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(r) Interest income, interest expenses and other net finance income and expenses
Interest income and expenses are recognised as they accrue in profit or loss, using the effective interest method unless collectability
is in doubt.
Other net finance income comprises dividend income, gains on the disposal of available-for-sale investments, changes in the
fair value of investments designated at fair value through profit or loss and held for trading investments and gains and losses
on hedging instruments that are recognised in profit or loss. Dividend income is recognised in profit or loss on the date that
Heineken's right to receive payment is established, which in the case of quoted securities is the ex-dividend date.
Other net finance expenses comprise unwinding of the discount on provisions, changes in the fair value of investments designated
at fair value through profit or loss and held for trading investments, impairment losses recognised on investments, and gains or
losses on hedging instruments that are recognised in profit or loss.
Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognised
in profit or loss using the effective interest method.
Foreign currency gains and losses are reported on a net basis in the other net finance expenses.
sIncome tax
Income tax comprises current and deferred tax. Current tax and deferred tax are recognised in profit or loss except to the extent
that it relates to a business combination, or items recognised directly in equity or in other comprehensive income.
Current tax is the expected income tax payable or receivable in respect of taxable profit or loss for the year, using tax rates enacted
or substantially enacted at the balance sheet date, and any adjustment to income tax payable in respect of profits of previous years.
Ci rrent tax payable also includes any tax liability arising from the declaration of dividends.
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial
resorting purposes and their tax bases.
Di ferred tax assets and liabilities are not recognised for the following temporary differences: (i) the initial recognition of goodwill,
(ii the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting
n taxable profit or loss, (iii) differences relating to investments in subsidiaries, joint ventures and associates resulting from translation
o oreign operations and (iv) differences relating to investments in subsidiaries and joint ventures to the extent that the Company
is ible to control the timing of the reversal of the temporary difference and they will probably not reverse in the foreseeable future.
D ferred tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date
a d are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.
D erred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they
ate to income taxes levied by the same tax authority on the same taxable entity, or on different taxable entities which intend
e er to settle current tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities simultaneously.
A leferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences, to the extent that it is
p )bable that future taxable profits will be available against which they can be utilised. Deferred tax assets are reviewed at each
b ance sheet date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
D ferred tax assets are recognised in respect of the carry forward of unused tax losses and tax credits. When an entity has a history
o ecent losses, the entity recognises a deferred tax asset arising from unused tax losses or tax credits only to the extent that the
e ity has sufficient taxable temporary differences or there is convincing other evidence that sufficient taxable profit will be
a ailable against which the unused tax losses or unused tax credits can be utilised by the entity.
H
neken N.V. Annual Report 2010
