Notes to the consolidated financial statements
82 Financial statements
3. Significant accounting policies
(m) Loans and borrowings
Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are
subsequently stated at amortised cost any difference between the proceeds (net of transaction costs)
and the redemption value is recognised in the income statement over the period of the borrowings using
the effective interest method.
Borrowings for which the Group has an unconditional right to defer settlement of the liability for at least
12 months after the balance sheet date, are classified as non-current liabilities.
(n) Revenue
(i) Products sold
Revenue from the sale of products in the ordinary course of business is measured at the fair value of
the consideration received or receivable, net of sales tax, excise duties, returns, customer discounts and
other sales-related discounts. Revenue from the sale of products is recognised in the income statement
when the amount of revenue can be measured reliably, the significant risks and rewards of ownership
have 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 revenues are proceeds from royalties, rental income and technical services to third parties, net
of sales tax. 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.
(0) Other income
Other income are gains from sale of P, P and 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.
(p) Expenses
(1) 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.
(q) Government grants
Government grants are recognised at their fair value when it is reasonably assured that Heineken will
comply with the conditions attaching to them and the grants will be received.
Government grants relating to P, P and E are deducted from the carrying amount of the asset.
Government grants relating to costs are deferred and recognised in the income statement over the
period necessary to match them with the costs that they are intended to compensate.
Heineken N.V. Annual Report 2007
