Porsche 2009 Annual Report Download - page 153

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Impairment test
At the end of each reporting period, the group assesses whether there is any indication of
impairment. An impairment test is performed at least once a year for goodwill, capitalized costs for
products under development and intangible assets with an indefinite useful live. For intangible as-
sets with finite useful lives, property, plant and equipment as well as investments accounted for at
equity an impairment test is performed when there is an indication that the asset may be impaired.
The recoverable amount is determined in the course of impairment testing. The recoverable
amount is the higher of fair value less costs to sell and value in use. The fair value less costs to sell
is the amount obtainable from the sale of an asset in an arm’s length transaction between knowl-
edgeable, willing parties, less any costs to sell. Costs to sell are incremental costs incurred to sell
the asset or cash-generating unit. Value in use is determined using the discounted cash flow method
or capitalized earnings method on the basis of the estimated future cash flows expected to arise
from the continuing use of the asset and its disposal.
The recoverable amount is generally determined separately for each asset. If it is not pos-
sible to determine the recoverable amount for an individual asset because it does not generate
cash inflows that are largely independent of the cash inflows from other assets, it is determined on
the basis of a group of assets that constitutes a cash-generating unit.
If the carrying amount of an asset or cash-generating unit exceeds its recoverable amount,
an impairment loss is recognized to account for the difference. Impairment losses are recognized
through profit or loss under in the item amortization of intangible assets and depreciation of prop-
erty, plant and equipment, leased assets and investment property.
It is reviewed on an annual basis whether the reasons for a previously recognized impair-
ment loss still exist. If the reasons for impairments recognized in prior years no longer exist, the
impairments are reversed through profit or loss (with the exception of goodwill). The amount re-
versed cannot exceed the amount that would have been determined as the carrying amount, net of
depreciation and amortization if applicable, had no impairment loss been recognized for the asset in
prior years.
To determine whether goodwill is impaired, the segments of the Porsche SE group were
used in general as a cash-generating unit until the date of their deconsolidation in the current fiscal
year. The impairment test of recognized brands was based on the data of the relevant brand or-
ganizations. In the case of other intangible assets and property, plant and equipment, the product
or model series was used to determine the cash-generating units.