Daimler Annual Report 2011 - Alle jaarverslagen

7 | Consolidated Financial Statements | Notes to the Consolidated Financial Statements
Leasing. Leasing includes all arrangements that transfer
the right to use a specified asset for a stated period of time
in return for a payment, even if the right to use such asset
is not explicitly described in an arrangement. The Group is
a lessee of property, plant and equipment and a lessor of
its products. It is evaluated on the basis of the risks and rewards
of a leased asset whether the ownership of the leased asset
is attributed to the lessee (finance lease) or to the lessor (operating
lease). Rent expense on operating leases by which the
Group is lessee is recognized over the respective lease terms
on a straight-line basis. Equipment on operating leases by
which the Group is lessor is carried initially at its acquisition
or manufacturing cost and is depreciated to its expected
residual value over the contractual term of the lease, on a
straight-line basis. The same accounting principles apply
to assets if Daimler sells such assets and leases them back
from the buyer.
Impairment of non-current non-financial assets. Daimler
assesses at each reporting date whether there is an indication
that an asset may be impaired. If such indication exists,
Daimler estimates the recoverable amount of the asset.
The recoverable amount is determined for each individual asset
unless the asset generates cash inflows that are not largely
independent of those from other assets or groups of assets
(cash-generating units). In addition, goodwill and other
intangible assets with indefinite useful lives are tested annually
for impairment; this takes place at the level of the cashgenerating
units. If the carrying amount of an asset or of a cashgenerating
unit exceeds the recoverable amount, an impairment
loss is recognized for the difference.
The recoverable amount is the higher of fair value less costs
to sell and value in use. For cash generating units, Daimler
determines the recoverable amount as fair value less costs
to sell and compares it with the carrying amount (including
goodwill). If no observable market prices exist, fair value is
measured by discounting future cash flows using a riskadjusted
interest rate. Cash flows are estimated on the basis
of multi-year planning. Periods not covered by the forecast
are taken into account by recognizing a residual value (terminal
value), which generally does not consider any growth rates.
If fair value less costs to sell is lower than the carrying amount,
value in use is additionally calculated to determine the
recoverable amount.
An assessment for assets other than goodwill is made at each
reporting date as to whether there is any indication that
previously recognized impairment losses may no longer exist
or may have decreased. If this is the case, Daimler records
a partial or an entire reversal of the impairment; the carrying
amount is thereby increased to its recoverable amount.
However, the increased carrying amount may not exceed the
carrying amount that would have been determined (net of
depreciation) had no impairment loss been recognized in prior
years.
Non-current assets held for sale and disposal groups.
The Group classifies non-current assets or disposal groups as
held for sale if the conditions of IFRS 5 Non-current assets
held for sale and discontinued operations are fulfilled. In this
case, the assets or disposal groups are no longer depreciated
but measured at the lower of carrying amount and fair value
less costs to sell. If fair value less costs to sell subsequently
increases, any impairment loss previously recognized is reversed,
this reversal is restricted to the impairment loss previously
recognized for the assets or disposal group concerned. The
Group generally discloses these assets or disposal groups
separately in the statement of financial position.
Inventories. Inventories are measured at the lower of cost
and net realizable value. The net realizable value is the estimated
selling price less any remaining costs to sell. The cost of
inventories is generally based on the specific identification
method and includes costs incurred in acquiring the inventories
and bringing them to their existing location and condition.
Costs for large numbers of inventories that are interchangeable
are allocated under the average cost formula. In the case
of manufactured inventories and work in progress, cost
also includes production overheads based on normal capacity.
Financial instruments. A financial instrument is any
contract that gives rise to a financial asset of one entity and
a financial liability or equity instrument of another entity.
Financial instruments in the form of financial assets and financial
liabilities are generally presented separately. Financial
instruments are recognized as soon as Daimler becomes a party
to the contractual provisions of the financial instrument.
Upon initial recognition, financial instruments are measured
at fair value. For the purpose of subsequent measurement,
financial instruments are allocated to one of the categories
mentioned in IAS 39 Financial Instruments: Recognition and
Measurement. Transaction costs directly attributable to acquisition
or issuance are considered by determining the carrying
amount if the financial instruments are not measured at fair
value through profit or loss. If the transaction date and the
settlement date (i.e. the date of delivery) differ, Daimler uses
the transaction date for purposes of initial recognition or
derecognition.
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