Which Companies May Apply This Standard?

🏢 Small Companies (K2 Standard)

Companies that meet size criteria for simplified reporting:

  • Average number of employees during the year: max 50
  • Balance sheet total: max 40 million SEK
  • Net turnover: max 80 million SEK

Note: Must meet at least 2 of the 3 criteria for 2 consecutive years

📊 What K2 Standard Includes

  • Simplified accounting rules
  • Reduced disclosure requirements
  • Streamlined annual report format
  • Less complex valuation methods
  • Simplified consolidated accounts (if applicable)

Annual Report Components

📋 Management Report

Required for all companies. Must include:

  • Description of the business
  • Significant events during and after year-end
  • Expected future development
  • Research and development activities
  • Information about branches

💰 Income Statement

Shows company performance over the year:

  • Operating revenue
  • Operating expenses
  • Financial items
  • Extraordinary items (if any)
  • Tax expense
  • Net income for the year

🏦 Balance Sheet

Shows financial position at year-end:

  • Fixed assets
  • Current assets
  • Equity
  • Provisions
  • Long-term liabilities
  • Current liabilities

📝 Notes

Additional information and explanations:

  • Accounting principles applied
  • Breakdown of major balance sheet items
  • Commitments and contingencies
  • Related party transactions
  • Events after balance sheet date

Annual Report Preparation Timeline

1

January-February

  • Close year-end bookkeeping
  • Prepare year-end adjustments
  • Verify all transactions recorded
  • Calculate depreciation
2

March-April

  • Prepare draft annual report
  • Review with management/board
  • Conduct any necessary audit
  • Make final adjustments
3

May

  • Board/shareholder approval
  • Sign annual report
  • File with Companies Registration Office
  • Submit tax return

📋 Recent Regulatory Updates (2025)

Economic Associations - New Requirements

Starting with the 2025 financial year, all economic associations must submit a copy of their annual report to the Companies Registration Office. This requirement now applies the same rules that previously only applied to public limited companies and certain trading companies.

Fundamental Accounting Principles

Materiality Principle

Information should be included if its omission or misstatement could influence economic decisions

Going Concern Principle

Assume the company will continue operating in the foreseeable future

Consistency Principle

Apply accounting methods consistently from period to period

Prudence Principle

Exercise caution in recognition of income and expenses

Accrual Principle

Record transactions when they occur, not when cash changes hands

Individual Valuation

Value assets and liabilities individually