RJ 170 going concern: material uncertainty, liquidation basis and the going-concern paragraph

The short answer

RJ 170 elaborates art. 2:384(3) DCC. In case of material uncertainty about going concern, the annual accounts remain on a going-concern basis, but the notes describe the uncertainty and the circumstances. If discontinuation is unavoidable, you prepare the annual accounts on a liquidation basis. A planned termination in which all debts are paid falls outside this. A micro entity also includes this information.

Updated 30 October 2026

Key facts

What the law requires

In valuing assets and liabilities, the assumption is that the entirety of the activities of the legal entity to which those assets and liabilities are devoted will be continued, unless that assumption is incorrect or its correctness is subject to serious doubt; in that case this is explained in the notes, stating the effect on equity and result.

According to the RJ, "serious doubt" in this provision and "material uncertainties" in the provision on the auditor's report (art. 2:393(5)(h) DCC) mean the same (RJ 170.106; RJk A2.211). RJ 170 applies only if the entity as a whole is in difficulty. If only a part stops, the rules for discontinued operations apply (RJ 345).

The four situations

Whether situation 2 or 3 applies depends on how certain the help from third parties is. A signed credit extension or an unconditional commitment from the shareholder can remove the uncertainty; a conversation with the bank cannot (RJ 170.302). If part of the activities continues, there is no unavoidable discontinuity (RJ 170.103).

Planned termination. If the entity was established for a fixed period, or it has been decided to dissolve it or to cease all activities, and all debts are expected to be paid, the ordinary accounting principles continue to apply. You do set out the termination and its possible effect on equity and result, with the activities still running (RJ 170.104; RJk A2.211a).

Signals of material uncertainty

The RJ lists signals that, alone or together, may point to material uncertainty (RJ 170.303; in the RJk since financial year 2026 in A2.214a). In our own words:

• little or negative equity;
• breached covenants with no clarity on what the bank will do;
• customers who do not pay or suppliers who withdraw credit;
• negative operating cash flows, now or in the forecast;
• heavy losses or large falls in value of the assets that have to earn the money;
• loss of an important market, licence, concession or supplier;
• staff shortages or a shortage of essential raw materials.

After the balance sheet date the situation can also deteriorate to the point that there is material uncertainty after all (RJ 170.304). If it turns out before adoption that discontinuation is unavoidable, you still prepare the annual accounts on a liquidation basis (RJ 170.102; RJ 160.206).

What a going-concern paragraph contains

In case of material uncertainty (situation 3), the notes include a going-concern paragraph. A structure that helps the reader:

1. the facts: result, equity, liquidity and what has happened;
2. the board's measures and how far they have progressed, such as financing that has been promised or is still to be concluded;
3. the conclusion that a material uncertainty exists about going concern;
4. the choice to value on a going-concern basis nonetheless, and that the annual accounts contain no adjustments for the case that continuation fails.

Write what is really going on. A reassuring standard sentence about financing that is not yet arranged falls short; see also financing not yet arranged.

The annual accounts on a liquidation basis

• All assets that meet the definition go on the balance sheet at the expected net realisable amount, including assets that were not recognised before, such as a self-built customer base. Increases in value are therefore possible (RJ 170.201 and 170.202).
• All liabilities are stated at the amount needed to settle them, without taking the entity's own creditworthiness into account (RJ 170.203).
• You include accruals for the expected costs of winding up and for the expected operating result until then (RJ 170.204).
• You process the transition prospectively: the difference from the old carrying amounts goes through the profit and loss account and the comparative figures stay (RJ 170.205).
• The ordinary rules for presentation, notes and legal reserves continue to apply; for upward revaluations of assets without frequent market quotation you form a revaluation reserve (RJ 170.207; art. 2:390(1) DCC).

Case: Webwinkel Zonnig BV stops

Webwinkel Zonnig BV (fictitious, small) closes 2026 with equity of € 30.000. In February 2027, before the annual accounts are prepared, the bank calls in the credit. No buyer comes forward and the shareholder does not inject capital. The board decides to cease the activities and sell the assets; the creditors will not be paid in full and a composition is being prepared. There is no longer a realistic chance of continuing: the 2026 annual accounts are prepared on a liquidation basis.

The € 130.000 goes as an expense into the 2026 profit and loss account; the 2025 figures stay as they were. For the upward revaluation of the domain name and customer base, Zonnig forms a revaluation reserve of € 25.000, which makes the other reserves even more negative. A tax receivable remains nil, because there is nothing to offset. The notes state that continuation was not assumed, with the effect of € 130.000 (art. 2:384(3) DCC). As a small entity, Zonnig may consider the additional information of RJ 170.208, such as the winding-up plan and the valuation methods (RJk A2.216).

Had the shareholder undertaken in writing and unconditionally to pay all debts, this would have been a planned termination: ordinary accounting principles with an explanation, and inventory at the lower net realisable value under the ordinary rules (art. 2:387(2) DCC).

What each class explains in the notes

How it works in Jaarrekening.io

Jaarrekening.io asks whether there is serious doubt about going concern and, if so, whether the annual accounts are still prepared on a going-concern basis. Questions follow about the circumstances, the measures, the effect and, for a liquidation basis, the principles used and the winding-up plan. The draft text uses only what you confirm and gives no opinion of its own on the chance of success. A micro entity also gets the question whether additional information is needed, for example in case of doubt about going concern.

Sources

• Art. 2:384 DCC: going-concern assumption (para. 3) (wetten.overheid.nl, in Dutch)
• Art. 2:393 DCC: material uncertainty in the auditor's report (para. 5(h)) (wetten.overheid.nl, in Dutch)
• Art. 2:390 DCC: revaluation reserve (wetten.overheid.nl, in Dutch)
• RJ Publication 2025-3B: micro, exceptional circumstances also public (RJk M1.401) (rjnet.nl, in Dutch)
• RJ Publication 2025-10: signals of material uncertainty in RJk A2.214a (rjnet.nl, in Dutch)
• Financial Reporting Council (Raad voor de Jaarverslaggeving): Guidelines (rjnet.nl)

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