Regulatory Alerts2026-05-06
Decision on Notice to Netcompany Group A/S Regarding the Half-Year Report for the First Half of 2025
The Danish Business Authority issued a formal notice to Netcompany Group A/S regarding deficiencies in its first half of 2025 half-year report prepared under IAS 34 and Danish listing rules. The Authority found that while the company's inability to finalize the initial accounting for its July 2025 acquisition of SDC A/S justified omitting specific IFRS 3 disclosures, the report failed to explicitly state which disclosures were missing and the precise reasons for their omission as mandated by IFRS 3 paragraph B66. Consequently, the Authority requires Netcompany to provide a detailed explanation identifying the exact unprovided information and the specific accounting uncertainties preventing its disclosure.
Decision 04-05-2026 As part of the financial statement review of listed companies, the Danish Business Authority has conducted a review of the half-year report for Netcompany Group A/S for the first half of 2025. The half-year report has been prepared in accordance with IAS 34 as well as additional Danish disclosure requirements for listed companies.
The Authority's review of the half-year report led to the Authority raising the following matters.
The Authority's review also covered several other matters, although the Authority did not find any breaches of IFRS or the Half-Year Report Decree.
Missing information preventing the company from providing all required disclosures in accordance with IFRS 3, paragraph B64, cf. B66
The company's half-year report states that on 1 July 2025, the company completed the transaction to acquire SDC A/S through a merger with its subsidiary Netcompany Banking Services A/S, after which the company holds 100% of the voting rights and share capital of the former SDC A/S. The previous shareholders of SDC A/S thus received cash consideration for their shareholdings and are not shareholders in the continuing entity.
The consideration is stated in the half-year report to be 1 billion DKK.
It is further stated that the initial accounting treatment was not completed at the time of publication of the half-year report on 14 August 2025. The half-year report does not contain a description of the reasons why the initial accounting treatment was not completed at the time of publication of the half-year report.
The company informed the Authority that upon a closer review following the acquisition date on 1 July 2025, it became aware of a number of accounting matters at SDC A/S, after which the recorded balance sheet was not assessed as fairly presented in accordance with the requirement thereof in IAS 1. This led to a more extensive review of balance sheet accounts than anticipated. The work was carried out over a period of 3 months.
At the time of publication of the half-year report for the first half of 2025, the preliminary investigations indicated a need for significant changes to both balance sheet recognition and the income statement, making it impossible to publish figures in the half-year report for the first half of 2025 that met the quality requirements of IFRS.
As a result of the extensive work on the opening balance sheet, it is the company's assessment that the basis for providing users of financial statements with fairly presented financial information as defined in IAS 1 regarding the merger with SDC A/S, as well as the relevant information concerning the opening balance sheet in accordance with IFRS 3, was not present in connection with the preparation of the half-year report for the first half of 2025. The company assessed that the risk of providing information that was not complete, neutral, and free from error was too high in light of the significant accounting uncertainties associated with the review of the accounting practices for SDC A/S.
The company therefore stated the following in the half-year report:
” SDC’s closing balance and thereby also the initial accounting for the business combinations is incomplete at the time of reporting Q2 2025. ”.
IAS 34, paragraph 16A(i), states that in the case of business combinations, the company must provide the disclosures required in accordance with IFRS 3.
In accordance with IFRS 3, paragraph B66, the acquirer shall provide the disclosures required in IFRS 3, paragraph B64, if the acquisition date of a business combination falls after the end of the reporting period but before the financial statements are authorized for issue, unless the initial accounting for a business combination is not completed by the time the financial statements are authorized for issue. In this situation, the acquirer must, however, describe which disclosures could not be provided and the reasons therefor.
Authority's Assessment Based on the company's description, the Authority does not dispute that the company was unable at the time of publication of the half-year report to provide all the disclosures regarding the business combination required in accordance with IFRS 3, paragraph B64.
However, it is a requirement in accordance with IFRS 3, paragraph B66, that if the company is unable to provide all the disclosures in accordance with IFRS 3, paragraph B64, the company must describe which disclosures cannot be provided and the reasons why the disclosures cannot be provided.
The fact that the company merely states that the initial accounting treatment of the acquisition balance sheet was not completed prior to the publication of the half-year report is, in the Authority's assessment, not sufficient to meet the requirement in IFRS 3, paragraph B66.
In the Authority's assessment, IFRS 3, paragraph B66, requires the company to specifically describe the reason why the company cannot provide the disclosures required in accordance with IFRS 3, paragraph B64.
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