Porsche 2011 Annual Report Download - page 161

The recoverable amount is generally determined separately for each asset. If it is not possible 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. Any impairment losses are recognized through
profit or loss in the item amortization of intangible assets and depreciation of property, plant and equipment,
leased assets and investment property.
It is reviewed on an annual basis whether the reasons for a previously recognized impairment 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 reversed cannot exceed the amount that
would have been determined as the carrying amount, net of any depreciation and amortization, had no
impairment loss been recognized for the asset in prior years.
Investment property
Investment property held to generate rental income is accounted for at depreciated cost. The
underlying useful lives and depreciation methods used in subsequent measurement correspond to those
applied for items of property, plant and equipment used by the group.
Other receivables and financial assets
Other receivables and financial assets (excluding derivative financial instruments) are accounted for at
amortized cost. Appropriate allowance is made for known individual risks and general credit risks.
Inventories
Inventories are stated at the lower of cost or net realizable value as of the reporting date.
The cost of inventories comprises all costs of purchase and other costs incurred in bringing the
inventories to their present location and condition. In addition to costs directly attributable, the costs of
conversion of the internally produced goods include an appropriate portion of incurred materials and production
overheads as well as production-related depreciation and other directly attributable costs.
Net realizable value is the estimated selling price in the ordinary course of business less the estimated
costs of completion and the estimated costs necessary to make the sale.
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