SEC Form 20-F - Deutsche Bank Annual Report 2012

Deutsche Bank Notes to the Consolidated Financial Statements F-30
Annual Report 2010 on Form 20-F 01 – Significant Accounting Policies
Goodwill and Other Intangible Assets
Goodwill arises on the acquisition of subsidiaries, associates and jointly controlled entities, and represents the
excess of the aggregate of the cost of an acquisition and any noncontrolling interest in the acquiree over the
fair value of the identifiable net assets acquired at the date of the acquisition. For each business combination
any noncontrolling interest in the acquiree is measured either at fair value or at the noncontrolling interest’s
proportionate share of the acquiree’s identifiable net assets.
For the purpose of calculating goodwill, fair values of acquired assets, liabilities and contingent liabilities are
determined by reference to market values or by discounting expected future cash flows to present value. This
discounting is either performed using market rates or by using risk-free rates and risk-adjusted expected future
cash flows.
Goodwill on the acquisition of subsidiaries is capitalized and reviewed for impairment annually, or more frequently
if there are indications that impairment may have occurred. For the purposes of impairment testing, goodwill
acquired in a business combination is allocated to cash generating units which are the smallest identifiable
groups of assets that generate cash inflows largely independent of the cash inflows from other assets or groups
of assets and that are expected to benefit from the synergies of the combination and considering the business
level at which goodwill is monitored for internal management purposes. In identifying whether cash inflows
from an asset (or a group of assets) are largely independent of the cash inflows from other assets (or groups of
assets) various factors are considered including how management monitors the entity’s operations or makes
decisions about continuing or disposing of the entity’s assets and operations. On this basis, the Group’s primary
cash-generating units are Corporate Banking & Securities, Global Transaction Banking, Asset Management
and Private Wealth Management within the Asset and Wealth Management segment, Private & Business Clients
and Corporate Investments.
In addition, for certain nonintegrated investments which are not allocated to the respective segments’ primary
cash-generating units, goodwill is tested individually for impairment on the level of each of these nonintegrated
investments.
Goodwill on the acquisitions of associates and jointly controlled entities is included in the cost of the investments
and the entire carrying amount of the equity method investment is reviewed for impairment annually, or more
frequently if there is an indication that impairment may have occurred.
If goodwill has been allocated to a cash-generating unit and an operation within that unit is disposed of, the
attributable goodwill is included in the carrying amount of the operation when determining the gain or loss on
its disposal.
Intangible assets are recognized separately from goodwill when they are separable or arise from contractual or
other legal rights and their fair value can be measured reliably. Intangible assets that have a finite useful life
are stated at cost less any accumulated amortization and accumulated impairment losses. Customer-related
intangible assets that have a finite useful life are amortized over periods of between 1 and 20 years on a straightline
basis based on their expected useful life. Mortgage servicing rights are carried at cost and amortized in
proportion to, and over the estimated period of, net servicing revenue. The assets are tested for impairment
and their useful lives reaffirmed at least annually.