IFRS vs. Dutch GAAP

Core differences

1. Standards and Principles

• IFRS: International standards issued by IASB.
• Dutch GAAP: Local standards issued by the Dutch Accounting Standards Board (RJ), more rules-based.
• Example: Dutch GAAP allows more flexibility for small entities in valuation and disclosures.

2. Control and Consolidation

• IFRS: Control based on substance; broader criteria.
• Dutch GAAP: Similar but with some local nuances.
• Example: A Dutch subsidiary controlled via contractual rights may be consolidated under IFRS but might be treated differently under Dutch GAAP.

3. Recognition of Intangible Assets

• IFRS: Internally generated intangibles are generally expensed; development costs can be capitalized if certain criteria are met.
• Dutch GAAP: More permissive, allowing recognition of internally generated intangibles in some cases.
• Example: Software development costs may be capitalized under Dutch GAAP but expensed under IFRS unless specific conditions are satisfied.

4. Revenue Recognition

• IFRS: Based on transfer of control (IFRS 15).
• Dutch GAAP: Less detailed; often based on completion or performance obligations.
• Example: A service provider might recognize revenue earlier under Dutch GAAP if the work is substantially completed.

5. Lease Accounting

• IFRS (IFRS 16): Lessees recognize nearly all leases on the balance sheet.
• Dutch GAAP: May still permit operating leases off-balance sheet.
• Example: Office leases are recognized as right-of-use assets and liabilities under IFRS, whereas Dutch GAAP might only disclose lease expenses.