Notes to the Consolidated Balance Sheet, Profit and Loss Account and Cash Flow Statement for 2003
Comparative figures
The comparative figures in the consolidated profit and loss
account have been restated to facilitate comparison, following
the changes in accounting policies. The changes do not affect
the reported net profit.
The presentation of the consolidated balance sheet before
appropriation of profit also means restating shareholders' equity
in the 2002 figures. Shareholders' equity as at 31 December 2002
has been increased by €94 million, which was the amount of the
final dividend for 2002 paid in 2003. Current liabilities have been
reduced by the same amount.
As a result of the above changes, the reported net turnover
in 2002 has been reduced by €1,811 million to €8,482 million,
with the same reduction in operating expenses.
Valuation of assets and liabilities
Intangible fixed assets
Goodwill is calculated as the difference between the cost of
an acquisition and its net asset value. In the case of acquisition
of beverage wholesalers, the acquisition cost is almost entirely
determined by the customer base, and this element is treated
as goodwill.
Goodwill is carried at cost less accumulated amortisation
and impairment. Amortisation is calculated by the straight-line
method based on the expected economic life of the assets
concerned, subject to a maximum of 20 years.
Other intangible fixed assets satisfying the applicable criteria
are capitalised and amortised 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 investment.
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 determined on the basis of the Fleineken
accounting policies as far as possible. Other non-consolidated
participating interests are stated at cost less any necessary
provisions.
Loans to non-consolidated companies and other financial 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 indica
tions exist, the net realisable value is determined by taking
into account the future cash flows. 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 purchased from third parties are stated at replacement
cost, based on 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 formed 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 returnable 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.
HEINEKEN N.V. ANNUAL REPORT 2003