5 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. The Group has the following primary operating segments, which have been identified based on the way operations and financial information are organized and financial information is reported to the Board of Management:

• Assurance;

• Advisory.

The operating results of all operating segments for which discrete financial information is available is reviewed regularly by the Board of Management so that it can make decisions about resources to be allocated to the segment and to assess the segment’s performance.

As the Group operates in the Netherlands, there is only one geographic segment, the Netherlands.

The pricing of intersegment transactions is determined in accordance with the applicable internal policies.

The Group’s operating segments are its reportable segments.

Information about reportable segments

Information related to each reportable segment is set out below. Net sales, income and operational results are used to measure performance as management believes this information to be the most relevant in evaluating the results of the respective segments relative to other entities that operate in the same industries. In addition, average FTEs per segment are closely monitored.

The total of net sales, income and operational result is reconciled to the amounts reported in the financial statements below. Other and intersegment eliminations include the elimination of revenues between operating segments on the one hand and central departments and support services on the other hand, on income level. On operational result level, intersegment eliminations relate to the elimination of all costs of central departments and support services providing services to the operating segments.

Reconciliation of information on reportable segments to the amounts reported in the financial statements

Work performed by employees for internal purposes (adjustments internal revenue) is included in net sales for internal reporting purposes. This is excluded from income or consolidated revenue.

Income for internal reporting purposes is exclusive of client-related expenses, such as travel expenses, expense declarations or external client-related invoices. When these expenses are invoiced to the client, they are included in consolidated revenue.

Operational result presented for internal reporting purposes includes “notional” advanced fees paid to Coöperatie KPMG U.A. as a cost element, while they are not a cost element under IFRS. In addition, for internal reporting purposes, IFRS 16 is not followed and therefore the effects thereof are presented as a reconciling item.

For internal reporting purposes, certain items that are considered one-off and non-operational are presented separately and are therefore not considered part of operational result, however they are included in consolidated operating result. Extraordinary results comprise, amongst others, expenses for claims and legal proceedings and insurance reimbursements.