DHL 2014 Annual Report Download - page 161

Pending legal proceedings in which the Group is involved are
disclosed in Note . e outcome of these proceedings could
have a signicant eect on the net assets, nancial position and
results of operations of the Group. Management regularly analyses
the information currently available about these proceedings and
recognises provisions for probable obligations including estimated
legal costs. Internal and external legal advisers participate in mak-
ing this assessment. In deciding on the necessity for a provision,
management takes into account the probability of an unfavourable
outcome and whether the amount of the obligation can be esti-
mated with sucient reliability. e fact that an action has been
launched or a claim asserted against the Group, or that a legal dis-
pute has been disclosed in the Notes, does not necessarily mean
that a provision is recognised for the associated risk.
All assumptions and estimates are based on the circum-
stances prevailing and assessments made at the balance sheet
date. For the purpose of estimating the future development of the
business, a realistic assessment was also made at that date of the
economic environ ment likely to apply in the future to the dierent
sectors and regions in which the Group operates. In the event of
developments in this general environment that diverge from the
assumptions made, the actual amounts may dier from the esti-
mated amounts. In such cases, the assumptions made and, where
necessary, the carrying amounts of the relevant assets and liabil-
ities are adjusted accordingly.
At the date of preparation of the consolidated nancial state-
ments, there is no indication that any signicant change in the
assumptions and estimates made will be required, so that on the
basis of the information currently available it is not expected that
there will be signicant adjustments in nancial year  to the
carrying amounts of the assets and liabilities recognised in the
nan cial statements.
 Consolidation methods
e consolidated nancial statements are based on the 
nan cial statements of Deutsche Post  and the subsidiaries,
joint operations and investments accounted for using the equity
method included in the consolidated nancial statements and
prepared in accordance with uniform accounting policies as at
 December .
Acquisition accounting for subsidiaries included in the
consolidated nancial statements uses the purchase method of
accounting. e cost of the acquisition corresponds to the fair
value of the assets given up, the equity instruments issued and
the liabilities assumed at the transaction date. Acquisition-related
costs are recognised as expenses. Contingent consideration is rec-
ognised at fair value at the date of initial consolidation.
e assets and liabilities, as well as income and expenses, of
joint operations are included in the consolidated nancial state-
ments in proportion to the interest held in these operations, in
accordance with  . Accounting for the joint operators’ share
of the assets and liabilities, as well as recognition and measurement
of goodwill, use the same methods as applied to the consolidation
of subsidiaries.
In accordance with  , joint ventures and companies on
which the parent can exercise signicant inuence (associates) are
accounted for in accordance with the equity method using the
purchase method of accounting. Any goodwill is recognised under
invest ments accounted for using the equity method.
In the case of step acquisitions, the equity portion previ-
ously held is remeasured at the fair value applicable on the date
of acquisition and the resulting gain or loss recognised in prot
or loss.
Intra-group revenue, other operating income, and expenses
as well as receivables, liabilities and provisions between companies
that are consolidated fully or on a proportionate basis are elimin-
ated. Intercompany prots or losses from intra-group deliveries
and services not realised by sale to third parties are eliminated.
Unrealised gains and losses from business transactions with invest-
ments accounted for using the equity method are eliminated on a
proportionate basis.
Deutsche Post  Group —  Annual Report
155
Consolidated Financial Statements — NOTES — Basis of preparation