Dictionary

What is an annual report?

An annual report is the company’s consolidated report for a financial year. It shows how the finances have developed and gives owners, investors, creditors and other stakeholders a shared overview of the company’s position.

The annual report is both a legal requirement for many companies and an important management tool. It brings together the key information on profit and loss, the balance sheet, notes and management’s review of the past year.

In brief

The annual report explains the company’s financial year.

An annual report is a consolidated account of a company’s financial position and activities in the past financial year. It provides a detailed overview of the company’s income, expenses, assets, liabilities and equity.

1 Shows the year’s result and financial performance.

2 Documents assets, liabilities and equity at the balance sheet date.

3 Makes information available to authorities and stakeholders.

Contents

What does an annual report typically include?

An annual report varies by company size and reporting class, but it will typically consist of several standard sections that together provide a picture of the company’s finances and development.

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Management review

Explains the company’s activities, development, strategy and material matters during the year.

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Income statement

Shows the year’s income, expenses and the overall result for the period.

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Balance sheet

Shows assets, liabilities and equity at the balance sheet date.

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Cash flows

An overview of cash flows in and out of the business, where relevant.

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Notes

Additional explanations and details behind the figures in the accounts.

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Endorsements

Management statement and any auditor’s statement confirming the report has been prepared.

Why the annual report is used.

The annual report has both a practical and a legal purpose. It is used as documentation, as a basis for decisions, and as part of the company’s statutory reporting.

Purpose

Documents the company’s financial result for the financial year
Provides insight into the company’s financial position and development
Ensures transparency for investors, lenders, and partners.
Supports investment and financing decisions

Danmark

Requirements and rules

In Denmark, all limited liability companies, including ApS and A/S, are required to submit annual reports to the Danish Business Authority.

The requirements depend on accounting class A, B, C or D
Smaller companies can produce a simpler report
Larger companies typically need to produce more comprehensive disclosures
The report is a core part of the company’s formal financial reporting.

Put it into practice

Assessment of the company’s financial health
Dialogue with the bank, investors and creditors
Internal follow-up on progress and key metrics
Communication of results and plans to owners and stakeholders

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