Must I include prior-year comparative figures?
State the prior-year amounts for as many line items as possible (art. 2:363(5) DCC). Adjust them if needed for comparability and explain this.
The short answer
State the prior-year amounts for as many line items as possible (art. 2:363(5) DCC). Adjust them if needed for comparability and explain this.
Basis: art. 2:363(5) DCC
Which prior amounts do you show next to this year?
Comparative figures give context to the development of equity and result. Art. 2:363(5) DCC prescribes that, as far as possible, the amount for the previous financial year is stated for each item.
For the balance sheet, include per item the position at the previous balance sheet date and, for the profit and loss account, the amounts for the preceding reporting period, insofar as they exist. A current receivables item of € 60,000 next to € 40,000 last year shows the development. Keep a reconciliation with last year's adopted annual accounts: if the new opening balance sheet shows € 42,000, the difference of € 2,000 must be explained. Art. 2:363(5) DCC says 'as far as possible' for each item, so the old categorical wording 'without exception' goes too far.
When must a comparative amount be adjusted?
If you change the layout or classification compared with last year, assess whether the comparative figures must be adjusted for a meaningful comparison. Explain the departure caused by an adjustment.
If you change the presentation, an amount published last year may be reclassified to make the columns comparable. Suppose € 15,000 of receivables was under 'other receivables' last year but is now shown as trade receivables. Then adjust the comparative column where necessary and explain the departure caused by the adjustment. Do not silently change the originally filed annual accounts as a result. A change in accounting policy or correction of an error has its own rules alongside the general comparability requirement. Record in the file which old amounts were carried over and which were recalculated.
What do you do in the first financial year?
In the first financial year after incorporation there are generally no comparative figures yet for the same BV. Other exceptional situations, such as a merger or demerger, call for separate assessment; do not fill in fictitious zeros.
In the first financial year of a new BV, there is usually no previous annual accounts of that BV. State clearly that no comparative figures are available, instead of filling in a fictitious zero everywhere. For a demerged business, merger or continuation, relevant historical data may exist; assess the specific reporting rules for that. Also pay attention to the period: a first financial year of eighteen months next to a following financial year of twelve months calls for an explanation of turnover differences. The amounts must show the actual reporting periods; a monthly average is at most additional analysis.
How do you make two years truly comparable?
Compare the same economic substance per item. A new name for 'trade receivables' can be recognised without any effect on amounts, but merging customer and group receivables may require a reclassification of last year. Suppose the new year shows € 80,000 of trade receivables and last year they stood on two separate lines totalling € 60,000. Record which old amounts together make € 60,000, so the reader can follow the development. Adjusting the comparative column does not change the old entries; it makes the presentation next to the current year understandable.
Also check the length of the reporting periods. A financial year of twelve months next to an earlier extended first year of eighteen months shows turnover of € 1.2 million next to € 1.8 million. Without an explanation that may look like a sharp decline, while the monthly average may be the same. The statutory columns keep showing the real periods; an additional analysis may explain that difference. Have a colleague trace the comparative figures back to the old adopted annual accounts and document all adjustments. That prevents a wrong old column from being copied year after year.
Sources
Frequently asked questions
May I reclassify last year without an explanation?
No. Explain a necessary adjustment for comparability and the departure from the original.
Are zeros correct in a first financial year?
Do not use a fictitious zero if there is simply no earlier period; describe the absence of a comparison.
Can I take the figures from an old PDF?
Yes, but tie them in with the opening balance sheet and document any reclassification or correction.
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