Financial statements I Notes to the consolidated financial statements continued
3. Significant accounting policies continued
Foreign currency differences are recognised in other comprehensive income and are presented within equity in the translation reserve. However, if
the operation is a non-wholly-owned subsidiary, then the relevant proportionate share of the translation difference is allocated to the non-controlling
interests. When a foreign operation is disposed of such that control, significant influence or joint control is lost, the cumulative amount in the translation
reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. When H EINEKEN disposes of only part of
its interest in a subsidiary that includes a foreign operation while retaining control, the relevant proportion of the cumulative amount is reattributed
to non-controlling interests. When H EINEKEN disposes of only part of its investment in an associate or joint venture that includes a foreign operation
while retaining significant influence or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.
Foreign exchange gains and losses arising from a monetary item receivable from or payable to a foreign operation, the settlement of which is
neither planned nor likely in the foreseeable future, are considered to form part of a net investment in a foreign operation and are recognised
in other comprehensive income, and are presented within equity in the translation reserve.
The following exchange rates, for the most important countries in which HEINEKEN has operations, were used while preparing these consolidated
(iii) Reporting in hyperinflationary economies
When the economy of a country in which we operate is deemed hyperinflationary and the functional currency of a Group entity is the currency of
that hyperinflationary economy, the financial statements of such Group entities are adjusted so that they are stated in terms of the measuring unit
current at the end of the reporting period. This involves restatement of income and expenses to reflect changes in the general price index from the
start of the reporting period and, restatement of non-monetary items in the balance sheet, such as P, P E to reflect current purchasing power as at
the period end using a general price index from the date when they were first recognised. Comparative amounts are not adjusted. Any differences
arising were recorded in equity on adoption.
(iv) Hedge of net investments in foreign operations
Foreign currency differences arising on the retranslation of a financial liability designated as a hedge of a net investment in a foreign operation are
recognised in other comprehensive income to the extent that the hedge is effective and regardless of whether the net investment is held directly or
through an intermediate parent. These differences are presented within equity in the translation reserve. To the extent that the hedge is ineffective,
such differences are recognised in profit or loss. When the hedged part of a net investment is disposed of, the relevant amount in the translation
reserve is transferred to profit or loss as part of the profit or loss on disposal.
(c) Non-derivative financial instruments
Non-derivative financial instruments comprise investments in equity and debt securities, trade and other receivables, cash and cash equivalents,
loans and borrowings, and trade and other payables.
Heineken N.V. Annual Report 2011