Notes to the
consolidated
financial statements
continued
3 Significant accounting policies continued
Overview
Business review
Governance
Financials
Investors
Ahold Delhaize Annual Report 2016
A discontinued operation is a component of the Company that either has been disposed of or is classified as held for sale, and represents a
separate major line of business or geographical area of operations or is part of a single coordinated plan to dispose of a separate major line of
business or geographical area of operations. Results from discontinued operations that are clearly identifiable as part of the component disposed
of and that will not be recognized subsequent to the disposal are presented separately as a single amount in the consolidated income statement.
Results and cash flows from discontinued operations are reclassified for prior periods and presented in the financial statements so that the results
and cash flows from discontinued operations relate to all operations that have been discontinued as of the balance sheet date for the latest
period presented.
Property, plant and equipment
Items of property, plant and equipment are stated at cost less accumulated depreciation and impairment losses. Cost includes expenditures
that are directly attributable to the acquisition or construction of an asset and borrowing costs incurred during construction. Where applicable,
estimated asset retirement costs are added to the cost of an asset. Subsequent expenditures are capitalized only when it is probable that future
economic benefits associated with the item will flow to the Company and the costs can be measured reliably. All other subsequent expenditures
represent repairs and maintenance and are expensed as incurred.
Investment property
Investment property consists of land and buildings held by Ahold Delhaize to earn rental income or for capital appreciation, or both.
These properties are not used by the Company in the ordinary course of business. The Company often owns (or leases under a finance lease)
shopping centers containing both an Ahold Delhaize and third-party retail units. In these cases, the third-party retail units generate rental income,
but are primarily of strategic importance for operating purposes to Ahold Delhaize in its retail operations. The Company recognizes the part of
an owned (or leased under a finance lease) shopping center that is leased to third-party retailers as investment property, unless it represents an
insignificant portion of the property. Land and buildings leased to franchisees are not considered to be investment property as they contribute
directly to Ahold Delhaize’s retail operations. Investment property is measured on the same basis as property, plant and equipment.
Depreciation is computed using the straight-line method based on the estimated useful lives of the items of property, plant and equipment, taking
into account the estimated residual value. Where an item of property, plant and equipment comprises major components having different useful
lives, each such part is depreciated separately. The assets’ useful lives are reviewed at each balance sheet date and adjusted if appropriate.
Depreciation of assets subject to finance leases and leasehold improvements is calculated on a straight-line basis over either the lease term
(including renewal periods when renewal is reasonably assured) or the estimated useful life of the asset, whichever is shorter.
indefinite
30-40 years
10-20 years
5-10 years
3-15 years
5-10 years
The ranges of estimated useful lives of property, plant and equipment are:
Land
Buildings
Certain structural components of buildings
Finish components of buildings
Machinery and equipment
Other
