BMW 2007 Annual Report Download - page 90

88 Group Financial Statements
73 Group Financial Statements
73 Income Statements
74 Balance Sheets
76 Cash Flow Statements
78 Group Statement of Changes
in Equity
79 Statement of Income and
Expenses recognised directly
in Equity
80 Notes
80 – Accounting Principles
and Policies
89 – Notes to the Income
Statement
96 – Notes to the Balance Sheet
117 – Other Disclosures
131 – Segment Information
separately as part of the financial result. All other
costs relating to allocations to pension provisions are
allocated to costs by function in the income state-
ment.
Other provisions are recognised when the Group
has an obligation to a third party, an outflow of re-
sources is probable and a reliable estimate can be
made of the amount of the obligation. Measurement
is computed on the basis of fully attributable costs.
Non-current provisions with a remaining period of
more than one year are discounted to the present
value of the expenditures expected to settle the ob-
ligation at the balance sheet date.
Financial liabilities are measured on first-time
recognition at cost, which is equivalent to the fair value
of the consideration given. Transaction costs are in-
cluded in this initial measurement. Subsequent to
initial recognition, liabilities are, with the exception of
derivative financial instruments, measured at amor-
tised cost. The BMW Group has no liabilities which
are held for trading. Liabilities from finance leases
are stated at the present value of the future lease
payments and disclosed under financial liabilities.
The preparation of the Group financial state-
ments in accordance with IFRSs requires manage-
ment to make certain assumptions and estimates
that affect the reported amounts of assets and lia-
bilities, revenues and expenses and contingent lia-
bilities. The assumptions and estimates relate prin-
cipally to the group-wide determination of economic
useful lives, the recognition and measurement of
provisions and the recoverability of future tax bene-
fits. All assumptions and estimates are based on
f actors known at the balance sheet date. They are
determined on the basis of the most likely outcome
of future business developments. This includes the
situation in the automotive sector and the general
business environment. Actual amounts could in cer-
tain cases differ from those assumptions and esti-
mates, if business conditions develop differently to
the Group’s expectations at the balance sheet date.
Where new information comes to light, differences
are reflected in the income statement and assump-
tions changed accordingly. There was no indication
at the balance sheet date that any assumptions and
estimates were subject to any material risks. For
that reason, there is no reason to assume that the
figures will require to be adjusted in the coming
financial year. No adjustments of this nature were
recorded during the financial year 2007.
New financial reporting rules
(a) Financial reporting rules applied for the first time
in the financial year 2007
The following Standards and Revised Standards
were applied for the first time in the financial year
2007:
– Amendments to IAS 1 (Presentation of Financial
Statements: Capital Disclosures), mandatory for
financial years beginning on or after 1 January
2007
–
IFRS 7 (Financial Instruments: Disclosures),
mandatory for financial years beginning on or after
1 January 2007
In addition, the following Interpretations were applied
for the first time:
– IFRIC 7 (Applying the Restatement Approach un-
der IAS 29 Financial Reporting in Hyperinflationary
Economics), mandatory for financial years begin-
ning on or after 1 March 2006
– IFRIC 8 (Scope of IFRS 2), mandatory for financial
years beginning on or after 1 May 2006
– IFRIC 9 (Reassessment of Embedded Derivatives),
mandatory for financial years beginning on or after
1 June 2006
– IFRIC 10 (Interim Financial Reporting and Impair-
ment), mandatory for financial years beginning on
or after 1 November 2006
IFRS 7 (Financial Instruments: Disclosures) results
in a greater scope of disclosures about financial in-
struments in the Notes to the Group financial state-
ments. Other financial reporting rules applied for
the first time in 2007 did not have a significant im-
pact on the BMW Group.
(b) New financial reporting rules issued in 2007
The IASB issued a revised version of IAS 23 (Bor-
rowing Costs) in 2007, which is mandatory for finan-
cial years beginning on or after 1 January 2009. A
revised version of IAS 1 (Presentation of Financial
Statements) was also issued. The revised standard
is mandatory for financial years commencing on or
after 1 January 2009.
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