Notes to the Consolidated Financial Statements (continued)
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O Q,
Introduction Report of the Executive Board Report of the Supervisory Board
Movement in deferred tax balances during the year
Changes in Effect of Balance
Balance accounting movements 31
1 January policy Changes in in foreign Recognised Recognised December
In millions of
2018 (IFRS 9) consolidation exchange
in income
in equity
Transfers
2018
P,P&E
(449)
(1)
6
36
(2)
(410)
Intangible
assets
(1,292)
(7)
(22)
60
23
(1,238)
Investments
48
(10)
1
39
Inventories
22
1
5
2
30
Borrowings
4
17
(25)
18
(3)
11
Post-retirement
obligations
294
5
(75)
1
225
Provisions
101
(3)
20
1
119
Other items
85
(2)
1
(7)
14
(10)
81
Tax losses
carried forward
460
(19)
(34)
(12)
395
Net tax
assets/
(liabilities)
(727)
(2)
(8)
(19)
50
(43)
1
(748)
In millions of
Balance
1 January
2017
Changes in
consolidation
Effect of
movements
in foreign
exchange
Recognised
in income
Balance
Recognised 31 December
in equity Transfers 2017
P,P&E
(476)
(15)
36
2
4
(449)
Intangible assets
(1,346)
(201)
127
132
(4)
(1,292)
Investments
121
(8)
(65)
48
Inventories
26
(3)
4
(5)
22
Borrowings
(30)
21
24
(13)
2
4
Post-retirement
obligations
340
5
(8)
(33)
(9)
(1)
294
Provisions
80
2
(4)
18
5
101
Other items
233
24
(81)
(51)
(15)
(25)
85
Tax losses
carried forward
391
48
(16)
37
460
Net tax assets/
(liabilities)
(661)
(119)
70
44
(37)
(24)
(727)
Heineken N.V. Annual Report 2018! 10
Financial Statements
Sustainability Review
Other Information
Accounting estimates and judgements
The tax legislation in the countries in which HEINEKEN operates is often complex and subject to
interpretation. In determining the current and deferred income tax position, judgement is required.
New information may become available that causes HEINEKEN 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.
Accounting policies
Income tax comprises current and deferred tax. Current tax is the expected income tax payable or
receivable in respect of taxable income or loss for the year, using tax rates enacted or substantively enacted
at the balance sheet date, and any adjustment to income tax payable in respect of previous years.
Deferred tax is a tax payable or receivable in the future and is recognised in respect of temporary
differences between the carrying amounts of assets and liabilities for financial reporting purposes and
their tax bases. Deferred tax is not recognised on temporary differences related to:
- Initial recognition of assets or liabilities in a transaction that is not a business combination and that
affects neither accounting nor taxable profit or loss
- Investments in subsidiaries, associates and joint ventures to the extent that HEINEKEN is able to control
the timing of the reversal of the temporary differences and it is probable (>50% chance) that they will
not reverse in the foreseeable future
- Initial recognition of non-deductible goodwill
The amount of deferred tax provided is based on the expected manner of recovery or settlement of the
carrying amount of assets and liabilities, using tax rates (substantively) enacted, at year-end.
Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be
available against which they can be utilised.
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
Current and deferred tax are recognised in the income statement (refer to note 12.1), except when it
relates to a business combination or for items directly recognised in equity or other comprehensive income
(refer to note 12.3).
