Dutch Accounting Standards Board

Foundation of the Dutch Accounting Standard Board

The Foundation for Annual Reporting coordinates the activities of the Dutch Accounting Standards Board (DASB) and also ensures adequate funding of the DASB. The Foundation for Annual Reporting was formed by the following organisations in September 1981:

• Federation of Netherlands Industry (VNO; Verbond van Nederlandse Ondernemingen);
• Netherlands Christian Employers' Federation (NCW; Nederlands Christelijk Werkgeversverbond);
• Federation of Netherlands Trade Unions (FNV; Federatie Nederlandse Vakbeweging);
• Christian National Federation of Trade Unions in the Netherlands (CNV; Christelijk Nationaal Vakverbond in Nederland);
• Netherlands Institute of Registeraccountants (NIVRA; Nederlands Instituut van Registeraccountants).
  
  In 2001 the Association of Investment analysts (VBA; Vereniging van Beleggingsanalisten) joined the Foundation's Board and in 2002 the Order of the Accountants-Administrator's consultants NOvAA (Nederlandse Orde van Accountants-Administratieconsulenten) and the Royal Association of Small and Medium-sized Enterprises in the Netherlands (Koninklijke Vereniging MKB-Nederland). In 2007 Eumedion joined. The Social and Economic Council (SER; Sociaal-Economische Raad), NBA (former NIVRA and NOvAA merged to NBA)  and Eumedion acontribute to the Foundation's budget. The Foundation also receives revenues from copyrights of the Dutch Accounting Standards.

Tasks of the Dutch Accounting Standard Board

1. The Foundation's objectives are set forth as follows in its Constitution: The Foundations object’s consist in fostering, within the Netherlands, the quality and practicality of external reporting, particularly when it concerns the financial statements, by corporations and legal entities.
2. The quality of external reporting is of interest to the users of information; the latter category comprises actual and prospective investors, employees, financial backers, suppliers and other trade creditors, clients, supervisors, authorities and the latter institutions, and the general public. 
3. It seeks to achieve the aforementioned  object by:
   
   a) publishing (draft) standards and other communications relating to annualreporting of which so-called authoritative statements and recommendations on  the topic of external reporting form part;
   b) providing authorities and other regulatory organisations with advice, be it onrequest or of its own accord or, on external reporting activities;
   c)participating in interational organisations involvend in enhancing the quality of, or developing, standards for the benefit of external reporting. 
   
   Each year in September the DASB publishes two sets of Guidelines in Dutch (Dutch Accounting Standards): Dutch Accounting Standards for medium size and large legal entities and Dutch Accounting Standards for micro and small legal entities. The DASB furthermore prepares comment letters to Exposure Drafts and Discussion Papers of EFRAG and IASB, attends EFRAG-CFFS meetings and provides members for some EFRAG working groups. The DASB seeks to ensure that the Dutch Accounting Standards cover most of the questions arising in practice. The Dutch Accounting Standards proceed from Dutch company law and statutory regulations governing individual and consolidated financial statements and management board reports, as ruled by (Part 9, Book 2 of)  the Dutch Civil Code. The Dutch Accounting Standards also incorporate court rulings of the Enterprise Chamber (of the Court of Appeal at Amsterdam) and the Supreme Court where these are considered of general relevance. In its deliberation for the Dutch Accounting Standards, the DASB also considers the applicable International Financial Reporting Standards as endorsed by the EU (IFRS-EU).

Dutch Accounting Standards

The accounting standards to be applied in the Netherlands depends on the size of the Dutch legal entity.

Small (and micro) entities have to choose between:
- Book 2 of the Dutch Civil Code combined with fiscal valuations principles;
- Dutch Accounting Standards for micro- and small legal entities;
- Dutch Accounting Standards for medium sized and large legal entities; or
- IFRS-EU (including some parts of the Dutch Civil Code elaborated in the Dutch Accounting Standards for medium sized and large legal entities).

Medium sized and large entities have to choose between:
- Dutch Accounting Standards for medium sized and large legal entities; and
- IFRS-EU (including some parts of the Dutch Civil  Code elaborated in the Dutch  Accounting Standards for medium sized and large legal entities).

Listed entities (independent of size) must apply IFRS-EU (including some parts of the Dutch Civil  Code elaborated in the Dutch Accounting Standards for medium sized and large legal entities).

The criteria

	revenue	total assets	number of employees
Micro entities	≤ € 0,7 mln	≤ € 0,35 mln	< 10
Small entities	≤ € 12 mln	≤ € 6 mln	< 50
Medium Entities	≤ € 40 mln	≤ € 20 mln	< 250
Large entities	> € 40 mln	> € 20 mln	≥ 250

In order to qualify for a category, the entity has to fulfill two out of the three mentioned criteria for two successive financial years.

Meetings of the Dutch Accounting Standard Board

The DASB is made up of members who are appointed by the organisations (members of foundations) which represent (1) the preparers, (2) the users and (3) the auditors of financial statements of Dutch companies. The Board meets at least once every month , which meetings are also attended by representatives (observers) from the Ministry of Security and Justice, the Ministry of Finance and the Authority Financial Markets (the Dutch Financial Markets supervisors) who are not entitled to vote on Board decisions. The DASB meetings are not open to public observation, nor are its minutes.

Due process of the Dutch Accounting Standard Board

The DASB uses a due process in developing the Dutch Accounting Standards. First the DASB Staff or a DASB Working group prepares a Draft  Standard. The DASB discusses the Draft Standard and, if necessary, makes adjustments before issuing the Draft Standard for comment. Comments received on these Draft Standards are studied and considered, and the drafts are revised if necessary before being finalized. Where Dutch company law or statutory provisions are involved, the appropriate references are given. By making a distinction in the Standards between authoritative statements (printed bold) and recommendations, the DASB aims to reflect differences in the practical significance of the Standards. In other words, the authoritative statements printed in bold carry extra weight. The DASB does not pretend that the authoritative statements in either the draft or the final Standards are compulsory in the same way the legal requirements are. In the final analysis, it is for the Courts of Justice to decide on the merits of each case which standards are to be considered generally acceptable for a specific set of financial statements. This implies that each company bears individual responsibility for its own financial statements. The Dutch Accounting Standards, and in particular the authoritative statements incorporated in them, are generally conductive to provide the insight and enable a reasonable judgment to be formed regarding the financial position and results of the company. Which implies that the authoritative statements of DASB are not expected to be departed from without good reason. The DASB also believes that its recommendations and, to some extent, its Draft Standards will give support and direction to Dutch financial reporting practice.