Notes to the consolidated financial statements
11 Property, plant and equipment continued
12 Investment property
31 www.ahold.com/reports2008
Financial statements
AHOLD ANNUAL REPORT 2008 68
Buildings and land include improvements to these assets. "Other" buildings and land mainly includes distribution centers.
"Other" property, plant and equipment mainly consist of trucks, trailers and other vehicles, as well as office furniture and fixtures.
Assets under construction mainly consist of stores.
In 2008, Ahold recognized impairment losses of EUR 10 million related to Stop Shop/Giant-Landover (EUR 7 million), Albert
Heijn (EUR 2 million) and Albert/Hypernova (EUR 1 million). The carrying amount of the affected assets exceeded the higher of the
present value of their estimated future cash flows and fair value less costs to sell. The present value of estimated future cash flows
has been calculated using discount rates ranging between 9.0-12.6 percent (2007: 8.4-12.5 percent).
Assets classified as held for sale or sold during 2008 mainly relate to the divestment of Schuitema.
The additions to property, plant and equipment include capitalized borrowing costs of EUR 4 million (2007: EUR 6 million).
Generally, the capitalization rate used to determine the amount of capitalized borrowing costs is a weighted average of the interest
rate applicable to the respective operating companies. This rate ranged between 5.8-8.4 percent (2007: 4.3-6.7 percent). Other
movements include transfers to and from investment property.
The carrying amount of land and buildings includes an amount of EUR 762 million and EUR 243 million (December 30, 2007:
EUR 795 million and EUR 236 million) in respect of assets held under finance leases and financings, respectively. In addition, the
carrying amount of machinery and equipment includes an amount of EUR 8 million (December 30, 2007: EUR 9 million) in respect
of 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 EUR 75 million (December 30, 2007: EUR 196 million) have been pledged as security for liabilities,
mainly for loans.
million
2008
2007
At the beginning of the year
At cost
658
592
Accumulated depreciation and impairment losses
(195)
(161)
Carrying amount
463
431
Additions
52
8
Depreciation
(18)
(14)
Impairment losses
(2)
(1)
Assets classified as held for sale or sold
(32)
(20)
Transfers from property, plant and equipment
18
89
Exchange rate differences
14
(30)
Closing carrying amount
495
463
At the end of the year
At cost
658
658
Accumulated depreciation and impairment losses
(163)
(195)
Carrying amount
495
463
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 shopping centers leased to third-party retailers as investment property, unless it represents
an insignificant portion of the property.
The carrying amount of investment property includes an amount of EUR 49 million (December 30, 2007: EUR 41 million) and
EUR 38 million (December 30, 2007: EUR 37 million) in respect of assets held under finance leases and financings, respectively.
Ahold does not have legal title to these assets. Company-owned investment property with a carrying amount of EUR 65 million
(December 30, 2007: EUR 67 million) has been pledged as security for liabilities, mainly for loans.
