Non-current liabilities (langlopende schulden)
Non-current liabilities (langlopende schulden) are obligations with a remaining term of more than one year, insofar as not callable earlier.
What do non-current liabilities mean?
Non-current liabilities (langlopende schulden) are obligations with a remaining term of more than one year, insofar as not callable earlier.
The remaining term at the balance sheet date is decisive, not the original one. The repayment due in the coming financial year is shown under current liabilities or stated separately. Security and interest rate belong in the notes.
How does it work?
For each type of liability, the entity states which amount has a remaining term of more than one year, with the interest rate, and for the total which amount runs longer than five years (art. 2:375(2) DCC). It also states for which liabilities security has been given and in what form (paragraph 3), which amount is subordinated (paragraph 4) and what will be repaid on the long-term loans in the next financial year (paragraph 6).
RJ 254 values a liability on initial recognition at fair value, including transaction costs, and afterwards at amortised cost. An arrangement fee is thus spread over the term instead of being expensed at once.
Example
A BV takes out a bank loan of € 200.000 on 1 July 2024, with a term of ten years, repayment of € 20.000 a year from 1 July 2025, 5% interest and a mortgage on the business premises. Balance on 31 December 2026: 200.000 − 2 × 20.000 = € 160.000. Of this, € 20.000 falls due in 2027: current. Non-current: € 140.000. Repayments are made five times in 2027 through 2031, so 160.000 − 100.000 = € 60.000 has a term of more than five years.
In the annual accounts
Liabilities side of the balance sheet; notes by size class.
Difference from a provision
For a liability, the amount and due date are fixed: there is an agreement or an assessment. For a provision, the obligation is probable or certain, but its size or timing is uncertain (art. 2:374(1) DCC). A warranty claim whose outcome is not yet certain is therefore a provision; the loan to pay it is a liability.
Common mistakes
- Showing the whole loan as non-current without stating the repayment of the coming year
- Leaving out security where required
What to watch for
- Request a balance confirmation from the lender for each balance sheet date.
- A subordinated loan from the shareholder remains a liability; from medium-sized upwards you state the amount and nature of the subordination (art. 2:375(4) DCC).
- Micro: only the total with a term of more than one year (art. 2:395a(4) DCC). Small: no breakdown by type and no interest rate, but the security (art. 2:396(3) DCC). Medium-sized and large: all disclosures of art. 2:375 DCC.
Legal basis and source
art. 2:375 DCC
Frequently asked questions
Is a loan from the director-major shareholder (DGA) to their own BV a non-current liability?
Only if there is a loan agreement with a term of more than one year. Without agreements on term and repayment, the amount is immediately callable and therefore current.
What happens if I breach a bank covenant?
If the loan thereby becomes immediately callable at the balance sheet date, it is current. It remains non-current if, at the balance sheet date at the latest, you have agreed with the bank that it will not call the loan because of this breach, or a remedy period running until at least twelve months after the balance sheet date. If such an agreement is made only after the balance sheet date but before preparation, you may also show the loan as non-current; you then explain this (RJk B9.206; RJ 254 for medium-sized and large entities).
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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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