11 Property, plant and equipment continued
12 Investment property
-
Ahold
Annual Report 2010
Group at a glance
Performance
Governance
Financials
Notes to the consolidated financial statements continued
Other movements mainly include transfers to and from investment property.
The carrying amount of land and buildings includes an amount related to assets held under finance leases and financings of €795 million
and €203 million (January 3, 2010: €716 million and €223 million), respectively. In addition, the carrying amount of machinery and
equipment includes an amount of €6 million (January 3, 2010: €9 million) relating to assets held under finance leases. Ahold does not
have legal title to these assets. Company-owned property, plant and equipment with a carrying amount of €74 million (January 3, 2010:
€76 million) has been pledged as security for liabilities, mainly for loans.
million 2010 2009
At the beginning of the year
At cost
734
664
Accumulated depreciation and impairment losses
(203)
(163)
Carrying amount
531
501
Additions
16
14
Acquisitions through business combinations
10
Depreciation
(25)
(21)
Impairment losses
(1)
(6)
Assets classified from (to) held for sale or sold
(5)
4
Transfers from property, plant and equipment
37
35
Exchange rate differences
29
(6)
Closing carrying amount
582
531
At the end of the year
At cost
809
734
Accumulated depreciation and impairment losses
(227)
(203)
Carrying amount
582
531
A significant portion of Ahold's investment property is comprised of shopping centers containing both an Ahold store and third-party retail
units. The third-party retail units generate rental income, but are primarily of strategic importance to Ahold in its retail operations. Ahold
recognizes the part of a shopping center leased to a third-party retailer as investment property, unless it represents an insignificant portion
of the property.
In 2010, Ahold recognized impairment losses of €1 million related to Ahold USA.
The carrying amount of investment property includes an amount related to assets held under finance leases and financings of €45 million
and €51 million (January 3, 2010: €47 million and €42 million), respectively. Ahold does not have legal title to these assets. Company-
owned investment property with a carrying amount of €70 million (January 3, 2010: €60 million) has been pledged as security for liabilities,
mainly for loans.
The fair value of investment property as of January 2, 2011 amounted to approximately €745 million (January 3, 2010: €744 million). Fair
value represents the price at which a property could be sold to a knowledgeable, willing party, and has generally been determined based
on internal appraisals, using discounted cash flow projections. In certain instances, Ahold cannot determine the fair value of the investment
property reliably. In such cases, the fair value is assumed to be equal to the carrying amount.
Rental income from investment property included in the income statement in 2010 amounted to €67 million (2009: €65 million). Direct
operating expenses (including repairs and maintenance but excluding depreciation expense) arising from rental-income-generating and
non-rent-generating investment property in 2010 amounted to €27 million (2009: €21 million, which was decreased by €16 million to
correct the amount disclosed in Ahold's 2009 Annual Report.).
