B. Restatements of US GAAP consolidated net income and shareholders' equity
00 Ahold ANNUAL REPORT 2002 179
BOARD GOVERNANCE HIGHLIGHTS OPERATING REVIEW FINANCIAL INVESTOR REL AT IONS
(11) Income tax effects of reconciling items
The accounting for deferred tax assets and liabilities under Dutch GAAP and US GAAP are similar, except that under
Dutch GAAP a deferred tax asset is recorded where it is probable that the benefit will be realized. Under US GAAP the
asset is recognized to the extent it is more likely than not that the benefit will be realized. Under US GAAP, the Company's
deferred tax valuation allowance was EUR 9 higher than under Dutch GAAP, as the realization of the related deferred tax
assets was deemed to be more likely than not rather than probable as required under Dutch GAAP. In addition there are
tax effects of reconciling items between Dutch GAAP and US GAAP.
(12) Share in income (loss) of joint ventures and equity investees, net of tax
Ahold's joint ventures and equity investees report their income (loss) under Dutch GAAP and US GAAP. Ahold's share in
net income (loss) of joint ventures and equity investees under Dutch GAAP is recognized in the consolidated statements of
operations. This adjustment reflects the difference between Ahold's share in net income (loss) of joint ventures and equity
investees determined under Dutch GAAP and its share in net income (loss) of joint ventures and equity investees
determined under US GAAP.
In fiscal 2000 the difference mainly relates to the amortization of goodwill relating to joint ventures and equity investees
under US GAAP that was charged directly to shareholders' equity under Dutch GAAP.
In fiscal 2001, the principal difference relates to a goodwill impairment loss of EUR 505 recognized under US GAAP in
fiscal 2001, relating to DAIH. Under Dutch GAAP, this impairment loss was not recognized because the related goodwill
was charged directly to equity upon acquisition (see Note 31(a)1).
SFAS No. 142 requires that goodwill arising on the acquisition of investments in joint ventures and equity investees no
longer be amortized effective December 31, 2001. However, this goodwill continues to be evaluated for impairment in
accordance with APB Opinion No. 18 as a whole with the investment balance, as applicable, recording an impairment
charge if the total decline in value is judged to be other than temporary, which is also the impairment policy under Dutch
GAAP. The goodwill balances discussed in Note 16 are classified within the "Other" balance in the US GAAP condensed
consolidated balance sheets presented below. The difference between Dutch GAAP and US GAAP in fiscal 2002 primarily
relates to the impairment of goodwill under Dutch GAAP related to DAIH. While under US GAAP, in fiscal 2002, the
Company recognized a transitional goodwill impairment loss of EUR 93 related to certain equity method investees,
representing the Company's proportionate interest in transitional impairment losses recognized by the investees, as
a cumulative effect of a change in accounting principle. The impairment loss related principally to DAIH.
(13) Dividend on cumulative preferred financing shares
Under Dutch GAAP, dividends on the Company's cumulative preferred financing shares are considered to be a distribution
of profits and are, therefore, charged directly to shareholders' equity (retained earnings). Under US GAAP, dividends on the
Company's cumulative preferred financing shares are reflected as charges to the consolidated statements of operations.
Under both Dutch GAAP and US GAAP, dividends on the Company's cumulative preferred financing shares are taken into
account in calculating net income (loss) per common share.
In addition to the restatements to its Dutch GAAP financial statements described in Note 3, the Company also made
certain adjustments to its previously-reported consolidated shareholders' equity as of December 30, 2001 and
consolidated net income (loss) for fiscal 2001 and 2000, that only had an impact on the Company's previously reported
US GAAP amounts. The total impact of these adjustments on consolidated shareholders' equity as of December 30, 2001
and consolidated net income (loss) for fiscal 2001 and 2000 ended under US GAAP are presented below. Restatements of
EUR 77 relating to periods prior to fiscal 2000 were recorded as a reduction of opening retained earnings as of January 2,
2000:
