Notes to the consolidated financial statements
97
12 Investment property (continued)
Ahold at a glance
Business review
Governance
Financials
Ahold
Annual Report 2015
In 2015, Ahold recognized net impairment losses of €3 million. These were related to Ahold USA (€2 million) and the Netherlands (€1 million).
The carrying amount of investment property includes an amount related to assets held under finance leases and financings of €25 million and €43 million (December 28, 2014: €29 million and €48 million), respectively.
Ahold does not have legal title to these assets. Company-owned investment property with a carrying amount of €79 million (December 28, 2014: €75 million) has been pledged as security for liabilities, mainly for loans.
The fair value of investment property as of January 3, 2016, amounted to approximately €772 million (December 28, 2014: €744 million). 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 a market participants' perspective. Approximately 60%
of Ahold's fair value measurements are categorized within Level 2. The most significant inputs into this valuation approach are observable market retail yields and tenant rents to calculate the fair value. The remaining fair
value measurements which are categorized within Level 3 primarily include the fair value measurements based on the Company's own valuation methods and the fair value for mixed-use properties and properties held for
strategic purposes. For mixed-use properties and properties held for strategic purposes, Ahold cannot determine the fair value of the investment property reliably. In such cases, the fair value is assumed to be equal to the
carrying amount.
Rental income from investment property included in the income statement in 2015 amounted to €70 million (2014: €66 million). Direct operating expenses (including repairs and maintenance but excluding depreciation
expense) arising from rental-income-generating and non-rent-generating investment property in 2015 amounted to €34 million (2014: €30 million).
