99
11 Property, plant and equipment (continued)
12 Investment property
Ahold Annual Report 2012
Ahold at a glance
Our strategy
Our performance
Governance
Financials
Investors
Notes to the consolidated
financial statements
Buildings and land includes improvements to these assets. "Other" buildings and land mainly includes distribution centers. "Other" property, plant and equipment mainly consists of trucks,
trailers and other vehicles. Assets under construction mainly consists of stores.
In 2012, Ahold recognized impairment losses of €49 million. These were related to Ahold USA (€31 million), Other Europe (€1 7 million) and the Netherlands (€1 million). The carrying
amount of the affected assets exceeded the higher of their value in use and fair value less costs to sell. The value-in-use method involves estimating future cash flows. The present value of
estimated future cash flows has been calculated using pre-tax discount rates ranging between 7.0% and 12.1% (201 1: 7.6%-1 0.5%). 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.
The additions to property, plant and equipment include capitalized borrowing costs of €2 million (2011€2 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 4.1% and 9.2% (2011: 4.6%-7.6%).
Other movements mainly include transfers to investment property and from lease-related intangible assets.
The carrying amount of land and buildings includes an amount related to assets held under finance leases and financings of €881 million and €1 82 million (January 1, 2012: €850 million
and €1 96 million), respectively. In addition, the carrying amount of machinery and equipment includes an amount of €2 million (January 12012: €5 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 €64 million (January 1, 2012: €67 million) has been
pledged as security for liabilities, mainly for loans.
million
2012
2011
At the beginning of the year
At cost
870
809
Accumulated depreciation and impairment losses
(277)
(227)
Carrying amount
593
582
Additions 18 27
Depreciation
(24)
(23)
Impairment losses
(7)
(1)
Assets classified from (to) held for sale or sold
(32)
(7)
Transfers from property, plant and equipment
24
3
Exchange rate differences
(7)
12
Closing carrying amount 565 593
At the end of the year
At cost
876
870
Accumulated depreciation and impairment losses
(311)
(277)
Carrying amount
565
593
