HEINEKEN N.V. ANNUAL REPORT 2008
(ii) Foreign operations
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on
consolidation, are translated to euro at exchange rates at the balance sheet date. The revenue and expenses
of foreign operations are translated to euro at exchange rates approximating the exchange rates ruling at the
dates of the transactions.
Foreign currency differences are recognised directly in equity as a separate component. When a foreign
operation is disposed of, in part or in full, the relevant amount in the translation reserve is transferred to
the income statement. Foreign exchange gains and losses arising from a monetary item receivable from or
payable to a foreign operation, the settlement of which is neither planned nor likely in the foreseeable future,
are considered to form part of a net investment in a foreign operation and are recognised directly in equity
in the translation reserve.
The following exchange rates, for most important countries in which Fleineken has operations, were used
whilst preparing these consolidated financial statements:
Year-end
Average
2008
2008
2007
1.0499
1.3636
1.2577
1.3877
F
0.6734
0.6043
0.6309
0.6027
E(
p
0.1303
0.1238
0.1255
0.1294
N
N
0.0051
0.0058
0.0057
0.0058
P
:M
0.2408
0.2783
0.2856
0.2645
B
0.0242
0.0278
0.0275
0.0286
U
0.7185
0.6793
0.6832
0.7308
Z/
R
0.0765
0.0997
0.0826
0.1036
(i Fledge of net investments in foreign operations
F eign currency differences arising on the retranslation of a financial liability designated as a hedge of a net
ir estment in a foreign operation are recognised directly in equity, in the translation reserve, to the extent
t it the hedge is effective. To the extent that the hedge is ineffective, such differences are recognised in the
ir ome statement. When the hedged part of a net investment is disposed of, the associated cumulative
a lount in equity is transferred to the income statement as an adjustment to the profit or loss on disposal.
(f Non-derivative financial instruments
(i General
F n-derivative financial instruments comprise investments in equity and debt securities, trade and other
r eivables, cash and cash equivalents, loans and borrowings, and trade and other payables. Non-derivative
f ancial instruments are recognised initially at fair value plus, for instruments not at fair value through profit
o oss, any directly attributable transaction costs. Subsequent to initial recognition non-derivative financial
ir truments are measured as described subsequently.
C sh and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable on
c nand and form an integral part of Heineken's cash management are included as a component of cash and
c >h equivalents for the purpose of the statement of cash flows.
A counting for interest income, interest expenses and other net finance income and expenses are discussed
ii lote 3t.
