Академический Документы
Профессиональный Документы
Культура Документы
*connectedthinking
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Table of contents
Preface Executive summary 1. Accounting framework and first-time adoption (Sections 1, 2, 3 and 35) 2. Financial statements (Sections 3, 4, 5, 6, 7, 8 and 10) 3. Business combinations, consolidated financial statements, and investments in associates and joint ventures (Sections 9, 14, 15 and 19) Business combinations Consolidation Investments in associates Investments in joint ventures 4. Income and expenses (Sections 2, 23, 24, 25, 26 and 28) Income Expenses 5. Financial assets and liabilities (Sections 11 and 12) Financial instruments: general information Basic financial instruments Additional financial instruments issues 6. Non-financial assets (Sections 13, 16, 17, 18 and 27) Inventories Investment property Property, plant and equipment Intangible assets other than goodwill Impairment of non-financial assets 7. Non-financial liabilities and equity (Sections 21, 22, 28 and 29 Provisions and contingencies Equity Employee benefits Income taxes 8. Other topics (Sections 20, 30, 31, 32, 33 and 34) Leases Foreign currencies Hyperinflation Events after the end of the reporting period Related-party disclosures Specialised activities Discontinued operations and assets held for sale Appendices Appendix I Appendix II Appendix III Appendix IV Appendix V Exemptions for medium-sized entities in the Netherlands Examples Statement of financial position Examples Statement of comprehensive income Examples Statement of changes in equity Examples Statement of cash flows 3 6 12 18 28 28 32 37 41 44 44 50 56 56 58 63 69 69 71 73 76 79 83 83 85 87 92 96 96 99 101 102 103 104 106 109 110 111 113 115 116
PricewaterhouseCoopers
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Preface
The International Financial Reporting Standard for Small and Medium-sized Entities (IFRS for SMEs) applies to all entities that do not have public accountability. An entity has public accountability if it files 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 for example, a bank, insurance entity, pension fund, securities broker/dealer. The definition of an SME is therefore based on the nature of an entity rather than on its size. The standard is applicable immediately. It is a matter for authorities in each territory to decide which entities are permitted 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 fully compliant IFRS information. It also recognised that users of private entity financial statements have a different focus from those interested in publically listed companies. IFRS for SMEs attempts to meet the users needs while balancing the costs and benefits to preparers. It is a stand-alone standard; it does not require preparers of private entity financial statements to cross-refer to full IFRS. The more modest disclosure requirements will appeal to users and preparers. Embedding the standard across a private group with extensive global operations that use a variety of local reporting standards will significantly ease the monitoring 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 model formats); - 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 the Netherlands are included in Book 2 of the Code, which contains legal provisions relating to all legal persons and entities, including co-operatives and associations, as well as limited liability companies. The financial reporting regulatory framework is built around the relevant elements of the Code, and is supplemented by the Dutch Accounting Standards, judicial precedence (de Ondernemingskamer) and, more latterly, International Financial Reporting Standards and the Authority for Financial Markets (Autoriteit Financile Markten (AFM)). The Dutch Accounting Standards (DAS) have no legal force, but provide more detailed guidance on the interpretation of the law and in areas not specifically covered by the Code. In practice, the Dutch Accounting Standards form an important part of Dutch Generally Accepted Accounting Principles and this has been confirmed in a number of legal cases.
PricewaterhouseCoopers
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
We based our overview of similarities and differences on Dutch Law and the 2009 version of the DAS which is applicable for financial statements for annual periods beginning on or after 1 January 2010. For that reason this overview includes the revised DAS 271 in respect of employee benefits. An entity shall apply the revised DAS 271 for annual periods beginning on or after 1 January 2010, but earlier adoption is recommended. The main difference with the old version of DAS 271 is the cancellation of the difference between defined benefit plans and defined contribution plans. Instead a liability approach is introduced. The Dutch GAAP column deals with the recognition and measurement requirements for medium-sized and large entities. Small entities are not covered in this overview. The size criteria and specific exemptions for medium-sized entities 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 not covered in IFRS for SMEs, we did not include this exemption in the tables, but out scoped it in the additional notes after each subject. Examples are accounting for step acquisitions, emission rights and separate financial statements. The IFRS for SMEs and full IFRS do not require presentation of separate financial statements for the parent entity or for the individual 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 kostprijs current value actuele waarde replacement value vervangingswaarde value in use bedrijfswaarde fair value marktwaarde / rele waarde realisable value opbrengstwaarde Furthermore we included examples of a Statement of financial Position, a Comprehensive income statement, a Statement of changes in equity and a Statement of cash flows in the appendices based on Dutch GAAP and IFRS for SMEs in order to show the major differences in presentation. This publication is a part of PricewaterhouseCoopers ongoing commitment to help companies navigate the switch from local GAAP to IFRS for SMEs.
PricewaterhouseCoopers
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
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.
PricewaterhouseCoopers
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Executive summary
This executive summary aims to demonstrate how converting to IFRS for SMEs has implications far beyond the entitys financial reporting function; to highlight some of the key differences between IFRS for SMEs, full IFRS and Dutch GAAP; 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 authoritative pronouncements issued under IFRS for SMEs and full IFRSs published up to 9 July 2009. With regard to Dutch GAAP it takes into account the 2009 version which is applicable for financial statements for annual periods beginning on or after 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. 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 entitys 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.
PricewaterhouseCoopers
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
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. 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. 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
PricewaterhouseCoopers
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
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. 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.
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 of financial 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
PricewaterhouseCoopers
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
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. 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. 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.
PricewaterhouseCoopers
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
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. 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.
Non-financial liabilities and equity Employee benefits, defined benefit plans (chapter 7)
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. 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 employees 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.
PricewaterhouseCoopers
10
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
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. 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.
PricewaterhouseCoopers
11
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
1.
Full IFRS
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]
Scope
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]
Definitions
Asset An asset is a resource Same as IFRS for SMEs. controlled by an entity as a [DAS 930.49(a), 53-59]. 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. [IFRS Framework, paras 49(a), 53-59].
PricewaterhouseCoopers
12
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
Full IFRS
Liability
Refer to chapter 7: Non-financial liabilities and equity. Refer to chapter 4: Income and expenses. Refer to chapter 4: Income and expenses. Same as IFRS for SMEs. In addition, regard needs to be given to the materiality considerations. [DAS 930.82-88]
Refer to chapter 7: Non-financial liabilities and equity. Refer to chapter 4: Income and expenses. Refer to chapter 4: Income and expenses. Same as IFRS for SMEs. In addition, regard needs to be given to the materiality considerations. [IFRS Framework, paras 82-88]
PricewaterhouseCoopers
13
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
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.
Full IFRS
Underlying assumptions
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 [art. 384.1 BW2 T9, Resolution on categories of financial fair value, DAS 930.100-101] instruments). [IFRS Framework, paras 100, 101] Financial statements are Same as IFRS for SMEs. Same as IFRS for SMEs. prepared on an accrual basis [art. 384.3 BW2 T9, [IAS 1.25, 1.27, 1.32] and on the assumption that the DAS 930.22,23 and DAS entity is a going concern and will 115.301-305] 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] 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]
Qualitative characteristics
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 subcharacteristics 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 subcharacteristics 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]
PricewaterhouseCoopers
14
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
Full IFRS
Similar to IFRS for SMEs. Similar to IFRS for SMEs. However an entity is required to [IAS 1.15-1.16, 1.19, 1.20] 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]
Offsetting
Similar to IFRS for SMEs. Offsetting is allowed if an entity possesses an adequate legal instrument to balance and settle the asset and liability simultaneously. [DAS 115.305] Liabilities related to refinancing Liabilities related to refinancing are presented as non-current if are presented as non-current if the refinancing is completed the refinancing is completed before the balance sheet date. before the balance sheet date. Liabilities related to refinancing Liabilities related to refinancing completed after the balance may be presented as nonsheet date are addressed as current if the refinancing is events after the balance sheet completed after the balance date. sheet date, but before the date of issuance of the financial statements. In case of violation of debt In case of violation of debt covenants the liabilities may only covenants the liabilities may be presented as non-current if a only be presented as nonwaiver for one year is granted by current if a waiver for more the lender before the balance than one year is granted by the sheet date. lender before the date of [IFRS for SMEs 4.7] issuance of the financial statements. [DAS 254.304-307]
PricewaterhouseCoopers
15
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
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
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
Reconciliation
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] Same as IFRS for SMEs. [IFRS 1.39]
PricewaterhouseCoopers
16
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
Full IFRS
Mandatory exceptions
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]
Optional exemptions
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
Not applicable.
PricewaterhouseCoopers
17
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
2.
Sections 3, 4, 5, 6, 7 and 8 of the IFRS for SMEs are based on IAS 1, Presentation of financial statements (revised 2007, effective from 1 January 2009). They set the requirements for the presentation of financial statements, guidelines for their structure and minimum requirements for their content.
Dutch GAAP
An explicit statement that financial statements comply with the Dutch reporting standards is not required.
Full IFRS
Same as IFRS for SMEs. [IAS 1.16]
Going concern
Same as IFRS for SMEs. [art. 384.3 BW2 T9, DAS 930.22-23 and DAS 120.301303]
Similar to IFRS for SMEs. [art. 362.4 BW2 T9 and DAS 110.105-108]
Comparative information
Similar to IFRS for SMEs. However, is less prescriptive about movement schedules for the previous comparable period. [art. 363.5 BW2 T9 and DAS 110.127]
PricewaterhouseCoopers
18
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
Full IFRS
defined benefit obligations, fair value of plan assets) [IFRS for SMEs 3.14] A set of financial statements A set of financial statements comprises: comprises: a statement of financial a statement of financial position; position (balance sheet); a single statement of an income statement; comprehensive income a statement of cash flows; (including items of other notes comprising a comprehensive income), or summary of significant a separate income accounting policies and statement and a separate other explanatory statement of comprehensive information. income; [DAS 110.101] 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. [IFRS for SMEs 3.17-3.18]
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 financial statements. [IAS 1.10]
PricewaterhouseCoopers
19
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
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]
Full IFRS
Current/non-current distinction
PricewaterhouseCoopers
20
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
(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 comprehensive income 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] Similar to IFRS for SMEs. However separate presentation of discontinued operations is not allowed. Furthermore the two-statement approach is not permitted under Dutch Law. [GAO on model formats]
Full IFRS
Line items
PricewaterhouseCoopers
21
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
Full IFRS
If the entity applies the twostatement approach, the last three line items above are presented in a separate statement of comprehensive income. Profit or loss for the period and total comprehensive income for the period are allocated in the statement of comprehensive income to the amounts attributable to non-controlling interests and owners of the parent. [IFRS for SMEs 5.5-5.7] Extraordinary items are not permitted. [IFRS for SMEs 5.10]
Extraordinary items
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] 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]
PricewaterhouseCoopers
22
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
Full IFRS
Not permitted.
Not permitted.
PricewaterhouseCoopers
23
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
Full IFRS
Same as IFRS for SMEs. In 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]
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]
Same as IFRS for SMEs; however, IFRS allows certain cash flows to be reported on a net basis. [IAS 7.21-7.22]
Bank overdrafts
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.
PricewaterhouseCoopers
24
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
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]
Full IFRS
Same as IFRS for SMEs. [IAS 7.25-7.28]
PricewaterhouseCoopers
25
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
Full IFRS
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] Same as IFRS for SMEs. [DAS 145.301-305]
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. [art. 362.1 BW2 T9 and DAS 150.201-204] Same as IFRS for SMEs. [art. 361.1 and DAS 110.125]
PricewaterhouseCoopers
26
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
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 in accounting policies and accounting estimates. Furthermore information about key sources of estimation uncertainty and judge-ments may be included. [DAS 300.101-107 and DAS 930.21] Not specifically covered in Dutch GAAP, practice is similar to IFRS for SMEs. [DAS 930.21]
Full IFRS
Similar to IFRS for SMEs; however, IFRS generally has more extensive disclosures requirements, as well as a sensitivity analysis. [IAS 1.222, 1.225, 1.229]
Where applicable, the notes include disclosures of changes in accounting policies and accounting estimates, information about key sources of estimation uncertainty and judgements. [IFRS for SMEs 8.2-8.7]
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] 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]
Similar to IFRS for SMEs. In addition, sensitivity analysis is required. [IAS 1.122]
Similar to IFRS for SMEs. In addition, sensitivity analysis is required. [IAS 1.125]
PricewaterhouseCoopers
27
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
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. Full IFRS and IFRS for SMEs require the use of the purchase method of accounting for most business combination transactions. DAS also allow the pooling of interest method when certain criteria are met. The most common type of combination 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 for accounting 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 in IFRS 3 (revised).
Dutch GAAP
Similar scope exclusion as IFRS for SMEs. [DAS 216.104]
Full IFRS
Same scope exclusion as IFRS for SMEs. [IFRS 3R.2]
Business
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
Purchase accounting
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.
PricewaterhouseCoopers
28
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
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]
Full IFRS
IFRS 3 (revised) defines negative goodwill as bargain purchase. In addition, the stepbased 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] Similar to IFRS for SMEs. In addition, IFRS 3 (revised) includes more extensive guidance on indicators to identify the acquirer. [IFRS 3R.6-7, Appendix B, paras B13-B18]
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. [IFRS for SMEs 19.8-19.10] 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. [IFRS for SMEs 19.11]
2. Cost of acquisition
Share-based consideration
Shares issued as consideration are recorded at their fair value at the date of the exchange. [IFRS for SMEs 19.11]
Similar to IFRS for SMEs; 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] Similar to IFRS for SMEs for measurement of equity instruments given as part of the consideration. Full IFRS includes further guidance. [IFRS 3R.37]
PricewaterhouseCoopers
29
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
Similar to IFRS for SMEs. [DAS 216.239-240]
Full IFRS
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. Equityclassified contingent consideration is not remeasured at each reporting date; its settlement is accounted for within equity. [IFRS 3R.39, 3R.58] Similar to IFRS for SMEs; 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] Similar to IFRS for SMEs; 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]
The acquirer recognises separately the acquirees 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. [IFRS for SMEs 19.14]
Similar to IFRS for SMEs, except for the recognition of contingent liabilities. [DAS 216.208-210]
Restructuring provision
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. [IFRS for SMEs 19.18]
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] The acquired contingencies are not recognised separately. The contingent liabilities are assumed to be included in the
Contingent liabilities
The acquired contingencies are recognised separately at the acquisition date as a part of allocation of the cost, provided
PricewaterhouseCoopers
30
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
amount recognised as (negative) goodwill. [DAS 216.209] 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. [art. 386.3, 389.7 BW2 T9and DAS 216.221]
Full IFRS
Goodwill
Goodwill Goodwill (the excess of the cost of the business combination over the acquirers interest in the net fair value of the identifiable assets, liabilities and contingent liabilities) is recognised as an intangible asset at the acquisition date. After initial recognition, the goodwill is measured at cost less 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. [IFRS for SMEs 19.22-19.23]. If an associate becomes a subsidiary or joint venture, the investor shall remeasure its previously held equity interest to fair value and recognise the resulting gain or loss, if any, in profit or loss. [IFRS for SMEs 14.8i (i)] Negative goodwill is recognised in profit or loss immediately after management has reassessed the identification and measurement of identifiable items arising on acquisition and the cost of the business combination. [IFRS for SMEs 19.24] 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. [IFRS 3R.32, IAS 36.9-10]
Negative goodwill
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] 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; IFRS 3 (revised) uses the term gain on bargain purchase instead of negative goodwill. [IFRS 3R.34, 3R.36]
PricewaterhouseCoopers
31
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
directly as a profit in the income statement. [DAS 216.235]
Full IFRS
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 separate financial 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 the previous standard; however, all transactions with non-controlling interests are now equity transactions and do not affect goodwill or the profit or loss.
Dutch GAAP
Same as IFRS for SMEs. [DAS 940]
Full IFRS
Same as IFRS for SMEs. [IAS 27R.4]
Subsidiary
Similar to IFRS for SMEs. 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.
PricewaterhouseCoopers
32
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
A 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]
Full IFRS
Consolidation
Requirements to Parent entities prepare prepare consolidated consolidated financial financial statements statements that include all subsidiaries. An exemption applies to a parent entity that is itself a subsidiary and the immediate or ultimate parent produces consolidated financial 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. 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 parents not presenting consolidated financial Personal holdings are exempt statements; from presenting consolidated when the parents securities financial statements if certain are not publicly traded and criteria are met. the parent is not in the process of issuing securities An exemption also applies to an in public securities markets; intermediate holding company and that is consolidated by a parent when the IFRS does not allow company that publishes annual exclusion of a subsidiary from accounts complying with the the consolidation for the fourth and seventh EEC same reasons given in IFRS directives or equivalent, and no for SMEs, except that it does notification of objection in writing not specifically mention the is received from holders of at exclusion due to the least 10% of issued capital. The restriction in the transfer of parents financial statements funds to the parent company. should be filed by the company. [art. 407, 408 BW2 T9, DAS An entity is exempt from 217.101 and 214-217]. consolidation for a subsidiary
PricewaterhouseCoopers
33
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
Full IFRS
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] 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]
Similar to IFRS for SMEs. 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]
Similar to IFRS for SMEs. Special guidance exists on how to treat lease contracts concluded with SPEs. [DAS 217.205]
PricewaterhouseCoopers
34
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
Full IFRS
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] Similar to IFRS for SMEs. [DAS 217.504]
Accounting policies
Reporting periods
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] An entity is required to present separate financial statements. An entity is allowed to include a condensed company income statement if consolidated financial statements are 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; in 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] Similar to IFRS for SMEs, but with a reference to held-for-sale classification. [IAS 27R.38]
Different accounting policies are permitted when accounting for different types of investment in different classes. [IFRS for SMEs 9.26]
PricewaterhouseCoopers
35
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
group 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] Not covered in Dutch GAAP.
Full IFRS
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. [IFRS for SMEs 9.28-9.29]
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. Areas covered in Dutch GAAP but not in IFRS for SMEs include: subsidiary acquired with the intention to dispose of in the near future.
PricewaterhouseCoopers
36
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Investments in associates
IFRS for SMEs
Definition 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. [IFRS for SMEs 14.2]
Dutch GAAP
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 companys 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] 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]
Full IFRS
Same as IFRS for SMEs. [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 investees 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. [IFRS for SMEs 14.3]
Similar to IFRS for SMEs; in 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 policymaking 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] 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.
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 investments using one of the following: the net asset value method; visible equity value if insufficient data are
PricewaterhouseCoopers
37
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
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] Not permitted except when certain criteria are met. Dividends are deducted from the costs of acquisition in case of pre acquisition profits. [art. 389.9 BW2 T9, DAS 214.325 and 504]
Full IFRS
[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 permitted for an investment in an associate that has a published price quotation. [IFRS for SMEs 14.5-14.7] 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.
Fair value
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 Like the equity method, the accounting policy is to expense investors share of the transaction costs or to include associates profit or loss is them in the cost of the The investors share of the presented in the income investment. associates profit or loss and statement. Distributions received [IAS 28.11, 28.23, 28.29-28.30] other comprehensive income are from the associate reduce the presented in the statement of carrying amount of the comprehensive income. investment. Distributions received from the associate reduce the carrying In addition a legal reserve for amount of the investment. undistributable profits of In case of losses in excess of associates should be the investment, after the recognised. investors interest is reduced to [DAS 214.307-309] 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] An associate is initially Not permitted. Not permitted except in recognised at the transaction separate financial statements. price (excluding transaction [IAS 28.35] costs). Changes in fair value
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.
PricewaterhouseCoopers
38
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
Full IFRS
Legal reserves
Where separate financial statements of a parent are prepared (this is not required), management adopts a policy of accounting for all its associates either: at cost less impairment; or at fair value through profit or loss. [IFRS for SMEs 9.26]
If an investor loses significant influence over an associate as a result of a full or partial disposal, it derecognises that
In cases where the net equity method is applied, but where there are restrictions with regard to the distribution of dividends, special rules apply. This means that the investing company can still record its share in the results of the participation, but is required to recognise a legal nondistributable reserve, being the difference 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] 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] In case of loss of significant influence over an associate as a result of a full or partial disposal, the investor shall use
Similar to IFRS for SMEs; in addition, investments are accounted for in accordance with IFRS 5 when they are classified as held for sale. [IAS 27.38]
Similar to IFRS for SMEs. However reference is made to IAS 39. [IAS 28.19A]
PricewaterhouseCoopers
39
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
the last known net asset value as a basis for the subsequent measurement at cost or fair value. [DAS 214.321]
Full IFRS
Similar to IFRS for SMEs. However the term participating interest is used instead of associate. [GAO on model formats]
Similar to IFRS for SMEs; however, only those associates accounted for using the equity method are presented as a line item. [IAS 1.54(e), 28.38]
Areas covered in IFRS but not in IFRS for SMEs include: 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. Areas covered in Dutch GAAP but not in IFRS for SMEs include: guidance on significant influence; profit and loss from upstream and downstream transactions; acquisition of an investment in an associate; associates held by venture capital organisations, mutual funds, unit trusts and similar entities.
PricewaterhouseCoopers
40
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
Similar to IFRS for SMEs [DAS 215.103 and DAS 940]
Full IFRS
Same as IFRS for SMEs. [IAS 31.3]
Similar to IFRS for SMEs. In addition, different types of joint ventures are allowed to be measured differently. [DAS 215.204-205]
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]
PricewaterhouseCoopers
41
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
215.201 and 208] Refer to Investments in associates. Refer to Investments in associates (net asset value method). [DAS 214.307-309] Proportionate consolidation is allowed. [art. 409 BW2 T9 and DAS 215.201]
Full IFRS
Not permitted.
Equity method
Proportionate consolidation
Fair value
Refer to Investments in associates. [IFRS for SMEs 15.14] Where separate financial statements of a parent are prepared (which is not required), the entity adopts a policy of accounting for all of its jointly controlled entities either: at cost less impairment; or at fair value through profit or loss. [IFRS for SMEs 9.26]
Not permitted.
Proportionate consolidation requires the venturers share of the assets, liabilities, income and expenses to be either combined on a line-by-line basis, with similar items in the venturers financial statements, or reported as separate line items in the venturers 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] Not permitted.
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). [art. 389 BW2 T9 and DAS 215.208] Similar to IFRS for SMEs. 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
Similar to IFRS for SMEs; in addition, investments are accounted for in accordance with IFRS 5 when they are classified as held for sale. [IAS 31.46]
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
PricewaterhouseCoopers
42
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
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]
Full IFRS
Areas covered in IFRS but not in IFRS for SMEs include: contractual arrangements; exceptions to proportionate consolidation and equity method; operators of joint ventures; associates held for sale; associates held by venture capital organisations, mutual funds, unit trusts and similar entities. Areas covered in Dutch GAAP but not in IFRS for SMEs include: contractual arrangements; operators of joint ventures; associates held by venture capital organisations, mutual funds, unit trusts and similar entities.
PricewaterhouseCoopers
43
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
4.
Income
The revenue section (Section 23) addresses the various categories of revenue recognition (sale of goods, rendering of services, interest, royalties and dividends, construction contracts and barter transactions). Government grants are addressed in Section 24.
Dutch GAAP
Similar to IFRS for SMEs. DAS use the term baten. [DAS 930.70(a)].
Full IFRS
Similar to IFRS for SMEs. [IFRS Framework para 70(a)]
Revenue
Same as IFRS for SMEs. Similar to IFRS for SMEs. DAS use the term opbrengsten. [IAS 18.7] [DAS 940]
Revenue
Recognition general Same as IFRS for SMEs; however, includes a separate standard for construction contracts. [DAS 270.1, DAS 221] Same as IFRS for SMEs; however, includes a separate standard for construction contracts. [IAS 18.1, 18.4, 11.1]
PricewaterhouseCoopers
44
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
Full IFRS
Measurement
Multiple-element arrangements
Sale of goods
Rendering of services
PricewaterhouseCoopers
45
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
Full IFRS
Partly covered in Dutch GAAP. Practice is similar to IFRS for SMEs. [DAS 221.109 and 320]
Royalties
Dividends
PricewaterhouseCoopers
46
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
A construction contract in Dutch GAAP does not need to be specifically negotiated, which makes the scope broader. [DAS 940]
Full IFRS
Same as IFRS for SMEs. [IAS 11.3]
General
Similar to IFRS for SMEs. Additional guidance on reliable estimations of the percentage of completion is provided. [DAS 221.301-303]
Same as IFRS for SMEs. Additional detailed guidance on fixed price and cost-plus contracts is provided. [IAS 11.22-11.24]
Similar to IFRS for SMEs. When Same as IFRS for SMEs. the final outcome cannot be [IAS 11.32] 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]
Presentation
Dutch GAAP is less strict in the Same as IFRS for SMEs. requirements to separate assets [IAS 11.39-45] and liabilities. Furthermore work in progress related to construction contracts is a separate line item as part of the category inventories. [art. 369 BW2 T9 and DAS 221.406-412]
PricewaterhouseCoopers
47
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
Similar to IFRS for SMEs. [DAS 221.111-112]
Full IFRS
Similar to IFRS for SMEs. [IAS 11.8-11.9]
Other topics
Barter transaction Partly covered in Dutch GAAP. Practice is similar to IFRS for SMEs. [DAS 270.108 and 108(a)] Similar to IFRS for SMEs. [IAS 18.12, SIC 31]
Discounting of revenues
PricewaterhouseCoopers
48
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
Same as IFRS for SMEs. [DAS 274.102]
Full IFRS
Similar to IFRS for SMEs. [IAS 20.3]
Similar to IFRS for SMEs, 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 shareholders 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).
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.
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Expenses
The table below includes comparisons for certain key topics such as borrowing costs (Section 25), share-based payments (Section 26) and employee benefits (Section 28). Employee benefits For employee benefits, the Section 28 only focuses on the expense recognition and not on other topics, such as the distinction between defined contribution plans and defined benefit plans, definitions, and recognition and measurement principles of pension obligations and plan assets. These topics are addressed in chapter 7 of this publication. With regard to Dutch GAAP the comparisons have been made based on the revised Dutch Accounting Standard 271 on Employee Benefits issued in 2009 and applicable for accounting periods beginning 1 January 2010. The former DAS 271 Employee Benefits, in which the distinction between defined contribution and defined benefit is applicable, has many points in common with Section 28 of IFRS for SMEs. If certain conditions are met Dutch legal entities are allowed to apply the standards on pensions that are applicable under US GAAP or (EU endorsed) IFRS. Share-based payments Accounting 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 the following subjects: Vesting conditions; Choice of settlement; Modifications; and Taxes.
Dutch GAAP
Similar to IFRS for SMEs. DAS use the term lasten. [DAS 930.70(b)]
Full IFRS
Similar to IFRS for SMEs. [IFRS Framework, para 70(b)]
Similar to IFRS for SMEs, although expenses are recognised in the income statement. [DAS 930.94]
PricewaterhouseCoopers
50
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
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. [art. 388.2 BW2 T9 and DAS 273.204-212] Similar to IFRS for SMEs. [DAS 275.203 and 205]
Full IFRS
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]
Recognition
Equity-settled share-based transactions granted to nonemployees (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 measured at the fair value of the 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]
PricewaterhouseCoopers
51
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
Full IFRS
market data, such as a [DAS 275.203-204, 301-302 and recent transaction in the 314] entitys 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 entitys shares). A corresponding increase in equity is recognised. [IFRS for SMEs 26.9-26.10] Cash-settled share-based payment transactions are measured at the fair value of the 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. [IFRS for SMEs 26.14] 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. [IFRS for SMEs 26.16] Specific 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
Group plans
Governmentmandated plans
PricewaterhouseCoopers
52
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
Full IFRS
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.
PricewaterhouseCoopers
53
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
Full IFRS
A 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 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] Similar to IFRS for SMEs. However, full IFRS includes more detailed guidance in clarifying the term curtailment and settlement.
Past-service costs
Past-service costs are Not applicable. recognised in full in profit or loss in the period in which they occur. [IFRS for SMEs 28.16, 28.21, 28.25(e)]
Gains and losses on the Not applicable. curtailment or settlement of a defined benefit plan are recognised in profit or loss when the curtailment or settlement occurs. [IFRS for SMEs 28.21]
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. [IFRS for SMEs 28.38]
Full IFRS also requires the acceleration of related unrecognised gains/losses. [IAS 19.109-115] Entities are allowed to apply US- The application of US-GAAP is GAAP or IFRS related to not allowed in full IFRS. pensions and other postretirement benefits in the financial statements instead of DAS 271. These standards are to be applied in full. [DAS 271.101] No specific exemption for group No specific exemption for group plans. plans.
PricewaterhouseCoopers
54
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
Same as IFRS for SMEs [DAS 271.503]
Full IFRS
Similar to IFRS for SMEs. However, full IFRS includes further guidance on the minimum requirement of a detailed plan. [IAS 19.133-19.138]
Measurement
Termination benefits do not provide an entity with future economic benefits and are recognised as an expense immediately. [IFRS for SMEs 28.31-28.32] Termination benefits are Same as IFRS for SMEs. measured at the best estimate [DAS 271.504-505] 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. [IFRS for SMEs 28.36-28.37]
PricewaterhouseCoopers
55
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
5.
IFRS for SMEs contains two sections dealing with financial instruments. Section 11 addresses simple payables and receivables and other basic financial instruments. It is relevant to all SMEs. Section 12 applies to other, more complex financial instruments and transactions. If an entity enters into only basic financial instrument transactions, Section 12 is not applicable. However, even entities with only basic financial instruments should consider the scope of Section 12 to ensure they are exempt. An entity could apply either (a) Section 11 and Section 12 in full, or (b) the recognition and measurement requirements of IAS 39 Financial instruments: Recognition and measurement, and the disclosure requirements of IFRS for SMEs (Section 11 and 12). IFRS 7, Financial instruments: Disclosures, is not applicable to SMEs under either option. Dutch GAAP as well as full IFRS do not distinguish between basic and more complex (additional) instruments but between different categories. Measurement of a financial instrument depends on this classification. IFRS for SMEs is the starting point for this brochure and therefore the distinction between basic and more complex financial instruments is decisive for the brochures format. It should however be noticed that a financial instrument according to full IFRS or Dutch GAAP could be a basic FI or a more complex FI according to IFRS for SMEs.
Dutch GAAP
Not applicable.
Full IFRS
Not applicable.
Categories
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 measurement categories of 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
PricewaterhouseCoopers
56
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
Full IFRS
measurement categories of financial liabilities: financial liabilities at fair value through profit or loss; other liabilities. [IAS 39.9] Similar to IFRS for SMEs; 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]
Scope
Dutch GAAP distinguishes three measurement categories of financial liabilities: trading portfolio; derivatives; other financial liabilities. [DAS 290.407 and 413] Sections 11 and 12 apply to all Similar to IFRS for SMEs; financial instruments, except for however, DAS 290 also scopes the following: out: interests in subsidiaries, financial guarantees; associates and joint ventures; contracts with payments financial instruments that based on climatic, geological meet the definition of an or other physical variables; entitys own equity; contingent assets or liabilities leases; related to a business employee benefits; combination; insurance contracts; certain loan commitments; contracts for contingent certain commodity contracts. consideration in a business [DAS 290.202] combination (applies to acquirer only). [IFRS for SMEs 11.7, 12.3] Some financial instruments that In the issuers consolidated meet the definition of a liability financial statements the are classified as equity because classification of its issued they represent the residual financial instruments is based on interest in the net assets of the the economic substance of a entity. Instruments, or components of instruments, that financial instrument. There are some exceptions. are subordinate to all other classes of instruments are classified as equity if they impose on the entity an obligation to deliver to another party a pro rata share of the net assets of the entity only on liquidation. IFRS for SMEs 22.4] 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] 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 the
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]
consolidated financial statements. [DAS 290.810] Examples of basic Examples of financial Although the distinction between Not applicable. and more complex instruments that normally qualify basic and complex instruments financial instruments as being basic are: is not applicable, a number of
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]
PricewaterhouseCoopers
57
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
Full IFRS
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); Examples of financial profit and los (DAS 270) instruments that do not meet the borrowing costs (DAS 273). conditions of basic are: asset-backed securities and As a result, the specific repurchase agreements; measurement principles for options, rights, warrants, these financial assets and futures, forward contracts and liabilities are dealt with in these interest rate swaps that can chapters, and not necessarily in be settled in cash or by DAS 290 where the general exchanging other financial principles for instruments are instruments; included. hedging instruments; [DAS 290.103] commitments to make a loan to another entity; investments in another entitys equity instruments other than non-convertible and non-puttable ordinary shares and preference shares; and investments in convertible debt. [IFRS for SMEs 11.5-11.6]
Initial recognition
A financial instrument is recognised only when the entity becomes a party to its contractual provision. [IFRS for SMEs 11.12, 12.6] Similar to IFRS for SMEs. [DAS 290.701] Similar to IFRS for SMEs. [IAS 39.14]
Dutch GAAP
Full IFRS
PricewaterhouseCoopers
58
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
Full IFRS
Measurement
Initial 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. [IFRS for SMEs 11.13] On initial recognition, financial 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 290.103 and 501] At the end of each reporting Financial assets period, basic debt instruments Financial assets in the trading are measured at amortised cost portfolio are measured at fair using the effective interest value through profit or loss. method. Acquired loans and bonds held to maturity are measured Commitments to receive a loan at amortised cost. are measured at cost less Other acquired quoted loans impairment. and bonds are measured at fair value. Any upward fair Investments in non-convertible value changes are and non-puttable ordinary recognised in the income shares or preference shares are statement or directly into measured at fair value through equity and recycled when profit or loss if fair value can be realised. measured reliably, otherwise at Other acquired unquoted cost less impairment. loans and bonds are [IFRS for SMEs 11.14] measured at amortised cost or at fair value. On initial recognition, financial 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] 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
Subsequent measurement
PricewaterhouseCoopers
59
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
Loans and other receivables are measured at amortised cost. Investments in quoted equity instruments are measured at fair value. Any upward fair value changes are recognised in the income statement or directly into equity and recycled when realised. Investments in unquoted equity instruments are measured at amortised cost or at fair value.
Full IFRS
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). [IFRS for SMEs 11.15] Method of calculating the amortised cost of a financial instrument and of allocating the interest income/expense over the relevant period. [IFRS for SMEs 11.16] 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
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] Similar to IFRS for SMEs, 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]
Same as IFRS for SMEs. Refer to the above-mentioned note regarding amortised cost. [DAS 273.201, DAS 290 Appendix A and DAS 940] Similar to IFRS for SMEs. [DAS 290.524-531]
PricewaterhouseCoopers
60
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
Full IFRS
evidence 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. [IFRS for SMEs 11.27] The objective of using a Same as IFRS for SMEs. valuation technique is to [DAS 290.527] establish what the transaction price would have been on the measurement date in an arms 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. [IFRS for SMEs 11.28-11.29] The fair value of equity Similar to IFRS for SMEs [DAS instruments is reliably 290.527 and 290.505]. 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. [IFRS for SMEs 11.30-11.32] 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 Similar to IFRS for SMEs. However, in respect of current assets an entity is allowed to recognise an impairment loss that is expected as a result from a 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, but more guidance provided around valuation. [IAS 39.48, IAS 39 AG69-79]
PricewaterhouseCoopers
61
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
Full IFRS
investments cannot be reversed. [IAS 39.58, 39.66, 39.69]
subsequent period, impairment losses are reversed in the profit or loss of subsequent periods. [IFRS for SMEs 11.21-24, 11.26] For instruments measured at Similar to IFRS for SMEs. amortised cost (for example, [DAS 290.537] 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 assets original effective interest rate. [IFRS for SMEs 11.25(a)] 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. [IFRS for SMEs 11.33] Financial liabilities are derecognised only when they are extinguished - that is, when the obligation is discharged, is cancelled or expires. [IFRS for SMEs 11.36] Similar to IFRS for SMEs. The economic substance of 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]
Derecognition
Financial assets Similar to IFRS for SMEs; however, IFRS includes additional guidance on passthrough arrangements, continuing involvement and some other relevant aspects relating to transfer of a financial asset. [IAS 39.17-39.37]
Financial liabilities
Similar to IFRS for SMEs. The economic substance of the transaction determines whether (part of) a financial liability is derecognised. [DAS 115.110-112]
Similar to IFRS for SMEs, however there is some antiabuse guidance included in IAS39. [IAS 39.39-42, IAS39.AG62]
PricewaterhouseCoopers
62
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
Full IFRS
Subsequent measurement
Fair value
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] Similar to IFRS for SMEs. Similar to IFRS for SMEs but [DAS 290.524-531] more guidance provided around
PricewaterhouseCoopers
63
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
Full IFRS
valuation. [IAS 39.48-39.49, IAS 39 AG6979]
Derecognition
Financial assets and liabilities Refer to basic financial instruments in this chapter. Refer to basic financial instruments in this chapter.
Hedge accounting
General Similar to IFRS for SMEs. [art. 384.8 BW2 T9 and DAS 290.601, 602] Similar to IFRS for SMEs. [IAS 39.71]
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 Only certain risks and hedging general hedging strategy for instruments are permitted, as such groups of hedging described in more detail below. instruments, and how this links to the general risk In addition, management should management policy of the expect the hedging instrument company, how the hedged to be highly effective in items and hedging offsetting the designated instruments are identified hedged risk in order to apply and how ineffectiveness is hedge accounting. assessed and booked. [IFRS for SMEs 12.16] 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
PricewaterhouseCoopers
64
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
nature). [DAS 290.613-290.616]
Full IFRS
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. [IFRS for SMEs 12.17]
effectiveness test at the inception of the hedge to demonstrate that the relationship will be highly effective during its life. [IAS 39.88] An entity is allowed to hedge the IAS 39 restricts the risks or risks in (a group of) assets, portions in a financial instrument liabilities, binding contracts or that can be hedged based on a highly probable future principal that those risks or transactions. portions must be separately The risks for which hedge identifiable components of the accounting is permitted are not financial instrument, and specifically included in the DAS, changes in the cash flows or fair but need to be separately value of the entire financial identifiable and measurable to instrument arising from changes be able to measure the in the designated risks and effectiveness of the hedge. portions must be reliably [DAS 290.609-612] 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] IAS 39 permits three types of hedging relationship: Cash flow hedges; Fair value hedges; and Hedges of a net investment in a foreign operation.
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; Hedges of a net investment in a foreign operation; Cost price hedges.
Cost price hedging is not Cost price hedge accounting is allowed. accounted as follows: [IAS 39.86] 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 remeasured in the balance sheet either. [DAS 290.617, 618 and 633639]
PricewaterhouseCoopers
65
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
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 consolidated financial 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]
Full IFRS
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 prepayment, 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]
PricewaterhouseCoopers
66
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
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.
Full IFRS
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 variable interest rate risk, foreign exchange risk, commodity price risk and net investment in a foreign operation
The entity documents its chosen method as part of the hedging documentation. [DAS 290.614.c, 615.c, 616, 628-629] Where an entity designates the Similar to IFRS for SMEs, hedging relationship and it except that complies with the conditions journal entries depend on above, it recognises in profit or whether cash flow hedge loss any excess of the fair value accounting or cost price of the hedging instrument over hedge accounting is being the change in the fair value of applied. If cash flow hedge the expected cash flows (hedge accounting is applied, the ineffectiveness). The effective effective part of changes in part is recognised in other fair value of the hedging comprehensive income. instrument is recognised in other comprehensive income. The amount recognised in other If cost price hedge accounting comprehensive income is is applied the effective part of recognised in profit or loss when the derivative is kept at cost; the hedged item affects profit or and loss or when the hedging DAS 290 contains a policy relationship ends. choice relating to the situation where the hedge of a forecast Hedge accounting is transaction results in discontinued when: recognition of a non-financial the hedging instrument asset or liability in case of expires, is sold or terminated; cash flow hedge accounting. the hedge no longer meets [DAS 290.625-632 and 640] 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
Similar to IFRS for SMEs, 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]
PricewaterhouseCoopers
67
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
Full IFRS
Similar to IFRS for SMEs except Similar to IFRS for SMEs. for the fact that the cost price [IAS 39.89-94] hedge accounting model can be used if the hedge item is carried at cost in the balance sheet. [DAS 290.619-640]
Areas covered in IFRS but not in IFRS for SMEs include: embedded derivatives; reclassifications between categories of financial instruments; detail guidance on derecognition of financial assets; Areas covered in Dutch GAAP but not in IFRS for SMEs include: embedded derivatives; reclassifications between categories of financial instruments.
PricewaterhouseCoopers
68
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
6.
Inventories
IFRS for SMEs Definition and scope
Definition 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. [IFRS for SMEs 13.1] 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. [IFRS for SMEs 13.2-13.3] 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
Dutch GAAP
Same as IFRS for SMEs. [DAS 220.105 and DAS 940]
Full IFRS
Same as IFRS for SMEs. [IAS 2.6]
Construction contracts are not in Same as IFRS for SMEs. scope of this standard. [IAS 2.2-2.3] [DAS 220.103]
Similar to IFRS for SMEs with 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. [art. 390.1 BW2 T9 and DAS 220.302-311 and 331]
Same as IFRS for SMEs; however, IAS 2 refers to net realisable value. [IAS 2.9-2.10, 2.28-2.33]
PricewaterhouseCoopers
69
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
Full IFRS
Cost of inventories
Costs 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. [IFRS for SMEs 13.6] 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. [IFRS for SMEs 13.8] Borrowing costs are recognised as an expense. [IFRS for SMEs 25.2] Similar to IFRS for SMEs. [DAS 220.304] Same as IFRS for SMEs. [IAS 2.11]
Costs of conversion
Other costs
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. [IFRS for SMEs 13.17-13.18] An entity may use techniques for measuring the cost of
Borrowing costs are included in the cost of inventories under limited circumstances as identified by DAS 273. [DAS 220.312-313] Similar to IFRS for SMEs. LIFO is allowed under Dutch Law, though this method is not recommended. [art. 385.2 BW2 T9 and DAS 220.314-317]
Borrowing costs are included in the cost of inventories under limited circumstances as identified by IAS 23. [IAS 2.17] Same as IFRS for SMEs. [IAS 2.25]
Similar to IFRS for SMEs. The Similar to IFRS for SMEs, the most recent purchase price is an most recent purchase price is
PricewaterhouseCoopers
70
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
example of measurement at replacement value. [DAS 220.321-322]
Full IFRS
not mentioned as an example. [IAS 2.21]
Areas covered in IFRS but not in IFRS for SMEs include: extensive guidance on net realisable value.
Investment property
IFRS for SMEs
Definition 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. [IFRS for SMEs 16.1] 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. [IFRS for SMEs 16.5, 25.2] 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. [IFRS for SMEs 16.7-16.8]
Dutch GAAP
Same as IFRS for SMEs. [DAS 213.104 and DAS 940]
Full IFRS
Same as IFRS for SMEs. [IAS 40.5]
Initial measurement
Subsequent measurement
Similar to IFRS for SMEs 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] 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]
Similar to IFRS for SMEs except for borrowing costs that are directly attributable to the acquisition, construction or 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]
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]
PricewaterhouseCoopers
71
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
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. [art. 390.1 BW2 T9 and DAS 213.503-511] Similar to IFRS for SMEs; a reference is made to DAS 212, Property plant and equipment. [DAS 213.515]
Full IFRS
Same as IFRS for SMEs. [IAS 40.33-40.55]
Cost model
Transfers
Mixed use
The cost model is consistent with the treatment of property, plant and equipment (PPE). Investment properties are carried at cost less accumulated depreciation and any accumulated impairment losses. [IFRS for SMEs 16.8] Transfer to or from investment properties applies when the property meets or ceases to meet the definition of an investment property. [IFRS for SMEs 16.9] 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. [IFRS for SMEs 16.4]
Similar to IFRS for SMEs; however, full IFRS refers to IAS 16, Property plant and equipment. [IAS 40.56]
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] In case of mixed use, the separation of PPE and Investment Property is based on the ability of the entity to sell both parts separately. [DAS 213.108]
IFRS includes further guidance on the situations when a property can be transferred to or from the investment property category. [IAS 40.57] In case of mixed use, the separation of PPE and Investment Property is based on the ability of the entity to sell both parts separately. [IAS 40.10]
Areas covered in IFRS but not in IFRS for SMEs include: extensive guidance on transfers to and from investment property; disposals; inability to determine fair value reliably. Areas covered in Dutch GAAP but not in IFRS for SMEs include: disposals; inability to determine fair value reliably.
PricewaterhouseCoopers
72
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
Similar to IFRS for SMEs. [DAS 212.106 and DAS 940]
Full IFRS
Same as IFRS for SMEs. 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
Similar to IFRS for SMEs, except that borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset 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. [art. 388.2 BW2 T9 and DAS 212.435-436]
Similar to IFRS for SMEs, except that borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are required to be capitalised as part of the cost of that asset. [IAS 16.16, IAS 23.8]
Subsequent measurement
Legal reserves
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 accumulated impairment 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] If an entity re-values an asset, it recognises a revaluation reserve (legal requirement). Any downward revaluations, including permanent
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 depreciation and subsequent accumulated impairment losses. [IAS 16.29-16.31]
PricewaterhouseCoopers
73
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
diminutions 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] 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]
Full IFRS
Major inspection
Impairment
Depreciation definition
Components approach
Depreciation charge
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. [IFRS for SMEs 17.6-17.7] 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. [IFRS for SMEs 17.24, 27.5] The systematic allocation of the depreciable amount of an asset over its useful life. [IFRS for SMEs Glossary] 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. [IFRS for SMEs 17.16] The depreciation charge for each period is recognised in the profit or loss unless it is included in the carrying amount
PPE may have significant parts with different useful lives. Depreciation is calculated based on each individual parts 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] Same as IFRS for SMEs. [IAS 16.48]
PricewaterhouseCoopers
74
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
Same as IFRS for SMEs. [DAS 212.426-428]
Full IFRS
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]
Depreciation method
Similar to IFRS for SMEs. The depreciation method is reviewed at least at each annual reporting date. Change in the depreciation method is accounted for as a change in estimate. [IAS 16.60-16.62]
Similar to IFRS for SMEs, 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. [art. 390.1 BW2 T9 and DAS 212.501-503]
Similar to IFRS for SMEs. In 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]
PricewaterhouseCoopers
75
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
Same as IFRS for SMEs. [DAS 210.104, 109-111 and DAS 940]
Full IFRS
Same as IFRS for SMEs. [IAS 38.8, 38.11-38.12]
Recognition as an expense
Similar to IFRS for SMEs. 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]
Initial measurement
Separately acquired intangible 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. [IFRS for SMEs 18.9-18.10] 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. [IFRS for SMEs 18.11] Same as IFRS for SMEs. [DAS 210.203-204] Same as IFRS for SMEs. [IAS 38.24, 38.27]
Similar to IFRS for SMEs. 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
PricewaterhouseCoopers
76
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
entity; 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 costs are expensed as incurred. Development costs are capitalised when specific criteria are met. [DAS 210.221-230]
Full IFRS
All research and development costs are recognised as an expense. [IFRS for SMEs 18.14]
Research costs are expensed as incurred. Development costs are capitalised when specific criteria are met. [IAS 38.51, 38.54, 38.57] 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 depreciation and subsequent accumulated impairment losses. [IAS 38.72] 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. Similar to IFRS for SMEs with 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 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
Subsequent measurement
Measurement after initial recognition Intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses (cost model). [IFRS for SMEs 18.18] 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 depreciation and subsequent accumulated impairment losses. [DAS 210.302 and 306] Similar to IFRS for SMEs. [DAS 210.401 and 407-408]
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. [IFRS for SMEs 18.19]
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
Similar to IFRS for SMEs, 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.
PricewaterhouseCoopers
77
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
Full IFRS
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]
their useful lives is assumed to be zero, unless there is either a [DAS 210.401 and 416] 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 accounted for as a change in estimate. [IFRS for SMEs 18.20-18.24] Intangible assets Not applicable. All intangible Same as IFRS for SMEs. with indefinite useful assets are considered to have [DAS 210.407] life finite lives. [IFRS for SMEs 18.19-18.20]
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, 27.527,7]
Similar to IFRS for SMEs. 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]
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] Same as IFRS for SMEs. In 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]
Areas covered in IFRS but not in IFRS for SMEs include: disposals; acquisition by way of government grants; revaluation; emission rights. Areas covered in Dutch GAAP but not in IFRS for SMEs include: disposals; acquisition by way of government grants; revaluation; emission rights.
PricewaterhouseCoopers
78
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
Similar to IFRS for SMEs. [DAS 940]
Full IFRS
Same as IFRS for SMEs. [IAS 36.6]
Most of the scope exclusions are also applicable under Dutch GAAP. DAS 121 deals with noncurrent 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] Same as IFRS for SMEs. [IAS 36.8, 36.13 36.65]
Impairment of assets
Impairment formula An asset is impaired when its carrying amount exceeds it recoverable amount, whereby the recoverable amount is defined as the higher of an assets or CGUs fair value less costs to sell and its value in use. [IFRS for SMEs 27.5, 27.11] An impairment loss is recognised immediately in the profit or loss. [IFRS for SMEs 27.6] Similar to IFRS for SMEs. [DAS 121.201 and DAS 940]
Impairment losses
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] Assets (including goodwill) are Same as IFRS for SMEs, tested for impairment when there however certain intangible is an indication that the asset assets arte tested for impairment may be impaired. The existence irrespective of any indicators.
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] The following assets are tested for impairment irrespective of whether there is indication of impairment:
PricewaterhouseCoopers
79
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
Full IFRS
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] Same as IFRS for SMEs. An additional indicator exists when the entitys net asset value is above its market capitalisation. [IAS 36.12]
of impairment indicators is Reference is made to the assessed at each reporting date. paragraph Intangible assets [IFRS for SMEs 27.7] other than goodwill. [DAS 121.202]
Indicators of impairment
External indicators of impairment include a decline in an assets market value, significant adverse changes in technological, market, economic or legal environment and increases in market interest rates.
Same as IFRS for SMEs. An additional indicator exists when the entitys net asset value is above its market capitalisation. [DAS 121.203]
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. [IFRS for SMEs 27.9] Recoverable amount Recoverable amount is the higher of an assets (or CGUs) 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. [IFRS for SMEs 27.11-27.13] 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. [IFRS for SMEs 27.15-27.20] Fair value less costs When performing the impairment to sell test of an asset (or CGU), the entity estimates the fair value less costs to sell based on a
Similar to IFRS for SMEs, but 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]
PricewaterhouseCoopers
80
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
Full IFRS
Allocation of goodwill
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 cashgenerating 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 of impairment
Similar to IFRS for SMEs. However a reversal on goodwill impairment is allowed in very rare circumstances. [DAS 121.601-618]
Similar to IFRS for SMEs; however, includes more detailed guidance and distinction of reversal of impairment for an individual asset, a CGU and goodwill. [IAS 36.109-36.125]
PricewaterhouseCoopers
81
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
Full IFRS
Areas covered in IFRS but not in IFRS for SMEs include: guidance to estimate value in use; corporate assets. Areas covered in Dutch GAAP but not in IFRS for SMEs include: guidance to estimate value in use.
PricewaterhouseCoopers
82
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
Same as IFRS for SMEs. [Art. 374.1 BW2 T9, DAS 940]
Full IFRS
Similar to IFRS for SMEs. [IAS 37.10]
Most of the scope exclusions are Similar to IFRS for SMEs; also applicable for Dutch GAAP. however, includes additional [DAS 252.101, 103] scope exclusions such as executory contracts. [IAS 37.1]
Provisions
Recognition Similar to IFRS for SMEs. In addition it is allowed to recognise a provision for major inspection. [Art. 374.1 BW2 T9, DAS 252.201 - 204, DAS 212.451] Similar to IFRS for SMEs. [IAS 37.14-37.26]
Initial measurement
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. [IFRS for SMEs 21.4, 21.6] The amount recognised as a It is allowed to measure a Similar to IFRS for SMEs. provision is the best estimate of provision, either at present value [IAS 37.36] the amount required to settle the or nominal value.
PricewaterhouseCoopers
83
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
[DAS 252.306-307]
Full IFRS
Accrued interest
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]
Reimbursement
Similar to IFRS for SMEs. Similar to IFRS for SMEs. However the reimbursement is [IAS 37.53-37.58] 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]
Subsequent measurement
Refer to chapter 6, Non-financial assets (property plant and equipment). Same as IFRS for SMEs, although the second criterion (re. the valid expectation to execute the plan) is less strict. [DAS 252.413 - 416]
Refer to chapter 6, Non-financial assets (property plant and equipment). Same as IFRS for SMEs. [IAS 37 IN14]
PricewaterhouseCoopers
84
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
Full IFRS
Same as IFRS for SMEs, Similar to IFRS for SMEs. although as an accounting policy [IAS 16.76 (b)] option entities are allowed to recognise this provision during the useful life of the asset. [DAS 212.443-444]
Contingencies
Contingent liabilities A contingent liability is either a Similar to IFRS for SMEs. possible but uncertain obligation, [DAS 252.205-208, DAS 940] 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 cannot be measured reliably. Management does not recognise a contingent liability as a liability unless it has been acquired in a business combination. Similar to IFRS for SMEs. [IAS 37.10, 37.27-37.28, IFRS 3.23]
Contingent assets
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] Contingent assets are not Similar to IFRS for SMEs. Similar to IFRS for SMEs. recognised. However, when the [DAS 252.209-212, 518-521 and [IAS 37.10, 37.31, 37.33] inflow of economic benefits is DAS 940] 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]
Equity
IFRS for SMEs includes a separate section on equity. Under full IFRS, equity instruments are addressed in various different standards. Under Dutch GAAP the accounting treatment of equity in the separate financial statements differs from the consolidated financial statements.
PricewaterhouseCoopers
85
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
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 consolidated financial statements. [art. 373 BW2 T9, art. 411.1 BW2 T9] Similar to IFRS for SMEs [DAS 240.206]
Full IFRS
Residual interest in the assets of the entity after deducting all liabilities. [IFRS Glossary]
Treasury shares
Equity instruments are measured at the fair value of the consideration received or receivable, net of direct issue costs. [IFRS for SMEs 22.8] 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. [IFRS for SMEs 22.4] 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. [IFRS for SMEs 22.13-22.14] Treasury shares are the equity instruments that have been issued and re-acquired by the entity. An entity deducts from
Full IFRS is not explicit, but the application in practice is the same.
Similar to IFRS for SMEs. However presentation as equity is allowed, but not required. [DAS 290.808]
Similar to IFRS for SMEs. Additional disclosure is required when the issuer classifies the financial instruments components as either equity or debt in accordance with the prevailing characteristics of the contractual arrangement. [DAS 290.813-819]
PricewaterhouseCoopers
86
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
Full IFRS
Non-controlling interest
Similar to IFRS for SMEs. [art. 10.2 GAO on model formats; DAS 240.303]
Employee benefits
The section on defined benefit plans focuses only on the recognition and measurement of the defined benefit liability on statement of financial position. The recognition and measurement of the related income and expenses are addressed in chapter 4, Income and expenses. With regard to Dutch GAAP the comparisons have been made based on the revised Dutch Accounting Standard 271 on Employee Benefits issued in 2009 and applicable for accounting periods beginning 1 January 2010. The former DAS 271 Employee Benefits, in which the distinction between defined contribution and defined benefit is applicable, has many points in common with Section 28 of IFRS for SMEs. When certain conditions are met, Dutch legal entities are allowed to apply the standards on pensions that are applicable under US GAAP or (EU endorsed) IFRS.
Dutch GAAP
Similar to IFRS for SMEs, although other long-term employee benefits are together with the short-term benefits in the section employee benefits during active employment. [DAS 271.103]
Full IFRS
Same as IFRS for SMEs. [IAS 19.4, 19.7]
PricewaterhouseCoopers
87
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
Full IFRS
Refer to chapter 4, Income and expenses. Similar to IFRS for SMEs. [IAS 19.24-19.25]
Distinction between defined contribution (DC) plans and defined benefit (DB) plans
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. [IFRS for SMEs 28.10] Multi-employer plans Multi-employer plans and state and state plans 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. [IFRS for SMEs 28.11]
A provision may be recognised dependent on the conditions of the agreement (uitvoeringovereenkomst) between the entity and the pension fund. [DAS 271.302, 311]
PricewaterhouseCoopers
88
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
A provision is recognised when the same general criteria with regard to provisions (DAS 252) are met. [DAS 271.313]
Full IFRS
Similar to IFRS for SMEs. [IAS 19.39-19.42]
Not applicable.
Defined benefit plans An entity recognises a liability for Not applicable. 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. [IFRS for SMEs 28.14]
The DB liability is the net total of: A DB liability as such is not the present value of the DB applicable. Other provisions
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] 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] The DB liability is the net total of: the present value of the DB
PricewaterhouseCoopers
89
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
(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]
Full IFRS
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 reporting date of plan assets (if any) out of which the obligations are to be settled directly. [IAS 19.54] 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]
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.
Not applicable.
Discount rate
If this is not the case, an alternative method is permitted in which future salary progression, future service and possible mortality during an employees period of service are not considered. Valuations performed inbetween comprehensive valuations are adjusted for the changes in number of employees and salaries if the principal actuarial assumptions have not changed significantly. [IFRS for SMEs 28.18-28.20] The DB obligation is recorded at Not applicable. 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. [IFRS for SMEs 28.17] Plan assets are measured at fair Not applicable. value. When the market price is unavailable, the fair value of the
PricewaterhouseCoopers
90
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
Full IFRS
plan assets is estimated for example, using discounted cash flows. [IFRS for SMEs 28.15(b), 11.2711.32] No distinction between expected Not applicable. 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)]
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]
Areas covered in IFRS but not in IFRS for SMEs include: 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.
PricewaterhouseCoopers
91
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Income taxes
IFRS for SMEs Current taxes
Definition The amount of income taxes payable (recoverable) in respect of the taxable profit (tax loss) for the current period. [IFRS for SMEs Glossary] 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. [IFRS for SMEs 29.4-29.5] 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. [IFRS for SMEs 29.6, 29.2329.24] Similar to IFRS for SMEs. [DAS 940] Same as IFRS for SMEs. [IAS 12.5]
Dutch GAAP
Full IFRS
Recognition
Measurement
Similar to IFRS for SMEs except that DAS 272 is silent on the discounting current tax. [DAS 272.201-202]
Similar to IFRS for SMEs except that IAS 12 is silent on the discounting current tax. [IAS 12.46]
Deferred taxes
Definition of deferred The amounts of income taxes tax liabilities/ payable (potentially recoverable) (assets) in future in respect of taxable (deductible) temporary differences (and the carryforward of unused tax losses and tax credits). [IFRS for SMEs Glossary] 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 Same as IFRS for SMEs. [DAS 940] Same as IFRS for SMEs. [IAS 12.5]
Same as IFRS for SMEs, 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]
The tax basis of an asset or liability is determined based on the expected manner of recovery or settlement.
PricewaterhouseCoopers
92
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
Full IFRS
[IAS 12.52]
Temporary differences
Recognition of deferred taxes (general principles, and the recognition of deferred tax assets)
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, 315316, 318 and 505] The concept of valuation allowance is not applicable.
Similar to IFRS for SMEs. There are also additional exceptions for initial recognition of an asset and liability in a transaction that is not a business combination and affects neither accounting profit nor taxable profit at the time of the 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]
PricewaterhouseCoopers
93
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
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.
Full IFRS
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 Deferred tax assets and Same as IFRS for SMEs. liabilities are measured using the liabilities are measured using the [IAS 12.47, 49, 53] tax rates (and tax laws) that tax rates (and tax laws) that apply or have been apply or have been (substantively) enacted by the (substantively) enacted by the reporting date. reporting date. Deferred tax assets and Deferred taxes are allowed to be liabilities are not discounted. discounted. Where an entity is subject to With regard to different tax rates, different tax rates depending on the same approach as IFRS for different levels of taxable SMEs is applicable. income, deferred tax assets and [DAS 272.401 - 405] 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] The net carrying amount of the Similar to IFRS for SMEs. The Similar to Dutch GAAP. deferred tax asset is reviewed at carrying amount of the deferred [IAS 12.56] each reporting date; the tax asset is reviewed at each valuation allowance is adjusted reporting date and is reduced to reflect the current assessment when it is no longer probable of future taxable profits. that sufficient taxable profit will [IFRS for SMEs 29.22] 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] Current and deferred tax is Current and deferred tax is Current and deferred tax is recognised in the same recognised in profit of loss, recognised in profit of loss, component of total except to the extent that the tax except to the extent that the tax comprehensive income as the arises from a business arises from a business transaction or other event that transaction or a transaction or transaction or a transaction or resulted in the tax expense. event that is recognised in the event that is recognised in the [IFRS for SMEs 29.27] same or other period outside same or other period outside profit or loss (directly in equity). profit or loss (either in other [DAS 272.502] comprehensive income or
PricewaterhouseCoopers
94
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
Full IFRS
directly in equity). [IAS 12.58, 12.61A, 12.68]
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
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]
Areas covered in IFRS but not in IFRS for SMEs include: 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. Areas covered in Dutch GAAP but not in IFRS for SMEs include: assets carried at fair value; reassessment of unrecognised deferred tax assets; deferred tax arising from a business combination.
PricewaterhouseCoopers
95
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
8.
Leases
IFRS for SMEs Definition and scope
Definition
Dutch GAAP
Full IFRS
Same as IFRS for SMEs. [IAS 17.4]
A lease is an agreement Same as IFRS for SMEs. whereby the lessor conveys to [DAS 940] the lessee in return for a payment or a series of payments the right to use an asset for an agreed period of time. [IFRS for SMEs Glossary] 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. [IFRS for SMEs 20.1-20.3]
Similar to IFRS for SMEs except Same as IFRS for SMEs except for 4, 5 and 6. Furthermore there for 5 and 6. are some exceptions related to [IAS 17.2, IFRIC 4] investment property. [DAS 292.101]
Lease classification
General characteristics A lease is classified at inception as a finance lease if it transfers to the lessee substantially all of the risks and rewards incidental Same as IFRS for SMEs. [DAS 292.117-120, 292.123] Same as IFRS for SMEs. [IAS 17.8, 17.10]
PricewaterhouseCoopers
96
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
Full IFRS
Same as IFRS for SMEs. In 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]
Same as IFRS for SMEs. [IAS 17.59, 17.61, 17.63, 17, IG]
PricewaterhouseCoopers
97
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
Full IFRS
Operating lease
Similar to IFRS for SMEs, except for the expected inflation adjustments that are included when incurred. [DAS 292.210-211 and DAS 940]
Similar to IFRS for SMEs, except for the expected inflation adjustments. [IAS 17.33]
Operating lease
Similar to IFRS for SMEs, except for the expected inflation 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]
Similar to IFRS for SMEs, except for the expected inflation adjustments. [IAS 17.49-17.51, 53]
PricewaterhouseCoopers
98
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
Full IFRS
Areas covered in IFRS but not in IFRS for SMEs include: implementation guidance; operating leases incentives (SIC 15); evaluating the substance of transactions involving the legal form of a lease (SIC 27). Areas covered in Dutch GAAP but not in IFRS for SMEs include: operating leases incentives; evaluating the substance of transactions involving the legal form of a lease.
Foreign currencies
IFRS for SMEs Definitions
Functional currency Currency of the primary economic environment in which the entity operates. [IFRS for SMEs 30.2] Currency in which the financial statements are presented. [IFRS for SMEs Glossary] 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. [IFRS for SMEs 30.6-30.7] A transaction in a foreign currency is recorded in the functional currency using the exchange rate at the date of transaction (average rates may be used if they do not fluctuate significantly). Similar to IFRS for SMEs. [DAS 122.105-111] Same as IFRS for SMEs. [IAS 21.8]
Dutch GAAP
Full IFRS
Presentation currency
Functional currency
General Similar to IFRS for SMEs though Similar to IFRS for SMEs. the Dutch Accounting Standards [IAS 21.17, 21] include additional guidance. [DAS 122.105 - 111]
PricewaterhouseCoopers
99
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
Full IFRS
Similar to 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 and loss on disposal of the foreign operation.
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 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. [art. 389.8 BW2 T9 and DAS 122.207-213, 311] Change in functional A change is justified only if there Similar to IFRS for SMEs. currency are changes in underlying [DAS 122.110, 214] 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]
Cumulative translation differences on foreign operations initially recognised in equity are recycled to profit or loss upon disposal of the foreign operation. [IAS 21.28, 30, 32, 39, 40, 48]
PricewaterhouseCoopers
100
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
Similar to IFRS for SMEs. Some additional requirements are applicable according to Dutch Law. [DAS 122.301]
Full IFRS
Same as IFRS for SMEs. [IAS 21.38]
Similar to IFRS for SMEs, except that cumulative translation 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. [art. 389.8 BW2 T9, DAS 122.302-306 and 311]
Similar to IFRS for SMEs, except that cumulative translation differences on foreign operations initially recognised in equity are recycled to profit or loss upon disposal of the foreign operation. [IAS 21.39-21.40, 48]
Areas covered in IFRS but not in IFRS for SMEs include: tax effects of all exchange differences.
Hyperinflation
IFRS for SMEs
Definition 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%. [IFRS for SMEs 31.2] Where an entitys functional currency is the currency of a hyperinflationary economy, the
Dutch GAAP
Similar to IFRS for SMEs. Dutch GAAP is less detailed. [DAS 122.312]
Full IFRS
Same as IFRS for SMEs. [IAS 29.3]
Presentation
PricewaterhouseCoopers
101
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
Full IFRS
Dutch GAAP
Full IFRS
Same as IFRS for SMEs. [IAS 10.3]
Adjusting event
Events after the end of the Similar to IFRS for SMEs. reporting period are those However DAS 160 distinguishes events, favourable and three periods: unfavourable, that occur the period between the end of between the end of the reporting the reporting period and the period and the date when the date when the financial financial statements are statements are authorised for authorised for issue. issue; [IFRS for SMEs 32.2] 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] Adjusting events provide further Similar to IFRS for SMEs. In evidence of conditions that addition thereto any adjusting existed at the end of the events in period (b) do lead to reporting period and lead to adjustments if this is essential adjustments to the financial for a clear understanding of the statements. financial statements. Adjusting [IFRS for SMEs 32.2(a), 32.5] 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 auditors report. [art. 362.5 BW2 T9 and DAS 160.201-205]
PricewaterhouseCoopers
102
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
Similar to IFRS for SMEs. An exemption is applicable for nonadjusting events leading to discontinuity. [DAS 160.206-207]
Full IFRS
Same as IFRS for SMEs. [IAS 10.3(b)]
Date of authorisation Management discloses the date for issue on which the financial statements were authorised for issue and who gave that authorisation. If the owners or other persons have the power to amend the financial statements after issue, this fact is also disclosed. [IFRS for SMEs 32.9]
Related-party disclosures
IFRS for SMEs
Definition 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 related parties are: subsidiaries; fellow subsidiaries; associates; joint ventures; key management personnel of the entity and its parent (which include close members of their families); parties with control or joint control or significant influence over the entity (which include close
Dutch GAAP
Similar to IFRS for SMEs. [art. 381.3 BW2 T9 and draft DAS 330]
Full IFRS
Similar to IFRS for SMEs. [IAS 24.9]
PricewaterhouseCoopers
103
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
Full IFRS
Disclosures
Similar to IFRS for SMEs, but disclosures are only required in case of material transactions between parties that did not take place at arms length. [art. 381.3 BW2 T9]
Specialised activities
IFRS for SMEs Agriculture
Definitions Biological asset: a living animal or plant. Agricultural produce: the harvested product of biological assets. [IFRS for SMEs Glossary] 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 any accumulated impairment losses.
Dutch GAAP
Full IFRS
Not specifically covered in Dutch Same as IFRS for SMEs. GAAP. [IFRS Glossary]
Not specifically covered in Dutch 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]
Similar to IFRS for SMEs; however, exemption from measurement at fair value is only allowed if the fair value cannot be measured reliably. This is the case for biological assets for which marketdetermined prices or values are not available and for which alternative estimates of fair value are determined to be clearly unreliable. In such
PricewaterhouseCoopers
104
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
Full IFRS
cases, biological assets are measured at cost. [IAS 41.12-41.13, 41.26, 41.30]
Extractive industries
Recognition and measurement 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. [IFRS for SMEs 34.11] Not specifically covered in Dutch Exploration and evaluation GAAP. 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] Similar to IFRS for SMEs. [DAS 390.101] Similar to IFRS for SMEs; however, guidance is more detailed. [IFRIC 12.2]
Not specifically covered in Dutch Same as IFRS for SMEs. GAAP, although there are some [IFRIC 12.15-12.17, 23, 26] disclosure requirements. [DAS 390.102, 103]
PricewaterhouseCoopers
105
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
Full IFRS
Areas covered in IFRS but not in IFRS for SMEs include: government grants related to biological assets; scope and elements of cost of exploration and evaluation assets (IFRS 6).
Dutch GAAP
Similar to IFRS for SMEs. In 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]
Full IFRS
Same as IFRS for SMEs, except the glossary IFRS for SMEs includes the reference for held for sale. [IFRS 5.32]
Presentation
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]
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)]
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. [IFRS 5.33] 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
PricewaterhouseCoopers
106
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Dutch GAAP
Full IFRS
available 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 to present 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).
PricewaterhouseCoopers
107
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
PricewaterhouseCoopers
108
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
9.
Appendices
Appendix I Appendix II Appendix III Appendix IV Appendix V Exemptions for medium-sized entities in the Netherlands Examples Statement of financial position Examples Statement of comprehensive income Examples Statement of changes in equity Examples Statement of cash flows
PricewaterhouseCoopers
109
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
The above criteria (particularly net turnover and total assets) are subject to periodical revision to take account of inflation 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 exemptions stated below are only provided for medium-sized companies.
Subject Foreign currencies Exemptions regarding recognition and measurement 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 the balance sheet date instead of at the average rate. Exchange rate differences regarding this method should be included in the translation reserve. The provisions of this guideline should be applied in full. [DAS 122.304] Medium-sized entities are exempt from preparing an Overzicht Totaalresultaat. [DAS 265.101] Medium-sized entities are exempt from determining whether an arrangement contains a lease for contracts that do not primarily qualify as a lease agreement. [DAS 292.107-116] Medium-sized entities are exempt from the use of references in the financial statements. [DAS 300.104]
PricewaterhouseCoopers
110
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Appendix II
The balance sheets according to IFRS for SMEs and Dutch GAAP are provided to highlight the main differences between the two standards. We refer to our publication IFRS for SMEs - Illustrative consolidated financial statements 2010 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 December 2010 2009 Assets Current assets Cash and cash equivalents Derivative financial instruments Trade and other receivables Inventories Biological assets Non-current assets Property, plant and equipment Investment property Intangible assets Biological assets Investments in associates Deferred income tax assets Total assets Liabilities Current liabilities Borrowings Trade and other payables Current income tax liability Provisions Non-current liabilities Borrowings Deferred income tax liability Employee benefit obligations Provisions Total liabilities Equity Total equity attributable to the owners of the parent Total liabilities and equity 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0 0 0 0 0
PricewaterhouseCoopers
111
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
0 0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0 0
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 must recognise an equal legal (non-distributable) reserve. This reserve is formed by direct transfer from distributable reserves, usually retained earnings. The legal reserve is released directly to the distributable reserves in line with the amortisation of the related costs. The amortisation period for both capitalised cost categories 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.
PricewaterhouseCoopers
112
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Appendix III
The profit and loss statements according to IFRS for SMEs and Dutch GAAP are provided to highlight the main differences between the two standards. We refer to our publication IFRS for SMEs - Illustrative consolidated financial statements 2010 which provides a detailed overview of the primary statements under IFRS for SMEs. The consolidated statement of comprehensive income may be presented in one statement including the income statement and the other comprehensive income statement. It is also allowed to present two separate statements (refer to chapter 2). In this appendix a single statement is presented. Dutch GAAP does not distinguish an income statement and an other comprehensive 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 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Revenue Other income Changes in inventories of finished goods and work in progress Raw materials and consumables used Gain/(loss) arising from changes in fair value of biological assets Gain/(loss) from changes in fair value of investment property Employee salaries and benefits expense Depreciation and amortisation Transportation expense Advertising costs Research and development Operating lease expenses Other gains/(losses) net Other expenses Operating profit Finance income Finance costs Finance costs net Profit before income tax Income tax expense Profit for the year from continuing operations Discontinued operations: Profit for the year from discontinued operations Profit for the year Other comprehensive income: Gains/(losses) recognised directly in equity Currency translation differences Actuarial loss on employee benefit obligations, net of tax Changes in fair value of hedging instruments, net of tax Transfer to foreign exchange gains/(losses) Other comprehensive income for the year, net of tax Total comprehensive income for the year Profit attributable to: Owners of the parent Total comprehensive income attributable to: Owners of the parent
5
0 0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0 0
Classification of expenses by function is also allowed, whichever provides information that is reliable and more relevant.
PricewaterhouseCoopers
113
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Net turnover Changes in inventories of finished goods and work in progress Capitalised production costs of own assets Other operating income Total operating income Costs of raw materials and consumables Costs of work contracted out and other external costs Wages and salaries Social insurance contributions Amortisation of intangible fixed assets and depreciation of tangible fixed assets Other changes in value of intangible and tangible fixed assets Impairment of current assets Other operating expenses Total operating expenses Income from fixed asset investments Other interest income and similar income Changes in value of fixed and current investments Interest expense and similar expenses Results on ordinary activities before tax Tax on result on ordinary activities Share in profit or loss of subsidiaries and participations Result on ordinary activities after tax Extraordinary income Extraordinary expense Tax on net extraordinary profit or loss Extraordinary result after tax Net result after tax
Model E of the GAO on model formats is applied. Classification of expenses by function is also allowed, whichever provides information that is reliable and more relevant.
PricewaterhouseCoopers
114
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Appendix IV
The statement of changes in equity is a primary statement according to IFRS for SMEs. In Dutch GAAP, however, this statement 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 and Other reserves Retained share premium earnings 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Total 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
At 1 January 2009 Profit for the year Currency translation differences Actuarial loss on employee benefit obligations, net of tax Changes in fair value of hedging instruments, net of tax Total comprehensive income for the year Dividend paid Employee share option schemes Value of employee services Issue of shares At 31 December 2009 Profit for the year Currency translation differences Changes in fair value of hedging instruments, net of tax Transfer to foreign exchange gains/(losses) Total comprehensive income for the year Employee share option schemes Value of employee services Issue of shares At 31 December 2010
PricewaterhouseCoopers
115
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
Appendix V
The statements of cash flows according to IFRS for SMEs and Dutch GAAP are provided to highlight the main differences between the two standards. We refer to our publication IFRS for SMEs - Illustrative consolidated financial statements 2010 which provides a detailed overview of the primary statements under IFRS for SMEs. The cash flow statement is not dealt with in the Dutch Civil Code, but in the Dutch Accounting Standards (DAS). According to DAS 360 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: Consolidated Statement of Cash Flows.
PricewaterhouseCoopers
116
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
PricewaterhouseCoopers
117
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
PricewaterhouseCoopers
118
From Dutch GAAP to IFRS for SMEs: A comparison between IFRS for SMEs, Dutch GAAP and IFRS
pwc.com
PricewaterhouseCoopers
119