regnskapsprinsippet

Regnskapsprinsippet is a central concept in Norwegian accounting that governs how financial information is recognized and reported in financial statements. In practice, it is commonly understood as the accrual-based principle: revenues and expenses are recognized in the period to which they relate, regardless of when cash is received or paid. The principle aims to present a faithful and timely representation of an entity’s economic activity, enabling users to assess performance, liquidity, and solvency.

The accrual basis under regnskapsprinsippet means that income is recognized when it is earned and expenses when they are incurred, not when the corresponding cash flows occur. This extends to the recognition and measurement of assets, liabilities, provisions, depreciation, and the amortization of intangible assets. The principle supports comparability over time and between entities, and it interfaces with other fundamental concepts such as going concern, consistency, prudence, and materiality.

In Norway, regnskapsprinsippet is applied in statements prepared under the Regnskapsloven (Accounting Act) and in financial reporting frameworks adopted in Norwegian GAAP, including IFRS for certain entities. The principle underpins the preparation of financial statements that reflect economic reality, enabling stakeholders to assess profitability, financial position, and cash flows.

Limitations of the principle arise from the use of estimates and judgments in areas such as impairment, provisions, and fair values. Policies must be disclosed, and consistency in applying accounting methods is important for comparability. While highly influential, the regnskapsprinsippet operates within the broader regulatory and standards environment and may evolve with changes in law and international accounting standards.