Food Lion 2012 Annual Report Download - page 106

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104 // DELHAIZE GROUP FINANCIAL STATEMENTS’12
9. Investment Property
Investment property, principally comprised of owned rental space attached to supermarket buildings and excess real estate, is
held for long-term rental yields or appreciation and is not occupied by the Group.
In accordance with the Group’s accounting policy in Note 2.3, investment property is accounted for at cost less accumulated
depreciation and accumulated impairment losses, if any. When stores held under finance lease agreements are closed (see
Note 20.1) or if land will no longer be developed for construction purposes, they are reclassified from property, plant and
equipment to investment property.
In 2012, €44 million of property, plant and equipment was transferred to investment property (see Note 8), of which €34 million
related to the store portfolio review, which took place at the beginning of 2012. In 2011, Delhaize Group acquired investment
property of €34 million as part of the Delta Maxi acquisition (see Note 4.1), of which €21 million was subsequently classified as
“held for sale.” In 2012, as a result of the weakening real estate market and the deteriorating state of the property for sale,
making a sale within the foreseeable future unlikely, part of these properties (net book value of €7 million) has been reclassified
into investment property (see Note 5.2).
During 2012, the Group recorded €14 million of impairment charges, primarily on 15 properties in the United States and a
warehouse in Albania. In 2011, an impairment loss of €17 million was recorded, primarily due to the portfolio review (€12 million).
(in millions of €)
2012
2011(1)
2010
Cost at January 1
137
91
79
Additions
6
2
15
Sales and disposals
(29)
(7)
(6)
Acquisition through business combinations
—
34
—
Transfers (to) from other accounts
142
12
(3)
Currency translation effect
(6)
5
6
Cost at December 31
250
137
91
Accumulated depreciation and impairment at January 1
(54)
(31)
(29)
Depreciation expense
(4)
(3)
(3)
Sales and disposals
26
3
5
Impairment
(14)
(17)
(2)
Transfers to (from) other accounts
(91)
(3)
—
Currency translation effect
3
(3)
(2)
Accumulated depreciation and impairment at December 31
(134)
(54)
(31)
Net carrying amount at December 31
116
83
60
_______________
(1) 2011 was revised to reflect the effects of the completion in the second quarter of 2012 of the purchase price allocation of the Delta Maxi acquisition.
At December 31, 2012, 2011 and 2010, the Group only had insignificant investment property under construction.
The fair value of investment property amounted to €146 million, €115 million and €92 million at December 31, 2012, 2011 and
2010, respectively. The fair values for disclosure purposes have been determined using either the support of qualified
independent external valuers or by internal valuers with the necessary recognized and relevant professional qualification,
applying a combination of the present value of future cash flows and observable market values of comparable properties.
Rental income from investment property recorded in other operating income was €7 million for 2012, €5 million for 2011 and
€3 million for 2010. Operating expenses arising from investment property generating rental income, included in selling, general
and administrative expenses, were €6 million in 2012, €5 million in 2011 and €4 million in 2010. Operating expenses arising from
investment property not generating rental income, included in selling, general and administrative expenses were €4 million in
2012, €2 million in 2011 and €4 million in 2010.