Notes to the Consolidated Financial Statements (continued)
(c) Non-derivative financial instruments
Report of the
Report of the
Annual Report 2016
Non-derivative financial instruments comprise investments in equity and debt securities, trade and other receivables, cash and cash equivalents,
loans and borrowings, and trade and other payables.
Non-derivative financial instruments are recognised initially at fair value plus, for instruments not at fair value through profit or loss, any directly
attributable transaction costs. Subsequent to initial recognition, non-derivative financial instruments are measured as described below.
If HEINEKEN has a legal right to offset financial assets with financial liabilities and if HEINEKEN intends either to settle on a net basis or to realise
the asset and settle the liability simultaneously, financial assets and liabilities are presented in the statement of financial position as a net amount.
The right of set-off is available today and not contingent on a future event and it is also legally enforceable for all counterparties in a normal course
of business, as well as in the event of default, insolvency or bankruptcy.
Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts and commercial papers form an integral part of HEINEKEN's
cash management and are included as a component of cash and cash equivalents for the purpose of the statement of cash flows.
Accounting policies for interest income, interest expenses and other net finance income and expenses are discussed in note 3(r).
(ii) Held-to-maturity investments
If HEINEKEN has the positive intent and ability to hold debt securities to maturity, they are classified as held-to-maturity. Debt securities are loans
and long-term receivables and are measured at amortised cost using the effective interest method, less any impairment losses. Investments held-to-
maturity are recognised or derecognised on the day they are transferred to or by HEINEKEN.
(iii) Available-for-sale investments
HEINEKEN's investments in equity securities and certain debt securities are classified as available-for-sale. Subsequent to initial recognition, they are
measured at fair value and changes therein - other than impairment losses (see note 3i(i)) and foreign currency differences on available-for-sale
monetary items (see note 3b(i)) - are recognised in other comprehensive income and presented within equity in the fair value reserve. When these
investments are derecognised, the relevant cumulative gain or loss in the fair value reserve is transferred to profit or loss.
Where these investments are interest-bearing, interest calculated using the effective interest method is recognised in profit or loss. Available-for-sale
investments are recognised or derecognised by HEINEKEN on the date it commits to purchase or sell the investments.
Other non-derivative financial instruments are measured at amortised cost using the effective interest method, less any impairment losses.