DHL 2015 Annual Report Download - page 155

Deutsche Post  Group —  Annual Report
 
Other provisions are recognised for all legal or constructive obliga-
tions to third parties existing at the balance sheet date that have
arisen as a result of past events, that are expected to result in an
outow of future economic benets and whose amount can be
measured reliably. ey 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 dis-
counted at market rates of interest that reect the region and time
to settlement of the obligation. e discount rates used in the nan-
cial year were between .  and .  (previous year: .  and
 ). e eects arising from changes in interest rates are recog-
nised in net nancial income / net nance cost.
Provisions for restructurings are only established in accord-
ance with the aforementioned criteria for recognition if a detailed,
formal restructuring plan has been drawn up and communicated
to those aected.
e technical reserves (insurance) consist mainly of outstand-
ing loss reserves and  (incurred but not reported claims) re-
serves. Outstanding loss reserves represent estimates of obligations
in respect of actual claims or known incidents expected to give rise
to claims, which have been reported to the company but which have
yet to be nalised and presented for payment. Outstanding loss re-
serves are based on individual claim valuations carried out by the
company or its ceding insurers.  reserves represent estimates
of obligations in respect of incidents taking place on or before the
balance sheet date that have not been reported to the company. Such
reserves also include provisions for potential errors in settling out-
standing loss reserves. e company carries out its own assessment
of ultimate loss liabilities using actuarial methods and also commis-
sions an independent actuarial study of these each year in order to
verify the reasonableness of its estimates.
Financial liabilities
On initial recognition, nancial liabilities are carried at fair value
less transaction costs. e price determined on a price-ecient and
liquid market or a fair value determined using the treasury risk
management system deployed within the Group is taken as the fair
value. In subsequent periods the nancial liabilities are measured
at amortised cost. Any dierences between the amount received and
the amount repayable are recognised in income over the term of the
loan using the eective interest method.
      
e convertible bond on Deutsche Post  shares is split into an
equity and a debt component, in line with the contractual arrange-
ments. e debt component, less the transaction costs, is reported
under nancial liabilities (bonds), with interest added up to the
issue amount over the term of the bond using the eective interest
method (unwinding of discount). e value of the call option,
which allows Deutsche Post  to redeem the bond early if a spe-
cied share price is reached, is attributed to the debt component in
accordance with  .. e conversion right is classied as an
equity derivative and is reported in capital reserves. e carrying
amount is calculated by assigning to the conversion right the re-
sidual value that results from deducting the amount calculated sep-
arately for the debt component from the fair value of the instrument
as a whole. e transaction costs are deducted on a proportion-
atebasis.
Liabilities
Trade payables and other liabilities are carried at amortised cost.
e fair value of the liabilities corresponds more or less to their
carrying amount.
Deferred taxes
In accordance with  , deferred taxes are recognised for tempor-
ary dierences between the carrying amounts in the  nancial
statements and the tax accounts of the individual entities. Deferred
tax assets also include tax reduction claims which arise from the
expected future utilisation of existing tax loss carryforwards and
which are likely to be realised. e recoverability of the tax reduc-
tion claims is assessed on the basis of each entity’s earnings projec-
tions which are derived from the Group projections and take any
tax adjustments into account. e planning horizon is ve years.
In compliance with  . (b) and  . (b), deferred tax
assets or liabilities were only recognised for temporary dierences
between the carrying amounts in the  nancial statements and
in the tax accounts of Deutsche Post  where the dierences arose
aer  January . No deferred tax assets or liabilities are recog-
nised for temporary dierences resulting from initial dierences in
the opening tax accounts of Deutsche Post  as at  January .
Further details on deferred taxes from tax loss carryforwards can
be found in Note .
In accordance with  , deferred tax assets and liabilities are
calculated using the tax rates applicable in the individual countries
at the balance sheet date or announced for the time when the de-
ferred tax assets and liabilities are realised. e tax rate applied to
German Group companies is unchanged at . . It comprises the
corporation tax rate plus the solidarity surcharge, as well as a
municipal trade tax rate that is calculated as the average of the dif-
ferent municipal trade tax rates. Foreign Group companies use their
individual income tax rates to calculate deferred tax items. e
income tax rates applied for foreign companies amount to up to  
(previous year:  ).
145
Consolidated Financial Statements — NOTES — Basis of preparation