(iv) Software, research and development and other intangible assets
Purchased software is measured at cost less accumulated amortisation (refer (vi)) and impairment losses (refer
accounting policy 3k(ii)). Expenditure on internally developed software is capitalised when the expenditure
qualifies as development activities, otherwise it is recognised in the income statement when incurred.
Expenditure on research activities, undertaken with the prospect of gaining new technical knowledge and
understanding, is recognised in the income statement when incurred.
Development activities involve a plan or design for the production of new or substantially improved products,
software and processes. Development expenditure is capitalised only if development costs can be measured
reliably, the product or process is technically and commercially feasible, future economic benefits are probable,
and Heineken intends to and has sufficient resources to complete development and to use or sell the asset. The
expenditure capitalised includes the cost of materials, direct labour and overhead costs that are directly
attributable to preparing the asset for its intended use, and capitalised borrowing costs. Other development
expenditure is recognised in the income statement when incurred.
Capitalised development expenditure is measured at cost less accumulated amortisation (refer (vi)) and
accumulated impairment losses (refer accounting policy 3k(ii)).
Other intangible assets that are acquired by Heineken are measured at cost less accumulated amortisation
efer (vi)) and impairment losses (refer accounting policy 3k(ii)). Expenditure on internally generated goodwill
and brands is recognised in the income statement when incurred.
i Subsequent expenditure
ibsequent expenditure is capitalised only when it increases the future economic benefits embodied in the
lecific asset to which it relates. All other expenditure is expensed when incurred.
i i) Amortisation
mortisation is calculated over the cost of the asset, or other amount substituted for cost, less its residual value.
I tangible assets with a finite life are amortised on a straight-line basis over their estimated useful lives from the
c ite they are available for use, since this most closely reflects the expected pattern of consumption of the future
onomic benefits embodied in the asset. The estimated useful lives are as follows:
Strategic brands 40 - 50 years
Other brands 15 - 25 years
Customer-related and contract-based intangibles 5-30 years
Software 3-5 years
Capitalised development costs 3 years.
i) Gains and losses on sale
t gains on sale of intangible assets are presented in the income statement as other income. Net losses on sale
e included in amortisation. Net gains and losses are recognised in the income statement when the significant
ks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable,
e associated costs can be estimated reliably, and there is no continuing management involvement with the
Annual Report 2009 - Heineken N.V. 87