Report of the
Report of the
(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.
Amortisation is calculated over the cost of the asset, or other amount substituted for cost, less its residual value. Intangible assets with a finite life are
amortised on a straight-line basis over their estimated useful lives, other than goodwill, from the date they are available 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
Reacquired rights 3-12 years
Software 3-7 years
Capitalised development costs 3 years
Amortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.
(vii) Gains and losses on sale
Net gains on sale of intangible assets are presented in profit or loss as other income. Net losses on sale are included in amortisation. Net gains and losses
are recognised in profit or loss when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is
probable, the associated costs can be estimated reliably, and there is no continuing management involvement with the intangible assets.
Inventories are measured at the lower of cost and net realisable value. The cost of inventories is based on the weighted average cost formula, and
includes expenditure incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing them to their existing
location and condition. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion
and selling expenses.
(ii) Finished products and work in progress
Finished products and work in progress are measured at manufacturing cost based on weighted averages and takes into account the production stage
reached. Costs include an appropriate share of direct production overheads based on normal operating capacity.
(Hi) Other inventories and spare parts
The cost of other inventories is based on weighted averages. Spare parts are valued at the lower of cost and net realisable value. Value reductions and
usage of parts are charged to profit or loss. Spare parts that are acquired as part of an equipment purchase and only to be used in connection with this
specific equipment are initially capitalised and depreciated as part of the equipment.
Heineken N.V. Annual Report 2012