Heineken N.V. Annual Report 2004 Report of the Executive Board Financial Review
Group equity as a percentage of total assets
2000
40,7
43,6
38,9
2001
2002
2003
35,8
2004
37,1
IFRS
European Union regulation requires all publicly listed companies based in the EU to report their
financial statements under International Financial Reporting Standards (IFRS) as of January i, 2005.
These new standards, published by International Accounting Standards Board (IASB), are intended to
provide shareholders and other stakeholders with a better way to compare the results of companies
operating in different European countries.
In order to prepare for the transition from Dutch GAAP to IFRS, a project team was set up in early 2003
and continued its work throughout 2004. Its first task was to make a thorough analysis of the main
differences between Dutch GAAP and IFRS, and to prepare an estimate of the impact on our financial
results. Based on this analysis, we took some fundamental decisions on the IFRS accounting policies
to be applied and on the transition to the new policies.
The tasks of the project team were the following:
Updating existing accounting policies and writing new policies based on the IFRS standards;
Creating awareness in the operating companies about the coming changes;
Preparing the updates for the common and other IT systems in so far as they were affected
by IFRS; the main impact on systems is related to the change in valuation of Tangible Fixed Assets
and Inventories from current replacement to historic value;
Explaining in detail to the operating companies the consequences of the decisions on their
reporting;
Giving instructions to the operating companies with regard to the preparation of an IFRS 2004
opening balance and IFRS internal parallel reporting in 2004;
Informing the operating companies about IFRS related changes in our planning tools
and procedures.
In 2004 the attention of the project team and financial management was focused on the quality of
the internal parallel reporting. In close cooperation with our external auditors, we reviewed the
internal 2004 IFRS opening balance and 2004 first quarter results. Based on this review, all differences
between the Dutch GAAP and internal IFRS reporting were analysed and explained. We are also in
the process of the preparation of internal financial statements based on IFRS, in order to obtain more
insight in all consequences on both figures and disclosures of the 2005 statements to be published.
The main changes for Fleineken will relate to the valuation of tangible fixed assets at historic cost,
and the valuation of all financial instruments on the balance sheet at fair value. Additionally,
IFRS will no longer allow goodwill to be written off.
Based on preliminary unaudited IFRS figures for 2004, the restated figures will show an increase
in operating profit of €96 million and an increase in net profit of €95 million.
Preparation
Key differences
