Annual Report 2001 - Carlsberg Group

74 Accounting Policies
Accounting Policies
The annual accounts have been prepared in
accordance with Danish accounting legislation
and current Danish accounting standards. The
accounting policies are unchanged from last year
although there are a few changes in the contents
of individual items due to the incorporation of inter
alia Orkla’s beverage activities.
Consolidation principles
The Group accounts of the Carlsberg Group
comprise the accounts of the Parent Company,
Carlsberg A/S, and its subsidiaries, i.e. companies
in which the Parent Company, directly or indirectly,
holds the majority of the voting rights or - in some
other way - has a controlling interest. Associated
companies, which by agreement are managed
jointly with one or more other companies are pro
rata consolidated with the proportionate share of
the individual items being incorporated. Other
associated companies are included in the accounts
at a proportionate share of their financial
results and equity.
The Group accounts are prepared on the basis
of the accounts of the Parent Company, its subsidiaries
and pro rata consolidated companies, by
combining items of a uniform nature and eliminating
intercompany sales, licences, interest, dividends,
profit and balances. Shareholdings in subsidiaries
and pro rata consolidated associated
companies are offset against a proportionate
share of the equity of the relevant companies,
stated in accordance with the accounting policies
of the Group.
Minority shareholders’ share of profit and equity
in subsidiaries is stated separately.
In the case of acquisition of new subsidiary and
associated companies as well as increases in
shareholdings therein, any excess of the cost
price over net assets stated in accordance with
Group accounting policies at the date of acquisi-
tion is, wherever possible, allocated to the assets
and liabilities of the individual companies. Any remaining
amount (Group goodwill) is taken directly
to equity. As a starting point, any negative difference
in value (reduction in value) is taken to equity.
To the extent that a negative difference in value
at the time of acquisition is attributable to expected
reductions in future operating results, the difference
in value is appropriated to other reserves
and used when the reductions are realised. In the
case of disposal of subsidiaries and associated
companies, the company’s results are included in
the Group’s profit and loss account until the date
of disposal. Any realised gains or losses compared
to the book value at the date of disposal are
recorded in the profit and loss account. Orkla’s
beverage activities are included at book value as
from 1 January 2001.
Foreign currencies
The accounts of foreign subsidiary and associated
companies are translated into Danish kroner at the
average exchange rates during the financial year
for income and expense items and at the exchange
rates ruling at the balance sheet date for
assets and liabilities.
Exchange gains and losses resulting from the
translation of the net assets of foreign companies
at the exchange rates ruling at the balance sheet
date are taken to equity.
Amounts receivable and payable in foreign currencies
are translated into Danish kroner at the
exchange rates ruling at the balance sheet date.
Hedging arrangements are assessed separately.
Realised and unrealised exchange gains and losses
are recorded in the profit and loss account. Exchange
gains or losses after tax on liabilities to
hedge investments in subsidiary or associated
companies are taken directly to equity.