DHL 2011 Annual Report Download - page 170

 e carrying amounts of non-monetary assets recognised at
consolidated companies operating in hyperin ationary economies
are generally indexed in accordance with   and thus re ect
the current purchasing power at the balance sheet date.
In accordance with  , receivables and liabilities in the
 nancial statements of consolidated companies that have been
prepared in local currencies are translated at the closing rate as
at the balance sheet date. Currency translation di erences are rec-
ognised in other operating income and expenses in the income
statement. In  nancial year , income of   million (previ-
ous year:   million) and expenses of   million (previous
year:   million) resulted from currency translation di erences.
In contrast, currency translation di erences relating to net invest-
ments in a foreign operation are recognised in other comprehen-
sive income.
 Accounting policies
Uniform accounting policies are applied to the annual
 nan cial statements of the entities that have been included in the
consolid ated  nancial statements.  e consolidated  nancial state-
ments are prepared under the historical cost convention, except
where items are required to be recognised at their fair value.
Revenue and expense recognition
Deutsche Post DHL’s normal business operations consist of
the provision of logistics services. All income relating to normal
business operations is recognised as revenue in the income state-
ment. All other income is reported as other operating income.
Revenue and other operating income is generally recognised when
services are rendered, the amount of revenue and income can be
reliably measured and in all probability the economic bene ts
from the transactions will  ow to the Group. Operating expenses
are recognised in income when the service is utilised or when the
expenses are incurred.
Intangible assets
Intangible assets are measured at amortised cost. Intangible
assets comprise internally generated and purchased intangible
assets and purchased goodwill.
Internally generated intangible assets are capitalised at cost
if it is probable that their production will generate an in ow of
future economic bene ts and the costs can be reliably measured.
In the Group, this concerns internally developed so ware. If the
criteria for capitalisation are not met, the expenses are recognised
immediately in income in the year in which they are incurred. In
addition to direct costs, the production cost of internally devel-
oped so ware includes an appropriate share of allocable produc-
tion overhead costs. Any borrowing costs incurred for qualifying
assets are included in the production cost. Value added tax arising
in conjunction with the acquisition or production of intangible
assets is included in the cost if it cannot be deducted as input tax.
Capitalised so ware is amortised using the straight-line method
over useful lives of between two and  ve years.
 Adjustment of prior-period amounts
Income statement
 m 2010 Adjustments 2010
adjusted
Revenue 51,481 –93 51,388
Materials expense –29,473 93 –29,380
Up until the third quarter of , part of the reduction in
income attributable to customer discounts was recognised under
materials expense rather than revenue.  e prior-period amounts
were adjusted. No opening balance sheet as at  January  is
presented because it was not a ected by the adjustment.
 Currency translation
 e  nancial statements of consolidated companies prepared
in foreign currencies are translated into euros  in accordance
with   using the functional currency method.  e functional
currency of foreign companies is determined by the primary eco-
nomic environment in which they mainly generate and use cash.
Within the Group, the functional currency is predominantly the
local currency. In the consolidated  nancial statements, assets and
liabilities are therefore translated at the closing rates, whilst peri-
odic income and expenses are generally translated at the monthly
closing rates.  e resulting currency translation di erences are
recognised in other comprehensive income. In  nancial year ,
currency translation di erences amounting to   million (previ-
ous year:   million) were recognised in other comprehensive
income (see the statement of comprehensive income and statement
of changes in equity).
Goodwill arising from business combinations a er  Janu-
ary  is treated as an asset of the acquired company and there-
fore carried in the functional currency of the acquired company.
 e exchange rates for the currencies that are signi cant for
the Group were as follows:
Closing rates Average rates
Currency Country
2010
EUR 1 =
2011
EUR 1 =
2010
EUR 1 =
2011
EUR 1 =
  1.34 1.29 1.32 1.40
 Switzerland 1.25 1.22 1.37 1.23
  0.86 0.84 0.86 0.87
 Sweden 8.97 8.93 9.49 9.01
Deutsche Post DHL Annual Report 
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