AB InBev Financial Results
Financial Reporting in hyperinflationary economies
In May 2018, the Argentinean peso underwent a severe devaluation, causing Argentina's three-year cumulative inflation to
exceed 100% and thus, triggering the requirement to transition to hyperinflation accounting as of 2018, as prescribed by IAS
29 Financial Reporting in Hyperinflationary Economies.
Under IAS 29, non-monetary assets and liabilities stated at historical cost, equity and income statements of subsidiaries
operating in hyperinflationary economies are restated for changes in the general purchasing power of the local currency,
applying a general price index. These re-measured accounts are used for conversion into US dollar at the period closing
exchange rate. As a result, the statement of financial position and net results of subsidiaries operating in hyperinflation
economies are stated in terms of the measuring unit current at the end of the reporting period.
The 2022 results, restated for purchasing power, were translated at the December 2022 closing rate of 177.131872
Argentinean pesos per US dollar (2021 results at 102.749214 Argentinean pesos per US dollar).
Exchange rates
The most important exchange rates that have been used in preparing the financial statements are:
1 US dollar equals:
Argentinean peso
Brazilian real
Canadian dollar
Colombian peso
Chinese yuan
Euro
Mexican peso
Pound sterling
Peruvian nuevo sol
South Korean won
South African rand
(F) INTANGIBLE ASSETS
Research and development
Closing rate
Average rate
31 December 2022
31 December 2021
31 December 2022
31 December 2021
177.131872
5.217705
1.353834
4 807.99
6.898736
0.937559
19.361452
0.831548
3.820004
102.749214
5.580497
1.270792
3 977.14
6.352382
0.882924
20.583378
0.741903
3.976006
5.164428
1.297354
4 211.36
6.661729
0.951768
20.123646
0.811905
3.845294
5.368651
1.249693
3 741.19
6.456753
0.841767
20.339905
0.725564
1 260.16
16.968472
1 188.32
15.947907
1 286.17
16.392270
3.877055
1 139.06
14.873785
Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and
understanding, is recognized in the income statement as an expense as incurred.
Expenditure on development activities, whereby research findings are applied to a plan or design for the production of new
or substantially improved products and processes, is capitalized if the product or process is technically and commercially
feasible, future economic benefits are probable, and the company has sufficient resources to complete development. The
expenditure capitalized includes the cost of materials, direct labor and an appropriate proportion of overheads. Other
development expenditure is recognized in the income statement as an expense as incurred. Capitalized development
expenditure is stated at cost less accumulated amortization (see below) and impairment losses (refer to accounting policy
N).
Amortization related to research and development intangible assets is included within the cost of sales if production related
and in sales and marketing if related to commercial activities.
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets are capitalized as part
of the cost of such assets.
Supply and distribution rights
A supply right is the right for AB InBev to supply a customer and the commitment by the customer to purchase from AB
InBev. A distribution right is the right to sell specified products in a certain territory. Acquired distribution rights are measured
initially at cost or fair value when obtained through a business combination. Amortization related to supply and distribution
rights is included within sales and marketing expenses.
Brands
If part of the consideration paid in a business combination relates to trademarks, trade names, formulas, recipes or
technological expertise these intangible assets are considered as a group of complementary assets that is referred to as a
brand for which one fair value is determined. Expenditure on internally generated brands is expensed as incurred.
35View entire presentation