In addition to the EUR 100 in adjustments described above, net income for fiscal 2001 and fiscal 2000 decreased by
EUR 215 and EUR 103, respectively due to the intentional and unintentional misinterpretation of Dutch GAAP and
US GAAP resulting in the inappropriate recognition of vendor allowances before they were earned.
As a result shareholders' equity as of December 30, 2001 decreased by EUR 418. The impact on the consolidated
statement of operations for fiscal 2001 and 2000 is summarized in the following table:
Impact on consolidated statement of operations for fiscal 2001 and 2000 2001 2000
Net sales (80) (44)
Cost of sales (214) (104)
Selling, general and administrative expenses (2)
Tax effect 118 56
Share in income (loss) of joint ventures and equity investees (37) (11)
Net impact of vendor allowance adjustments on net income (215) (103)
(d) Acquisition Accounting
In connection with the acquisitions of Superdiplo and the Company's interest in ICA in December 2000 and April 2000,
respectively, Ahold did not properly allocate purchase consideration to certain acquired real estate properties at the
respective acquisition dates. The restated financial position and results for fiscal 2001 and 2000 reflect adjustments
to record such assets at their fair values at the acquisition date and the subsequent depreciation thereof. In certain
instances, such adjustments to the fair values of these acquired assets affected the amounts of gains that the Company
recognized on subsequent sales of these acquired assets and real estate properties, which have been adjusted accordingly.
Ahold has recorded adjustments related to a decrease to the fair value of acquired real estate property at Superdiplo and
an increase to the fair value of acquired real estate property at ICA. Since certain of these properties were subsequently
sold, the gains recognized on the sale of these properties were decreased accordingly in fiscal 2001 and 2000, respectively.
During fiscal 2001, the Company partially applied the guidance set forth in RJ 252 "Provisions", by applying it only
prospectively for acquisitions after January 1, 2001. For more information, see Note 2 under "Restructuring provisions".
Furthermore, various errors were made in the calculations of the restructuring reserves, which have been adjusted.
In connection with several of the Company's acquisitions in fiscal 2001, the Company did not allocate purchase
consideration to certain identifiable intangible assets upon acquisition. The restated financial position and results for
fiscal 2001 reflect adjustments to record these acquired intangible assets at their fair values at the respective dates of
their acquisition and a corresponding reduction of goodwill.
In connection with Ahold's acquisition of Stop Shop, the Company recognized certain pre-acquisition income tax
contingency reserves and valuation allowances against deferred tax assets in the acquisition balance sheet. As a result of
the completion of the Internal Revenue Service review in fiscal 2001, reserves and allowances should have been reversed
with a corresponding decrease in goodwill. As the purchase price adjustment was not made in fiscal 2001, the Company
increased shareholders' equity as of December 30, 2001.
As a result of the aforementioned adjustments, shareholders' equity as of December 30, 2001 increased by EUR 71 and
net income decreased by EUR 36, for fiscal 2001 and EUR 8, for fiscal 2000.
(e) Reserves, allowances and provisions
Prior to fiscal 2002, the Company recorded certain reserves, allowances and provisions related to income taxes, pensions
and restructuring expenses. The Company subsequently determined that these reserves, allowances and provisions, and
releases thereof, should not have been recorded under Dutch GAAP, since the documentation available was not adequate
to support the amounts recorded, or the reserves, allowances and provisions were of a non-specific nature. In addition
certain pension and early retirement plans had not been accounted for as defined benefit plans and the charges and
accruals related to certain health and welfare plans were not calculated appropriately prior to 2002.
As a result of these adjustments, shareholders' equity as of December 30, 2001 decreased by EUR 105 and net income
decreased by EUR 33, for fiscal 2001 and EUR 38, for fiscal 2000.
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