Porsche 2009 Annual Report Download - page 145

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In subsequent periods, the carrying amount is changed to reflect the Porsche SE group’s
share of changes in net assets of the associate or joint venture. The share in profit or loss is rec-
ognized in the income statement within the item “profit/loss from investments accounted for at
equity”. This item also includes dilutive effects reducing the investment carrying amount that arise
from capital increases at the level of the investment without participation or with disproportionately
low participation of the Porsche SE group and which do not lead to any changes in the status of the
investment as an associate or joint venture.
Changes in income and expenses recognized directly in equity at the level of the associate
or joint venture are recognized in a separate item within Porsche SE’s group equity. Distributions
received lead to a reduction of the investment’s carrying amount.
An impairment test is carried out whenever there is any indication in accordance with
IAS 39 that the entire carrying amount of the investment is impaired. Where the carrying amount of
the investment exceeds its recoverable amount determined in accordance with IAS 36, an impair-
ment loss is recognized to account for the difference. Value in use is determined on the basis of the
estimated future cash flows expected to be generated by the investment accounted for at equity in
accordance with IAS 28.33a. At least once a year, it is assessed whether there is any indication
that the reason for a previously recognized impairment loss no longer exists or an impairment
amount has decreased. If this is the case, the recoverable amount is recalculated and an impair-
ment previously recognized that no longer exists is reversed.
An impairment test was carried out in the reporting period for both the investment in
Volkswagen AG and the investment in Porsche Zwischenholding GmbH. Value in use was determined
for both investments using the discounted cash flow method by applying the average weighted cost
of capital. Growth rates below the general price increases were used to extrapolate the cash flow
over the detailed planning phase. There was no need to recognize any impairment for the invest-
ments.
Currency translation
Foreign currency items in the financial statements of the entities included in the consoli-
dated financial statements are measured at the spot exchange rates at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies are translated into the functional
currency at the closing rate. Non-monetary items denominated in a foreign currency measured at
historical cost are translated using the exchange rate at the date of the initial transaction. Non-
monetary items measured at fair value in a foreign currency are translated using the exchange rate
prevailing on the date when the fair value was determined. Exchange rate gains and losses as of the
reporting date are recorded in profit or loss.