72. Notes to the consolidated financial statements (j) Inventories (i) General Inventories are stated at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses. (ii) Finished products and work in progress Finished products and work in progress are stated at manufacturing cost taking into account the production stage reached. Costs include an appropriate share of direct production overheads based on normal operating capacity. (Hi) Other inventories and spare parts The cost of other inventories is based on weighted averages and includes expenditure incurred in acquiring the inventories and bringing them to their existing location and condition. Spare parts are valued at the lower of cost or net realisable value. Value reductions and usage of parts are charged to the income statement. Spare parts are acquired as part of an equipment purchase and will only be used in connection with this specific equipment are initially capitalised and amortised as part of the equipment. (k) Trade and other receivables Long-term trade receivables, trade and other receivables are stated at (amortised) cost less impairment losses (refer accounting policy m). (I) Cash and cash equivalents Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable on demand and form an integral part of Heineken's cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows. (m) Impairment (i) General The carrying amounts of Heineken's assets other than, inventories (refer accounting policy j) and deferred tax assets (refer accounting policy u), are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the asset's recoverable amount is estimated. For goodwill, the recoverable amount is estimated at each balance sheet date. An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. Impairment losses are recognised in the income statement. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to cash-generating units and then, to reduce the carrying amount of the other assets in the unit on a pro rata basis. Goodwill is tested annually and was also tested for impairment at 1 January 2004, the date of transition to IFRS. When a decline in the fair value of an available-for-sale financial asset has been recognised directly in equity and there is objective evidence that the asset is impaired, the cumulative loss that had been recognised directly in equity is recognised in the income statement even though the financial asset has not been derecognised. The amount of the cumulative loss that is recognised in the income statement is the difference between the acquisition cost and current fair value, less any impairment loss on that financial asset previously recognised in the income statement. Heineken N.V. - Annual Report 2005

Jaarverslagen en Personeelsbladen Heineken

Jaarverslagen | 2005 | | pagina 78