Notes to the consolidated financial statements

1 General

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

2 Basis of preparation

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

3 Significant accounting policies

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 2.6, which address changes in Read more over 3 Significant accounting policies

4 Segment reporting

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

5 Revenue

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

6 Other income

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

7 Cost of outsourced work and other external charges

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

8 Employee benefits expenses

Salaries and other employee benefit expenses increased by over 11% mainly in line with the increase in number of staff of more than 10% and additionally as a result of increased fixed pay. Read more over 8 Employee benefits expenses

9 Other expenses

Other employee expenses increased as a result of higher training costs and costs related to secondments of personnel. Read more over 9 Other expenses

12 Income taxes

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

13 Fees payable to Coöperatie KPMG U.A.

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.

14 Intangible assets and goodwill

Software mainly relates to back-office systems. The remaining period of amortization as at 30 September 2023 is two to eight years (30 September 2022: two to eight years). Read more over 14 Intangible assets and goodwill

16 Other financial assets

Information about the Group’s exposure to credit and market risks, and fair value measurement, is included in Note 24 Financial instruments and associated risks. Read more over 16 Other financial assets

17 Receivables

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

18 Cash and cash equivalents

Bank balances, including business savings accounts, are at the free disposal of the Group. Read more over 18 Cash and cash equivalents

19 Equity

The Company has an authorized capital of EUR 20,000 (2021/2022: EUR 20,000), which is divided into 800 shares of EUR 25 each (2021/2022: 800 shares of EUR 25 each). Read more over 19 Equity

20 Loans and borrowings

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 income tax of KPMG N.V. In 2023, 4,820 Read more over 20 Loans and borrowings

21 Employee benefits

Long-term employee benefits mainly consist of WIA supplement (Occupational Disability Insurance Act) benefits and provisions for long-service entitlements. Read more over 21 Employee benefits

22 Provisions

Movements in provisions in 2022/2023: Read more over 22 Provisions

23 Trade and other payables

The Group’s liquidity risk relating to trade and other payables is disclosed in Note 24.3 Liquidity risk. Read more over 23 Trade and other payables

24 Financial instruments and associated risks

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 24 Financial instruments and associated risks

25 Leases

The Group leases office buildings, cars and office equipment. The leases typically run for a period of five years for cars, five to 15 years for buildings and five years for office equipment. Read more over 25 Leases

26 List of subsidiaries

Unless otherwise stated, the following subsidiaries are wholly owned by KPMG N.V. Read more over 26 List of subsidiaries

27 Liabilities and assets not recognized in the consolidated statement of financial position

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 27 Liabilities and assets not recognized in the consolidated statement of financial position

28 Collaboration agreements and related parties

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 28 Collaboration agreements and related parties

29 Subsequent events

In March 2024, KPMG reached an agreement with the bankruptcy trustees of Imtech. Read more over 29 Subsequent events