11 Derivatives
-
-
-
-
-
12 Related party transactions
Ahold
Annual Report 2011
Groupata glance
Performance
Governance
Notes to the parent company financial statements continued
Investors
The parent company regularly enters into derivative contracts with banks to hedge foreign currency and interest exposures of the parent
company or its subsidiaries. Derivative contracts that are entered into to hedge exposures of subsidiaries are generally mirrored with
intercompany derivative contracts with the subsidiaries that are exposed to the hedged risks on substantially identical terms as the external
derivative contracts. In these parent company financial statements, the external derivative contracts and the intercompany derivative
contracts are presented separately on the balance sheet. In situations where the external derivative contract qualifies for hedge accounting
treatment in the consolidated financial statements, the external derivative contract and the intercompany derivative contract are presented
as "Hedging derivatives external" and "Hedging derivatives intercompany," respectively. In situations where the external derivative contract
does not qualify for hedge accounting treatment in the consolidated financial statements, the external derivative contract and the
intercompany derivative contract are presented as "Other derivatives external" and "Other derivatives intercompany," respectively.
Fair value movements of external derivative contracts that were entered into to hedge the exposures of subsidiaries are recorded directly
in income, where they effectively offset the fair value movements of the mirroring intercompany derivatives that are also recorded directly
in income. Details of these derivative contracts, other financial instruments, and the parent company's risk management strategies are
included in Note 30 to the consolidated financial statements and in the tables presented below.
Non-current hedging derivatives - assets
Hedging
Other
derivatives
derivatives
2011
2010
million
externa
externa
Total
Total
Beginning of year
151
196
347
335
Reclassification to current assets
(141)
(141)
Fair value changes
(10)
43
33
12
End of year - 239 239 347
Non-current hedging derivatives - liabilities
Hedging
Hedging
Other
derivatives
derivatives
derivatives
2011
2010
million
external
intercompany
intercompany
Total
Total
Beginning of year
69
151
196
416
459
Reclassification to current liabilities
(141)
(141)
Fair value changes
20
(10)
43
53
(43)
End of year 89 - 239 328 416
Fair value changes include exchange rate differences and installments paid on a cross-currency swap that was entered into on behalf of
one of the parent company's subsidiaries.
Koninklijke Ahold N.V. has entered into arrangements with a number of its subsidiaries and affiliated companies in the course of its
business. These arrangements relate to service transactions and financing agreements and were conducted at market prices.