DHL 1998 Annual Report Download - page 76

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II. Formats, Accounting and Valuation Methods
(1) Formats
The formats used for the balance sheet and profit and loss account are
based on those set out in section 298 in conjunction with sections 266 and
275 of the Commercial Code.In the noncurrent asset section of the balance
sheet a separate caption has been provided for Housing promotion loans.
The profit and loss account has been prepared in the “type of expense”
format.
(2) Accounting and valuation policies
Purchased intangible assets are valued at cost, including incidental costs
of acquisition, less amortization provided by the straight-line method.
Property, plant and equipment are stated at purchase or construction cost,
including incidental costs, less systematic depreciation provided by the
straight-line method. Subsidies received are recorded as deferred income
and recognized as income over the term of the subsidies. Systematic
depreciation is provided over useful lives consistent with those specified in
the tax rules.The adjusted tax depreciation tables by the Federal Minister of
Finance have been taken into consideration for the asset additions during
the 1998 business year. Special depreciation is provided where it is neces-
sary for an asset to be stated at a lower value.
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 years’s depreciation on additions during the
first six months and half of a full year’s depreciation on additions during
the second half-year. Low-value fixed assets are written off completely and
treated as disposals in the year of acquisition.
Shares in affiliated companies and other participations 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 Other participations. No adjustment to the group’s uniform
valuation methods is made for the valuation of Participations in associated
companies.
Loans receivable bearing no or only low rate of interest are stated at present
value.Other loans are stated at nominal value.The increase in present value
from year to year is treated as an addition to the loan.
Inventories of postage stamps, heating fuel and spare parts at the freight
mail centers are stated at fixed values. Inventories of other raw materials,
supplies and consumables are stated at the lower of average (moving or
weighted) or year-end prices.Unfinished products, unfinished services and
finished products as well as goods are stated at the lower of (i) cost (deter-
mined by the LIFO method) or moving average prices or (ii) market price.
To the extent necessary, inventories are stated net of reasonable valuation
allowances.
72
Group Annex