Calculating equity and making it reconcile

Short answer

Your equity is your assets minus your debts. It reconciles when the opening balance plus the result plus your contributions minus your withdrawals equals the closing balance on your balance sheet. If it does not reconcile, there is almost always a withdrawal, a contribution or a result in your figures that is not in the right place.

Enter your opening balance, your result and your movements. You see what your closing balance should then be, and whether that matches what is on your balance sheet. The calculation happens in your own browser; nothing is sent or stored.

The reconciliation in one line

Equity at the end

equity at the start + result + contributions + other movements − withdrawals = equity at the end

This is the same sum your accountant or the Tax and Customs Administration (Belastingdienst) uses in a reconciliation of equity. If your closing balance differs, something is wrong in your bookkeeping — not necessarily in your annual accounts, but usually somewhere before that.

A worked example

You started the year with € 10,000 of equity, your result is € 25,000, you withdrew € 18,000 and contributed nothing. Then your closing balance is € 17,000.

Item	Amount
Equity at the start	10,000
Result for the financial year	+ 25,000
Contributions	+ 0
Withdrawals	− 18,000
Equity at the end	17,000

What a difference tells you

A difference is not a sign that you did something wrong; it is a clue to where you should look. The order in which you search makes the most difference:

Check whether the opening balance equals last year's closing balance. If it does not, look for that and go no further.
Go through your withdrawals and contributions. One forgotten withdrawal of a few hundred euro is the most common cause.
Check whether the result was carried over into equity exactly once.
Look at private expenses booked as business costs, and at business costs you paid privately.
For a BV: check whether dividend or a current-account movement was included as a movement.

First the opening balance, then the rest

Nine times out of ten the difference is in the opening balance or in a withdrawal. Start there, because the rest of your bookkeeping builds on it.

In a first financial year

Then your opening balance is zero, unless you started with an existing business. In the first year the reconciliation therefore looks simple: your closing balance is your result minus your withdrawals plus your contributions. If that is wrong, it is almost always in withdrawals you did not record.

More about recording those movements is in private withdrawals and contributions, and the full explanation of the reconciliation is in opening and closing equity.

Frequently asked questions

How do I calculate my equity?

Subtract your debts from your assets. For the reconciliation through the year there is a second route: equity at the start, plus the result, plus your contributions, minus your withdrawals. Those two outcomes should be the same.

Why does my equity not reconcile?

Almost always because of a withdrawal or contribution that was not recorded, a private expense booked as a business cost, a result that was not carried over, or an opening balance that differs from last year's closing balance. The difference itself tells you which way to look.

What is my equity in the first financial year?

Zero, unless you started with an existing business (a takeover, a contribution in kind or a conversion). In that case you take over the closing balance of your predecessor as the opening balance.

Are private withdrawals part of my result?

No. A withdrawal is not an expense and a contribution is not revenue; they are movements in your equity. If you still book them in the profit and loss account, your result is wrong and your equity will not reconcile.

Opening and closing equityWhy the reconciliation is the best check there is.
Private withdrawals and contributionsWhere those movements belong.
Calculating depreciationThe other calculator on this site.

Prepare your annual accounts yourself?

Work through the wizard, check your figures and download the annual accounts and the KVK filing documents as PDFs. € 60,44 per financial year, once.

Start your annual accounts View a sample See how it works first

Je vult eerst alles in en bekijkt het resultaat — betalen doe je pas als je de stukken wilt downloaden. Geen abonnement. En zit er een fout in de stukken die wij kunnen herstellen? Dan leveren we gratis een nieuwe versie, zo vaak als nodig.

This calculator gives a general outcome. Check with the Tax and Customs Administration (Belastingdienst) or an accountant what applies in your situation. ZelfJaarrekening.nl is a tool, not an accounting firm; you cannot derive rights from this explanation.