09-01-2020

Accounting and reporting requirements in The Netherlands

Accounting and reporting requirements in The Netherlands

The Dutch Civil Code requires that the management of a company prepares and subsequently presents several business information from profit and loss to cash flow statements. Learn more about preparation of annual accounts in The Netherlands.

Preparation of annual accounts

The Dutch Civil Code requires that the management of a company prepares and subsequently presents to the shareholders/board of directors:

  • Balance sheet and profit and loss account with explanatory notes thereon;

  • Cash flow statement (for medium-sized and large companies);

  • Annual (Directors') report (unless the group exemption applies or in case the company is classified as small);

  • Other information such as the audit report and a statement of post-balance sheet events which have material financial consequences for the company and the companies included in its consolidated annual accounts, together with a guesstimate of the amount in euro.

Accounting principles

The annual financial statements and the notes required, together with the information required to be included in the annual report of the directors as well as the supplementary information should be prepared in accordance with Dutch general accepted accounting principles.

These principles include:

  • part 9, Book 2 of the Dutch Civil Code;
  • case law;
  • the authoritative statements included in the Guidelines for Annual Reporting in the Netherlands issued under the responsibility of the Council for Annual Reporting;
  • if applicable, the special requirements from regulatory and supervisory bodies relating to financial statements.

Companies may apply other principles, like:

  • International Financial Reporting Standards;
  • the framework of principles and guidelines as accepted by the European Commission or comparable standards.

Listed companies are obliged to prepare the annual accounts in accordance with International Financial Reporting Standards.
The legislation in respect of annual accounts and annual reports applies to cooperatives, mutual insurance societies and public and private companies with limited liability as well as partnerships, in which foreign, public and private companies are all fully liable partners.
Annual financial statements (annual accounts) are defined as the balance sheet and the profit and loss account with explanatory notes.
The figures in the annual accounts should normally be expressed in Euros but, if the activities justify it, a foreign currency may be used.
Unless the general meeting has resolved to use another language the accounts must be in Dutch.

Publication of accounts

The company must publish its annual accounts within eight days after adoption. Publication is carried out by depositing a copy at the office of the Chamber of Commerce of the district in which the company has its office. The date(s) of adoption and approval must be shown on the copy filed. Information that has to be included in the annual accounts depends on the size and type of the company. A distinction is made between:

  • Micro, small, medium-sized and large companies;

  • Group companies;

  • Insurance companies;

  • Credit institutions.

Companies are categorized as small or medium-sized if during two consecutive financial years they have not exceeded at least two of the following three figures:

Micro

Small

Medium-sized

Total assets

< € 350.000

< € 6.000.000

< € 20.000.000

Net turnover

< € 700.000

< € 12.000.000

< € 40.000.000

Averige number of employees

< 10 persons

< 50 persons

< 250 persons

Small

Medium-sized

Total assets

< € 4.400.400

< € 17.500.000

Net turnover

< € 8.800.000

< € 35.000.000

Averige number of employees

< 5 persons

< 250 persons

These figures include the figures of subsidiaries on a consolidated basis. They do not apply to insurance companies and credit institutions. Documents to be filed are:

  • Large companies: full balance sheet, full profit and loss account, cash flow statement and notes thereon, annual report and other information;

  • Medium-sized companies: limited balance sheet, limited profit and loss account, cash flow statement and notes thereon, annual report and other information;

  • Small companies: summary of balance sheet and notes thereon.

If the company has subsidiaries, consolidated group accounts should be included. The language used for publication at the Trade Register must be Dutch, English, French or German.

Consolidation principles

The financial statements of group companies are required to be consolidated in group accounts and included in the notes to the annual report, unless the proper view is better served by the inclusion of the subsidiary financial statements separately under the notes (for instance where a subsidiary operates in a totally different industry).

A company which, solely or jointly with another group company, heads its group, must include consolidated accounts for the group.

Basis of consolidation

In general group companies are consolidated on a full consolidation basis. However, the financial information may be included pro rata to the interest held therein. In the consolidated accounts the shareholders' net equity does not need to be separately categorized. Under restricted circumstances other valuation methods and bases for the calculation of the results may be applied than those applied by the company’s corporate accounts.

The reasons, which must be justified, must be shown in the accounts. Any difference between the shareholders' equity shown in the statutory balance sheet and the consolidated balance sheet and between the results after tax must be explained. The consolidated accounts may never be prepared on the basis of information prepared more than three months prior to or after the balance sheet date of the parent. The results of subsidiaries acquired during the year have to be processed in the group results as far as the results have been realized after acquisition.

Audit requirements

In principle all companies other than those classified as small are required to be audited. The auditor ascertains whether the financial statements, annual accounts and the annual report, are drawn up in accordance with the law and give the required insight into the capital, the results and in so far the nature of the annual accounts permits the solvency and liquidity of the company. Under certain conditions, group companies are exempt from this obligation.

The auditor must examine whether the financial statements provide the required legal disclosures and whether the financial statements, the directors’ report and other information comply with the statutory requirements. It should also be verified that the directors’ report does not conflict with the financial statements. In principle the auditor is appointed each year by the shareholders and reports to them and the management on the reliability of the annual financial statements.

For actual advice please contact KroeseWevers
015 L8964 bewerkt
Eric Hutten RA
Director of Audit
Send an email +31 (0)5 38 50 49 45
More information? +31 (0)53 850 49 00
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