Porsche 2008 Annual Report Download - page 159

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Intangible assets acquired separately with a finite useful life are amortized on a straight-line basis
over their useful life, taking any impairments into account. Useful lives range from three to five
years. Useful lives, residual values and methods of amortization are reviewed, and adjusted if
appropriate, at least at each balance sheet date. If adjustments are made, these are accounted
for as changes in estimates.
Goodwill and intangible assets with indefinite useful lives are not amortized. Each asset or cash-
generating unit is tested at least once a year for impairment. Intangible assets with indefinite
useful lives are reviewed once a year to determine whether the indefinite life assessment continues
to be supportable. If this is no longer the case, the change in the useful life assessment from
indefinite to finite is made prospectively.
Development costs are recognized for products provided that expenditures can be attributed
reliably and all other recognition criteria of IAS 38 are met. The capitalized development costs
include all costs and overhead expenditure directly attributable to the development process that is
incurred after the point in time at which all recognition criteria are met. Capitalized development
costs are amortized beginning at start of production using the straight-line method over the ex-
pected useful life of the product, usually five to ten years. Research and non-capitalizable devel-
opment costs are expensed as incurred.
Property, plant and equipment
Items of property, plant and equipment are measured at cost less depreciation over the useful life
of the assets and impairment losses. The cost of items of property, plant and equipment acquired
as part of a business combination is fair value as at the date of acquisition. Self-constructed items
of property, plant and equipment are recognized at cost. Cost is determined on the basis of the
direct and indirect production-related costs that are directly attributable. Investment grants are
generally deducted from cost. Costs for repairs and maintenance are recognized as an expense.
Depreciation, which is charged on a straight-line basis in general, reflects the pattern of the assets
expected utility to the company. For equipment used in shift operations, increased depreciation
rates are applied.
Depreciation is based on the following useful lives:
Residual values, depreciation method and useful lives are reviewed, and adjusted if appropriate, at
each balance sheet date.
Years
Buildings 25 to 50
Technical equipment and machinery 6 to 20
Other equipment, furniture and fixtures 3 to 15