Assess the effect of the EU Fourth Directive on the national accounting in Germany, and Netherlands








The various directives created by the EU dominated regulation changes. The preparation of the Fourth Directive started in 1968 but there was much work to be done. In 1970, the Act of Annual Financial Statements of Enterprises (WJO) was issued in the Netherlands. It was needed, due to the fact that the last revision of Dutch Company Law’s last revision dated back in 1929. The WJO extended the requirements for the contents and publication of financial reports and brought the Dutch regulations closer to the level of the upcoming Fourth Directive. The WJO applied to public companies and to the large private liability companies. The small and the medium sized firms changed their form a public company to a private company just to avoid the financial regulations. The number of the public companies by the time of the introduction of the WJO was 46,000 but only 3,000 of them were affected by the WJO, while the rest of them became a private liability company. The necessary alterations due to the Fourth Directive were implemented in the Civil Code in 1983 and increased the scope of the Company law that applied to all public and private limited liability companies since then. As a result the count of disclosures by Dutch firms increased from some 84,000 to almost 225,000 just in 7 years (1984-1991).

After the amendments the Dutch Civil Code no longer required the use of both RVA (replacement value accounting) and HC (historical cost). Limpberg’s normative theory of replacement value accounting (RVA) can be summarized in 3 value concepts: two value concepts (PV = present value of expected net receipts from an asset; NRV = net realizable value of an asset) and an entry value concept (RC = replacement cost of an asset). HC is, and always has been, more common than RVA in Dutch external financial reporting. After the harmonization with the Fourth Directive of the Council Dutch companies are free to choose between RVA and HC.

It is said that in Germany everything is forbidden unless it’s allowed. Unlike Dutch company law that allows a greater freedom of choice on the accounting method, the German company law is dominated by closely defined statutory prescriptions (such as company and capital market legislation).








1.   Leblond, Harold.  2005. The international dimension of the harmonization of accounting standarts in the EU, [online]  [Accessed : 27 December 2008]

2.   Bouma, J.L.and Feenstra, D. W. (1997) Accounting and business traditions in the Netherlands. European accounting review, iss. 6

3.   Roques, C. Service statistics and the international harmonization on accounting rules, [online]  [Accessed : 27 December 2008]



Темата е разработена 2009 г.

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Ключови думи:

effect of the EU, national accounting, Act of Annual Financial Statements of Enterprises (WJO), EU Fourth Directive, Dutch Civil Code, international harmonization on accounting rules

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