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Notes to the consolidated financial statements
85
3 Significant accounting policies (continued)
4 Acquisitions
2015 acquisitions
Ahold at a glance I Business review I Governance I Financials I Investors
Amendments to IAS 16 and IAS 38, "Clarification of Acceptable Methods of Depreciation and Amortization,"
prohibit entities from using a revenue-based depreciation method for items of property, plant and equipment
and introduce a rebuttable presumption that revenue is not an appropriate basis for amortization of an
intangible asset. The amendments apply prospectively for annual periods beginning on or after January 1,
2016. Currently the Company uses the straight-line method for depreciation and amortization of property, plant
and equipment, and intangible assets, respectively. The Company believes that the straight-line method is the
most appropriate method to reflect consumption of economic benefits in the respective assets and accordingly
does not anticipate that the application of these amendments will have a significant effect on the future
consolidated financial statements.
Narrow-scope amendments to IAS 27, "Equity Method in Separate Financial Statements," will allow entities to
use the equity method to account for investments in subsidiaries, joint ventures and associates in their separate
financial statements. The amendments are effective for annual periods beginning on or after January 1, 2016,
and are to be applied retrospectively. Based on Ahold's current financial position, these amendments will not
have an effect on the future consolidated financial statements.
Narrow-scope amendments to IFRS 10 and IAS 28, "Sale or Contribution of Assets between an Investor and
its Associate or Joint Venture," clarified an inconsistency between these standards with regard to the sale or
contribution of assets between an investor and its associate or joint venture. Following the amendments, a
full gain or loss is recognized when a transaction involves a business (whether it is housed in a subsidiary or
not). A partial gain or loss is recognized when a transaction involves assets that do not constitute a business,
even if these assets are housed in a subsidiary. The Company has yet to assess the amendments' full
impact. The amendments' effective date has been postponed by the IASB and a new effective date has not
been identified.
Annual improvements to IFRSs 2012-2014 Cycle made a number of amendments to various IFRSs, which,
based on Ahold's current financial position, the Company anticipates will not have a significant effect on the
future consolidated financial statements. The amendments are summarized as follows:
a The amendments to IFRS 5, "Non-current Assets Held for Sale and Discontinued Operations," added
specific guidance for cases in which an entity reclassifies an asset from held for sale to held for distribution
to shareholders or vice versa and cases in which held-for-distribution accounting is discontinued.
a The amendments to IFRS 7 "Financial Instruments: Disclosures," include a description of the term "continuing
involvement" for the purpose of the transfer disclosures.
a The amendments to IAS 19, "Employee Benefits," clarify that the high-quality corporate bonds used in
estimating the discount rate for post-employment benefits should be denominated in the same currency as
the benefits to be paid.
There are no other IFRSs or IFRIC interpretations that have been issued but are not yet effective that are
expected to have a material effect on the future consolidated financial statements.
Ahold
Annual Report 2015
A&P stores in the United States
On July 20, 2015, Ahold announced that it had entered into an agreement with The Great Atlantic Pacific
Tea Company to acquire 25 A&P stores in Greater New York. On October 8, 2015, all conditions had been
met and Ahold commenced its purchase of 25 former A&P stores. The purchase and conversion of the stores
were completed by mid-November 2015. The purchase price for all of the stores, inventory and other working
capital items is $154 million (€141 million). Goodwill recognized in the amount of $104 million (€96 million),
of which $59 million (€54 million) will be deductible for tax purposes, represents expected synergies from the
combination of operations.
From the date of acquisition, the stores contributed $140 million (€129 million) to 2015 net sales and lowered
net income by $11 million (€10 million) in 2015. The impact excludes $4 million (€3 million) in transaction costs
related to the acquisition, which are included in general and administrative expenses. It is not practicable to
provide the 2015 pro-forma effect on Ahold's net sales and net income.
Jumbo
On August 14, 2012, Ahold announced that its Albert Heijn division had completed the transaction with
Jumbo concerning 78 C1000 and four Jumbo stores for a total consideration of €290 million in cash. A net
amount of €260 million was paid by January 3, 2016 (2015: credit €6 million, 2014: €2 million, 2013:
credit €1 million and 2012: €265 million) in relation to the transferred stores. As of January 3, 2016, Ahold
reached agreement with 75 franchisees, of which 71 stores had been converted and opened under the
Albert Heijn banner and four stores had been divested upon acquisition. For the remaining seven stores, Ahold
did not reach agreements with the franchisees and these stores were transferred back to Jumbo. In 2015
and 2014, Ahold recognized €9 million and €8 million, respectively, of impairment losses for the prepaid
consideration. Goodwill recognized in the amount of €234 million by January 3, 2016 (2015: €60 million,
2014: €45 million, 2013: €76 million and 2012: €53 million), which will not be deductible for tax purposes,
represents expected synergies from the combination of operations, as well as the ability to expand Ahold's
geographic reach.
The 17 stores that were converted to the Albert Heijn banner through 2015 have contributed €80 million to
2015 net sales and an insignificant amount to 2015 net income. It is not practicable to provide the 2015 pro-
forma effect on Ahold's net sales and net income.
