assets are valued at zero, unless their future realiza tion can reasonably be expected. The provision for pension liabilities is determined using the accrued benefit valuation method on the basis of present value according to actuarial principles. Pension lia bilities on account of previous service are fully pro vided for. Backservice liabilities originating from improved compensation and pension plans are charged directly to the profit and loss account and added to the provision for pension liabilities. The provision for other personnel schemes is calculated on the basis of the present value of the benefit commitments on account of termination, transfer, retaining pay and disability, where applicable taking into account the expected degree of utilization of the scheme concerned. Debts Long-term debts and current liabilities are shown at par value. Accounting policies for the determination of income Proceeds and expenses in the statement of income are in principle accounted foratthetimewhen the relevant goods or services are supplied. Net turnover means the proceeds of products supplied and services rendered to third parties, after deduction ofturnover taxes and discounts. The consumption of raw materials and other materials is stated at replacement cost in the statement of income. Excise duties are stated at the actual amount incurred. The depreciation based on replacement cost is applied on a straight-line basis, in accordance with the estimated useful life of each asset; the withdrawal from the investment facilities equalization account is allowed for in this calculation. Earnings of non-consolidated participations consist of the dividends received in the financial year from participations valued at cost of acquisition and the Heineken share in the earnings of participations valued at net asset value. As far as possible the share in the earnings of participations valued at net asset value is determined according to the Heineken policies for the determination of income, taking account oftaxation and minority interests. Interest expenses are allocated to the period to which they relate. Interest variances, resulting from financial instruments used to control the interest risk, are accounted for as interest income and/or expense. These interest instruments are used to hedge the risk of reduction of interest income from surplus cash invested in short-term bank deposits. Interest hedging instruments are not used without an underlying position. Taxation on profit is calculated on the income according to the annual accounts on the basis of nominal rates. Due account is taken of taxation on profit distribu tions which is borne by the Group, and the facilities applicable. The differences from the taxes actually payable in respect of the financial year are offset against the provision for deferred tax liabilities. 52

Jaarverslagen en Personeelsbladen Heineken

Jaarverslagen | 1997 | | pagina 66