Financial statements - Notes to the consolidated financial statements
Note 37
2005 1
Divestments of assets held for sale
During 2005 and 2004 Ahold completed several divestments. Under IFRS, the gains and losses on divestments ditter
signiticantly trom those under US GAAP, due to ditterences in the carrying value upon disposal and ditterences in the
cumulative currency translation adjustment balances that have been included in net income upon disposal. Cumulative
currency translation adjustments under US GAAP were signiticantly ditterent compared to IFRS as a result ot the transitional
provisions ot IFRS, which allowed cumulative currency translation balances to be set to zero as ot December 29, 2003.
2004
Income from discontinued operations under IFRS 1
197
265
US GAAP adjustments:
Ditterences in operational results
Ditterences in carrying value upon divestments
Ditterences in cumulative currency translation adjustments
(16)
(28)
(155)
(350)
513
(704)
Loss from discontinued operations under US GAAP
(2)
(276)
1 Included within the income from discontinued operations under IFRS is EUR 147 and EUR 15 related to the Company's 50% interest in Paiz Ahold for 2005 and 2004,
respectively, which does not qualify as a discontinued operation under US GAAP.
10 Investments in joint ventures and associates
Ahold records its share ot income (loss) ot joint ventures and associates under both IFRS and US GAAP using the equity
method ot accounting. This adjustment retlects various ditterences between Ahold's share in income (loss) ot joint ventures
and associates determined under IFRS and its share in income (loss) ot joint ventures and associates determined under US
GAAP. Additionally, the ditterence in shareholders' equity includes ditterences related to goodwill ot and on the investments
in joint ventures and associates recorded prior to December 1, 2000.
In connection with the acquisition ot its 50% interest in ICA in 2000, which was accounted tor under the equity method under
IFRS and US GAAP, Ahold granted a put option to its joint venture ("JV") partners in ICA ("Put Option"). Under US GAAP the
put option was considered to be an in-the-money put option that was recorded at tair value. Accordingly, Ahold recorded the
Put Option as a liability and an increase in goodwill recorded relating to the investment in ICA. Under IFRS, IAS 39 also
requires that the tair value ot the Put Option be recognized as a liability. However, since goodwill was charged to shareholders'
equity under Dutch GAAP, the ottset to the Put Option liability was recorded in opening shareholders' equity under IFRS,
resulting in a decrease ot group equity. IFRS and US GAAP require that subsequent tair value changes ot the Put Option are
recorded in income. On November 5, 2004 one ot the JV partners, Canica, exercised its Put Option to sell its 20% interest in
ICA to Ahold. Concurrently Ahold agreed to sell a 10% interest to HIAB, the other JV Partner, whereby HIAB also agreed to
waive its tuture rights under the Put Option. Atter these transactions, Ahold holds a 60% interest in ICA and IHAB holds the
remaining 40% interest. As a result ot this transaction the Put Option liability was released under IFRS and US GAAP.
The gain on this transaction was ditterent under US GAAP as a result ot the atorementioned ditterences in the carrying value ot
the goodwill on ICA as a result ot ditterences between IFRS and US GAAP that impact the carrying value ot ICA. Since the Put
Options have been exercised and waived, no ditterences exist between US GAAP and IFRS as ot January 1, 2006 with respect
to the Put Options. However, a ditterence remains in the carrying value ot the investment as a result ot ditterences in the
carrying value ot goodwill and ditterences in the carrying value ot the investment in ICA relating to the application ot US GAAP
and IFRS.
As described in section 9 ot this note, the 2005 sale ot the Company's 50% interest in Paiz Ahold was accounted tor as a
discontinued operation under IFRS but not under US GAAP. Ditterences in the carrying value ot the investment and the related
currency translation adjustment theretore results in a EUR 167 lower gain on divestments under US GAAP than under IFRS.
196
