Report of the Report of the
Contents Overview Executive Board Supervisory Board
Financial
statements
Other information
2. Basis of preparation
Presentation of Items of Other Comprehensive Income (Amendments to IAS1)
Asa result of the amendments to IAS 1, HEINEKEN has modified the presentation of its statement of other comprehensive income.
The modification is to split items based on whether or not they could be recycled to profit or loss in the future. Comparative information
has been re-presented accordingly.
Revised IAS 19 Employee Benefits
Asa result of the revision of IAS 19, HEINEKEN has changed its accounting policy with respect to the basis for determining the income
or expense related to defined benefit plans.
Under the revised IAS 19, HEINEKEN determines the net interest expense (income) on the net defined benefit liability by applying the
discount rate used to measure the defined benefit obligation at the beginning of the annual period to the net defined benefit liability
(asset) at the beginning of the annual period, taking into account any changes in the net defined benefit liability (asset) during the
period as a result of contributions and benefit payments.
Conseguently, the net interest on the net defined benefit liability (asset) now comprises:
interest cost on the defined benefit obligation;
interest income on plan assets; and
interest effect of applying the asset ceiling.
Previously, HEINEKEN determined interest income on plan assets based on their long-term expected return. The variance between
actual and expected return continues to be accounted for in other comprehensive income. Therefore, the change in method of
calculating the net interest expense (income) has no impact on eguity. The change in accounting policy increased the defined benefit
expense recognised in profit or loss and correspondingly increased the defined benefit plan remeasurement gain recognised in other
comprehensive income by EUR98 million for the reporting period ending 31 December 2013 (EUR45 million reduction of remeasurement
loss for the period ending 31 December 2012).
HEINEKEN now presents the net interest on the net defined benefit liability (asset) in other net finance income and expenses rather
than personnel expenses. As a result, a reclassification from personnel expenses to other net finance income and expenses of
EUR57 million was made for the reporting period ending 31 December 2013 (EUR51 million for the period ending 31 December 2012).
The revised IAS 19 no longer allows inclusion of future pension administration costs as part of the defined benefit obligation. Such
costs should be recognised when the administration services are incurred. Previously, HEINEKEN accrued a surcharge for pension
administration costs of the Dutch pension plan as part of the current service costs in the defined benefit obligation. With the
adoption of the revised standard, this accrual was released to eguity. As a result, HEINEKEN's defined benefit obligation decreased
by EUR57 million asatl January 2012.
3. Significant accounting policies
General
The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial
statements and have been applied consistently by HEINEKEN entities.
(a) Basis of consolidation
(i) Business combinations
Business combinations are accounted for using theacguisition method as attheacguisition date, which is the date on which control
is transferred to HEINEKEN. HEINEKEN controls an entity when it is exposed to, or has rights to, variable returns from its involvement
with the entity and has the ability to affect those returns through its power over the entity.
HEINEKEN measures goodwill at the acguisition date as the fair value of the consideration transferred plus the fair value of any
previously-held eguity interest in the acguiree and the recognised amount of any non-controlling interests in the acguiree, less the
net recognised amount (generally fair value) of the identifiable assets acguired and liabilities assumed. When the excess is negative,
a bargain purchase gain is recognised immediately in profit or loss.
Heineken N.V. Annual Report 2013
