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96 // DELHAIZE GROUP FINANCIAL STATEMENTS’12
6. Goodwill
(in millions of €)
2012
2011(1)
2010
Gross carrying amount at January 1
3 487
2 900
2 707
Accumulated impairment at January 1
(73)
(72)
(67)
Net carrying amount at January 1
3 414
2 828
2 640
Acquisitions through business combinations and adjustments to initial purchase accounting
3
517
12
Classified as held for sale
(8)
—
—
Impairment loss
(136)
—
—
Currency transaction effect
(84)
69
176
Gross carrying amount at December 31
3 396
3 487
2 900
Accumulated impairment at December 31
(207)
(73)
(72)
Net carrying amount at December 31
3 189
3 414
2 828
_______________
(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.
Goodwill is allocated and tested for impairment at the cash-generating unit (CGU) level that is expected to benefit from synergies
of the combination the goodwill resulted from, which at Delhaize Group represents an operating entity or country level, being also
the lowest level at which goodwill is monitored for internal management purpose.
During 2012, the Group revisited its reporting to the CODM for its U.S. operations (see Note 3). As a consequence, Delhaize
Group’s U.S. operations represent separate operating segments at which goodwill needs to be reviewed for impairment testing
purposes.
In 2011, Delhaize Group acquired 100% of the retail company Delta Maxi Group, operating in five countries in the Balkan area.
During the first half of 2012, Delhaize Group completed the purchase price allocation of the Delta Maxi acquisition and
recognized goodwill of €507 million at acquisition date (see Note 4.1).
The Group’s CGUs with significant goodwill allocations are detailed below:
(in millions)
2012
2011
2010
Food Lion
USD
1 259
1 259
1 259
Hannaford
USD
1 984
1 984
1 984
United States
EUR
2 458
2 507
2 427
Serbia
RSD
36 228
45 844
—
Bulgaria
BGN
—
30
—
Bosnia & Herzegovina
BAM
—
50
—
Montenegro
EUR
—
10
—
Albania
ALL
—
1 161
—
Maxi(1)
EUR
318
497
—
Belgium
EUR
186
184
182
Greece
EUR
207
207
202
Romania
EUR
20
19
17
Total
EUR
3 189
3 414
2 828
_______________
(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.
In accordance with the accounting policies stated in Note 2.3, Delhaize Group conducts an annual impairment assessment for
goodwill and, in addition, whenever events or circumstances indicate that an impairment may have occurred. The impairment test
of goodwill involves comparing the recoverable amount of each CGU with its carrying value, including goodwill, and recognition
of an impairment loss if the carrying value exceeds the recoverable amount.
The recoverable amount of each operating entity is determined based on the higher of value in use calculations and the fair value
less cost to sell:
The value in use (“VIU”) calculations use local currency cash flow projections based on the latest available financial plans
approved by management for all CGUs, adjusted to ensure that the CGUs are tested in its current condition, covering a
three-year period, based on actual results of the past and using observable market data, where possible. Cash flows beyond
the three-year period are extrapolated to five years.