DHL 2002 Annual Report Download - page 99

14
Inventories
Finished goods and goods purchased and held for resale
are carried at cost or at moving average prices. Valuation
allowances are charged for obsolete inventories and for
slow-moving goods.
Receivables and other assets
Unless held for trading, receivables and other assets are car-
ried at amortized cost at the balance sheet date. Doubtful
receivables are carried at their principal amount, less appro-
priate specific allowances. In addition to any necessary spe-
cific valuation allowances, global valuation allowances are
charged to take account of identifiable risks from the general
credit risk.
Current financial instruments
Current financial instruments are available-for-sale financial
assets, and are carried at their fair values at the balance sheet
date. Unrealized gains or losses from remeasurement are
generally credited or charged directly to the revaluation
reserve in equity. This reserve is reversed to income either
when the assets are sold or otherwise disposed of, or if the
fair value of the assets falls more than temporarily below
their cost.
Financial instruments held for trading and derivatives
All financial instruments held for trading and derivatives
are assigned to the “trading” category. They are generally
measured at their fair values, and all changes in fair value
are recognized in income. Under IAS 39, all derivatives that
do not satisfy the strict criteria for hedge accounting under
IAS 39.142 are also measured at their fair values, with
remeasurement gains and losses recognized in income.
Fair value measurement is also applied irrespective of the
effectiveness of the hedges. Note 45 contains detailed dis-
closures on hedges.
Receivables and other securities from financial services
Originated loans and receivables are carried at amortized
cost. Purchased loans and receivables classified as “held
to maturity” are measured at cost. Purchased loans and
receivables classified as “available for sale” or held for “trad-
ing” are measured at their fair values. “Held-to-maturity”
and originated securities are measured at amortized cost,
while “available-for-sale” securities and securities held for
“trading” are measured at their fair values.
Provisions
Provisions for pensions are measured using the projected unit
credit method prescribed by IAS 19 for defined benefit plans.
The interest component of pension expenses is reported
under staff costs.
Other provisions are recognized for liabilities to third
parties arising from past events, whose settlement is expected
to result in an outflow of economic benefits and that can be
measured reliably. They represent uncertain obligations that
are carried at the best estimate of the expenditure required
to settle the obligation. Provisions with more than one year
to maturity are discounted at market rates of interest that
reflect the risk and the time until settlement of the obligation.
The interest cost on discounted staff-related provisions
is carried under staff costs, while the interest cost on other
discounted provisions is carried under net finance costs.
Liabilities
Liabilities are normally carried at their redemption amount.
Deferred taxes
Deferred taxes are calculated in accordance with IAS 12
(Income Taxes). Deferred tax assets result primarily from
tax loss carryforwards at Deutsche Post AG and Deutsche
Postbank AG. In compliance with IAS 12.24 (b) and
IAS 12.15 (b), deferred tax assets or liabilities can only be
recognized for temporary differences between the carrying
amounts in the financial accounts and in the tax accounts
of Deutsche Post AG and Deutsche Postbank AG where
the differences have arisen after January 1, 1996. No deferred
tax assets or liabilities can be recognized for temporary
differences resulting from initial differences in the opening
tax accounts of Deutsche Post AG and Deutsche Postbank AG
as of January 1, 1996.