DHL 2011 Annual Report Download - page 171

Impairment
At each balance sheet date, the carrying amounts of intan-
gible assets, property, plant and equipment and investment prop-
erty 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 rever-
sal 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 rever-
sal of the impairment loss is recognised in the income statement.
Impairment losses recognised in respect of goodwill may not be
reversed.
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 ( s
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 .
Intangible assets are amortised using the straight-line
method over their useful lives. Licences are amortised over the
term of the licence agreement. Capitalised customer relationships
are amortised using the straight-line method over a period of  ve
to  years. Impairment losses are recognised in accordance with
the principles described in the section headed Impairment.
Intangible assets that are not a ected by legal, economic,
contractual, or other factors that might restrict their useful lives
are considered to have inde nite useful lives.  ey are not amor-
tised but are tested for impairment annually or whenever there
are indications of impairment.  ey mainly include brand names
from business combinations. Impairment testing is carried out in
accordance with the principles described in the section headed
Impairment.
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.
Useful lives
years
2010 2011
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
If there are indications of impairment, an impairment test
must be carried out; see the section headed Impairment.
Deutsche Post DHL Annual Report 
Consolidated Financial Statements
Notes
Basis of preparation
165