New K2 and K3 rules in Sweden: what companies should know from 2026

For many smaller companies in Sweden, K2 has been the simpler and more commonly used framework for annual reports. K3 is more detailed and is often used by larger or more complex companies. From 2026, changes introduced by the Swedish Accounting Standards Board (Bokföringsnämnden) will affect which companies and organisations may use K2, as well as what companies need to consider when preparing annual accounts. 

If your company prepares annual accounts in Sweden, this is an area worth reviewing ahead of the next year-end.

What are K2 and K3?

K2 and K3 are Swedish accounting frameworks used when preparing annual accounts.

K2 is a simplified, rules-based framework. It is often used by smaller companies because it is easier to apply and requires fewer judgements.

K3 is the main principles-based framework. It is more extensive and requires more analysis, documentation and accounting judgements.

Which framework is right depends on the type of business, its size, complexity and legal requirements.

What changes from 2026?

The Swedish Accounting Standards Board (Bokföringsnämnden) has introduced changes to the K2 and K3 rules that apply to financial years beginning after 31 December 2025. 

One of the most important changes is that certain companies and associations will no longer be able to use K2.

According to the Swedish Accounting Standards Board, companies and organisations that will no longer be permitted to apply K2 include, among others:

• housing co-operatives (bostadsrättsföreningar) and co-operative tenancy associations (kooperativa hyresrättsföreningar)

• companies with one or more branches abroad during the financial year

• companies that have held crypto-assets during the financial year, except where crypto has only been used or received on a single occasion as payment

• companies that have acquired goods or services in exchange for share-based remuneration, for example employee incentive programmes 

This means that some organisations that previously relied on the simpler K2 framework may need to switch to K3.

Why this matters for Swedish companies

Moving from K2 to K3 is not just a technical accounting issue. It can affect how assets, depreciation, provisions, disclosures and the company’s financial performance are presented in the annual accounts.

K3 often requires more detailed assessments and more documentation. For companies approaching year-end, it can become more stressful if the transition is left too late.

The change may also affect how external parties view the company. Banks, investors, board members and potential buyers often scrutinise annual accounts closely. A move to K3 can change how the company’s financial position is presented.

Specific impact on housing co-operatives

Housing co-operatives are one of the groups most affected by the new rules. The Swedish Accounting Standards Board states that housing co-operatives and co-operative tenancy associations must prepare annual accounts under K3 for financial years beginning after 31 December 2025. 

This is important because K3 often requires component depreciation for buildings. Instead of treating a building as a single asset, different parts of the building may need to be depreciated separately based on their useful lives.

For example, a roof, a lift, a heating system and a façade may have different useful lives. Under K3, this can create a more detailed and transparent picture of future maintenance costs.

For board members, property managers and members of housing co-operatives, this can make the annual accounts more informative, but also more complex.

Companies with crypto-assets should review their accounting

Another important change concerns crypto-assets. The Swedish Accounting Standards Board states that companies that have held crypto-assets during the financial year generally may not apply K2, except where crypto has only been used or received on a single occasion as payment. 

This is relevant for companies that:

• hold cryptocurrency as an asset

• accept payments in crypto

• trade crypto

• use crypto in business transactions

• invest company funds in digital assets

Accounting for crypto-assets can be complex because classification, valuation and documentation need to be handled correctly. Companies with crypto exposure should therefore review this ahead of the year-end.

Foreign branches and international companies

Companies with one or more branches abroad during the financial year may also be covered by the restriction and therefore may not use K2 under the new rules. 

This is particularly relevant for international entrepreneurs and Swedish companies expanding overseas.

If your Swedish company operates in another country, has foreign registration, local payroll, sales abroad or a branch structure, you should check whether K3 applies.

International operations often create additional accounting issues, including:

• foreign currency translation

• foreign tax reporting

• intra-group transactions

• risk of a permanent establishment

• consolidation issues

• VAT and cross-border invoicing

What should companies do now?

The best approach is to review which accounting framework the company uses before the financial year ends. If the company needs to move from K2 to K3, additional preparation may be required.

Key steps include:

1. Confirm which framework the company uses today

Check the latest annual accounts and the company’s accounting policies.

2. Review whether the company is still allowed to use K2

Consider crypto-assets, foreign branches, share-based remuneration and other complexity.

3. Assess the impact of a transition to K3

Identify which accounting areas may be affected.

4. Update the documentation

K3 often requires stronger documentation and more accounting judgements.

5. Plan the year-end work earlier

A transition to K3 can take longer than a standard year-end close.

Common mistakes to avoid

Many companies wait until the annual accounts are due to be prepared before checking whether K2 or K3 applies. That can create unnecessary time pressure.

Common mistakes include:

• assuming K2 can still be used because it was used last year

• missing accounting consequences related to crypto

• overlooking operations in foreign branches

• underestimating the documentation requirements under K3

• not updating accounting policies

• involving the board too late

The earlier you review the rules, the easier the transition will be.

Do you need help with K2 or K3 accounting in Sweden?

If your company is affected by the new K2 and K3 rules, professional accounting support can help you avoid mistakes and prepare the annual accounts correctly.

An accounting consultant can help you:

• assess whether K2 or K3 applies

• prepare a transition to K3

• review accounting policies

• manage the requirements for annual accounts

• document complex accounting areas

• co-ordinate bookkeeping, tax and annual reporting

For many companies, this is not just about compliance. It is also an opportunity to improve financial reporting and gain better insight into the business.

Summary

The changes to K2 and K3 from 2026 are important for companies and associations in Sweden. Companies with crypto-assets, foreign branches, share-based remuneration or a housing co-operative structure should review the rules well in advance.

Accounting rules can feel technical, but the practical message is simple: don’t wait until the year-end. Check which framework applies now, understand what affects your company, and prepare the documentation in good time.

Unsure whether your company can still use K2 or needs to move to K3? Contact us for accounting support in Sweden and we will help you prepare everything correctly.