104 FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
HEINEKEN N.V. ANNUAL REPORT 20' 8
15. Intangible assets
Brands and customer-related/contract-based intangibles acquired
The main brands acquired in 2008 are Fosters, Strongbow and Sagres. The main customer-related and
contract-based intangibles acquired are related to customer relationships with pubs or retailers in the UK,
Finland and Portugal (constituting either by way of a contractual agreement or by way of non-contractual
relations). Furthermore, Fleineken extended its licence agreement with FEMSA Cerveza for 10 years. Under
the terms of the agreement Fleineken will be the exclusives importer, marketer and seller of the Femsa
beer brands.
Impairment tests for cash-generating units containing goodwill
Per region the aggregate carrying amounts of goodwill allocated to each cash-generating unit are as follows:
In millions of EUR 2008 2007
Western Europe
3,220
94
Central and Eastern Europe (excluding Russia)
1,479
1,251
Russia
104
435
The Americas
356
16
Africa and the Middle East
234
86
5,393
1,882
Goodwill in respect of Western Europe, Central and Eastern Europe (excluding Russia) and the Americas is
monitored on a regional basis for the purpose of impairment testing. In respect of operating companies that
are less integrated in the other regions and Russia, goodwill is monitored on an individual country basis. The
increase in goodwill relates to the newly acquired entities as further explained in note 6. Throughout the year
goodwill reduced due to foreign currency losses and the impairment of goodwill related to Fleineken Russia.
As explained in note 3b, the accounting treatment for JVs has changed from proportionate consolidation to
the equity method and as such the goodwill on CCU is no longer accounted for separately. Consequently, the
goodwill is now included in the cost of the joint venture.
Goodwill is tested for impairments annually. The recoverable amounts of the cash-generating units are based
on value in use calculations. Value-in-use was determined by discounting the future post-tax cash flows
generated from the continuing use of the unit using a post-tax discount rate. The key assumptions used for
the value-in-use calculations are as follows:
Cash flows were projected based on actual operating results and the three-year business plan. Cash flows
for a further seven-year period were extrapolated using expected annual per country volume growth
rates, which are based on external sources. Management believes that this forecasted period is justified
due to the long-term nature of the beer business and past experiences.
The beer price growth per year after the first three-year period is assumed to be at specific per country
expected annual long-term inflation, based on external sources.
Cash flows after the first 10-year period were extrapolated using expected annual long-term inflation,
based on external sources, in order to calculate the terminal recoverable amount.
A per cash-generating unit-specific post-tax Weighted Average Cost of Capital (WACC) was applied in
determining the recoverable amount of the units. The WACCs used are presented in the table below,
accompanied by the expected volume growth rates and the expected long-term inflation: