DES GB2012 E

Significant accounting policies REVENUE AND EXPENSE RECOGNITION Revenue and other operating income are recognised once the relevant service has been rendered or once the risk has passed to the customer. Operating expenses are recognised once the service has been utilised or at the time when they are booked through profit and loss. Interest income and expense are accrued. INTANGIBLE ASSETS Intangible assets relate exclusively to software purchased by Deutsche EuroShop AG. Additions are measured at cost. These are amortised using the straight-line method over the expected useful life of five years. The method of depre- ciation and the depreciation period are reviewed annually at the end of each financial year. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment is reported at cost, less scheduled depreciation and, where applicable, unscheduled write-downs (impairment charges). Operating and office equipment comprises company cars, office equipment, fittings and technical equipment belong- ing to Deutsche EuroShop AG, and is depreciated using the straight-line method over three to 13 years. The method of depreciation and the depreciation period are reviewed annually at the end of each financial year. INVESTMENT PROPERTIES Under IAS 40, investment property must initially be measured at cost at the date of acquisition. Property that is under construction and that is intended to be used as investment property following its completion also falls under the scope of IAS 40. Property held as a financial investment can either be recognised at amortised cost (cost model) or using the fair-value model. Subsequently, all properties must be measured at their fair value and the annual net changes recognised in income under measurement gains/losses. Investment property is property held for the long term to earn rental income or capi- tal gains. Under IAS 40, investment property measured using the fair value model is no longer depreciated. As in previous years, the fair values of the properties in the period under review were determined by the Feri EuroRating Services AG and GfK GeoMarketing GmbH appraisal team using the discounted cash flow (DCF) method. In accord- ance with the DCF method, future cash flows from the property in question are discounted back to the measure- ment date. In addition, the net income from the property is determined over a detailed planning period of ten years. A resale value is forecast for the end of the ten-year detailed planning phase. The net income is then capitalised over the remaining life. In a second step, the resale value is discounted back to the measurement date. Averaged across all properties, 11.0% (2011: 11.8%) of rental income is deducted for management and adminis- trative costs, with the result that net income equates to 89.0% (2011: 88.2%) of rental income. Actual manage- ment and administrative costs amounted to 10.3% of rental income in the year under review (2011: 9.7%). { 153 } DES ANNUAL REPORT 2012 CONSOLIDATED FINANCIAL STATEMENTS Signiﬁcant accounting policies

DES GB2012 E

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