Note 37
11 Other
Other includes individually insignificant differences between IFRS and US GAAP including FIN 46(R) "Consolidation ot
Variable Interest Entities" ("VIE's"), FIN 45 "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others" and inventory valuation. Under FIN 45 certain guarantees are required to be
recognized at fair value and are amortized over the remaining term of the guarantee. Under IFRS these guarantees are only
required to be disclosed. The cumulative effect of the adoption of FIN 46(R) in 2004 has been presented as the cumulative
effect of a change in accounting policy in 2004.
12 Income taxes
This item includes the income tax effects of reconciling items and the reversal of tax expense recorded under IFRS as a result
of the release of income tax contingencies set up through purchase accounting. For US GAAP, the reversals were instead
credited to goodwill. Refer to the goodwill section for further detail. Deferred income tax assets (liabilities) are accounted
for in accordance with SFAS No. 109 "Accounting for Income taxes" ("SFAS No. 109") for US GAAP. Refer to paragraph e
"Additional US GAAP disclosure" below.
13 Minority interests
The minority interests difference results from minority ownership in certain subsidiaries in the Stop&Shop Arena, the Central
Europe Arena and the Schuitema Arena. The difference represents the impact of differences between IFRS and US GAAP on
the minority shareholders' share in net income (loss) and shareholders' equity of those Arenas.
14 Cumulative preferred financing shares
IFRS requires the cumulative preferred financing shares to be classified as debt instruments, because the payment of the
dividends on these instruments is not at the discretion of the Company and the shareholders do not participate in any
additional dividends that are declared. In substance the dividend is considered a contractually required fixed interest rate
payment and the instruments are treated similar to perpetual debt under IFRS. The related dividends are therefore classified as
interest expense under IFRS. Under US GAAP, the cumulative preferred financing shares are considered equity instruments
under SFAS No. 150 "Accounting for Certain Financial Instruments with Characteristics of both Liability and Equity" ("SFAS
No. 150") with the related dividends charged to equity, because the shares outstanding, are non-mandatorily redeemable
financial instruments and do not embody an unconditional obligation of the Company to issue a variable number of shares.
However since the Company is required to offer redemption of the shares to the holders in the event of a change in control of
the Company and consequently redemption is not solely within the control of the Company, the cumulative preferred financing
shares are classified outside of permanent shareholders' equity under US GAAP and are presented as a separate class of equity
as required by EITF D-98 ("Classification and measurement of Redeemable Securities" ("EITF D-98").
AHOLD ANNUAL REPORT 2005 197
