Note 37
Status 1
expense was recognized under US GAAP for this plan. Consequently, the IFRS share-based compensation expenses of EUR 24
and EUR 19 recognized in 2005 and 2004, respectively, have been excluded from US GAAP net income.
9 Non-current assets held for sale and discontinued operations
Classification as held for sale and discontinued operations
The criteria for recognizing non-current assets or disposal groups as assets held for sale are similar under IFRS and US GAAP.
However certain divestments and planned divestments meet the definition of a discontinued operation under US GAAP, but not
under IFRS. Under IFRS, the divestment must represent a separate major line of business or geographical area of operations,
whereas under US GAAP, a component of an entity can be classified as a discontinued operation. In 2005 the following
divestments or intended divestments qualified as discontinued operations under US GAAP, but not under IFRS:
Entity (component)
1 Arena 1
Classified
as of
Wilson Farms and SugarCreek
Giant-Carlisle/Tops Arena
Divested 2005
Q4 2003
Williams Humbert
Other Retail Arena
Divested 2005
Q4 2004
Polish Hypermarkets
Central Europe Arena
Divested 2005
Q4 2004
Tops Adirondacks
Giant-Carlisle/Tops Arena
Held for sale
Q1 2005
Sofco
U.S. Foodservice
Divested 2005
Q2 2005
Shopping centers Poland
Central Europe Arena
Held for sale
Q2 2005
Furthermore, equity investees such as investments in joint ventures and associates cannot qualify as assets held for sale or
discontinued operations under US GAAP. Under IFRS, investments in joint ventures and associates accounted for under the
equity method can qualify as assets held for sale and discontinued operations. In 2005 Ahold completed the sale of its 50%
interest in Paiz Ahold to Wal-Mart Stores Inc. Paiz Ahold is accounted for as a discontinued operation under IFRS in 2005
(with retrospective reclassification of results of operations in the comparative figures), but not under US GAAP.
The reclassification of line items in the consolidated statements of operations related to discontinued operations is
retrospective under both IFRS and US GAAP. Until 2004, Ahold reclassified non-current assets (and disposal groups) held for
sale retrospectively under US GAAP, as permitted under SFAS No. 144 "Accounting for the impairment or disposal of long-
lived assets." Since IFRS does not permit such retrospective reclassification of non-current assets (and disposal groups) held
for sale, the Company decided to change its accounting policy in this respect as from 2005. As a result, non-current assets
(and disposal groups) held for sale are reclassified prospectively as from 2005 under US GAAP.
Impairment of assets held for sale
Differences in the impairment of assets held for sale result from differences in the carrying value of these assets between IFRS
and US GAAP. The majority of these differences are related to goodwill and the cumulative currency translation adjustment,
which is included in the carrying value tested for impairment under US GAAP when the Company has committed to a plan to
dispose of assets that will cause the cumulative translation adjustment to be included in net income. The Company recorded
an additional impairment loss under US GAAP of EUR 158 in 2004 (2005: nil) as these assets or disposal groups had a higher
carrying value under US GAAP compared to IFRS. Unrealized cumulative translation adjustments of EUR 185 (2005: nil)
respectively have been taken into account in determining the carrying amount while performing the impairment test of
non-current assets or disposal groups held for sale under US GAAP in 2005 and 2004, respectively. The difference in
impairment causes a difference in the result on divestment as stated in the next section.
AHOLD ANNUAL REPORT 2005 195
