00 Ahold ANNUAL REPORT 2002 171
BOARD GOVERNANCE HIGHLIGHTS OPERATING REVIEW FINANCIAL INVESTOR REL AT IONS
The effects of the application of US GAAP on consolidated shareholders' equity as of December 29, 2002 and December
30, 2001 are set out in the table below:
December 29,
2002
December 30,
2001
(as restated -
see Note 31.b)
Shareholders' equity in accordance with Dutch GAAP
2,609
5,496
Items increasing (decreasing) shareholders' equity:
Goodwill, net of accumulated amortization
(i)
7,866
8,572
Other intangible assets, net of accumulated amortization
(2)
737
889
Impairment of:
Goodwill and other intangible assets
(3)
(3,511)
(4)
Other long-lived assets
(4)
5
(5)
Restructuring provisions
(6)
12
42
Sale and leaseback of property
(7)
(210)
(190)
Derivative instruments
(8)
(352)
(165)
Valuation of ICA Put Option
(9)
(541)
(510)
Other
(10)
(20)
(7)
Income tax effects
(11)
195
(207)
Investments in joint ventures and equity investees, net of tax
(12)
1,878
1,818
Minority interest impact on reconciling items
(127)
(185)
Shareholders' equity in accordance with US GAAP
8,541
15,544
(1) Recognition and amortization of goodwill
Recognition and amortization of goodwill
Under Dutch GAAP, through November 2000, goodwill was charged directly to shareholders' equity upon acquisition. As
discussed in Note 2, effective December 1, 2000, the Company changed its accounting policy to capitalize and amortize
goodwill on a straight-line basis over a period not exceeding 20 years. This change in accounting policy was applied
prospectively for all business combinations completed after December 1, 2000.
Under US GAAP, for business combinations initiated through June 30, 2001, goodwill was capitalized and amortized on a
straight-line basis over a period not exceeding 40 years. In June 2001, the FASB issued SFAS No. 141, "Business
Combinations" ("SFAS No. 141"), which addresses the initial recognition and measurement of goodwill and other
intangible assets acquired in a business combination. Under US GAAP, the Company adopted SFAS No. 141 for business
combinations initiated after June 30, 2001. In June 2001, the FASB issued SFAS No. 142, "Goodwill and Other
Intangible Assets" ("SFAS No. 142"). SFAS No. 142 addresses the accounting for goodwill and other intangible assets
subsequent to a business acquisition. SFAS No. 142 requires that intangible assets with finite useful lives be amortized
over their estimated useful lives and that goodwill and other intangible assets with indefinite useful lives are not
amortized, but rather tested, at least annually, for impairment. For business combinations consummated after June 30,
2001, the provisions of SFAS No. 142 were applied from the date of acquisition. Effective December 31, 2001, the
provisions of SFAS No. 142 were applied to goodwill and other intangible assets acquired prior to June 30, 2001.
During fiscal 2001 and 2000, the Company recognized additional goodwill amortization under US GAAP of EUR 155 and
EUR 240, respectively, primarily related to acquisitions that were completed prior to the change in the Company's Dutch
GAAP accounting policy to capitalize goodwill effective December 1, 2000, which was partially offset by the impact of a
difference in the amortization period for goodwill under Dutch GAAP and US GAAP. During fiscal 2002, the Company
recognized EUR 253 less goodwill amortization under US GAAP since goodwill is no longer amortized under US GAAP,
after the adoption of SFAS No. 142, effective December 31, 2001.
Measurement date for acquisitions
Under Dutch GAAP as applicable in fiscal 2000 the measurement date used to determine the value of shares issued as
consideration in connection with a business acquisition is the date on which control of the net assets and operations of
the acquiree is effectively transferred to the acquirer. Under US GAAP, the measurement date used to determine the value
of shares is the date on which the significant terms are agreed upon and announced. As a result, a difference arose on the
valuation of the Ahold shares issued as consideration in connection with the acquisition of Superdiplo in December 2000.
Accordingly, goodwill recorded for this transaction was EUR 36 lower under US GAAP.
