with IFRSs as adopted by the IASB, if that is the case.

Accounting laws

The accounting legislation in Sweden consists of mandatory accounting acts, the Annual Accounts Act of 1995 and the Book-keeping Act of 1999 being the most important ones. Both the Annual Accounts Act and the Bookkeeping Act are general frameworks for accounting and both acts refer to 'generally accepted accounting principles'.

The Annual Accounts Act is based on the EC Fourth, Seventh, and Eleventh Directives. Credit institutions, brokers and dealers in securities, and insurance companies are covered by two special accounting acts.

Swedish Accounting Standards Board

Bokforingsnamnden, BFN (The Swedish Accounting Standards Board) is a governmental body with the main objective of promoting the development of, in Sweden, generally accepted accounting principles regarding current recording as well as the setting up of annual accounts.

The Board issues general advice and information material on accounting matters and accounting practices. Finansinspektionen (The Swedish Financial Supervisory Authority) is responsible for issuing standards required for financial companies.

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.