Notes to the Consolidated Financial Statements continued
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(iv) Separable embedded derivatives
Embedded derivatives are separated from the host contract and accounted for separately if the economic characteristics and risks of the host contract and
the embedded derivative are not closely related, a separate instrument with the same terms as the embedded derivative would meet the definition of a
derivative, and the combined instrument is not measured at fair value through profit or loss. Changes in the fair value of separable embedded derivatives
are recognised immediately in profit or loss.
(e) Share capital
(i) Ordinary shares
Ordinary shares are classified as eguity. Incremental costs directly attributable to the issue of ordinary shares are recognised as a deduction from eguity,
net of any tax effects.
(ii) Repurchase of share capital (treasury shares)
When share capital recognised as eguity is repurchased, the amount of the consideration paid, which includes directly attributable costs, is net of any tax
effects recognised as a deduction from eguity. Repurchased shares are classified as treasury shares and are presented in the reserve for own shares.
When treasury shares are sold or reissued subseguently, the amount received is recognised as an increase in eguity, and the resulting surplus or deficit on
the transaction is transferred to or from retained earnings.
(iii) Dividends
Dividends are recognised as a liability in the period in which they are declared.
(f) Property, plant and equipment
(i) Owned assets
Items of property, plant and equipment (P, P E) are measured at cost less government grants received (refer to (q)), accumulated depreciation (refer to
(iv)) and accumulated impairment losses (3i(ii)).
Cost comprises the initial purchase price increased with expenditures that are directly attributable to the acquisition of the asset (such as transports and
non-recoverable taxes). The cost of self-constructed assets includes the cost of materials and direct labour and any other costs directly attributable to
bringing the asset to a working condition for its intended use (refer to an appropriate proportion of production overheads), and the costs of dismantling
and removing the items and restoring the site on which they are located. Borrowing costs related to the acquisition or construction of qualifying assets are
capitalised as part of the cost of that asset. Cost also may include transfers from equity of any gain or loss on qualifying cash flow hedges of foreign
currency purchases of P, P E.
Spare parts that are acquired as part of an equipment purchase and only to be used in connection with this specific equipment or purchased software that
is integral to the functionality of the related equipment are capitalised and amortised as part of that equipment. In all other cases, spare parts are carried
as inventory and recognised in the income statement as consumed. Where an item of P, P E comprises major components having different useful lives,
they are accounted for as separate items (major components) of P, P E.
Returnable bottles and kegs in circulation are recorded within P, P E and a corresponding liability is recorded in respect of the obligation to repay
the customers' deposits. Deposits paid by customers for returnable items are reflected in the consolidated statement of financial position within
current liabilities.
73 Heineken N.V. Annual Report 2015