DHL 2008 Annual Report Download - page 148

Deutsche Post World Net Annual Report 2008
For the home savings business (Deutsche Postbank Group),
provisions are recognised, based on the di erent tari s and condi-
tions applicable to the contracts, for uncertain liabilities relating to
reimbursements of arrangement fees and for retroactively payable
interest rate bonuses where loans have not been taken up or there has
been a change in the applicable interest rate or tari of the contract.
 ese provisions are calculated as a percentage of the total potential
liability, based on the statistical data available relating to customer
behaviour and taking into account the general environment likely
to a ect the business in the future.
 e technical reserves (insurance) consist mainly of out-
standing loss reserves and  (incurred but not reported claims)
reserves. Outstanding loss reserves represent estimates of ultimate
obligations in respect of actual claims or known incidents expected
to give rise to claims, which have been reported to the company but
have yet to be  nalised and presented for payment. Outstanding loss
reserves are based on individual claim valuations carried out by the
company or its ceding insurers.  reserves represent estimates of
ultimate obligations in respect of incidents taking place on or before
the balance sheet date which have not been reported to the company
but will nonetheless give rise to claims in the future. Such reserves
also include provisions for potential errors in settling outstanding
loss reserves.  e company carries out its own assessment of ulti-
mate loss liabilities using actuarial methods and also commissions
an independent actuarial study of these each year as a means of veri-
fying the reasonableness of its estimates.
Financial liabilities
On initial recognition,  nancial liabilities are carried at fair
value less transaction costs.  e price determined on a price-e cient
and liquid market or a fair value determined using the treasury risk
management system deployed within the Group is taken as the fair
value. In subsequent periods the  nancial liabilities are measured at
amortised cost. Any di erences between the amount received and
the amount repayable are recognised in income over the term of the
loan using the e ective interest method.
Liabilities
Trade payables and other liabilities are carried at amortised
cost.  e fair value of the liabilities corresponds more or less to their
carrying amount.
Deferred taxes
In accordance with  , deferred taxes are recognised for
temporary di erences between the carrying amounts in the 
 nancial statements and the tax accounts of the individual entities.
Deferred tax assets also include tax reduction claims which arise
from the expected future utilisation of existing tax loss carryforwards
and which are likely to be realised. In compliance with  . (b)
and  . (b), deferred tax assets or liabilities were only recognised
for temporary di erences between the carrying amounts in the 
 nancial statements and in the tax accounts of Deutsche Post  and
Deutsche Postbank  where the di erences arose a er  January
. No deferred tax assets or liabilities can be recognised for tem-
porary di erences resulting from initial di erences in the opening
tax accounts of Deutsche Post  and Deutsche Postbank  as at
 January . Further details on deferred taxes from tax loss carry-
forwards can be found in Note 19.
In accordance with  , deferred tax assets and liabilities
are calculated by using the tax rates applicable in the individual coun-
tries at the balance sheet date or announced for the time when the
deferred tax assets and liabilities are realised.  e tax rate of . 
applied to German Group companies comprises the corporation tax
rate plus the solidarity surcharge, as well as a municipal trade tax rate
which is calculated as the average of the di erent municipal trade
tax rates. Foreign Group companies use their individual income tax
rate to calculate deferred tax items.  e income tax rates applied for
foreign companies range from   to  .
Income taxes
Income tax assets and liabilities are measured at the amounts
for which repayments from or payments to the tax authorities are
expected to be received or made.
Contingent liabilities
Contingent liabilities represent possible obligations whose
existence will be con rmed only by the occurrence or non-occur-
rence of one or more uncertain future events not wholly within the
control of the enterprise. Contingent liabilities also include certain
obligations that will probably not lead to an out ow of resources
embodying economic bene ts, or where the amount of the out ow
of resources embodying economic bene ts cannot be measured with
su cient reliability. In accordance with  , contingent liabilities
are not recognised as liabilities (see Note 52).
8 The exercise of judgement in applying the accounting
policies
 e preparation of -compliant consolidated  nancial
statements requires the exercise of judgement by management. All
estimates are reassessed on an ongoing basis and are based on his-
torical experience and expectations with regard to future events that
appear reasonable under the given circumstances.  is applies to the
following matters in particular:
In the case of certain contracts, a decision must be made
whether they should be accounted for as derivatives or as execu-
tory contracts. Financial assets are classi ed under four categories,
namely, held-to-maturity investments, loans and receivables, availa-
ble-for-sale  nancial assets and  nancial assets at fair value through
pro t or loss. In measuring the provisions for pensions and other
employee bene ts, there are di erent options for recognising actuar-
ial gains and losses. For this purpose, the Group applies the “corridor
method” in accordance with  . (  corridor). With respect
to assets held for sale, it must be determined whether the assets are
available for sale in their present condition and whether their sale
is highly probable. If that is the case, the assets and the associated
liabilities are reported and measured as assets held for sale and lia-
bilities associated with assets held for sale.
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