Food Lion 2012 Annual Report Download - page 88

86 // DELHAIZE GROUP FINANCIAL STATEMENTS’12
 Interest Income is recognized as interest accrues (using the effective interest method) and is included in “Income from
investments” (see Note 29.2).
 Dividend income is recognized when the Group’s right to receive the payment is established. The income is included in
“Income from investments” (see Note 29.2).
Cost of Sales
Cost of sales includes the purchase cost of products sold and all costs associated with getting the products into the retail stores
including buying, warehousing and transportation costs. Finally, cost of sales includes appropriate vendor allowances (see also
accounting policy for “Inventories” above).
Selling, General and Administrative Expenses
Selling, general and administrative expenses include store operating expenses, costs incurred for activities which serve securing
sales, administrative and advertising expenses.
Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision
maker (CODM), who is responsible for allocating resources and assessing performance of the operating segments (see Note 3).
2.4 Significant Use of Estimates, Assumptions and Judgment
The preparation of financial statements in conformity with IFRS requires Delhaize Group to make judgments, estimates and
assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities and income and
expenses, which inherently contain some degree of uncertainty. These estimates are based on experience and assumptions
Delhaize Group believes to be reasonable under the circumstances. By definition, actual results could and will often differ from
these estimates. In the past, the Group’s estimates generally have not deviated materially from actual results. Revisions to
accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.
Information about significant areas of estimation uncertainty and critical judgments in applying accounting policies that have the
most significant effect on the amounts in the consolidated financial statements is included in, but not limited to, the following
notes:
 Note 4.1 - Business combinations;
 Notes 6, 7, 8, 11, 14, 19 - Assessing assets for impairment and fair values of financial instruments;
 Notes 13, 25 - Accounting for vendor allowances;
 Note 20 - Provisions;
 Note 21 - Employee Benefits; and
 Note 22 - Income Taxes.
2.5 Standards and Interpretations Issued but not yet Effective
The following standards, amendments to or revisions of existing standards or interpretations have been published and are
mandatory for the Group’s accounting periods beginning on January 1, 2013 or later periods. Unless otherwise indicated below,
Delhaize Group is still in the process of assessing the impact of these new standards, interpretations, or amendments to its
consolidated financial statements and does not plan to early adopt them:
 Amendments to IAS 1 Presentation of Items of Other Comprehensive Income (applicable for annual periods beginning on or
after July 1, 2012): Following the adoption of the amendment the Group will have to modify its presentation by grouping
items presented in OCI on the basis of whether they are potentially reclassifiable to profit or loss subsequently. The initial
application will have little impact on the Group's consolidated financial statements.
 Amendments to IAS 19 Employee Benefits (applicable for annual periods beginning on or after January 1, 2013): The
amendment will require, besides others, replacing interest cost and expected return on plan assets with a net interest
amount that is calculated by applying the discount rate to the net defined benefit liability (asset), including the impact of
taxes in the measurement of the defined benefit obligation and immediate recognition of all past service costs. The
amendments to IAS 19 require retrospective application. Based on the Group’s assessment, the revised IAS 19 standard
would have increased the 2012 defined benefit cost by €2 million, and will increase the 2013 defined benefit cost by
€1 million.
 Amendments to IAS 32 Offsetting Financial Assets and Financial Liabilities (applicable for annual periods beginning on or
after January 1, 2014). The amendment adds application guidance to the existing financial asset and financial liabilities
offsetting requirements in IAS 32. The Group believes that the initial application of the amendment should have minimal
impact on its consolidated financial statements.
 Amendments to IFRS 7 Disclosures - Offsetting Financial Assets and Financial Liabilities (applicable for annual periods
beginning on or after January 1, 2013). The change will require specific disclosures to all recognized financial instruments