3. Significant accounting policies
(f) Derivative financial instruments (including hedge accounting)
(g) Share capital
(h) Property, Plant and Equipment (P, P E)
84 Annual Report 2009 - Heineken N.V.
Notes to the consolidated financial statements
(iv) Separable embedded derivatives
Embedded derivatives are separated from the host contract and accounted for separately if the economic
characteristics and risks of the host contract and the embedded derivative are not closely related, a separate
instrument with the same terms as the embedded derivative would meet the definition of a derivative, and the
combined instrument is not measured at fair value through profit or loss. Changes in the fair value of separable
embedded derivatives are recognised immediately in the income statement.
(i) Ordinary shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares
are recognised as a deduction from equity, net of any tax effects.
(ii) Repurchase of share capital (treasury shares)
When share capital recognised as equity is repurchased, the amount of the consideration paid, which includes
directly attributable costs, is net of any tax effects, and is recognised as a deduction from equity. Repurchased
shares are classified as treasury shares and are presented in the reserve for own shares. When treasury shares
are sold or reissued subsequently, the amount received is recognised as an increase in equity, and the resulting
surplus or deficit on the transaction is transferred to or from retained earnings.
Dividends are recognised as a liability in the period in which they are declared.
(i) Owned assets
Items of property, plant and equipment are measured at cost less government grants received (refer (s)),
accumulated depreciation (refer (iv)) and accumulated impairment losses (3k(ii)).
Cost comprises the initial purchase price increased with expenditures that are directly attributable to the
acquisition of the asset (like transports and non-recoverable taxes). The cost of self-constructed assets includes
the cost of materials and direct labour and any other costs directly attributable to bringing the asset to a
working condition for its intended use (like an appropriate proportion of production overheads), and the costs of
dismantling and removing the items and restoring the site on which they are located. Borrowing costs related to
the acquisition or construction of qualifying assets are capitalised as part of the cost of that asset.
Spare parts that are acquired as part of an equipment purchase and only to be used in connection with this
specific equipment are initially capitalised and amortised as part of the equipment.
Where an item of property, plant and equipment comprises major components having different useful lives,
they are accounted for as separate items of property, plant and equipment.