Dutch Bookkeeping

Dutch Bookkeeping Holland

Dutch GAAP

Dutch Bookkeeping typically falls under the purview of the Dutch GAAP guidelines prevalent in the Netherlands. These are broad frameworks that are considered compulsory for businesses to follow and implements, in their financial management practices. At a working level, most of the accounting procedures and rules that comprise the Dutch GAAP are based on the directives of the European Union Community. Dutch Bookkeeping guidelines apply to all business entities, including BVs, NVs, partnerships, and other types of businesses. However, there are special rules that apply to the NV entities; these include stock listed companies, financial institutions and insurance companies. BV, in this case, refers to Dutch private limited liability companies while NV represents public companies owned by shareholders, whose shares are traded on the public market or public stock exchanges.

IFRS

After the incorporation of the amendments since 2005, the principal framework implemented by the European Union, called the IFRS (International Financing Reporting Standards) apply to all listed companies registered or operating within the European Union, including insurance companies or financial institutions in the Netherlands. The Dutch Bookkeeping regulations, compliant to the Dutch GAAP, is continuously adapted to the International Financing Reporting Standards.

Dutch Bookkeeping regulatory frameworks

Certain aspects of the Dutch Bookkeeping regulatory frameworks include rules that: all financial information provided by companies must be relevant, clear, reliable and comparable, and be compliant to the accounting principles. The financial statements issued by each company as a part of bookkeeping in Holland must accurately and transparently reflect the company’s position in relation with the principles mentioned above.

All BV and NV entities must issue an annual balance sheet and profit and loss account statement together with notes elucidating all particulars contained therein, as per the Dutch Bookkeeping regulations. Balance sheets contain a company’s assets, liabilities and shareholder’s equity at a specific moment in time. As per the Dutch bookkeeping laws prevalent in Holland presently. These segments reflect the company’s current financial scenario and give the investors an idea as to what the company owns and owes to others, as well as the amount invested by the shareholders and their current value. Profit and loss statements totalize the incomes and expenses covered by the company during a specific period of time, usually a fiscal quarter or year. These records provide information that shows a company’s ability to generate profit by increasing revenue and reducing costs. Dependent on the size of the company specific reporting regulations and exemptions apply. Companies are therefore distinguished into different categories according to size micro entities, small sized entities, medium sized entities and large entities.

The following conditions apply.

Total of assets                              < € 350.000 < € 6.000.000   < € 20.000.000
Total net turnover                       < € 700.000 < € 12.000.000 < € 40.000.000
Average number of employees < 10             < 50                    < 250

For companies exceeding this criteria conditions: category large applies. For companies where any two of the three criteria mentioned are applicable for two consecutive years the category applies.

Accounting or bookkeeping in the Netherlands is usually conducted and regularly audited by the Chartered Accountants of the Netherlands. Since 2013, the NBA- the Netherlands Institute of Chartered Accountants, is the principal professional association for bookkeeping professionals in the Netherlands.

While not all BV’s are mandated to publish their financial statements, all accounting records should be maintained for a period of 7 years in any country and in any currency. All Dutch bookkeeping financial statements maintained and published by BVs and NVs in the Netherlands must comply with the guidelines set under Dutch GAAP or IFRS, as per the requirements of the bookkeeping system in the Netherlands. Accordingly, holding companies are required to prepare consolidated audited financial statements on an annual basis. However, consolidation of all statements by the bookkeeping system in Holland is not required if the company is an intermediary holding company and a holding company that has a position higher in the hierarchical structure prepares consolidated financial statements under the approved Dutch bookkeeping standards in the Netherlands.