DHL 2009 Annual Report Download - page 161

on the type of intangible asset and the complexity involved in deter-
mining its fair value.  e independent expert determines the fair
value using appropriate valuation techniques, normally based on
expected future cash  ows. In addition to the assumptions about
the development of future cash  ows, these valuations are also sig-
ni cantly a ected by the discount rates used.
Impairment testing for goodwill is based on assumptions with
respect to the future.  e Group carries out these tests annually
and also whenever there are indications that goodwill has become
impaired.  e recoverable amount of the  must then be calcu-
lated.  is amount is the higher of fair value less costs to sell and
value in use. Determining value in use requires adjustments and es-
timates to be made with respect to forecasted future cash  ows and
the discount rate applied. Although management believes that the
assumptions made for the purpose of calculating the recoverable
amount are appropriate, possible unforeseeable changes in these
assumptions – e. g. a reduction in the  margin, an increase in
the cost of capital, or a decline in the long-term growth rate – could
result in an impairment loss that could negatively a ect the Group’s
net assets,  nancial position and results of operations.
Pending legal proceedings in which the Group is involved are
disclosed in Note .  e outcome of these proceedings could have
a signi cant e ect on the net assets,  nancial position and results
of operations of the Group. Management regularly analyses the
information currently available about these proceedings and recog-
nises provisions for probable obligations including estimated legal
costs. Internal and external legal advisers participate in making this
assess ment. In deciding on the necessity for a provision, manage-
ment takes into account the probability of an unfavourable outcome
and whether the amount of the obligation can be estimated with
su cient reliability.  e fact that an action has been launched or a
claim asserted against the Group, or that a legal dispute has been
disclosed in the Notes, does not necessarily mean that a provision
is recognised for the associated risk.
All assumptions and estimates are based on the circumstances
prevailing and assessments made at the balance sheet date. For the
purpose of estimating the future development of the business, a
realistic assessment was also made at that date of the economic en-
vironment likely to apply in the future to the di erent sectors and
regions in which the Group operates. In the event of developments
in this general environment that diverge from the assumptions
made, the actual amounts may di er from the estimated amounts.
In such cases, the assumptions made and, where necessary, the car-
rying amounts of the relevant assets and liabilities are adjusted ac-
cordingly.
At the date of preparation of the consolidated  nancial state-
ments, there is no indication that any signi cant change in the
assumptions and estimates made will be required, so that on the
basis of the information currently available it is not expected that
there will be any signi cant adjustments in  nancial year  to
the carry ing amounts of the assets and liabilities recognised in the
 nancial statements.
Estimates and assessments made by management
 e preparation of the consolidated  nancial statements in ac-
cordance with  requires assumptions and estimates to be made
that a ect the amounts of the assets and liabilities included in the
balance sheet, the amounts of income and expenses, and the disclo-
sures relating to contingent liabilities.
Amongst other things, these assumptions relate to the rec-
ognition and measurement of provisions. When determining the
provisions for pensions and other employee bene ts, the discount
rate used is an important factor that has to be estimated. It is based
on the rate of return on high-quality corporate bonds.  e risk
premiums for corporate bonds compared with government bonds
declined substantially again year-on-year. As a result, the market
returns on which the calculated rate of interest is based also fell. An
increase or a reduction of one percentage point in the discount rate
used would result in a reduction or increase of around   million
in the pension obligations of pension plans in Germany. A similar
change in the discount rate used to measure the pension obligations
of the Group companies in the  would result in a reduction or
increase of around   million. Since actuarial gains and losses
are only recognised if they exceed   of the higher of the de ned
bene t obligation and the fair value of the plan assets, changes in
the discount rate used for the Group’s bene t plans generally have
little or no e ect on the expense or the carrying amount of the pro-
visions recognised in the following  nancial year.
 e Group has operating activities around the globe and is
subject to local tax laws. Management can exercise judgement when
calculating the amounts of current and deferred taxes in the rel-
evant countries. Although management believes that it has made
a reasonable estimate relating to tax matters that are inherently
uncertain, there can be no guarantee that the actual outcome of
these uncertain tax matters will correspond exactly to the original
estimate made. Any di erence between actual events and the esti-
mate made could have an e ect on tax liabilities and deferred taxes
in the period in which the matter is  nally decided.  e amount
recognised for deferred tax assets could be reduced if the estimates
of planned taxable income or the tax bene ts achievable as a result
of tax planning strategies are revised downwards, or in the event
that changes to current tax laws restrict the extent to which future
tax bene ts can be realised.
Goodwill is regularly reported in the Group’s balance sheet
as a consequence of business combinations. When an acquisition
is initially recognised in the consolidated  nancial statements, all
identi able assets, liabilities and contingent liabilities are measured
at their fair values at the date of acquisition. One of the most impor-
tant estimates this requires is the determination of the fair values of
these assets and liabilities at the date of acquisition. Land, buildings
and o ce equipment are generally valued by independent experts,
whilst securities for which there is an active market are recognised
at the quoted exchange price. If intangible assets are identi ed in
the course of an acquisition, their measurement can be based on
the opinion of an independent external expert valuer, depending
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