H fifillslEil 87 3 Significant accounting policies (continued) Ahold at a glance Notes to the consolidated financial statements Our strategy Our performance Governan Financials Investors Ahold Annual Report 2013 Defined benefit costs are split into three categories: Service cost, past service cost, gains and losses on curtailment and settlements Net interest expense or income Remeasurement The first category is presented as labor costs within operating earnings. Past-service costs are recognized in the income statement in the period of plan amendment. Results from curtailments or settlements are recognized immediately. During 2012, the Company changed its policy for measuring past service years within the Dutch pension fund. The previous policy was to calculate past service years based on a participant's accrued benefits, but this has been changed to a methodology that will use the maximum past service years based on a participant's actual date of hire or accrued benefits. Net interest is calculated by applying the discount rate to the net defined benefit liability or asset and is presented within net financial expenses. Remeasurements, comprising actuarial gains and losses, the effect of the asset ceiling (if applicable) and the return on plan assets (excluding interest) are recognized immediately in the balance sheet with a charge or credit to other comprehensive income in the period in which it occurs. Remeasurements recorded in other comprehensive income are not recycled. Contributions to defined contribution plans are recognized as an expense when employees have rendered service entitling them to the contributions. Post-employment benefits provided through industry multi-employer plans, managed by third parties, are generally accounted for under defined contribution criteria. For other long-term employee benefits, such as long-service awards, provisions are recognized on the basis of discount rates and other estimates that are consistent with the estimates used for the defined benefit obligations. For these all actuarial gains and losses are recognized in the income statement immediately. Provisions Provisions are recognized when (i) the Company has a present (legal or constructive) obligation as a result of past events, (ii) it is more likely than not that an outflow of resources will be required to settle the obligation, and (iii) the amount can be reliably estimated. The amount recognized is the best estimate of the expenditure required to settle the obligation. Provisions are discounted whenever the effect of the time value of money is significant. The provision for the Company's self-insurance program is recorded based on claims filed and an estimate of claims incurred but not yet reported. The provision includes expenses incurred in the claim settlement process that can be directly associated with specific claims. Other expenses incurred in the claim settlement process are expensed when incurred. The Company's estimate of the required liability of such claims is recorded on a discounted basis, utilizing an actuarial method based upon various assumptions that include, but are not limited to, historical loss experience, projected loss development factors and actual payroll costs. Restructuring provisions are recognized when the Company has approved a detailed formal restructuring plan and the restructuring has either commenced or has been announced to those affected by it. Onerous contract provisions are measured at the amount by which the unavoidable costs to fulfill agreements exceeds the expected benefits from such agreements. Changes in presentation In 2013, Ahold changed the presentation of its income statement to a framework that provides a better alignment between expense categories and functions. The change resulted in certain reclassifications within the 2012 income statement. In the 2012 income statement, this change decreased cost of sales by €133 million and increased selling expenses and general and administrative expenses by €87 million and €46 million, respectively. Furthermore, the comparative 2012 expenses by nature figures have been changed to conform to the current year presentation (see Note 8). In 2013, Ahold's investment in ICA met the criteria to be classified as a discontinued operation and, accordingly, €75 million that was previously reported in 2012 as share of income from joint ventures has been reclassified to income from discontinued operations. In 2013, Ahold's investment in Slovakia met the criteria to be classified as a discontinued operation and, accordingly, a €26 million loss that was previously reported in 2012 within income before taxes has been reclassified to income from discontinued operations. In the 2012 income statement, this change decreased net sales by €159 million, cost of sales by €1 19 million, selling expenses by €40 million and general and administrative expenses by €24 million. The tables at the end of this note outline the effects on Ahold's comparative 2012 amounts. New accounting policies effective for 2013 The amendment to IAS 1"Presentation of Financial Statements," as part of the "Annual Improvements to IFRSs 2009-2011 Cycle," became effective in 2013. These amendments require Ahold to group the items in other comprehensive income on the basis of whether they are potentially able to be subsequently reclassified to profit or loss (reclassification adjustments). The presentation of Ahold's consolidated statement of comprehensive income has been adjusted to comply with these amendments; however the amendments have no effect on Ahold's financial position or performance. IAS 19, "Employee Benefits," (as revised in June 2011) became effective for the Company as of January 1, 2013. Ahold has applied the revised standard retrospectively and in accordance with the transitional provisions as set out in IAS 19.173 (as revised). These transitional provisions do not have an effect on future periods.

Jaarverslagen | 2013 | | pagina 170