Porsche 2011 Annual Report Download - page 160

Where group companies are the lessee in operating leases, i.e. when not all significant risks and
rewards incidental to ownership are transferred to the group entities, lease or rental payments are recognized
as an expense in the income statement.
Finance leases
A lease is classified as a finance lease if substantially all risks and rewards incidental to ownership are
transferred to the lessee.
Where items of property, plant and equipment are used under a finance lease, the lessee recognizes
the individual assets and liabilities resulting from the lease at fair value or, if lower, the present value of the
minimum lease payments. Items of property, plant and equipment are depreciated on a straight-line basis over
the economic useful life or the term of the lease, if shorter.
Where group companies act as the lessor under finance leases, receivables relating to the leases are
initially recognized at an amount equal to the net investment.
Borrowing costs
Borrowing costs that are attributable to the acquisition, construction or production of a qualifying asset
are recognized as part of the cost of that asset. The Porsche SE group did not capitalize any borrowing costs
either in the 2011 reporting period or in SFY 2010.
Impairment test
At the end of each reporting period, the group assesses whether there is any indication of impairment.
An impairment test is performed at least once a year for goodwill, capitalized costs for products under
development and intangible assets with an indefinite useful live. For intangible assets with finite useful lives,
property, plant and equipment as well as investments accounted for at equity an impairment test is performed
when there is an indication that the asset may be impaired. With respect to the latter, please also refer to the
section “Equity accounting” under “Consolidation principles” above.
The recoverable amount is determined in the course of impairment testing. The recoverable amount is
the higher of fair value less costs to sell and value in use. The fair value less costs to sell is the amount
obtainable from the sale of an asset in an arm’s length transaction between knowledgeable, willing parties, less
any costs to sell. Costs to sell are incremental costs incurred to sell the asset or cash-generating unit. Value in
use is determined using the discounted cash flow method or capitalized earnings method on the basis of the
estimated future cash flows expected to arise from the continuing use of the asset and its disposal.
160 FINANCIALS