DHL 2010 Annual Report Download - page 165

Since January , goodwill has been accounted for using
the impairment-only approach in accordance with  .  is
stipulates that goodwill must be subsequently measured at cost,
less any cumulative adjustments from impairment losses. Pur-
chased goodwill is therefore no longer amortised and instead is
tested for impairment annually in accordance with  , regard-
less of whether any indication of possible impairment exists, as in
the case of intangible assets with an inde nite useful life. In addi-
tion, the obligation remains to conduct an impairment test if there
is any indication of impairment. Goodwill resulting from company
acquisitions is allocated to the identi able groups of assets ( or
groups of  s) that are expected to bene t from the synergies of
the acquisition.  ese groups represent the lowest reporting level
at which the goodwill is monitored for internal management pur-
poses.  e carrying amount of a  to which goodwill has been
allocated is tested for impairment annually and whenever there is
an indication that the unit may be impaired. Where impairment
losses are recognised in connection with a  to which goodwill
has been allocated, the existing carrying amount of the goodwill
is reduced  rst. If the amount of the impairment loss exceeds the
carrying amount of the goodwill, the di erence is allocated to the
remaining non-current assets in the .
Finance leases
A lease  nancing transaction is an agreement in which the
lessor conveys to the lessee the right to use an asset for a speci-
 ed period in return for a payment or a number of payments. In
accordance with  , bene cial ownership of leased assets is at-
tributed to the lessee if the lessee bears substantially all risks and
rewards incident to ownership of the leased asset. To the extent
that bene cial ownership is attributable to the Group as the les-
see, the asset is capitalised at the date on which use starts, either at
fair value or at the present value of the minimum lease payments if
this is less than the fair value. A lease liability in the same amount
is recognised under non-current liabilities.  e lease is measured
subsequently at amortised cost using the e ective interest method.
 e depreciation methods and estimated useful lives correspond to
those of comparable purchased assets.
Operating leases
For operating leases, the Group reports the leased asset at
amortised cost as an asset under property, plant and equipment
where it is the lessor.  e lease payments recognised in the period
are shown under other operating income. Where the Group is the
lessee, the lease payments made are recognised as lease expense
under materials expense. Lease expenses and income are recog-
nised using the straight-line method.
Property, plant and equipment
Property, plant and equipment is carried at cost, reduced by
accumulated depreciation and valuation allowances. In addition
to direct costs, production cost includes an appropriate share of
allocable production overhead costs. Borrowing costs that can be
allocated directly to the purchase, construction or manufacture
of property, plant and equipment are capitalised. Value added tax
arising in conjunction with the acquisition or production of items
of property, plant or equipment is included in the cost if it cannot
be deducted as input tax. Depreciation is generally charged using
the straight-line method.  e Group uses the estimated useful lives
indicated below for depreciation. If there are indications of impair-
ment, the principles described in the section headed Impairment
are applied.
Impairment
At each balance sheet date, the carrying amounts of intangi-
ble assets, property, plant and equipment and investment property
are reviewed for indications of impairment. If there are any such
indications, an impairment test must be carried out.  is is done
by determining the recoverable amount of the relevant asset and
comparing it with the carrying amount.
In accordance with  , the recoverable amount is the
asset’s fair value less costs to sell or its value in use, whichever is
higher.  e value in use is the present value of the pre-tax cash
 ows expected to be derived from the asset in future.  e discount
rate used is a pre-tax rate of interest re ecting current market
conditions. If the recoverable amount cannot be determined for
an individual asset, the recoverable amount is determined for the
smallest identi able group of assets to which the asset in question
can be allocated and which generates independent cash  ows (cash
generating unit – ). If the recoverable amount of an asset is
lower than its carrying amount, an impairment loss is recognised
immediately in respect of the asset. If, a er an impairment loss has
been recognised, a higher recoverable amount is determined for
the asset or the  at a later date, the impairment loss is reversed
up to a carrying amount that does not exceed the recoverable
amount.  e increased carrying amount attributable to the reversal
of the impairment loss is limited to the carrying amount that would
have been determined (net of amortisation or depreciation) if no
impairment loss had been recognised in the past.  e reversal of
the impairment loss is recognised in the income statement. Impair-
ment losses recognised in respect of goodwill may not be reversed.
Useful lives
years
2009 2010
Buildings 5 to 50 5 to 50
Technical equipment and machinery 3 to 10 3 to 10
Passenger vehicles 4 to 6 4 to 6
Trucks 5 to 8 5 to 8
Aircraft 15 to 20 15 to 20
Other vehicles 3 to 8 3 to 8
 systems 3 to 8 3 to 8
Other operating and o ce equipment 3 to 10 3 to 10
Deutsche Post DHL Annual Report 
Consolidated Financial Statements
Notes
Basis of preparation
151