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98 Group Financial Statements Notes Share-Based Payments Share options are granted to certain directors and senior employees. Th e options are granted at the market price on the grant date and are exercisable at that price. No compensation cost is recognized in the income statement for share options granted before November 7, 2002. When the options are exercised, the proceeds received, net of any transaction costs, are taken directly to equity. For share options granted after November 7, 2002, the fair value of the options granted is recognized as personnel costs with a corresponding increase in equity. Th e fair value is mea- Non-Current Assets Held for Sale and Related Liabilities Non-current assets or disposal groups are carried as being available for sale if the associated carrying amount is mostly realized in a disposal transaction and not from continued use. Th ese non-current assets and the associated liabilities are presented in separate line items in the balance sheet under IFRS 5. Th ey are measured at the lower of carrying amount or fair value less cost to sell. Scheduled depreciation/amortization is not recorded if a non-current asset is classifi ed as available for sale or forms part of a disposal group that is classifi ed as available for sale. Government Grants A government grant is not recognized until there is reasonable assurance that the enterprise will comply with the conditions attaching to it and that the grant will be received. Grants for assets are recognized as accrued liabilities and recycled to in- Estimates and Assumptions Th e preparation of IFRS-compliant consolidated fi nancial statements requires the use of estimates and assumptions that may impact the carrying amounts of assets, liabilities, income and expenses recognized. Amounts actually realized may diff er from estimated amounts. Th e following section presents estimates and assumptions that are material in the Bertelsmann Group fi nancial statements for understanding the insecurities associated with fi nancial reporting. Recognition of Income and Expense: Some Bertelsmann companies that enter into long-term production contracts with customers and recognize revenues according to the percentageof-completion method do have to estimate the degree of completion. Th is results from the relationship between the contract costs already incurred by the end of the fi scal year and the estimated total project costs. sured at the grant date and allocated over the vesting period during which the employees become unconditionally entitled to the options. Th e fair value of the options granted is measured using a binomial option-pricing model, taking into account the terms and conditions at which the options were granted. Th e amount recognized as an expense is adjusted to refl ect the actual number of share options vesting. Share options forfeited solely due to share prices not achieving the vesting threshold are excluded. Components of entities that fulfi ll the requirements of IFRS 5.32 are classifi ed as discontinued operations and are thus carried separately in the income statement and cash fl ow statement. All of the changes in amounts made during the year under review that are directly connected with the sale of a discontinued operation in any preceding period are also stated in this separate category. If a component of an entity is no longer classifi ed as available for sale, the results of this entity component that was previously carried under discontinued operations, are reclassifi ed to continued operations for all of the reporting periods shown. come over the expected useful life of the respective asset using the straight-line method. Performance-related grants are recognized as income in the periods in which the expenses to be compensated by the grants were incurred. In the event of return rights, mostly for print products, estimates must also be made with regard to the anticipated return volume, as revenues are recognized taking the anticipated returns into account. Return ratios determined using statistical methods are used to identify the anticipated returns. Inventories, trade receivables and other receivables: Writedowns are formed for doubtful receivables based on risk factors such as the customer’s risk of default taking the maturity structure of the receivables into account. Sales estimates and assumptions on future sales success are also made in connection with advances paid to authors to secure exploitation rights in their publications. In addition, in the case of sport and fi lm rights, estimates are made with regard to anticipated revenues. 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 Impairment: Intangible assets with defi nite useful life and property, plant and equipment are tested for impairment in accordance with IAS 36 if indications exist that an asset may be impaired. Goodwill and intangible assets with indefi nite useful life are tested for impairment at least once a year. Impairment is recorded when the carrying amount of an asset exceeds its recoverable amount. Th e recoverable amount is the higher of fair value less selling costs and the value in use, and generally at fi rst the fair value less selling costs is ascertained. As a rule, this is identifi ed using the discounted cash fl ow method, which is based on future cash fl ow forecasts identifi ed as part of company forecasts. Th e cash fl ow forecasts are based on the management’s best possible estimates with regard to future growth. Th e most important assumptions include estimated growth rates, the weighted average cost of capital and tax rates. Changes to these estimates as a result of more recent information could have a material impact on the amount of the possible impairment. For detailed information on the assumptions and estimates that are used in impairment testing for intangible assets (including goodwill) and property, plant and equipment in the Bertelsmann Group, please refer to notes 10 “Select noncurrent assets” and 11 “Goodwill”. Pension commitments and provisions: Pension obligations are measured based on the projected unit credit method, taking into account not only biometric calculations and prevailing longterm capital market interest rates but in particular assumptions about future salary and pension increases and anticipated returns on plan assets. Information on the assumptions made in pension accounting can be found under note 20. Provisions for threatened losses, litigation and warranties are also based to a signifi cant extent on management estimates with regard to their amount and probability of occurrence. Assessments of whether there is a present obligation, an outfl ow of resources is probable and if it is possible to reliably determine the amount of the obligation are generally based on the expertise Bertelsmann Annual Report 2009 of in-house or third-party specialists. More recent information could change the estimates and thus impact the Group’s fi nancial position and results of operations. In the case of purchase price allocations, assumptions are also made regarding the valuation of intangible assets acquired as part of business combinations. Valuations are based on fair value. As a rule, this is the present value of the future incoming/ outgoing payments after taking into account the present value of the tax amortization benefi t. In addition, the defi nition of uniform useful lives within the Group is also based on management estimates. Information on useful life can be found in the sections “Other Intangible Assets” and “Property, Plant and Equipment” on pages 92 and 93. Assessments of the ability to realize future tax benefi ts are also based on assumptions and estimates. Deferred tax assets are only carried in the amount in which they are likely to be subsequently utilized. When assessing the probability of the ability to use deferred tax assets in the future, various factors are taken into account, including past earnings, company forecasts, tax forecast strategies and loss carryforward periods. Information relating to the ability to realize tax benefi ts is presented in note 9 “Income Taxes.” Assumptions are also made when identifying the fair values of non-exchange listed derivatives. In this regard, Bertelsmann uses various actuarial methods that take into account the market conditions and risks in eff ect on the respective balance sheet dates. Estimates and assumptions also relate to share-based payments. Th e conditions of the stock option plans are presented in greater detail in the section “Stock Option Plans at Subsidiaries” under note 19, “Shareholders’ Equity.” Th e estimates and assumptions applied within the Group are constantly reviewed. Adjustments to estimates are generally recognized in the period in which the respective adjustment is made and in future periods. 99
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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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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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Instead, the company began holding
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A home-made antenna on the roof of
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Annabelle Long is astonished. The y
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150 Group Financial Statements Note
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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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