DHL 1997 Annual Report Download - page 72

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In providing depreciation on movable items of plant and equipment
advantage is taken of the simplification rule in the Income Tax
Regulations permitting provision of a full year's depreciation on
additions during the first six months and half of a full year's depre-
ciation on additions during the second half-year. Low value fixed
assets costing not more than DM 800 each excluding value added
tax are
written off completely and treated as disposals in the year of
acquisition.
Shares in affiliated companies are valued at cost. Valuation of
the right to have Postbank shares transferred to Deutsche Post AG
is based on a valuation report; in the balance sheet, this right is
included under Participating interests.
Loans receivable bearing no or only a low rate of interest are stated
at present value; other loans are stated at nominal amount. The
increase in present value from year to year is treated as an addition
to the loan. Inventories of postage stamps and heating fuel are
stated at fixed values; beginning in 1997, spare parts at freight mail
centers are also stated at fixed values. Inventories of other supplies
and consumables are stated at the lower of average (moving or
weighted) or year-end prices. Merchandise is stated at the lower of
(i) cost (determined by the LIFO method) or moving average prices
or (ii) market price. To the extent necessary, inventories are stated
net of reasonable valuation allowances.
Receivables and other assets are stated at nominal amounts less
appropriate individual valuation allowances. Noninterest-bearing
receivables with a maturity of more than one year are stated at
present value. A general valuation allowance is provided to cover
general credit risks. Marketable securities are valued at the lower of
cost or market price.
The special loss account from the setting up of certain accruals was
set up and included in the opening balance sheet in 1990 under sec-
tion 17(4) of the Law on the Opening Deutschmark Balance Sheet
and the Redetermination of Capital to offset the accruals for uncer-
69