DHL 2015 Annual Report Download - page 156

Deutsche Post  Group —  Annual Report
Income taxes
Income tax assets and liabilities are measured at the amounts for
which repayments from, or payments to, the tax authorities are
expected to be received or made. Tax-related nes are recognised
in income taxes if they are included in the calculation of income tax
liabilities, due to their inclusion in the tax base and / or tax rate.
Contingent liabilities
Contingent liabilities represent possible obligations whose exist-
ence will be conrmed only by the occurrence, or non-occurrence,
of one or more uncertain future events not wholly within the con-
trol of the enterprise. Contingent liabilities also include certain
obligations that will probably not lead to an outow of resources
embodying economic benets, or where the amount of the outow
of resources embodying economic benets cannot be measured
with sucient reliability. In accordance with  , contingent
liabilities are not recognised as liabilities, Note .
 Exercise of judgement in applying the accounting policies
e preparation of -compliant consolidated nancial state-
ments requires the exercise of judgement by management. All esti-
mates are reassessed on an ongoing basis and are based on historical
experience and expectations with regard to future events that appear
reasonable under the given circumstances. For example, this applies
to assets held for sale. In this case, it must be determined whether
the assets are available for sale in their present condition and
whether their sale is highly probable. If this is the case, the assets
and the associated liabilities are reported and measured as assets
held for sale and liabilities associated with assets held for sale.
Estimates and assessments made by management
e preparation of the consolidated nancial statements in accord-
ance with s requires management to make certain assumptions
and estimates that may aect the amounts of the assets and liabil-
ities included in the balance sheet, the amounts of income and ex-
penses, and the disclosures relating to contingent liabilities. Ex-
amples of the main areas where assumptions, estimates and the
exercise of management judgement occur are the recognition of
provisions for pensions and similar obligations, the calculation of
discounted cash ows for impairment testing and purchase price
allocations, taxes and legal proceedings.
Disclosures regarding the assumptions made in connection
with the Group’s dened benet retirement plans can be found in
Note .
e Group has operating activities around the globe and is sub-
ject to local tax laws. Management can exercise judgement when
calculating the amounts of current and deferred taxes in the relevant
countries. Although management believes that it has made a rea-
sonable estimate relating to tax matters that are inherently uncer-
tain, there can be no guarantee that the actual outcome of these
uncertain tax matters will correspond exactly to the original esti-
mate made. Any dierence between actual events and the estimate
made could have an eect on tax liabilities and deferred taxes in the
period in which the matter is nally decided. e amount recog-
nised for deferred tax assets could be reduced if the estimates of
planned taxable income or the tax benets achievable as a result of
tax planning strategies are revised downwards, or in the event that
changes to current tax laws restrict the extent to which future tax
benets can be realised.
Goodwill is regularly reported in the Group’s balance sheet as
a consequence of business combinations. When an acquisition is
initially recognised in the consolidated nancial statements, all
identiable assets, liabilities and contingent liabilities are measured
at their fair values at the date of acquisition. One of the most import-
ant estimates this requires is the determination of the fair values of
these assets and liabilities at the date of acquisition. Land, buildings
and oce equipment are generally valued by independent experts,
whilst securities for which there is an active market are recognised
at the quoted exchange price. If intangible assets are identied in
the course of an acquisition, their measurement can be based on the
opinion of an independent external expert valuer, depending on the
type of intangible asset and the complexity involved in determining
its fair value. e independent expert determines the fair value us-
ing appropriate valuation techniques, normally based on expected
future cash ows. In addition to the assumptions about the develop-
ment of future cash ows, these valuations are also signicantly
aected by the discount rates used.
Impairment testing for goodwill is based on assumptions with
respect to the future. e Group carries out these tests annually and
also whenever there are indications that goodwill has become im-
paired. e recoverable amount of the  must then be calculated.
is amount is the higher of fair value less costs to sell and value in
use. Determining value in use requires assumptions and estimates
to be made with respect to forecasted future cash ows and the
discount rate applied. Although management believes that the as-
sumptions made for the purpose of calculating the recoverable
amount are appropriate, possible unforeseeable changes in these
assumptions – e. g. a reduction in the  margin, an increase in
the cost of capital or a decline in the long-term growth rate – could
result in an impairment loss that could negatively aect the Group’s
net assets, nancial position and results of operations.
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