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Similarities and Differences Dutch GAAP Vs. IFRS www.pwc.nl Similarities and Differences Dutch GAAP vs. IFRS March 2018 At PwC, our purpose is to build trust in society and solve important problems. We’re a network of firms in 158 countries with more than 236,000 people. At PwC in the Netherlands over 4,800 people work together. We’re committed to delivering quality in assurance, tax and advisory services. Tell us what matters to you and find out more by visiting us at www.pwc.nl. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details. 2 PwC Similarities and Differences Dutch GAAP vs. IFRS Note: This publication is for those who wish to gain a broad understanding of the significant differences between Dutch GAAP and IFRS. It is not comprehensive. It focuses on a selection of those differences most commonly found in practice. When applying the individual accounting frameworks, entities should consult all of the relevant accounting standards and, where applicable, national law. While every effort has been made to ensure accuracy, information contained in this publication may not be comprehensive or may have been omitted that may be relevant to a particular reader. In particular, this publication is not intended as a study of all aspects of Dutch GAAP or IFRS or as a substitute for reading the standards and interpretations when dealing with specific issues. No responsibility for loss to any person acting or refraining from acting as a result of any material in this publication can be accepted by PwC. Recipients should not act on the basis of this publication without seeking professional advice. Similarities and Differences Dutch GAAP vs. IFRS 3 Contents Preface 6 1. Accounting framework and first-time adoption 9 1.1 Accounting framework 9 1.2 First-time adoption 14 1.3 Errors, change in accounting policies, change in estimates 16 2. Financial statements 19 2.1 Primary statements and notes 19 2.2 Separate financial statements 28 3. Business combinations, consolidated financial statements, and investments in associates and joint ventures 31 3.1 Business combinations 31 3.2 Consolidation 36 3.3 Equity accounting (Investments in associates and joint ventures) 41 3.4 Joint arrangements 44 4. Income and expenses 47 4.1 Income 47 4.2 Expenses 53 4.3 Government grants 54 4.4 Borrowing costs 55 4.5 Share based payments 56 4.6 Employee benefits 58 5. Financial instruments 61 5.1 Definitions, scope and classification 62 5.2 Measurement, impairment and derecognition 63 5.3 Hedge accounting 70 5.4 Impairments 74 6. Non-financial assets 77 6.1 Inventories 77 6.2 Property, plant and equipment 80 6.3 Investment property 83 6.4 Intangible assets other than goodwill 85 6.5 Impairment 88 4 PwC 7. Non-financial liabilities and equity 93 7.1 Provisions and contingencies 93 7.2 Equity 97 7.3 Employee benefits 100 7.4 Income taxes 103 8. Other topics 107 8.1 Leases 107 8.2 Events after the end of the reporting period 121 8.3 Related-party disclosures 123 8.4 Discontinued operations and non-current assets held for sale 124 8.5 Segment reporting 126 8.6 Interim financial reporting 127 8.7 Insurance Companies/Contracts 128 8.8 Earnings per share 130 8.9 Service concessions 132 8.10 Foreign currencies 133 8.11 Hyperinflation 136 9. IFRS only 139 9.1 Agriculture (IAS 41) 139 9.2 Exploration for and evaluation of mineral resources 140 10. Dutch GAAP only 143 10.1 Intercompany transactions 143 10.2 Threshold and size criteria of entities 144 10.3 Directors’ report 145 10.4 Public sector accounting 146 Similarities and Differences Dutch GAAP vs. IFRS Contents 5 Preface Introduction The Dutch Accounting Standards have no legal This publication “Similarities and Differences force, but provide more detailed guidance on the Dutch GAAP vs. IFRS” is designed by PwC The interpretation of the law and in areas not specifi- Netherlands to highlight some of the key differences cally covered by the Code. In practice, the Dutch between Dutch GAAP and IFRS and to encourage Accounting Standards form an important part of early consideration of what IFRS means to the the Dutch Generally Accepted Accounting Principles entity. In this publication, we deal with Dutch GAAP which has been confirmed in a number of legal as a starting point whereas we elaborate on the key cases. differences with IFRS in the adjacent IFRS column. If there are no or only less significant differences a Applicability “similar to” remark is included in the IFRS column. We based our publication on Dutch Law and the 2017 version of the DAS which is applicable Dutch GAAP for financial statements on annual periods In this overview of similarities and differences we beginning on or after 1 January 2018. The Dutch refer to Dutch GAAP, which covers: GAAP column deals with the recognition and • The Dutch Civil Code, Book 2, Part 9 (‘BW 2 T9’); measurement requirements for medium-sized including: and large entities. Micro and small entities are - The General Administrative Order on model not covered in this overview. The size criteria and formats (‘Besluit modellen jaarrekening’ – specific exemptions for medium-sized entities are ‘GAO on model formats’); included in chapter 10. - The Decree on valuations (‘Besluit actuele With regard to IFRS authoritative pronounce- waarde’); and ments and other developments through 1 January • The Dutch Accounting Standards (‘Richtlijnen 2018 are taken into account which means that we voor de jaarverslaggeving’). pay attention to the standards IFRS 9, 15, 16 and 17. For entities applying IFRS as endorsed by the Dutch company law is part of the Dutch Civil Code. European Union the Standards IFRS 9 and 15 are The legal provisions relating to entities limited by effective for annual periods beginning on or after 1 shares in the Netherlands are included in Book January 2018. The lease standard, IFRS 16, will be 2 of the Code, which contains legal provisions effective from 1 January 2019 and is conditionally relating to all legal persons and entities, including permitted to be early adopted on or after 1 January co-operatives and associations, as well as limited 2018. Therefore, IAS 17, the current lease standard liability entities. The legal financial reporting is taken into account as well. Furthermore, a framework is built upon the relevant elements brief summary of IFRS 17, insurance contracts, is of the Code, and is supplemented by the Dutch provided in this publication although this standard Accounting Standards (‘DAS’), judicial precedence will be effective per 1 January 2021 only. (‘de Ondernemingskamer’), International Financial Reporting Standards (IFRS) and the Authority for Some topics cannot be compared as they are not Financial Markets (‘Autoriteit Financiële Markten’ dealt with in one of the two frameworks. Public (AFM)). sector accounting for example is only covered under Dutch GAAP, whereas the standard on Agriculture in IFRS (IAS 41) has no equivalent in the DAS. Therefore, in chapter 10 and 11 respectively, we elaborate more on the IFRS only and Dutch GAAP only topics. 6 PwC Terminology and appendices This publication is not all-encompassing. When For your information we included the translation applying the individual accounting frameworks, of frequently used terms below: entities should consult all of the relevant accounting historical cost - historische kostprijs standards and, where applicable, national law. current value - actuele waarde value in use - bedrijfswaarde The online version of this publication can be fair value - marktwaarde/reële waarde accessed via the Dutch branch of realizable value - opbrengstwaarde www.inform.pwc.com current cost - actuele kostprijs Furthermore, we included examples of a balance Amsterdam, March 2018 sheet, an income statement, a cash flow statement and a statement of changes in equity in the Jan Backhuijs appendices based on Dutch GAAP and IFRS in order Jeroen Tuithof to become more familiar with the major differences Kavish Gharbharan in presentation. PwC The Netherlands This publication is a part of PwC’s on-going commitment to help entities navigate the switch from Dutch GAAP to IFRS and to support those entities that use both GAAP’s in their group structure or wish to compare and contrast. Similarities and Differences Dutch GAAP vs. IFRS Preface 7 1 8 PwC 1. Accounting framework and first-time adoption 1.1 Accounting framework Book 2, Part 9 of the Dutch Civil Code, which deals with the financial statements 1 and annual report, provides instructions on the principles of valuation of assets and liabilities and the determination of the results. Additional guidance is included in the DAS. IFRSs are developed and published to promote the use of those IFRSs in general purpose financial statements and other financial reporting. Dutch Law facilitates the use of IFRS. The following comparisons have been made based on the Dutch Civil Code, DAS 100 ‘Introduction’, DAS 930 ‘Framework for the preparation and presentation of financial statements’, DAS 115 ‘Criteria for recognition and disclosure of information, DAS 254 ‘Liabilities’ (Dutch GAAP), and the Conceptual framework 2010, IAS 1 ‘Presentation of financial statements’ and IAS 32 ‘Financial instruments: presentation’ (IFRS). Similarities and Differences Dutch GAAP vs. IFRS 1. Accounting framework and first-time adoption 9 Dutch GAAP IFRS Scope Bv’s, nv’s and some other legal entities are subject to IFRSs are developed and published to promote the use the requirements of Book 2, Part 9 of the Dutch Civil of those IFRSs in general purpose financial statements Code (hereafter ‘the Code’). Additional guidance is and other financial reporting. IFRSs apply to all general included in the DAS.
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