NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS COIV flNUED
HEINEKEN N.V. ANNUAL REPORT 2C
3. Significant accounting policies
All impairment losses are recognised in the income statement. Any cumulative loss in respect of an
available-for-sale financial asset recognised previously in equity is transferred to the income statement.
An impairment loss is reversed if the reversal can be related objectively to an event occurring after the
impairment loss was recognised. For financial assets measured at amortised cost and available-for-sale
financial assets that are debt securities, the reversal is recognised in the income statement. For available-
for-sale financial assets that are equity securities, the reversal is recognised directly in equity.
(ii) Non-financial assets
The carrying amounts of Fleineken's non-financial assets, other than inventories (refer accounting policy (j))
and deferred tax assets (refer accounting policy (u)), are reviewed at each reporting date to determine
whether there is any indication of impairment. If any such indication exists then the asset's recoverable
amount is estimated. For goodwill and intangible assets that have indefinite lives or that are not yet available
for use, the recoverable amount is estimated each year at the same time.
The recoverable amount of an asset or cash-generating unit is the higher of an asset's fair value less costs to
sell and value in use. The recoverable amount of an asset or cash-generating unit is considered the value in
use. In assessing value in use, the estimated future cash flows are discounted to their present value using a
post-tax discount rate that reflects current market assessments of the time value of money and the risks
specific to the asset.
For the purpose of impairment testing, assets are grouped together into the smallest group of assets that
generates cash inflows from continuing use that largely are independent of the cash inflows of other assets
or groups of assets (the 'cash-generating unit').
For the purpose of impairment testing, goodwill acquired in a business combination, is allocated to each of
the acquirer's cash-generating units, or groups of cash-generating units, that is expected to benefit from the
synergies of the combination. Each unit or group of units to which the goodwill is allocated represents the
lowest level within the entity at which the goodwill is monitored for internal management purposes. Goodwill
is monitored on regional, subregional or country level depending on the characteristics of the acquisition, the
synergies to be achieved and the level of integration.
An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its
recoverable amount. A cash-generating unit is the smallest identifiable asset group that generates cash flows
that largely are independent from other assets and groups. Impairment losses are recognised in the income
statement. Impairment losses recognised in respect of cash-generating units are allocated first to reduce
the carrying amount of any goodwill allocated to the units and then to reduce the carrying amounts of the
other assets in the unit (group of units) on a pro rata basis. An impairment loss in respect of goodwill is not
reversed. In respect of other assets, impairment losses recognised in prior periods are assessed at each
reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is
reversed if there has been a change in the estimates used to determine the recoverable amount. An
impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying
amount that would have been determined, net of depreciation or amortisation, if no impairment loss had
been recognised.
