Control balance sheet – valuation of assets and liabilities
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Fact-checked: October 1, 2026 · Swedish law
A control balance sheet begins with the company's financial statements, but the Swedish Companies Act allows for certain specific valuation adjustments. This does not mean that the board is free to choose the highest possible market value. The adjustments must fall within the scope of Chapter 25, Section 14 of the Swedish Companies Act and be consistent with generally accepted accounting principles.
The starting point: standard accounting first
The company's ongoing accounting, closing of accounts documentation, and applicable accounting frameworks are the starting point. A control balance sheet is therefore not an independent "market value balance sheet." The difference is that the Swedish Companies Act permits certain adjustments that may result in a different capital structure than the ordinary balance sheet.
Which valuation adjustments are permitted?
According to Chapter 25, Section 14 of the Swedish Companies Act, the following may, among other things, be performed:
- assets may be recorded at a higher value and provisions or liabilities at a lower value than in the ordinary financial statements, provided that the valuation principles are consistent with generally accepted accounting principles,
- assets may be recorded at net realisable value,
- certain liabilities arising from government support may be omitted under specific legal conditions.
It is therefore not accurate to say generally that "all assets may be written up to fair value." Every adjustment must have legal and accounting-related support.
Common items in practice
Properties, machinery, and equipment
If an asset has a documentable value higher than the reported value, an adjustment may in some cases be possible. The assessment must be made according to the framework of the law and generally accepted accounting principles. Supporting evidence could, for example, be an independent appraisal, market data, agreements, or other verifiable information.
Inventory
Inventory should not be automatically increased simply because a sales price is higher than the book value. When using net realisable value, sales costs and actual realisability need to be taken into account. Obsolescence and damage may, at the same time, indicate a lower value.
Accounts receivable
Receivables must be assessed based on what can actually be expected to be collected. Uncertain or disputed receivables cannot simply be recorded at the full nominal amount. Therefore, document the customer's ability to pay, disputes, and other relevant circumstances.
Intangible assets
The older version of this article gave the impression that trademarks, patents, and other intangible assets can generally be "revalued" when their value has risen. It is not that simple. Accounting for intangible items is strictly regulated. A possible adjustment must be assessed against both Chapter 25, Section 14 of the Swedish Companies Act and the accounting framework the company applies.
Liabilities and provisions
Liabilities may not be reduced simply because the company hopes to negotiate better terms. If an item is recorded at a lower value than in the ordinary financial statements, there must be support for the valuation, and it must be consistent with generally accepted accounting principles.
How are untaxed reserves handled?
The Swedish Companies Act explicitly states that untaxed reserves must be divided into equity and deferred tax liabilities in the control balance sheet. The older text described untaxed reserves as if they were accumulated distributable profits. That was incorrect and has now been removed.
Adjustments must be reported separately
Chapter 25, Section 14 of the Swedish Companies Act requires that adjustments be reported separately. It is therefore useful to work with a column structure that shows the ordinary reported value, the control balance sheet adjustment, and the value in the control balance sheet, as well as a clear reference to the supporting documentation.
| Item | Ordinary value | KBR adjustment | KBR value | Documentation |
|---|---|---|---|---|
| Example: property | Reported value | + documented adjustment | Adjusted value | Valuation evidence |
| Example: accounts receivable | Nominal/reported | − uncertain portion | Estimated value | Ledger/dispute |
Read more about the documentation in Control balance sheet – evidence, notes, and appendices.
Common mistakes
- Treating the control balance sheet (KBR) as a free market valuation.
- Increasing values without verifiable evidence.
- Selectively mixing K2 and K3 rules to obtain a better result.
- Forgetting deferred tax on untaxed reserves.
- Failing to report KBR adjustments separately.
- Focusing on assets but missing uncertain receivables, provisions, or other negative items.
For the difference between the frameworks, see Control balance sheet in K2 and K3.
The Template Store's Control Balance Sheet Template – Without Auditor costs 49 SEK and can be used as a structured work paper for companies that do not have an elected auditor. The valuations must always be adapted to the individual company.
