SEC Form 20-F - Deutsche Bank Annual Report 2012

Deutsche Bank Notes to the Consolidated Balance Sheet F-124
Annual Report 2010 on Form 20-F 24 – Goodwill and Other Intangible Assets
Other intangible assets with finite useful lives are generally amortized over their useful lives based on the straightline
method (except for the VOBA, as explained in Note 01 “Significant Accounting Policies” and Note 39
“Insurance and Investment Contracts”, and for mortgage servicing rights).
Mortgage servicing rights are amortized in proportion to and over the estimated period of net servicing revenues.
The useful lives of other amortized intangible assets by asset class are as follows.
Useful lives in
years
Internally generated intangible assets:
Software up to 10
Purchased intangible assets:
Customer-related intangible assets up to 25
Contract-based intangible assets up to 40
Value of business acquired up to 30
Other up to 20
Unamortized Intangible Assets
Within this asset class, the Group recognizes certain contract-based and marketing-related intangible assets
which are deemed to have an indefinite useful life. In particular, the asset class comprises investment management
agreements related to retail mutual funds and certain trademarks. Due to the specific nature of these
intangible assets, market prices are ordinarily not observable and, therefore, the Group values such assets
based on the income approach of valuation, using a post-tax discounted cash flow methodology.
Retail investment management agreements: This asset, amounting to € 774 million, relates to the Group’s U.S.
retail mutual fund business and is allocated to the Asset Management cash-generating unit. Retail investment
management agreements are contracts that give DWS Investments the exclusive right to manage a variety of
mutual funds for a specified period. Since the contracts are easily renewable, the cost of renewal is minimal,
and they have a long history of renewal, these agreements are not expected to have a foreseeable limit on the
contract period. Therefore, the rights to manage the associated assets under management are expected to
generate cash flows for an indefinite period of time. The intangible asset was valued at fair value based upon a
third party valuation at the date of the Group’s acquisition of Zurich Scudder Investments, Inc. in 2002.
In 2010, there was no impairment as the recoverable amount of the retail investment management agreements,
calculated as fair value less costs to sell, exceeded its carrying amount. The fair value was determined using
the multi-period excess earnings method.
In 2009, a reversal of an impairment loss of € 287 million was recognized and recorded as impairment of
intangible assets in the income statement. A related impairment loss had been taken in the fourth quarter of
2008. The impairment reversal was related to retail investment management agreements for certain open end
funds and was recorded in AWM. The impairment reversal was due to an increase in fair value as a result of
increases in market values of invested assets as well as current and projected operating results and cash flows
of investment management agreements. The recoverable amount of the asset was calculated as fair value less
costs to sell, using the multi-period excess earnings method.