To the extent that the hedge is ineffective, changes in fair value are recognized in profit or loss. Amounts accumulated in
OCI are recycled in the income statement in the periods when the hedged item affects profit or loss (e.g., when the forecast
sale that is hedged takes place).
If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold, terminated, exercised, or the
designation is revoked, then hedge accounting is discontinued prospectively. The cumulative gain or loss previously
recognized in OCI and presented in the discontinued cash flow hedge reserve in equity remains in there until the hedged
item affects profit or loss.
Fair value hedges are used to hedge the fair values of assets or liabilities recognized in the balance sheet or firm
commitments not yet recognized in the financial statements. W hen designated as such a fair value hedge, the gain or loss
from re-measuring the hedging instrument at fair value is recognized in profit or loss. Additionally, the gain or loss on the
hedged item, a ttri butable to the hedged risk, is recognized in profit or loss by adjusting the carrying amount of the hedged
item. Delhaize Group usually hedges financial liabilities. As for economic hedges, the changes in the hedging instrument
follow the hedged item and, therefore, they are usually presented in the income stateme nt as "Finance costs" (see N ote
29.1).
Hedges of a net investment, Delhaize Group currently does not hedge any of its net investments in any of its foreign
operations.
Share Capital and Treasury Shares
Ordinary shares,' Delhaize Group's ordinary shares are classified as equity. Incremental costs directly attributable to the
issuance of ordinary shares and share options are recognized as a deduction from equity, net of any tax effects.
Tre asu ry shares, Shares of the Group purchased by the Group or companies within the Group are included in equity at cost
(including any costs directly attributable to the purchase of the shares) until the shares are cancelled, sold or otherwise
disposed. Wh ere such shares are subsequently reissued, any consideration received, net of any directly attributable
incremental transaction costs and the related income tax effects, is included in equity attributable to the company's equity
holders.
Income Taxes
The tax expense for the period comprises current and deferred tax. Tax is recognized in the income statement except to the
extent that it relates to items recognized directly in OCI or equity.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet
date in the countries where the Group's subsidiaries and associates operate and generate taxable income. Provisions and
receivables are established on the basis of amounts expected to be paid to or recovered from the tax authorities.
Deferred tax liabilities and assets are recognized, using the liability method, on temporary differences arising between the
carrying amount in the consolidated financial statements and the tax basis of assets and liabilities. However, the deferred income
tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination
that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined,
considering (i) tax rates and laws that have been enacted or substantively enacted at the balance sheet date that are expected to
apply when the temporary differences reverse and (ii) the expected manner of realization or settlement of the carrying amount of
assets and liabilities.
Deferred tax liabilities are recognized for temporary differences arising on investments in subsidiaries, associates and interests in
joint ventures, if any, except where the Group is able to control the timing of the reversal of the temporary difference and it is
probable that the temporary difference will not reverse in the foreseeable future.
A deferred tax asset is recognized only to the extent that it is probable that future taxable profit will be available against which the
temporary difference can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that
it is no longer probable that the related tax benefit will be realized.
Deferred tax assets and liabilities are only offset if there is a legally enforceable right to offset current tax liabilities and assets
and the deferred income taxes relate to the same taxable entity and the same taxation authority.
The Group elected to present interests and penalties relating to income taxes in "Income tax expense" in the income statement.
rovisions
Pr
Provisions are recognized when the Group has a present legal or constructive obligation as a result of past events, it is more
likely than not that an outflow of resources will be required to settle the obligation, and the amount can be reliably estimated.
Provisions are measured at balance sheet date at management's best estimate of the expenditures expected to be required to
settle the obligation, discounted using a pre-tax discount rate that reflects the current market assessments of the time value of
money and the risk specific to the liability, if material. Wh ere discounting is used, the increase in the provision due to the passage
of time ("unwinding of the discount") is recognized in "Finance costs" (see Note 29.1).
DELHAIZE GROUP FINANCIAL STATEMENTS '12 83
