Adidas 2001 Annual Report Download - page 78

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73
Consolidated Accounts
Goods in transit mainly relate to shipments from suppliers in the Far
East to subsidiaries in Europe, Asia and the Americas. This balance has
declined due to stronger purchase controls and an earlier start of the
next season.
The allowance for obsolescence mainly relates to inventories on hand.
Retail expansion, in particular factory outlets, has improved clearance
margins, thus reducing overall provisioning requirements. In addition,
the stock aging structure continued to improve.
7. Other Current Assets
Other current assets consist of the following:
Prepaid expenses relate mainly to promotion agreements and service
contracts.
Investment property held for sale relates to parts of the land of the
former “Herzo Base” in Herzogenaurach. This land was bought in 1998
and is owned by the GEV Grundstücksgesellschaft Herzogenaurach mbH
& Co. KG. The part to be sold is not needed in the future by adidas-
Salomon, the remaining part is used for the new adidas-Salomon
international headquarters “World of Sports”, which is included under
property, plant and equipment. The area to be sold is currently lying idle
and has a size of 77 hectares. According to the “Urban Design Contract”,
signed with the town Herzogenaurach in December 2001, the land is to
be split in a housing area (31 hectares), an industrial area (19 hectares),
a public area (24 hectares) and other areas (3 hectares).The fair value
of this investment property cannot be determined reliably at the current
time as the land is not yet developed, and a binding land-use plan and
building permits do not yet exist. The range of the fair value for the
undeveloped land could be up to €50 million.
With the adoption of IAS 39, the Company now states all derivative
financial instruments at fair value. The prior year amount for interest rate
and currency options represents capitalized premiums paid (see also Note
2 and 20).
Dec. 31 Dec. 31
(euros in thousands) 2001 2000
Prepaid expenses 73,482 88,043
Taxes receivable 75,939 83,871
Interest rate options 1,954 3,305
Currency options 6,089 12,890
Forward contracts 39,869 –
Security deposits 15,412 11,333
Receivables from affiliated companies 885 1,657
Investment property held for sale 16,923 15,926
Sundry 42,156 42,833
Other current assets, gross 272,709 259,858
Less: allowance 5,780 5,675
Other current assets, net 266,929 254,183