Accounting policies: meaning
The rules by which assets, liabilities, income and expenses are measured and allocated. They must be applied consistently and stated in the notes (art. 2:384 DCC).
What do accounting policies mean?
The rules by which assets, liabilities, income and expenses are measured and allocated. They must be applied consistently and stated in the notes (art. 2:384 DCC).
A policy determines when an item is recognised and on what basis. The same policy is applied consistently; changes require a reasoned explanation. Differences from tax measurement can lead to deferred taxes.
How does it work?
The law knows two policies: acquisition or production cost and current value (art. 2:384(1) DCC). The Decree on current value determines which current value qualifies: current cost, value in use, market value or realisable value. Profits are only taken if they have been realised at the balance sheet date (paragraph 2).
The notes set out the policies per item (art. 2:384(5) DCC). Choosing a different policy than last year is allowed only for well-founded reasons, with the reason and the effect on equity and result in the notes (paragraph 6). RJ 140 requires retrospective treatment: opening equity is recalculated and the comparative figures are adjusted. More at accounting policies.
Example
A wholesaler (BV) measures its inventory up to and including 2025 at weighted average purchase prices and switches to FIFO in 2026, because that fits the actual flow of goods better. Under the old method inventory on 31 December 2025 was € 210.000, under FIFO € 198.000. Equity as at 1 January 2026 becomes € 12.000 lower (before tax) as a direct movement, the comparative figures for 2025 are recalculated and the notes state the reason and effect.
In the annual accounts
Notes to the balance sheet and profit and loss account; level of detail depends on the class.
Difference from an estimate
The policy is the rule: inventory at cost or lower net realisable value. The estimate is the filling in with figures: which part is slow-moving, how long the machine lasts. You treat a new policy retrospectively, a revised estimate under RJ 145 only in the current and following financial years.
Common mistakes
- Changing a policy without explanation
- Assuming tax rules are commercially correct as a matter of course
What to watch for
- Check that the notes match what the bookkeeping does. If it says straight-line over five years, the asset register must show that too.
- Micro: the explanation is not mandatory (art. 2:395a(6) DCC), except the statement that tax-based policies have been used (paragraph 7). Small: the explanation is in the notes, which are filed with the rest (art. 2:396(8) DCC).
- A micro entity may not measure at market value (art. 5a Decree on current value).
Legal basis and source
art. 2:384 DCC
Frequently asked questions
May I choose a different depreciation method every year?
No, not at will: the method follows the pattern in which the asset yields you benefit. If that pattern changes, you adjust the method as a change in estimate, from this year onward and without restating the comparative figures (RJk A3.202 and A3.205). A better estimate of the useful life is also a change in estimate. Only a different accounting policy, such as current value instead of cost, is a change in accounting policy (article 2:384(6) DCC).
Can I use cost and current value side by side?
You choose one policy per category of assets. On revaluation, RJ 212 requires the whole category of tangible fixed assets to be revalued. Business premises at current value and machinery at cost is therefore possible.
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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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