Article 2:362 DCC: the true and fair view requirement and the choices in the annual accounts

The short answer

The annual accounts must, according to standards acceptable in society, give such a view that a reader can form a sound judgment about the assets and the result, and where possible about solvency and liquidity. In addition, article 2:362 DCC governs the balance sheet before or after appropriation of profit, supplementing and departing, the accrual principle, correction after adoption, language and currency, and the choice for IFRS.

Updated 30 October 2026

Key facts

Paragraph 1: the true and fair view requirement

1. The annual accounts give, according to standards that are regarded as acceptable in society, such a view that a sound judgment can be formed about the assets and the result and, to the extent the nature of annual accounts permits, about the solvency and liquidity of the legal entity. If the international structure of its group justifies this, the legal entity may prepare the annual accounts according to the standards that are regarded as acceptable in society in one of the other member states of the European Communities and give the view referred to in the first sentence.

What this means

This is the yardstick for the whole of the annual accounts. The law does not prescribe every entry; it asks that a reader, such as a bank, supplier or shareholder, can form a sound judgment from the figures. The standards that count as acceptable are in practice the Guidelines: the RJk for micro and small, the RJ for medium-sized and large. Their legal status is covered under is the RJ mandatory.

The requirement applies to every class, micro included. Anyone who complies with all the individual provisions but gives a misleading picture does not comply with paragraph 1. The second sentence, standards from another EU member state, is meant for Dutch group members of international groups and is rarely used.

Paragraphs 2 and 3: balance sheet and profit and loss account

2. The balance sheet with the notes shows faithfully, clearly and consistently the size of the assets and their composition in asset and liability items at the end of the financial year. The balance sheet may show the assets as they are composed taking into account the appropriation of profit or the treatment of the loss, or, as long as this has not been determined, taking into account the proposal for it. At the top of the balance sheet it is stated whether the appropriation of the result has been included.

3. The profit and loss account with the notes shows faithfully, clearly and consistently the size of the result for the financial year and its derivation from the items of income and expenses.

What this means

Faithfully, clearly and consistently are three requirements: the figures agree with reality, the reader can follow them and you apply the same method every year. Paragraph 2 gives one choice. You show the balance sheet before appropriation of the result, with the result as the last item of equity (art. 11 of the Decree on annual accounts models (Besluit modellen jaarrekening)), or after appropriation, with the proposed dividend already as a liability or as a separate item in equity. At the top of the balance sheet you say which of the two it is.

How you show a proposed dividend is elaborated in RJ 160.208 for medium-sized and large entities. Medium-sized and large entities also disclose the proposal for appropriation (art. 2:380c DCC); small entities are exempt from this (art. 2:396(7) DCC).

Paragraph 4: supplementing and departing

4. If providing the view referred to in paragraph 1 requires it, the legal entity provides in the annual accounts information supplementing what is required by the special provisions of and under this title. If this is necessary for providing that view, the legal entity departs from those provisions; the reason for this departure is explained in the notes, to the extent necessary stating its effect on assets and result.

What this means

Two duties. If the individual provisions give too little insight, you supplement. And if a provision leads to an incorrect picture in a particular case, you depart from it, with the reason and the effect in the notes. RJ 110.106 to 110.109 stress that the annual accounts are ultimately tested against paragraph 1. Departing is exceptional; a provision that you find awkward is no reason.

Even a micro-entity, which need not prepare notes, may have to disclose something because of paragraph 4. RJk M1.202 gives as examples a material uncertainty about going concern and annual accounts on a liquidation basis. That supplement then also goes into the published balance sheet (RJk M1.401).

Paragraph 5: attributing income and expenses

5. The income and expenses of the financial year are included in the annual accounts, irrespective of whether they led to receipts or expenditure in that financial year.

What this means

The annual accounts work on an accrual basis, not on a cash basis. An invoice for December that you pay in January is an expense of December; an annual rent paid in advance you spread over the months. The accruals and deferrals of art. 2:364 DCC follow from this. The only statutory exception is for micro: it may work without accruals and deferrals for the other operating expenses, if it states so under the balance sheet (art. 2:395a(3) DCC).

Paragraph 6: what comes to light after preparation

6. The annual accounts are adopted taking into account what has come to light about the financial position at the balance sheet date between the preparation of the annual accounts and the general meeting at which they are dealt with, to the extent that is indispensable for the view referred to in paragraph 1. If it subsequently turns out that the annual accounts fall seriously short in giving this view, the board informs the members or shareholders of this without delay and files a notice thereof with the Business Register; an auditor's report is attached to the notice if the annual accounts were examined in accordance with article 393. A legal entity whose securities are admitted to trading on a regulated market as referred to in the Financial Supervision Act is deemed to have complied with the obligation to file the notice referred to in the second sentence with the Business Register if it has sent the notice pursuant to article 5:25m, fifth paragraph, of that Act to the Stichting Autoriteit Financiële Markten.

What this means

There are three periods. What you learn before preparation about the situation at the balance sheet date, you simply process (art. 2:384(2) DCC). What comes to light between preparation and adoption you process only if it is indispensable for the view; the board then prepares the annual accounts again. What comes to light after adoption does not change the adopted annual accounts. If they fall seriously short as a result, the board informs the shareholders immediately and files a notice with the KVK (RJ 160.104 and 160.203; RJk A4.103 and A6.107).

That applies to every size class. Only for audited annual accounts must the notice include an auditor's report. How you then correct an error in the following year is covered in RJ 150 Correction of errors and for micro and small in RJk A3; see also correcting filed annual accounts.

Case: the bankruptcy of the largest customer

Velmoor Groothandel BV (fictional, small) prepares the 2025 annual accounts on 15 April 2026. Equity is € 140.000, profit before tax € 60.000. The balance sheet shows a receivable of € 85.000 from the largest customer. On 20 May 2026, three weeks before the general meeting of 10 June, that customer goes bankrupt; the trustee expects to pay out 10%.

The bankruptcy says something about the situation on 31 December: the customer was already unhealthy then. The effect turns the profit into a loss and more than halves equity; that is indispensable for the view. The board prepares the annual accounts again and the meeting adopts the revised version. The tax effect is left out of consideration here for simplicity.

Had the bankruptcy only become known on 1 July, after adoption, the 2025 annual accounts would have stood. The write-down would then fall in 2026. Only if the adopted annual accounts fall seriously short as a result do the notice to the shareholders and the notice to the KVK follow.

Paragraph 7: foreign currency and another language

7. If the activity of the legal entity or the international structure of its group justifies it, the annual accounts or only the consolidated annual accounts may be prepared in a foreign currency. The items are described in the Dutch language, unless the general meeting has decided to use another language.

What this means

Annual accounts in dollars or pounds are allowed, but only with a reason: the activities themselves or the international group. If a BV in practice works in euros, one foreign customer is no justification. Medium-sized and large entities explain the choice; RJ 122.301 and 122.504 elaborate the translation and the notes. The issued capital is stated in the chosen currency at the rate on the balance sheet date (art. 2:373(5) DCC). You can read more about the considerations under annual accounts in dollars.

The items are in Dutch, unless the general meeting chooses another language. Annual accounts in English therefore require a decision, not just a translation; see annual accounts in English.

Paragraphs 8 to 10: IFRS

8. A legal entity may prepare the annual accounts according to the standards adopted by the International Accounting Standards Board and endorsed by the European Commission, provided the legal entity applies all adopted and endorsed standards applicable to it. A legal entity that prepares the consolidated annual accounts under this title cannot prepare the single-entity annual accounts according to the adopted and endorsed standards. A legal entity that prepares the consolidated annual accounts according to the standards referred to in the first sentence of this paragraph may apply in the single-entity annual accounts the valuation principles that it also applied in the consolidated annual accounts.

9. A legal entity that prepares the annual accounts according to the standards referred to in paragraph 8 applies of this title only divisions 7 to 10 and articles 362, paragraph 6, penultimate sentence, paragraph 7, last sentence and paragraph 10, 365(2), 373, 379(1) and (2), 380b, part d, 382, 382a, 383, 383b to 383e, 389(8) and (10), and 390. Banks also apply article 421(5). Insurers also apply article 441(10).

10. The legal entity states in the notes according to which standards the annual accounts have been prepared.

What this means

Every legal entity may follow the IFRS accepted in the EU instead of Title 9, but then in full. There is one order: the single-entity annual accounts may follow IFRS only if the consolidated ones do so too. Conversely, a group with IFRS consolidated annual accounts may follow Title 9 in the single-entity annual accounts with the IFRS valuation principles; RJ 105 covers that combination, in force from financial year 2026 (RJ 100.103 and 100.104).

Even under IFRS part of Title 9 continues to apply, including the statutory reserves (art. 2:365(2), 2:373, 2:389(8) and 2:390 DCC), the management report and disclosure. For an ordinary BV IFRS is rarely worthwhile; the choice matters for listed companies, which must already follow IFRS for the consolidated accounts, and for subsidiaries of IFRS groups. See IFRS or Dutch GAAP.

By size class

Common mistakes

• Not stating at the top of the balance sheet whether the appropriation of the result has been included.
• Filing adopted annual accounts again with different figures. The adopted version stands; if it falls seriously short, a notice follows, and the correction comes in the next year.
• Reporting in dollars without the activities or the group justifying it.
• Preparing the annual accounts in English without a decision of the general meeting.

How it works in Jaarrekening.io

Jaarrekening.io prepares the balance sheet before appropriation of the result, with the result as the last item of equity; the app does not yet offer a balance sheet after appropriation. The annual accounts are in euros. If a medium-sized or large legal entity keeps its records in another currency, the AI check warns that the figures must first be converted to euros.

Sources

• Art. 2:362 DCC, text in force from 1 July 2026 (wetten.overheid.nl, in Dutch)
• Overview of amendments to art. 2:362 DCC (wetten.overheid.nl, in Dutch)
• Art. 11 Decree on annual accounts models: appropriation of result at the top of the balance sheet (wetten.overheid.nl, in Dutch)
• Dutch Accounting Standards Board (RJ): the full bundle (in Dutch)
• Dutch Accounting Standards Board (RJ): the small bundle (in Dutch)

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