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 April

In order to receive subsidies, the drop in revenue must have been

  • at least 20 percent if you apply for a subsidy for March
  • at least 30 percent if you apply for a subsidy for April or May

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.

Which amounts to use

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 you applied for a subsidy, 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 earlier than the subsidy-month
  • 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

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 for April:

If the estimated normal revenue in April 2020 is assessed based on the revenue in April 2019, the estimated normal revenue cannot be more than five times higher or less than 20% lower than the actual revenue.

Use this formula to determine the drop in revenue:

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

Example calculation of drop in revenue for enterprises established in March 2019 or earlier:

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

January 2020: NOK 110,000
February 2020: NOK 90,000 (the average for January and February is NOK 100,000)
March 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 20%, enterprise A may apply for a subsidy for March 2020.

Use this formula to determine the drop in revenue:

The revenue drop (in %) for enterprises established in April 2019 or later =

Example calculation of drop in revenue for enterprises established in April 2019 or later:

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

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

As the drop in revenue is less than 20%, enterprise B may not apply for a subsidy for March 2020.

Do you have any questions?