DHL 2015 Annual Report Download - page 150

Deutsche Post  Group —  Annual Report
Useful lives
Years 1
Internally developed software up to 10
Purchased software up to 5
Licences term of agreement
Customer relationship up to 20
1 The useful lives indicated represent maximum amounts specified by the Group. The actual
useful lives may be shorter due to contractual arrangements or other specific factors such
astime and location.
Intangible assets that are not aected by legal, economic, contrac-
tual, or other factors that might restrict their useful lives are con-
sidered to have indenite useful lives. ey are not amortised but
are tested for impairment annually or whenever there are indica-
tions of impairment. ey generally include brand names from
business combinations and goodwill, for example. Impairment test-
ing is carried out in accordance with the principles described in the
section headed Impairment.
Property, plant and equipment
Property, plant and equipment is carried at cost, reduced by accu-
mulated depreciation and valuation allowances. In addition to dir-
ect costs, production cost includes an appropriate share of allocable
production overhead costs. Borrowing costs that can be allocated
directly to the purchase, construction or manufacture of property,
plant and equipment are capitalised. Value added tax arising in con-
junction with the acquisition or production of items of property,
plant or equipment is included in the cost if it cannot be deducted
as input tax. Depreciation is charged using the straight-line method.
e estimated useful lives applied to the major asset classes are pre-
sented in the table below:
Useful lives
Years 1
Buildings 20 to 50
Technical equipment and machinery 10 to 20
Aircraft 15 to 20
 systems 4 to 5
Transport equipment and vehicle fleet 4 to 18
Other operating and oce equipment 8 to 10
1 The useful lives indicated represent maximum amounts specified by the Group. The actual
useful lives may be shorter due to contractual arrangements or other specific factors such
astime and location.
If there are indications of impairment, an impairment test must be
carried out; see section headed Impairment.
Impairment
At each balance sheet date, the carrying amounts of intangible assets,
property, plant and equipment and investment property are re-
viewed for indications of impairment. If there are any such indica-
tions, an impairment test is carried out. is is done by determining
the recoverable amount of the relevant asset and comparing it with
the carrying amount.
In accordance with  , the recoverable amount is the asset’s
fair value less costs to sell or its value in use (present value of the
pre-tax free cash ows expected to be derived from the asset in
future), whichever is higher. e discount rate used for the value in
use is a pre-tax rate of interest reecting current market conditions.
If the recoverable amount cannot be determined for an individual
asset, the recoverable amount is determined for the smallest iden-
tiable group of assets to which the asset in question can be allo-
cated and which generates independent cash ows (cash generating
unit – ). If the recoverable amount of an asset is lower than its
carrying amount, an impairment loss is recognised immediately in
respect of the asset. If, aer an impairment loss has been recognised,
a higher recoverable amount is determined for the asset or the 
at a later date, the impairment loss is reversed up to a carrying
amount that does not exceed the recoverable amount. e increased
carrying amount attributable to the reversal of the impairment loss
is limited to the carrying amount that would have been determined
(net of amortisation or depreciation) if no impairment loss had been
recognised in the past. e reversal of the impairment loss is recog-
nised in the income statement. Impairment losses recognised in
respect of goodwill may not be reversed.
Since January , goodwill has been accounted for using the
impairment-only approach in accordance with  . is stipu-
lates that goodwill must be subsequently measured at cost, less any
cumulative adjustments from impairment losses. Purchased good-
will is therefore no longer amortised and instead is tested for im-
pairment annually in accordance with  , regardless of whether
any indication of possible impairment exists, as in the case of intan-
gible assets with an indenite useful life. In addition, the obligation
remains to conduct an impairment test if there is any indication of
impairment. Goodwill resulting from company acquisitions is allo-
cated to the identiable groups of assets ( s or groups of  s)
that are expected to benet from the synergies of the acquisition.
ese groups represent the lowest reporting level at which the good-
will is monitored for internal management purposes. e carrying
amount of a  to which goodwill has been allocated is tested for
impairment annually and whenever there is an indication that the
unit may be impaired. Where impairment losses are recognised in
connection with a  to which goodwill has been allocated, the
existing carrying amount of the goodwill is reduced rst. If the
amount of the impairment loss exceeds the carrying amount of the
goodwill, the dierence is allocated to the remaining non-current
assets in the .
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