Notes to the consolidated financial statements continued
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3. Significant accounting policies
(b) Foreign currency
(i) Foreign currency transactions
Transactions in foreign currencies are translated to the respective functional currencies of FHEINEKEN entities at the exchange rates at the
dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the
functional currency at the exchange rate at that date. The foreign currency gain or loss arising on monetary items is the difference between
amortised cost in the functional currency at the beginning of the period, adjusted for effective interest and payments during the period,
and the amortised cost in foreign currency translated at the exchange rate at the end of the reporting period.
Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional
currency at the exchange rate at the date that the fair value was determined. Non-monetary items in a foreign currency that are measured
at cost are translated into the functional currency using the exchange rate at the date of the transaction.
Foreign currency differences arising on retranslation are recognised in profit or loss, except for differences arising on the retranslation of
available-for-sale (equity) investments and foreign currency differences arising on the retranslation of a financial liability designated as
a hedge of a net investment, which are recognised in other comprehensive income.
(ii) Foreign operations
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated to Euro
at exchange rates at the reporting date. The income and expenses of foreign operations, excluding foreign operations in hyperinflationary
economies, are translated to Euro at exchange rates approximating to the exchange rates ruling at the dates of the transactions. Group
entities, with a functional currency being the currency of a hyperinflationary economy, first restate their financial statements in accordance
with IAS 29, Financial Reporting in Flyperinflationary Economies (see 'Reporting in hyperinflationary economies' below). The related income,
costs and balance sheet amounts are translated at the foreign exchange rate ruling at the balance sheet date.
Foreign currency differences are recognised in other comprehensive income and are presented within equity in the translation reserve.
Flowever, if the operation is not a wholly owned subsidiary, 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
FHEINEKEN 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 FHEINEKEN 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.
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Fleineken N.V. Annual Report 2014