Mercedes 2015 Annual Report Download - page 201

208 E | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Deferred tax assets or liabilities are calculated on the basis
of temporary differences between the tax basis and the financial
reporting of assets and liabilities including differences from
consolidation, on unused tax loss carryforwards and unused
tax credits. Measurement is based on the tax rates expected
to be effective in the period in which an asset is recognized or
a liability is settled. For this purpose, the tax rates and tax
rules are used which have been enacted at the reporting date
or are soon to be enacted. Daimler recognizes a valuation
allowance for deferred tax assets when it is unlikely that a corre-
sponding amount of future taxable profit will be available
against which the deductible temporary differences, tax loss
carryforwards and tax credits can be utilized. Deferred tax
liabilities for taxable temporary differences in connection with
investments in subsidiaries, branches, associates and interests
in joint arrangements are not recognized if the Group is able
to control the timing of the reversal of the temporary difference
and it is probable that the temporary difference will not
reverse in the foreseeable future.
Earnings per share
Basic earnings per share are calculated by dividing profit
attributable to shareholders of Daimler AG by the weighted
average number of shares outstanding. As nothing occurred
in the years 2015 and 2014 that resulted in any dilution, diluted
earnings per share were the same as basic earnings per share
in those years.
Intangible assets
Intangible assets acquired are measured at acquisition
or manufacturing cost less accumulated amortization.
If necessary, accumulated impairment losses are recognized.
Intangible assets with indefinite lives are reviewed annually
to determine whether indefinite-life assessment continues
to be appropriate. If not, the change in the useful-life assessment
from indefinite to finite is made on a prospective basis.
Intangible assets other than development costs with finite
useful lives are generally amortized on a straight-line basis
over their useful lives (three to ten years) and are tested for
impairment whenever there is an indication that the intangible
asset may be impaired. The amortization period for intangible
assets with finite useful lives is reviewed at least at each year-end.
Changes in expected useful lives are treated as changes in
accounting estimates. The amortization expense on intangible
assets with finite useful lives is recorded in functional costs.
Development costs for vehicles and components are recognized
if the conditions for capitalization according to IAS 38 are
met. Subsequent to initial recognition, the asset is carried
at cost less accumulated amortization and accumulated impair-
ment losses. Capitalized development costs include all direct
costs and allocable overheads and are amortized on a straight-
line basis over the expected product life cycle (a maximum
of ten years). Amortization of capitalized development costs is
an element of manufacturing costs and is allocated to those
vehicles and components by which they were generated and is
included in cost of sales when the inventory (vehicles) is sold.
Goodwill
For acquisitions, goodwill represents the excess of the consid-
eration transferred over the fair values assigned to the
identifiable assets proportionally acquired and liabilities
assumed. Goodwill is accounted for at the subsidiaries
in the functional currency of those subsidiaries.
In connection with obtaining control, non-controlling interest
in the acquiree is principally recognized at the proportionate
share of the acquiree’s identifiable assets, which are measured
at fair value.
Property, plant and equipment
Property, plant and equipment are measured at acquisition
or manufacturing costs less accumulated depreciation.
If necessary, accumulated impairment losses are recognized.
The costs of internally produced equipment and facilities
include all direct costs and allocable overheads. Acquisition
or manufacturing costs include the estimated costs, if any,
of dismantling and removing the item and restoring the site.
Property, plant and equipment are depreciated over the useful
lives as shown in table  E.07.
Useful lives of property, plant and equipment
Buildings and site improvements 10 to 50 years
Technical equipment and machinery 6 to 25 years
Other equipment, factory and office equipment 3 to 30 years
E.07