118
Financial statements Notes to the consolidated financial statements
32. Financial risk management and financial instruments
The movement in the allowance for impairment in respect of trade and other receivables (excluding derivatives) during the year
was as follows:
2010
Balance as at 1 January
334
Changes in consolidation
-
Impairment loss recognised
168
109
Allowance used
(52)
(26
Allowance released
(53)
_J45
Effect of movements in exchange rates
5
Balance as at 31 December
402
334
The movement in the allowance for impairment in respect of loans during the year was as follows:
2010
Balance as at 1 January
185
177
Changes in consolidation
(8)
Impairment loss recognised
37
Allowance used
(23)
(27
Allowance released
(2)
Effect of movements in exchange rates
2
Balance as at 31 December 191 185
Impairment losses recognised for trade and other receivables (excluding derivatives) and loans are part of the other non-cash item
in the consolidated statement of cash flows.
The income statement impact of EUR35 million (2009: EUR39 million) in respect of loans and the income statement impact of
EUR115 million (2009: EUR64 million) in respect of trade receivables (excluding derivatives) were included in expenses for raw
materials, consumables and services.
The allowance accounts in respect of trade and other receivables and held-to-maturity investments are used to record impairment
losses, unless Heineken is satisfied that no recovery of the amount owing is possible, at that point the amount considered irrecoverabi
is written off against the financial asset.
Liquidity risk
Liquidity risk is the risk that Heineken will encounter difficulty in meeting the obligations associated with its financial liabilities that
are settled by delivering cash or another financial asset. Heineken's approach to managing liquidity is to ensure, as far as possible,
that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without
incurring unacceptable losses or risking damage to Heineken's reputation.
Recent times have proven the credit markets situation could be such that it is difficult to generate capital to finance long-term
growth of the Company. Although currently the situation is more stable, the Company has a clear focus on ensuring sufficient
access to capital markets to finance long-term growth and to refinance maturing debt obligations. Financing strategies are under
continuous evaluation. In addition, the Company focuses on a further fine-tuning of the maturity profile of its long-term debts with
its forecasted operating cash flows. Strong cost and cash management and controls over investment proposals are in place to
ensure effective and efficient allocation of financial resources.