DHL 2012 Annual Report Download - page 159

e carrying amounts of nancial assets not carried at fair
value through prot or loss are tested for impairment at each
balance sheet date and whenever there are indications of impair-
ment. e amount of any impairment loss is determined by com-
paring 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
carrying 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.
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.
Investment property
In accordance with  , investment property is property
held to earn rentals or for capital appreciation or both, rather than
for use in the supply of services, for administrative purposes, or
for sale in the normal course of the company’s business. It is meas-
ured in accordance with the cost model. Depreciable investment
property is depreciated over a period of between ve and  years
using the straight-line method. e fair value is determined on
the basis of expert opinions. Impairment losses are recognised in
accord ance with the principles described under the section headed
Impairment.
Inventories
Inventories are assets that are held for sale in the ordinary
course of business, are in the process of production, or are con-
sumed in the production process or in the rendering of services.
ey are measured at the lower of cost or net realisable value. Valu-
ation allowances are charged for obsolete inventories and slow-
moving goods.
Government grants
In accordance with  , government grants are recog-
nised at their fair value only when there is reasonable assurance
that the conditions attaching to them will be complied with and
that the grants will be received. e grants are reported in the in-
come statement and are generally recognised as income over the
periods in which the costs they are intended to compensate are
incurred. Where the grants relate to the purchase or production of
assets, they are reported as deferred income and recognised in the
income statement over the useful lives of the assets.
Deutsche Post DHL Annual Report 
Consolidated Financial Statements
Notes
Basis of preparation
155