Entities which by agreement are managed jointly with one or more other parties (joint ventures) are consolidated proportionately, and the individual accounting entries are recognised in proportion to the ownership interest. 

The consolidated financial statements have been prepared as a consolidation of the financial statements of the Parent Company, subsidiaries and proportionately consolidated entities according to the Group’s accounting policies. On consolidation, intra-Group income and expenses, shareholdings, intra-Group balances and dividends, and realised and un- realised gains on intra-Group transactions are eliminated. Unrealised gains on transactions with associates and proportionately consoli- dated entities are eliminated in proportion to the Group’s ownership share of the entity. Unrealised losses are eliminated in the same way as unrealised gains to the extent that impairment has not taken place. 

Investments in subsidiaries and propor- tionately consolidated entities are set off against the proportionate share of the sub- sidiaries’ fair value of identifiable net assets, including recognised contingent liabilities, at the acquisition date. 

The accounting items of subsidiaries are included in full in the consolidated financial statements. Non-controlling interests’ share 

of the profit/loss for the year and of the eq- uity of subsidiaries is included in the Group’s profit/loss and equity respectively, but is disclosed separately. 

Entities acquired or formed during the year are recognised in the consolidated financial statements from the date of acquisition or formation. Entities which are disposed of or wound up are recognised in the consolidated income statement until the date of disposal or winding-up. The comparative figures are not restated for entities acquired, disposed of or wound up. 

## Foreign currency translation 

For each of the reporting entities in the Group, a functional currency is determined. The func- tional currency is the primary currency used for the reporting entity’s operations. Transac- tions denominated in currencies other than the functional currency are considered transactions denominated in foreign currencies. 

On initial recognition, transactions denomi- nated in foreign currencies are translated to the functional currency at the exchange rates at the transaction date. Foreign exchange differences arising between the exchange rates at the transaction date and at the date of payment are recognised in the income statement as financial income or financial expenses. 

Receivables, payables and other monetary items denominated in foreign currencies are translated at the exchange rates at the end of the reporting period. The difference between the exchange rates at the end of the reporting period and at the date at which the receivable or payable arose or the exchange rate in the latest consolidated financial statements is rec- ognised in the income statement as financial income or financial expenses. 

On recognition in the consolidated financial statements of entities with a functional currency other than the presentation cur- rency of Carlsberg A/S (DKK), the income statement and statement of cash flows are translated at the exchange rates at the transaction date, and the statement of financial position items are translated at the exchange rates at the end of the report- ing period. An average exchange rate for the month is used as the exchange rate at the transaction date to the extent that this does not significantly deviate from the ex- change rate at the transaction date. Foreign exchange differences arising on translation of the opening balance of equity of foreign entities at the exchange rates at the end of the reporting period and on translation of the income statement from the exchange rates at the transaction date to the ex- change rates at the end of the reporting period are recognised in other comprehen- 

sive income and attributed to a separate translation reserve in equity. 

Foreign exchange adjustment of balances with foreign entities which are considered part of the investment in the entity is recog- nised in the consolidated financial statements in other comprehensive income if the balance is denominated in the functional currency of the Parent Company or the foreign entity. Correspondingly, foreign exchange gains and losses on the part of loans and derivative financial instruments which is designated as hedges of investments in foreign entities with a functional currency other than that of Carlsberg A/S and which effectively hedge against corresponding foreign exchange gains and losses on the investment in the entity are also recognised in other comprehensive income and attributed to a separate transla- tion reserve in equity. 

On recognition in the consolidated financial statements of associates with a functional currency other than the presentation cur- rency of Carlsberg A/S, the share of profit/ loss and other comprehensive income for the year is translated at average exchange rates and the share of equity, including goodwill, is translated at the exchange rates at the end of the reporting period. Foreign exchange differences arising on the translation of the share of the opening balance of equity of 

