Note 36
Transitional arrangements upon adoption of IFRS as applied by the Company
Impact of IFRS on 2004 net income and group equity as previously reported under Dutch GAAP
The rules for first-time adoption of IFRS generally require that first-time adopters apply all IFRS accounting policies
retrospectively when determining the 2004 opening balance sheet. IFRS 1 "First-time Adoption of International Financial
Reporting Standards" contains certain one-time exemptions to this general principle. Where relevant, Ahold has applied
these one-time exemptions as follows:
IFRS exemption options
1 Application by Ahold
Business combinations
Business combinations concluded before December 29, 2003 are not restated. As a
consequence, the Dutch GAAP goodwill balances as of December 28, 2003 have been brought
forward to the 2004 IFRS opening balance. This is also applicable to goodwill balances related
to investments in joint ventures and associates concluded before December 29, 2003. Under
IFRS goodwill balances related to investments in joint ventures and associates are included in
the carrying amount of the net investment and are not separately shown in the balance sheet.
Fair value or revaluation
as deemed cost
For items of property, plant and equipment and investment property for which an impairment
loss under Dutch GAAP had been recognized prior to December 29, 2003, Ahold has elected to
use the revalued amount as deemed cost at the date of the impairment. As such, no impairment
losses recognized prior to December 29, 2003 will be reversed under IFRS. The accumulated
impairment losses related to items of property, plant and equipment and investment property,
which were still in service as of the transition date to IFRS amounted to approximately
EUR 120. Ahold's deemed cost approach does not impact the carrying amount of property,
plant and equipment and investment property.
Defined (employee) benefit plans
The deferral approach for actuarial gains and losses is applied prospectively and not
retrospectively. As a result, all pre-2004 actuarial gains and losses have been recognized
as of December 29, 2003.
Currency translation reserve
The currency translation reserve has been set to zero for all subsidiaries, joint ventures and
associates as of December 29, 2003.
Comparatives for financial instruments
The accounting standards for financial instruments (IAS 32 and 39) have been applied as of
the transition date, December 29, 2003.
Designation of financial assets and
liabilities
Each financial asset and liability has been designated, as of December 29, 2003, as a financial
asset or financial liability "at fair value through profit and loss", as "available for sale" or as
"loans and receivables". Ahold does not have "held to maturity" assets.
Share-based payments
IFRS 2 "Share-based Payment" is not applied to grants made on or before November 7, 2002.
IFRS 2 is applied to grants made after November 7, 2002 only to the extent that they have not
vested as of January 1, 2005.
Non-current assets held for sale and
discontinued operations
IFRS 5 "Non-current Assets Held for Sale and Discontinued Operations" is applied as of the
transition date, December 29, 2003.
Upon adoption of IFRS several accounting policies have been changed. These changes are set out below in the context of
the impact on group equity as of January 2, 2005 and December 29, 2003 and consolidated net income 2004 as previously
reported in the 2004 consolidated financial statements under Dutch GAAP. Ahold's significant accounting policies are
discussed in Note 3.
1 Goodwill and other intangible assets with indefinite lives
Business combinations concluded prior to December 29, 2003 have not been restated and the carrying amount of goodwill
under IFRS as of December 29, 2003 is equal to the carrying amount under Dutch GAAP as of that date.
Under IFRS, the useful lives of goodwill and brand names have been determined to be indefinite and are therefore not
amortized. Instead, IFRS requires an annual impairment test to be performed. The impairment test on the transition date
of goodwill and brand names did not result in an additional impairment charge.
Under Dutch GAAP, these assets were amortized in 2004. The impact of reversing the amortization of goodwill and brand
names in 2004 amounted to EUR 155.
AHOLD ANNUAL REPORT 2005 179
