DHL 2007 Annual Report Download - page 138
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Deutsche Post World Net Annual Report 2007
e carrying amounts of nancial assets not carried at fair value through
pro t or loss are tested for impairment at each balance sheet date and
whenever there are indications of impairment. e amount of any im-
pairment loss is determined by comparing the carrying amount and the
fair value. If there are objective indications of impairment, an impair-
ment loss is recognised in the income statement under other operating
expenses or net nance costs. Impairment losses are reversed if there are
objective reasons arising a er the balance sheet date indicating that the
reasons for impairment no longer exist. e increased carrying amount
resulting from the reversal of the impairment loss may not exceed the
carrying amount that would have been determined (net of amortisation
or depreciation) if the impairment loss had not been recognised.
Impairment losses are recognised within the Group if the debtor is
experiencing signi cant nancial di culties, it is highly probable that
the debtor will be the subject of bankruptcy proceedings, there ceases to
be an active market for a nancial instrument, there are material chang-
es in the issuer’s technological, economic, legal, or market environment,
or the fair value of a nancial instrument falls below its amortised cost
for a signi cant period.
A fair value hedge hedges the fair value of recognised assets and liabili-
ties. Changes in the fair value of both the derivatives and the hedged
item are simultaneously recognised in income.
A cash ow hedge hedges the uctuations in future cash ows from
recognised assets and liabilities (in the case of interest rate risks), highly
probable forecast transactions as well as unrecognised rm commit-
ments that entail a currency risk. e e ective portion of a cash ow
hedge is recognised in the hedging reserve in equity. Ine ective portions
resulting from changes in the fair value of the hedging instrument are
recognised directly in income. e gains and losses generated by the
hedging transactions are initially recognised in equity and are then re-
classi ed into pro t or loss in the period in which the asset acquired or
liability assumed a ects pro t or loss. If a hedge of a rm commitment
subsequently results in the recognition of a non- nancial asset, the gains
and losses recognised directly in equity are included in the initial carry-
ing amount of the asset (basis adjustment).
Hedges of net investments (net investment hedges) in foreign entities
are treated in the same way as cash ow hedges. e gain or loss from
the e ective portion of the hedge is recognised in equity, whilst the gain
or loss attributable to the ine ective portion is recognised directly in
income. e gains or losses taken directly to equity continue to be rec-
ognised in equity until the disposal or partial disposal of the net invest-
ment. Detailed information on hedging transactions can be found in
Note ..
Regular way purchases and sales of nancial assets are recognised at the
settlement date. A nancial asset is derecognised if the rights to receive
the cash ows from the asset have expired. Upon transfer of a nancial
asset, a review is made under the disposal rules pursuant to IAS as to
whether the asset should be derecognised. A disposal gain/loss arises
upon disposal. e remeasurement gains/losses recognised directly in
equity in prior periods must be reversed as of the disposal date. Finan-
cial liabilities are derecognised if the payment obligations arising from
them have expired.
Investment property
In accordance with IAS , investment property is property held to earn
rentals or for capital appreciation or both, rather than for use in the sup-
ply of services or for administrative purposes or for sale in the normal
course of the company’s business. It is measured in accordance with the
cost model. Depreciable investment property is depreciated over a peri-
od of between ve and years. e fair value is determined on the basis
of expert opinions. Impairment losses are recognised in accordance with
the principles described under the section headed “Impairment”.
Inventories
Inventories are assets that are held for sale in the ordinary course of
business, are in the process of production, or are consumed in the pro-
duction process or in the rendering of services. ey are measured at the
lower of cost and net realisable value. Valuation allowances are charged
for obsolete inventories and slow-moving goods.
Government grants
In accordance with IAS , government grants are recognised at their
fair value only when there is reasonable assurance that the conditions
attaching to them will be complied with and that the grants will be
received. e grants are reported in the income statement and are gen-
erally recognised as income over the periods in which the costs which
they are intended to compensate are incurred. Where the grants relate
to the purchase or production of assets, they are reported as deferred
income and recognised in the income statement over the useful lives
of the assets.
Non-current assets held for sale and liabilities associated with
non-current assets held for sale
Non-current assets held for sale are assets available for sale in their
present condition and whose sale is highly probable. ey may consist
of individual non-current assets, groups of assets (disposal groups), or
components of an entity (discontinued operations). Liabilities intended
to be disposed of together with the assets in a single transaction form part
of the disposal group or discontinued operation and are also reported
separately as liabilities associated with non-current assets held for sale.
Non-current assets held for sale are no longer depreciated or amortised,
but are recognised at the lower of their fair value less costs to sell and
the carrying amount. Gains and losses arising from the remeasurement
of individual non-current assets or disposal groups classi ed as held for
sale are reported in the pro t or loss from continuing operations until
the nal date of disposal. Gains and losses arising from the measure-
ment to fair value less costs to sell of discontinued operations classi ed
as held for sale are reported in the pro t or loss from discontinued op-
erations. is also applies to the pro t or loss from operations of these
components of an entity and the gain or loss on disposal.