Cash flow statement: when it is mandatory and how it is built
Profit is not cash. The cash flow statement shows where cash came from and where it went, and so explains the difference between result and bank balance.
The short answer
The cash flow statement shows where cash came from and what it was spent on, divided over operating activities, investments and financing. Book 2 DCC does not mention it as part of the annual accounts. Guideline 360 of the Dutch Accounting Standards Board (Raad voor de Jaarverslaggeving) requires it for medium-sized and large legal entities; micro and small legal entities are exempt.
Updated 30 October 2026
Key facts
| Basis | Guideline 360 The cash flow statement (Raad voor de Jaarverslaggeving); art. 2:361(1) DCC does not mention the statement |
| For whom | Medium-sized and large legal entities |
| Exempt | Micro and small; furthermore, among others, group companies whose provider of capital prepares an equivalent consolidated cash flow statement, and users of art. 2:403 DCC |
| Layout | Operating activities, investing activities, financing activities |
| Method | Direct or indirect; both are allowed |
Law and guideline: where the obligation comes from
Whoever looks in Title 9 will not find the cash flow statement. The law describes the annual accounts as the balance sheet and the profit and loss account with the notes (art. 2:361(1) DCC). In 2008 the minister confirmed that there is no obligation laid down in the law to include a cash flow statement in the annual accounts.
The obligation comes from the Dutch Accounting Standards (Richtlijnen voor de jaarverslaggeving). They fill in what the law means by standards that are considered acceptable in society (art. 2:362(1) DCC). Guideline 360 first applied only to large legal entities and was extended in the 2004 revision: since financial year 2005, all medium-sized and large legal entities include a cash flow statement.
In practice the guideline is followed. When it was proposed in 2014 to include the statement in the law, the Dutch Accounting Standards Board saw no reason for it: in its impression its pronouncement was sufficiently complied with.
The guideline has exemptions. Small legal entities need not include the statement. The same applies to a legal entity whose capital is provided, directly or indirectly, entirely by another legal entity that includes an equivalent cash flow statement in consolidated annual accounts, and when the group exemption of art. 2:403 DCC is applied.
Three kinds of cash flows
| Category | What falls under it | Examples |
|---|---|---|
| Operating activities | Transactions that lead to income and costs in the profit and loss account | Receipts from customers, payments to suppliers and employees, profit tax paid |
| Investing activities | Investments in and disposals of intangible, tangible and financial fixed assets | Purchase of a machine, sale of a business property, purchase of a participating interest |
| Financing activities | Activities to finance operations and investments | Drawing and repaying loans, issuing shares |
Interest and dividend received and paid are shown separately in the statement, classified by their nature. Cash is cash on hand and bank balances, deposits payable on demand and highly liquid investments that can be converted into cash without significant valuation risk. The terms themselves are under operating cash flow, investing cash flow and financing cash flow.
Direct or indirect method
The two methods differ only in how operating cash flow is presented. The direct method shows the receipts and payments themselves: what came in from customers, what went out to suppliers and staff. The indirect method starts with the result and adjusts it for items that cost or generated no cash, such as depreciation, and for changes in inventories, receivables and payables.
The indirect method ties in with the figures you already have and shows why profit and cash flow diverge. The direct method requires bookkeeping from which receipts and payments by type can be derived.
Worked example: profit made, yet less cash
A BV (private limited company) closes 2025 with a positive result, while the bank balance has fallen. The statement under the indirect method shows how that can be. The numbers are fictitious.
| Cash flow statement 2025 | € |
|---|---|
| Operating result | 60.000 |
| Depreciation | 20.000 |
| Increase in receivables | −15.000 |
| Increase in inventories | −5.000 |
| Increase in payables | 8.000 |
| Interest paid | −5.000 |
| Corporate income tax paid | −9.000 |
| Cash flow from operating activities | 54.000 |
| Investments in tangible fixed assets | −30.000 |
| Cash flow from investing activities | −30.000 |
| Repayment of bank loan | −20.000 |
| Dividend paid | −10.000 |
| Cash flow from financing activities | −30.000 |
| Change in cash | −6.000 |
Cash was € 71.000 on 1 January and € 65.000 on 31 December: exactly € 6.000 less. Operations generated € 54.000, but the BV spent € 30.000 on new business assets and € 30.000 on repayment and dividend.
Note the investments. The carrying amount of tangible fixed assets rose from € 75.000 to € 85.000, so by € 10.000. The investment is nevertheless € 30.000, because € 20.000 was depreciated in the same year.
Obligation per size class
| Item | Micro | Small | Medium-sized | Large |
|---|---|---|---|---|
| Requirements: two of the three, on two consecutive balance sheet dates (financial years from 1-1-2024) | assets ≤ € 450.000, net turnover ≤ € 900.000, < 10 employees | assets ≤ € 7.5 million, net turnover ≤ € 15 million, < 50 employees | assets ≤ € 25 million, net turnover ≤ € 50 million, < 250 employees | At least two limits for medium-sized exceeded |
| Cash flow statement | Not mandatory | Not mandatory | Mandatory under Guideline 360 | Mandatory under Guideline 360 |
| Exemption within a group | – | – | Possible | Possible |
| Include voluntarily | Allowed | Allowed; then also include comparative figures | – | – |
Even without an obligation, the statement is useful for a small BV that invests or repays: it is the quickest way to see whether operations can bear the repayments. See must I prepare a cash flow statement; you determine the class itself with the size criteria.
Common mistakes
- The closing balance does not tie in. The cash at the end of the statement equals the cash and cash equivalents on the balance sheet, or the difference is explained.
- Including items without cash movement. Depreciation or a revaluation is not a cash flow; in the indirect method you adjust for it.
- Deriving investments from the carrying amount. The difference between opening and closing balance is the investment minus the depreciation.
- Costs instead of payments. For interest and tax, what was paid in the year counts, not what was booked as an expense.
- No comparative figures. Here too, the previous year belongs next to it.
- Confusing it with a liquidity forecast. The cash flow statement looks back; a forecast looks ahead.
The cash flow statement in Jaarrekening.io
Jaarrekening.io shows a layout under the indirect method, derived from the balances of the balance sheet and profit and loss account. That is a worksheet and not a finished statement: you add the movements in working capital, the items without cash movement and the purchases and sales of fixed assets from the ledger.
Sources
- Art. 2:361 DCC: what the law counts as annual accounts (wetten.overheid.nl)
- Art. 2:362 DCC: standards that are acceptable in society (wetten.overheid.nl)
- Raad voor de Jaarverslaggeving: Guidelines for medium-sized and large legal entities (rjnet.nl)
- NBA, De Accountant (February 2008): The cash flow statement in practice
- NBA, accountant.nl (July 2025): RJ provisions that conflict with Title 9
- BDO: RJ at a glance, 2020 edition (summary of RJ 360, page 52)
- RJ-Uiting 2017-5: disclosure provisions for micro and small legal entities, paragraph 310 (rjnet.nl)
Frequently asked questions
Is the cash flow statement part of the annual accounts?
According to the law, the annual accounts consist of the balance sheet, profit and loss account and notes (art. 2:361(1) DCC). Guideline 360 asks medium-sized and large legal entities to include a cash flow statement in addition. It then stands as a separate statement next to the balance sheet and the profit and loss account.
Which method must I choose?
Both are allowed. The indirect method is the easiest to derive from the annual accounts and explains the difference between result and cash flow. The direct method shows the receipts and payments themselves and demands more of the bookkeeping.
Why did I make a profit and yet have less money in the bank?
Because profit and cash measure different things. Growing receivables and inventories, investments, repayments and dividend cost cash without lowering the result. Depreciation lowers the result without costing cash.
What is the difference from a liquidity forecast?
The cash flow statement accounts for the cash flows of the past financial year. A liquidity forecast is an expectation of future receipts and expenditure and is not part of the annual documents.
Must a holding company without activities include a cash flow statement?
Only if it is medium-sized or large and no exemption applies. You determine the size class of a holding company including the group companies (art. 2:396(2) DCC).
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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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