Consistency principle

What does consistency principle mean?

The principle that valuation and result determination policies are applied consistently from year to year, so that figures remain comparable (bestendige gedragslijn).

Valuation and result determination methods stay consistent between years. A change may be necessary or permitted, but it must be substantiated and, where required, its effects must be apparent from the notes. This keeps comparison meaningful.

How does it work?

Art. 2:384(6) DCC permits a valuation or result determination policy different from the previous financial year only for well-founded reasons. The reason is stated in the notes, with the significance for equity and result on the basis of adjusted figures. The same applies to the layout of the balance sheet and profit and loss account (art. 2:363(4) DCC). A change is well founded if the law or the Guidelines (RJ) require it, or if it significantly improves insight (RJ 140).

You account for a change in accounting policy retrospectively: equity at the end of the previous financial year is recalculated, the cumulative effect is a direct movement in that equity and the comparative figures are adjusted (RJ 140). A change in estimate is not a break with the consistency principle; you account for it prospectively, in the current year and the following years (RJ 145).

Example

A trading BV valued its inventory under FIFO up to and including 2024 and switches to weighted average prices in 2025, because the group it has belonged to since that year uses that method. Under FIFO the inventory at the end of 2024 was € 210.000; under average prices € 198.000. The BV reduces inventory and equity at 1 January 2025 by € 12.000 (ignoring tax), adjusts the 2024 comparative figures and puts the reason and effect in the notes. It calculates the 2025 result entirely with the new method.

In the annual accounts

Accounting policies and comparative figures in the notes.

Difference from a change in estimate

A change in accounting policy changes the rule: from cost to current value, from FIFO to average prices. A change in estimate changes an assessment within the same rule: the useful life goes from five to seven years, the percentage of uncollectible receivables from 2 to 4. The first affects opening equity and the comparative figures, the second only the current year and the future. Correction of a material error is a third category (RJ 150).

Common mistakes

• Changing method to steer profit
• Automatically treating a change in estimate as a change in accounting policy

What should you watch for?

• Put the accounting policies per item in the notes (art. 2:384(5) DCC) and compare the text with last year's every year. A difference without explanation is immediately noticeable to a reader.
• If you switch bookkeeping package or accounting firm, check that depreciation periods and the inventory method have stayed the same.
• The switch to tax-based valuation policies, which only micro and small entities may make, has its own transitional rule: the difference in equity goes directly into opening equity and the comparative figure may remain unchanged (art. 1 Besluit fiscale waarderingsgrondslagen, the Decree on tax valuation policies).

Legal basis and source

art. 2:384(6) DCC

• Dutch Civil Code Book 2, article 384
• Decree on tax valuation policies (Besluit fiscale waarderingsgrondslagen)

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