g)@
Notes to the Consolidated Financial Statements
1. Reporting entity
2. Basis of preparation
3. Significant events in the period and accounting estimates and judgements
(a) Impact of COVID-19 on the financial statements
(b) Significant accounting estimates and judgements
1 Heineken N.V. Report of the Report of the Financial Sustainability Other
Annual Report 2020 Introduction Executive Board Supervisory Board Statements Review Information
Heineken N.V. (the 'Company') is a public company domiciled in the Netherlands, with its head office in
Amsterdam. The consolidated financial statements of the Company as at 31 December 2020 comprise the
Company, its subsidiaries (together referred to as 'HEINEKEN') and HElNEKEN's interests in joint ventures
and associates. The Company is registered in the Trade Register of Amsterdam No. 33011433.
HEINEKEN is primarily involved in the brewing and selling of beer and cider. Led by the Heineken® brand,
HEINEKEN has a portfolio of more than 300 international, regional, local and speciality beers and ciders.
The consolidated financial statements are:
- Prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the
European Union (EU) and comply with the financial reporting requirements included in Part 9 of Book 2 of
the Dutch Civil Code. All standards and interpretations issued by the International Accounting Standards
Board (lASB) and the International Financial Reporting Interpretations Committee (IFRIC) effective year-
end 2020 have been adopted by the EU. Consequently, the accounting policies applied by the Company also
comply fully with IFRS as issued by the lASB.
- Prepared by the Executive Board of the Company and authorised for issue on 9 February 2021 and will be
submitted for adoption to the Annual General Meeting of Shareholders on 22 April 2021.
- Prepared on the historical cost basis unless otherwise indicated.
- Presented in Euro, which is the Company's functional currency.
- Rounded to the nearest million unless stated otherwise.
Since the end of the last annual reporting period, the COVID-19 outbreak has evolved into a pandemic that
has far reaching impact on HElNEKEN's people and business. Containment measures such as restrictions
of movement for populations and outlet closures, sometimes combined with the mandatory lockdown of
production facilities presented key challenges to the execution of HElNEKEN's strategy, and materially
affected performance. The reported net loss for the year ending 31 December 2020 was €88 million
(2019: €2,374 million, profit). The impact from lower volume, adverse product and channel mix and
incremental expenses driven by the pandemic, including credit losses and impairments on property, plant
and equipment and intangible assets, was partially offset through continued cost mitigation.
Since 31 December 2019, many currencies have devalued significantly versus the Euro. Primarily the
devaluation of the Mexican Peso and Brazilian Real impacted the Euro value of HElNEKEN's fixed assets
and equity. Currency translations also had a negative impact on HElNEKEN's consolidated statement of
comprehensive income.
ln various countries, HElNEKEN received government support that included, for example, compensation
for personnel expenses and delayed payments for value-added tax. As at 31 December 2020, government
support measures resulted in a reduction of operating expenses of €53 million and deferred tax payments
of €98 million, which had a cumulative positive impact on cash flow of €151 million.
During its financial reporting process, HElNEKEN assessed the impact of COVlD-19 on its financial estimates
and judgements. The impact of COVlD-19 on financial estimates and judgements is mainly reflected in
impairment of financial and non-financial assets, and other financial instrument disclosures (including
credit management). All significant estimates and judgements are disclosed in the notes to the consolidated
financial statements (if applicable). Notes containing the most significant estimates and judgements are
referred to in note 3(b).
ln preparing these consolidated financial statements, management is required to make estimates and
judgements that affect the application of accounting policies and the reported amounts of assets and
liabilities, income and expenses.
The application of accounting policies requires judgements that impact the amounts recognised.
Additionally, amounts recognised are based on factors that are by default associated with
uncertainty. Therefore actual results may differ from estimates.
