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Notes to the Consolidated Financial Statements (continued)
11 Financing and capital structure
11.1 Net finance income and expense
11.2 Cash and cash equivalents
Introduction Report of the Executive Board Report of the Supervisory Board
HEINEKEN's investments in associates and joint ventures are accounted for using the equity method of
accounting, meaning they are initially recognised at cost. The consolidated financial statements include
HEINEKEN's share of the net profit or loss of the associates and JVs whereby the result is determined using
the accounting policies of HEINEKEN.
When HEINEKEN's share of losses exceeds the carrying amount of the associate or joint venture, the
carrying amount is reduced to nil and recognition of further losses is discontinued except to the extent that
HEINEKEN has an obligation or has made a payment on behalf of the associate or joint venture.
Interest expenses are mainly related to interest charges over the outstanding bonds and bank loans (refer
to note 11.3). Other net finance income and expenses comprises dividend income, fair value changes of
financial assets and liabilities measured at fair value, transactional foreign exchange gains and losses (on
net basis), unwinding of discount on provisions and interest on the net defined benefit obligation.
In millions of
Dividend income from fair value through OCI investments2
Net change in fair value of derivatives
Net foreign exchange gain/floss)1
Unwinding discount on provisions
Interest on the net defined benefit obligation
Other net finance income/(expenses)
Net finance income/(expenses)
1 Transactional foreign exchange effects of working capital and foreign currency denominated loans, the latter being offset by net
change in fair value of derivatives.
2 In 2017 these investments were classified as available-for-sale investments.
Heineken N.V. Annual Report 2018
Interest income and expenses are recognised as they accrue, using the effective interest method.
Dividend income is recognised in the income statement on the date that HEINEKEN's right to receive
payment is established, which is the ex-dividend date in the case of quoted securities.
Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts and commercial
paper 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.
In millions of
Cash and cash equivalents
Bank overdrafts and commercial paper
Cash and cash equivalents in the statement of cash flows
The following table presents the recognised 'Cash and cash equivalents' and 'Bank overdrafts and
commercial paper' and the impact of netting on the gross amounts. The column 'Net amount' shows the
impact on HEINEKEN's balance sheet if all amounts subject to legal offset rights had been netted.
In millions of
offset in the
Balance as at
31 December 2018
Cash and cash
Bank overdrafts and