tiï O A
Notes to the Consolidated Financial Statements (continued)
(b) Foreign currency
(c) Cash flow statement
(d) Offsetting financial instruments
Introduction Report of the Executive Board Report of the Supervisory Board
Foreign currency transactions
Transactions in foreign currencies are translated to the respective functional currencies of HEINEKEN
entities using the exchange rates at transaction date. Receivables, payables and other monetary assets
and liabilities denominated in foreign currencies are retranslated to the functional currency using the
exchange rates at the balance sheet date. Resulting foreign currency differences are recognised in the
income statement, except for foreign currency differences arising on retranslation of Fair Value through
Other Comprehensive Income (FVOCI) investments and financial liabilities designated as a hedge of
a net investment, which are recognised in other comprehensive income.
Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are
retranslated to the functional currency at the exchange rate at the date that the fair value was determined.
Non-monetary items in a foreign currency that are measured at cost are translated into the functional
currency at the exchange rate at transaction date.
Foreign operations
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on
acquisition, and of intercompany loans with a permanent nature (quasi-equity) are translated to Euro at
exchange rates at the reporting date. The income and expenses of foreign operations are translated to
Euro at exchange rates approximating to the exchange rates ruling at the dates of the transactions, except
for foreign operations in hyperinflationary economies. In 2018 HEINEKEN did not have any significant
foreign operations in hyperinflationary economies.
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.
The cumulative amount in the translation reserve is (either fully or partly) reclassified to the income
statement upon disposal (either fully or partly) or liquidation.
Financial Statements
Sustainability Review
Heineken N.V. Annual Report 2018^ 70
Other Information
Exchange rates of key currencies
The following exchange rates, for the most important countries in which HEINEKEN has operations, were
used while preparing these consolidated financial statements:
Year-end
Year-end
Average
Average
In
2018
2017
2018
2017
Brazilian Real (BRL)
0.2250
0.2517
(10.6)
0.2322
0.2774
(16.3)
Great Britain Pound (GBP)
1.1179
1.1271
(0.8)
1.1303
1.1410
(0.9)
Mexican Peso (MXN)
0.0446
0.0425
4.9
0.0440
0.0469
(6.2)
Nigerian Naira (NGN)
0.0024
0.0025
(4.0)
0.0024
0.0027
(11.1)
Polish Zloty (PLN)
0.2327
0.2398
(3.0)
0.2347
0.2349
(0.1)
Russian Ruble (RUB)
0.0125
0.0144
(13.2)
0.0135
0.0152
(11.2)
Singapore Dollar (SGD)
0.6414
0.6241
2.8
0.6279
0.6417
(2.2)
United States Dollar (USD)
0.8734
0.8338
4.7
0.8466
0.8854
(4.4)
Vietnamese Dollar in 1,000 (VND)
0.0376
0.0367
2.5
0.0368
0.0389
(5.4)
The cash flow statement is prepared using the indirect method. Assets and liabilities acquired as part of a
business combination are included in investing activities (net of cash acquired). Dividends paid to shareholders
are included in financing activities. Dividends received are classified as operating activities, as well as interest paid.
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.
