Notes to the Consolidated Financial Statements continued
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3. Significant accounting policies continued
The measurement of deferred tax assets and liabilities reflects the tax consequences that would follow the manner in which the Company expects, at the
end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax is determined using tax rates (and laws) that have been enacted or substantively enacted at the balance sheet date and are expected to
apply when the related deferred tax asset is realised or the deferred tax liability is settled.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes
levied by the same tax authority on the same taxable entity, or on different taxable entities which intend either to settle current tax liabilities and assets on
a net basis or to realise the assets and settle the liabilities simultaneously.
Deferred tax is provided for on temporary differences arising on investments in subsidiaries and associates, except where the timing of the reversal of the
temporary difference is controlled by the Company and it is probable that the temporary difference will not reverse in the foreseeable future.
A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future
taxable profits will be available against which they can be utilised. Deferred tax assets are reviewed at each balance sheet date and are reduced to the
extent that it is no longer probable that the related tax benefit will be realised.
(iii) Uncertain tax positions
In determining the amount of current and deferred income tax, the Company takes into account the impact of uncertain income tax positions and
whether additional taxes and interest may be due. This assessment relies on estimates and assumptions and may involve a series of judgements about
future events. New information may become available that causes the Company to change its judgement regarding the adequacy of existing tax
liabilities; such changes to tax liabilities will impact the income tax expense in the period that such a determination is made.
(t) Discontinued operations
A discontinued operation is a component of HEINEKEN's business that represents a separate major line of business or geographical area of operations that
has been disposed of or is held for sale or distribution, or is a subsidiary acquired exclusively with a view to resale. Classification as a discontinued operation
occurs upon disposal or when the operation meets the criteria to be classified as held for sale, if earlier. When an operation is classified as a discontinued
operation, the comparative statement of comprehensive income is re-presented as if the operation had been discontinued from the start of the
comparative year.
(u) Earnings per share
HEINEKEN presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable
to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the year, adjusted for the weighted
average number of own shares purchased in the year. Diluted EPS is determined by dividing the profit or loss attributable to ordinary shareholders by the
weighted average number of ordinary shares outstanding, adjusted for the weighted average number of own shares purchased in the year and for the
effects of all dilutive potential ordinary shares which comprise share rights granted to employees.
(v) Cash flow statement
The cash flow statement is prepared using the indirect method. Changes in balance sheet items that have not resulted in cash flows such as translation
differences, fair value changes, equity-settled share-based payments and other non-cash items have been eliminated for the purpose of preparing this
statement. Assets and liabilities acquired as part of a business combination are included in investing activities (net of cash acquired). Dividends paid to
ordinary shareholders are included in financing activities. Dividends received are classified as operating activities. Interest paid is also included in
operating activities.
82 Helneken N.V. Annual Report 2015