Construction company annual accounts: projects in progress under RJ 221
Instalment invoices are not turnover. This is how a contractor determines project revenue, the balance sheet position and the moment a loss is recognised.
The short answer
The annual accounts of a construction company stand or fall with the projects in progress. If the project result can be estimated reliably, revenue and costs follow the progress (RJ 221). Otherwise revenue is limited to the recoverable costs and you recognise no profit. An expected loss is recognised at once. On the balance sheet each project is shown net of the instalments invoiced.
Updated 30 October 2026
Key facts
| Guideline | RJ 221 Projects in progress |
| Main rule | Revenue and costs in proportion to the performance delivered (RJ 221.301) |
| Result cannot be estimated | Revenue up to the recoverable project costs, no profit (RJ 221.314) |
| Expected loss | Immediately and in full as an expense (RJ 221.323) |
| Presentation | Netted per project: an asset for a debit balance, a current liability for a credit balance (RJ 221.409) |
When is a job a project in progress?
A project in progress is a project agreed with a client for the construction of an asset, whose execution normally spans more than one reporting period (RJ 221.106). A renovation that starts in October and is delivered in March qualifies. Replacing a gutter in one week and invoicing it does not.
Project revenue falls under RJ 221; RJ 270 applies to separate deliveries and services outside the project. If you work as a self-employed person (zzp'er) or in a vof, you are not covered by Title 9 and you prepare your figures for income tax.
Construction has no size classes or audit requirement of its own: both follow from balance sheet total, net turnover and staff, as explained in the size criteria and in the audit requirement check.
In proportion to progress, or without interim profit
If you can estimate the result of a project reliably, you account for revenue and costs in proportion to the performance delivered (RJ 221.301). That requires that revenue, remaining costs and progress can be determined reliably (RJ 221.302). You measure progress by the costs incurred as a share of the estimated total costs, by a survey of the work performed or by completion of a recognisable part (RJ 221.309).
If that estimate is not possible, for example in the first phase of a complex job, you recognise revenue up to the amount of the costs incurred that you can probably recover, and no profit (RJ 221.314). For mainly short projects you may also use this method for practical reasons when the result can be estimated, as long as it does not materially distort the figures (RJ 221.316).
| In proportion to progress | Without interim profit | |
|---|---|---|
| When | Project result can be estimated reliably | Cannot be estimated reliably, or a flow of short projects |
| Revenue during construction | Percentage of completion × total project revenue | Costs incurred that are probably recoverable |
| Profit | During execution, in proportion to progress | As soon as the result is reliably established, at the latest on completion |
Additional and reduced work and claims belong to project revenue (RJ 221.201), but only for the amount you expect to be entitled to.
Worked example: a renovation with a contract sum of € 200.000
A contractor BV takes on a renovation for € 200.000 and budgets the costs at € 162.500. On 31 December € 65.000 of costs have been incurred, so 40% of the budget, and € 60.000 of instalments have been invoiced.
| In proportion to progress | Without interim profit | |
|---|---|---|
| Project revenue in the financial year | 40% × € 200.000 = € 80.000 | € 65.000 |
| Project costs in the financial year | € 65.000 | € 65.000 |
| Result on the project | € 15.000 | € 0 |
| Project in progress on the balance sheet | € 80.000 − € 60.000 = € 20.000 (asset) | € 65.000 − € 60.000 = € 5.000 (asset) |
Had the contractor already invoiced € 90.000, the first method would show € 10.000 as a liability under current liabilities (RJ 221.409). If it turns out in December that the costs will come to € 215.000, you recognise the whole expected loss of € 15.000 immediately (RJ 221.323).
Chain liability and the G-account
If you engage a subcontractor, the Dutch Tax Administration (Belastingdienst) can hold you, as contractor, liable for the payroll taxes he has to remit on that work. To limit that risk you pay the payroll-tax part of the invoice into his G-account: a blocked bank account from which he can only pay payroll taxes and VAT to the Belastingdienst.
The balance of your own G-account is shown under cash and cash equivalents; medium-sized and large entities state next to it that it is not freely available (art. 2:372(2) DCC). A liability claim hanging over you is disclosed as a contingent liability in the notes (art. 2:381(1) DCC); only a micro entity is exempt from that. If payment is probable, you recognise a provision in every size class.
Common mistakes in construction projects
- Treating invoiced instalments as turnover (RJ 221.311).
- Valuing projects in progress as inventory, while the balance is a receivable or a liability (RJ 221.407).
- Offsetting a loss on one project against the profit on another; you determine the loss per project (RJ 221.324).
What BVs in this sector file
Contractors and specialised construction companies fall under SBI section F, construction (SBI 41–43). Property development (SBI 41) is included there as well.
| Balance sheet class, financial year 2024 | Filings | Solvency: p25 – median – p75 | Current ratio: p25 – median – p75 |
|---|---|---|---|
| Micro (balance sheet up to and including € 450.000) | 8.847 | 1,1% – 47,4% – 79,0% | 0,90 – 1,79 – 4,25 |
| Small (balance sheet above € 450.000 up to and including € 7,5 million) | 8.773 | 22,5% – 47,4% – 70,1% | 1,17 – 1,84 – 3,57 |
| Medium-sized (balance sheet above € 7,5 million up to and including € 25 million) | 810 | 13,6% – 35,5% – 59,3% | 0,81 – 1,50 – 2,82 |
| Large (balance sheet above € 25 million) | 218 | 4,0% – 28,1% – 64,1% | 0,52 – 1,29 – 3,89 |
In the small balance sheet class, section F had a median solvency of 47,4% for financial year 2024, lower than the 73,4% of all balance sheets in that class together; the median current ratio was 1,84, lower than nationally (3,28). The national figure is high because of the many holding companies.
The balance sheet class follows only the balance sheet total, not the statutory size class. The dataset does not state a legal form; it covers all filings in XBRL with this SBI section, mostly from BVs. Source: KVK Business Register Open Dataset of annual accounts, processed by Jaarrekening.io, CC BY 4.0. Data downloaded and processed on 2 November 2026. Explanation and all sectors: solvency by sector and current ratio by sector.
What Jaarrekening.io does for a construction BV
Jaarrekening.io reads the XAF audit file or the trial balance (Excel or CSV) of your construction BV and uses it to prepare the annual accounts. The progress per project, the method and the estimate of losses remain your judgement. The software sends nothing to the KVK.
Sources
Frequently asked questions
May a small construction company account for all projects without interim profit?
Yes, if the duration of the projects is predominantly shorter than twelve months, or if there is a steady flow of projects of stable size that are completed regularly. The condition is that this has no material effect on equity and result (RJ 221.316). An expected loss is still recognised immediately.
Where does a project appear that has been invoiced further than the work has progressed?
Under current liabilities. For each project you offset the realised revenue against the instalments invoiced; a credit balance is an obligation to the client, a debit balance is an asset (RJ 221.409).
Does work that has been delivered but not yet invoiced belong to this year's turnover?
Yes. Revenue follows the performance delivered, not the invoice date. The last instalment you invoice in January for work delivered in December is turnover of the old financial year.
Does a self-employed person without staff (zzp'er) in construction get a G-account?
No. The Dutch Tax Administration (Belastingdienst) does not cooperate with a G-account for a self-employed person without staff who works as a subcontractor, because he is not liable to withhold payroll taxes. That also applies if the client demands a G-account.
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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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