Financial statements I Notes to the consolidated financial statements continued
3. Significant accounting policies continued
(0) Other income
Other income are gains from sale of P, P E, intangible assets and (interests in) subsidiaries, joint ventures and associates, net of sales tax. They are
recognised in profit or loss when ownership has been transferred to the buyer.
(1) Operating lease payments
Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the lease. Lease incentives received
are recognised in profit or loss as an integral part of the total lease expense, over the term of the lease.
(ii) Finance lease payments
Minimum lease payments under finance leases are apportioned between the finance expense and the reduction of the outstanding liability. The
finance expense is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance
of the liability. Contingent lease payments are accounted for by revising the minimum lease payments over the remaining term of the lease when
the lease adjustment is confirmed.
(q) Government grants
Government grants are recognised at their fair value when it is reasonably assured that EIEINEKEN will comply with the conditions attaching to them
and the grants will be received.
Government grants relating to P, P E are deducted from the carrying amount of the asset.
Government grants relating to costs are deferred and recognised in profit or loss over the period necessary to match them with
the costs that they are intended to compensate.
(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.
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.
Other net finance income and expenses comprises dividend income, gains and losses 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, changes in fair value of hedging instruments
that are recognised in profit or loss, unwinding of the discount on provisions and impairment losses recognised on investments. 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.
Foreign currency gains and losses are reported on a net basis in the other net finance income and expenses.
(s) Income 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. Current 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 reporting purposes
and their tax bases.
Heineken N.V. Annual Report 2011