Notes to the Consolidated Financial Statements continued
Reportofthe Reportofthe Financial Other
Contents Overview Executive Board Supervisory Board Statements Information
3. Significant accounting policies continued
(ii) Restructuring
A provision for restructuring is recognised when HEIN EKEN has approved a detailed and formal restructuring plan, and the restructuring has either
commenced or has been announced publicly. Future operating losses are not provided for. The provision includes the benefit commitments in connection
with early retirement and redundancy schemes.
(iii) Onerous contracts
A provision for onerous contracts is recognised when the expected benefits to be derived by HEINEKEN from a contract are lower than the unavoidable
cost of meeting its obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the
contract and the expected net cost of continuing with the contract and taking into consideration any reasonably obtainable sub-leases. Before a provision
is established, HEINEKEN recognises any impairment loss on the assets associated with that contract.
(iv) Other
The other provisions, not being provisions for restructuring or onerous contracts, consist mainly of surety and guarantees, litigation and claims and
environmental provisions.
(m) Loans and borrowings
Loans and borrowings are recognised initially at fair value, net of transaction costs incurred. Loans and borrowings are subseguently stated at amortised
cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in profit or loss over the period of the
borrowings using the effective interest method. Loans and borrowings included in a fair value hedge are stated at fair value in respect of the risk
being hedged.
Loans and borrowings for which H EIN EKEN has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet
date are classified as non-current liabilities.
(n) Revenue
(i) Products sold
Revenue from the sale of products in the ordinary course of business is measured at the fair value of the consideration received or receivable, net of
sales tax, excise duties, returns, customer discounts and other sales-related discounts. Revenue from the sale of products is recognised in profit or loss
when the amount of revenue can be measured reliably, the significant risks and rewards of ownership have been transferred to the buyer, recovery of
the consideration is probable, the associated costs and possible return of products can be estimated reliably, and there is no continuing management
involvement with the products.
If it is probable that discounts will be granted and the amount can be measured reliably, the discount is recognised as a reduction of revenue as the sales
are recognised.
(ii) Other revenue
Other revenues are proceeds from royalties, rental income, pub management services and technical services to third parties, net of sales tax. Royalties are
recognised in profit or loss on an accrual basis in accordance with the substance of the relevant agreement. Rental income, pub management services and
technical services are recognised in profit or loss when the services have been delivered.
(0) Other income
Other income includes gains from sale of P, P E, intangible assets and (interests in) subsidiaries, joint ventures and associates, net of sales tax. They are
recognised in profit or loss when risks and rewards have been transferred to the buyer.
(p) Expenses
(1) Operating lease payments
Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the lease. Lease incentives received are
recognised in profit or loss as an integral part of the total lease expense, over the term of the lease.
80 Heineken N.V. Annual Report 2015