(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
3i(ii)). Expenditure on internally developed software is capitalised when the expenditure qualifies as development activities, otherwise
it is recognised in profit or loss when incurred.
Expenditure on research activities, undertaken with the prospect of gaining new technical knowledge and understanding,
is recognised in profit or loss 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 profit or loss when incurred.
Capitalised development expenditure is measured at cost less accumulated amortisation (refer (vi)) and accumulated impairment
losses (refer accounting policy 3i(ii)).
Other intangible assets that are acquired by Heineken and have finite useful lives, are measured at cost less accumulated amortisation
(refer (vi)) and impairment losses (refer accounting policy 3i(ii)). Expenditure on internally generated goodwill and brands is recognised
in profit or loss when incurred.
(v Subsequent expenditure
Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which
it relates. All other expenditure is expensed when incurred.
A nortisation is calculated over the cost of the asset, or other amount substituted for cost, less its residual value. Intangible assets
w th a finite life are amortised on a straight-line basis over their estimated useful lives, other than goodwill, from the date they are
a ailable for use, since this most closely reflects the expected pattern of consumption of the future economic 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 5-20 years
Software 3-7 years
Capitalised development costs 3 years
nortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.
Gains and losses on sale
gains on sale of intangible assets are presented in profit or loss as other income. Net losses on sale are included in amortisation,
t gains and losses are recognised in profit or loss when the significant risks and rewards of ownership have been transferred
t the buyer, recovery of the consideration is probable, the associated costs can be estimated reliably, and there is no continuing
i anagement involvement with the intangible assets.
neken N.V. Annual Report 2010