Food Lion 2008 Annual Report Download - page 73
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Please find page 73 of the 2008 Food Lion annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.Business Combinations and Goodwill
Business combinations are accounted for using the purchase method. The cost of an acquisition is measured as the fair value of the assets given, equity instru-
ments issued and liabilities incurred or assumed at the date of acquisition, plus costs directly attributable to the acquisition. Identifiable assets acquired, liabilities
and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any
minority interest. The excess of the cost of acquisition over the fair value of the Group’s share of the identifiable net assets acquired and contingent liabilities
assumed is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the business acquired, the difference is recognized
directly in the income statement.
After initial recognition, goodwill is not amortized, but annually reviewed for impairment and whenever there is an indication that goodwill may be impaired. For
the purpose of testing goodwill for impairment, goodwill is allocated to each of the Group’s cash generating units that are expected to benefit from the synergies
of the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units.
When Delhaize Group acquires a business, embedded derivatives separated from the host contract by the acquiree are not reassessed on acquisition unless
the business combination results in a change in the terms of the contract that significantly modifies the cash flows that would otherwise be required under the
contract.
Non-current Assets / Disposal Groups Held for Sale and Discontinued Operations
Non-current assets and disposal groups are classified and presented in the balance sheet as held for sale if their carrying amount will be recovered through a
sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset (or disposal group)
is available for immediate sale in its present condition. Management with proper authority must be committed to the sale and the sale should be expected to
qualify for recognition as a completed sale within one year from the date of classification.
Immediately before classification as held for sale, the assets (or components of a disposal group) are re-measured in accordance with the Group’s accounting
policies. Thereafter, non-current assets (or disposal group) held for sale are measured at the lower of their carrying amount or fair value less costs to sell. If the
impairment exceeds the carrying value of the non-current assets within the scope of IFRS 5 Non-current Assets Held for Sale and Discontinued Operations
measurement guidance, Delhaize Group recognizes a separate provision to reflect the difference in its financial statements. Non-current assets are not depreci-
ated or amortized once classified as held for sale.
A discontinued operation is a component of a business that either has been disposed, or is classified as held for sale, if earlier, and:
• representsaseparatemajorlineofbusinessorgeographicalareaofoperations;
• ispartofasinglecoordinatedplantodisposeofaseparatemajorlineofbusinessorgeographicalareaofoperations;or
• isasubsidiaryacquiredexclusivelywithaviewtoresale.
When an operation is classified as a discontinued operation, the comparative income statements are re-presented as if the operation had been discontinued
from the start of the comparative periods. The resulting profit or loss after taxes is reported separately in the income statements (see Note 5).
Translation of Foreign Currencies
Items included in the financial statement of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity
operates (“functional currency”). Delhaize Group’s financial statements are presented in (millions of) euros, the parent entity’s functional and Group’s presentation
currency, except where stated otherwise.
Foreign currency transactions of an entity are recognized in its financial records at the exchange rate prevailing at the date of the transaction or valuation where
items are re-measured. Monetary assets and liabilities denominated in foreign currencies are subsequently translated at the balance sheet date exchange rate
into the functional currency of the entity. Gains and losses resulting from the settlement of foreign currency transactions and from the translation of monetary
assets and liabilities denominated in foreign currencies are included in the income statement. Exchange differences arising on monetary items that form part of
a net investment in a foreign operation (i.e., items that are receivable from or payable to a foreign operation, for which settlement is neither planned, nor likely
to occur in the foreseeable future) are recognized in the “Cumulative translation adjustment” component of equity. Exchange differences arising on the retransla-
tion into the functional currency of an entity of non-monetary items carried at fair value are included in the income statement except for differences arising on
the retranslation of non-monetary items in respect of which gains and losses are recognized directly in equity. For such non-monetary items, any exchange
component of that gain or loss is also recognized directly in equity.
The results and financial position of all Group entities that have a functional currency different from the Group’s presentation currency are translated into the
presentation currency as follows: (i) the balance sheets of foreign subsidiaries are converted to euros at the year-end exchange rate (closing exchange rate); (ii)
goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the
closing rate; (iii) the income statements are translated at the average daily exchange rate (i.e., the yearly average of exchange rates on each working day). The
differences arising from the use of the average daily exchange rate for the income statement and the closing exchange rate for the balance sheet are recorded
in the “Cumulative translation adjustment” component of equity. None of the Group entities has the currency of a hyper-inflationary economy nor does Delhaize
Group hedge net investments in foreign operations.
(in EUR) Closing Rate Average Daily Rate
2008 2007 2006 2008 2007 2006
1 USD 0.718546 0.679302 0.759301 0.679902 0.729661 0.796433
100 CZK - 3.755445 3.638348 - 3.601579 3.528376
100 SKK 3.319392 2.977697 2.904022 3.198802 2.960814 2.685711
100 RON 24.860162 27.718491 29.555194 27.154728 29.982331 28.362039
100 THB 2.071037 2.283105 2.138123 2.062906 2.261727 2.101122
100 IDR 0.006562 0.007232 0.008443 0.007044 0.007982 0.008686
69
Certification of Responsible
Persons
Supplementary
Information
Historical
Financial Overview
Report of the
Statutory Auditor
Summary Statutory Accounts of
Delhaize Group SA