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11 Property, plant and equipment (continued)
12 Investment property
565
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Ahold Annual Report 2013
Buildings and land includes improvements to these assets. "Other" buildings and land mainly includes distribution centers and warehouses. "Other" property, plant and equipment mainly
consists of trucks, trailers and other vehicles. Assets under construction mainly consists of stores.
In 2013, Ahold recognized net impairment losses of €69 million for property, plant and equipment. These were mainly related to Ahold USA (€66 million). On August 6, 2013, Stop Shop
announced plans to close six stores and three gas stations in New Hampshire. Ahold recognized $24 million (€18 million) of impairments related to these stores based on the exit assumption.
The carrying amount of the associated assets were written down to nil. The remainder relates to various other operating and closed stores.
The higher of the value in use or fair value less cost to sell represents an asset's recoverable amount. 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 6.4% and 12.8% (2012: 7.0%-12.1%). Fair value represents the price that would be received to
sell an asset in an orderly transaction between market participants and has generally been measured by using discounted cash flow projections based on the assets' highest and best use from
the market participants' perspective. The fair value less cost to sell was the recoverable amount in the determination of €15 million of the impairment losses.
The additions to property, plant and equipment include capitalized borrowing costs of €2 million (2012: €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 3.6% and 7.5% (2012: 4.1%-9.2%).
Other movements mainly include transfers to investment property and from lease-related intangible assets.
The carrying amount of land and buildings includes amounts related to assets held under finance leases and financings of €808 million and €1 63 million respectively (December 30, 2012:
€881 million and €1 82 million). In addition, the carrying amount of machinery and equipment and other includes an amount of €4 million (December 30, 2012: €2 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 €48 million (December 30, 2012:
€64 million) has been pledged as security for liabilities, mainly for loans.
million
2013
2012
At the beginning of the year
At cost
876
870
Accumulated depreciation and impairment losses
(311)
(277)
Carrying amount
593
Additions 16 18
Depreciation (22) (24)
Impairment losses and reversals - net (7) (7)
Assets classified to held for sale or sold (18)
Transfers from property, plant and equipment and lease-related intangibles 26 24
Exchange rate differences (17) (7)
Closing carrying amount 543 565
At the end of the year
At cost 863 876
Accumulated depreciation and impairment losses (320) (311)
Carrying amount
543
