DHL 2014 Annual Report Download - page 153

e carrying amounts of non-monetary assets recognised at con-
solidated 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 recog-
nised in other operating income and expenses in the income state-
ment. In nancial year , income of  million (previous year,
adjusted:  million) and expenses of  million ( previous
year, adjusted:  million) resulted from currency translation
dierences. In contrast, currency translation dierences relating
to net investments in a foreign operation are recognised in other
comprehensive income.
e company’s business in Venezuela is subject to exchange
controls. e Venezuelan currency, the bolívar fuerte, is not freely
convertible. In March , a new exchange rate system known
as   (Sistema Complementario de Administración de
Divisas) was introduced and the state-set exchange rate adjusted.
Deutsche Post  Group began using this system in the second
quarter of  and modied the conversion rate on this basis.
Due to currency eects, the cash and cash equivalents of the com-
panies aected decreased by  million and non-current assets
by  million as at the date of the change. Other current assets
declined by  million and current provisions and liabilities by
 million. e corresponding contra entries are included in the
currency translation reserve in equity. Cash and cash equivalents
amounted to  million as at  December .
 Accounting policies
Uniform accounting policies are applied to the annual nancial
statements of the entities that have been included in the consoli-
dated nancial statements. e consolidated nancial statements
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  Group’s normal business operations consist
of the provision of logistics services. All income relating to nor-
mal business operations is recognised as revenue in the income
statement. 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 over its useful life.
Intangible assets are amortised using the straight-line
method over their useful lives. Impairment losses are recognised
in accordance with the principles described in the section headed
Impairment. e useful lives of signicant intangible assets are pre-
sented in the table below.
Useful lives
Years 1
Internally developed software up to 10
Purchased software up to 5
Licences term of agreement
Customer relationships up to 20
1 The useful lives indicated represent maximum amounts specified by the Group.
The actual useful lives may be shorter due to contractual arrangements or other
specific factors such as time and location.
Intangible assets that are not aected by legal, economic, con-
tractual, or other factors that might restrict their useful lives are
considered to have indenite useful lives. ey are not amortised
but are tested for impairment annually or whenever there are indi-
cations of impairment. ey generally include brand names from
business combinations, for example. Impairment testing is carried
out in accordance with the principles described in the section
headed Impairment.
Deutsche Post  Group —  Annual Report
147
Consolidated Financial Statements — NOTES — Basis of preparation