Carrying amount
The carrying amount (boekwaarde) is the amount at which an asset is shown on the balance sheet under the chosen valuation policy, after depreciation and any impairments.
What does carrying amount mean?
The carrying amount (boekwaarde) is the amount at which an asset is shown on the balance sheet under the chosen valuation policy, after depreciation and any impairments.
The carrying amount is the recognised amount after depreciation and any impairments. It is not automatically the selling price or tax value. A revaluation model can lead to a different carrying amount than cost less depreciation.
How does it work?
The carrying amount is the amount at which an item is shown on the balance sheet. For a fixed asset on a cost basis it is the acquisition or production cost, less cumulative depreciation, less impairments. The movement schedule of art. 2:368(1) DCC shows the path from opening to closing carrying amount: investments added, disposed assets deducted, revaluations added, depreciation and impairments deducted.
The carrying amount is an outcome of the chosen policy and not a valuation. A building bought in 1998 can be on the balance sheet at a fraction of today's price; a custom-built machine can have more carrying amount than a buyer would pay for it. Besides the commercial carrying amount there is a tax one, which can differ because of the tax depreciation rules. That difference is the basis for deferred taxes (RJ 272).
Example
A BV bought a van on 1 January 2022 for € 40.000 and depreciates it over five years to a residual value of € 10.000, so € 6.000 a year. Carrying amount at the end of 2025: 40.000 − 4 × 6.000 = € 16.000. On 1 March 2026 it sells the van for € 19.500. Until the sale date it depreciates for two more months: 2/12 × 6.000 = € 1.000; the carrying amount at sale is € 15.000. Book profit: 19.500 − 15.000 = € 4.500. Journal entry: bank € 19.500 debit, cumulative depreciation € 25.000 debit, vehicles € 40.000 credit, book profit € 4.500 credit.
In the annual accounts
Assets or liabilities on the balance sheet, depending on the item concerned.
Difference from current value
Current value is what an asset would fetch on the market today; insurers and buyers use it. The carrying amount is what is left after depreciating the original cost. On a sale, the difference between proceeds and carrying amount is a book profit or book loss. Anyone who reads the equity of a BV as the value of the business adds up carrying amounts and misses hidden reserves and self-built goodwill.
Common mistakes
- Equating carrying amount with market value
- Leaving a write-down in place after sale
What should you watch for?
- Make the total of the fixed asset register agree with the ledger and with the balance sheet.
- Remove an asset that has been sold, stolen or scrapped from the books at cost and cumulative depreciation; what remains as carrying amount is a book loss.
- Medium-sized and large legal entities show opening and closing carrying amount per item in the movement schedule. A small legal entity may omit this (art. 2:396(3) DCC); a micro entity shows only the sum of fixed assets.
Legal basis and source
art. 2:384 and 2:386 DCC
Frequently asked questions
Can the carrying amount be zero while the asset is still in use?
Yes. If the cost is fully depreciated and the residual value is set at zero, the asset appears on the balance sheet at zero, even if it lasts for years. It stays in the fixed asset register until it is disposed of.
What is the carrying amount of a BV?
This usually means equity according to the balance sheet: all assets at carrying amount, less provisions and liabilities. It is not a selling price for the shares.
Read more
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.
Get started