116770 Project Obelix Pt1.qxp - Carlsberg Group

Carlsberg Breweries GroupOther provisionsOther provisions are recognised when, as a result of events arising before or at the balance sheet date, theGroup has a legal or a constructive obligation and it is probable that there may be an outflow of resources embodyingeconomic benefits to settle the obligation. Other provisions are discounted if the effect is material to themeasurement of the liability. The Carlsberg Breweries Group’s average borrowing rate is used as the discountrate.Restructuring costs are recognised under liabilities when a detailed, formal restructuring plan has been announcedto the persons affected no later than at the balance sheet date. On acquisition of entities, restructuringprovisions in the acquiree are only included in goodwill when the acquiree has a restructuring liability at the acquisitiondate.A provision for onerous contracts is recognised when the expected benefits to be derived by the Group from acontract are lower than the unavoidable costs of meeting its obligations under the contract.When the Group has a legal obligation to dismantle or remove an asset or restore the site on which the asset islocated, a provision is recognised corresponding to the present value of expected future costs.Financial liabilitiesAmounts owed to credit institutions, bonds etc. are recognised at the date of borrowing at the net proceeds receivedless transaction costs paid. In subsequent periods, the financial liabilities are measured at amortised costusing the effective interest method. Accordingly, the difference between the proceeds and the nominal value isrecognised in the income statement under financial expenses over the term of the loan.Financial liabilities also include the capitalised residual obligation on finance leases, which is measured at amortisedcost.Other liabilities are measured at amortised cost.Deposits on returnable packagingThe refund obligation in respect of deposits on returnable packaging is stated on the basis of deposit price aswell as an estimate of the number of bottles, kegs, cans and crates in circulation.LeasesFor accounting purposes lease obligations are divided into finance and operating leases.Leases are classified as finance leases if they transfer substantially all the risks and rewards incident to ownershipto the lessee. All other leases are classified as operating leases.The accounting treatment of assets held under finance leases and lease obligations is described under Property,plant and equipment and Financial liabilities respectively.Operating lease payments are recognised in the income statement on a straight-line basis over the lease term.Deferred incomeDeferred income comprises payments received concerning income in subsequent years and is measured atcost.Assets held for saleAssets held for sale comprises non-current assets and disposal groups held for sale. Disposal groups are definedas a group of assets to be disposed of, by sale or otherwise, together as a group in a single transactionand those liabilities directly associated with the assets that will be transferred in the transaction.F-162