Notes: 31
178
Ahold Annual Report 2003
Financial Statements
5. Impairment on assets held for sale
As described in Note 2, when the Company has approved and announced its plan for discontinuance of a component,
the assets attributable to that component should be analyzed for impairment. Under Dutch GAAP this impairment
analysis compares the estimated net selling price against the carrying value of the assets, excluding the cumulative
currency translation adjustments related to the net assets, which had been recorded in shareholders' equity.
Under US GAAP, if the Company has a current expectation that, more likely than not, an asset (or asset group)
will be sold before the end of its estimated useful life and the assets qualify as held for sale, an impairment analysis
should be performed. This impairment analysis compares the estimated net selling price against the carrying value
of the net assets, including the cumulative currency translation adjustments related to the assets, which had been
recorded in shareholders' equity.
Under US GAAP, the Company recorded an impairment of EUR 506 with respect to the businesses that qualify
as assets held for sale due to a higher carrying value under US GAAP as compared to Dutch GAAP. Under US
GAAP the carrying value includes the unrealized cumulative translation adjustment of EUR 582 in the impairment
calculation.
6. Restructuring provisions
Under Dutch GAAP, through December 31, 2000, the Company recorded provisions for closed and divested facilities
("exit costs") and severance and other personnel costs (all costs collectively, "Restructuring Costs") when it entered into
plans for store and distribution center closures or sales, as described in Note 2. Effective January 1, 2001, restructuring
provisions are recorded for expected costs of planned reorganizations only if certain specified criteria are met.
Under US GAAP, through December 31, 2002, the criteria that had to be met in order to record a restructuring
provision, including a requirement to communicate terms of a restructuring plan to employees prior to recognition of
the related provision, were defined in EITF 94-3 "Liability Recognition for Certain Employee Termination Benefits and
Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring)" ("EITF 94-3") and EITF 95-3
"Recognition of Liabilities in Connection with a Purchase Business Combination" ("EITF 95-3") and further
discussed in SEC Staff Accounting Bulletin No. 100 "Restructuring and Impairment Charges" ("SAB 100").
As of January 1, 2003, Ahold adopts SFAS No. 146, "Accounting for Costs related to Exit or Disposal Activities"
("SFAS No. 146"). SFAS No. 146 changed the criteria for recording a restructuring provision to consider future
services required to be rendered to receive the one-time benefit. SFAS No. 146 also changed the criteria related to
recognition of costs associated with the termination of contracts to include a distinction between early termination
costs and continuing costs to be incurred without economic benefit. Application of these provisions can result in
differences in both the timing and amount of restructuring charges recognized under US GAAP as compared to
Dutch GAAP.
The Company has, under Dutch GAAP, incurred restructuring provisions as a result of both restructuring
of operations and also as a direct result of certain acquisitions.
In 2003, under Dutch GAAP, the Company incurred provisions for restructuring plans of EUR 26, mainly
relating to Albert Heijn and Deli XL. Under US GAAP restructuring charges amounting to EUR 14 were not
recognized in income due to timing differences for the recognition of restructuring costs, including costs associated
with the termination of contracts, of which EUR 8 related to Spain, EUR 7 related to Albert Heijn, EUR (2) related
to U.S. Foodservice and EUR 1 related to various other entities.
In 2002, under Dutch GAAP, the Company incurred provisions for restructuring plans of EUR 42, mainly
relating to USF and Albert Heijn. Under US GAAP additional restructuring charges were recognized in income
amounting to EUR 26, relating to timing differences for the recognition of restructuring costs, including costs
associated with the termination of contracts, of which EUR 19 related to USF and EUR 7 to various other entities.
In 2001, the Company incurred provisions for the acquisition of Alliant in November 2001. The main feature
of the restructuring plan for this acquisition related to the integration of USF's operations and those of Alliant, and
caused the Company to recognize a provision for restructuring of its USF operations. The expected total provisions
under Dutch GAAP of EUR 141 included EUR 111 costs provided in December 2001 for the integration of USF and
Alliant post-acquisition. Under US GAAP, at December 30, 2001, the Company did not meet the notification criteria
for recognizing certain restructuring costs including EUR 31 for the acquisition and integration of Alliant. In addition,
provisions of EUR 2 for other entities were not recognized in 2001 under US GAAP.
