Notes to the Consolidated Balance Sheet, Profit and Loss Account and Cash Flow Statement for 2002
When the relevant legal requirements are changed, good
will will be capitalised and amortised over the expected
economic life of the assets concerned.
Other intangible fixed assets are capitalised and amor
tised by the straight-line method over three years. If the
net realisable value of intangible fixed assets is less than
the carrying amount, a diminution in value is applied.
Costs of internally developed brands, patents and licences
and research and development are expensed.
Brands, patents and licences purchased with acquisitions
are treated as part of the goodwill paid.
Tangible fixed assets
Except for land, which is not depreciated, tangible fixed
assets are stated at replacement cost less accumulated
depreciation. The following average useful lives are used
for depreciation purposes:
Buildings 30-40 years
Plant and equipment 10-30 years
Other fixed assets 5-10 years
The replacement cost is based on appraisals by internal
and external experts, taking into account technical and
economic developments. Other factors taken into account
include the experience gained in the construction of
breweries throughout the world.
Grants received in respect of investments in tangible
fixed assets are deducted from the amount of the invest
ment.
Projects under construction are included at cost.
Financial fixed assets
Non-consolidated participating interests where the group
has a significant influence are stated at the Heineken
share of the net asset value, which is arrived at as far as
possible on the basis of the Heineken accounting policies.
Other non-consolidated participating interests are stated
at cost less any necessary provisions.
Loans to non-consolidated companies and other finan
cial fixed assets are carried at face value, less provisions
for credit risks.
Impairment of assets
Regular assessments are made for any indications that
intangible and tangible fixed assets might be impaired.
If any such indications exist, the net realisable value of
the assets concerned is determined. If the net realisable
value of an asset is less than its book value, the difference
is deducted from the carrying amount as an impairment
loss and charged to the profit and loss account.
Current assets
Stocks bought in from third parties are stated at replace
ment cost, arrived at on the basis of prices from current
purchase contracts and latest prices as at balance sheet
date. Finished products and work in progress are stated at
manufactured cost based on replacement cost and taking
into account the production stage reached. Stocks of
spare parts are depreciated on a straight-line basis taking
account of obsolescence. If the recoverable amount or net
realisable value of stocks is less than their replacement
cost, provisions are made in respect of the difference.
Advance payments on stocks are included at face value.
Receivables are carried at face value less a provision
for credit risks and less the amount of deposits on return
able packaging.
Securities are carried at the lower of historical cost
and quoted price, or estimated market value in the case
of unlisted securities.
Cash is included at face value.
Revaluations
Differences in carrying amounts due to revaluations
are credited or debited to group equity, less an amount
in respect of deferred tax liabilities where applicable.
Provisions
The provision for deferred tax liabilities is formed in
respect of timing differences between the balance sheet
for reporting purposes and the recognition of assets and
liabilities for tax purposes as well as taxation on profit
distributions borne by the group. The liabilities are calcu
lated at the standard tax rates on balance sheet date and
are stated at face value. Deferred tax assets are netted
off against deferred tax liabilities of the same kind
over matching periods. A net deferred tax asset is not
recognised unless future realisation is reasonably certain.
The provisions for pension liabilities and similar
schemes are calculated at net present value according to
actuarial principles based on current pay levels. Full provi
sion is made for pension liabilities in respect of accrued
benefit rights. Prior-service liabilities resulting from
improvements in remuneration packages and pension
plans are added to the provision for pension liabilities and
charged directly to the result.
Provisions connected with reorganisation plans are cal-
HEINEKEN N.V. ANNUAL REPORT 2002
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