Financial Statements continued
Notes to the consolidated financial statements
continued
3 Significant accounting policies
been transferred to the buyer, recovery of the consideration is probable, the associated costs and
possible return of products can be estimated reliably, and there is no continuing management
involvement with the products.
(ii) Other revenue
Other revenue are proceeds from sale of by-products, POS material, royalties, rental income and
technical services to third parties, net of sales tax. Sales of by-products and POS materials are
recognised in the income statement when ownership has been transferred to the buyer. Royalties
are recognised in the income statement on an accrual basis in accordance with the substance of the
relevant agreement. Rental income and technical services are recognised in the income statement
when the services have been delivered.
(m) Other income
Other income are gains from sale of P, P E, intangible assets and (interests in) subsidiaries, joint
ventures and associates, net of sales tax. They are recognised in the income statement when
ownership has been transferred to the buyer.
(n) Expenses
(i) Operating lease payments
Payments made under operating leases are recognised in the income statement on a straight-line basis
over the term of the lease. Lease incentives received are recognised in the income statement as an
integral part of the total lease expense, over the term of the lease.
(ii) Finance lease payments
Minimum lease payments under finance leases are apportioned between the finance expense and the
reduction of the outstanding liability. The finance expense is allocated to each period during the lease
term so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Contingent lease payments are accounted for by revising the minimum lease payments over the
remaining term of the lease when the lease adjustment is confirmed.
(o) Interest income, interest expenses and other net finance expenses
Interest income and expenses are recognised as they accrue, using the effective interest method.
Other finance income comprises dividend income, gains on the disposal of available-for-sale financial
assets, changes in the fair value of financial assets at fair value through profit or loss, foreign currency
gains, and gains on hedging instruments that are recognised in the income statement. Dividend income
is recognised on the date that Heineken's right to receive payment is established, which in the case
of quoted securities is the ex-dividend date.
Other finance expenses comprise unwinding of the discount on provisions, changes in the fair value of
financial assets at fair value through profit or loss, foreign currency losses, impairment losses recognised
on financial assets, and losses on hedging instruments that are recognised in the income statement.
(p) Income tax
Income tax comprises current and deferred tax. Income tax is recognised in the income statement
except to the extent that it relates to items recognised directly to equity, in which case it is recognised
in equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted
or substantially enacted at the balance sheet date, and any adjustment to tax payable in respect of
previous years.
Deferred tax is recognised using the balance sheet method, for temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for
taxation purposes. Deferred tax is not recognised for the following temporary differences: the initial
QO Heineken N.V.
OfcAnnual Report 2006
