90 FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
HEINEKEN N.V. ANNUAL REPORT 20C3
3. Significant accounting policies
(ii) New relevant standards and interpretations not yet adopted
IFRS 3 Revised Business combinations (effective from 1 July 2009). This standard continues to apply the
acquisition method to business combinations, with some significant changes. For example, all payments
to purchase a business are to be recorded at fair value at the acquisition date, with contingent payments
classified as debt subsequently re-measured through the income statement. There is a choice on an
acquisition-by-acquisition basis to measure the non-controlling interest in the acquiree either at fair vale
or at the non-controlling interest's proportionate share of the acquiree's net assets. All acquisition-related
costs should be expensed. Based on the revised IAS 12, tax losses from previous acquisitions and
recognised subsequent to the implementation of IFRS 3R will be recognised through the income
statements instead as adjustment to goodwill. Fleineken will apply IFRS 3R prospectively to all business
combinations from 1 January 2010.
IAS 27 (Amended) Consolidated and Separate Financial Statements (effective from 1 July 2009) requires
accounting for changes in ownership interests by the Group in a subsidiary, while maintaining control,
to be recognised as an equity transaction. When the Group loses control of a subsidiary, any interest
retained in the former subsidiary will be measured at fair value with the gain or loss recognised in the
income statement. Heineken will apply this standard as from 1 January 2010.
4. Determination of fair values
(i) General
A number of Fleineken's accounting policies and disclosures require the determination of fair value, for both
financial and non-financial assets and liabilities. Fair values have been determined for measurement and/or
disclosure purposes based on the following methods. When applicable, further information about the
assumptions made in determining fair values or for the purpose of impairment testing is disclosed in the
notes specific to that asset or liability.
(ii) Property, plant and equipment
The fair value of property, plant and equipment recognised as a result of a business combination is based on
the quoted market prices for similar items.
(iii) Intangible assets
The fair value of brands acquired in a business combination is based on the 'relief of royalty' method. The
fair value of customer relationships acquired in a business combination is determined using the multi-period
excess earnings method, whereby the subject asset is valued after deducting a fair return on all other assets
that are part of creating the related cash flows. The fair value of other intangible assets is based on the
discounted cash flows expected to be derived from the use and eventual sale of the assets.
(iv) Inventories
The fair value of inventories acquired in a business combination is determined based on its estimated selling
price in the ordinary course of business less the estimated costs of completion and sale, and a reasonable
profit margin based on the effort required to complete and sell the inventories.
(v) Investments in equity and debt securities
The fair value of financial assets at fair value through profit or loss, held-to-maturity investments and
available-for-sale financial assets is determined by reference to their quoted closing bid price at the reporting
date. The fair value of held-to-maturity investments is determined for disclosure purposes only.
In case the quoted price does not exist at the date of exchange or in case the quoted price exists at the date
of exchange but was not used as the cost, the investments are valued indirectly based on discounted cash
flow models.
(vi) Trade and other receivables
The fair value of trade and other receivables is estimated as the present value of future cash flows,
discounted at the market rate of interest at the reporting date.