DHL 2014 Annual Report Download - page 155

Operating leases
For operating leases, the Group reports the leased asset at amor-
tised cost as an asset under property, plant and equipment where
it is the lessor. e lease payments recognised in the period are
shown under other operating income. Where the Group is the
lessee, the lease payments made are recognised as lease expenses
under materials expense. Lease expenses and income are recog-
nised using the straight-line method.
Investments accounted for using the equity method
Investments accounted for using the equity method cover asso-
ciates and joint ventures. ese are recognised using the equity
method in accordance with   (Investments in Associates
and Joint Ventures). Based on the cost of acquisition at the time
of purchase of the investments, the carrying amount of the invest-
ment is increased or reduced annually to reect the share of earn-
ings, dividends distributed and other changes in the equity of the
associates and joint ventures attributable to the investments of
Deutsche Post  or its consolidated subsidiaries. e goodwill
contained in the carrying amounts of the investments is accounted
for in accordance with  . Investments accounted for using the
equity method are impaired if the recoverable amount falls below
the carrying amount. Gains and losses from the disposal of invest-
ments accounted for using the equity method, as well as impair-
ment losses and their reversals, are recognised in other operating
income or other operating expenses; Note .
Financial instruments
A nancial instrument is any contract that gives rise to a nancial
asset of one entity and a nancial liability or equity instrument of
another entity. Financial assets include in particular cash and cash
equivalents, trade receivables, originated loans and receivables,
and derivative nancial assets held for trading. Financial liabilities
include contractual obligations to deliver cash or another nancial
asset to another entity. ese mainly comprise trade payables, li-
abilities to banks, liabilities arising from bonds and nance leases,
and derivative nancial liabilities.
Fair value option
Under the fair value option, nancial assets or nancial liabilities
may be measured at fair value through prot or loss on initial rec-
ognition if this eliminates or signicantly reduces a measurement
or recognition inconsistency (accounting mismatch). e Group
makes use of the option in order to avoid accounting mismatches.
Financial assets
Financial assets are accounted for in accordance with the pro-
visions of  , which distinguishes between four categories of
nan cial instruments.
--  
ese nancial instruments are non-derivative nancial assets
and are carried at their fair value, where this can be measured
reli ably. If a fair value cannot be determined, they are carried at
cost. Changes in fair value between reporting dates are generally
recognised in other comprehensive income (revaluation reserve).
e reserve is reversed to income either upon disposal or if the fair
value falls below cost more than temporarily. If, at a subsequent
balance sheet date, the fair value of a debt instrument has increased
objectively as a result of events occurring aer the impairment loss
was recognised, the impairment loss is reversed in the appropriate
amount. Impairment losses recognised in respect of equity instru-
ments may not be reversed to income. If equity instruments are
recognised at fair value, any reversals must be recognised in other
comprehensive income. No reversals may be made in the case of
equity instruments that were recognised at cost. Available-for-sale
nancial instruments are allocated to non-current assets unless
the intention is to dispose of them within  months of the bal-
ance sheet date. In particular, investments in unconsolidated sub-
sidiaries, marketable securities and other equity investments are
reported in this category.
--  
Financial instruments are assigned to this category if there is an
intention to hold the instrument to maturity and the economic
conditions for doing so are met. ese nancial instruments are
non-derivative nancial assets that are measured at amortised cost
using the eective interest method.
  
ese are non-derivative nancial assets with xed or determin-
able payments that are not quoted on an active market. Unless
held for trading, they are recognised at cost or amortised cost at
the balance sheet date. e carrying amounts of money market
receiv ables correspond approximately to their fair values due to
their short maturity. Loans and receivables are considered current
assets if they mature not more than  months aer the balance
sheet date; otherwise, they are recognised as non-current assets. If
the recoverability of receivables is in doubt, they are recognised
at amortised cost, less appropriate specic or collective valuation
allowances. A write-down on trade receivables is recognised if
there are objective indications that the amount of the outstanding
receivable cannot be collected in full. e write-down is recognised
in the income statement via a valuation account.
Deutsche Post  Group —  Annual Report
149
Consolidated Financial Statements — NOTES — Basis of preparation