Intangible assets
Goodwill, being the difference between the price
paid and the valuation, calculated according to
Heineken policies of newly acquired participations
in which at least significant influence is exercised
over management policy, is offset against share
holders' equity. Moreover, in the case of acquisition
of beverage wholesalers, the purchase price is almost
totally determined by the client base, which, as an
intangible fixed asset, in line with Group accounting
principles is not shown as an asset. Hence, a signifi
cant part ofthe purchase price is goodwill. Costs of
other intangible assets, including brands, patents,
licences, software, research and development, are
charged directly to the statement of income.
Accounting policies for the valuation of
assets and liabilities
Fixed assets Tangible fixed assets have been valued
on the basis of replacement cost and, with the
exception of sites, after deduction of cumulative
depreciation.
The following average economic life-tables are
applied in determing depreciation:
Plants 30-40 years
Machinery and installations 10-30 years
Other fixed operating assets 5-10 years
The replacement cost is based on valuations by
internal and external experts, taking technical and
economic developments into account, and support
ed by the experience gained in the construction of
breweries worldwide. Projects under construction
are stated at cost of acquisition.
The non-consolidated participations in which a
significant influence is exercised over management
policy are stated at the Heineken share in the net
asset value. As far as possible this net asset value is
determined on the basis ofthe Heineken
accounting policies. The other non-consolidated
participations are valued at the cost of acquisition,
after deduction of provisions considered necessary.
Loans to non-consolidated participations and other
financial fixed assets are shown at parvalue, less a
provision for bad debts.
Current assets Stocks obtained from third parties
have been valued on the basis of replacement cost.
The replacement cost is based on the prices of
current purchase contracts and on market prices
applicable on the balance sheet date. Finished
products and products in process are valued at
manufacturing cost, based on replacement cost
and taking into account the stage of processing.
Stocks of spare parts are depreciated on a straight-
line basis in view ofthe reduction of application
possibility. Provisions on stocks are made up to the
recoverable amount or net realizable value where
this is lower than the replacement value.
Prepayments on stocks are stated at par value.
Accounts receivable are shown at par value, after
deduction of a provision for bad debts and less the
amount of deposits due in line with the obligation
to take back own packaging materials. Securities
are valued at the cost of acquisition except where
the market price or the estimated market value of
unlisted securities is lower. Cash at bank and in
hand is stated at parvalue.
Revaluation Differences in valuation resulting
from revaluation are credited or debited to the
Group funds, where applicable after deduction of
an amount for deferred tax liabilities.
Investment facilities equalization account
The purpose of the investment facilities equaliza
tion account is to apportion the amounts received
under arrangements in several countries with
regard to investments over the estimated life of the
assets concerned.
Provisions xhe provision for deferred tax liabilities
is calculated at the nominal value for timing
differences in valuation between the balance sheet
and the statement offinancial condition for fiscal
purposes, and the taxes on profit distributions
which are borne by the Group. Calculation ofthe
liabilities takes place at the tax rates applicable on
the balance sheet date, and at par value. Deferred
tax assets are netted off with deferred tax liabilities,
taking into account the terms ofthe deferred tax
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