ANNUAL REPORT 2011 - Kuehne + Nagel

Goodwill is stated at cost less accumulated impairment losses.
Goodwill is tested annually for impairment at year-end. However,
if there is an indication that goodwill would be impaired at
any other point in time, an impairment test is performed.
Other intangibles
Other identifiable intangibles (i.e. software, customer lists,
customer contracts etc.) purchased from third parties or acquired
in a business combination are separately recognised as intangibles,
and are stated at cost less accumulated amortisation and
accumulated impairment losses. Intangibles acquired in a business
combination are recognised separately from goodwill if
they are subject to contractual or legal rights or are separately
transferable and their fair value can be reliably estimated. Software
is amortised over its estimated useful life, three years maximum.
Other intangibles are amortised on a straight line basis
over their estimated useful life (up to ten years maximum).
There are no intangibles with indefinite useful life recognised in
the Group’s balance sheet.
11 Cash and cash equivalents
Cash and cash equivalents comprise cash at banks and in hand
as well as short-term deposits and highly liquid investments with
a term of three months or less that are readily convertible to
known amounts of cash and that are subject to an insignificant
risk of changes in value. For the purpose of the consolidated
cash flow statement, cash and cash equivalents consist also of
bank overdrafts that are repayable on demand as forming an
integral part of the Group’s cash management.
12 Impairment
The carrying amounts of the Group’s investments in associates
and joint ventures, its intangibles and property, plant and equipment,
are reviewed at each balance sheet date to determine
whether there is any indication of impairment. If any such indication
exists, the asset’s recoverable amount is estimated. Goodwill
is tested for impairment every year. An impairment loss is recognised
whenever the carrying amount of an asset or its cashgenerating
unit exceeds its recoverable amount.
Consolidated Financial Statements 2011 _ _ _ _ _ _ Accounting Policies
Calculation of a recoverable amount
The recoverable amount of an asset is the greater of its fair
value less costs to sell and its value in use. In assessing value in
use, the estimated future cash flows are discounted to their
present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks
specific to the asset. For an asset that does not generate largely
independent cash inflows, the recoverable amount is determined
for the cash-generating unit to which the asset belongs.
Reversals of impairment losses
An impairment loss in respect of goodwill is not reversed. In
respect to other assets, an impairment loss is reversed if there
has been a change in the estimates used to determine the recoverable
amount. An impairment loss is reversed only to the extent
that the asset’s carrying amount does not exceed the carrying
amount that would have been determined, net of depreciation
or amortisation, if no impairment loss had been recognised.
13 Share capital
Shares
Shares are classified as equity. Incremental costs directly attributable
to the issue of shares and share options are recognised as a
deduction from equity.
Treasury shares
When share capital recognised as equity is repurchased, the
amount of the consideration paid, which includes directly attributable
costs, net of any tax effects, is recognised as a deduction
from equity. Repurchased shares are classified as treasury shares
and are presented as a deduction from total equity. When treasury
shares are sold or reissued subsequently, the amount
received is recognised as an increase in equity, and the resulting
surplus or deficit on the transaction is transferred to/from the
share premium.
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