Balance sheet
The balance sheet shows the assets and their financing on one date. Total assets equal the total of equity, provisions and liabilities.
What does balance sheet mean?
The balance sheet shows the assets and their financing on one date. Total assets equal the total of equity, provisions and liabilities.
The balance sheet compares assets with financing on one date. A profit and loss account, by contrast, measures a period. Equal balance sheet totals prove the arithmetic closes, not that the valuation is correct or complete.
How does it work?
Article 2:362(2) DCC requires the balance sheet, together with the notes, to give a true, clear and consistent view of the size and composition of the capital at the end of the financial year. The top states whether the profit appropriation has been included. A balance sheet before profit appropriation shows the result for the year as a separate line; a balance sheet after profit appropriation has already divided it between reserves and dividend payable.
The layout is laid down in art. 2:364 DCC and in the Dutch Decree on annual accounts formats (Besluit modellen jaarrekening). Format A lists the items one below the other, with current assets minus current liabilities as an intermediate total; format B places assets and liabilities side by side. Small entities may use the shorter formats C and D (art. 1(2) of the decree); the decree does not apply to micro-entities (paragraph 3).
Example
A wholesaler (BV, private limited company) at 31 December 2025, format B. Assets: equipment € 30.000, inventory € 45.000, accounts receivable € 35.000, bank € 10.000; total € 120.000. Liabilities and equity: issued capital € 1.000, other reserves € 27.000 and result for the financial year € 12.000 (together equity € 40.000), provision for product claims € 5.000, bank loan € 40.000 of which € 8.000 is repaid in 2026, accounts payable € 25.000 and VAT payable € 10.000; total € 120.000.
In the annual accounts
Balance sheet for all size classes; the form of publication differs per class.
Difference from a trial balance
The trial balance is a working list from the bookkeeping: all ledger accounts with their balance, including the turnover and expense accounts. The balance sheet is the end product: only assets, equity, provisions and liabilities, classified according to the law and after the year-end adjustments.
Common mistakes
- Putting turnover on the balance sheet
- Offsetting a debt and a receivable without a basis
What to look out for
- Recalculate equity: opening balance plus result, plus contributions, minus dividend. If that does not arrive at the closing balance, something was booked directly to equity. See also The balance sheet does not balance, what now?.
- State which amount of the long-term loans is repaid in the following financial year (art. 2:375(6) DCC), or show that part under current liabilities.
- What becomes public differs per class: a micro-entity files only an abridged balance sheet (art. 2:395a(8) DCC), a small entity a balance sheet with notes (art. 2:396(8) DCC), medium-sized and large entities also the profit and loss account.
Legal basis and source
art. 2:364 DCC
Frequently asked questions
Why are both sides of the balance sheet always equal?
Because every euro of assets comes from somewhere: from the owners, from retained profit or from creditors. Equity is the balancing item: assets minus provisions and liabilities.
What is the difference between a balance sheet before and after profit appropriation?
Before profit appropriation, the result for the financial year is a separate item within equity. After profit appropriation it has been added to the reserves and the proposed dividend is shown under liabilities. Article 2:362(2) DCC requires the top of the balance sheet to state which of the two has been chosen.
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Preparing Dutch annual accounts?
Your first set of annual accounts is free, for every size class. Create an account and prepare the annual accounts of your Dutch company under Title 9 of Book 2 of the Dutch Civil Code.
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