3. Significant accounting policies
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Financial Statements
Notes to the consolidated financial statements
(c) Basis of consolidation
(v) Transactions eliminated on consolidation
Intra-Heineken balances and transactions, and any unrealised gains and losses or income and expenses arising
from intra-Heineken transactions, are eliminated in preparing the consolidated financial statements. Unrealised
gains arising from transactions with equity accounted associates and JVs are eliminated against the investment
to the extent of the Heineken's interest in the investee. Unrealised losses are eliminated in the same way as
unrealised gains, but only to the extent that there is no evidence of impairment.
(d) Foreign currency
(i) Foreign currency transactions
Transactions in foreign currencies are translated to the respective functional currencies of Heineken entities
at the exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign
currencies at the balance sheet date are retranslated to the functional currency at the exchange rate at that date.
The foreign currency gain or loss arising on monetary items is the difference between amortised cost in the
functional currency at the beginning of the period, adjusted for effective interest and payments during the period,
and the amortised cost in foreign currency translated at the exchange rate at the end of the reporting period.
Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are
retranslated to the functional currency at the exchange rate at the date that the fair value was determined.
Foreign currency differences arising on retranslation are recognised in the income statement, except for
differences arising on the retranslation of avaiiable-for-sale (equity) investments and foreign currency
differences arising on the retranslation of a financial liability designated as a hedge of a net investment,
which are recognised in other comprehensive income.
Non-monetary assets and liabilities denominated in foreign currencies that are measured at cost remain
translated into the functional currency at historical exchange rates.
(ii) Foreign operations
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on
consolidation, are translated to euro at exchange rates at the balance sheet date. The revenue and expenses
of foreign operations are translated to euro at exchange rates approximating the exchange rates ruling at the
dates of the transactions.
Foreign currency differences are recognised in other comprehensive income and are presented within equity
in the translation reserve. When a foreign operation is disposed of, in part or in full, the relevant amount in the
translation reserve is transferred to the income statement. Foreign exchange gains and losses arising from a
monetary item receivable from or payable to a foreign operation, the settlement of which is neither planned nor
likely in the foreseeable future, are considered to form part of a net investment in a foreign operation and are
recognised in other comprehensive income, and are presented within equity in the translation reserve.
Annual Report 2009 - Heineken N.V.
