86 FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CG IUI
HEINEKEN N.V. ANNUAL REPORT 20 )8
3. Significant accounting policies
(ii) Other revenue
Other revenues are proceeds from royalties, rental income, pub management services 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.
(q) Other income
Other income are gains from sale of P, P 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.
(r) Expenses
(i) 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.
(s) 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 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.
(t) Interest income, interest expenses and other net finance income and expenses
Interest income and expenses are recognised as they accrue, using the effective interest method unless
collectibility is in doubt.
Other net finance income comprises dividend income, gains on the disposal of available-for-sale investments,
changes in the fair value of investments designated at fair value through profit or loss and held for trading
investments and gains and losses on hedging instruments that are recognised in the income statement.
Dividend income is recognised in the income statement on the date that Heineken's right to receive payment
is established, which in the case of quoted securities is the ex-dividend date.
Other net finance expenses comprise unwinding of the discount on provisions, changes in the fair value of
investments designated at fair value through profit or loss and held for trading investments, impairment
losses recognised on investments, and gains or losses on hedging instruments that are recognised in the
income statement.
Foreign currency gains and losses are reported on a net basis.