110. Not<
30. Explanation of transition to IFRS continued
Notes to the reconciliation consolidated income statement 2004
1 The increase in revenue as a result of the change to IFRS is €57 million for the full year and is primarily
the result of a reclassification of certain sales proceeds, rental income and sale of by-products, which
were netted with the corresponding costs under Dutch GAAP. These items are now included in 'Other
revenue', which is part of revenue. These items are partially offset by the reclassification, from revenue
to net financing costs, of interest received on loans to on-premise outlets.
2 The increase is explained by the items mentioned in note 1.
3 The decrease in depreciation and amortisation is for €40 million due to the lower valuation of
property, plant equipment and for €81 million to the termination of amortisation of goodwill, while
the capitalisation and amortisation of brands adds €8 million. Other effects amount to €4 million.
4 Share of profit of associates remains unchanged. The €190 million impairment taken on Cervejerias
Kaiser, the capital gain on sales of Whitbread shares of €17 million and dividend income received from
participating interests carried at cost (€12 million) are in other net financing income and impairment
of financial assets.
5 The adjustment to net financing costs amounts to €11 million as the interest received on loans
to on-premise outlets has been reclassified from net revenue to net financing costs. Also the realised
and unrealised foreign currency results are now reported under net financing costs rather than
other fixed costs.
6 The net impact on taxation under IFRS is zero, despite a profit before taxation, which is €111 million
higher. The most significant part of the increase in profit is a result of the absence of goodwill
amortisation (€81 million) under IFRS. Most of the goodwill amortisation was already considered under
Dutch GAAP to be non-deductible for tax purposes, meaning that the cancellation of the amortisation
charge has therefore little effect on taxation.
A higher tax charge, due to higher profit under IFRS and the reduction of the recognised deferred tax
asset is offset with €20 million exceptional, non-recurring tax benefits mainly due to the release of
deferred tax liabilities related to the recognition of brands under IFRS. In 2004 lower corporate income
tax rates were enacted in a number of countries and as a result the additional deferred tax liability
recognised for brands under IFRS is carried at the lowered tax rates and released through the income
statement in 2004.
Heineken N.V. - Annual Report 2005
