When the benefits of a plan are improved, the portion of the increased benefit relating to past service by
employees is recognised as an expense in the income statement on a straight-line basis over the average period
until the benefits become vested. To the extent that the benefits vest immediately, the expense is recognised
immediately in the income statement.
In respect of actuarial gains and losses that arise, Heineken applies the corridor method in calculating the
obligation in respect of a plan. To the extent that any cumulative unrecognised actuarial gain or loss exceeds
ten per cent of the greater of the present value of the defined benefit obligation and the fair value of plan assets,
that portion is recognised in the income statement over the expected average remaining working lives of the
employees participating in the plan. Otherwise, the actuarial gain or loss is not recognised.
(iii) Other long-term employee benefits
Heineken's net obligation in respect of long-term employee benefits, other than pension plans, is the amount
of future benefit that employees have earned in return for their service in the current and prior periods; that
benefit is discounted to determine its present value, and the fair value of any related assets is deducted. The
discount rate is the yield at balance sheet date on high-quality credit-rated bonds that have maturity dates
approximating the terms of Heineken's obligations. The obligation is calculated using the projected unit credit
method. Any actuarial gains and losses are recognised in the income statement in the period in which they arise.
(iv) Termination benefits
1 rmination benefits are payable when employment is terminated by the Group before the normal retirement
d ite, or whenever an employee accepts voluntary redundancy in exchange for these benefits. Termination
b nefits are recognised as an expense when Heineken is demonstrably committed to either terminating the
e nployment of current employees according to a detailed formal plan without possibility of withdrawal, or
p oviding termination benefits as a result of an offer made to encourage voluntary redundancy. Termination
b nefits for voluntary redundancies are recognised if Heineken has made an offer encouraging voluntary
r dundancy, it is probable that the offer will be accepted, and the number of acceptances can be estimated
B nefits falling due more than 12 months after the balance sheet date are discounted to their present value.
Annual Report 2009 - Heineken N.V.