Porsche 2012 Annual Report Download - page 173

Accounting policies
The assets and liabilities of Porsche SE and the consolidated German and foreign subsidiar-
ies included are accounted for using uniform accounting policies applicable within the Porsche
SE group. The same accounting policies are also used at the level of the associates and joint
ventures of Porsche SE. Where necessary, adjustments are made. Generally, the comparative
information for the fiscal year 2012 is based on the same accounting policies as for the fiscal
year 2011.
Since the contributions to profit or loss made by the investments accounted for at equity
have a significant impact on the net assets and results of operations of the Porsche SE group,
those accounting policies applicable at the Porsche SE group only within the Porsche Holding
Stuttgart GmbH group and the Volkswagen group are also included in the explanations below.
With the exception of certain items, such as investments accounted for at equity or deriva-
tive financial instruments, the consolidated financial statements are prepared using the historical
cost principle. The measurement principles used are described below in detail.
Intangible assets
Purchased intangible assets that are not acquired in a business combination are initially recog-
nized at cost in accordance with IAS 38. The cost of intangible assets acquired in a business
combination is fair value as at the date of acquisition. Following initial recognition, intangible
assets are carried at cost less any accumulated amortization and any accumulated impairment
losses.
The useful lives of intangible assets are assessed as either finite or indefinite.
Intangible assets acquired for a consideration with a finite useful life are written off on a
straight-line basis over their economic useful life, taking any impairments into account. Useful
lives generally range from three to five years. Useful lives, residual values and methods of amor-
tization are reviewed, and adjusted if appropriate, at least at the end of the reporting year. If
adjustments are made, these are accounted for as changes in estimates.
Intangible assets with indefinite useful lives are not amortized. These include goodwill and
brand names from business combinations. The useful lives of brands are considered indefinite
based on the assessment that the inflow of economic benefits from these assets cannot be
attributed to a specific period. 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 deter-
mine 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.
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