Doing Business In Sweden - Significant Accounting Practices

Consolidated Accounts

Companies are required to consolidate all entities including partnerships in which they control, directly or indirectly, more than 50% of the votes.

Acquisitions of subsidiaries are generally accounted for by the purchase method. The great majority of Swedish consolidated accounts are prepared on this basis, but other methods are occasionally used. Under certain specific circumstances, the pooling-of-interests method is acceptable.

The Financial Accounting Standards Council's first recommendation pertain to the following consolidated accounting issues:

- Goodwill must be computed using the market value of all assets in the acquired company. It should be amortised against operating income either on a straight-line or a declining-balance method, preferably over 10 but no more than 20 years.