Notes to the Consolidated Financial Statements (continued)
(0) Other income
(q) Government grants
(r) Interest income, interest expenses and other net finance income and expenses
Report of the
Report of the
Annual Report 2016
(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.
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.
(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.
(ii) Finance lease payments
Minimum lease payments under finance leases are apportioned between the finance expense and the reduction of the outstanding liability.
The finance expense is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance
of the liability. Contingent lease payments are accounted for by revising the minimum lease payments over the remaining term of the lease when
the lease adjustment is confirmed.
Government grants are recognised at their fair value when it is reasonably assured that HEINEKEN will comply with the conditions attaching to them
and the grants will be received.
Government grants relating to P, P E are deducted from the carrying amount of the asset.
Government grants relating to costs are deferred and recognised in profit or loss over the period necessary to match them with the costs that they
are intended to compensate.
Interest income and expenses are recognised as they accrue in profit or loss, using the effective interest method unless collectability is in doubt.
Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognised in profit or loss
using the effective interest method.
Other net finance income and expenses comprises dividend income, gains and losses on the disposal of available-for-sale investments, changes
in the fair value of investments designated at fair value through profit or loss and held for trading investments, changes in fair value of hedging
instruments that are recognised in profit or loss, unwinding of the discount on provisions, impairment losses recognised on investments and interest
on the net defined benefit obligation. Dividend income is recognised in the income statement on the date that HEINEKEN's right to receive payment
is established, which in the case of quoted securities is the ex-dividend date.
Foreign currency gains and losses are reported on a net basis in the other net finance income and expenses.