Notes to the
consolidated
financial statements
continued
3 Significant accounting policies continued
Overview
Business review
Governance
Financials
Investors
Ahold Delhaize Annual Report 2016
New accounting policies not yet effective for 2016
The IASB issued several standards, or revisions to standards, that are not yet effective for 2016, but will become effective in coming years.
IFRS 9, “Financial Instruments,” addresses the classification, measurement and recognition of financial assets and financial liabilities. Based on
Ahold Delhaize’s current financial position, the Company anticipates that the application of IFRS 9 in the future may have an impact on amounts
reported in respect of the Company’s financial assets and financial liabilities. However, it is not practicable to provide a reasonable estimate of the
effect of IFRS 9 until a detailed review has been completed. IFRS 9, as amended in July 2014, is effective for annual periods beginning on or after
January 1, 2018.
Amendments to IAS 12, “Income Taxes,” were made to address diversity in practice surrounding the recognition of deferred tax assets for unrealized
losses on debt instruments measured at fair value, as well as provide additional guidance on how deductible temporary differences should be
measured in situations when tax law limits the offsetting of certain types of losses against specific sources of taxable profits. The amendments to
IAS 12 apply prospectively for annual periods beginning on or after January 1, 2017. The Company is in the process of evaluating the full impact of
the amendments.
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.
Amendments to IAS 7, “Disclosure Initiative,” were made to require additional cash flow disclosures that will enable users of financial statements
to evaluate changes in liabilities arising from financing activities, including changes arising from both cash flows and non-cash changes.
The amendments to IAS 7 apply prospectively for annual periods beginning on or after January 1, 2017. The Company does not anticipate that the
application of these amendments will have a significant effect on the results of future consolidated financial statements, but they may alter the
manner in which certain financial information is presented.
IFRS 15, “Revenue from Contracts with Customers,” establishes a single comprehensive model for entities to use in accounting for revenue
from contracts with customers. IFRS 15 will supersede the current revenue recognition guidance including IAS 18 “Revenue,” IAS 11 “Construction
Contracts,” and the related Interpretations when it becomes effective for annual periods beginning on or after January 1, 2018. Under IFRS 15, an
entity recognizes revenue when (or as) a performance obligation is satisfied, i.e., when “control” of the goods or services underlying the particular
performance obligation is transferred to the customer. More prescriptive guidance has been added in IFRS to deal with specific scenarios.
Furthermore, extensive disclosures are required by IFRS 15. The Company has identified the following areas where policies will change, but none are
expected to have a significant effect on the consolidated financial statements: (1) timing of revenue recognition for online sales will change from
delivery from warehouse to receipt by customers, and (2) anticipated product returns will need to be considered when recognizing sales at bol.com.
IFRS 16, “Leases,” eliminates the current dual accounting model for lessees, which distinguishes between on-balance sheet finance leases and off-
balance sheet operating leases. Instead, there is a single, on-balance sheet accounting model that is similar to current finance lease accounting.
The Company anticipates that the application of IFRS 16 will have a significant effect on its reported assets and liabilities, and operating and
financing expenses. However, due to the various transition options within the standard that are available to the Company, it is not practicable to
provide a reasonable estimate of the effect of IFRS 16 until a detailed review has been completed. IFRS 16 is effective for annual periods beginning
on or after January 1, 2019.
