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Notes to the Consolidated Financial Statements (continued)
3. Significant accounting policies (continued)
(j) Assets or disposal groups classified as held for sale
(k) Employee benefits
Report of the
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Information
Heineken N.V. Annual Report 2017
An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was recognised. For financial
assets measured at amortised cost and available-for-sale financial assets that are debt securities, the reversal is recognised in profit or loss.
For available-for-sale financial assets that are equity securities, the reversal is recognised in other comprehensive income.
(ii) Non-financial assets
The carrying amounts of HEINEKEN's non-financial assets, other than inventories (referto accounting policy (h)) and deferred tax assets (refer
to accounting policy (s)),are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication
exists, the asset's recoverable amount is estimated. For goodwill and intangible assets that are not yet available for use, the recoverable amount
is estimated each year at the same time.
For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that
generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the cash-
generating unit,'CGU').
The recoverable amount of an asset or CGU is the higher of an asset's fair value less costs of disposal and value in use. In assessing value in use, the
estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time
value of money and the risks specific to the asset or CGU.
Forthe purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the acquirer's CGUs, or groups of CGUs
expected to benefit from the synergies of the combination. Each unit or group of units to which the goodwill is allocated represents the lowest level
within the entity at which the goodwill is monitored for internal management purposes. Goodwill is monitored on regional, sub-regional or country
level depending on the characteristics of the acquisition, the synergies to be achieved and the level of integration.
An impairment loss is recognised in profit or loss if the carrying amount of an asset or its CGU exceeds its recoverable amount. Impairment losses
recognised in respect of a CGU are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the
carrying amounts of the other assets in the unit (group of units) on a pro rata basis. An impairment loss in respect of goodwill is not reversed.
In respect of other assets, impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss
has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable
amount. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have
been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
Goodwill that forms part of the carrying amount of an investment in an associate and joint venture is not recognised separately, and therefore is
not tested for impairment separately Instead, the entire amount of the investment in an associate and joint venture is tested for impairment as a
single asset when there is objective evidence that the investment in an associate may be impaired.
Assets or disposal groups comprising assets and liabilities, that are expected to be recovered primarily through sale rather than through continuing
use are classified as held for sale. Immediately before classification as held for sale, the assets, or components of a disposal group, are measured at
the lower of their carrying amount and fair value less costs of disposal. Any impairment loss on a disposal group is first allocated to goodwill, and
then to remaining assets and liabilities on a pro rata basis, except that no loss is allocated to inventories, financial assets, deferred tax assets and
employee defined benefit plan assets, which continue to be measured in accordance with HEINEKEN's accounting policies. Impairment losses on
initial classification as held for sale and subsequent gains or losses on remeasurement are recognised in profit or loss. Gains are not recognised in
excess of any cumulative impairment loss.
Intangible assets and P, P E once classified as held for sale are not amortised or depreciated. In addition, equity accounting of equity-accounted
investees ceases once classified as held for sale.
(i) Defined contribution plans
A defined contribution plan is a post-employment benefit plan (pension plan) under which HEINEKEN pays fixed contributions into a separate
entity HEINEKEN has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all
employees the benefits relating to employee service in the current and prior periods.
Obligations for contributions to defined contribution pension plans are recognised as an employee benefit expense in profit or loss in the periods
during which services are rendered by employees. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction
in future payments is available. Contributions to a defined contribution plan that are due more than 12 months after the end of the period in
which the employee renders the service are discounted to their present value.
(ii) Defined benefit plans
A defined benefit plan is a post-employment benefit plan (pension plan) that is not a defined contribution plan. Typically, defined benefit plans
define an amount of pension benefit that an employee will receive on retirement, usually dependent on one or more factors such as age, years of
service and compensation.
