Intangible fixed assets
Goodwill paid upon the acquisition of subsidiaries is charged directly to stockholders' equity.
The capitalized intangible fixed assets primarily represents the discounted value of the difference between the fair
rental value of comparable stores and the rentals actually due at the time of acquisition of group companies or
takeover of leases. Intangible fixed assets are amortized over the remaining life of the lease agreements according to
the straight-line method.
Capitalized lease commitments
This refers to the discounted value of future payments due under capitalized real estate leases. The majority of
capitalized lease commitments relate almost entirely to real estate in the United States.
Deferred income taxes
The provision for deferred taxes refers to the deferred net tax liabilities arising from the temporary difference
between financial and tax valuations of assets and liabilities. Deferred tax liabilities are based on the tax rates
prevailing at the end of the fiscal year. The balance of receivables and liabilities is stated at face value.
Statement of General
earnings Income and expenses are recorded in the year to which they pertain.
Net sales
This represents sales to third parties, excluding value added tax and sales tax.
Cost of sales
This includes the historic or manufacturing costs of the products sold, as well as the costs of purchasing, storing
and transporting.
Selling expenses
This consists of costs incurred in connection with selling and promotional activities.
General and administrative expenses
This includes all other costs not included in cost of sales or selling expenses.
Income from unconsolidated subsidiaries and affiliates
This represents Ahold's share in the results of the unconsolidated subsidiaries and affiliates, stated on the balance
sheet at net asset value.
The dividends received or receivable with respect to the other unconsolidated subsidiaries and affiliates are
included under this heading.
Income taxes
This represents current and deferred taxes based on earnings before income taxes as reported in the consolidated
statements of earnings.
Minority interests
This represents the share of minority interest stockholders in the net earnings of consolidated subsidiaries.
Annual Report 1995 Royal Ahold 43
