Report of the Report of the
Contents Overview Executive Board Supervisory Board
Financial
statements
Other information
Goodwill arising on the acquisition of a non-controlling interest in a subsidiary represents the excess of the cost of the additional
investment over the carrying amount of the interest in the net assets acquired at the date of exchange.
Goodwill is measured at cost less accumulated impairment losses (refer accounting policy 3i(ii)). Goodwill is allocated to individual
or groups of cash-generating units (CGUs) for the purpose of impairment testing and is tested annually for impairment. Negative
goodwill is recognised directly in profit or loss as other income.
(ii) Brands
Brands acquired, separately or as part of a business combination, are capitalised if they meet the definition of an intangible asset
and the recognition criteria are satisfied.
Strategic brands are well-known international/local brands with a strong market position and an established brand name. Strategic
brands are amortised on an individual basis over the estimated useful life of the brand. Other brands are amortised on a portfolio
basis per country.
(Hi) Customer-related, contract-based intangibles and reacquired rights
Customer-related and contract-based intangibles are capitalised if they meet the definition of an intangible asset and the recognition
criteria are satisfied. If the amounts are not material these are included in the brand valuation. The relationship between brands and
customer-related intangibles is carefully considered so that brands and customer-related intangibles are not both recognised on the
basis of the same cash flows.
Reacquired rights are identifiable intangible assets recognised in an acquisition that represent the right an acquirer previously has
granted to the acquiree to use one or more of the acquirer's recognised or unrecognised assets.
Customer-related and contract-based intangibles acquired as part of a business combination are valued at fair value. Customer-related
and contract-based intangibles acquired separately are measured at cost.
Customer-related, contract-based intangibles and reacquired rights are amortised over the remaining useful life of the customer
relationships or the period of the contractual arrangements.
(iv) Software, research and development and other intangible assets
Purchased software is measured at cost less accumulated amortisation (refer (vi)) and impairment losses (refer accounting policy
3i(ii)). Expenditure on internally developed software is capitalised when the expenditure qualifies as development activities, otherwise
it is recognised in profit or loss when incurred.
Expenditure on research activities, undertaken with the prospect of gaining new technical knowledge and understanding, is recognised
in profit or loss when incurred.
Development activities involve a plan or design for the production of new or substantially improved products, software and processes.
Development expenditure is capitalised only if development costs can be measured reliably, the product or process is technically and
commercially feasible, future economic benefits are probable, and HEIN EKEN intends to and has sufficient resources to complete
development and to use or sell the asset. The expenditure capitalised includes the cost of materials, direct labour and overhead costs
that are directly attributable to preparing the asset for its intended use, and capitalised borrowing costs. Other development expenditure
is recognised in profit or loss when incurred.
Capitalised development expenditure is measured at cost less accumulated amortisation (refer (vi)) and accumulated impairment
losses (refer accounting policy 3i(ii)).
Other intangible assets that are acquired by HEIN EKEN and have finite useful lives, are measured at cost less accumulated amortisation
(refer (vi)) and impairment losses (refer accounting policy 3i(ii)). Expenditure on internally generated goodwill and brands is recognised
in profit or loss when incurred.
Heineken N.V. Annual Report 2013
71