DHL 2011 Annual Report Download - page 173

A fair value hedge hedges the fair value of recognised assets
and liabilities. Changes in the fair value of both the derivatives and
the hedged item are recognised in income simultaneously.
A cash  ow hedge hedges the  uctuations in future cash  ows
from recognised assets and liabilities (in the case of interest rate
risks), highly probable forecast transactions as well as unrecog-
nised  rm commitments that entail a currency risk.  e e ective
portion of a cash  ow hedge is recognised in the hedging reserve in
equity. Ine ective portions resulting from changes in the fair value
of the hedging instrument are recognised directly in income.  e
gains and losses generated by the hedging transactions are initially
recognised in equity and are then reclassi ed to pro t or loss in
the period in which the asset acquired or liability assumed a ects
pro t or loss. If a hedge of a  rm commitment subsequently results
in the recognition of a non- nancial asset, the gains and losses
recognised directly in equity are included in the initial carrying
amount of the asset (basis adjustment).
Net investment hedges in foreign entities are treated in the
same way as cash  ow hedges.  e gain or loss from the e ective
portion of the hedge is recognised in other comprehensive income,
whilst the gain or loss attributable to the ine ective portion is rec-
ognised directly in income.  e gains or losses recognised in other
comprehensive income remain there until the disposal or partial
disposal of the net investment. Detailed information on hedging
transactions can be found in Note ..
Regular way purchases and sales of  nancial assets are rec-
ognised at the settlement date, with the exception of held-for-
trading instruments, particularly derivatives. A  nancial asset is
derecognised if the rights to receive the cash  ows from the asset
have expired. Upon transfer of a  nancial asset, a review is made
under the requirements of   governing disposal as to whether
the asset should be derecognised. A disposal gain / loss arises upon
disposal.  e remeasurement gains / losses recognised in other
comprehensive income in prior periods must be reversed as at the
disposal date. Financial liabilities are derecognised if the payment
obligations arising from them have expired.
  
 ese are non-derivative  nancial assets with  xed or deter-
minable payments that are not quoted on an active market. Unless
held for trading, they are recognised at cost or amortised cost at
the balance sheet date.  e carrying amounts of money market
receivables correspond approximately to their fair values due to
their short maturity. Loans and receivables are considered current
assets if they mature not more than  months a er the balance
sheet date; otherwise, they are recognised as non-current assets. If
the recoverability of receivables is in doubt, they are recognised
at amortised cost, less appropriate speci c or collective valuation
allowances. A write-down on trade receivables is recognised if
there are objective indications that the amount of the outstanding
receivable cannot be collected in full.  e write-down is recognised
in the income statement via a valuation account.
        
All  nancial instruments held for trading and derivatives that
do not satisfy the criteria for hedge accounting are assigned to this
category.  ey are generally measured at fair value. All changes
in fair value are recognised in income. All  nancial instruments
in this category are accounted for at the trade date. Assets in this
category are recognised as current assets if they are either held for
trading or will likely be realised within  months of the balance
sheet date.
To avoid variations in net pro t resulting from changes in the
fair value of derivative  nancial instruments, hedge accounting is
applied where possible and economically useful. Gains and losses
from the derivative and the related hedged item are recognised in
income simultaneously. Depending on the hedged item and the
risk to be hedged, the Group uses fair value hedges and cash  ow
hedges.
 e carrying amounts of  nancial assets not carried at fair
value through pro t or loss are tested for impairment at each bal-
ance sheet date and whenever there are indications of impairment.
 e amount of any impairment loss is determined by compar-
ing the carrying amount and the fair value. If there are objective
indications of impairment, an impairment loss is recognised in the
income statement under other operating expenses or net  nancial
income / net  nance costs. Impairment losses are reversed if there
are objective reasons arising a er the balance sheet date indicat-
ing that the reasons for impairment no longer exist.  e increased
carry ing amount resulting from the reversal of the impairment loss
may not exceed the carrying amount that would have been deter-
mined (net of amortisation or depreciation) if the impairment loss
had not been recognised. Impairment losses are recognised within
the Group if the debtor is experiencing signi cant  nancial di -
culties, it is highly probable that the debtor will be the subject of
bankruptcy proceedings, there are material changes in the issuer’s
technological, economic, legal or market environment, or the fair
value of a  nancial instrument falls below its amortised cost for a
prolonged period.
Deutsche Post DHL Annual Report 
Consolidated Financial Statements
Notes
Basis of preparation
167