DHL 2002 Annual Report Download - page 97

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The carrying amounts of non-monetary assets recog-
nized in the case of consolidated companies operating in
hyperinflationary economies are indexed in accordance with
IAS 29 and thus reflect the current purchasing power at the
balance sheet date.
In accordance with IAS 21, receivables and liabilities
in the single-entity financial statements of consolidated
companies that have been prepared in local currencies are
translated at the closing rate. Currency translation differences
are recognized in other operating income and expenses in
the income statement.
Accounting policies
Revenue and expense recognition
Revenue and income from banking transactions, as well as
other operating income, is generally recognized when services
are rendered, the amount of revenue and income can be reli-
ably measured and it is probable that the economic benefits
from the transactions will flow to the Group.
Operating expenses are recognized when the service is
utilized or when the expenses are incurred.
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Intangible assets
Purchased intangible assets are carried at cost. Internally
generated intangible assets are carried at cost if the criteria
for recognition as an asset are satisfied. This is the case in
particular if future economic benefits will probably flow from
the assets. At Deutsche Post World Net, these relate only to
internally developed software. In addition to direct costs, the
production cost of internally developed software includes
an appropriate share of attributable production overheads.
Any borrowing costs are not included in production costs.
Value added tax arising in conjunction with the acquisition
or production of intangible assets is included in the cost if
it cannot be deducted as input tax.
Intangible assets are reduced by straight-line amortiza-
tion over their useful lives. Capitalized software is amortized
over two to six years, licenses over the term of the license
agreement. Intangible assets are written down if there are
indications of impairment and if the recoverable amount is
lower than amortized cost. The write-downs are reversed if
the reasons for the impairment losses no longer apply.
Goodwill, including goodwill from capital consolida-
tion, is capitalized in accordance with IAS 22 and normally
reduced by straight-line amortization over a useful life of
15 to 20 years. The useful life is determined in particular by
the strategic importance to the Group of the underlying
acquisitions. Additions during the year under review are
amortized ratably. Goodwill is regularly tested for impairment
and is written down if there are indications of impairment.
Foreign currency translation
The following exchange rates were generally applied to foreign currency translation in the Group:
Country Currency Closing rates Average rates
2001 2002 2001 2002
€1 = €1 = €1 = €1 =
USA USD 0.88130 1.04220 0.89347 0.944756
Switzerland CHF 1.48290 1.45480 1.51038 1.467149
United Kingdom GBP 0.60850 0.65000 0.62054 0.628732
Sweden SEK 9.30120 9.15580 9.26121 9.158917