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82 Notes to Consolidated Financial Statements
In July 2001, the FASB issued SFAS 141, “Busi-
ness Combinations,” and SFAS 142. SFAS 141 requires
that the purchase method of accounting be used for all
business combinations initiated after June 30, 2001.
SFAS 141 also specifies the types of acquired intan-
gible assets that are required to be recognized and
reported separately from goodwill and those acquired
intangible assets that are required to be included in
goodwill. SFAS 142 requires that goodwill no longer be
amortized, but instead tested for impairment at least
annually. SFAS 142 also requires recognized intangible
assets with a definite useful life to be amortized over
their respective estimated useful lives and reviewed for
impairment in accordance with SFAS 121 and subse-
quently, SFAS 144 after its adoption (see below). Any
recognized intangible asset determined to have an
indefinite useful life will not be amortized, but instead
tested for impairment in accordance with SFAS 142
until its life is determined to no longer be indefinite.
DaimlerChrysler adopted the provisions of SFAS
141 as of July 1, 2001, and SFAS 142 is effective Janu-
ary 1, 2002. Goodwill that was acquired in a business
combination completed after June 30, 2001, and any in-
tangible asset determined to have an indefinite useful
life that was acquired after June 30, 2001 were not
amortized. Goodwill acquired in business combinations
completed before July 1, 2001, and intangible assets
with indefinite useful lives acquired before July 1,
2001, were amortized until December 31, 2001.
SFAS 142 requires the Group to evaluate its exist-
ing intangible assets and goodwill and to make any
necessary reclassifications in order to conform with the
new separation requirements at the date of adoption.
Upon adoption of SFAS 142, the Group is also required
to reassess the useful lives and residual values of all
intangible assets and make any necessary amortization
period adjustments by March 31, 2002.
In connection with the transitional impairment
evaluation, SFAS 142 requires DaimlerChrysler to per-
form an assessment of whether there is an indication
that goodwill is impaired as of January 1, 2002. To ac-
complish this, DaimlerChrysler is currently (1) identify-
ing its reporting units, (2) determining the carrying
value of each reporting unit by assigning the assets and
liabilities, including the existing goodwill and intan-
gible assets to those reporting units, and (3) determin-
ing the fair value of each reporting unit. This first step
of the transitional assessment is required to be com-
pleted by June 30, 2002. If the carrying value of any
reporting unit exceeds its fair value, then detailed fair
values for each of the assigned assets (excluding good-
will) and liabilities will be determined to calculate the
amount of goodwill impairment, if any. This second
step is required to be completed as soon as possible,
but no later than December 31, 2002. Any transitional
impairment loss resulting from the adoption will be
recognized as the effect of a change in accounting prin-
ciple in the Group’s statement of income (loss). Because
of the extensiveness of the efforts needed to comply
with the adoption of these statements, it is not practi-
cable to reasonably estimate the impact on the Group’s
financial statements.
In June 2001, the FASB issued SFAS 143, “Ac-
counting for Asset Retirement Obligations.” The state-
ment applies to legal obligations associated with the
retirement of tangible long-lived assets that result from
the acquisition, construction, development and (or) the
normal operation of a long-lived asset, except for cer-
tain obligations of lessees. SFAS 143 requires that the
fair value of a liability for an asset retirement obligation
be recognized in the period in which it is incurred if a
reasonable estimate of fair value can be made. The
associated asset retirement costs are capitalized as part
of the carrying amount of the long-lived asset and subse-
quently allocated to expense over the asset’s useful life.
The Group expects to adopt SFAS 143 on January 1,
2003. DaimlerChrysler is currently determining the
impact of the adoption of SFAS 143.