Financial statements Notes to the consolidated financial statements
3. Significant accounting policies
(vi) Investments in associates and joint ventures
Investments in associates are those entities in which Heineken has significant influence, but not control, over the financial and
operating policies. Significant influence is presumed to exist when the Group holds between 20 and 50 per cent of the voting power
of another entity. Joint ventures are those entities over whose activities Heineken has joint control, established by contractual
agreement and requiring unanimous consent for strategic financial and operating decisions.
Investments in associates and joint ventures are accounted for using the equity method (equity-accounted investees) and are
recognised initially at cost. The cost of the investment includes transaction costs.
The consolidated financial statements include Heineken's share of the profit or loss and other comprehensive income, after
adjustments to align the accounting policies with those of Heineken, from the date that significant influence or joint control
commences until the date that significant influence or joint control ceases.
When Heineken's share of losses exceeds the carrying amount of the associate, including any long-term investments, the carrying
amount is reduced to nil and recognition of further losses is discontinued except to the extent that Heineken has an obligation or
has made a payment on behalf of the associate or joint venture.
(vii) 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
(b) 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 reporting 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.
Non-monetary items in a foreign currency that are measured in terms of historical cost are translated using the exchange rate at the
date of the transaction. Foreign currency differences arising on retranslation are recognised in profit or loss, except for differences
arising on the retranslation of available-for-sale (equity) investments and foreign currency differences arising on the retranslation o'
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.