Financial statements - Notes to the consolidated financial statements
Note 37
-
1 Goodwill
The effect of the application of US GAAP on shareholders' equity as of January 1, 2006 and January 2, 2005 is set out
in the table below:
Note
January 1,
2006
January 2,
2005 (as
restated. See
Note 37 d.)
Group equity in accordance with IFRS
4,715
3,952
Minority interests in accordance with IFRS
(64)
(64)
Equity attributable to common shareholders of Ahold in accordance with IFRS
4,651
3,888
Items increasing (decreasing) shareholders' equity:
Goodwill
1
3,623
3,214
Other intangible assets, net of accumulated amortization
2
503
456
Other non-current assets
3
47
45
Provisions
4
4
2
Real estate
5
(232)
(238)
Derivative instruments and loans
6
50
27
Pensions and other post-employment benefits
7
209
65
Non-current assets held for sale and discontinued operations
9
(135)
Investments in joint ventures and associates, net of tax
10
1,370
1,529
Other
11
(15)
(5)
Income taxes
12
(106)
(21)
Minority interest, net of tax
13
(54)
(79)
Shareholders' equity in accordance with US GAAP
10,050
8,748
Recognition and measurement
Pursuant to the exemption available under IFRS 1, the Company elected not to restate the carrying amount of goodwill arising
from business combinations and investments in joint ventures and associates completed prior to December 29, 2003 from its
previous balance under Dutch GAAP.
Under Dutch GAAP goodwill was charged directly to shareholders' equity upon acquisition until November 30, 2000. 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 with respect to all business combinations completed after December 1, 2000.
Under US GAAP, goodwill was capitalized and amortized on a straight-line basis over a period not exceeding 40 years with
respect to business combinations completed prior to June 30, 2001. The Company adopted SFAS No. 141 "Business
Combinations" ("SFAS No. 141") and SFAS No. 142 "Goodwill and Other Intangible Assets" ("SFAS No. 142") for business
combinations initiated after June 30, 2001. Effective 2002, the provisions of SFAS No. 142 were applied to goodwill and
other intangible assets acquired prior to June 30, 2001. Since the adoption of SFAS No. 141 and SFAS No. 142 goodwill is
no longer amortized, but rather tested, at least annually, for impairment. Subsequent to the IFRS transition date, goodwill is no
longer amortized but rather tested for impairment under IFRS and US GAAP. The impairment testing methodology under IFRS
differs in certain aspects from the impairment testing methodology under US GAAP, as described under 'Impairment'.
188
