RJ 273 Interest expense: effective interest, discount and capitalised construction interest

The short answer

Under RJ 273 you allocate interest to the outstanding principal, with premium, discount and arrangement costs through the effective interest rate. You capitalise interest on debt only for an asset that takes a long time to get ready, such as a building under construction, and then for all such assets. Interest on equity never (art. 2:388(2) DCC).

Updated 30 October 2026

Key facts

What counts as interest expense

Besides the agreed interest, RJ 273 includes in interest expense everything so closely connected with the financing that it can count as interest: the spreading of premium and discount, repayment premiums, issue costs, a penalty for early repayment, arrangement costs and exchange differences on a loan to the extent that they adjust the interest. The interest portion of a finance lease belongs here too (RJ 273.104). If you let a supplier wait longer than usual in exchange for a higher price, you book that extra price as interest (RJ 273.203).

Credit commission and commitment fees are charged to the year to which they relate (RJ 273.201). Interest expense and similar costs are shown as a separate line in the profit and loss account (art. 2:377(3)(o) DCC).

Allocating with the effective interest rate

You allocate interest to the remaining principal. You spread premium, discount and repayment premiums over the term so that the expense, together with the coupon interest, forms the effective interest rate, and so that the liability on the balance sheet is stated at amortised cost overall (RJ 273.201). Premium not yet recognised increases the liability; you preferably deduct discount from the liability, but the law also permits capitalising it separately and writing it off annually (art. 2:375(5) DCC; art. 2:386(5) DCC).

Spreading on a straight-line basis instead of with the effective interest rate is permitted under the RJ only if the difference is not material; with a zero-coupon loan that is rarely so (RJ 273.201). The RJk permits straight-line spreading for micro and small entities without that condition (RJk B16.104).

Example: a BV borrows € 500.000 for five years at 4% and receives € 485.000. The effective interest rate is about 4,69%. In year 1 the interest expense is € 22.732 (€ 20.000 coupon and € 2.732 discount); on a straight-line basis it would be € 23.000. The difference of € 268 is not material, so straight-line is also permitted here under the RJ.

Capitalising interest: when and how much

The production cost at which an asset is valued includes the acquisition cost of the raw materials and consumables used and the other costs that can be allocated directly to production. The production cost may also include a reasonable share of the indirect costs and the interest on debt for the period that can be allocated to the production of the asset; in that case the notes state that this interest has been capitalised.

• Qualifying assets only. A building, a factory or inventory that has to mature for a long time. Routinely produced inventory and assets that are already ready when purchased do not count (RJ 273.105 and 273.204).
• All or nothing. If you capitalise interest, you do so for all your qualifying assets (RJ 273.206; RJk A2.209). Outsourced construction also counts as production (RJ 273.205).
• Specific loan. You capitalise the interest on that loan, minus what you earn by temporarily placing money not yet used (RJ 273.207).
• General loans. For the expenditure you finance from them, you multiply the weighted average interest rate by the expenditure, taking time into account. You first deduct instalments from customers and subsidies, and you never capitalise more than the interest you actually owe for that period (RJ 273.207).
• Start, pause, end. You start as soon as there is expenditure and the work is under way, suspend during a longer period without activity, and stop when the asset is essentially ready (RJ 273.208–210). An office complex with separate, independently usable buildings is treated building by building (RJ 273.211).
• Ceiling. If total costs exceed the recoverable amount, you write down (RJ 273.212).

Case: interest during the construction of a distribution centre

Distributie Veenoord BV builds a distribution centre for its own use in 2026; construction runs the whole year and the centre is ready on 31 December. For the construction it takes out a construction loan of € 2.000.000 at 4,5% on 1 January. Money not yet needed is temporarily placed; that yields € 12.000. From 1 July the construction expenditure exceeds the construction loan by an average of € 800.000, paid from the bank overdraft facility (€ 1.000.000 at 6%) and a loan from the shareholder (€ 500.000 at 3%). The weighted average of those two is 5%.

The € 98.000 goes into the cost of the distribution centre and is depreciated along with it from 2027. If Veenoord capitalises this interest, it does so for a following construction project as well. Interest on its own equity does not count.

Per class. As a medium-sized or large BV, Veenoord discloses that it capitalises interest, the amount of € 98.000 and the interest rates used (RJ 273.302); the RJ recommends showing the total interest with the capitalised interest visibly deducted. As a small BV it discloses only that it capitalises interest (art. 2:388(2) DCC); the amount and interest rate are a matter for consideration (RJk B16.105). As a micro entity it may also capitalise the interest, but it has no notes in which it must disclose this.

What changes per financial year

For financial years in 2025, RJ 273.202 still set out how to account for payment discounts to customers: as a reduction of turnover or as interest expense. For 2026 and 2027 that paragraph has been deleted, because the treatment of payment discounts is already in RJ 270 on revenue (RJ-Uiting 2025-3A). Otherwise the rules are the same in these three years. RJk B16 has not been changed in substance since 2016.

Common mistakes

• Taking the arrangement fee of a loan as an expense at once instead of spreading it over the term.
• Capitalising construction interest on one project and not on another.
• Continuing to capitalise interest after the building has been put into use, or during months when construction stood still.
• Not deducting the return on temporarily placed borrowed money from the interest to be capitalised.
• Including a calculated interest on equity in the cost.

How it works in Jaarrekening.io

In the notes, the app asks whether you have capitalised interest on debt and, if so, the amount and the interest rate used. For a small entity the amount and interest rate are voluntary, in line with RJk B16.105. Which assets qualify and how much interest you allocate, you calculate yourself.

Sources

• Art. 2:388 DCC: acquisition and production cost, capitalised interest (wetten.overheid.nl)
• Art. 2:375 DCC, paragraph 5: capitalising discount
• Art. 2:377 DCC: interest expense as a separate line
• RJ-Uiting 2025-3A: deleted RJ 273.202 on payment discounts, financial years from 2026 (rjnet.nl)
• Dutch Accounting Standards (Richtlijnen voor de jaarverslaggeving) (rjnet.nl)

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