DHL 2007 Annual Report Download - page 139
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Notes Consolidated Financial Statements
Deutsche Post World Net Annual Report 2007
Receivables and other securities as well as liabilities from fi nancial
services (Deutsche Postbank Group)
e operating activities of the Deutsche Postbank Group are presented
under the balance sheet items receivables and other securities from -
nancial services and liabilities from nancial services. e classi cation
of nancial instruments required by IFRS . is as follows:
Measured at amortised cost1)
Balance sheet item IAS 39 category
Loans and advances to other banks Loans and receivables
Loans and advances to customers Loans and receivables
Held to maturity
Non-current fi nancial assets Held to maturity
Loans and receivables
Deposits from other banks Liabilities at amortised cost
Amounts due to customers Liabilities at amortised cost
Securitised liabilities Liabilities at amortised cost
Subordinated debt Liabilities at amortised cost
Measured at fair value
Balance sheet item IAS 39 category
Loans and advances to customers Designated as at fair value
Investment securities Available for sale
Trading assets Held for trading
Trading liabilities Held for trading
Hedging derivatives (assets)
Hedging derivatives (fair values)
1) Including fair value changes to hedged risk for hedged items (fair value hedge).
Loans and advances to other banks and customers are generally recog-
nised at amortised cost (“loans and receivables” category). is category
also includes money market lendings. Premiums and discounts includ-
ing transaction costs are recognised in the income statement under net
interest income. Interest accrued on loans and advances as well as premi-
ums and discounts are reported together with the loans and advances to
which they relate under the relevant balance sheet items. Premiums and
discounts are deferred using the e ective interest method.
Identi able credit risks are covered by speci c valuation allowances (or
collective valuation allowances). In addition, portfolio-based valuation
allowances are recognised for groups of nancial assets with similar
default risk pro les in respect of risks that have arisen but have not yet
been identi ed. e amounts of the allowances are determined on the
basis of Basel II parameters (expected default rates and probability). e
allowance for losses on loans and advances is deducted from assets as
a separate balance sheet item. It comprises the allowance for losses on
loans and advances to other banks and customers.
Trading assets comprise securities and derivatives with positive fair
values acquired for the purpose of generating a pro t from short-term
uctuations in market prices or dealing margins. ey also include the
positive fair values of banking book derivatives and derivatives associ-
ated with hedged items measured under the fair value option. ese
transactions are recognised at the trade date. Trading assets are meas-
ured at their fair values. Remeasurement gains and losses as well as gains
or losses on the sale or disposal of trading assets are recognised in net
trading income. If there are publicly quoted market prices on an active
market as de ned by IAS .AG ., these are generally used as the fair
value; if this is not the case, fair value is determined using recognised
valuation models.
Investment securities are composed of bonds not held for trading and
other xed-income securities, equities and other non- xed-income
securities. Investment securities are recognised at the settlement date
and are measured at cost at the time of initial recognition. Held-to-
maturity bonds and securities not listed on an active market are carried
at amortised cost. Premiums and discounts are allocated directly to the
nancial instruments and deferred over the remaining maturity using
the e ective interest method.
Liabilities and subordinated debt are carried at amortised cost (IAS .).
e carrying amount of hedged liabilities that meet the requirements
for hedge accounting is adjusted for the gains and losses from changes
in fair value attributable to the hedged risk. Premiums, discounts and
issue costs are recognised in net interest income by applying the e ec-
tive interest method.
Trading liabilities comprise derivatives with negative fair values that
were acquired for the purpose of generating a pro t from short-term
uctuations in market prices or dealing margins. ey also include the
negative fair values of banking book derivatives. Remeasurement gains
and losses as well as gains or losses realised on the settlement of trad-
ing liabilities are recognised in net trading income. Derivatives carried
under trading liabilities are recognised at the trade date.
Cash and cash equivalents
Cash and cash equivalents comprise cash, demand deposits and other
short-term liquid nancial assets with an original maturity of up to three
months and are carried at their principal amount. Overdra facilities
used are recognised in the balance sheet as amounts due to banks.
Share-based payment
In accordance with IFRS , the stock option plan for executives is meas-
ured using investment techniques based on option pricing models. e
objective is to determine a fair value for options. A stochastic simulation
model is used for this purpose, which assumes a logarithmic normal
distribution of the returns on Deutsche Post shares and the Dow Jones
EURO STOXX Total Return Index and is therefore based on the same
fundamental assumption as the Black-Scholes model. e options are
measured at fair value on the grant date. e option price thus calcu-
lated is recognised in income under sta costs and spread over the term
of the options.
Stock appreciation rights (SARs) issued to members of the Board of
Management and executives are measured using investment techniques
based on option pricing models in accordance with IFRS . e objective
is to determine their fair value. A stochastic simulation model is used
for this purpose, which assumes a logarithmic normal distribution of
the returns and is therefore based on the same fundamental assumption
as the Black-Scholes model. e
SARs are measured at each reporting
date and at the settlement date. e amount determined is recognised in
income under sta costs to re ect the services rendered as consideration
during the vesting period (lock-up period). A provision is recognised for
the same amount.