Cost of sales (kostprijs van de omzet)
Cost of sales (kostprijs van de omzet) is the cost attributable to the goods or services sold in the reporting period.
What does cost of sales mean?
Cost of sales (kostprijs van de omzet) is the cost attributable to the goods or services sold in the reporting period.
Unsold inventory in principle stays on the balance sheet. The precise allocation of production and purchase costs follows the chosen, permitted basis.
How does it work?
This item exists only in the functional format of the profit and loss account: net turnover, cost of sales, gross operating result, selling costs and general and administrative expenses (art. 2:377(4) DCC, model F of the Decree on annual accounts formats). Cost of sales includes the depreciation and impairments that belong to production, but no interest expense (paragraph 4(b)). In the by-nature format (paragraph 3, model E) costs are shown by type: raw materials, wages, depreciation.
For a trading company the calculation is: opening inventory plus purchases minus closing inventory. For a manufacturer, production wages and the allocated indirect production costs are added.
Example
A bicycle shop (BV) starts 2026 with € 60.000 of inventory, buys € 410.000 (including € 6.000 freight) and counts € 75.000 of inventory on 31 December, after a € 3.000 write-down of obsolete models. Cost of sales: 60.000 + 410.000 − 75.000 = € 395.000. The write-down is included, because it lowers closing inventory. With € 590.000 net turnover, the gross operating result is € 195.000, or 33,1%. Had the € 410.000 of purchases been booked directly as costs, profit would have been € 15.000 too low.
In the annual accounts
P&L under the functional format; inventory on the balance sheet.
Difference from the year's purchases
Purchases are what you bought in the financial year; cost of sales is what you sold of those and earlier purchases. The difference is the inventory movement. If inventory grows, cost of sales is lower than purchases; if it shrinks, higher.
Common mistakes
- Booking all purchases directly as costs
- Including selling costs in cost of sales without a definition
What to watch for
- Record which costs you count as cost of sales and which as selling or administrative costs; the classification may only deviate from last year's for well-founded reasons (art. 2:363(4) DCC).
- Count the inventory at the balance sheet date; without a reliable closing inventory the item cannot be calculated.
- Small and medium-sized entities combine net turnover, cost of sales and other operating income into one item, gross operating result (art. 2:396(4) DCC and art. 2:397(3) DCC). Micro entities use the abbreviated by-nature layout of art. 2:395a(5) DCC.
Legal basis and source
art. 2:377 and 2:388 DCC
Frequently asked questions
Do salespeople's wages belong in cost of sales?
No. In the functional format they belong in selling costs. Only the wages of staff who make the product or perform the service count.
How do I determine cost of sales for a service provider?
From the direct costs of the assignments performed: the wage costs of the staff doing the work, hired third parties and project-related costs. The by-nature format does not require this allocation.
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