items. Net deferred tax assets are valued at zero,
unless their future realization 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 liabilities on account
of previous service are fully provided for.
Backservice liabilities originating from improved
compensation and pension plans are charged
directly to the statement of income 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 commit
ments on account oftermination, 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 for at the time when
the relevant goods or services are supplied.
Net turnover means the proceeds of products
supplied and services rendered to third parties,
after deduction of turnover taxes and discounts
to customers.
The consumption of raw materials and other
materials is stated at replacement cost in the
statement of income.
Excise duties are stated at the nominal amount
incurred. The depreciation based on replacement
cost is applied on a straight-line basis, in accor
dance with the estimated useful life of each asset;
the withdrawal from the investment facilities equa
lization 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 net
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
forthe determination of income, taking account
of taxation 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 Croup, 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.
H E I N E K
F I N A N C
S T A T E M
19 9 9
51
EN N. V.
I A L
E N T S
