Values

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Report Statements Supervisory
Board
Income Statement
Statement of Comprehensive Income
Balance Sheet
Cash Flow Statement
Statement of Changes in Equity
Notes
Inventories
Inventories, including raw materials and supplies, fi nished goods
and work in progress as well as merchandise, are recognized at
the lower of historical cost and net realizable value at the end of
the year. Similar inventories are reported at average cost less cost
to sell or using the FIFO (fi rst-in, fi rst-out) method. Inventories
originating from intragroup suppliers are adjusted to eliminate
intercompany profi ts and are measured at the Group’s manufacturing
cost.
Inventories carried at cost are reviewed for possible writedowns
at the end of the year. Net realizable value is applied
for this purpose as of the balance sheet date. Net realizable
value is defi ned as the estimated sales price less expected costs
to complete and estimated selling expenses. A write-down is
recognized if the net realizable value of an item of inventories
is lower than its historical cost. Write-downs are reversed if the
circumstances causing their recognition no longer apply. Th e
new carrying amount then represents the lower of historical
cost and adjusted net realizable value. Th e consumption of
inventories is reported in the income statement in the cost of
materials or changes in inventories.
In addition to raw materials and supplies, fi nished goods,
work in progress and merchandise, inventories include all
short-term fi lm, television and similar rights that are intend-
Bertelsmann Annual Report 2009
ed for broadcast or sale within the Group’s normal operating
cycle (i. e., one year). In particular, this includes fi lms and TV
shows currently in production, co-productions and acquired
broadcasting rights. Th e carrying amount of such items at the
balance sheet date is as a rule the lower of historical cost or
net realizable value.
Th e amortization of fi lm and television rights starts from the
date of initial broadcast and depends either on the number of
planned broadcasts or the expected revenues. Th e broadcastbased
amortization of fi lm and television rights is performed
as follows:
• Entertainment programs, such as soap operas, documentaries
and sports, quiz or music programs are written off in full at the
initial broadcast date;
• 50 percent of the carrying amount of children’s programs and
cartoons is written off at each of the fi rst two broadcast dates;
• Th e consumption of cinema productions, TV feature fi lms and
series also spans a maximum of two broadcasts: 67 percent of
the value is consumed upon the fi rst broadcast, the remaining
33 percent upon the second broadcast.
For in-house productions, consumption is reported in the
income statement under changes in inventories, while the consumption
of acquired rights is reported in the cost of materials.
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