Porsche 2012 Annual Report Download - page 187

Key sources of judgment are the classification of financial instruments as well as determin-
ing the parameters underlying their measurement (see section 4.2.2 in note [21]), deciding which
indicators are indicative of an impairment of associates and joint ventures (see the section
“Equity accounting” under “Consolidation principles”) as well as the recognition of deferred tax
assets, provisions and contingent liabilities (see note [22] on litigation in particular). At the level
of the investees, further key sources of judgment include determining the starting point for the
recognition of development costs as an asset, the classification of leases as operating or finance
leases and deciding which indicators are indicative of an impairment of items of property, plant
and equipment and leased assets.
The judgments and estimates are based on assumptions that are derived from the current
information available. In particular, the circumstances given when preparing the consolidated
financial statements and assumptions as to the expected future development of the global and
industry environment were used to estimate the company’s future business performance.
The estimates on which accounting is based are associated with uncertainties. This applies
above all to forecasted cash flows and discount rates. Another factor which may cause vari-
ances from expectations is the outcome of litigation. Factors which may cause variances from
judgments and estimates at the level of associates include expectations about global economic
growth and any resulting changes in planning, developments in exchange rates, interest rates
and the price of raw materials as well as environmental and other legal provisions.
In such cases, the assumptions, and if necessary the carrying amounts of the assets and
liabilities concerned, are adjusted accordingly. Prior to the date of authorization of the financial
statements by the executive board for issue to the supervisory board, there were no indications
that the carrying amounts of the assets and liabilities presented in the consolidated balance
sheet would require any significant adjustment in the following reporting period other than as
described under subsequent events. Judgments and estimates by management included as-
sumptions relating to macroeconomic development, the development of automotive markets
and the legal environment that are described in the forecast report as part of Porsche SE’s
group management report for the 2012 reporting period.
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