ITAA Bekwaamheidsexamen Accountant flashcards

33 cards. Read the term and the definition here. The deck at the top of this page is optional.

Accounting equation

Assets equal liabilities plus equity. Every transaction preserves this identity, which is why total debits must always equal total credits in the ledger.

Accrual principle

Revenue and expenses are recognised in the period they are earned or incurred, not when cash moves. This requires accrual and deferral entries at period end.

Straight-line depreciation

Annual charge equals acquisition cost minus residual value, divided by the useful life in years. The same amount is recorded every full year of the asset's life.

Lower of cost or NRV

Inventory is measured at the lower of historical cost and net realisable value. NRV is expected selling price minus costs to complete and sell.

Going concern assumption

Financial statements assume the entity continues operating for the foreseeable future. Material uncertainty about this must be disclosed in the notes.

Current ratio

Current assets divided by current liabilities. It indicates short-term liquidity; a value below one signals that short-term obligations exceed available short-term resources.

Quick ratio

Current assets excluding inventory and prepayments, divided by current liabilities. A stricter liquidity measure because it counts only quickly convertible assets.

Materiality threshold

A misstatement is material if it could change users' economic decisions. Both size relative to benchmarks and qualitative factors such as fraud or covenant impact are assessed.

Consolidation control

Control exists when the parent has power over the investee, exposure to variable returns, and the ability to use its power to affect those returns.

Revenue recognition steps

Identify the contract, identify distinct performance obligations, determine the transaction price, allocate it to obligations, then recognise revenue when each obligation is satisfied.

Trial balance

A listing of all ledger accounts with debit and credit balances. Total debits must equal total credits before financial statements are prepared.

Journal entry mechanics

Each entry records equal debit and credit amounts across at least two accounts. Debits increase assets and expenses; credits increase liabilities, equity, and income.

Working capital

Current assets minus current liabilities. Positive working capital generally indicates the entity can fund its short-term operating obligations from short-term resources.

Provision recognition

A provision is recognised when a present obligation exists from a past event, an outflow is probable, and the amount can be reliably estimated.

Deferred tax

Temporary differences between accounting and tax values create deferred tax assets or liabilities, measured at the tax rates expected when the difference reverses.

Audit assertion categories

Assertions cover occurrence, completeness, accuracy, cut-off, classification, and existence. Procedures are designed to address each assertion relevant to an account balance.

Corporate income tax rate

Dutch corporate income tax is levied at 19% on profits up to EUR 200,000 and 25.8% above that threshold for 2024.

Loss carry-forward rules

Tax losses may be carried back one year and forward six years. Losses from 2022 onward may be carried forward for nine years.

Participation exemption

Gains and dividends from a qualifying shareholding of at least 5% are exempt from corporate income tax when the participation or motive test is met.

Innovation box

Qualifying innovation profits are taxed at an effective rate of 9% on the first EUR 50,000 and 16% on the excess above that amount.

Box 2 rate

Substantial shareholding income is taxed at 24.5% up to EUR 67,000 and 33% above that threshold for 2024.

Box 3 allowance

The tax-free asset allowance in box 3 is EUR 57,000 per person for 2024. Assets above this amount are subject to deemed return taxation.

Standard VAT rate

The standard Dutch VAT rate is 21%, applied to most goods and services unless a specific exemption or reduced rate applies.

Reduced VAT rate

A 9% rate applies to food, water, books, medicines, and certain services such as passenger transport and cultural events.

Zero VAT rate

A 0% rate applies to intra-EU supplies and exports, provided the supplier holds valid documentation of the transport or export.

Dividend withholding tax

The main rate is 15%. A conditional 8.3% rate applies to qualifying profits up to EUR 200,000 for 2024.

Arm's-length principle

Intercompany transactions must be priced as if concluded between independent parties. Article 8b Wet Vpb codifies this principle in Dutch law.

Transfer pricing documentation

Entities with consolidated revenue above EUR 50 million must maintain a master file and local file describing their intercompany pricing policies.

Fiscal unity

A parent and its Dutch subsidiaries (95% or more held) may be taxed as one entity, allowing losses and profits to be offset within the group.

30% ruling

Incoming employees with specific expertise may receive a tax-free allowance. The maximum percentage and salary threshold are set annually by regulation.

Box 1 rates

Income from employment and owner-occupied housing is taxed in box 1 at progressive rates across brackets, with the top rate applying above the highest threshold.

Substantial shareholding test

A shareholder holds a substantial interest when owning at least 5% of shares, profit-sharing certificates, or voting rights in a company.

VAT reverse charge

For certain business-to-business services, the recipient rather than the supplier accounts for VAT. The supplier issues an invoice without charging VAT.