Good accounting practice (god regnskapsskikk)

God regnskapsskikk — literally "good accounting practice" — refers to the recommendations and norms that supplement the rules laid down in Norwegian legislation and regulations, in particular the Accounting Act (regnskapsloven) and the Bookkeeping Act (bokføringsloven). It is a legal standard in Norwegian accounting law rather than a codified rulebook, and it is not the same thing as UK or US GAAP, although it plays a comparable role: it means following the basic accounting principles set out in the Act, together with the accepted practice and norms developed by accounting professionals. The Norwegian Accounting Standards Board (Norsk RegnskapsStiftelse, NRS) prepares its own accounting standards as part of god regnskapsskikk.

Why does god regnskapsskikk matter?

Following god regnskapsskikk ensures that the accounts give a correct picture of the company's financial situation. That matters for maintaining trust among investors, creditors and other stakeholders. It also helps to avoid errors that can lead to liability and costs for the business. God regnskapsskikk makes it possible to adapt accounting practice to new economic conditions and transactions that are not necessarily regulated in detail in the legislation.

How do you practise god regnskapsskikk?

To practise god regnskapsskikk, you should follow these guidelines:

1. Follow the basic principles: Make sure that all accounting information is recorded and that the annual accounts are prepared in line with the basic principles of the Norwegian Accounting Act.
2. Use the Norwegian Accounting Standards: Follow the topic-based accounting standards prepared by Norsk RegnskapsStiftelse, covering among other things inventory, pension costs and public grants.
3. Keep up to date: Economic conditions and transactions change. Make sure you keep track of new norms and recommendations from accounting bodies such as NRS and the Financial Supervisory Authority of Norway (Finanstilsynet).
4. Be accurate and document everything: Avoid common mistakes, such as mixing up purchases of office supplies with fixtures and fittings, or losing receipts. Be careful with documentation, and record all transactions in good time.