70
Notes to the Consolidated Financial Statements (continued)
3. Significant accounting policies (continued)
(b) Foreign currency (continued)
Heineken NV.
Report of the
Report of the
Financial
Sustainability
Other
Annual Report 2016
Introduction
Executive Board
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Information
(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
Hyperinflationary Economies. 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. However, 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 HEINEKEN 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 HEINEKEN 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.
The following exchange rates, for the most important countries in which HEINEKEN has operations, were used while preparing these consolidated
financial statements:
In EUR
Year-end
2016
Year-end
2015
Average
2016
Average
2015
Brazilian real (BRL)
0.2915
0.2319
0.2592
0.2705
Great Britain pound (GBP)
1.1680
1.3625
1.2209
1.3772
Mexican peso (MXN)
0.0463
0.0530
0.0484
0.0568
Nigerian naira (NGN)
0.0030
0.0046
0.0036
0.0047
Polish zloty (PLN)
0.2260
0.2357
0.2292
0.2390
Russian ruble (RUB)
0.0156
0.0124
0.0135
0.0147
Singapore dollar (SGD)
0.6564
0.6486
0.6547
0.6556
United States dollar (USD)
0.9487
0.9185
0.9036
0.9011
Vietnamese dollar in 1,000 (VND)
0.0417
0.0409
0.0404
0.0411
(iii) Hedge of net investments in foreign operations
Foreign currency differences arising on the translation of a financial liability designated as a hedge of a net investment in a foreign operation are
recognised in other comprehensive income to the extent that the hedge is effective and regardless of whether the net investment is held directly or
through an intermediate parent. These differences are presented within equity in the translation reserve. To the extent that the hedge is ineffective,
such differences are recognised in profit or loss. When the hedged part of a net investment is disposed of, the relevant amount in the translation
reserve is transferred to profit or loss as part of the profit or loss on disposal.