DHL 2008 Annual Report Download - page 146

Deutsche Post World Net Annual Report 2008
Assets held for sale and liabilities associated
with assets held for sale
Assets held for sale are assets available for sale in their present
condition and whose sale is highly probable.  ey may consist of indi-
vidual non-current assets, groups of assets (disposal groups) or com-
ponents 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 assets held for
sale. 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 remeasure-
ment 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 measurement to fair value less costs to sell of discontin-
ued operations classi ed as held for sale are reported in the pro t or
loss from discontinued operations.  is also applies to the pro t or
loss from operations of these components of an entity and the gain
or loss on disposal.
Receivables and other securities as well as liabilities
from fi nancial services (Deutsche Postbank Group)
For  nancial year , receivables and other securities as
well as liabilities from  nancial services are reported in the assets
held for sale and liabilities associated with assets held for sale bal-
ance sheet items. Financial year  is the last year for which the
operating activities of the Deutsche Postbank Group are presented in
the balance sheet items receivables and other securities from  nan-
cial services and liabilities from  nancial services.
Whether or not there is an active market for a  nancial
instrument is relevant for assessing the accounting policies for the
 nancial instrument in question. According to  ., a  nan-
cial instrument is regarded as quoted in an active market if quoted
prices are readily and regularly available from an exchange, dealer,
broker, industry group, pricing service or regulatory agency, and
those prices represent actual and regularly occurring market trans-
actions on an arm’s length basis. If the conditions mentioned do not
exist, there is an inactive market.
Loans and advances to other banks and customers are gener-
ally recognised at amortised cost (“loans and receivables” category).
 is category also includes money market lendings. Premiums and
discounts including transaction costs are recognised in the income
statement under net interest income. Interest accrued on loans and
advances as well as premiums 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, portfo-
lio-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 allow-
ances are determined on the basis of Basel  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 deriva-
tives and derivatives associated with hedged items measured under
the fair value option.  ese transactions are recognised at the trade
date. Trading assets are measured 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 pub-
licly quoted market prices on an active market as de ned by  .
   ., 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 recog-
nition. 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 ( .).  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 ective 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 trading 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 depos-
its 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 remuneration
In accordance with  , the stock option plan for exec-
utives is measured using investment techniques based on option
pricing models. The 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   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 fair value thus calculated for probable options
is recognised in income under sta costs and allocated over the term
of the options.
Stock appreciation rights  issued to members of the
Board of Management and executives are measured on the basis of
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