0000000005729817

Assurance

From Dutch GAAPto IFRS for SMEs*

A comparison between IFRS for SMEs, Dutch GAAP and IFRS

*connectedthinking

From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS

PricewaterhouseCoopers 2

Table of contents

Preface 3Executive summary 61. Accounting framework and first-time adoption (Sections 1, 2, 3 and 35) 122. Financial statements (Sections 3, 4, 5, 6, 7, 8 and 10) 183. Business combinations, consolidated financial statements, and investments in associates

and joint ventures (Sections 9, 14, 15 and 19) 28Business combinations 28Consolidation 32Investments in associates 37Investments in joint ventures 41

4. Income and expenses (Sections 2, 23, 24, 25, 26 and 28) 44Income 44Expenses 50

5. Financial assets and liabilities (Sections 11 and 12) 56Financial instruments: general information 56Basic financial instruments 58Additional financial instruments issues 63

6. Non-financial assets (Sections 13, 16, 17, 18 and 27) 69Inventories 69Investment property 71Property, plant and equipment 73Intangible assets other than goodwill 76Impairment of non-financial assets 79

7. Non-financial liabilities and equity (Sections 21, 22, 28 and 29 83Provisions and contingencies 83Equity 85Employee benefits 87Income taxes 92

8. Other topics (Sections 20, 30, 31, 32, 33 and 34) 96Leases 96Foreign currencies 99Hyperinflation 101Events after the end of the reporting period 102Related-party disclosures 103Specialised activities 104Discontinued operations and assets held for sale 106

Appendices 109

Appendix I Exemptions for medium-sized entities in the Netherlands 110Appendix II Examples – Statement of financial position 111Appendix III Examples – Statement of comprehensive income 113Appendix IV Examples – Statement of changes in equity 115Appendix V Examples – Statement of cash flows 116



Preface

The ‘International Financial Reporting Standard for Small and Medium-sized Entities’ (IFRS for SMEs) applies to allentities that do not have public accountability. An entity has public accountability if it files its financial statements with asecurities commission or other regulatory organisation for the purpose of issuing any class of instrument in a publicmarket, or if it holds assets in a fiduciary capacity for a broad group of outsiders – for example, a bank, insuranceentity, pension fund, securities broker/dealer. The definition of an SME is therefore based on the nature of an entityrather than on its size.

The standard is applicable immediately. It is a matter for authorities in each territory to decide which entities arepermitted or even required to apply IFRS for SMEs.

The IASB developed this standard in recognition of the difficulty and cost to private companies of preparing fullycompliant IFRS information. It also recognised that users of private entity financial statements have a different focusfrom those interested in publically listed companies. IFRS for SMEs attempts to meet the users’ needs while balancingthe costs and benefits to preparers. It is a stand-alone standard; it does not require preparers of private entity financialstatements to cross-refer to full IFRS.

The more modest disclosure requirements will appeal to users and preparers. Embedding the standard across aprivate group with extensive global operations that use a variety of local reporting standards will significantly ease themonitoring of financial information, reduce the complexity of statutory reconciliations (thereby reducing the risk of error),make the consolidation process more efficient and streamline reporting procedures across group entities.

In this overview of similarities and differences we refer to Dutch GAAP, which covers: The Dutch Civil Code, Book 2, Part 9 (‘BW 2 T9’); including:

- The General Administrative Order on model formats (‘Besluit modellen jaarrekening’ – ‘GAO on modelformats’);

- The Resolution on fair value (‘Besluit actuele waarde’); and The Dutch Accounting Standards (‘Richtlijnen voor de jaarverslaggeving’).

Dutch company law is part of the Dutch Civil Code. The legal provisions relating to companies limited by shares in theNetherlands are included in Book 2 of the Code, which contains legal provisions relating to all legal persons andentities, including co-operatives and associations, as well as limited liability companies. The financial reportingregulatory framework is built around the relevant elements of the Code, and is supplemented by the Dutch AccountingStandards, judicial precedence (‘de Ondernemingskamer’) and, more latterly, International Financial ReportingStandards and the Authority for Financial Markets (‘Autoriteit Financiële Markten’ (AFM)).

The Dutch Accounting Standards (‘DAS’) have no legal force, but provide more detailed guidance on the interpretationof the law and in areas not specifically covered by the Code. In practice, the Dutch Accounting Standards form animportant part of Dutch Generally Accepted Accounting Principles and this has been confirmed in a number of legalcases.



We based our overview of similarities and differences on Dutch Law and the 2009 version of the DAS which isapplicable for financial statements for annual periods beginning on or after 1 January 2010. For that reason thisoverview includes the revised DAS 271 in respect of employee benefits. An entity shall apply the revised DAS 271 forannual periods beginning on or after 1 January 2010, but earlier adoption is recommended. The main difference withthe old version of DAS 271 is the cancellation of the difference between defined benefit plans and defined contributionplans. Instead a liability approach is introduced.The Dutch GAAP column deals with the recognition and measurement requirements for medium-sized and largeentities. Small entities are not covered in this overview. The size criteria and specific exemptions for medium-sizedentities are included in App. II.

The focus of this document is based on the IFRS for SMEs. If Dutch GAAP or full IFRS deals with exemptions notcovered in IFRS for SMEs, we did not include this exemption in the tables, but out scoped it in the additional notes aftereach subject. Examples are accounting for step acquisitions, emission rights and separate financial statements. TheIFRS for SMEs and full IFRS do not require presentation of separate financial statements for the parent entity or for theindividual subsidiaries. Some standards do however provide some guidance regarding separate financial statements.We included these items, but not the full guidance in Dutch GAAP regarding this subject.

For your information we included the translation of frequently used terms below:historical cost historische kostprijscurrent value actuele waardereplacement value vervangingswaardevalue in use bedrijfswaardefair value marktwaarde / reële waarderealisable value opbrengstwaarde

Furthermore we included examples of a Statement of financial Position, a Comprehensive income statement, aStatement of changes in equity and a Statement of cash flows in the appendices based on Dutch GAAP and IFRS forSMEs in order to show the major differences in presentation.

This publication is a part of PricewaterhouseCoopers’ ongoing commitment to help companies navigate the switch fromlocal GAAP to IFRS for SMEs.

Hugo van den EndeBob OwelPricewaterhouseCoopersThe Netherlands



Note: This publication is for those who wish to gain a broad understanding of the significant differences between ‘International

Financial Reporting Standards for Small and Medium-sized Entities (IFRS for SMEs)’, Dutch GAAP and ‘full’ IFRS. It is not

comprehensive. It focuses on a selection of those differences most commonly found in practice. When applying the individual

accounting frameworks, companies should consult all of the relevant accounting standards and, where applicable, national law.

Where this publication states 'Same as IFRS for SMEs', this means that the IASB guidance is identical in full IFRS or Dutch GAAP

as IFRS for SMEs. Where it states 'Similar to IFRS for SMEs', this means that the guidance is not identical and there are minor

differences

While every effort has been made to ensure accuracy, information contained in this publication may not be comprehensive or may

have been omitted that may be relevant to a particular reader. In particular, this publication is not intended as a study of all aspects

of full IFRS, Dutch GAAP or IFRS for SMEs or as a substitute for reading the standards and interpretations when dealing with

specific issues. No responsibility for loss to any person acting or refraining from acting as a result of any material in this publication

can be accepted by PricewaterhouseCoopers. Recipients should not act on the basis of this publication without seeking

professional advice.



Executive summary

This executive summary aims to demonstrate how converting to IFRS for SMEs has implications far beyond the entity’sfinancial reporting function; to highlight some of the key differences between IFRS for SMEs, full IFRS and DutchGAAP; and to encourage early consideration of what IFRS for SMEs means to the entity.

These and other issues are expanded upon in the main body of this publication. It takes into account authoritativepronouncements issued under IFRS for SMEs and full IFRSs published up to 9 July 2009. With regard to Dutch GAAPit takes into account the 2009 – version which is applicable for financial statements for annual periods beginning on orafter 1 January 2010.

Full IFRS: Liabilities related to refinancing completed after the balance sheet date are

addressed as events after the balance sheet date. In case of violation of debt

covenants the liabilities may only be presented as non-current if a waiver for one year

is granted by the lender before the balance sheet date.

IFRS for SMEs: Similar to full IFRS.

Dutch GAAP: Liabilities related to refinancing may be presented as non-current if the

refinancing is completed after the balance sheet date, but before the date of issuance

of the financial statements. In case of violation of debt covenants the liabilities may

only be presented as non-current if a waiver for more than one year is granted by the

lender before the date of issuance of the financial statements.

Accounting framework and

First time adoption (chapter 1)

Full IFRS: The first-time adoption mandatory exceptions are the same as in IFRS for

SMEs; the optional exemptions are similar but not exactly the same as a result of

differences between the sections in the IFRS for SMEs and full IFRS.

IFRS for SMEs: First-time adoption requires full retrospective application of the IFRS

for SMEs effective at the reporting date for an entity’s first IFRS for SMEs financial

statements. There are five mandatory exceptions, 12 optional exemptions and one

general exemption to the requirement for retrospective application.

The entity is not permitted to benefit more than once from the special first-time

adoption measurement and restatement exemptions.

Dutch GAAP: There are no separate guidelines regarding a first-time adoption.

General approach would be to retrospectively apply accounting principles in full.



Full IFRS: A statement of changes in equity is required, presenting a reconciliation of

equity items between the beginning and end of the period.

IFRS for SMEs: Same requirement. However, if the only changes to the equity during

the period are a result of profit or loss, payment of dividends, correction of prior-period

errors or changes in accounting policy, a combined statement of income and retained

earnings can be presented instead of both a statement of comprehensive income and

a statement of changes in equity.

Dutch GAAP: A statement of changes in equity is required, presenting a reconciliation

of equity items between the beginning and end of the period. However this is not a

primary statement, but should be included in the disclosure notes.

Financial statements (chapter

2)

Full IFRS: An entity is required to present a statement of comprehensive income either

in a single statement, or in two statements comprising of a separate income statement

and a separate statement of comprehensive income.

There is no prescribed format. Management selects a method of presenting its

expenses by either function or nature. Additional disclosure of expenses by nature is

required if presentation by function is chosen.

IFRS for SMEs: Same as full IFRS.

Dutch GAAP: The statement of comprehensive income is not a primary statement.

Instead, under Dutch GAAP only the income statement (or profit and loss account)

according to the models of the General Administrative Order on model formats is

applicable. Next to this, an ‘Overzicht Totaalresultaat’ is required in the disclosure

notes for large entities.

Full IFRS: Transaction costs are excluded under IFRS 3 (revised). Contingent

consideration is recognised regardless of the probability of payment.

Contingent liabilities are part of the cost of a business.

IFRS for SMEs: Transaction costs are included in the acquisition costs. Contingent

considerations are included as part of the acquisition cost if it is probable that the

amount will be paid and its fair value can be measured reliably.

Contingent liabilities are part of the cost of a business.

Dutch GAAP: Transaction costs are included in the cost of the acquisition. Contingent

considerations are included as part of the acquisition cost if it is probable that the

amount will be paid and its fair value can be measured reliably.

Contingent liabilities are assumed to be included in the acquisition price and are not a

separate part of the cost of a business.

Business

combinations (chapter 3)

Full IFRS: Amortisation of goodwill is not permitted. Goodwill is subject to an

impairment test annually and when there is an indicator of impairment. The option

provided by full IFRS to measure the non-controlling interest using either fair value

method or proportionate share method on each transaction may result in a different

goodwill amount compared to IFRS for SMEs or Dutch-GAAP.

IFRS for SMEs: After initial recognition, the goodwill is measured at cost less



Business

combinations (chapter 3)

– continued

accumulated amortisation and any accumulated impairment losses. Goodwill is

amortised over its useful life, which is presumed to be 10 years if the entity is unable to

make a reliable estimate of the useful life.

Dutch GAAP: Similar to IFRS for SMEs. However there is a rebuttable presumption

that the useful life of goodwill is up to a maximum of 20 years. According to Dutch law

it is also allowed to charge goodwill directly to the shareholders’ equity or the profit and

loss account.

Full IFRS: Investments in associates in the consolidated financial statements are

accounted for using the equity method. The cost method is only permitted in the

separate financial statements.

To account for a jointly controlled entity, either the proportionate consolidation method

or the equity method is allowed. The cost and fair value model are not permitted.

IFRS for SMEs: An entity may account for its investments in associates or jointly

controlled entities in the consolidated financial statements using one of the following: the cost model (cost less any accumulated impairment losses);

the equity method; the fair value through profit or loss model.

Proportionate consolidation for jointly controlled entities is not allowed.

Dutch GAAP: An entity may account for its investments in associates in the

consolidated financial statements using one of the following methods:

net asset value method; visible equity value if insufficient data are available to apply the net asset value

method.

Proportionate consolidation for jointly controlled entities is allowed. The net asset value

method is permitted otherwise.

Investments in associates and

joint ventures (chapter 3)

Full IFRS: For investments in associates the equity method is applied. Goodwill related

to associates is part of the carrying amount of the associate. Any goodwill included as

part of the carrying amount of the investment in the associate is not tested separately

for impairment but, rather, as part of the test for impairment of the investment as a

whole.

IFRS for SMEs: Same as full IFRS.

Dutch GAAP: For investments in associates the net asset value method is applied.

Unlike the equity method goodwill is recognised as a separate intangible asset;

therefore subject to amortisation and a separate impairment test if triggering events

are applicable.

Financial instruments –

derivatives and hedging

(chapter 5)

Full IFRS: IAS 39, ‘Financial instruments: Recognition and measurement’,distinguishes four measurement categories of financial assets – that is, Financial

assets at fair value through profit or loss, Held-to-maturity investments, Loans and

receivables and Available-for-sale financial assets. There are two categories offinancial liabilities – that is, Financial liabilities at fair value through profit or loss and

Other liabilities.

IFRS for SMEs: There are two sections dealing with financial instruments: a section



for simple payables and receivables, and other basic financial instruments; and a

section for other, more complex financial instruments. Most of the basic financial

instruments are measured at amortised cost; the complex instruments are generally

measured at fair value through profit or loss.

Dutch GAAP: There are five measurement categories of financial assets: trading

portfolio, derivatives, acquired loans and bonds, loans and other receivables and

investments in equity instruments. There are three measurement categories of

financial liabilities: trading portfolio, derivatives and other financial liabilities.

Financial instruments –

derivatives and hedging

(chapter 5)

– continued

The hedging models under IFRS and IFRS for SMEs are based on the principles in full

IFRS. However, there are a number of detailed application differences, some of which

are more restrictive under IFRS for SMEs (for example, a limited number of risks and

hedging instruments are permitted) however no quantitative effectiveness test required

under IFRS for SMEs.

Dutch GAAP: DAS 290 is largely based on full IFRS; however there are differences

which are sometimes fundamental. For example in Dutch GAAP:

cost price hedge accounting is permitted; ineffective hedges may qualify for hedge accounting; generic hedge documentation is allowed;

derivatives are allowed to be measured at cost when certain criteria are met; and a critical terms test is allowed for retrospective testing.

Full IFRS: For tangible and intangible assets, there is an accounting policy choice

between the cost model and the revaluation model. Goodwill and other intangibles

with indefinite lives are reviewed for impairment and not amortised.

IFRS for SMEs: The cost model is the only permitted model. All intangible assets,

including goodwill, are assumed to have finite lives and are amortised.

Dutch GAAP: For tangible and intangible assets, there is an accounting policy choice

between the cost model and the revaluation model. All intangible assets, including

goodwill, are assumed to have finite lives and are amortised.

Full IFRS: IAS 40, ‘Investment property’, offers a choice of fair value and the cost

method.

IFRS for SMEs: Investment property is carried at fair value if this fair value can be

measured without undue cost or effort.

Dutch GAAP: DAS 213, ‘Investment property’, offers a choice of fair value and the cost

method.

Non-financial assets (chapter

6)

Full IFRS: Research costs are expensed as incurred; development costs are capitalised

and amortised, but only when specific criteria are met. Borrowing costs are capitalised if

certain criteria are met.

IFRS for SMEs: All research and development costs and all borrowing costs are

recognised as an expense.



Dutch GAAP: Research costs are expensed as incurred; development costs are

capitalised and amortised, but only when specific criteria are met. Borrowing costs may

be capitalised when certain criteria are met.

Non-financial assets (chapter

6)

– continued

Full IFRS: Goodwill acquired in a business combination is allocated to the Cash

Generating Units (CGUs) that are expected to benefit from the synergies of the

combination. Goodwill is tested for impairment at the lowest level at which it is

monitored by management. CGUs may be grouped for testing, but the grouping cannot

be higher than an operating segment as defined in IFRS 8 (before aggregation).

IFRS for SMEs: Goodwill is allocated to the CGUs that are expected to benefit from

the synergies of the combination. If such allocation is not possible and the reporting

entity has not integrated the acquired business, the acquired entity is measured as a

whole when testing goodwill impairment. If such allocation is not possible and the

acquired business is integrated, the entire group is considered when testing goodwill

impairment.

Dutch GAAP: Goodwill is allocated to each cash-generating unit or smallest group of

cash-generating units to which a portion of that carrying amount could be allocated on a

reasonable and consistent basis.

Initially the company applies ‘bottom-up’ test. If the goodwill cannot be allocated on a

reasonable and consistent basis a ‘top-down’ test is applied in allocating the goodwill to

cash-generating units.

Full IFRS: Under IAS 19, ‘Employee benefits’, actuarial gains or losses can be

recognised immediately or amortised into profit or loss over the expected remaining

working lives of participating employees.

IFRS for SMEs: Requires immediate recognition and splits the expense into different

components.

Dutch GAAP: No distinction is made between defined benefit plans and defined

contribution plans. Instead DAS 271 applies a liability approach to pension accounting.

The pension contributions payable by the employer to the pension fund are expensed.

Non-financial liabilities and

equity

– Employee benefits, defined

benefit plans (chapter 7)

Full IFRS: The use of an accrued benefit valuation method (the projected unit credit

method) is required for calculating defined benefit obligations.

IFRS for SMEs: The circumstance-driven approach is applicable, which means that the

use of an accrued benefit valuation method (the projected unit credit method) is

required if the information that is needed to make such a calculation is already

available, or if it can be obtained without undue cost or effort. If not, simplifications are

permitted in which future salary progression, future service or possible mortality during

an employee’s period of service are not considered.

Dutch GAAP: No distinction is made between defined benefit plans and defined

contribution plans. Instead DAS 271 applies a liability approach to pension accounting.



Full IFRS: A deferred tax asset is only recognised to the extent that it is probable that

there will be sufficient future taxable profit to enable recovery of the deferred tax asset.

IFRS for SMEs: A valuation allowance is recognised so that the net carrying amount of

the deferred tax asset equals the highest amount that is more likely than not to be

recovered. The net carrying amount of deferred tax asset is likely to be the same

between full IFRS and IFRS for SMEs.

Dutch GAAP: Similar to (full) IFRS.

Full IFRS: No deferred tax is recognised upon the initial recognition of an asset and

liability in a transaction which is not a business combination and affects neither

accounting profit nor taxable profit at the time of the transaction.

IFRS for SMEs: No such exemption.

Dutch GAAP: No such exemption, but similar approach applies.

Non-financial liabilities and

equity

– Income taxes (chapter 7)

Full IFRS: There is no specific guidance on uncertain tax positions. In practice,

management will record the liability measured as either a single best estimate or a

weighted average probability of the possible outcomes, if the likelihood is greater than

50%.

IFRS for SMEs: Management recognises the effect of the possible outcomes of a

review by the tax authorities. It should be measured using the probability-weighted

average amount of all the possible outcomes. There is no probable recognition

threshold.

Dutch GAAP: There is no specific guidance under DAS 272. In practice, the company

will apply a policy based on the general principles of a provision using DAS 252.

Other topics – Discontinued

operations and assets held for

sale (chapter 8)

Full IFRS: Amounts for discontinued operations are required and identified in the

statement of comprehensive income.

IFRS for SMEs: Discontinued operations are presented separately in the statement of

comprehensive income and the statement of cash flows. There are additional

disclosure requirements in relation to discontinued operations.

Dutch GAAP: Separate presentation of discontinued operations in the income

statement is not allowed. There are only some disclosure requirements.



1. Accounting framework and first-time adoption(Sections 1, 2, 3 and 35)

IFRS for SMEs Dutch GAAP Full IFRSScope An entity that publishes general

purpose financial statements for

external users and does not

have public accountability can

use the IFRS for SMEs. An

entity has ‘public accountability’

if it files or is in the process of

filing its financial statements with

a securities commission or other

regulatory organisation for the

purpose of issuing any class of

instrument in a public market or

if it holds assets in a fiduciary

capacity for a broad group of

outsiders. Banks, insurance

companies, securities brokers

and dealers and pension funds

are examples of entities that

hold assets in a fiduciary

capacity for a broad group of

outsiders.

Small listed entities are not

included in the scope of the

IFRS for SMEs.

If a subsidiary of an IFRS entity

uses the recognition and

measurement principles

according to full IFRS, it must

provide the disclosures required

by full IFRS.

[IFRS for SMEs 1.1-1.6]

BVs, NVs and some other legal

entities are subject to the

requirements of BW2 T9.

Additional guidance is included

in the DAS. Listed entities in the

Netherlands are required to

apply (full) IFRS for their

consolidated financial

statements.

Dutch Law facilitates the use of

Full IFRS in general purpose

financial statements for non-

listed entities

[art. 360, 362 BW2 T9 and DAS

100.100-104]

IFRSs are developed and

published to promote the use of

those IFRSs in general purpose

financial statements and other

financial reporting. IFRSs apply

to all general purpose financial

statements, which are directed

towards the common information

needs of a wide range of users.

[Preface to IFRS, paras 7, 10]

DefinitionsAsset An asset is a resource

controlled by an entity as a

result of past events and from

which future economic benefits

are expected to flow to the

entity.

Future economic benefits can

arise from continuing use of the

asset or from its disposal.

The following factors are not

Same as IFRS for SMEs.

[DAS 930.49(a), 53-59].


[IFRS Framework, paras 49(a),

53-59].



IFRS for SMEs Dutch GAAP Full IFRSessential in assessing the

existence of an asset:

its physical substance;

the right of ownership.

[IFRS for SMEs 2.15(a), 2.17-

2.19]Liability A liability is a present obligation

of an entity arising from past

events, the settlement of which

is expected to result in an

outflow from the entity of

resources embodying economic

benefits.

The present obligation can be

either a legal or constructive

obligation (based on established

pattern of past practice or a

creation of valid expectations).

[IFRS for SMEs 2.15(b), 2.20-

2.21]


[DAS 930.49(b), 60-64]


[IFRS Framework, paras 49(b),

60-64]

Equity Refer to chapter 7: Non-financial

liabilities and equity.

Refer to chapter 7: Non-financial

liabilities and equity.

Refer to chapter 7: Non-financial

liabilities and equity.Income Refer to chapter 4: Income and

expenses.

Refer to chapter 4: Income and

expenses.


expenses.Expenses Refer to chapter 4: Income and

expenses.


expenses.


expenses.Recognition of theelements of thefinancialstatements

Recognition is the process of

incorporating in the balance

sheet or income statement an

item that meets the definition of

an element and satisfies the

following criteria:

It is probable that any future

economic benefit associated

with the item will flow to or

from the entity.

The item has a cost or a

value that can be measured

reliably.

A failure to recognise an item

that satisfies these criteria is not

rectified by disclosure of

accounting policies used or by

notes or explanatory materials

An item that fails to meet the

recognition criteria may qualify

for recognition at a later date as

a result of subsequent

circumstances or events.


Same as IFRS for SMEs. In

addition, regard needs to be

given to the materiality

considerations.

[DAS 930.82-88]


addition, regard needs to be

given to the materiality

considerations.

[IFRS Framework, paras 82-88]



IFRS for SMEs Dutch GAAP Full IFRSConcepts and pervasive principles

Measurementbases

Items are usually accounted for

at their historical cost. However,

certain categories of financial

instruments, investments in

associates and joint ventures,

investment property and

agricultural assets are valued at

fair value. All items other than

those carried at fair value

through profit or loss are subject

to impairment.

[IFRS for SMEs 2.46, 2.47-2.51]

The measurement bases

include historical cost and

current value. Current value

includes replacement value,

realisable value, value in use

and fair value. The

measurement basis most

commonly adopted is historical

cost.

[art. 384.1 BW2 T9, Resolution on

fair value, DAS 930.100-101]

The measurement bases

include historical cost, current

cost, realisable value and

present value. The

measurement basis most

commonly adopted is historical

cost. However, certain items

are valued at fair value (for

example, investment property,

biological assets and certain

categories of financial

instruments).

[IFRS Framework, paras 100,

101]Underlyingassumptions

Financial statements are

prepared on an accrual basis

and on the assumption that the

entity is a going concern and will

continue in operation in the

foreseeable future (which is at

least, but not limited to, 12

months from the balance sheet

date).

Offsetting assets and liabilities

or income and expenses is not

permitted unless it is required or

permitted by individual sections

in the IFRS for SMEs.

[IFRS for SMEs 2.36, 2.52, 3.8]


[art. 384.3 BW2 T9,

DAS 930.22,23 and DAS

115.301-305]


[IAS 1.25, 1.27, 1.32]

Qualitativecharacteristics

The principal qualitative

characteristics that make the

information provided in financial

statements useful to users are

understandability, relevance,

materiality, reliability, substance

over form, prudence,

completeness, comparability,

timeliness and achieving a

balance between benefit and

cost.

Information is material if its

omissions or misstatement could

influence the economic

decisions of users made on the

basis of the financial statements.

Materiality depends on the size

of the omission or misstatement

judged in the particular

circumstances.

[IFRS for SMEs 2.4- 2.14]

The four qualitative

characteristics under Dutch

GAAP are understandability,

relevance, reliability and

comparability.

Materiality is a sub-characteristic

of relevance. Substance over

form, prudence and

completeness are sub-

characteristics of reliability.

Timeliness and balance between

benefit and cost are defined as

constraints on relevant and

reliable information instead of as

qualitative characteristics.

[DAS 930.24-46]

The four qualitative

characteristics under IFRS are

understandability, relevance,

reliability and comparability.

Materiality is a sub-characteristic

of relevance. Substance over

form, prudence and

completeness are sub-

characteristics of reliability.

Timeliness and balance between

benefit and cost are defined as

constraints on relevant and

reliable information instead of as

qualitative characteristics.

[IFRS Framework, paras 24-46]



IFRS for SMEs Dutch GAAP Full IFRSFair presentation Financial statements should

show a true and fair view, or

present fairly the financial

position, of an entity’s

performance and changes in

financial position. This is

achieved by applying the

appropriate section of the IFRS

for SMEs and the principal

qualitative characteristics

outlined above.

In extremely rare circumstances,

entities are permitted to depart

from IFRS for SMEs, only if

management concludes that

compliance with one of the

requirements would be so

misleading as to conflict with the

objective of the financial

statements. The nature, reason

and financial impact of the

departure is explained in the

financial statements.

[IFRS for SMEs 3.7]

Similar to IFRS for SMEs.

However an entity is required to

depart from the Dutch Civil Code

if necessary in order to provide a

true and fair view in the financial

statements. The reason for the

departure should be disclosed.

[art. 362.4 BW2 T9]


[IAS 1.15-1.16, 1.19, 1.20]

Offsetting Assets and liabilities or income

and expenses cannot be offset,

except where specifically

required or permitted by the

standard.

[IFRS for SMEs 2.52]


Offsetting is allowed if an entity

possesses an adequate legal

instrument to balance and settle

the asset and liability

simultaneously.

[DAS 115.305]


[IAS 1.32]

Refinancing anddebt covenants

Liabilities related to refinancing

are presented as non-current if

the refinancing is completed

before the balance sheet date.


completed after the balance

sheet date are addressed as

events after the balance sheet

date.

In case of violation of debt

covenants the liabilities may only

be presented as non-current if a

waiver for one year is granted by

the lender before the balance

sheet date.

[IFRS for SMEs 4.7]


are presented as non-current if

the refinancing is completed

before the balance sheet date.


may be presented as non-

current if the refinancing is

completed after the balance

sheet date, but before the date

of issuance of the financial

statements.

In case of violation of debt

covenants the liabilities may

only be presented as non-

current if a waiver for more

than one year is granted by the

lender before the date of

issuance of the financial

statements.

[DAS 254.304-307]


[IAS 1.72]



IFRS for SMEs Dutch GAAP Full IFRSFirst-time adoption

Transition to IFRSfor SMEs/IFRS/Dutch GAAP

The first-time adopter of the

IFRS for SMEs is an entity that

presents its first annual financial

statements that conform with the

IFRS for SMEs regardless of

whether its previous accounting

framework was full IFRS or

another set of generally

accepted accounting principles.

First-time adoption requires full

retrospective application of the

IFRS for SMEs effective at the

reporting date for an entity’s first

IFRS for SMEs financial

statements. There are five

mandatory exceptions, 12

optional exemptions and one

general exemption to the

requirement for retrospective

application. The entity is not

permitted to benefit more than

once from the special first-time

adoption measurement and

restatement exemptions.

[IFRS for SMEs 35.1-35.2, 35.9-

35.11]

There are no separate guidelines

regarding a first-time adoption.

General approach would be to

retrospectively apply accounting

principles in full.

The first-time adopter of IFRS is

an entity that presents its first

annual financial statements that

conform to IFRS.

The mandatory exceptions are

the same as in IFRS for SMEs;

the optional exemptions are

similar but not exactly the same

as a result of differences

between the sections in the

IFRS for SMEs and full IFRS.

[IFRS 1.2, 1.4, 1.7, 1.10, 1.13,

1.26]

Date of transition This is the beginning of the

earliest period for which full

comparative information is

presented in accordance with

IFRS for SMEs in its first IFRS

for SMEs financial statements.


No separate guidelines

applicable.

This is the beginning of the

earliest period for which full

comparative information is

presented in accordance with full

IFRS in its first IFRS financial

statements.

[IFRS 1 appendix A]Reconciliation A first-time adopter’s first

financial statements include the

following reconciliations:

Reconciliations of its equity

reported under its previous

financial reporting framework

to its equity under IFRS for

SMEs for both the transition

date and the end of the latest

period presented in the

entity’s most recent annual

financial statements under its

previous financial reporting

framework.

A reconciliation of the profit or

loss reported under its

previous financial reporting

framework for the latest


applicable.


[IFRS 1.39]



IFRS for SMEs Dutch GAAP Full IFRSperiod in its most recent

annual financial statements to

its profit or loss under IFRS

for SMEs for the same period.

[IFRS for SMEs 35.13]Mandatoryexceptions

A first-time adopter does not

change the accounting that it

followed previously for any of the

following transactions:

derecognition of financial

assets and liabilities;

hedge accounting;

estimates;

discontinued operations;

measuring non-controlling

interests.



applicable.

In addition to the exceptions in

IFRS for SMEs, full IFRS has a

mandatory exception relating to

assets classified as held for

sale.

[IFRS 1.26]

Optionalexemptions

The following optional

exemptions to the requirement

for retrospective application are

available for use insofar they are

relevant to the entity:

business combinations;

share-based payment

transactions;

fair value or revaluation as

deemed cost for PPE,

investment property or

intangible asset;

cumulative translation

differences;

separate financial statements;

compound financial

instruments;

deferred income tax;

a financial asset or an

intangible asset accounted for

in accordance with IFRIC 12;

extractive activities;

arrangements;

containing a lease;

decommissioning liabilities

included in the cost of PPE.



applicable.

Most of the exemptions in IFRS

for SMEs are also applicable

under full IFRS. There are

additional exemptions such as

borrowing costs and leases.

[IFRS 1.13]

General exemption The general exemption is on the

ground of impracticability.

‘Impracticable’ is defined in the

glossary as being: ‘When the

entity cannot apply it after

making every reasonable effort

to do so’.



applicable.

Not applicable.



2. Financial statements(Sections 3, 4, 5, 6, 7, 8 and 10)

Sections 3, 4, 5, 6, 7 and 8 of the IFRS for SMEs are based on IAS 1, ‘Presentation of financial statements’ (revised2007, effective from 1 January 2009). They set the requirements for the presentation of financial statements, guidelinesfor their structure and minimum requirements for their content.

IFRS for SMEs Dutch GAAP Full IFRSGeneral requirementsCompliance Management explicitly states

that financial statements

comply with IFRS for SMEs.

Compliance cannot be claimed

unless the financial statements

comply with all the

requirements of this standard.

[IFRS for SMEs 3.3]

An explicit statement that

financial statements comply

with the Dutch reporting

standards is not required.


[IAS 1.16]

Going concern Financial statements areprepared on an accruals basisand on the assumption that theentity is a going concern andwill continue in operation for theforeseeable future (which is atleast 12 months from the end ofthe reporting period).



[art. 384.3 BW2 T9, DAS

930.22-23 and DAS 120.301-

303]


[IAS 1.25-26]

Departure from thestandard

Management departs from the

standard if it concludes that

compliance with the requirement

would be so misleading as to

conflict with the objective of the

financial statements as set out in

Section 2 ‘Concepts and

pervasive principles’.

Management may not depart

from the standard if the relevant

regulatory framework prohibits

this.

[IFRS for SMEs 3.4]


[art. 362.4 BW2 T9 and DAS

110.105-108]


[IAS 1.20]

Comparativeinformation

Management discloses

comparative information in

respect of the previous

comparable period for all

amounts reported in the financial

statements in the primary

statements and in the notes),

except when IFRS for SMEs

permits or requires otherwise

(reconciliation for PPE,

investment property, intangible

assets, goodwill, provisions,


However, is less prescriptive

about movement schedules for

the previous comparable

period.


110.127]


[IAS 1.38]



IFRS for SMEs Dutch GAAP Full IFRSdefined benefit obligations, fair

value of plan assets)

[IFRS for SMEs 3.14]Components offinancial statements

A set of financial statements

comprises:

a statement of financial

position;

a single statement of

comprehensive income

(including items of other

comprehensive income), or

a separate income

statement and a separate

statement of comprehensive

income;

a statement of changes in

equity;

a statement of cash flows;

notes comprising a

summary of significant

accounting policies and

other explanatory

information.

Under certain circumstances,

the statements under (b) and (c)

may be combined into one

statement of income and

retained earnings.


A set of financial statements

comprises:

a statement of financial

position (balance sheet);

an income statement;

a statement of cash flows;

notes comprising a

summary of significant

accounting policies and

other explanatory

information.

[DAS 110.101]

Similar as IFRS for SMEs. The

entity may use titles for the

statements other than those

used in the standard.

In addition, management

includes a statement of

financial position as at the

beginning of the earliest

comparative period when an

entity applies an accounting

policy retrospectively or makes

a retrospective restatement or

when it reclassifies items in its


[IAS 1.10]

Statement of financial position (balance sheet)General There is no prescribed balance

sheet format. However, the

following items are required to

be presented on the face of the

balance sheet as a minimum:

Assets:

cash and cash equivalents;

trade and other receivables;

financial assets;

inventories;

PPE;

investment property;

intangible assets;

biological assets;

investments in associates

and in joint-ventures;

current tax assets;

deferred tax assets.

According to the GAO on model

formats (Besluit Modellen

Jaarrekening) there are two

prescribed balance sheet

formats (Models A-B)

depending on size criteria. The

following items should not be

renamed:

Assets:

non-current assets;

current assets.

Liabilities and equity:

equity;

provisions;

non-current liabilities;

current liabilities.

Provisions are presented

separately from other

The following additional line

items are required on the

balance sheet:

total of assets classified as

held for sale and assets

included in disposal groups

classified as held for sale;

liabilities included in disposal

groups classified as held for

sale.

Only those investments that are

to be accounted for using the

equity method are presented as

a line item.

[IAS 1.54]



IFRS for SMEs Dutch GAAP Full IFRSLiabilities and equity:

Trade and other payables.

Financial liabilities.

Current tax liabilities.

Deferred tax liabilities.

Provisions.

Equity attributable to the

owners of the parent.

Non-controlling interests

(presented within equity).

Refer to Appendix II for an

example of a balance sheet.

[IFRS for SMEs 4.2]

categories in contrary to IFRS

for SMEs. Provisions are

disclosed as non-current or

current depending on the

duration of the provision.

The order in the models should

not be changed.

Refer to Appendix II for an

example of a balance sheet.

[GAO on model formats]

Current/non-currentdistinction

The current/non-current

distinction is required except

when a liquidity presentation is

more relevant. An asset is

classified as current if it is:

expected to be realised, sold

or consumed in the entity’s

normal operating cycle

(irrespective of length);

primarily held for the

purpose of trading;

expected to be realised

within 12 months after the

balance sheet date; or

cash and cash equivalent

(that does not restrict its use

within the 12 months after

the balance sheet date).

A liability is classified as current

if:

it is expected to be settled in

the entity’s normal operating

cycle;

it is primarily held for the

purpose of trading;

it is expected to be settled

within 12 months after the

balance sheet date; or

the entity does not have an

unconditional right to defer

settlement of the liability

until12 months after the

balance sheet date.



[DAS 190.201-210]


[IAS 1.60, 1.66, 1.69]

Statement of comprehensive income and income statementGeneral An entity is required to present

a statement of comprehensive

There are six prescribed

income statement formats


[IAS 1.81-1.83]



IFRS for SMEs Dutch GAAP Full IFRSincome either in a single

statement, or in two statements

comprising of a separate

income statement and a

separate statement of

comprehensive income.

There is no prescribed format.

Management selects a method

of presenting its expenses by

either function or nature.

Additional disclosure of

expenses by nature is required

if presentation by function is

chosen.

Refer to Appendix III for an

example of a single statement

of comprehensive income.

[IFRS for SMEs 5.2, 5.11]

(Models E-J) in the GAO on

model formats.

The order in the models should

not be changed.

Dutch Law does not distinguish

an income statement and a


statement. An ‘Overzicht

Totaalresultaat’ is required in

the disclosure notes for large

entities.

Refer to Appendix III for an

example of an income

statement.

[GAO on model formats and

DAS 265]Line items The following items are

required to be presented on the

face of the statement of

comprehensive income (as a

single statement) as a

minimum:

revenue;

finance costs;

share of profit or loss of

associates and joint

ventures accounted for

using the equity method;

tax expense;

a single item comprising the

total of (1) the post-tax gain

or loss of discontinued

operations, and (2) the post-

tax gain or loss recognised

on the measurement to fair

value less costs to sell or on

the disposal of the assets or

disposal group(s)

constituting the discontinued

operation;

profit or loss for the period;

items of other


classified by nature;

share of the other

comprehensive income of

associates and joint-

ventures accounted for

using the equity method;


However separate presentation

of discontinued operations is

not allowed. Furthermore the

two-statement approach is not

permitted under Dutch Law.



[IAS 1.82-1.83]



IFRS for SMEs Dutch GAAP Full IFRS total comprehensive income.

If the entity applies the two-

statement approach, the last

three line items above are

presented in a separate


income.

Profit or loss for the period and

total comprehensive income for

the period are allocated in the


income to the amounts

attributable to non-controlling

interests and owners of the

parent.

[IFRS for SMEs 5.5-5.7]Extraordinary items Extraordinary items are not

permitted.


Extraordinary items are

permitted in very rare

circumstances, which lead to

revenues or costs clearly

distinguishable from those

related to normal activities.

Examples are natural disasters

or expropriation

[DAS 270.407-410]


[IAS 1.87]

Statement of changes in equityGeneral The statement of changes in

equity presents a reconciliation

of equity items between the

beginning and end of the period.

The following items are

presented on the face of the

statement of changes in equity:

total comprehensive income

for the period, showing

separately the total amount

attributable to owners of the

parent and to non-controlling

interests;

for each component of the

equity, the effects of changes

in accounting policies and

corrections of material prior-

period errors;

for each component of

equity, reconciliation

between the carrying

amount at the beginning and

the end of the period,

separately disclosing

The statement of changes in

equity is not a primary

statement, but part of the

disclosure note on equity.

Disclosure is only required in

the separate financial

statements.

Refer to Appendix IV for an

example of a statement of

changes in equity.

[art. 378, 410.1 BW2 T9 and

DAS 240.237, 401-411]

Same as IFRS for SMEs

[IAS 1.106]

The amounts of dividends

recognised as distributions to

owners during the period, and

the related amount per share,

are presented either in the

statement of changes in equity

or in the notes.

[IAS 1.107]



IFRS for SMEs Dutch GAAP Full IFRSchanges resulting from (1)

profit or loss, (2) each item

of other comprehensive

income, and (3) the amount

of investments by and

dividends and other

distributions to owners.

Refer to Appendix IV for an

example of a statement of

changes in equity.

[IFRS for SMEs 6.3](Combined)statement ofincome andretained earnings

A combined statement of

income and retained earnings

can be presented instead of

both a statement of

comprehensive income and a

statement of changes in equity

if the only changes to the equity

of an entity during the period

are a result of profit or loss,

payment of dividends,

correction of prior-period errors

or changes in accounting

policy.

In addition to the line items

required in the statement of

comprehensive income, the

following items are presented in

the (combined) statement of

income and retained earnings:

retained earnings at the start

of the period;

dividends declared and paid

or payable during the period;

restatement of retained

earnings for correction of

prior-period errors;

restatement of retained

earnings for changes in

accounting policy;

retained earnings at the end

of the period.


Not permitted. Not permitted.

Statement of cash flowsContent The cash flow statement

presents the generation and

use of cash by category

(operating, investing and

finance) over a specified period

of time.


Refer to Appendix V for an

example of a statement of cash

flows.

[DAS 360.201-227]


[IAS 7.10-7.17]



IFRS for SMEs Dutch GAAP Full IFRSOperating activities are the

entity’s principal revenue-

producing activities. Investing

activities are the acquisition

and disposal of non-current

assets (including business

combinations) and investments.

Financing activities are

changes in the equity and

borrowings.

Refer to Appendix V for an

example of a statement of cash

flows.

[IFRS for SMEs 7.1, 7.3, 7.4-

7.6]Reporting cash flowfrom operatingactivities

Operating cash flows may be

presented by using either the

direct method (gross cash

receipts and payments) or the

indirect method (adjusting net

profit or loss for non-operating

and non-cash transactions, and

for changes in working capital).

Examples of non-cash

transactions are acquisition of

assets by means of a finance

lease, or conversion of debt to

equity.

[IFRS for SMEs 7.7, 7.18-7.19]


addition, the direct method is

encouraged.

[DAS 360.209-216]

Same as IFRS for SMEs;

however, IFRS allows certain

cash flows to be reported on a

net basis. In addition, the direct

method is encouraged.

[IAS 7.18-7.20, 22]

Reporting cash flowfrom investing andfinancing activities

Cash flows from investing and

financing activities are reported

separately gross (that is, gross

cash receipts and gross cash

payments).

Cash flows related to interest

and dividends should be

reported consistently in

operating, investing or financing

activities.


Similar to IFRS for SMEs;

however DAS recommend

including paid and received

interest and received dividends

in operating or finance activities

and paid dividends in finance

activities.

[DAS 360.213, 217-221]


however, IFRS allows certain

cash flows to be reported on a

net basis.

[IAS 7.21-7.22]

Bank overdrafts Bank overdrafts are normally

considered financing activities

similar to borrowings. However,

if they are repayable on

demand and form an integral

part of an entity’s cash

management, bank overdrafts

are a component of cash and

cash equivalents.

[IFRS for SMEs 7.2]

This exemption is not included

in Dutch GAAP however it is

best practice to consider bank

overdrafts as a component of

cash if certain criteria are met.


[IAS 7.8]



IFRS for SMEs Dutch GAAP Full IFRSForeign currencycash flows

Cash flows arising from

transactions in foreign

currencies are translated to the

functional currency using the

exchange rate at the date of the

cash flows.

Cash flows of a foreign

subsidiary are translated to the


exchange rate at the date of the

cash flows.

Unrealised gains and losses

arising from changes in foreign

currency exchange rates are

not cash flows. These gains

and losses are presented

separately from cash flows from

operating, investing and

financing activities.


Similar to IFRS for SMEs; the

use of average rates for the

translation of cash flows arising

from transactions in foreign

currencies is also allowed.

[DAS 360.203]


[IAS 7.25-7.28]

Accounting policies, estimates and errorsSelection ofaccounting policiesand hierarchy ofother guidance

When IFRS for SMEs does not

address a transaction, other

event or condition,

management uses its

judgement in developing and

applying an accounting policy

that results in information that is

relevant and reliable.

If there is no relevant guidance,

management considers the

following sources, in

descending order:

the requirements and

guidance in IFRS for SMEs

on similar and related

issues; and

the definitions, recognition

criteria and measurement

concepts for assets,

liabilities and income and

expenses.

Management may also, but is

not required to, consider full

IFRS.


When DAS do not address a

transaction, other event or

condition, management is

expected to refer to DAS 930

(the Framework) in order to

select recognition criteria and

measurement concepts for

assets, liabilities, income and

expenses.

[DAS 110.110 and DAS 930]


however, management

considers IFRS as a source of

information (and not IFRS for

SMEs). In addition,

management may consider the

most recent pronouncements of

other standard-setting bodies,

other accounting literature and

accepted industry practices to

the extent that these do not

conflict with the concepts in

IFRS.

With regard to the definitions,

recognition criteria and

measurement concepts for


expenses, reference is made to

the Framework.

[IAS 8.10-8.12]

Consistency ofaccounting policies

Management chooses and

applies consistently one of the

available accounting policies.


[DAS 110.124]


[IAS 8.13]



IFRS for SMEs Dutch GAAP Full IFRSAccounting policies are applied

consistently to similar

transactions.

[IFRS for SMEs 10.7]Changes inaccounting policies

Changes in accounting policies

as a result of an amendment to

the IFRS for SMEs are

accounted for in accordance

with the transition provision of

that amendment. If specific

transition provisions do not

exist, the changes are applied

retrospectively.


Similar to IFRS for SMEs. In

addition disclosure of the future

effects of the change in

accounting policies should be

included in the notes to the

financial statements. A change

in accounting policies is more

often allowed.

[DAS 140.206-207]


[IAS 8.19-8.27]

Changes inaccountingestimates

Changes in accounting

estimates are recognised

prospectively by including the

effects in profit or loss in the

period that is affected (that is,

the period of change and future

periods) except if the change in

estimates gives rise to changes

in assets, liabilities or equity. In

this case, it is recognised by

adjusting the carrying amount

of the related asset, liability or

equity in the period of change.



[DAS 145.301-305]


[IAS 8.36-8.37]

Correction of prior-period /fundamental errors

Errors may arise from mistakes

and oversights or

misinterpretation of available

information.

Material prior-period errors are

adjusted retrospectively (that is,

by adjusting opening retained

earnings and the related

comparatives) unless it is

impracticable to determine the

effects of the error.


A fundamental error is an error

in the financial statements

detected after the approval of

the financial statements by the

general meeting of

shareholders, which results in

serious shortcomings in the

financial statements in the light

of giving adequate insight

required by law. Fundamental

errors are adjusted

retrospectively in the first set of

financial statements after their

detection. Other errors are

adjusted in profit or loss.


150.201-204]


[IAS 8.41-45]

Notes to the financial statementsGeneral The notes are an integral part

of the financial statements.

Notes provide additional

information to the amounts

disclosed in the primary

statements.


[art. 361.1 and DAS 110.125]


[IAS 1.112]



IFRS for SMEs Dutch GAAP Full IFRS[IFRS for SMEs 8.1-8.2]

Structure Information presented in one of

the primary statements is

cross-referenced to the relevant

notes where possible.

The following disclosures are

included, as a minimum, within

the notes to the financial

statements:

a statement of compliance

with IFRS for SMEs;

accounting policies;

key sources of estimation

uncertainty and judgements;

explanatory notes for items

presented in the financial

statements;

information not presented in

the primary statements.

Where applicable, the notes

include disclosures of changes


accounting estimates,

information about key sources

of estimation uncertainty and

judgements.


Information presented in one of

the primary statements should

be cross-referenced to the

relevant notes where possible

by large entities.

The following disclosures are

included, as a minimum, within

the notes to the financial

statements:

accounting policies;

principles regarding

consolidation;

explanatory notes for items

presented in the financial

statements (financial

summaries, notes required

by Dutch law and other

information in order to

provide a true and fair view);

information not presented in

the primary statements.

Where applicable, the notes

include disclosures of changes


accounting estimates.

Furthermore information about

key sources of estimation

uncertainty and judge-ments

may be included.

[DAS 300.101-107 and DAS

930.21]


however, IFRS generally has

more extensive disclosures

requirements, as well as a

sensitivity analysis.

[IAS 1.222, 1.225, 1.229]

Information aboutjudgements

The judgements that

management has made in

applying the accounting policies

and that have the most

significant effect on the

amounts recognised in the

financial statements are

disclosed in the notes.

[IFRS for SMEs 8.6]

Not specifically covered in

Dutch GAAP, practice is similar

to IFRS for SMEs.

[DAS 930.21]


addition, sensitivity analysis is

required.

[IAS 1.122]

Information aboutkey sources ofestimationuncertainty

The nature and carrying

amounts of assets and liabilities

for which estimates and

assumptions have a significant

risk of causing a material

adjustment to their carrying

amount within the next financial

period are disclosed in the

notes.

[IFRS for SMEs 8.7]

Refer to ‘structure’ mentioned

above.

[DAS 930.21]


addition, sensitivity analysis is

required.

[IAS 1.125]



3. Business combinations, consolidated financial statements,and investments in associates and joint ventures(Sections 9, 14, 15 and 19)

Business combinations

A business combination involves the bringing together of separate entities or businesses into one reporting entity. FullIFRS and IFRS for SMEs require the use of the purchase method of accounting for most business combinationtransactions. DAS also allow the pooling of interest method when certain criteria are met. The most common type ofcombination is where one of the combining entities obtains control over the other.

The following comparisons have been made based on DAS 216 and IFRS 3 (revised) issued in 2008 and applicable foraccounting periods beginning 1 July 2009.

The requirements of IFRS for SMEs are based on the former IFRS 3, ‘Business combinations’, before it was revised.There are therefore some differences between the IFRS for SMEs business combinations requirements and those inIFRS 3 (revised).

IFRS for SMEs Dutch GAAP Full IFRSScope of the

standardCombinations involving entities

or businesses under common

control or formation of a joint

venture are excluded from the

scope.


Similar scope exclusion as

IFRS for SMEs.

[DAS 216.104]

Same scope exclusion as IFRS

for SMEs.

[IFRS 3R.2]

Business An integrated set of activities

and assets conducted and

managed for the purpose of

providing either a return to

investors or lower costs or

other economic benefits directly

and proportionately to

policyholders or participants.

[IFRS for SMEs Glossary]

Dutch GAAP do not provide for

such a definition. Practice is

similar to IFRS for SMEs.

Same as IFRS for SMEs,

except that the integrated set of

activities and assets need only

to be capable of being

conducted and managed to

qualify as a business.

[IFRS 3R Appendix A]

Acquisition date The date on which the acquirer

obtains control over the

acquiree.



[DAS 216.105 and DAS 940]


[IFRS 3R.8]

Purchaseaccounting

All business combinations are

accounted for by applying the

purchase method. The steps in

applying the purchase method

are:

1. Identify the acquirer.

2. Measure the cost of the

business combination.

Most transactions qualify as an

acquisition. Under certain strict

rules, the pooling of interest

method is allowed.

Acquisitions are accounted for

by applying the purchase

accounting method, which is

The accounting under IFRS 3

(revised) is not a cost-allocation

model. The fair value of

acquired assets and liabilities

(with some exceptions) is

compared to the fair value of

the consideration to determine

goodwill.



IFRS for SMEs Dutch GAAP Full IFRS3. Allocate the cost of the

business combination to the

identifiable assets acquired

and liabilities and contingent

liabilities assumed at the

acquisition date.


similar to IFRS for SMEs.

Poolings of interests are

accounted for by applying the

pooling of interest method. The

pooling of interests method is

allowed in very rare

circumstances.

[DAS 216.107-108, 201, 301

and DAS 940]

IFRS 3 (revised) defines

negative goodwill as ‘bargain

purchase’. In addition, the step-

based accounting for a

business combination includes

an additional step that consists

of re-measuring the previously

held equity interest in the

acquiree at its fair value at the

acquisition date. Gains or

losses are recorded in profit or

loss.

[IFRS 3R.4-5]1. Identifying theacquirer

An acquirer is identified for all

business combinations. The

acquirer is the combining entity

that obtains control of the other

combining entities or

businesses.

Examples of indicators to

identify the acquirer include:

the relative fair value of the

combining entities;

the giving up of cash/other

asset in a business

combination where they

were exchanged for voting

ordinary equity instruments;

the power of management to

dominate the management

of the combined entity.



[DAS 216.107 and 108]


addition, IFRS 3 (revised)

includes more extensive

guidance on indicators to

identify the acquirer.

[IFRS 3R.6-7, Appendix B,

paras B13-B18]

2. Cost ofacquisition

The cost of a business

combination includes the fair

value of assets given, liabilities

incurred or assumed and equity

instruments issued by the

acquirer, in exchange for the

control of the acquiree, plus

any directly attributable costs.



[DAS 216.203-207]


however, IFRS 3 (revised) does

not have a cost-allocation

model. The fair value of

consideration transferred

excludes the transaction costs

(which are expensed) and

requires re-measurement of the

previously held interest at fair

value as part of the

consideration.

[IFRS 3R.37, 3R.42, 3R.53]Share-basedconsideration

Shares issued as consideration

are recorded at their fair value

at the date of the exchange.



[DAS 216.206]

Similar to IFRS for SMEs for

measurement of equity

instruments given as part of the

consideration. Full IFRS

includes further guidance.

[IFRS 3R.37]



IFRS for SMEs Dutch GAAP Full IFRSAdjustments to thecost of a businesscombinationcontingent onfuture events(Contingentconsidera-tion)

Contingent consideration is

included as part of the cost at

the date of the acquisition if it is

probable (that is, more likely

than not) that the amount will

be paid and can be measured

reliably.

If such adjustment is not

recognised at the acquisition

date but becomes probable

afterwards, the additional

consideration adjusts the cost

of the combination.



[DAS 216.239-240]

Contingent consideration is

recognised initially at fair value

as either a financial liability or

equity regardless of the

probability of payment. The

probability of payment is

included in the fair value, which

is deemed to be reliably

measurable. Financial liabilities

are re-measured to fair value at

each reporting date. Changes

in the fair value of contingent

consideration that are not

measurement period

adjustments are recognised

either in profit or loss or in other

comprehensive income. Equity-

classified contingent

consideration is not re-

measured at each reporting

date; its settlement is

accounted for within equity.

[IFRS 3R.39, 3R.58]3. Allocating thecost of a business

The acquirer recognises

separately the acquiree’s

identifiable assets, liabilities

and contingent liabilities that

existed at the date of

acquisition. These assets and

liabilities are generally

recognised at fair value at the

date of acquisition.


Similar to IFRS for SMEs,

except for the recognition of

contingent liabilities.

[DAS 216.208-210]


however, the exception to fair

value measurement also

applies for reacquired rights

(based on contractual terms),

replacement of share-based

payment awards (in

accordance with IFRS 2),

income tax (IAS 12, ‘Income

taxes’), employees benefits

(IAS 19, ‘Employee benefits’)

and indemnification assets.

[IFRS 3R.18, 3R.24-31]Restructuringprovision

The acquirer may recognise

restructuring provisions as part

of the acquired liabilities only if

the acquiree has at the

acquisition date an existing

liability for a restructuring

recognised in accordance with

the guidance for provisions.


A restructuring provision is

recognised in the acquisition

balance sheet if the acquirer

developed and announced the

main features of a formal plan

before the acquisition date.

The further details of this plan

should be formalised within

three months after the

acquisition date.

[DAS 216.212]


however, includes further

guidance that a restructuring

plan conditional on the

completion of the business

combination is not recognised

in the accounting for the

acquisition. These expenses

are recognised post-acquisition.

[IFRS 3R.11]

Contingentliabilities

The acquired contingencies are

recognised separately at the

acquisition date as a part of

allocation of the cost, provided

The acquired contingencies are

not recognised separately. The

contingent liabilities are

assumed to be included in the


[IFRS 3R.23, 3R.56]



IFRS for SMEs Dutch GAAP Full IFRStheir fair values can be

measured reliably.


amount recognised as

(negative) goodwill.

[DAS 216.209]

Goodwill

Goodwill Goodwill (the excess of the costof the business combinationover the acquirer’s interest inthe net fair value of theidentifiable assets, liabilitiesand contingent liabilities) isrecognised as an intangibleasset at the acquisition date.After initial recognition, thegoodwill is measured at costless accumulated amortisationand any accumulatedimpairment losses. Goodwill isamortised over its useful life,which is presumed to be 10years if the entity is unable tomake a reliable estimate of theuseful life.[IFRS for SMEs 19.22-19.23].


However there is a rebuttable

presumption that the useful life

of goodwill is up to a maximum

of

20 years.

According to Dutch law it is also

allowed to charge goodwill

directly to the shareholders’

equity or the profit and loss

account.[art. 386.3, 389.7 BW2 T9andDAS 216.221]

Amortisation of goodwill is notpermitted. Goodwill is subject toan impairment test annuallyand when there is an indicatorof impairment. The optionprovided by full IFRS tomeasure the non-controllinginterest using either fair valuemethod or proportionate sharemethod on each transactionmay result in a differentgoodwill amount.[IFRS 3R.32, IAS 36.9-10]

Associate becomessubsidiary or jointventure

If an associate becomes asubsidiary or joint venture, theinvestor shall remeasure itspreviously held equity interestto fair value and recognise theresulting gain or loss, if any, inprofit or loss.[IFRS for SMEs 14.8i (i)]

The acquirer is allowed to

recognise the assets and

liabilities at fair value when

acquiring control: any change in

value to assets or liabilities

retained in its previously held

interest is recognised in equity

as a revaluation reserve.

[DAS 216.204]

Similar to IFRS for SMEs.[IAS 28.18]

Negative goodwill Negative goodwill is recognisedin profit or loss immediatelyafter management hasreassessed the identificationand measurement ofidentifiable items arising onacquisition and the cost of thebusiness combination.[IFRS for SMEs 19.24]

Negative goodwill is deferred

as a liability and released to the

income statement when

charges or losses are

recognised, provided that this

has been anticipated at

acquisition date and these

charges and losses can be

reliably measured.

If no expected charges or

losses are identified at

acquisition date, any negative

goodwill is released in

accordance with the weighted

average of the remaining useful

life of the depreciable or

amortisable assets acquired.

Where negative goodwill

exceeds the fair value of the

identified non monetary assets,

the excess is recognised

Similar to IFRS for SMEs; IFRS3 (revised) uses the term ‘gainon bargain purchase’ instead of‘negative goodwill’.[IFRS 3R.34, 3R.36]



IFRS for SMEs Dutch GAAP Full IFRSdirectly as a profit in the income

statement.[DAS 216.235]

Areas covered in full IFRS but not in IFRS for SMEs include:

deferred tax recognised after initial purchase accounting;

non-controlling interests;

extensive guidance on step acquisitions;

a business combination achieved without the transfer of consideration;

indemnification assets;

re-acquired rights;

shared-based payments;

employee benefits;

full goodwill method

Areas covered in Dutch GAAP but not in IFRS for SMEs include:

deferred tax recognised after initial purchase accounting.

Consolidation

The following comparisons have been made based on DAS 217 and IAS 27 (revised), ‘Consolidated and separatefinancial statements’, issued in 2008. IAS 27 (revised) applies to annual periods beginning on or after 1 July 2009.Earlier application is permitted. IAS 27 (revised) does not change the presentation of non-controlling interests from theprevious standard; however, all transactions with non-controlling interests are now equity transactions and do not affectgoodwill or the profit or loss.

IFRS for SMEs Dutch GAAP Full IFRSDefinitionsControl Control is the power to govern

the financial and operating

policies of an entity to obtain

benefits from its activities.

[IFRS for SMEs 9.4]


[DAS 940]


[IAS 27R.4]

Subsidiary A subsidiary is an entity that is

controlled by a parent.



However the term ‘subsidiary’ is

not used in Dutch GAAP.

Instead, three other concepts

are commonly applied:

a ‘participating interest’;

a ‘daughter company’;

a ‘group company’.


[IAS 27R.4]



IFRS for SMEs Dutch GAAP Full IFRSA participating interest is any

shareholding of 20% or more.

A daughter company is a

company in which either a

majority of the voting power is

retained by the parent, or the

parent has a right to appoint and

dismiss the majority of the board

of directors of a company.

A group company is an entity

which is controlled by the group

and part of an economic unity in

which legal entities are linked to

each other. In practice, this

means that the various entities

operate as one entity for

organisational and economic

purposes. Though different in

terminology, Dutch GAAP offers

virtually the same guidance as

IFRS for SMEs on how to treat

investments encompassed by

the above-described concepts.

[art. 24 BW2 T9 and DAS 940]

ConsolidationRequirements toprepare consolidatedfinancial statements

Parent entities prepare


statements that include all

subsidiaries. An exemption

applies to a

parent entity that is itself a

subsidiary and the immediate or

ultimate parent produces


statements that comply with full

IFRS or with IFRS for SMEs.

A subsidiary is not excluded

from the consolidation because:

the investor is a venture

capital organisation or similar

entity;

its business activities are

dissimilar from those of other

entities within the

consolidation;

it operates in a jurisdiction

that imposes restrictions on

transferring cash or other

assets out of the jurisdiction.

An entity is exempt from

Similar to IFRS for SMEs

although Dutch GAAP

prescribes the consolidation of

group companies (not

subsidiaries). However, most

subsidiaries qualify as group

companies.

Personal holdings are exempt

from presenting consolidated

financial statements if certain

criteria are met.

An exemption also applies to an

intermediate holding company

that is consolidated by a parent

company that publishes annual

accounts complying with the

fourth and seventh EEC

directives or equivalent, and no

notification of objection in writing

is received from holders of at

least 10% of issued capital. The

parent’s financial statements

should be filed by the company.

[art. 407, 408 BW2 T9, DAS

217.101 and 214-217].

Exemption applies to a parent

entity:

that is itself wholly-owned or if

the owners of the minority

interests have been informed

about and do not object to the

parent’s not presenting


statements;

when the parent’s securities

are not publicly traded and

the parent is not in the

process of issuing securities

in public securities markets;

and

when the IFRS does not allow

exclusion of a subsidiary from

the consolidation for the

same reasons given in IFRS

for SMEs, except that it does

not specifically mention the

exclusion due to the

restriction in the transfer of

funds to the parent company.

An entity is exempt from

consolidation for a subsidiary



IFRS for SMEs Dutch GAAP Full IFRSconsolidation when on

acquisition there is evidence that

control is intended to be

temporary and this entity is the

only existing subsidiary.

[IFRS for SMEs 9.2-3, 9.7-9.9]

that was acquired with an

intention to dispose of it in the

near future (which is accounted

for in accordance with IFRS 5).

[IAS 27R.9, 27R.10, 27R.12,

27R.16-17]

Scope of

consolidated

financial statements

IFRS for SMEs focuses on the

concept of control in determining

whether a parent/subsidiary

relationship exists. All

subsidiaries are consolidated.

Control is presumed to exist

when a parent owns, directly or

indirectly, more than 50% of an

entity’s voting power.

Control also exists when a

parent owns half or less of the

voting power but has legal or

contractual rights to control the

majority of the entity’s voting

power or board of directors, or

power to govern the financial

and operating policies.

Control can also be achieved by

having convertible instruments

that are currently exercisable.

[IFRS for SMEs 9.4-9.6, 9.14]


However the term ‘subsidiary’ is

not used in Dutch GAAP.

Instead, three other concepts

are commonly applied:

a ‘participating interest’;

a ‘daughter company’; and

a ‘group company’.

[art. 24, 362.1, 406.1 BW2

T9,DAS 217.101, 201 and DAS

940]

Same as IFRS for SMEs; in

addition, IFRS provides

extensive guidance on potential

voting rights, which are

assessed. Instruments that are

currently exercisable or

convertible are included in the

assessment.

[IAS 27R.13-15]

Special purpose

entities (SPEs)

An SPE is an entity created to

accomplish a narrow, well-

defined objective. An entity

consolidates an SPE when the

substance of the relationship

between the entity and the SPE

indicates that the SPE is

controlled by the entity.

IFRS for SMEs requires the

following indicators of control to

be considered:

whether the SPE conducts

its activities on behalf of the

evaluating entity;

whether the evaluating entity

has the decision-making

power to obtain the majority

of the benefits of the SPE;

whether the evaluating entity

has the right to obtain the

majority of the benefits of the

SPE;


Special guidance exists on how

to treat lease contracts

concluded with SPEs.

[DAS 217.205]


[SIC 12.9-10]



IFRS for SMEs Dutch GAAP Full IFRS whether the evaluating entity

has the majority of the

residual or ownership risks of

the SPE or its assets.

[IFRS for SMEs 9.10, 11]

Presentation of non-

controlling interest

(NCI)

NCIs are presented as a

separate component of equity in

the balance sheet. Profit or loss

and total comprehensive income

are attributed to NCIs and

owners of the parent in the


income.

[IFRS for SMEs 4.2, 5.6, 9.13,

9.20-9.22]

Similar to IFRS for SMEs with

regard to the balance sheet.

Profit or loss which is

attributable to NCIs is presented

as a separate component in the

income statement.

[art. 411 BW2 T9, art. 10.2 GAO

on model formats and DAS

240.303]


[IAS 1.54(q), 1.83, 27.27-27.28]

Accounting policies Consolidated financial

statements are prepared by

using uniform accounting

policies for like transactions, and

events in similar circumstances,

for all of the entities in a group.



[DAS 217.504]


[IAS 27R.24]

Intra group balances

and transactionsIntra-group balances and

transactions are eliminated in

full.



[DAS 217.507]


[IAS 27R.20-21]

Reporting periods The consolidated financial

statements of the parent and its

subsidiaries are usually drawn

up at the same reporting date

unless it is impracticable to do

so.


Similar to IFRS for SMEs; in

addition, Dutch GAAP specifies

the maximum difference of the

reporting periods (three months)

and the requirement to adjust for

significant transactions that

occur in the gap period.

[DAS 217.506]


addition, full IFRS specifies the

maximum difference of the

reporting periods (three months)

and the requirement to adjust for

significant transactions that

occur in the gap period.

[IAS 27R.22-23]

Separate and combined financial statementsSeparate financial

statementsWhen separate financial

statements of a parent are

prepared, the entity chooses to

account for all of its investments

in subsidiaries, jointly controlled

entities and associates either:

at cost less impairment; or

at fair value through profit or

loss.

Different accounting policies are

permitted when accounting for

different types of investment in

different classes.


An entity is required to present


An entity is allowed to include a

condensed company income

statement if consolidated


provided for.

In the separate financial

statements of the parent, the

entity accounts for all of its

investments in subsidiaries,

jointly controlled entities and

associates using the net asset

value method, unless there are

valid reasons, like the

international structure of the

Similar to IFRS for SMEs, but

with a reference to held-for-sale

classification.

[IAS 27R.38]



IFRS for SMEs Dutch GAAP Full IFRSgroup or the application of the

article 408 BW2 T9

consolidation exemption. In

these cases it is allowed to

measure the participating

interests at cost price.

[art. 361.1, 389, 402 BW2 T9,

DAS 214.202 and 325]

Combined financial

statements

Combined financial statements

are a single set of financial

statements of two or more

entities controlled by a single

investor. Combined financial

statements are not required by

IFRS for SMEs.


Not covered in Dutch GAAP. Not covered in full IFRS.

Areas covered in IFRS but not in IFRS for SMEs include:

loss of control;

transactions with minorities;

subsidiary acquired with the intention to dispose of in the near future.


subsidiary acquired with the intention to dispose of in the near future.



Investments in associates

IFRS for SMEs Dutch GAAP Full IFRSDefinition An associate is an entity over

which the investor has

significant influence, but that is

neither a subsidiary nor a joint

venture of the investor.


Dutch GAAP uses the term

‘participating interest’ which

represents a broader concept,

namely: contribution of capital

with the object of a long-term

relationship for the furtherance

of the company’s own activities.

For accounting purposes,

despite the differences in

concepts and terminology,

principles similar to IFRS for

SMEs are applied.

[art. 24c, 24d BW2 T9 and DAS

214.202]


[IAS 28.2]

Significant

influence

Significant influence is the

power to participate in the

financial and operating policy

decisions of the associate but is

not control or joint control over

those policies. It is presumed to

exist when the investor holds at

least 20% of the investee’s

voting power; it is presumed not

to exist when less than 20% is

held. These presumptions may

be rebutted if there is clear

evidence to the contrary.


Same as IFRS for SMEs. There

is a rebuttable presumption that

a participating interest exists if

the company holds 20% or

more of the share capital of the

entity. [art. 389.1 BW2 T9 and

DAS 214.302]


addition, IFRS gives the

following indicators of

significant influence to be

considered where the investor

holds less than 20% of the

voting power of the investee:

representation on the board

of directors or equivalent

body;

participation in policy-

making processes;

material transactions

between the investor and

the investee;

interchange of managerial

personnel;

provision of essential

technical information.

The existence and effect of

potential voting rights that are

currently exercisable or

convertible are considered

when assessing whether an

entity has significant influence.

[IAS 28.6-26.8]Measurement afterinitial recognition

An investor may account for its

investments using one of the

following:

the cost model (cost less

any accumulated impairment

losses);

An investor may account for its


following:

the net asset value method;

visible equity value if

insufficient data are

Investments in associates are

accounted for using the equity

method. Some exceptions are

in place − for example, when

the investment is classified as

held for sale.



IFRS for SMEs Dutch GAAP Full IFRS the equity method;

the fair value through profit

or loss model.


available to apply the net

asset value method;

The cost method (when

certain criteria are met).

[art. 389.2-3 BW2 T9 and DAS

214.306]

[IAS 28.13]

Cost model An investor measures its

associates at cost less any

accumulated impairment

losses. All dividends are

recognised in the income

statement.

The cost model is not permittedfor an investment in anassociate that has a publishedprice quotation.[IFRS for SMEs 14.5-14.7]

Not permitted except when


Dividends are deducted from

the costs of acquisition in case

of pre acquisition profits.

[art. 389.9 BW2 T9, DAS

214.325 and 504]

Not permitted except in


[IAS 28.35]

Equity method / netasset value method

An associate is initially

recognised at the transaction

price (including transaction

costs). The investor, on

acquisition of the investment,

accounts for the difference

between the cost of the

acquisition and its share of fair

value of the net identifiable

assets as goodwill, which is

included in the carrying amount

of the investment.

The investor’s share of the

associate’s profit or loss and

other comprehensive income are

presented in the statement of


Distributions received from the

associate reduce the carrying

amount of the investment.

In case of losses in excess of

the investment, after the

investor’s interest is reduced to

zero, additional losses are

provided for to the extent that

the investor has incurred legal

or constructive obligations or

has made payments on behalf

of the associate.

[IFRS for SMEs 5.5(c)(h), 14.8]

The net asset value is

applicable for investments in

associates Unlike the equity

method, goodwill is recognised

as a separate intangible asset;

therefore subject to

amortisation and a separate

impairment test if triggering

events are applicable.

Like the equity method, the

investor’s share of the

associate’s profit or loss is

presented in the income

statement. Distributions received

from the associate reduce the

carrying amount of the

investment.

In addition a legal reserve for

undistributable profits of

associates should be

recognised.

[DAS 214.307-309]

Initial recognition is at cost.

Cost is not defined in IAS 28,

‘Investments in associates’. In

other standards it is defined as

including transaction costs,

except in IFRS 3 (revised),

which requires transaction

costs in a business combination

to be expensed. Entities may

therefore choose whether their

accounting policy is to expense

transaction costs or to include

them in the cost of the

investment.

[IAS 28.11, 28.23, 28.29-28.30]

Fair value An associate is initially

recognised at the transaction

price (excluding transaction

costs). Changes in fair value

Not permitted. Not permitted except in


[IAS 28.35]



IFRS for SMEs Dutch GAAP Full IFRSare recognised in profit or loss.

The best evidence of the fair

value is a quoted price in an

active market. If the market is

not active, an entity estimates

fair value by using a valuation

technique. If the fair value

cannot be measured reliably,

the investor uses the cost

model.

[IFRS for SMEs 11.27, 14.9]Legal reserves Legal reserves are not covered

in the standards.

In cases where the net equitymethod is applied, but wherethere are restrictions withregard to the distribution ofdividends, special rules apply.This means thatthe investing company can stillrecord its share in the results ofthe participation, but is requiredto recognise a legal non-distributable reserve, being thedifference between:

the share in results since

acquisition; and

dividends to which the

investor is entitled and which

are collectible in the

Netherlands.

[art. 2.389 BW2 T9]

Legal reserves are not covered

in the standards.

Separate financialstatements

Where separate financial


prepared (this is not required),

management adopts a policy of

accounting for all its associates

either:



loss.


Separate financial statements

are required for the parent.

Management uses similar

accounting polices compared to

the consolidated accounts:

the net asset value method;

visible equity value if

insufficient data is available

to apply the net asset value

method;

at cost less impairment (only

if there are valid reasons, like

the international structure of

the group or the application of

the article 408 BW2 T9

consolidation exemption).

[art. 361.1, 389 BW2 T9 and

DAS 214.301-312 and 325]


addition, investments are


with IFRS 5 when they are

classified as held for sale.

[IAS 27.38]

Full or partialdisposal ofassociates

If an investor loses significant

influence over an associate as

a result of a full or partial

disposal, it derecognises that

In case of loss of significant

influence over an associate as

a result of a full or partial

disposal, the investor shall use


However reference is made to

IAS 39.

[IAS 28.19A]



IFRS for SMEs Dutch GAAP Full IFRSassociate and recognises in

profit or loss the difference

between, on the one hand, the

sum of the proceeds received

plus the fair value of any

retained interest and, on the

other hand, the carrying

amount of the investment in the

associate at the date significant

influence is lost.

Thereafter, the investor shall

account for any retained

interest using Section 11 Basic

Financial Instruments and

Section 12 Other financial

Instruments Issues, as

appropriate.

[IFRS for SMEs 14.8i (ii)]

the last known net asset value

as a basis for the subsequent

measurement at cost or fair

value.

[DAS 214.321]

Classification andpresentation

An investor classifies

investments in associates as

non-current assets. Associates

are presented as a line item on

the balance sheet.

[IFRS for SMEs 4.2(j), 14.11]


However the term participating

interest is used instead of

associate.



however, only those associates

accounted for using the equity

method are presented as a line

item.

[IAS 1.54(e), 28.38]


guidance on significant influence;

profit and loss from upstream and downstream transactions;

impairment losses;

acquisition of an investment in an associate;

associates held for sale;

associates held by venture capital organisations, mutual funds, unit trusts and similar entities.


guidance on significant influence;

profit and loss from upstream and downstream transactions;

acquisition of an investment in an associate;




Investments in joint ventures

The following comparison has been made based on DAS 215 and current IAS 31, ‘Interests in joint ventures’. The finaldraft of ED 9 on joint arrangements (expected in 2010) does not permit the option for proportionate consolidation forjointly controlled entities.

IFRS for SMEs Dutch GAAP Full IFRSDefinition A joint venture is defined as a

contractual arrangement

whereby two or more parties

(the venturers) undertake an

economic activity that is subject

to joint control. Joint control is

the contractually agreed

sharing of control over an

economic activity; it exists only

when the strategic financial and

operating decisions relating to

the activity require the

unanimous consent of the

parties sharing the control.



[DAS 215.103 and DAS 940]


[IAS 31.3]

Types of jointventure

IFRS SME distinguishes

between three types of joint

venture:

jointly controlled entities, in

which the arrangement is

carried on through a separate

entity (company or

partnership);

jointly controlled operations,

in which each venturer uses

its own assets for a specific

project;

jointly controlled assets,

which is a project carried on

with assets that are jointly

owned.

All joint ventures should be

treated the same in the


[IFRS for SMEs 15.3 and 9]


addition, different types of joint

ventures are allowed to be

measured differently.

[DAS 215.204-205]


[IAS 31.7]

Accounting forjointly controlledentities

A venturer may account for its


following:

the cost model (cost less any


losses);

the equity method;

the fair value through profit

A venturer may account for its

investments using:

proportionate consolidation if

this satisfies the true and fair

view;

the net asset value method

otherwise.

[art. 409 BW2 T9, and DAS

Either the proportionate

consolidation method or the

equity method is allowed to

account for jointly controlled

entities. Some exemptions are

applicable.

[IAS 31.2, 31.30]



IFRS for SMEs Dutch GAAP Full IFRSor loss model.


215.201 and 208]

Cost model Refer to ‘Investments in

associates’.


Refer to ‘Investments in

associates’.

Not permitted.

Equity method Refer to ‘Investments in

associates’


Refer to ‘Investments in

associates’ (net asset value

method).

[DAS 214.307-309]


[IAS 28, IAS 31.38-31.40]

Proportionateconsolidation

Not permitted. Proportionate consolidation is

allowed.

[art. 409 BW2 T9 and DAS

215.201]

Proportionate consolidation

requires the venturer’s share of

the assets, liabilities, income

and expenses to be either

combined on a line-by-line

basis, with similar items in the

venturer’s financial statements,

or reported as separate line

items in the venturer’s financial

statements. A full

understanding of the rights and

responsibilities conveyed in

management agreements is

necessary in order to reflect the

substance and economic reality

of the arrangement.

[IAS 31.30-31.37]Fair value Refer to ‘Investments in

associates’.


Not permitted. Not permitted.

Separate financialstatements

Where separate financial


prepared (which is not

required), the entity adopts a

policy of accounting for all of its

jointly controlled entities either:



loss.


Separate financial statements

are required for the parent. The

entity adopts a policy of

accounting for all of its jointly

controlled entities, either:

net asset value method;

at cost less impairment (only

if there are valid reasons,

like the international

structure of the group or the

application of the article 408

BW2 T9 consolidation

exemption).


215.208]


addition, investments are


with IFRS 5 when they are

classified as held for sale.

[IAS 31.46]

Accounting forcontributions toa jointly controlledentity

Gains and losses on

contribution or sales of assets

to a joint venture by a venturer

are recognised to the same

extent as that of the interests of

the other venturers provided

the assets are retained by the


Further requirement is provided

for recognition, prior to the

transfer, of expected loss on, or

existing impairment of, the

asset transferred. Unlike IFRS

for SMEs, Dutch GAAP


[IAS 31.48]



IFRS for SMEs Dutch GAAP Full IFRSjoint venture and significant

risks and rewards of ownership

of the contributed assets have

been transferred. The venturer

recognises the full amount of

any loss when there is

evidence of impairment loss

from the contribution or sale.


requires the use of fair values

for measurement by the joint

venture itself of contributions

from the venturers of assets

and liabilities.

[DAS 215.208-210]

Accounting forjointly controlledoperations

Requirements are similar to

jointly controlled entities without

an incorporated structure. A

venturer recognises in its

financial statements:

the assets that it controls;

the liabilities it incurs;

the expenses it incurs;

its share of income from the

sale of goods or services by

the joint venture.



[DAS 215.205]


[IAS 31.15]

Accounting forjointly controlledassets

A venturer accounts for its

share of the jointly controlled


expenses, and any liabilities

and expenses it has incurred.



[DAS 215.205]


[IAS 31.21]


contractual arrangements;

exceptions to proportionate consolidation and equity method;

operators of joint ventures;

associates held for sale;



contractual arrangements;

operators of joint ventures;




4. Income and expenses(Sections 2, 23, 24, 25, 26 and 28)

Income

The revenue section (Section 23) addresses the various categories of revenue recognition (sale of goods, rendering ofservices, interest, royalties and dividends, construction contracts and barter transactions). Government grants areaddressed in Section 24.

IFRS for SMEs Dutch GAAP Full IFRSDefinitionsIncome ‘Income’ is increases in

economic benefits during the

reporting period in the form of

inflows or enhancements of

assets; or decreases in liabilities

that result in increases in equity,

other than those relating to

contributions from equity

investors.

[IFRS for SMEs 2.23(a)]

Similar to IFRS for SMEs. DAS

use the term ‘baten’.

[DAS 930.70(a)].


[IFRS Framework para 70(a)]

Revenue ‘Revenue’ is income that arises

in the course of an entity’s

ordinary activities. It is referred

to by a variety of terms including

sales, fees, interest, dividends,

royalties and rent.



DAS use the term ‘opbrengsten’.

[DAS 940]


[IAS 18.7]

RevenueRecognition –general

The revenue section captures all

revenue transactions within one

of four broad categories:

sale of goods;

rendering of services;

use by others of an entity’s

assets (yielding interest,

royalties, etc.);

construction contracts.

Revenue recognition criteria for

each of these categories include

the probability that the economic

benefits associated with the

transaction will flow to the entity

and that the revenue and costs

can be measured reliably.

Additional recognition criteria

apply within each broad


however, includes a separate

standard for construction

contracts.

[DAS 270.1, DAS 221]


however, includes a separate

standard for construction

contracts.

[IAS 18.1, 18.4, 11.1]



IFRS for SMEs Dutch GAAP Full IFRScategory.

The principles laid out within

each of the categories are

generally to be applied without

significant further requirements

and/or exceptions.

[IFRS for SMEs 23.1]Measurement Measurement of revenue at the

fair value of the consideration

received or receivable is

required.



[DAS 270.106]


[IAS 18.9]

Multiple-elementarrangements

The revenue recognition criteria

are usually applied separately to

each transaction. However, in

certain circumstances, it is

necessary to separate a

transaction into identifiable

components in order to reflect

the substance of the transaction.

Two or more transactions may

need to be grouped together if

they are linked in such a way

that the whole commercial effect

cannot be understood without

reference to the series of

transactions as a whole.



[DAS 270.109]


[IAS 18.13]

Sale of goods In addition to the general

revenue recognition criteria

above, revenue from the sale of

goods is recognised when:

the entity has transferred to

the buyer the significant risks

and rewards of ownership of

goods; and

the entity retains neither

continuing managerial

involvement nor effective

control over the goods sold.



[DAS 270.110-114]


[IAS 18.14]

Rendering ofservices

Service transactions are

accounted for under the

percentage-of-completion

method when the outcome of a

transaction can be reliably

estimated.

Revenue may be recognised on

a straight-line basis if the


[DAS 270.115-123]


[IAS 18.20]



IFRS for SMEs Dutch GAAP Full IFRSservices are performed by an

indeterminate number of acts

over a specified period of time.

When the outcome of a service

transaction cannot be estimated

reliably, revenue is only

recognised to the extent of

recoverable expenses incurred.

Recognition of revenue may

have to be deferred in instances

where a specific act is more

significant than any other acts

and recognised when the

significant act is executed.

[IFRS for SMEs 23.14-23.16]Agreements for theconstruction of realestate

An entity that undertakes the

construction of real estate and

that enters into an agreement

with one or more buyers

accounts for the agreement as a

sale of services using the

percentage-of-completion

method if:

the buyer is able to specify

the major structural elements

of the design of the real

estate before construction

begins and/or specify major

structural changes once

construction is in progress; or

the buyer acquires and

supplies construction

materials and the entity

provides only construction

services.

[IFRS for SMEs 23A.14]

Partly covered in Dutch GAAP.

Practice is similar to IFRS for

SMEs.

[DAS 221.109 and 320]


[IFRIC 15]

Use by others of an entity’s assetsInterest Interest is recognised using the

effective interest method.



[DAS 270.125]


[IAS 18.30(a), IAS 39.9, IAS 39

AG5-AG8]

Royalties Royalties are recognised on an

accruals basis in accordance

with the substance of the

relevant agreement.

[IFRS for SMEs 23.29(b)]


[DAS 270.125]


[IAS 18.30(b)]

Dividends Dividends are recognised when

the shareholder’s right to

receive payment is established.

[IFRS for SMEs 23.29(c)]


[DAS 270.125]


[IAS 18.30(c)]



IFRS for SMEs Dutch GAAP Full IFRSScope and definition A construction contract is a

contract specifically negotiated

for the construction of an asset

or a combination of assets that

are closely interrelated or

interdependent in terms of their

design, technology and function

or their ultimate purpose or use.


A construction contract in Dutch

GAAP does not need to be

specifically negotiated, which

makes the scope broader.

[DAS 940]

Same as IFRS for SMEs. [IAS

11.3]

General When the outcome of a contract

can be estimated reliably,

revenue and costs are

recognised by reference to the

stage of completion of the

contract activity at the end of the

reporting period (percentage of

completion method).

Reliable estimation of the

outcome requires reliable

estimates of the stage of

completion, future costs and

collectability of billings.



Additional guidance on reliable

estimations of the percentage of

completion is provided.

[DAS 221.301-303]


Additional detailed guidance on

fixed price and cost-plus

contracts is provided.

[IAS 11.22-11.24]

Percentage ofcompletion method

The stage of completion of a

transaction or contract is

determined using the method

that measures most reliably the

work performed. When the final

outcome cannot be estimated

reliably, a zero-profit method is

used (revenue recognised is

limited to the extent of costs

incurred, if those costs are

expected to be recovered).

When it is probable that total

contract costs will exceed total

contract revenue, the expected

loss is recognised as an

expense immediately.

[IFRS for SMEs 23.21-27]

Similar to IFRS for SMEs. When

the final outcome cannot be

estimated reliably, a zero-profit

method is used (revenue

recognised is limited to the

extent of costs incurred, if those

costs are expected to be

recovered). This method is also

allowed if:

the contracts are expected to

be completed within one

year; and

the projects are equally

spread in time and size.

[DAS 221.314-316]


[IAS 11.32]

Presentation IFRS for SMEs requires the

assets and liabilities related to

construction contracts to be

presented separately.


Dutch GAAP is less strict in the

requirements to separate assets

and liabilities.

Furthermore work in progress

related to construction contracts

is a separate line item as part of

the category inventories.


221.406-412]


[IAS 11.39-45]



IFRS for SMEs Dutch GAAP Full IFRSCombining andsegmentingcontracts

Combining and segmenting

contracts is required when




[DAS 221.111-112]


[IAS 11.8-11.9]

Other topicsBarter transaction Revenue may be recognised on

the exchange of dissimilar

goods and services. The

transaction is measured at the

fair value of goods or services

received, adjusted by the

amount of any cash or cash

equivalents transferred.

The carrying value of the goods

and services given up, adjusted

by the amount of any cash or

cash equivalents transferred, is

used where the fair value of

goods or services received

cannot be measured reliably.

Exchanges of similar goods and

services do not generate

revenue.


Partly covered in Dutch GAAP.

Practice is similar to IFRS for

SMEs.

[DAS 270.108 and 108(a)]


[IAS 18.12, SIC 31]

Customer loyalty

programmes

The entity accounts for the

award credits as a separately

identifiable component of the

initial sales transaction. The

entity shall allocate the fair value

of the consideration received or

receivable in respect of the

initial sale between the award

credits and the other

components of the sale. The

consideration allocated to the

award credits is measured by

reference to their fair value, i.e.

the amount for which the award

credits could be sold separately.


Not covered in Dutch GAAP. Same as IFRS for SMEs.

[IFRIC 13]

Discounting ofrevenues

Discounting of revenues to

present value is required in

instances where the inflow of

cash or cash equivalents is

deferred. In such instances, an

imputed interest rate is used for

determining the amount of

revenue to be recognised, as

well as the separate interest

income component to be

recorded over time.



[DAS 270.107]


[IAS 18.11]



IFRS for SMEs Dutch GAAP Full IFRSGovernment grantsDefinition Assistance by government in the

form of transfers of resources to

an entity in return for past or

future compliance with certain

conditions relating to the

operating activities of the entity.



[DAS 274.102]


[IAS 20.3]

Recognition andmeasurement

An entity recognises

government grants according to

the nature of the grant as

follows:

A grant that does not impose

specified future performance

conditions on the recipient is

recognised in income when

the grant proceeds are

receivable.

A grant that imposes

specified future performance

conditions on the recipient is

recognised in income only

when the performance

conditions are met.

Grants received before the

income recognition criteria

are satisfied are recognised

as a liability and released to

income when all attached

conditions have been

complied with.

Grants are measured at the fair

value of the asset received or

receivable.



however a number of other

methods are allowed, like

offsetting the government grant

with the investment value in the

balance sheet.

[DAS 274.107-116]

There are two broad options

under IAS 20: the capital

approach and the income

approach. Accounting and

presentation could therefore be

different.

Revenue is not recognised until

there is a reasonable assurance

that:

the entity complies with the

conditions attached to the

grants; and

the grants are receivable.

Government grants are

recognised in the statement of

comprehensive income over the

periods necessary to match

them with the related costs that

they are intended to

compensate, on a systematic

basis. They are not credited

directly to shareholder’s interest.

[IAS 20.7, 20.12]

Areas covered in IFRS but not in IFRS for SMEs include: Revenue

- extended warranties;

- distinction between advertising and non-advertising barter transactions as included in SIC 31;

- transfer of assets from customers (IFRIC 18).

Government grants

- government assistance;

- repayment of government grants.

Areas covered in Dutch GAAP but not in IFRS for SMEs include: Revenue

- distinction between advertising and non-advertising barter transactions as included in SIC 31.

Government grants



- government assistance;

- repayment of government grants.

Expenses

The table below includes comparisons for certain key topics such as borrowing costs (Section 25), share-basedpayments (Section 26) and employee benefits (Section 28).

Employee benefitsFor employee benefits, the Section 28 only focuses on the expense recognition and not on other topics, such as thedistinction between defined contribution plans and defined benefit plans, definitions, and recognition and measurementprinciples of pension obligations and plan assets. These topics are addressed in chapter 7 of this publication. Withregard to Dutch GAAP the comparisons have been made based on the revised Dutch Accounting Standard 271 onEmployee Benefits issued in 2009 and applicable for accounting periods beginning 1 January 2010. The former DAS271 Employee Benefits, in which the distinction between defined contribution and defined benefit is applicable, hasmany points in common with Section 28 of IFRS for SMEs. If certain conditions are met Dutch legal entities are allowedto apply the standards on pensions that are applicable under US GAAP or (EU endorsed) IFRS.

Share-based paymentsAccounting for share-based payments does not differ exceptionally between Dutch GAAP and IFRS for SMEs.However on a detailed level a number of differences may be applicable. These differences mainly relate to thefollowing subjects: Vesting conditions; Choice of settlement; Modifications; and Taxes.

IFRS for SMEs Dutch GAAP Full IFRSDefinition of expense Expenses are decreases in

economic benefits during the

reporting period in the form of

outflows, depletions of assets or

incurrence of liabilities that

result in decreases in equity,

other than those relating to

distributions to equity investors.

[IFRS for SMEs 2.23(b)]

Similar to IFRS for SMEs. DAS

use the term ‘lasten’.

[DAS 930.70(b)]


[IFRS Framework, para 70(b)]

Expense recognition– general

The recognition of expenses

results directly from the

recognition and measurement of

assets and liabilities. Expenses

are recognised in the statement

of comprehensive income when

decrease in future economic

benefits related to a decrease in

an asset or an increase of a

liability has arisen that can be

measured reliably.



although expenses are


statement.

[DAS 930.94]


[IFRS Framework, para 94]



IFRS for SMEs Dutch GAAP Full IFRSBorrowing costs All borrowing costs are

expensed


Borrowing costs that are directly

attributable to the acquisition,

construction or production of a

qualifying asset as part of the

cost of that asset may be

capitalised. However this is not

required.

All other borrowing costs are

expensed.


273.204-212]

Borrowing costs that are directly

attributable to the acquisition,

construction or production of a

qualifying asset as part of the

cost of that asset are capitalised.

All other borrowing costs are

expensed.

[IAS 23R.5, 23R.8]

Share-based payment transactionsScope Share-based payment

transactions include equity-

settled and cash-settled share-

based payments. Programmes

established by law by which

equity instruments are awarded

for apparently nil or inadequate

consideration are equity-settled

share-based payments.



[DAS 275.203 and 205]


[IFRS 2.2-2.6, IFRIC 8]

Recognition An entity recognises the goods

or services received in a share-

based payment transaction

when it obtains the goods or as

services are received.



[DAS 275.202]


[IFRS 2.7]

Measurement –equity-settled share-based transactions

Transactions in respect of

goods or services received

from non-employees are

measured at fair value of the

goods or services received. If

the entity cannot estimate

reliably these fair values, the

transactions are measured at

the fair value of the equity

instruments granted, ignoring

any service or non-market

vesting conditions.

Transactions with employees

are measured at the fair value

of the instruments granted,

ignoring any service or non-

market vesting conditions. A

three-tier hierarchy is applied

when measuring the fair value

of the equity instruments:

1. use of observable market

prices;

2. use of specific observable

Equity-settled share-based

transactions granted to non-

employees (i.e. suppliers) are

measured at the fair value of the

goods or services received. In

case the fair value of the goods

or services cannot be measured

reliably, the transactions are


equity instruments granted.

Equity-settled share-based

transactions granted to

employees are measured at the

fair value of the granted equity

instruments. However these

equity-settled share-based

transactions may also be

measured at their intrinsic value

at the grant date. The intrinsic

value should be re-measured at

every balance sheet date and

the settlement date. Adjustments

in the intrinsic value are

recognised through profit or loss.

Transactions are measured at

fair value of the goods or

services received. If the entity

cannot estimate reliably these

fair values, which is deemed

always to be the case for

transactions with employees, the

transactions are measured at

the fair value of the equity

instruments granted, ignoring

any service or non-market

vesting conditions or reload

features.

[IFRS 2.10-2.12, 2.24]



IFRS for SMEs Dutch GAAP Full IFRSmarket data, such as a

recent transaction in the

entity’s shares or a recent

independent fair valuation of

the entity;

3. Use of a generally accepted

valuation technique that uses

market data to the greatest

extent practicable (directors

use their judgement to apply

the most appropriate

valuation method to

determine the fair value of

the entity’s shares).

A corresponding increase in

equity is recognised.


[DAS 275.203-204, 301-302 and

314]

Measurement –cash-settled share-based transaction

Cash-settled share-based

payment transactions are


liability. Until the liability is

settled, the fair value of the

liability is re-measured at each

reporting date and at the date of

final settlement, with any

changes in fair value recognised

in profit or loss.



[DAS 275.205 and 301]


[IFRS 2.30]

Group plans If a share-based payment award

is granted by a parent entity to

the employees of one or more

subsidiaries in the group, and

the parent presents consolidated

financial statements using either

the IFRS for SMEs or full IFRSs,

such subsidiaries are permitted

to recognise and measure

share-based payment expense

(and the related capital

contribution by the parent) on

the basis of a reasonable

allocation of the expense

recognised for the group.


No specific exemption for group

plans.


plans.

Government-

mandated plansSpecific measurement principles

apply for

programmes established under

law by which equity investors

(such as employees) are able to

acquire equity without providing

goods or services that can be

No specific exemption for

government-mandated plans.

No specific exemption for

government-mandated plans.



IFRS for SMEs Dutch GAAP Full IFRSspecifically identified (or by

providing goods or services that

are clearly less than the fair

value of the equity instruments

granted).


Employee benefits – post-employment benefitsDefined contributionplans

Defined contribution plan

expense is the contribution

payable by the employer to the

fund for that accounting period.


Not applicable. The distinction

between defined contribution

plan and defined benefit plan no

longer exists. The pension

contributions payable by the

employer to the pension fund

are expensed.

[RJ 271.306]


[IAS 19.44(b)]

Defined benefit plansComponents of thecost of a definedbenefit plans

Defined benefit plan expense

includes:

current-service cost;

interest cost;

the actual return on plan

assets;

actuarial gains and losses

(on liabilities) arising in the

period;

the effect of a new plan or

changes to an existing plan

during the period;

the effect of any curtailments

or settlements.


Not applicable. Similar to IFRS for SMEs;

except that the return on plan

assets is split between the

expected return and an actuarial

gain/loss.

[IAS 19.61]

Actuarial gains andlosses

Actuarial gains and losses on

liabilities are recognised in full in

profit or loss or in other

comprehensive income (without

recycling) in the period in which

they occur.


Not applicable. Actuarial gains and losses arise

on both assets and liabilities.

They may be recognised

immediately (either in profit or

loss or in other comprehensive

income) or amortised into profit

or loss over a period not

exceeding the expected

remaining working lives of

participating employees.

At a minimum, any cumulative

unrecognised net gain/loss in

excess of 10% of the greater of

the defined benefit obligation or

the fair value of plan assets at

the beginning of the year is

amortised over expected

remaining working lives (the

‘corridor’ method) each year.



IFRS for SMEs Dutch GAAP Full IFRSA policy of recognising actuarial

gains and losses in full in the

period in which they occur can

be adopted, and recognition may

be in other comprehensive

income. Amounts recognised in

the other comprehensive income

are not subsequently recognised

in profit or loss.

[IAS 19.92-19.93D]Past-service costs Past-service costs are

recognised in full in profit or loss

in the period in which they

occur.

[IFRS for SMEs 28.16, 28.21,

28.25(e)]

Not applicable. Past-service costs are

recognised as an expense on a

straight-line basis over the

average period until the plan

amendments vest.

To the extent that benefits are

vested as of the date of the plan

amendment, the cost of those

benefits is recognised

immediately in profit or loss.

[IAS 19.96]Curtailments andsettlements

Gains and losses on the

curtailment or settlement of a

defined benefit plan are

recognised in profit or loss when

the curtailment or settlement

occurs.


Not applicable. Similar to IFRS for SMEs.

However, full IFRS includes

more detailed guidance in

clarifying the term ‘curtailment’

and ‘settlement’.

Full IFRS also requires the

acceleration of related

unrecognised gains/losses.

[IAS 19.109-115]Application of otherstandards

The application of US-GAAP is

not allowed in IFRS for SMEs.

Entities are allowed to apply US-

GAAP or IFRS related to

pensions and other post-

retirement benefits in the

financial statements instead of

DAS 271. These standards are

to be applied in full.

[DAS 271.101]

The application of US-GAAP is

not allowed in full IFRS.

Group plans If a parent entity provides

benefits to the employees of

one or more subsidiaries in the

group, such subsidiaries are

under certain circumstances

permitted to recognise and

measure employee benefit

expense on the basis of a

reasonable allocation of the

expense recognised for the

group.



plans.


plans.



IFRS for SMEs Dutch GAAP Full IFRSEmployee benefits – termination benefitsRecognition Termination benefits are

recorded when management is

demonstrably committed to the

reduction in workforce.

Management is demonstrably

committed to a termination

when it has a detailed formal

plan for the termination and is

without realistic possibility of

withdrawal.

Termination benefits do not

provide an entity with future

economic benefits and are

recognised as an expense

immediately.



[DAS 271.503]


However, full IFRS includes

further guidance on the

minimum requirement of a

detailed plan.

[IAS 19.133-19.138]

Measurement Termination benefits are

measured at the best estimate

of the expenditure that would be

required to settle the obligation

at the reporting date. In the

case of an offer made to

encourage voluntary

redundancy, the measurement

of termination benefits is based

on the number of employees

expected to accept the offer.

When termination benefits are

due more than 12 months after

the end of the reporting period,

they are measured at their

discounted present value.



[DAS 271.504-505]


[IAS 19.139-19.140]



5. Financial assets and liabilities(Sections 11 and 12)

IFRS for SMEs contains two sections dealing with financial instruments. Section 11 addresses simple payables andreceivables and other basic financial instruments. It is relevant to all SMEs. Section 12 applies to other, more complexfinancial instruments and transactions. If an entity enters into only basic financial instrument transactions, Section 12 isnot applicable. However, even entities with only basic financial instruments should consider the scope of Section 12 toensure they are exempt. An entity could apply either (a) Section 11 and Section 12 in full, or (b) the recognition andmeasurement requirements of IAS 39 ‘Financial instruments: Recognition and measurement’, and the disclosurerequirements of IFRS for SMEs (Section 11 and 12). IFRS 7, ‘Financial instruments: Disclosures’, is not applicable toSMEs under either option.

Dutch GAAP as well as full IFRS do not distinguish between basic and more complex (additional) instruments butbetween different categories. Measurement of a financial instrument depends on this classification. IFRS for SMEs isthe starting point for this brochure and therefore the distinction between basic and more complex financial instrumentsis decisive for the brochure’s format. It should however be noticed that a financial instrument according to full IFRS orDutch GAAP could be a basic FI or a more complex FI according to IFRS for SMEs.

Financial instruments: general information

IFRS for SMEs Dutch GAAP Full IFRSAccounting policy option

An entity has a choice of

applying either Sections 11 and

12 of IFRS for SMEs in full, or

recognition and measurement

requirements of full IFRS (IAS

39) and disclosure requirements

of IFRS for SMEs (Sections 11

and 12).


Not applicable. Not applicable.

Definition, scope and examplesDefinition offinancial instrument

A financial instrument is a

contract that gives rise to a

financial asset of one entity and

a financial liability or equity

instrument of another entity.



[DAS 940]


[IAS 32.11]

Categories IFRS for SMEs distinguishes

between basic and complex

financial instruments. Section 11

establishes measurement and

reporting requirements for basic

financial instruments; Section 12

deals with additional financial

instruments.


Dutch GAAP distinguishes five

measurement categories of

financial assets:

trading portfolio;

derivatives;

acquired loans and bonds;

loans and other receivables;

investments in equity

instruments.

IAS 39 distinguishes four


financial assets:

financial assets at fair value

through profit or loss;

held-to-maturity investments;

loans and receivables;

available-for-sale financial

assets.

IAS 39 distinguishes two



IFRS for SMEs Dutch GAAP Full IFRSDutch GAAP distinguishes three


financial liabilities:

trading portfolio;

derivatives;

other financial liabilities.

[DAS 290.407 and 413]


financial liabilities:

financial liabilities at fair value

through profit or loss;

other liabilities.

[IAS 39.9]

Scope Sections 11 and 12 apply to all

financial instruments, except for

the following:

interests in subsidiaries,

associates and joint ventures;

financial instruments that

meet the definition of an

entity’s own equity;

leases;

employee benefits;

insurance contracts;

contracts for contingent

consideration in a business

combination (applies to

acquirer only).



however, DAS 290 also scopes

out:

financial guarantees;

contracts with payments

based on climatic, geological

or other physical variables;

contingent assets or liabilities

related to a business

combination;

certain loan commitments;

certain commodity contracts.

[DAS 290.202]


however, full IFRS also scopes

out contracts between an

acquirer and a vendor in a

business combination and

certain loan commitments.

[IAS 32.4, IAS 39.2, IFRS 7.3]

Classification asequity or liability(general)

Some financial instruments thatmeet the definition of a liabilityare classified as equity becausethey represent the residualinterest in the net assets of theentity. Instruments, orcomponents of instruments, thatare subordinate to allother classes of instruments areclassified as equity if theyimpose on the entity anobligation to deliver to anotherparty a pro rata share of the netassets of the entity only onliquidation.

IFRS for SMEs 22.4]

In the issuer’s consolidated

financial statements the

classification of its issued

financial instruments is based on

the economic substance of a

financial instrument. There are

some exceptions.

In the separate financial

statements the classification of

financial instruments by the

issuer is based on the legal form

of an instrument instead of the

economic substance of the

financial instrument.

[DAS 290.801-812 and

DAS 240.207-209]

In the consolidated and separate

financial statements a financial

instrument is classified as a

liability if the issuer could be

obliged to settle in cash or

another financial instrument.

[IAS 32.15, 16]

Classification asequity or liability(preference shares)

No specific guidance related to

preference shares that bear

contingent dividends.

Preference shares that bear

contingent dividends only

depending on the profit for the

year may be classified as equity

or as debt as an accounting

policy choice in theconsolidated financialstatements.[DAS 290.810]

Preference shares that bear

contingent dividends are

classified as a liability. The basis

for this presentation is the

payment of dividend, which

cannot be avoided indefinitely.

[IAS 32 AG25-26]

Examples of basicand more complexfinancial instruments

Examples of financial

instruments that normally qualify

as being ‘basic’ are:

Although the distinction between

basic and complex instruments

is not applicable, a number of

Not applicable.



IFRS for SMEs Dutch GAAP Full IFRS cash;

trade accounts and notes

receivable and payable;

loans from banks or other

third parties;

commercial paper and

commercial bills held;

bonds and similar debt

instruments.

Examples of financial

instruments that do not meet the

conditions of basic are:

asset-backed securities and

repurchase agreements;

options, rights, warrants,

futures, forward contracts and

interest rate swaps that can

be settled in cash or by

exchanging other financial

instruments;

hedging instruments;

commitments to make a loan

to another entity;

investments in another

entity’s equity instruments

other than non-convertible

and non-puttable ordinary

shares and preference

shares; and

investments in convertible

debt.


Standards is separated. For

these Standards a reference is

made to the applicable chapters

in the DAS:

non-current financial assets

(DAS 214);

receivables (DAS 222);

securities (DAS 226);

cash (DAS 228);

debt (DAS 254 and 256);

profit and los (DAS 270)

borrowing costs (DAS 273).

As a result, the specific

measurement principles for

these financial assets and

liabilities are dealt with in these

chapters, and not necessarily in

DAS 290 where the general

principles for instruments are

included.

[DAS 290.103]

Initial recognitionA financial instrument is

recognised only when the entity

becomes a party to its

contractual provision.



[DAS 290.701]


[IAS 39.14]

Basic financial instruments

IFRS for SMEs Dutch GAAP Full IFRSDefinitionBasic financialinstruments

Following instruments are

accounted for as basic financial

instruments:

cash;

debt instruments that provide

Not applicable. Not applicable.



IFRS for SMEs Dutch GAAP Full IFRSfixed unconditional returns to

the holder and do not contain

provisions that could result in

the holder losing principal,

interest, pre-payment or put

provisions contingent on

future events;

a commitment to receive a

loan that cannot be settled in

cash, and when executed,

meet the criteria of a basic

instrument;

investments in non-

convertible preference

shares and non-puttable

ordinary shares or preference

shares.


MeasurementInitial measurement On initial recognition, basic

financial instruments are

measured at the transaction

price (including transaction

costs unless the instrument is

measured at fair value through

profit or loss). The asset or

liability is measured at the

present value of the future

payments if payment is deferred

or is financed at an interest rate

that is not a market rate.


On initial recognition, financial

instruments are measured at

fair value plus, in the case of a

financial instrument other than


loss, transaction costs. The fair

value on initial recognition is

normally the transaction price,

unless part of the consideration

is for something other than a

financial instrument or the

instrument bears an off-market

interest rate.

[DAS 290.103 and 501]



fair value plus, in the case of a

financial instrument other than


loss, transaction costs. The fair

value on initial recognition is

normally the transaction price,

unless part of the consideration

is for something other than a

financial instrument or the

instrument bears an off-market

interest rate.

[IAS 39.43, IAS 39 AG64-65]

Subsequent

measurement

At the end of each reporting

period, basic debt instruments

are measured at amortised cost

using the effective interest

method.

Commitments to receive a loan

are measured at cost less

impairment.

Investments in non-convertible

and non-puttable ordinary

shares or preference shares are


profit or loss if fair value can be

measured reliably, otherwise at

cost less impairment.


Financial assets

Financial assets in the trading

portfolio are measured at fair

value through profit or loss.

Acquired loans and bonds

held to maturity are measured

at amortised cost.

Other acquired quoted loans

and bonds are measured at

fair value. Any upward fair

value changes are


statement or directly into

equity and recycled when

realised.

Other acquired unquoted

loans and bonds are

measured at amortised cost

or at fair value.

Financial instruments

classified as held for trading

and designated as at fair

value through profit or loss

are measured at fair value

through profit or loss.

Held-to-maturity investments

and loans and receivables

are measured at amortised

cost.

Financial liabilities other than

those at fair value through

profit or loss are measured at

amortised cost.

Available-for-sale

investments are measured at

fair value with changes in fair

value recorded in equity.

Investments in equity



IFRS for SMEs Dutch GAAP Full IFRS Loans and other receivables

are measured at amortised

cost.

Investments in quoted equity


fair value. Any upward fair

value changes are


statement or directly into

equity and recycled when

realised.

Investments in unquoted

equity instruments are

measured at amortised cost

or at fair value.

Financial liabilities

Financial liabilities in the

trading portfolio are

measured at fair value

through profit or loss.

Other financial liabilities are

measured at amortised cost.

[DAS 290.504]

securities whose fair value

cannot be measured reliably

are measured at cost less

impairment.

[IAS 39.46-47, 39.66]

Amortised cost Amortised cost is the net of:

the amount at which the

financial instrument is

measured at initial

recognition, minus

repayments of the principal;

plus/minus the cumulative

amortisation using the

effective interest method of

any difference between the

amount at initial recognition

and the maturity amount;

minus reduction for

impairment or uncollectability

(for financial assets).



however linear amortisation is

allowed if this does not lead to

major differences with the

effective interest method.

[DAS 273.201, DAS 290

Appendix A and DAS 940]


[IAS 39.9]

Effective interest

methodMethod of calculating the

amortised cost of a financial

instrument and of allocating the

interest income/expense over

the relevant period.


Same as IFRS for SMEs. Refer

to the above-mentioned note

regarding amortised cost.

[DAS 273.201, DAS 290

Appendix A and DAS 940]


[IAS 39.9]

Fair value –

investments in

ordinary or

preference shares

The best evidence of a fair

value is a quoted price in an

active market. When quoted

prices are not available, the

price of a recent transaction for

an identical asset may provide


[DAS 290.524-531]


[IAS 39.48]



IFRS for SMEs Dutch GAAP Full IFRSevidence of the current fair

value. If the market for a

financial instrument is not

active, and recent transactions

of an identical asset are not a

good estimate, management

estimates the fair value by using

a valuation technique.


Fair value –

valuation techniqueThe objective of using a

valuation technique is to

establish what the transaction

price would have been on the

measurement date in an arm’s

length transaction (normal

business considerations).

Valuation techniques include

using recent market

transactions, reference to the

current fair value of identical or

similar instruments, DCF

analysis and option pricing

models.



[DAS 290.527]


more guidance provided around

valuation.

[IAS 39.48, IAS 39 AG69-79]

Fair value - no active

marketThe fair value of equity

instruments is reliably

measurable if the variability in

the range of various estimates is

not significant, or if the

probabilities of the various

estimates can be reasonably

assessed. If these conditions

are not met, an entity is

precluded from measuring the

asset at fair value, and the asset

is carried at cost (less

impairment) defined as carrying

amount at the last day when the

asset was reliably measurable.


Similar to IFRS for SMEs [DAS

290.527 and 290.505].


[IAS 39 AG80-81]

Impairment of financial instruments measured at cost or amortised costGeneral At the end of each reporting

period, financial assets

measured at cost or amortised

cost are reviewed for objective

evidence of impairment.

Impairment losses are

recognised in profit or loss

immediately. If the objective

evidence reverses in a


However, in respect of current

assets an entity is allowed to

recognise an impairment loss

that is expected as a result froma future event on short term,

though this method is not

recommended.

[art. 2.387.3 BW2 T9, DAS

290.533, 537 and 539]

Similar to IFRS for SMEs except

for the following:

Impairment review also needs

to be performed for available-

for-sale financial assets

carried at fair value through

equity.

Impairment losses on equity

investments carried at cost

and available-for-sale equity



IFRS for SMEs Dutch GAAP Full IFRSsubsequent period, impairment

losses are reversed in the profit

or loss of subsequent periods.

[IFRS for SMEs 11.21-24,

11.26]

investments cannot be

reversed.

[IAS 39.58, 39.66, 39.69]

Assets measured atamortised cost

For instruments measured at

amortised cost (for example,

trade accounts, notes receivable

and loans from banks), the

impairment loss is the difference

between the assets carrying

amount and the present value of

estimated future cash flows

discounted at the financial

asset’s original effective interest

rate.



[DAS 290.537]


[IAS 39.63]

DerecognitionFinancial assets An entity only derecognises a

financial asset when:

the rights to the cash flows

from the assets have expired

or are settled;

the entity has transferred

substantially all the risks and

rewards of ownership of the

financial asset; or

the entity has retained some

significant risks and rewards

but has transferred control of

the asset to another party. In

this case, the asset is

derecognised, and any rights

and obligation created or

retained are recognised.


Similar to IFRS for SMEs. The


transaction determines whether

(part of) a financial asset is

derecognised. The transfer of

control is not specifically

required.

[DAS 115.110-112 and DAS

290.702]


however, IFRS includes

additional guidance on pass-

through arrangements,

continuing involvement and

some other relevant aspects

relating to transfer of a financial

asset.

[IAS 39.17-39.37]

Financial liabilities Financial liabilities are

derecognised only when they

are extinguished - that is, when

the obligation is discharged, is

cancelled or expires.




transaction determines whether

(part of) a financial liability is

derecognised.

[DAS 115.110-112]


however there is some anti-

abuse guidance included in

IAS39.

[IAS 39.39-42, IAS39.AG62]



Other financial instruments issues

IFRS for SMEs Dutch GAAP Full IFRSMeasurementInitial measurement At initial recognition, financial

assets and financial liabilities

are measured at their fair value.

This is normally the transaction

price.



instruments are measured at fair

value plus, in the case of a

financial instrument other than at

fair value through profit or loss,

transaction costs. The fair value

on initial recognition is normally

the transaction price, unless part

of the consideration is for

something other than a financial

instrument or the instrument

bears an off-market interest rate.

[DAS 290.501]


instruments are measured at fair

value plus, in the case of a

financial instrument other than at

fair value through profit or loss,

transaction costs. The fair value

on initial recognition is normally

the transaction price, unless part

of the consideration is for

something other than a financial

instrument or the instrument

bears an off-market interest rate.

[IAS 39.43, IAS 39 AG64-65]

Subsequent

measurementAt the end of each reporting

period, financial instruments are


profit or loss except for as

follows:

Equity instruments that are

not publicly traded and

whose fair value cannot

otherwise be measured

reliably.

Contracts linked to such

instruments that, if exercised,

will result in delivery of such

instruments.

These are measured at cost

less impairment. Cost is defined

as fair value on the last date it

was reliably measurable.


Refer to ‘basic financial

instruments’ in this chapter.

Additionally specific

measurement principles for

derivatives apply:

Derivatives with a quoted

underlying are measured at

fair value through profit or

loss.

Derivatives without a quoted

underlying are measured at

cost (or lower market value)

or at fair value through profit

or loss.

Derivatives that are

accounted for at cost and that

are monetary items are

required to be revalued at

closing spot rate (though

profit or loss).

Derivatives (i.e. options, rights,

warrants, futures, forward

contracts and interest rate

swaps) are allowed to be

measured at cost when certain

criteria are met. In case of a

negative market value for

derivatives measured at cost, a

provision for lower market has to

be recognised.

[DAS 290.504 and 513]



Fair value Refer to the guidance on fair

value in Section 11.27-32. Fair


[DAS 290.524-531]

Similar to IFRS for SMEs but

more guidance provided around



IFRS for SMEs Dutch GAAP Full IFRSvalue of a financial liability

payable on demand is not less

than the amount payable on

demand, discounted from the

first date payment could be

required to be paid.


valuation.

[IAS 39.48-39.49, IAS 39 AG69-

79]

Impairment of financial assets measured at cost or amortised costGeneral Refer to the guidance on

impairment in ‘basic financial

instruments’.






DerecognitionFinancial assets andliabilities

Refer to the guidance on

derecognition in ’basic financial

instruments’.






Hedge accountingGeneral An entity may designate a

hedging relationship between a

hedging instrument and a

hedged item in such a way as to

recognise gains and losses on a

hedged item and a hedging

instrument in profit or loss at the

same time.




290.601, 602]


[IAS 39.71]

Criteria for hedgeaccounting

In order to apply hedge

accounting, management

prepares documentation at the

inception of the relationship.

This documentation clearly

identifies the risk being hedged,

the hedging instrument, and the

hedged item.

Only certain risks and hedging

instruments are permitted, as

described in more detail below.

In addition, management should

expect the hedging instrument

to be highly effective in

offsetting the designated

hedged risk in order to apply

hedge accounting.


An entity has two options for

hedge documentation

individual hedge

documentation similar to

IFRS for SMEs; and

generic hedge

documentation for groups of

hedging instruments. This

documentation includes the

general hedging strategy for

such groups of hedging

instruments, and how this

links to the general risk

management policy of the

company, how the hedged

items and hedging

instruments are identified

and how ineffectiveness is

assessed and booked.

For both types of

documentation, prospective and

retrospective hedge

effectiveness needs to be

performed (can be qualitative in

IAS 39 also requires

documentation of a hedging

relationship at inception. This

documentation includes the

hedged item and hedging

instrument similar to the IFRS

for SMEs guidance. IAS 39 also

requires an entity to document

the risk management objective

and strategy for undertaking the

hedge.

IAS 39 allows more risks and

portions of hedged items to be

designated than the SME

guidance (see below).

IAS 39 allows a broader array of

hedging instruments than the

SME guidance.

IAS 39 requires management to

document a method of

effectiveness-testing and to

perform a prospective



IFRS for SMEs Dutch GAAP Full IFRSnature).

[DAS 290.613-290.616]

effectiveness test at the

inception of the hedge to

demonstrate that the relationship

will be highly effective during its

life.

[IAS 39.88]Risks for whichhedge accounting ispermitted

Hedge accounting is permitted

for the risk hedged as:

an interest rate risk of a debt

instrument measured at

amortised cost;

a foreign exchange or

interest rate risk in a firm

commitment or a highly

probable forecast

transaction;

a foreign exchange risk in a

net investment in a foreign

operation; or

a price risk of a commodity.


An entity is allowed to hedge the

risks in (a group of) assets,

liabilities, binding contracts or

highly probable future

transactions.

The risks for which hedge

accounting is permitted are not

specifically included in the DAS,

but need to be separately

identifiable and measurable to

be able to measure the

effectiveness of the hedge.

[DAS 290.609-612]

IAS 39 restricts the risks or

portions in a financial instrument

that can be hedged based on a

principal that those risks or

portions must be separately

identifiable components of the

financial instrument, and

changes in the cash flows or fair

value of the entire financial

instrument arising from changes

in the designated risks and

portions must be reliably

measurable.

A broader array of risks is

therefore eligible for hedging

under IAS 39 (for example,

equity price risk and one-sided

risks).

IAS 39 allows a group of similar

items to be designated as a

hedged item.

[IAS 39 AG99F]Models for hedgeaccounting

IFRS for SME permits three

types of hedging relationship.

The accounting used for these

relationships is comparable to

the models used in full IFRS and

Dutch GAAP:

Cash flow hedges;

Fair value hedges; and

Hedges of a net investment

in a foreign operation.

Cost price hedging is not

allowed.

[IFRS for SMEs 12.19-20 and

23-24]

DAS 290 permits four types of

hedging relationships:

Cash flow hedges;

Fair value hedges;


in a foreign operation;

Cost price hedges.

Cost price hedge accounting is

accounted as follows:

If the hedged item is

recognised at cost, the

derivative is also recognised

at cost.

As long as the hedged item is

not yet recognised in the

balance sheet, the hedging

instrument is not re-

measured in the balance

sheet either.

[DAS 290.617, 618 and 633-

639]

IAS 39 permits three types of

hedging relationship:

Cash flow hedges;

Fair value hedges; and


in a foreign operation.

Cost price hedging is not

allowed.

[IAS 39.86]



IFRS for SMEs Dutch GAAP Full IFRSHedging instrumentsfor which hedgeaccounting ispermitted

A hedging instrument:

is an interest rate swap, a

foreign currency swap, a

foreign currency forward

exchange contract, or a

commodity forward exchange

contract;

involves a party external to

the reporting entity;

has a notional amount equal

to the designated amount of

principal or notional amount

of the hedged item;

has a specified maturity date

no later than the maturity of

the hedged item, the

expected settlement of the

commodity purchase or sale

commitment, or the

occurrence of the highly

probable forecast

transaction; and

has no pre-payment, early

termination or extension

features.


DAS 290 permits hedging

instruments to be:

derivatives that are not net

written options; and

non-derivative assets or

liabilities used as a hedge of

foreign currency risk.

Hedging instruments are only

permitted to be designated if and

when concluded with external

parties (i.e. not concluded with

parties included in the


statements)

DAS give limited guidance with

regard to hedging instruments,

but in practice application is

much closer to Full IFRS than

IFRS for SMEs.

[DAS 290.605-608]

IAS 39 permits hedging

instruments to be:

derivatives that are not net

written options;

non-derivative assets or

liabilities used as a hedge of

foreign currency risk.

Management is permitted to

separately designate the intrinsic

value of an option or the spot

component of a forward

contract. IAS 39 therefore allows

a broader array of hedging

instruments to be used (for

example, interest rate collars,

purchased options and foreign

currency borrowings).

IAS 39 does not require the

notional amount of the hedging

instrument to be equal to the

hedged item.

IAS 39 does not require the

hedging instrument to have a

maturity corresponding to the

hedged item as long as the

entity can demonstrate that the

hedging instrument would be

highly effective.

IAS 39 does not restrict pre-

payment, early termination or

extension features in hedging

instruments only where they

make the hedging instrument a

net written option. However,

such features may impact the

effectiveness of the relationship.

IAS 39 allows groups of

derivatives or a non-derivative

and derivative to be designated

as a combined hedging

instrument in certain cases.

IAS 39 allows a single hedging

instrument to be designated as a

hedge of multiple risks.

[IAS 39.72-77, 39.82 and IAS

21.27]



IFRS for SMEs Dutch GAAP Full IFRSEffectiveness testing IFRS for SMEs does not require

quantitative assessments of

hedge effectiveness.

[IFRS for SMEs 12.16(d)]

The entity is required to perform

retrospective and prospective

effectiveness tests at least every

balance sheet date. A specific

method for testing effectiveness

is not defined, but examples of

testing are given that include

comparing the critical terms of

hedged item and hedging

instrument.

All ineffectiveness must be

recorded in profit or loss.

The entity documents its chosen

method as part of the hedging

documentation.

[DAS 290.614.c, 615.c, 616,

628-629]

The entity is required to perform

quantitative retrospective and

prospective effectiveness tests

at least once per reporting

period.

A specific method for testing

effectiveness is not defined, but

the entity documents its chosen

method as part of the hedging

documentation.

[IAS 39.88]

Hedges of variableinterest rate risk,foreign exchangerisk, commodityprice risk and netinvestment in aforeign operation

Where an entity designates the

hedging relationship and it

complies with the conditions

above, it recognises in profit or

loss any excess of the fair value

of the hedging instrument over

the change in the fair value of

the expected cash flows (hedge

ineffectiveness). The effective

part is recognised in other


The amount recognised in other

comprehensive income is

recognised in profit or loss when

the hedged item affects profit or

loss or when the hedging

relationship ends.

Hedge accounting is

discontinued when:

the hedging instrument

expires, is sold or terminated;

the hedge no longer meets

the criteria for hedge

accounting; and

the entity revokes the

designation.

The amounts deferred in other

comprehensive income on

discontinuance of the hedge are

recognised in profit or loss as


except that

journal entries depend on

whether cash flow hedge

accounting or cost price

hedge accounting is being

applied. If cash flow hedge

accounting is applied, the

effective part of changes in

fair value of the hedging

instrument is recognised in

other comprehensive income.

If cost price hedge accounting

is applied the effective part of

the derivative is kept at cost;

and

DAS 290 contains a policy

choice relating to the situation

where the hedge of a forecast

transaction results in

recognition of a non-financial

asset or liability in case of

cash flow hedge accounting.

[DAS 290.625-632 and 640]


except that:

IAS 39 specifies that the

amounts recognised in other

comprehensive income are

based on cumulative changes

in the fair value of the

hedging instrument and

hedged risk; and

IAS 39 contains a policy

choice relating to the situation

where the hedge of a forecast

transaction results in

recognition of a non-financial

asset or liability.

[IAS 39.95-39.101]



IFRS for SMEs Dutch GAAP Full IFRSsoon as the hedged item is

derecognised or as soon as a

forecast transaction is no longer

expected to take place.

[IFRS for SMEs 12.23-12.25]Hedge of a fixedinterest rate risk orcommodity price riskof a commodity held

For a hedge of fixed interest risk

or of commodity price risk of a

commodity held, the hedged

item is adjusted for the gain or

loss attributable to the hedged

risk. That element is included in

profit or loss to offset the impact

of the hedging instrument.

Hedging is discontinued when:

the hedging instrument

expires, is sold, or is

terminated;

the hedge no longer meets

the conditions for hedge

accounting; and

the entity revokes the

designation.

Upon discontinuance of the

hedging relationship for a

liability, the adjustment made to

the hedged item is amortised to

profit or loss using the effective

interest method.



for the fact that the cost price

hedge accounting model can be

used if the hedge item is carried

at cost in the balance sheet.

[DAS 290.619-640]


[IAS 39.89-94]


embedded derivatives;

reclassifications between categories of financial instruments;

detail guidance on derecognition of financial assets;


embedded derivatives;

reclassifications between categories of financial instruments.



6. Non-financial assets(Sections 13, 16, 17, 18 and 27)

Inventories

IFRS for SMEs Dutch GAAP Full IFRSDefinition and scopeDefinition Inventories are assets:

held for sale in the ordinary

course of business;

in the process of production

for such sale;

in the form of materials or

supplies to be consumed in

the production process or in

the rendering of services.



[DAS 220.105 and DAS 940]


[IAS 2.6]

Scope of thestandard

Out of scope are work in

progress under construction

contracts, financial instruments,

biological assets and

agricultural produce, as well as

inventories held by:

producers of agricultural,

forest and mineral products,

to the extent that they are

measured at fair value less

costs to sell through profit or

loss;

commodity brokers and

dealers who measure their

inventories at fair value less

costs to sell through profit or

loss.


Construction contracts are not in

scope of this standard.

[DAS 220.103]


[IAS 2.2-2.3]

Measurement andimpairment

Inventories are initially

recognised at cost. The cost of

inventories includes all costs of

purchase, costs of conversion

and other costs incurred in

bringing the inventories to their

present location and conditions.

Inventories are subsequently

valued at the lower of cost and

selling price less costs to

complete and sell. Inventories

are assessed for impairment at


regard to cost measurement.

However inventories are allowed

to be measured at replacement

value. In case of measurement

at replacement value a

revaluation reserve is

recognised.


220.302-311 and 331]


however, IAS 2 refers to net

realisable value.

[IAS 2.9-2.10, 2.28-2.33]



IFRS for SMEs Dutch GAAP Full IFRSeach reporting date.

Management then reassesses

the selling price, less cost to

complete and sell in each

subsequent period, to determine

if the impairment losses

previously recognised should be

reversed.

[IFRS for SMEs 13.4-13.5, 27.2-

27.4]

Cost of inventoriesCosts of purchase Cost of purchase of inventories

includes the purchase price,

import duties, non-refundable

taxes, transport and handling

costs and any other directly

attributable costs less trade

discounts, rebates and similar

items.



[DAS 220.304]


[IAS 2.11]

Costs of conversion Costs of conversion of

inventories include costs directly

related to the units of

production, such as direct

labour. They also include a

systematic allocation of fixed

and variable production

overheads that are incurred in

converting materials into

finished goods.



[DAS 220.305-309]


[IAS 2.12]

Other costs Borrowing costs are recognised

as an expense.


Borrowing costs are included in

the cost of inventories under

limited circumstances as

identified by DAS 273.

[DAS 220.312-313]

Borrowing costs are included in

the cost of inventories under

limited circumstances as

identified by IAS 23.

[IAS 2.17]Cost formulas The cost of inventories used is

assigned by using either the

first-in, first-out (FIFO) or

weighted average cost formula.

Last-in, last-out (LIFO) is not

permitted. The same cost

formula is used for all

inventories that have a similar

nature and use to the entity.

Where inventories have a

different nature or use, different

cost formula may be justified.


Similar to IFRS for SMEs. LIFO

is allowed under Dutch Law,

though this method is not

recommended.


220.314-317]


[IAS 2.25]

Techniques formeasuring cost

An entity may use techniques

for measuring the cost of


most recent purchase price is an

Similar to IFRS for SMEs, the

most recent purchase price is



IFRS for SMEs Dutch GAAP Full IFRSinventories if the results

approximate cost. Accepted

techniques are:

standard cost method;

retail method;

most recent purchase price.


example of measurement at

replacement value.

[DAS 220.321-322]

not mentioned as an example.

[IAS 2.21]


extensive guidance on net realisable value.

Investment property

IFRS for SMEs Dutch GAAP Full IFRSDefinition Investment property is a

property (land or building, or

part of a building, or both) held

by the owner or by lessee

under a finance lease to earn

rentals or for capital

appreciation or both.

A property interest held for use

in the production or supply of

goods or services or for

administrative purposes is not

an investment property.



[DAS 213.104 and DAS 940]


[IAS 40.5]

Initial measurement The cost of a purchased

investment property is its

purchase price plus any directly

attributable costs such as

professional fees for legal

services, property transfer

taxes and other transaction

costs. Borrowing costs are

recognised as an expense.



except for borrowing costs that

are directly attributable to the

acquisition, construction or

production of a qualifying asset.

These borrowing costs may be

capitalised as part of the cost of

that asset.

[DAS 213.301-306 and DAS

273.204]


except for borrowing costs that



production of a qualifying asset

are required to be capitalised

as part of the cost of that asset.

[IAS 23.10-15 and 40.20-40.24]

Subsequentmeasurement

Investment property is carried

at fair value if its fair value can

be measured reliably without

undue cost or effort.

Otherwise, the cost model is

used.


Management may choose as its

accounting policy to carry all its

investments properties at fair

value or at cost.

However, when an investment

property is held by a lessee

under an operating lease, the

entity follows the fair value model

for all its investment properties.

[DAS 213.501-502]

Management may choose as its

accounting policy to carry all its

investments properties at fair

value or at cost.

However, when an investment

property is held by a lessee

under an operating lease, the

entity follows the fair value

model for all its investment

properties.

[IAS 40.30]



IFRS for SMEs Dutch GAAP Full IFRSFair value Gains and losses arising from

changes in the fair value of

investment property are

recognised in profit or loss.


Similar to IFRS for SMEs. A

revaluation reserve shall be

recognised for the difference

between the cost price and the

fair value until the fair value is

realised.


213.503-511]


[IAS 40.33-40.55]

Cost model The cost model is consistent

with the treatment of property,

plant and equipment (PPE).

Investment properties are

carried at cost less

accumulated depreciation and


losses.


Similar to IFRS for SMEs; a

reference is made to DAS 212,

‘Property plant and equipment’.

[DAS 213.515]


however, full IFRS refers to IAS

16, ‘Property plant and

equipment’.

[IAS 40.56]

Transfers Transfer to or from investment

properties applies when the

property meets or ceases to

meet the definition of an

investment property.


The DAS include further

guidance on the situations

when a property can be

transferred to or from the

investment property category.

[DAS 213.601-609]

IFRS includes further guidance

on the situations when a

property can be transferred to

or from the investment property

category.

[IAS 40.57]Mixed use In case of mixed use, the

separation of PPE and

Investment Property is based

on the ability of the entity to

determine the fair value of the

Investment Property.


In case of mixed use, the



on the ability of the entity to sell

both parts separately.

[DAS 213.108]

In case of mixed use, the



on the ability of the entity to sell

both parts separately.

[IAS 40.10]


extensive guidance on transfers to and from investment property;

disposals;

inability to determine fair value reliably.


disposals;

inability to determine fair value reliably.



Property, plant and equipment

IFRS for SMEs Dutch GAAP Full IFRSDefinition Property, plant and equipment

(PPE) are tangible assets that

are:

held for use in the

production or supply of

goods and services, for

rental to others or for

administrative purposes;

expected to be used during

more than one period.



[DAS 212.106 and DAS 940]


PPE classified as held for sale,

biological assets, and some

others are explicitly out of

scope of IAS 16.

[IAS 16.3, 16.6]

Initial measurement PPE is measured initially at

cost. Cost includes:

purchase price;

any directly attributable

costs to bring the asset to

the location and condition

necessary for it to be

capable of operating in the

manner intended by

management;

the initial estimate of costs

of dismantling and removing

the item and restoring the

site on which it is located.

Borrowing costs are recognised

as an expense

[IFRS for SMEs 17.9-17.11,

25.2]


except that borrowing costs that




may be capitalised as part of

the cost of that asset.

Furthermore an entity may

recognise a provision for the

costs of dismantling and

removing the item as part of the

initial cost.


212.435-436]


except that borrowing costs that




are required to be capitalised

as part of the cost of that asset.

[IAS 16.16, IAS 23.8]


Classes of PPE are carried at

cost less accumulated

depreciation and any

impairment losses (cost model).


In addition to the cost model,

the revaluation model is

allowed, in which classes of

PPE are carried at a revalued

amount less any accumulated

depreciation and subsequent


losses.

A revaluation reserve is

recognised for the difference

between the cost price and the

revalued amount.

[art. 384.1, 390.1 BW2 T9 and

DAS 212.401]

In addition to the cost model,

the revaluation model is an

option, in which classes of PPE

are carried at a revalued

amount less any accumulated



losses.

[IAS 16.29-16.31]

Legal reserves Legal reserves are not covered

in the standard.

If an entity re-values an asset, it

recognises a revaluation

reserve (legal requirement).

Any downward revaluations,

including permanent

Legal reserves are not covered

in the standard.



IFRS for SMEs Dutch GAAP Full IFRSdiminutions in value, are

deducted from the revaluation

reserve, subject to maintaining

the revaluation reserve at the

statutory minimum. The

statutory minimum requires that

the reserve is at least equal to

the sum of the upward

revaluations above cost,

relating to the assets still held

at the balance sheet date. Any

downward revaluations which

would take the reserve below

this minimum level must be

taken to the profit and loss

account.

[art. 2.390 BW2 T9]Major inspection The cost of a major inspection

or replacement of parts of an

item occurring at regular

intervals over its useful life is

capitalised to the extent that it

meets the recognition criteria of

an asset. The carrying amount

of the previous inspection or

parts replaced is derecognised.


Similar to IFRS for SMEs. As

an accounting policy choice,

entities are also allowed to

recognise a provision for costs

of major inspection.

[DAS 212.445]


[IAS 16.13]

Impairment PPE is tested for impairment

when there is an indication that

the asset may be impaired.

Existence of impairment

indicators is assessed at each

reporting date.



[DAS 212.453 and DAS 121]


[IAS 16.63, 36.9]

Depreciation −definition

The systematic allocation of the

depreciable amount of an asset

over its useful life.



[DAS 212.106]


[IAS 16.6]

Componentsapproach

PPE may have significant parts

with different useful lives. The

cost of an item of PPE is

allocated to its significant parts,

with each part depreciated

separately only when the parts

have significantly different

patterns of benefit

consumption.



[DAS 212.418-420]

PPE may have significant parts

with different useful lives.

Depreciation is calculated

based on each individual part’s

life. Significant parts that have

the same useful life and

depreciation method may be

grouped in determining the

depreciation charge.

[IAS 16.43-16.45]Depreciation charge The depreciation charge for

each period is recognised in the

profit or loss unless it is

included in the carrying amount


[DAS 212.421]


[IAS 16.48]



IFRS for SMEs Dutch GAAP Full IFRSof another asset.

[IFRS for SMEs 17.17]Depreciable amountand depreciationperiod

The depreciable amount of an

asset is allocated over its useful

life. The residual value and the

useful life of an asset are

reviewed if there is an

indication of change since the

last reporting date and

amended if expectations differ

from previous estimates.

Change in residual value or

useful life is accounted for as a

change in estimate.



[DAS 212.426-428]

The depreciable amount of an

asset is allocated over its useful

life. The residual value and the

useful life of an asset are

reviewed at least at each

annual reporting date and

amended if expectations differ

from previous estimates.

Change in residual value or

useful life is accounted for as a

change in estimate.

[IAS 16.50-16.51]

Depreciationmethod

The depreciation method

should reflect the pattern in

which the asset’s future

economic benefits are expected

to be consumed by the entity.

The depreciation method is

reviewed if there is an

indication that there has been a

significant change since the last

annual reporting date. Change

in the depreciation method is

accounted for as a change in

estimate.



[DAS 212.423-425]


The depreciation method is

reviewed at least at each

annual reporting date. Change

in the depreciation method is


estimate.

[IAS 16.60-16.62]

Non-current assetsheld for sale

A plan to dispose of an asset is

an indicator of impairment that

triggers the calculation of the

asset’s recoverable amount for

the purpose of determining

whether the asset is impaired.



however, Dutch GAAP does not

have separate accounting for

assets held for sale.

If non-current assets are no

longer in use, those assets are

measured at their carrying

amount or lower fair value less

cost to sell (cost model). It is

also allowed to measure at the

higher fair value less cost to

sell (current value model). For

the difference compared to the

carrying amount, a revaluation

reserve shall be recognised.


212.501-503]


addition, PPE is classified as

held for sale if its carrying

amount will be recovered

principally through a sale

transaction rather than through

continuing use. Assets held for

sale, which are not depreciated,

are measured at the lower of its

carrying amount and fair value

less costs to sell.

[IAS 16.3, IFRS 5.6, 5.15]



Intangible assets other than goodwill

IFRS for SMEs Dutch GAAP Full IFRSDefinition An intangible asset is an

identifiable non-monetary asset

without physical substance. The

identifiable criterion is met when

intangible asset is separable

(that is, it can be sold,

transferred, licensed, rented or

exchanged), or where it arises

from contractual or legal rights.



[DAS 210.104, 109-111 and

DAS 940]


[IAS 38.8, 38.11-38.12]

General principlesfor recognition

Expenditure on intangibles is

recognised as an asset when it

meets the recognition criteria of

an asset.

[IFRS for SMEs 18.4 -18.7]


[DAS 210.201]


[IAS 38.21-38.23]

Recognition as anexpense

Expenditure on the following

items is not recognised as

assets:

start-up costs;

training;

advertising;

relocation costs;

expenditures on internally

generated intangibles such as

brands, mastheads, customer

lists, publishing titles and

items similar in substance.

Past expenses on intangible

items are not recognised as an

asset.



However, certain entity start-up

costs like incorporation and

share issue costs are allowed to

be capitalised. If these costs are

capitalised a legal reserve is

recognised.

[art. 365.1a, 365.2 BW2 T9 and

DAS 210.103]


[IAS 38.63, 38.69, 38.71]

Initial measurementSeparately acquiredintangible assets

Intangible assets are measured

initially at cost. Cost includes:

the purchase price; and

any costs directly attributable

to preparing the assets for its

intended use.



[DAS 210.203-204]


[IAS 38.24, 38.27]

Intangible assetsacquired as part of abusinesscombination

The cost of an intangible asset

acquired as a part of a business

combination is its fair value at

the acquisition date. There is a

rebuttable presumption that the

intangible assets can be

separated from goodwill.



However the intangible assets

are only recognised if the

following criteria are met:

it is probable that the

expected future economic

benefits that are attributable

to the asset will flow to the


[IAS 38.33]



IFRS for SMEs Dutch GAAP Full IFRSentity; and

the cost of the asset can be

measured reliably.

As a result fewer intangible

assets may be recognised. The

recognition of intangible assets

should not lead to (an increase

of) negative goodwill.

[DAS 210.201-202 and 207-212]Research anddevelopment costs

All research and development

costs are recognised as an

expense.


Research costs are expensed as

incurred. Development costs are

capitalised when specific criteria

are met.

[DAS 210.221-230]

Research costs are expensed as

incurred. Development costs are

capitalised when specific criteria

are met.

[IAS 38.51, 38.54, 38.57]

Subsequent measurementMeasurement afterinitial recognition

Intangible assets are carried at

cost less any accumulated

amortisation and any

accumulated impairment losses

(cost model).


In addition to the cost model, the

revaluation model is allowed

under certain conditions, in

which intangible assets are

carried at a revalued amount

less any accumulated


accumulated impairment losses.

[DAS 210.302 and 306]

In addition to the cost model, the

revaluation model is an option,

in which intangible assets are

carried at a revalued amount

less any accumulated


accumulated impairment losses.

[IAS 38.72]

Useful life The useful life of an intangible

asset is considered to be finite.

The useful life of an intangible

asset that arises from

contractual or other legal rights

should not exceed the period of

the contractual or other legal

rights but may be shorter

depending on the period over

which the asset is expected to

be used.



[DAS 210.401 and 407-408]

The useful life of an intangible

asset is either finite or indefinite.

The useful life is regarded as

indefinite when, based on

analysis of all of the relevant

factors, there is no foreseeable

limit to the period over which the

asset is expected to generate

net cash inflows.


regard to the useful life of an

intangible asset that arises from

contractual or other legal rights,

except that renewal periods may

be taken into account if certain

criteria are met.

[IAS 38.88, 38.94]Intangible assetswith finite useful life

Intangible assets are amortised

on a systematic basis over the

useful lives of the intangibles.

The useful life of an intangible is

presumed to be 10 years if a

reliable estimate cannot be

made.

The residual value at the end of


however, there is a rebuttable

presumption that the useful life

does not exceed twenty years.

The review of the amortisation

period, method and residual

value is performed at least at

every financial year-end.

Intangible assets with finite

useful life (including those that

are revalued) are amortised.

Amortisation is carried out on a

systematic basis over the useful

lives of the intangibles.

Same as IFRS for SMEs with

regard to the residual value of



IFRS for SMEs Dutch GAAP Full IFRStheir useful lives is assumed to

be zero, unless there is either a

commitment by a third party to

purchase the asset and/or there

is an active market for the asset.

The amortisation period, method

and residual value are reviewed

if there is an indication of

change since the last reporting

date. Changes in the

amortisation period/method are


estimate.


[DAS 210.401 and 416]

such assets.

The amortisation period, method

and residual value are reviewed

at least at each annual reporting

period.

[IAS 38.97, 38.100, 38.104]

Intangible assetswith indefinite usefullife

Not applicable. All intangible

assets are considered to have

finite lives.



[DAS 210.407]

These assets are not amortised.

The useful life assessment is

reviewed at each annual

reporting period to determine

whether events and

circumstances continue to

support an indefinite useful life

assessment.Change in the

useful life assessment from

indefinite to finite is an indicator

that an asset may be impaired

and is accounted for as a

change in estimate.

[IAS 38.107, 38.109, 38.110]Impairment Intangible assets are tested for

impairment when there is an

indication that the asset may be

impaired. Existence of

impairment indicators is

assessed at each reporting date.

[IFRS for SMEs 18.25, 27.5-

27,7]


In addition, intangibles with a

useful life exceeding twenty

years and intangibles not in use

are tested for impairment

annually irrespective of whether

there is an indication of

impairment.

[DAS 210.417-422]


addition, intangibles with

indefinite useful lives are tested

for impairment annually

irrespective of whether there is

an indication of impairment.

[IAS 36.9-36.10]


disposals;

acquisition by way of government grants;

revaluation;

emission rights.


disposals;

acquisition by way of government grants;

revaluation;

emission rights.



Impairment of non-financial assets

The below addresses the impairment of non-financial assets other than inventories. More detail on the impairment ofinventories is included elsewhere in this chapter.

IFRS for SMEs Dutch GAAP Full IFRSDefinition and scopeCash-generating unit(CGU)

The smallest identifiable group

of assets that generates cash

inflows that are largely

independent of the cash inflows

from other assets or groups of

assets.

[IFRS SME Glossary]


[DAS 940]


[IAS 36.6]

Scope Assets are subject to an

impairment test according to the

requirements outlined below,

with the following exceptions:

deferred tax assets;

employee benefit assets;

financial assets;

investment property carried

at fair value;

biological assets carried at

fair value less estimated cost

to sell.


Most of the scope exclusions are

also applicable under Dutch

GAAP. DAS 121 deals with non-

current assets, whereas

impairment of inventories is dealt

with in DAS 220.

[DAS 121.106]

Wording similar to IFRS for

SMEs. In addition to the assets

excluded from the scope of IFRS

for SMEs, full IFRS excludes the

following assets:

inventories;

deferred acquisition costs;

intangibles arising from

contractual rights under

insurance contracts;

non-current assets classified

as held for sale in accordance

with IFRS 5.

[IAS 36.2]

Impairment of assetsImpairment formula An asset is impaired when its

carrying amount exceeds it

recoverable amount, whereby

the recoverable amount is

defined as the higher of an

asset’s or CGU’s fair value less

costs to sell and its value in use.



[DAS 121.201 and DAS 940]


[IAS 36.8, 36.13 36.65]

Impairment losses An impairment loss is

recognised immediately in the

profit or loss.


Similar to IFRS for SMEs, unless

the asset is carried at revalued

amount in accordance with

another standard. In this case,

the impairment loss is treated as

a revaluation decrease in

accordance with that other

standard.

[IAS 121.401-402]

Same as IFRS for SMEs, unless

the asset is carried at revalued

amount in accordance with

another standard. In this case,

the impairment loss is treated as

a revaluation decrease in

accordance with that other

standard.

[IAS 36.60]Annual assessmentof indicators

Assets (including goodwill) are

tested for impairment when there

is an indication that the asset

may be impaired. The existence


however certain intangible

assets arte tested for impairment

irrespective of any indicators.

The following assets are tested

for impairment irrespective of

whether there is indication of

impairment:



IFRS for SMEs Dutch GAAP Full IFRSof impairment indicators is

assessed at each reporting date.


Reference is made to the

paragraph ‘Intangible assets

other than goodwill’.

[DAS 121.202]

intangible assets with an

indefinite useful life or an

intangible asset not yet

available for use;

goodwill;

all other assets: same as

IFRS for SMEs.

[IAS 36.9-36.10, 36.18]Indicators ofimpairment

External indicators of impairment

include a decline in an asset’s

market value, significant adverse

changes in technological,

market, economic or legal

environment and increases in

market interest rates.

Internal indicators include

evidence of obsolescence or

physical damage of an asset,

changes in the way an asset is

used (for example, due to

restructuring or discontinued

operations) or evidence from

internal reporting that the

economic performance of an

asset is, or will be, worse than

expected.


Same as IFRS for SMEs. An

additional indicator exists when

the entity’s net asset value is

above its market capitalisation.

[DAS 121.203]

Same as IFRS for SMEs. An

additional indicator exists when

the entity’s net asset value is

above its market capitalisation.

[IAS 36.12]

Recoverable amount Recoverable amount is the

higher of an asset’s (or CGU’s)

fair value less costs to sell and

its value in use. If either exceeds

the carrying amount, it is not

necessary to estimate the other

amount.



[DAS 121.301-304]


[IAS 36.6]

Value in use The value in use is defined as

the present value of the future

cash flows expected to be

derived from an asset or CGU.

Future cash flows are estimated

for the asset in its current

condition.

Cash inflows or outflows from

financing activities and income

tax receipts or payments are not

included.



more extensive guidance about

future cash flows estimation.

[DAS 121.309-327]

Same as IFRS for SMEs, but

more extensive guidance about

future cash flows estimation.

[IAS 36.30-36.53]

Fair value less coststo sell

When performing the impairment

test of an asset (or CGU), the

entity estimates the fair value

less costs to sell based on a


[DAS 121.305-308]


[IAS 36.25]



IFRS for SMEs Dutch GAAP Full IFRShierarchy of reliability of

evidence:

a price in a binding sale

agreement in an arm’s length

or market price in an active

market, less costs of

disposal;

best available information to

reflect the amount that an

entity could obtain at the

reporting date from disposal

of the asset in an arm’s

length transaction between

knowledgeable, willing

parties, less costs of

disposal. Outcome of recent

transactions for similar

assets within the same

industry need to be

considered.

[IFRS for SMEs 27.14]Allocation ofgoodwill

Goodwill is allocated to the

CGUs that are expected to

benefit from the synergies of the

combination.

If such allocation is not possible

and the reporting entity has not

integrated the acquired

business, the acquired entity is

measured as a whole when

testing goodwill impairment. If

such allocation is not possible

and the acquired business is

integrated, the entire group is

considered when testing

goodwill impairment.

Note: ‘integrated’ means that the

acquired business has been

restructured or dissolved into the

reporting entity or other

subsidiaries


Goodwill is allocated to each

cash-generating unit or smallest

group of cash-generating units to

which a portion of that carrying

amount could be allocated on a

reasonable and consistent basis.

Initially the company applies

‘bottom-up’ test. If the goodwill

cannot be allocated on a

reasonable and consistent basis

a ‘top-down’ test is applied in

allocating the goodwill to cash-

generating units. This approach

is based on a previous version of

IAS 36.

[DAS 121.514]

Goodwill acquired in a business

combination is allocated to the

CGUs that are expected to

benefit from the synergies of the

combination.

IAS 36 includes comprehensive

guidance on how to allocate

goodwill under several

circumstances.

Goodwill is tested for impairment

at the lowest level at which it is

monitored by management.

CGUs may be grouped for

testing, but the grouping cannot

be higher than an operating

segment as defined in IFRS 8

(before aggregation).

[IAS 36.80-36.87]

Reversal ofimpairment

At each reporting date after

recognition of the impairment

loss, an entity assesses whether

there is any indication that an

impairment loss may have

decreased or may no longer

exist. The impairment loss is

reversed if the recoverable


However a reversal on goodwill

impairment is allowed in very

rare circumstances.

[DAS 121.601-618]


however, includes more detailed

guidance and distinction of

reversal of impairment for an

individual asset, a CGU and

goodwill.

[IAS 36.109-36.125]



IFRS for SMEs Dutch GAAP Full IFRSamount of an asset (CGU)

exceeds its carrying amount.

The amount of the reversal is

subject to certain limitations.

Goodwill impairment can never

be reversed.



guidance to estimate value in use;

corporate assets.


guidance to estimate value in use.



7. Non-financial liabilities and equity(Sections 21, 22, 28 and 29)

Provisions and contingencies

IFRS for SMEs Dutch GAAP Full IFRSDefinition and scopeDefinition A provision is a liability of

uncertain timing or amount.



[Art. 374.1 BW2 T9, DAS 940]


[IAS 37.10]


The section on provisions does

not apply to provisions that arise

from:

leases;

construction contracts;

employee benefit obligations;

income taxes.


Most of the scope exclusions are

also applicable for Dutch GAAP.

[DAS 252.101, 103]


however, includes additional

scope exclusions such as

executory contracts.

[IAS 37.1]

ProvisionsRecognition A provision is recognised only

when:

the entity has a present

obligation to transfer

economic benefits as a result

of a past event;

it is probable (more likely

than not) that an entity will be

required to transfer economic

benefits in settlement of the

obligation; and

the amount of the obligation

can be estimated reliably.

A present obligation arising from

a past event may take the form

either of a legal obligation or a

constructive obligation. An

obligating event leaves the entity

no realistic alternative to settling

the obligation. If the entity can

avoid the future expenditure by

its future actions, it has no

present obligation, and no

provision is required.



addition it is allowed to

recognise a provision for major

inspection.

[Art. 374.1 BW2 T9, DAS

252.201 - 204, DAS 212.451]


[IAS 37.14-37.26]

Initial measurement The amount recognised as a

provision is the best estimate of

the amount required to settle the

It is allowed to measure a

provision, either at present value

or nominal value.


[IAS 37.36]



IFRS for SMEs Dutch GAAP Full IFRSobligation at the reporting date.

Where material, the amount of

the provision is the present value

of the amount expected to be

required to settle the obligation.


[DAS 252.306-307]

Accrued interest When a provision is measured at

the present value of the amount

expected to be required to settle

the obligation, the unwinding of

the discount shall be recognised

as a finance cost in profit or loss

in the period it arises.


Additions to the provision due to

accrued interest may be

presented either as interest

expenses or as part of the

related expense in profit or loss.

[DAS 252.317]


[IAS 37.60]

Reimbursement When some or all of the amount

required settling a provision is

reimbursed by another party,

management recognises the

reimbursement as a separate

asset only when it is virtually

certain that it will receive the

reimbursement on settlement of

the obligation. The

reimbursement receivable is

presented on the statement of

financial position as an asset

and is not offset against the

provision. The amount of any

expected reimbursement is

disclosed. Net presentation is

permitted in the statement of




However the reimbursement is

recognised as a separate asset

when it is probable that the

reimbursement will be received.

Additionally Dutch GAAP

requires that the recognised

receivable should not exceed the

amount of the provision.

[DAS 252.311-313]


[IAS 37.53-37.58]


Management reviews provisions

at each reporting date and

adjusts them to reflect the

current best estimate of the

amount that would be required to

settle the obligation at that

reporting date.



[DAS 252.314]


[IAS 37.59-37.60]

Provision for majorinspection

Refer to chapter 6, Non-financial

assets (property plant and

equipment).



equipment).



equipment).Provision forrestructuring

A constructive obligation to

restructure arises only when at

the balance sheet date an entity:

has a detailed formal plan for

the restructuring;

has raised a valid

expectation to execute the

plan.


although the second criterion (re.

the valid expectation to execute

the plan) is less strict.

[DAS 252.413 - 416]

Same as IFRS for SMEs. [IAS

37 IN14]



IFRS for SMEs Dutch GAAP Full IFRS[IFRS for SMEs 21A.3]

Provision forrestoration anddismantling

The cost of an item of property,

plant and equipment includes

the initial estimate of the costs of

dismantling and removing the

item and restoring the site on

which it is located. The

obligation for an entity incurs

either when the item is acquired

or as a consequence of using

the item during a particular

period for purposes other than to

produce inventories during that

period.

[IFRS for SMEs 17.10 (c)]


although as an accounting policy

option entities are allowed to

recognise this provision during

the useful life of the asset.

[DAS 212.443-444]


[IAS 16.76 (b)]

ContingenciesContingent liabilities A contingent liability is either a

possible but uncertain obligation,

or a present obligation that is not

recognised as a liability because

either it is not probable that an

outflow will occur or the amount


Management does not recognise

a contingent liability as a liability

unless it has been acquired in a

business combination.

A contingent liability is disclosed

unless the possibility of an

outflow of resources embodying

economic outflows is remote.

[IFRS for SMEs 21.12, 21.15]


[DAS 252.205-208, DAS 940]


[IAS 37.10, 37.27-37.28, IFRS

3.23]

Contingent assets Contingent assets are not

recognised. However, when the

inflow of economic benefits is

virtually certain, the related asset

is recognised as an asset.

A contingent asset is disclosed if

an inflow of economic benefits is

probable.

[IFRS for SMEs 21.13, 21.16]


[DAS 252.209-212, 518-521 and

DAS 940]


[IAS 37.10, 37.31, 37.33]

Equity

IFRS for SMEs includes a separate section on equity. Under full IFRS, equity instruments are addressed in variousdifferent standards. Under Dutch GAAP the accounting treatment of equity in the separate financial statements differsfrom the consolidated financial statements.



IFRS for SMEs Dutch GAAP Full IFRSDefinition Equity is the residual interest in

the entity’s assets after

deducting all its liabilities.

Equity includes:

investments by the owners

of the entity;

plus additions to those

investments earned through

profitable operations and

retained for use in the

entity’s operations;

less reductions to owner’s

investments as a result of

unprofitable operations and

distributions to owners.


Residual interest in the assets

of the entity after deducting all

liabilities.

[DAS 940].

In the separate accounts equity

includes:

share capital;

share premium;

revaluation reserves;

other statutory reserves;

reserves according to the

articles of association;

other reserves;

non distributed profits;

result for the year (unless

already appropriated).

These items are (if applicable)

presented separately. This is

however not required for the


statements.

[art. 373 BW2 T9, art. 411.1

BW2 T9]

Residual interest in the assets

of the entity after deducting all

liabilities.

[IFRS Glossary]

Issue of equityshares

Equity instruments are

measured at the fair value of

the consideration received or

receivable, net of direct issue

costs.



[DAS 240.206]

Full IFRS is not explicit, but the

application in practice is the

same.

Puttable financialinstruments andobligations arisingon liquidation

Puttable financial instruments

and instruments that impose on

the entity an obligation to

deliver a pro rata share in net

assets only on liquidation are

classified as equity if specified

criteria are met.



However presentation as equity

is allowed, but not required.

[DAS 290.808]


[IAS 32.16A-D]

Compound financialinstruments

On issuing convertible debt or

similar compound instruments

that contain both a liability and

an equity component,

management allocates the

proceeds between the liability

component and the equity

component at initial recognition.

This allocation cannot be

revised in a subsequent period.



Additional disclosure is required

when the issuer classifies the

financial instrument’s

components as either equity or

debt in accordance with the

prevailing characteristics of the

contractual arrangement.

[DAS 290.813-819]


[IAS 32.28-32.30]

Treasury shares Treasury shares are the equity

instruments that have been

issued and re-acquired by the

entity. An entity deducts from


[DAS 240.213-215]


[IAS 32.33]



IFRS for SMEs Dutch GAAP Full IFRSthe equity the fair value of the

consideration given for the

treasury shares. The entity

does not recognise a gain or

loss in profit or loss on the

purchase, sale, issue or

cancellation of treasury shares.

[IFRS for SMEs 22.16]Non-controllinginterest

In consolidated financial

statements, any non-controlling

interest in the net assets of a

subsidiary is included in equity.



[art. 10.2 GAO on model

formats; DAS 240.303]


[IAS 27.27]

Employee benefits

The section on defined benefit plans focuses only on the recognition and measurement of the defined benefit liability onstatement of financial position. The recognition and measurement of the related income and expenses are addressedin chapter 4, ‘Income and expenses’. With regard to Dutch GAAP the comparisons have been made based on therevised Dutch Accounting Standard 271 on Employee Benefits issued in 2009 and applicable for accounting periodsbeginning 1 January 2010. The former DAS 271 Employee Benefits, in which the distinction between definedcontribution and defined benefit is applicable, has many points in common with Section 28 of IFRS for SMEs. Whencertain conditions are met, Dutch legal entities are allowed to apply the standards on pensions that are applicableunder US GAAP or (EU endorsed) IFRS.

IFRS for SMEs Dutch GAAP Full IFRSEmployee benefits Employee benefits are all forms

of consideration given by an

entity in exchange for services

rendered by its employees.

These benefits include:

short-term employee benefits

(such as wages, salaries,

profit-sharing and bonuses);

termination benefits (such as

severance and redundancy

pay);

post-employment benefits

(such as retirement benefit

plans);

other long-term employee

benefits (such as long-term

service leave and jubilee

benefits).



although other long-term

employee benefits are together

with the short-term benefits in

the section ‘employee benefits

during active employment’.

[DAS 271.103]


[IAS 19.4, 19.7]

Short-term employeebenefits

The costs of short-term

employee benefits are

recognised as a liability after

deducting the amounts that have

been paid to the employees in


[DAS 271.202]


[IAS 19.10]



IFRS for SMEs Dutch GAAP Full IFRSthe period in which the

employees have rendered their

service.

The amounts recognised are

measured at the undiscounted

amount of benefits expected to

be paid in exchange for that

service.

[IFRS for SMEs 28.4-28.5]Termination benefits Refer to chapter 4, ‘Income and

expenses’.

Refer to chapter 4, ‘Income and

expenses’.

Refer to chapter 4, ‘Income and

expenses’.

Post-employment benefits – retirement benefits (pensions)General Post-employment benefits are

provided to employees either

through defined contribution

plans or defined benefit plans.


DAS 271 is applicable as from 1

January 2010, earlier adoption

encouraged): the definition of

defined benefit and defined

contribution is removed.

[DAS 271]


[IAS 19.24-19.25]

Distinction betweendefined contribution(DC) plans anddefined benefit (DB)plans

A DC plan is a post-employment

plan under which the reporting

entity pays fixed contribution into

a separate entity. The reporting

entity has no legal or

constructive obligation to pay

further contributions if the plan

does not hold sufficient assets to

pay all employees the benefits

relating to employee service in

the current or prior periods.

A DB plan is a post-employment

plan that is not a DC plan.

Whether an arrangement is a

DC plan or a DB plan depends

on the substance of the

transaction rather than the form

of the agreement.


DC and DB are removed from

the standard.

The regular contribution payable

by the employer to the pension

fund (including insurance

companies) is expensed.

If the company has an additional

liability towards the pension fund

(besides the regular

contribution) a pension provision

is recognised.

[DAS 271.306, 307, 311]


[IAS 19.7, 19.25-19.26]

Multi-employer plansand state plans

Multi-employer plans and state

plans are classified as DC plans

or DB plans on the basis of the

terms of the plan, including any

constructive obligation that goes

beyond the formal terms.

If sufficient information is not

available to use DB accounting

for a DB multi-employer plan, it

can be accounted for as if it

were a DC plan.


A provision may be recognised

dependent on the conditions of

the agreement

(uitvoeringovereenkomst)

between the entity and the

pension fund.

[DAS 271.302, 311]


[IAS 19.29-19.30, 19.36]



IFRS for SMEs Dutch GAAP Full IFRSInsured benefit A post-employment benefit plan

whose benefits are insured by

an insurance contract is treated

as a DC plan only where the

entity has no legal or

constructive obligation either:

to pay the employee benefits

directly to the employee

when they become due; or

to pay further amounts if the

insurer does not pay all

future employee benefits

relating to employee service

in the current and prior

periods.

A constructive obligation could

arise indirectly through the plan,

through the mechanism for

setting future premiums or

through a related-party

relationship with the insurer.


A provision is recognised when

the same general criteria with

regard to provisions (DAS 252)

are met.

[DAS 271.313]


[IAS 19.39-19.42]

Measurement ofdefined contributionplans

The contribution payable for a

period by the employer to the

fund is recognised as a liability

for a DC plan after deducting

any amount already paid.


Not applicable. Similar to IFRS for SMEs;

however, if the contributions to a

DC plan do not fall due wholly

within 12 months after the end of

the period, the future

contributions are discounted.

[IAS 19.44-19.45]Defined benefit plans An entity recognises a liability for

its obligation under DB plans net

of plan assets; it recognises the

net change in that liability during

the period as the cost of its DB

plans during the period.


Not applicable. Similar to IFRS for SMEs, except

for the following:

actuarial gains or losses can

be recognised immediately

(either in profit or loss or in

other comprehensive income)

or deferred using the

‘corridor’ method (whereby

gains and losses are

amortised into profit or loss

over the expected remaining

lives of participating

employees);

past-service costs are

recognised in profit or loss on

a straight-line basis over the

average period until the plan

amendments vest.

[IAS 19.54, 19.61, 19.92-19.93B,

19.96]Defined benefitliability / otherprovisions

The DB liability is the net total of:

the present value of the DB

A DB liability as such is not

applicable. Other provisions

The DB liability is the net total of:

the present value of the DB



IFRS for SMEs Dutch GAAP Full IFRSobligation at the end of the

reporting period;

less the fair value at the

reporting date of plan assets

(if any) out of which the

obligations are to be settled

directly.


(that are to be recognised when

certain criteria are met, refer to

the guidance above) are

measured on a best estimate

basis.

[DAS 271.315 and DAS

252.301]

obligation at the end of the

reporting period;

plus any actuarial gains (less

any actuarial losses) not

recognised due to the corridor

method;

minus any unrecognised past

service costs;

minus the fair value at the




directly.

[IAS 19.54]Actuarial valuationmethod

The use of an accrued benefit

valuation method (the projected

unit credit method) is required if

the information that is needed to

make such a calculation is

already available, or can be

obtained without undue cost or

effort.

If this is not the case, an

alternative method is permitted

in which future salary

progression, future service and

possible mortality during an

employee’s period of service are

not considered.

Valuations performed in-

between comprehensive

valuations are adjusted for the

changes in number of

employees and salaries if the

principal actuarial assumptions

have not changed significantly.


Not applicable. The use of an accrued benefit

valuation method (the projected

unit credit method) is required

for calculating DB obligations.

This method sees each period of

service as giving rise to an

additional unit of benefit

entitlement and measures each

unit separately to build up the

final obligation.

[IAS 19.64-19.65]

Discount rate The DB obligation is recorded at

present values using a discount

rate derived from high-quality

corporate bonds with a maturity

consistent with the expected

maturity of the obligations. In

countries where no deep market

in high-quality bonds exists, the

yield rate on government bonds

is used.


Not applicable. Same as IFRS for SMEs.

[IAS 19.78]

Fair value of planassets

Plan assets are measured at fair

value. When the market price is

unavailable, the fair value of the

Not applicable. Similar to IFRS for SMEs.

[IAS 19.102]



IFRS for SMEs Dutch GAAP Full IFRSplan assets is estimated − for

example, using discounted cash

flows.

[IFRS for SMEs 28.15(b), 11.27-

11.32]Expected return onplan assets

No distinction between expected

and actual return on plan assets.

All changes in the fair value of

plan assets are recorded in profit

or loss.

[IFRS for SMEs 28.25(c)]

Not applicable. The expected return on plan

assets is based on market

expectations at the beginning of

the period for returns over the

entire life of the related

obligation. It reflects changes in

the fair value of plan assets as a

result of actual contributions and

benefits paid. The difference

between actual and expected

returns on plan assets is an

actuarial gain or loss

[IAS 19.105-19.106]

Other long-term employee benefitsOther long-termemployee benefits

Other long-term benefits include

long-service and sabbatical

leave, jubilee and other long-

service benefits, long-term

disability benefits and

compensation, and bonus

payments paid after 12 months

or more after the end of the

period in which they are earned.

The amount recognised as a

liability for other long-term

benefits is the net total of:

the present value of the

benefit obligation at the

reporting date;

less the fair value at the




directly.



that measurement is based on a

best estimate rather than the

project unit credit method.

Discount rate is the company’s

actual market rate.

[DAS 271.203 - 207]


[IAS 19.126-19.130]


defined benefit plans that share risks between various entities under common control;

valuations of qualified insurance policies;

asset ceiling test;

detailed guidance on the measurement of defined benefit obligation.



Income taxes

IFRS for SMEs Dutch GAAP Full IFRSCurrent taxesDefinition The amount of income taxes

payable (recoverable) in respect

of the taxable profit (tax loss) for

the current period.



[DAS 940]


[IAS 12.5]

Recognition Unpaid current tax for current

and prior periods is recognised

as a liability. If the amount

already paid exceeds the

amount due for those periods,

the excess is recognised as an

asset.

The benefit relating to a tax loss

that can be carried back to

recover current tax of a previous

period is recognised as an asset.



[DAS 272.201-202]


[IAS 12.12-12.13]

Measurement Current tax liabilities (assets) for

the current and prior periods and

related tax expense (income) are

measured at the amount

expected to be paid to

(recovered from) the taxation

authorities, using the tax rates

(and tax laws) that have been

enacted or substantively enacted

by the reporting date.

Current taxes are not

discounted.


29.24]


that DAS 272 is silent on the

discounting current tax.

[DAS 272.201-202]


that IAS 12 is silent on the

discounting current tax.

[IAS 12.46]

Deferred taxesDefinition of deferredtax liabilities/(assets)

The amounts of income taxes

payable (potentially recoverable)

in future in respect of taxable

(deductible) temporary

differences (and the carry-

forward of unused tax losses

and tax credits).



[DAS 940]


[IAS 12.5]

Tax basis Tax basis is the measurement

under applicable (substantively

enacted) tax law of an asset,

liability or equity instrument.

The tax basis of an asset equals

the amount that would have

been deductible in arriving at

taxable profit if the carrying

amount of the asset has been


although ‘substantively enacted’

is not a part of the definition.

Furthermore, no detailed

guidance on the tax basis of an

asset and a liability.

[DAS 940]


[IAS 12.5]

The tax basis of an asset or

liability is determined based on

the expected manner of recovery

or settlement.



IFRS for SMEs Dutch GAAP Full IFRSrecovered through sales at the

end of the reporting period. The

tax basis of a liability equals its

carrying amount less any

amounts deductible in

determining taxable profit (or

plus any amounts included in

taxable profit) if the liability had

been settled at the end of the

reporting period.

[IFRS for SMEs Glossary, and

29.11-29.12]

[IAS 12.52]

Temporarydifferences

Temporary differences are

differences between the tax

basis of an asset or liability and

its carrying amount in the

financial statements that will

result in a taxable or deductible

amount when the carrying

amount of the asset or liability is

recovered or settled.



[DAS 940]


[IAS 12.5]

Deferred tax is provided for all

temporary differences and the

carry-forward of unused tax

losses, with a few exceptions

such as the initial recognition of

goodwill and the outside basis

differences (that is, temporary

difference arising from

investments in subsidiaries,

branches, joint ventures and

associates) from foreign

investments that are essentially

permanent in duration.


29.16]

Deferred tax is provided for all

temporary differences and the

carry-forward of unused tax

losses, with a few exceptions

such as the initial recognition of

goodwill. Furthermore the

recognition of a deferred tax

liability related to revaluation of

property, plant and equipment is

not required but strongly

recommended. If no deferred tax

liability is recognised, this should

be disclosed including the

quantitative effects.

A deferred tax asset is only

recognised to the extent that it is

probable that there will be

sufficient future taxable profit to

enable recovery of the deferred

tax asset. A deferred tax asset is

not recognised if the probability

of realisation is only connected

to the existence of a deferred tax

liability relating to revalued

assets.

[art. 390.1, 390.5 BW2 T9, DAS

272.301, 304, 306, 310, 315-

316, 318 and 505]

Similar to IFRS for SMEs. Thereare also additional exceptions forinitial recognition of an asset andliability in a transaction that isnot a business combination andaffects neither accounting profitnor taxable profit at the time ofthe transaction.

In addition, IAS 12 provides an

exemption to outside basis

difference regardless of whether

it is a domestic or foreign

investee.

A deferred tax asset is only

recognised to the extent that it is

probable that there will be

sufficient future taxable profit to

enable recovery of the deferred

tax asset.

[IAS 12.15, 24, 34, 39]

Recognition ofdeferred taxes(general principles,and the recognitionof deferred taxassets)

A valuation allowance is

recognised so that the net

The concept of ‘valuation

allowance’ is not applicable.

The concept of ‘valuation

allowance’ is not applicable.



IFRS for SMEs Dutch GAAP Full IFRScarrying amount of the deferred

tax asset equals the highest

amount that is more likely than

not to be recovered.

Refer to the previous line for the

conditions under which a

deferred tax asset is recognised.

The net carrying amount of

deferred tax asset is likely to be

the same, but Dutch GAAP does

not request the disclosure of a

valuation allowance.

Instead, a deferred tax asset is

only recognised to the extent

that it is probable that there will

be sufficient future taxable profit

to enable recovery of the

deferred tax asset. The net

carrying amount of deferred tax

asset is likely to be the same,

but full IFRS does not request

the disclosure of a valuation

allowance.

Deferred tax assets and

liabilities are measured using the

tax rates (and tax laws) that

apply or have been

(substantively) enacted by the

reporting date.


liabilities are not discounted.

Where an entity is subject to

different tax rates depending on

different levels of taxable

income, deferred tax assets and

liabilities are measured at the

average tax rate applicable to

the periods in which it expects

the temporary differences to

reverse.

[IFRS for SMEs 29.18, 29.19,

29.21-29.24]


liabilities are measured using the

tax rates (and tax laws) that

apply or have been

(substantively) enacted by the

reporting date.

Deferred taxes are allowed to be

discounted.

With regard to different tax rates,

the same approach as IFRS for

SMEs is applicable.

[DAS 272.401 - 405]


[IAS 12.47, 49, 53]

Review of deferredtax assets

The net carrying amount of the

deferred tax asset is reviewed at

each reporting date; the

valuation allowance is adjusted

to reflect the current assessment

of future taxable profits.



carrying amount of the deferred

tax asset is reviewed at each

reporting date and is reduced

when it is no longer probable

that sufficient taxable profit will

be available to allow recovery of

the deferred tax asset. This

reduction is reversed when

subsequently it becomes

probable that sufficient taxable

profit will be available.

[DAS 272.406]

Similar to Dutch GAAP.

[IAS 12.56]

Recognition directlyin comprehensiveincome / in equity

Current and deferred tax is

recognised in the same

component of total

comprehensive income as the

transaction or other event that

resulted in the tax expense.



recognised in profit of loss,

except to the extent that the tax

arises from a business

transaction or a transaction or

event that is recognised in the

same or other period outside

profit or loss (directly in equity).

[DAS 272.502]


recognised in profit of loss,

except to the extent that the tax

arises from a business

transaction or a transaction or

event that is recognised in the

same or other period outside

profit or loss (either in other

comprehensive income or



IFRS for SMEs Dutch GAAP Full IFRSdirectly in equity).

[IAS 12.58, 12.61A, 12.68]

Other topicsWithholding tax ondividend

Tax relating to dividends that is

paid or payable to taxation

authorities on behalf of the

shareholders (for example,

withholding tax) is charged to

equity as part of the dividends.



[DAS 272.506]


[IAS 12.65A]

Uncertain taxposition

An entity recognises the effect of

the possible outcomes of a

review by the tax authorities. It is

measured using the probability-

weighted average amount of all

the possible outcomes,

assuming that the tax authorities

will review the amounts reported

and have full knowledge of all

relevant information.


There is no specific guidance

under DAS 272. In practice, the

company will record the liability

measured as the single best

estimate.

There is no specific guidance

under IAS 12. In practice, the

company will record the liability

measured as either a single best

estimate or a weighted average

probability of the possible

outcomes, if the likelihood is

greater than 50%.

Offsetting An entity offsets current tax

assets and current tax liabilities,

or offsets deferred tax assets

and deferred tax liabilities, only

when it has a legally enforceable

right to set off the amounts and it

intends either to settle on a net

basis or to realise the asset and

settle the liability simultaneously.


Similar to IFRS for SMEs.[DAS 115.305]

For the offsetting of current tax,

same as IFRS for SMEs.

For the offsetting of deferred tax,

IAS 12 does not require a

detailed time schedule of the

reversal of each temporary

difference. Rather, it requires to

set off the assets and liabilities

of the same taxable entity if and

only if they relate to income tax

levied by the same authority and

the entity has a legal

enforceable right to set off

current tax assets against

liabilities.

[IAS 12.71, 74 and 75]


assets carried at fair value;

reassessment of unrecognised deferred tax assets;

deferred tax arising from a business combination;

current and deferred tax arising from share-based payment transactions;

exchange differences on deferred foreign tax liabilities or assets.


assets carried at fair value;

reassessment of unrecognised deferred tax assets;

deferred tax arising from a business combination.



8. Other topics(Sections 20, 30, 31, 32, 33 and 34)

Leases

IFRS for SMEs Dutch GAAP Full IFRSDefinition and scopeDefinition A lease is an agreement

whereby the lessor conveys to

the lessee in return for a

payment or a series of payments

the right to use an asset for an

agreed period of time.



[DAS 940]


[IAS 17.4]


The section on leases applies to

accounting for all leases other

than:

leases in the exploration

industries;

licensing agreements for

such items such as motion

picture films and video

recordings;

investment property;

biological assets;

leases that could result in a

loss to either party as a

result of contractual terms

that are unrelated to

changes in the price of

leased assets, changes in

foreign exchange rates or a

default by one of the

counterparties;

onerous operating leases.

Arrangements that do not take

the legal form of a lease but that

convey rights to use assets in

return for payments are in

substance leases and are

accounted as such.



for 4, 5 and 6. Furthermore there

are some exceptions related to

investment property.

[DAS 292.101]

Same as IFRS for SMEs except

for 5 and 6.

[IAS 17.2, IFRIC 4]

Lease classificationGeneralcharacteristics

A lease is classified at inception

as a finance lease if it transfers

to the lessee substantially all of

the risks and rewards incidental


[DAS 292.117-120, 292.123]


[IAS 17.8, 17.10]



IFRS for SMEs Dutch GAAP Full IFRSto ownership. All other leases

are treated as operating leases.

Whether a lease is a finance

lease or an operating lease

depends on the substance of the

transaction rather than the legal

form of the contract.

[IFRS for SMEs 20.4-20.5]Examples ofsituations that wouldnormally lead to alease beingclassified as afinance lease

Transfer of ownership of the

asset takes place by the end

of the lease term.

There is a bargain purchase

option.

Lease term is for the major

part of the economic life of

the asset.

At the inception of the lease,

the present value of the

minimum lease payments

amounts to at least

substantially all of the fair

value of the leased asset.

Leased assets are of a

specialised nature.



addition the following tests are

applicable:

The lease term is at least

75% of the economic life of

the asset.

The present value of the

minimum lease payments

amounts to at least 90% of

the fair value of the leased

asset.

[DAS 292.120]


[IAS 17.10]

Sale-and-lease-backtransactions

For sale-and-lease-back

transactions resulting in a lease-

back of a finance lease, any gain

realised by the seller-lessee on

the transaction is deferred and

amortised through the profit or

loss over the lease term.

Separate requirements apply

where the transaction results in

an operating lease.



[DAS 292.401-407]


[IAS 17.59, 17.61, 17.63, 17, IG]

Lease treatment in the financial statements of a lesseeFinancial lease The assets and liabilities are

recognised at fair value or, if

lower, at the present value of the

minimum lease payments at the

inception of the lease. The

present value of minimum lease

payment is discounted using the

interest rate implicit in the lease.

If the interest rate implicit in the

lease is impracticable to

determine the lessee's

incremental borrowing rate is to

be used.

Subsequent measurement:


However it is only required to

assess at the reporting date

whether an asset leased under a

finance lease is impaired, when

there is any indication that the

asset may be impaired.

[DAS 292.201, 206, 207, DAS

121.201 - 203 and DAS 940]


[IAS 17.20, 25, 27]



IFRS for SMEs Dutch GAAP Full IFRSassets are depreciated in

accordance with relevant IFRS

for SMEs section or over the

lease term if shorter. The lessee

apportions minimum lease

payments between finance

charge and reduction of

outstanding liability.

A lessee shall also assess at

each reporting date whether an

asset leased under a finance

lease is impaired.

[IFRS for SMEs 20.9-20.12]Operating lease The rental payments are

recorded as expense on a

straight-line basis over the lease

term unless another systematic

basis is more representative of

the time pattern of the user’s

benefit or the payments to the

lessor are structured to increase

in line with expected inflation to

compensate for the lessor’s

expected cost increases.


Similar to IFRS for SMEs, except

for the expected inflation

adjustments that are included

when incurred.

[DAS 292.210-211 and DAS

940]



adjustments.

[IAS 17.33]

Lease treatment in the financial statements of a lessorFinancial lease Assets held under a finance

lease are recognised and

presented as a receivable at an

amount equal to the net

investment in the lease.

Initial direct costs are capitalised

and depreciated.

[IFRS for SMEs 20.9 and 17]


However initial direct costs are

allowed to be immediately

recognised in the profit and loss.

[DAS 292.301 and 303]


[IAS 17.36]

Operating lease These assets are recorded

according to the nature of the

assets and depreciated on a

basis consistent with the normal

depreciation policy for similar

assets. Rental income is

recognised on a straight-line

basis over the lease term unless

another systematic basis is more

representative of the time

pattern in which the benefit of

the leased asset is diminished or

the payments to the lessor are

structured to increase in line with

expected inflation to compensate

for the lessor’s expected cost



adjustments that are included

when incurred.

Furthermore initial direct costs

(except for signing allowances)

are allowed to be immediately

recognised in the profit and loss.

[DAS 292.312-318]



adjustments.

[IAS 17.49-17.51, 53]



IFRS for SMEs Dutch GAAP Full IFRSincreases.

Initial direct costs are included in

the carrying amount of the asset

and allocation to the lease

period should be matched with

the allocation of the lease

benefits.

[IFRS for SMEs 20.24-20.25

and 27]


implementation guidance;

operating leases – incentives (SIC 15);

evaluating the substance of transactions involving the legal form of a lease (SIC 27).


operating leases – incentives;

evaluating the substance of transactions involving the legal form of a lease.

Foreign currencies

IFRS for SMEs Dutch GAAP Full IFRSDefinitionsFunctional currency Currency of the primary

economic environment in which

the entity operates.



[DAS 122.105-111]


[IAS 21.8]

Presentationcurrency

Currency in which the financial

statements are presented.



[DAS 940]


[IAS 21.8]

Functional currencyGeneral All components of the financial

statements are measured in the

functional currency. All

transactions entered into in

currencies other than the

functional currency are treated

as transactions in a foreign

currency.


Similar to IFRS for SMEs though

the Dutch Accounting Standards

include additional guidance.

[DAS 122.105 - 111]


[IAS 21.17, 21]

Foreign currenciestransactions

A transaction in a foreign

currency is recorded in the


exchange rate at the date of

transaction (average rates may

be used if they do not fluctuate

significantly).


[DAS 122.201-206]


[IAS 21.21-21.23]



IFRS for SMEs Dutch GAAP Full IFRSAt the end of each reporting

period, foreign currency

monetary balances are

translated using the exchange

rate at the closing rate.

Non-monetary balances

denominated in a foreign

currency and carried:

at cost: reported using the

exchange rate at the date of

the transaction;

at fair value: reported using

the exchange rate at the date

when the fair values were

determined.

[IFRS for SMEs 30.7-30.9]Recognition ofexchangedifferences

Exchange differences on

monetary items are recognised

in profit or loss for the period

except for those differences

arising on a monetary item that

forms part of an entity’s net

investment in a foreign entity

(subject to strict criteria of what

qualifies as net investment). In

the consolidated financial

statements, such exchange

differences are recognised as a

separate component in equity.

Recycling through profit or loss

of any cumulative exchange

differences that were previously

recognised in equity on disposal

of a foreign operation is not

permitted.

[IFRS for SMEs 30.10, 30.12-

31.13]


that exchange differences on a

monetary item that forms part of

a net investment in a foreign

operation are reclassified from

equity to profit and loss on

disposal of the foreign operation.

Cumulative exchange

differences on foreign operations

initially recognised in equity are

recommended to be recycled to

profit or loss upon disposal of

the foreign operation. The

alternative is transfer to the other

reserves.


122.207-213, 311]

Same as IFRS for SMEs, except

that exchange differences on a

monetary item that forms part of

a net investment in a foreign

operation are reclassified from

equity to profit or loss on


Cumulative translation



recycled to profit or loss upon


[IAS 21.28, 30, 32, 39, 40, 48]

Change in functionalcurrency

A change is justified only if there

are changes in underlying

transactions, events and

conditions that are relevant to

the entity.

The effect of a change in

functional currency is accounted

for prospectively from the date of

the change.

[IFRS for SMEs 30.14-16]


[DAS 122.110, 214]


[IAS 21.35-21.37]



IFRS for SMEs Dutch GAAP Full IFRSPresentation currencyGeneral An entity may choose to

present its financial statements

in any currency. If the

presentation currency differs

from the functional currency, an

entity translates its results and

financial position into the

presentation currency.


Similar to IFRS for SMEs. Some

additional requirements are

applicable according to Dutch

Law.

[DAS 122.301]


[IAS 21.38]

Translation to thepresentationcurrency

The assets and liabilities are

translated at the closing rate at

the date of the statement of

financial position; income and

expenses are translated using

the exchange rates at the dates

of the transactions (average

rates may be used if they do not

fluctuate significantly). All

resulting exchange differences

are recognised in other


Entities in the group may have

different functional currencies.

When preparing consolidated

financial statements, the

financial statements of all

entities are translated into the

reporting entity’s presentation

currency.



that cumulative translation



recommended to be recycled to

profit or loss upon disposal of

the foreign operation. The

alternative is transfer to the other

reserves.

[art. 389.8 BW2 T9, DAS

122.302-306 and 311]


that cumulative translation



recycled to profit or loss upon


[IAS 21.39-21.40, 48]


tax effects of all exchange differences.

Hyperinflation

IFRS for SMEs Dutch GAAP Full IFRSDefinition Hyperinflation is indicated by

characteristics of the economic

environment of a country. One

of the indicators is if the

cumulative inflation rate over

three years is approaching or

exceeds 100%.



Dutch GAAP is less detailed.

[DAS 122.312]


[IAS 29.3]

Presentation Where an entity’s functional

currency is the currency of a

hyperinflationary economy, the


[DAS 122.312]


[IAS 29.8, 29.9]



IFRS for SMEs Dutch GAAP Full IFRSfinancial statements are stated

in terms of the measuring unit

current at the end of the

reporting period. The gain or

loss on the net monetary

position is included in profit or

loss and separately disclosed.


Events after the end of the reporting period

IFRS for SMEs Dutch GAAP Full IFRSDefinitionsEvents after the endof the reportingperiod

Events after the end of the

reporting period are those

events, favourable and

unfavourable, that occur

between the end of the reporting

period and the date when the


authorised for issue.



However DAS 160 distinguishes

three periods:

the period between the end of

the reporting period and the

date when the financial

statements are authorised for

issue;

the period between the date

when the financial

statements are authorised for

issue and the approval of the

financial statements in the

shareholders’ meeting;

the period after the approval

of the financial statements.

[DAS 160.103-104]


[IAS 10.3]

Adjusting event Adjusting events provide furtherevidence of conditions thatexisted at the end of thereporting period and lead toadjustments to the financialstatements.

[IFRS for SMEs 32.2(a), 32.5]


addition thereto any adjusting

events in period (b) do lead to

adjustments if this is essential

for a clear understanding of the

financial statements. Adjusting

events in period (c) do not lead

to adjustments. However, if

these adjusting events

demonstrate that the financial

statements have serious

shortcomings then the

shareholders should be

informed and a statement of the

adjusting events should be filed

at the Chamber of Commerce

including an auditor’s report.


160.201-205]


[IAS 10.3(a)]



IFRS for SMEs Dutch GAAP Full IFRSNon-adjusting event Non-adjusting events relate to

conditions that arose after theend of the reporting period anddo not lead to adjustments, onlyto disclosures in the financialstatements.

[IFRS for SMEs 32.2(b), 32.7]

Similar to IFRS for SMEs. An

exemption is applicable for non-

adjusting events leading to

discontinuity.

[DAS 160.206-207]


[IAS 10.3(b)]

Recognition and measurementDividends Dividends proposed or declared

after the end of the reportingperiod are not recognised as aliability in the reporting period.


The balance sheet can be

presented before or after result

appropriation. In the latter case

proposed dividends are

recognised as a separate

component of equity, or as a

liability.

[art. 373.1 BW2 T9, GAO on

model formats and DAS

160.208]

Similar as IFRS for SMEs.

[IAS 10.12-10.13

Date of authorisationfor issue

Management discloses the dateon which the financialstatements were authorised forissue and who gave thatauthorisation. If the owners orother persons have the power toamend the financial statementsafter issue, this fact is alsodisclosed.



[art. 210.2 BW2]


[IAS 10.4-10.6]

Related-party disclosures

IFRS for SMEs Dutch GAAP Full IFRSDefinition A related party is a person or

entity that is related to the entity

that is preparing its financial

statements (the reporting

entity).

The main categories of relatedparties are: subsidiaries; fellow subsidiaries; associates; joint ventures; key management per-

sonnel of the entity and itsparent (which include closemembers of their families);

parties with control or jointcontrol or significantinfluence over the entity(which include close


[art. 381.3 BW2 T9 and draft

DAS 330]


[IAS 24.9]



IFRS for SMEs Dutch GAAP Full IFRSmembers of their families,where applicable);

post-employment benefitplans.

Related parties exclude financeproviders and governments inthe course of their normaldealings with the entity. Thereis also an exemption from thedisclosure requirements wherethere is state control over theentity.

[IFRS for SMEs 33.2]Disclosures Where there have been related-

party transactions, disclosure is

made of the nature of the

relationship, the amount of

transactions, and outstanding

balances and other elements

necessary for a clear

understanding of the financial

statements (for example,

volume and amounts of

transactions, amounts

outstanding and pricing

policies).



disclosures are only required in

case of material transactions

between parties that did not

take place at arms length.

[art. 381.3 BW2 T9]


[IAS 24.17]

Specialised activities

IFRS for SMEs Dutch GAAP Full IFRSAgricultureDefinitions Biological asset: a living

animal or plant.

Agricultural produce: the

harvested product of

biological assets.


Not specifically covered in Dutch

GAAP.


[IFRS Glossary]

Recognition andmeasurement

An entity involved in

agricultural activity measures

biological assets at fair value

less cost to sell where such fair

value is readily determinable

without undue cost or effort.

Where fair value is not used,

the entity measures such

assets at cost less any

accumulated depreciation and


losses.


GAAP. In practice biological

assets are measured at cost

(when frequent market

quotations are not available) or

current value with changes

through profit and loss (in case

of frequent market quotations).

[art. 384.7c and 390.1 BW2 T9]


however, exemption from

measurement at fair value is

only allowed if the fair value


This is the case for biological

assets for which market-

determined prices or values

are not available and for which

alternative estimates of fair

value are determined to be

clearly unreliable. In such



IFRS for SMEs Dutch GAAP Full IFRSThe agricultural produce

harvested from biological assets

is measured at fair value less

estimated costs to sell at the

point of harvest.

Gains or losses on initial

recognition and from change in

fair value are recognised in profit

or loss of the period.

[IFRS for SMEs 34.4-34.6, 34.8-

34.9]

cases, biological assets are

measured at cost.

[IAS 41.12-41.13, 41.26, 41.30]

Extractive industriesRecognition andmeasurement

An entity that is engaged in an

extractive industry recognises

exploration expenditure on the

acquisition or development of

tangible/intangible assets by

applying Sections 17 and 18.



GAAP.

Exploration and evaluation

assets are measured at cost.

An entity may develop a policy

to determine which

expenditures are recognised as

exploration and evaluation

assets. Full IFRS restricts

recognition of certain types of

expenditures as an asset.

[IFRS 6.8-6.9]

Service concession arrangementsDefinition An arrangement whereby a

government or other public

sector body contracts with a

private operator to develop,

operate and maintain

infrastructure assets such as

roads, prisons and hospitals.



[DAS 390.101]


however, guidance is more

detailed.

[IFRIC 12.2]

Categories andaccounting

The operator receives a

financial asset or an intangible

asset. The financial asset is

recognised to the extent that

the operator has an

unconditional contractual right

to receive cash or another

financial asset from or at the

direction of the grantor for the

construction services. The

intangible asset is recognised

to the extent that the operator

receives a right (or licence) to

charge users of the public

service. The financial and

intangible assets are initially

measured at fair value. They

are subsequently measured in

accordance with Section 11,

‘Basic financial instruments’,


GAAP, although there are some

disclosure requirements.

[DAS 390.102, 103]


[IFRIC 12.15-12.17, 23, 26]



IFRS for SMEs Dutch GAAP Full IFRSSection 12 ‘Other financial

instruments issues’, and

Section 18, ‘Intangible assets

other than goodwill’,

respectively.

[IFRS for SMEs 34.13-34-15]


government grants related to biological assets;

scope and elements of cost of exploration and evaluation assets (IFRS 6).

Discontinued operations and assets held for sale

IFRS for SMEs nor Dutch GAAP have ‘held for sale’ classification for non-financial assets or groups of assets andliabilities, as is required by IFRS 5, ‘Non-current assets held for sale and discontinued operations’. Instead in IFRSSME (not covered in Dutch GAAP), a decision to sell an asset is considered an impairment indicator, which triggers animpairment review. Discontinued operations are taken into account, but not in a separate section.

IFRS for SMEs Dutch GAAP Full IFRSDiscontinuedoperations –definition

A component of an entity that

either has been disposed of or

is held for sale. It represents a

separate major line of business

or geographical area of

operations, or is part of a single

coordinated plan to dispose of

a major line of business or

geographical area of

operations. It could also be a

subsidiary acquired exclusively

for resale.



addition Dutch GAAP uses the

term ‘not continued on a

permanent base’ as part of the

definition.

Separate rules are applicable

for subsidiaries acquired

exclusively for resale.

[DAS 217.305, 345.201 and

301-302]


except the glossary IFRS for

SMEs includes the reference

for held for sale.

[IFRS 5.32]

Presentation Amounts for discontinued

operations are required and

identified in the statement of


[IFRS for SMEs 5.5(e)]

Dutch GAAP does not allow the

separate presentation of

discontinued operations in the

income statement. There are

only some disclosure

requirements.

[DAS 345.301 – 310, and 401]

Discontinued operations are

presented separately in the


income and the statement of

cash flows. There are additional

disclosure requirements in

relation to discontinued

operations.

[IFRS 5.33]Non-current assetsheld for sale

Not covered. The decision to

sell an asset or plans to

discontinue the operation to

which an asset belongs are

considered an impairment

indicator.

[IFRS for SMEs 27.9(f)]

Not covered in Dutch GAAP. A non-current asset (or

disposal group) is classified as

‘held for sale’ if its carrying

amount is recovered principally

through a sale transaction

rather than through continuing

use. This is the case when the

asset (or disposal group) is



IFRS for SMEs Dutch GAAP Full IFRSavailable for immediate sale in

its present condition, its sale is

highly probable and the sale is

expected to be completed

within one year from the date of

classification.

Assets (or disposal group)

classified for sale are:

carried at the lower of the

carrying amount and fair

value less costs to sell;

not depreciated or

amortised;

presented separately in the

statement of financial

position.

[IFRS 5.1, 5.6-5.7, 5.15, 5.38]

IFRS for SMEs does not include sections on topics for which IFRS for SMEs does not have a specific requirement topresent such information. Those topics are:

segment reporting (IFRS 8 / DAS 350);

earnings per share (IAS 33 / DAS 340);

interim financial reporting (IAS 34 / DAS 394).



→ → → →



9. Appendices

Appendix I Exemptions for medium-sized entities in the Netherlands

Appendix II Examples – Statement of financial position

Appendix III Examples – Statement of comprehensive income

Appendix IV Examples – Statement of changes in equity

Appendix V Examples – Statement of cash flows



Appendix I Exemptions for medium-sized entities in the Netherlands

Companies are classified as small, medium or large on the basis of three quantitative criteria, being Total assets, netturnover and the average number of employees (Articles 396 and 397 of Book 2, Part 9 of the Dutch Civil Code). Referto the criteria below.

Small company Medium company Large companyNet turnover (€ ‘000) < 8,800 > 8,800 and < 35,000 > 35,000Total assets (€ ‘000) < 4,400 > 4,400 and < 17,500 > 17,500Employees < 50 > 50 and < 250 > 250

The above criteria (particularly net turnover and total assets) are subject to periodical revision to take account ofinflation etc.

A company will be classified as small, medium or large where it:

satisfies at least two out of three criteria for that size, and

satisfies those criteria for two consecutive years.

As mentioned in the introduction to this brochure, small-sized companies are not covered. Therefore the exemptionsstated below are only provided for medium-sized companies.

Subject Exemptions regarding recognition and measurementForeign currencies Medium-sized entities are allowed to make use of the alternative conversion of income and expense

posted by a foreign operation. This concerns the translation at the rate of exchange ruling at thebalance sheet date instead of at the average rate. Exchange rate differences regarding this methodshould be included in the translation reserve.The provisions of this guideline should be applied in full.[DAS 122.304]

Statement ofcomprehensive income

Medium-sized entities are exempt from preparing an ’Overzicht Totaalresultaat’.[DAS 265.101]

Leasing Medium-sized entities are exempt from determining whether an arrangement contains a lease forcontracts that do not primarily qualify as a lease agreement.[DAS 292.107-116]

Financial statements Medium-sized entities are exempt from the use of references in the financial statements.[DAS 300.104]



Appendix II Examples – Statement of financial position

The balance sheets according to IFRS for SMEs and Dutch GAAP are provided to highlight the main differencesbetween the two standards. We refer to our publication ‘IFRS for SMEs - Illustrative consolidated financial statements2010’ which provides a detailed overview of the primary statements under IFRS for SMEs.

IFRS for SMEs: Statement of financial position (balance sheet

As at 31 December2010 2009

AssetsCurrent assetsCash and cash equivalents 0 0Derivative financial instruments 0 0Trade and other receivables 0 0Inventories 0 0Biological assets 0 0

0 0Non-current assetsProperty, plant and equipment 0 0Investment property 0 0Intangible assets 0 0Biological assets 0 0Investments in associates 0 0Deferred income tax assets 0 0

0 0Total assets 0 0

LiabilitiesCurrent liabilitiesBorrowings 0 0Trade and other payables 0 0Current income tax liability 0 0Provisions 0 0

0 0

Non-current liabilitiesBorrowings 0 0Deferred income tax liability 0 0Employee benefit obligations 0 0Provisions 0 0

0 0Total liabilities 0 0

Equity 0 0Total equity attributable to the owners of the parent 0 0Total liabilities and equity 0 0



Dutch GAAP1: Balance sheet (before result appropriation)

As at 31 December2010 2009

AssetsNon-current assetsIntangible assets 0 0Property, plant and equipment 0 0Investment property 0 0Financial assets 0 0

0 0

Current assets 0 0Inventories 0 0Construction contractsReceivables 0 0Securities 0 0Cash and cash equivalents 0 0

0 0

Total assets 0 0

Equity and liabilitiesEquity2

Shareholders’ equity 0 0

Share premium 0 0

Revaluation reserves 0 0

Legal and statutory reserves3 0 0

Other reserves 0 0

Minority interest 0 0

0 0

Provisions4 0 0

Non-current liabilities 0 0

Current liabilities 0 0

Total equity and liabilities 0 0

1 Model B of the GAO on model formats is applied, making use of the provision in art. 8 part 1 of the GAO on model formats to include certain items in the disclosure

notes instead of the balance sheet.

2 This specification is not required for the consolidated financial statements. A company could choose to only present the group equity according to art. 10.2 of the

GAO on model formats.3 In case of capitalisation of incorporation and share issue costs or research and development costs (both not allowed under IFRS for SMEs), the entity mustrecognise an equal legal (non-distributable) reserve. This reserve is formed by direct transfer from distributable reserves, usually retained earnings. The legalreserve is released directly to the distributable reserves in line with the amortisation of the related costs. The amortisation period for both capitalised costcategories is a prescribed maximum of five years. [art. 365.2 and 386 BW2 T9]

4 Provisions should be presented separately on the face of the balance sheet according to the GAO on model formats.



Appendix III Examples – Statement of comprehensive income

The profit and loss statements according to IFRS for SMEs and Dutch GAAP are provided to highlight the maindifferences between the two standards. We refer to our publication ‘IFRS for SMEs - Illustrative consolidated financialstatements 2010’ which provides a detailed overview of the primary statements under IFRS for SMEs. The consoli-dated statement of comprehensive income may be presented in one statement including the income statement and theother comprehensive income statement. It is also allowed to present two separate statements (refer to chapter 2). Inthis appendix a single statement is presented. Dutch GAAP does not distinguish an income statement and an othercomprehensive income statement. However an ‘Overzicht Totaalresultaat’ is required to be disclosed for large entities.

IFRS for SMEs: Statement of comprehensive income – by nature of expense5

Year ended 31 December

2010 2009

Revenue 0 0

Other income 0 0

Changes in inventories of finished goods and work in progress 0 0

Raw materials and consumables used 0 0

Gain/(loss) arising from changes in fair value of biological assets 0 0

Gain/(loss) from changes in fair value of investment property 0 0

Employee salaries and benefits expense 0 0

Depreciation and amortisation 0 0

Transportation expense 0 0

Advertising costs 0 0

Research and development 0 0

Operating lease expenses 0 0

Other gains/(losses) – net 0 0

Other expenses 0 0

Operating profit 0 0

Finance income 0 0

Finance costs 0 0

Finance costs – net 0 0

Profit before income tax 0 0

Income tax expense 0 0

Profit for the year from continuing operations

Discontinued operations:

Profit for the year from discontinued operations 0 0

Profit for the year 0 0

Other comprehensive income:Gains/(losses) recognised directly in equity 0 0Currency translation differences 0 0Actuarial loss on employee benefit obligations, net of tax 0 0Changes in fair value of hedging instruments, net of tax 0 0Transfer to foreign exchange gains/(losses) 0 0Other comprehensive income for the year, net of tax 0 0Total comprehensive income for the year 0 0

Profit attributable to:Owners of the parent 0 0Total comprehensive income attributable to:Owners of the parent 0 0

5 Classification of expenses by function is also allowed, whichever provides information that is reliable and more relevant.



Dutch GAAP6: Income statement – by nature of expense7


2010 2009

Net turnover 0 0

Changes in inventories of finished goods and work in progress 0 0

Capitalised production costs of own assets 0 0

Other operating income 0 0

Total operating income 0 0

Costs of raw materials and consumables 0 0

Costs of work contracted out and other external costs 0 0

Wages and salaries 0 0

Social insurance contributions 0 0

Amortisation of intangible fixed assets and depreciation of tangible fixed assets 0 0

Other changes in value of intangible and tangible fixed assets 0 0

Impairment of current assets 0 0

Other operating expenses 0 0

Total operating expenses 0 0

Income from fixed asset investments 0 0

Other interest income and similar income 0 0

Changes in value of fixed and current investments 0 0

Interest expense and similar expenses 0 0

Results on ordinary activities before tax 0 0

Tax on result on ordinary activities 0 0

Share in profit or loss of subsidiaries and participations 0 0

Result on ordinary activities after tax 0 0

Extraordinary income 0 0

Extraordinary expense 0 0

Tax on net extraordinary profit or loss 0 0

Extraordinary result after tax 0 0

Net result after tax 0 0

6 Model E of the GAO on model formats is applied.

7 Classification of expenses by function is also allowed, whichever provides information that is reliable and more relevant.



Appendix IV Examples – Statement of changes in equity

The statement of changes in equity is a primary statement according to IFRS for SMEs. In Dutch GAAP, however, thisstatement is not a primary statement, although a similar statement is disclosed in the notes to the balance sheet (art.378 BW2 T9).

IFRS for SMEs: Statement of Changes in Equity

Attributable to owners of the parent

Share capital andshare premium

Other reserves Retainedearnings

Total

At 1 January 2009 0 0 0 0

Profit for the year 0 0 0 0

Currency translation differences 0 0 0 0

Actuarial loss on employee benefit obligations, net of tax 0 0 0 0

Changes in fair value of hedging instruments, net of tax 0 0 0 0

Total comprehensive income for the year 0 0 0 0

Dividend paid 0 0 0 0

Employee share option schemes

– Value of employee services 0 0 0 0

– Issue of shares 0 0

At 31 December 2009 0 0 0 0

Profit for the year 0 0 0 0

Currency translation differences 0 0 0 0

Changes in fair value of hedging instruments, net of tax 0 0 0 0

Transfer to foreign exchange gains/(losses) 0 0 0 0

Total comprehensive income for the year 0 0 0 0

Employee share option schemes

– Value of employee services 0 0 0 0

– Issue of shares 0 0 0 0

At 31 December 2010 0 0 0 0



Appendix V Examples – Statement of cash flows

The statements of cash flows according to IFRS for SMEs and Dutch GAAP are provided to highlight the maindifferences between the two standards. We refer to our publication ‘IFRS for SMEs - Illustrative consolidated financialstatements 2010’ which provides a detailed overview of the primary statements under IFRS for SMEs. The cash flowstatement is not dealt with in the Dutch Civil Code, but in the Dutch Accounting Standards (DAS). According to DAS360 a cash flow statement is mandatory for large and medium-sized entities.

Please find on the next pages IFRS for SMEs: Consolidated Statement of Cash Flows, and Dutch GAAP: ConsolidatedStatement of Cash Flows.



IFRS for SMEs: Statement of Cash Flows


2010 2009

Cash flows from operating activities

Profit including discontinued operations 0 0

Adjustments for non-cash income and expenses:

– Taxes 0 0

– Depreciation 0 0

– Amortisation 0 0

– Impairment of trade receivables 0 0

– Reduction in provision for impairment of inventories 0 0

– Changes in provisions 0 0

– Fair value (gains)/losses biological assets 0 0

– Fair value (gains)/losses investment property 0 0

– (Profit)/loss on disposal of property, plant and equipment 0 0

– Share-based payment and increase in retirement benefit obligations 0 0

– Fair value (gains)/losses on hedging instruments 0 0

– Finance costs – net 0 0

– Unrealised foreign exchange losses/(gains) on operating activities 0 0

Changes in working capital (excluding the effects of acquisition and

exchange differences on consolidation):

– Trade and other receivables 0 0

– Inventories 0 0

– Trade and other payables 0 0

Cash generated from operations 0 0

Interest paid 0 0

Income tax paid 0 0

Net cash from operating activities 0 0

Cash flows from investing activities

Acquisition of subsidiary, net of cash acquired 0 0

Purchases of property, plant and equipment (PPE) 0 0

Proceeds from sale of PPE 0 0

Purchases biological assets 0 0

Purchases of intangible assets 0 0

Interest received 0 0

Dividends received 0 0

Net cash used in investing activities 0 0

Cash flows from financing activities

Proceeds from issuance of ordinary shares 0 0

Proceeds from borrowings 0 0

Repayments of borrowings 0 0

Dividends paid to company’s shareholders 0 0

Net cash used in financing activities 0 0

Net (decrease)/increase in cash, cash equivalents and bank overdrafts 0 0

Cash, cash equivalents and bank overdrafts at beginning of year 0 0

Exchange gains/(losses) on cash, cash equivalents and bank overdrafts 0 0

Cash, cash equivalents and bank overdrafts at end of year 0 0



Dutch GAAP: Consolidated Statement of Cash Flows


2010 2009

Cash flows from operating activities

Profit before tax 0 0

Adjustments for non-cash income and expenses:

– Amortisation and depreciation 0 0

– Movements in provisions 0 0

Changes in working capital:

– Inventories 0 0

– Receivables 0 0

– Securities 0 0

– Current liabilities (exclusive of bank overdrafts) 0 0

Cash generated from operations 0 0

Interest received 0 0

Income tax expense 0 0

Interest paid 0 0

Dividends received 0 0

Net cash generated from operating activities 0 0

Cash flows from investing activities

Purchases of intangible assets 0 0

Purchases of property, plant and equipment (PPE) 0 0

Acquisition of investment property 0 0

Purchases of financial assets 0 0

Proceeds from sale of PPE 0 0

Proceeds from sale of investment property 0 0

Net cash used in investing activities 0 0

Cash flows from financing activities

Proceeds from issuance of shares and other contributions to equity 0 0

Purchase of treasury shares 0 0

Dividends paid 0 0

Proceeds from borrowings 0 0

Repayments of borrowings 0 0

Net cash used in financing activities 0 0

Net (decrease)/increase in cash, cash equivalents and bank overdrafts 0 0

Cash, cash equivalents and bank overdrafts at beginning of year 0 0

Exchange gains/(losses) on cash, cash equivalents and bank overdrafts 0 0

Cash, cash equivalents and bank overdrafts at end of year 0 0



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