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HEINEKEN N.V. ANNUAL REPORT 2008
(u) Income tax
Income tax comprises current and deferred tax. Income tax is recognised in the income statement except
to the extent that it relates to items recognised directly to equity, in which case it is recognised in equity.
Current tax is the expected income tax payable in respect of taxable profit for the year, using tax rates
enacted or substantially enacted at the balance sheet date, and any adjustment to income tax payable in
respect of profits of previous years.
Deferred tax is provided using the balance sheet method, for deductible respectively taxable temporary
differences between the carrying amounts of assets and liabilities for financial reporting purposes and their
tax bases.
Deferred tax assets and liabilities are not recognised for the following temporary differences: (i) the initial
recognition of goodwill, (ii) the initial recognition of assets or liabilities in a transaction that is not a business
C( mbination and that affects neither accounting nor taxable profit or loss, and (iii) differences relating to
in /estments in subsidiaries, joint ventures and associates resulting from translation of foreign operations.
D ferred tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the
b lance sheet date and are expected to apply when the related deferred tax asset is realised or the deferred
tc liability is settled.
D ferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities
ai d assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or
o different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to
n alise the assets and settle the liabilities simultaneously.
A Jeferred tax asset is recognised only to the extent that it is probable that future taxable profits will be
a ailable against which the temporary difference can be utilised. Deferred tax assets are reviewed at each
b lance sheet date and are reduced to the extent that it is no longer probable that the related tax benefit
w I be realised.
D ferred tax assets are recognised in respect of the carry forward of unused tax losses and tax credits.
V ïen an entity has a history of recent losses, the entity recognises a deferred tax asset arising from unused
t losses or tax credits only to the extent that the entity has sufficient taxable temporary differences or
t :re is convincing other evidence that sufficient taxable profit will be available against which the unused tax
k ses or unused tax credits can be utilised by the entity.
Earnings per share
H neken presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated
b dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average
r. mber of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the profit or
l< s attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding
t the effects of all dilutive potential ordinary shares, which comprise share rights granted to employees.
