Revenue – how to calculate the drop in revenue

In order to receive subsidies, the enterprise must have had a drop in revenue.

Read on to learn how you calculate the drop.

At least 30 percent in

In order to receive subsidies, the drop in revenue must have been at least 30 percent. For the month of March, the drop in revenue must be at least 20 percent in order to qualify for a subsidy.

How to calculate the drop for the subsidy-month

In order to determine the drop in revenue, you must compare the enterprise’s actual revenue in the subsidy-month in 2020 to the enterprise’s estimated normal revenue for the subsidy-month. The drop in revenue is the difference between the estimated normal revenue and the actual revenue, divided by the estimated normal revenue.

Use these amounts

Actual revenue for the subsidy-month: For the subsidy-month in 2020, you must enter the income from sale of goods that have been supplied and services that have been rendered, even though they are not invoiced. The sale of goods and services must be within industries that are covered by the scheme in Norway.

If you are receiving benefits in the form of subsidies, support or other payments for the same month for which the enterprise has applied for a subsidy in this scheme, you must include these benefits in your application. This could be for example benefits from NAV to compensate for loss of income, including compensation for self-employed persons and freelancers. The same applies to benefits from other subsidy schemes or insurance schemes, for example compensation to cover lost income from ticket sales and participant fees.

Do not include income or yield from capital, real property or other financial assets. However, rental income from real property is still considered revenue.

Estimated normal revenue for the subsidy-month

The estimated normal revenue consists of income from sale of goods that have been supplied and services that have been rendered in the same month as the subsidy-month in 2019, adjusted for the percentage growth in revenue from January and February 2019 to January and February 2020.

However, for the following enterprises the estimated normal revenue in the subsidy-month will be the average monthly revenue in January and February 2020:

  • Enterprises that were established less than one year before the subsidy-month
  • Enterprises that have restructured, for example in the form of a merger or demerger.
  • Enterprises that do not have any revenue in the same month as the subsidy-month in 2019
  • Enterprises that do not have revenue in January and February 2019, but that have revenue in January and February 2020

When estimating the percentage growth in revenue from January and February 2019 to January and February 2020, you can use accounting information relating to the revenue for these months. This is provided that the sales documentation has been issued and entered into the accounts in compliance with the provisions of the Bookkeeping Act, and that the accounting information will be used to determine revenue in all the months of January and February 2019 and January and February 2020.

Calculating the subsidy amount:

If the estimated normal revenue in the subsidy-month 2020 is assessed based on the revenue in subsidy-month 2019, the estimated normal revenue cannot be more than five times higher or less than 20% lower than the actual revenue. This rule applies from and including the month of April.

Use this formula to determine the drop in revenue:

The revenue drop (in %) for enterprises established in March 2019 or earlier =

Example calculation of a drop in revenue for enterprises that were established in the same month in 2019 for which the subsidy application is now submitted

Enterprise A has had the following revenue:
January 2019: NOK 40,000
February 2019: NOK 60,000 (the average for January and February is NOK 50,000)
June 2019: NOK 70,000

January 2020: NOK 110,000
February 2020: NOK 90,000 (the average for January and February is NOK 100,000)
June 2020: NOK 20,000 from the sale of goods and services, including a subsidy of NOK 5,000 relating to the virus outbreak.

 

As the drop in revenue is over 30%, enterprise A may apply for a subsidy for March 2020.

Use this formula to determine the drop in revenue:

(Average revenue in Jan-Feb 2020 – Income from the sale of goods and services in the subsidy-month 2020, including other corona-related subsidies) / Average revenue in Jan-Feb 2020

Example calculation of a drop in revenue for enterprises that were not established in the same month in 2019 for which the subsidy application is now submitted:

Enterprise B was established in September 2019. The enterprise has had the following revenue in these months:

January 2020: NOK 220,000
February 2020: NOK 180,000 (average in January and February = NOK 200,000)
June 2020: NOK 170,000
Enterprise B has not received any other subsidies for June 2020 relating to the virus outbreak

(200,000 – 170,000) / 200,000 = 15%

As the drop in revenue is less than 30%, enterprise B may not apply for a subsidy for June 2020.

Do you have any questions?