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92 Group Financial Statements Notes Accounting and Valuation Policies Recognition of Income and Expense Revenues are recognized when the product/service has been provided and risks associated therewith transferred. Th is excludes revenues from transactions applying the percentage of completion method per IAS 11. Th ese include income from services measured by percentage of completion to the extent the point of completion thereof can be reliably determined at the balance sheet date. Th e percentage of completion is determined using the input-oriented method. Under the input-oriented method, contract costs accruing through the balance sheet date are applied as a percentage of total estimated contract costs (cost-to-cost method). Goodwill Goodwill arising from business combinations accounted for in accordance with IFRS 3 represents acquisition cost in excess of the Group’s share of the fair value of identifi able assets, liabilities and contingent liabilities acquired. Initial recognition is at acquisition cost, with subsequent recognition at acquisition cost less accumulated impairment losses. Goodwill is subject to at least annual impairment testing. Impairment losses are measured as the diff erence between the carrying amount and Other Intangible Assets Internally generated intangible assets of the non-current assets are carried at cost which require to be capitalized in the balance sheet if the criteria for recognition as set out in IAS 38 have been met. Acquired intangible assets are carried at amortized cost. Intangible assets acquired as part of a business combination are initially recognized at fair value at the acquisition date in accordance with IFRS 3. Intangible assets with defi nite useful life are amortized systematically on a straight-line basis over their estimated useful life. Impairment losses are determined by applying the requirements for impairment testing (IAS 36). As a rule, capitalized Other income is recognized when it is probable that the economic benefi ts will fl ow to Bertelsmann Group and the amount can be measured reliably. Expenses are deferred on the basis of underlying facts or the period of time to which they relate. Interest income and expense are accrued. Dividends received from unconsolidated investments are recognized when the respective distribution is received. Revenues from services rendered are recognized based on their percentage of completion. the recoverable amount of the cash-generating units to which the goodwill has been allocated. Any impairment loss is immediately recognized in profi t or loss. Impairment of goodwill, including impairment losses recognized in the previous interim period, is not reversed. In the Bertelsmann Group, goodwill is tested for impairment each year as of December 31, as outlined in the section “Impairment Losses,” or if a triggering event arises. software is amortized over a period of between three and fi ve years. Supply rights and subscriber portfolios are amortized over a period of two to 15 years, while the amortization period for trademarks and music, fi lm and publishing rights is three to 15 years. Licenses are amortized over the term of the respective license agreement. Th e useful life is reviewed annually and adjusted to refl ect changes in expectations. Intangible assets with indefi nite useful life are not amortized. Instead, they are subject to at least annual impairment testing and written down to their recoverable amount as applicable. Bertelsmann Annual Report 2009
Company | Group Management Group Financial | Corporate Governance | Report of the | Boards/Mandates | Additional Information Report Statements Supervisory Board Income Statement Statement of Comprehensive Income Balance Sheet Cash Flow Statement Statement of Changes in Equity Notes Property, Plant and Equipment Items of property, plant and equipment are carried at cost less depreciation and, where applicable, impairment losses. Th e cost of items of property, plant and equipment produced internally within the Group includes direct costs and a portion of overhead costs directly attributable to their production. Th e cost of property, plant and equipment produced over a longer period of time also includes borrowing costs accrued up to the completion date. Th e amounts involved are insignifi cant to the Group. All other borrowing costs are expensed in the period accrued. Maintenance costs are carried as expenses for the period, whereas expenses for activities which lead to a longer useful life or improved use are generally capitalized. Impairment Losses In accordance with IAS 36 “Goodwill,” intangible assets and property, plant and equipment are tested for impairment at each balance sheet date, with impairment losses recognized if the recoverable amount of the respective assets has fallen below the carrying amount. Th e recoverable amount is the higher of fair value less cost to sell or value in use. If it is not possible to allocate cash infl ows to an asset, the relevant impairment losses are determined on the basis of cash fl ows attributable to the next highest cash-generating unit. Projected cash fl ows are based on internal estimates for three planning periods. Two additional planning periods are applied in addition. For periods Leasing If the Bertelsmann Group bears all material opportunities and risks as part of leasing agreements and is thus to be regarded as the economic owner (fi nance lease), the leased item is capitalized when the contract is entered into at its market value or the lower present value of the future lease payments less the costs included therein for insurance, maintenance and taxes and the profi ts thereupon. Payment obligations arising from fi nance leases are recognized as fi nancial liabilities in the same amount. If it is suffi ciently certain that ownership of the leased asset will pass to the lessee at the end of the lease term, the asset is depreciated over its useful life. Otherwise, it is depreciated over the term of the lease. Th ere are no contingent rents. Bertelsmann Annual Report 2009 Items of property, plant and equipment are depreciated on a straight-line basis over their estimated useful life. Th e estimated useful life and depreciation methods are reviewed annually in accordance with IAS 16. During the year under review, scheduled depreciation was based on the following useful lives: • Buildings: 20 to 50 years • Plant, technical equipment and machinery: fi ve to 15 years • Furniture, fixtures and other equipment: three to twelf years Individually significant components of non-current assets are recorded and depreciated separately (component approach). beyond this detailed horizon, a perpetual annuity is recognized, taking into account individual business-specifi c growth rates which as a rule range from 0 to 4 percent. Discounting is always based on the weighted average cost of capital (WACC) using the average after-tax cost of capital. If the reasons for impairment no longer apply, impairment losses may be reversed up to a maximum of the carrying amount of the respective asset if the impairment loss had not been recognized. Th e latter does not apply to goodwill and intangible assets with an indefi nite useful life. Leased assets primarily relate to buildings. Finance leases for buildings are generally subject to non-cancelable minimum lease terms of approximately 20 years. Upon expiry of this term, the lessee is as a rule entitled to purchase the leased asset at its residual value. Th e operating leases entered into by the Bertelsmann Group primarily relate to rental agreements for buildings and technical transmission facilities. Th e leased assets are allocated to the lessor – in economic terms. Th e lease installments constitute expenses for the period. Th e total amount of lease payments due over the non-cancelable minimum lease terms of these operating leases is disclosed in the notes under other fi nancial commitments. 93
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Annual Report 2009 Digitization Inn
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Bertelsmann at a Glance Key Figures
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Corporate Divisions at a Glance RTL
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Content 8 - 23 175 Years of Bertels
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8 175 Years of Bertelsmann The Lega
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10 175 Years of Bertelsmann 1835 -
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22 175 Years of Bertelsmann Future
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24 The Management Letter from the C
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28 The Management Executive Board B
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30 The Group Bertelsmann Essentials
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32 The Group Bertelsmann Essentials
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34 The Group Corporate Responsibili
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38 40 RTL Group 42 Random House 44
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40 Divisions RTL Group RTL Group is
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46 Divisions Arvato Arvato is one o
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48 Divisions Direct Group Direct Gr
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50 Spirit 175 Years Entrepreneurshi
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1 | Portrait, 1971 2 | In New York,
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O n January 2, 1947, the fi rst wor
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1 3 imprints have enough to do? How
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F all 1973. The Middle East oil cri
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M umbai, summer 2007: Torsten-Jörn
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trigued by the articles about forei
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C an a person create 27 magazines i
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C ologne Cathedral towers majestica
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Instead, the company began holding
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A home-made antenna on the roof of
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152 Corporate Governance Corporate
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154 Report of the Supervisory Board
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156 Report of the Supervisory Board
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158 Boards/Mandates Supervisory Boa
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160 Boards/Mandates Executive Board
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162 Responsibility Statement Respon
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164 Additional Information Financia
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Future
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