Notes to consolidated financial statements

KPMG N.V. (the Company) is the holding company of companies that operate in the Assurance or Advisory business segments. Read more over 1 General

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union (EU IFRS) and with Section 2:362(9) of the Dutch Civil Code. Read more over 2 Basis of preparation

The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements and by all companies included in the consolidation, except those explained in Note 2.5, which address changes in Read more over 3 Significant accounting policies

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. Read more over 4 Segment reporting

The Group generates revenue primarily from single or multiple performance obligations to deliver assurance and advisory services. The main component of these contracts is labor. Read more over 5 Revenue

Other sources of income include amounts billed to third parties for services other than assurance and advisory services. Read more over 6 Other income

Costs of outsourced work and other external charges relate to third-party services, including those from other members of the KPMG network, and expenses directly attributable to engagements. Read more over 7 Cost of outsourced work and other external charges

In line with 2020/2021 KPMG has further increased the various components of salaries and other employee benefits (mainly fixed and variable pay and additional one-time payments) during 2022 in reflection of the firm's higher profits. Read more over 8 Employee benefits expenses

Other employee expenses increased as a result of higher recruitment, entertainment and study costs, which reflects the increase in activities following the relaxation of Covid-19 measures. Read more over 9 Other expenses

Read more over 10 Finance income

Read more over 11 Finance expenses

Under management agreements, all earnings of KPMG N.V. are distributed to the partners, through Coöperatie KPMG U.A., who pay tax on these earnings. Read more over 12 Income taxes

The management fee payable to the partners, through Coöperatie KPMG U.A., is remuneration for professional services performed and entrepreneurial risk. Read more over 13 Fees payable to Coöperatie KPMG U.A.

Software mainly relates to back-office systems. The remaining period of amortization as at 30 September 2022 is two to eight years (30 September 2021: two to eight years). Read more over 14 Intangible assets and goodwill

Property, plant and equipment, with the exception of assets under construction, are subject to a first pledge in favor of Coöperatie KPMG U.A. as security for loans advanced. Read more over 15 Property, plant and equipment

Information about the Group’s exposure to credit and market risks, and fair value measurement, is included in Note 25 Financial instruments and associated risks. Read more over 16 Other financial assets

The recoverable amounts of trade receivables are estimated every quarter. Read more over 17 Receivables

Bank balances, including business savings accounts, are subject to a first pledge in favor of the bank in connection with the credit facility provided. Read more over 18 Cash and cash equivalents

On 29 November 2021, the Group’s 15% interest in KPMG Investments Malta Ltd. was sold to KPMG UK for a total consideration of EUR 4.6 million. As part of the external sale, certain non-compete warranties have been provided by the Company. Read more over 19 Assets held for sale

The Company has an authorized capital of EUR 20,000 (2020/2021: EUR 20,000), which is divided into 800 shares of EUR 25 each (2020/2021: 800 shares of EUR 25 each). Read more over 20 Equity

Employees have had the opportunity to participate in short term employee bonds with a maturity of one year, a one-year EURIBOR + 3% base rate interest and a variable surplus based on the realized profit before tax of KPMG N.V. In 2022, 3,922 bonds Read more over 21 Loans and borrowings

Long-term employee benefits consist of long-term pension plans that supplement WIA (Occupational Disability Insurance Act) benefits, provisions for long-service entitlements, and a number of special schemes and current employee benefit obligations Read more over 22 Employee benefits

Movements in provisions in 2021/2022: Read more over 23 Provisions

The Group’s liquidity risk relating to trade and other payables is disclosed in Note 25.3 Liquidity risk. Read more over 24 Trade and other payables

Financial instruments that are used by KPMG N.V. arise directly from normal business operations. During the financial year it was KPMG N.V. Read more over 25 Financial instruments and associated risks

The Group leases office buildings, cars and office equipment. The leases typically run for a period of five years for cars, five to fifteen years for buildings and five years for office equipment. Read more over 26 Leases

Unless otherwise stated, the following subsidiaries are wholly owned by KPMG N.V. Read more over 27 List of subsidiaries

The Group has long-term property leases for which the service costs are excluded from the lease liability and right-of-use asset in the consolidated balance sheet. Read more over 28 Liabilities and assets not recognized in the consolidated statement of financial position

In the Netherlands, the Group collaborates with an independent firm of tax consultants, Meijburg & Co. The financial figures of this firm are not included in the consolidated financial statements of KPMG N.V. Read more over 29 Collaboration agreements and related parties