76 FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
HEINEKEN N.V. ANNUAL REPORT 20
3. Significant accounting policies
(ii) Held-to-maturity investments
If Heineken has the positive intent and ability to hold debt securities to maturity, they are classified as held-to-
maturity. Debt securities are loans and long-term receivables and are measured at amortised cost using the
effective interest method, less any impairment losses. Investments held-to-maturity are recognised or
derecognised on the day they are transferred to or by Heineken.
(iii) Available-for-sale investments
Heineken's investments in equity securities and certain debt securities are classified as available-for-sale.
Subsequent to initial recognition, they are measured at fair value and changes therein, except for impairment
losses (see note 3k(i)), and foreign currency differences on available-for-sale monetary items (see note 3d(i)),
are recognised directly in equity. When these investments are derecognised, the cumulative gain or loss
previously recognised directly in equity is recognised in the income statement. Where these investments
are interest-bearing, interest calculated using the effective interest method is recognised in the income
statement. Available-for-sale investments are recognised or derecognised by Heineken on the date it
commits to purchase or sell the investments.
(iv) Investments at fair value through profit or loss
An investment is classified as at fair value through profit or loss if it is held for trading or is designated as
such upon initial recognition. Investments are designated at fair value through profit or loss if Heineken
manages such investments and makes purchase and sale decisions based on their fair value in accordance
with Heineken's documented risk management or investment strategy. Upon initial recognition, attributable
transaction costs are recognised in the income statement when incurred. Investments at fair value through
profit or loss are measured at fair value, with changes therein recognised in the income statement as part
of the other net finance income/(expenses). Investments at fair value through profit and loss are recognised
or derecognised by Heineken on the date it commits to purchase or sell the investments.
(v) Other
Other non-derivative financial instruments are measured at amortised cost using the effective interest
method, less any impairment losses. Included in non-derivative financial instruments are advances to
customers. Subsequently the advances are amortised over the term of the contract as a reduction
of revenue.
(f) Derivative financial instruments
(i) General
Heineken uses derivatives in the ordinary course of business in order to manage market risks. Generally
Heineken seeks to apply hedge accounting in order to minimise the effects of foreign currency fluctuations
in the income statement.
