BMW 2009 Annual Report Download - page 90

88
74 Group Financial Statements
74 Income Statements
74 Statement of
Comprehensive Income
76 Balance Sheets
78 Cash Flow Statements
80 Group Statement of Changes
in Equity
81 Notes
81 Accounting Principles
and Policies
90 Notes to the Income
Statement
97
Notes to the Statement
of Comprehensive Income
98 Notes to the Balance Sheet
119 Other Disclosures
133 Segment Information
Actuarial gains and losses are recognised, net of deferred
tax, directly in equity.
The expense related to the reversal of discounting on pen-
sion obligations and the income from the expected return
on pension plan assets are reported 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 statement.
Other provisions are recognised when the BMW Group
has an obligation to a third party, an outflow of resources
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 dis-
counted
to the present value of the expenditures expected
to settle the obligation at the end of the reporting period.
Financial liabilities are measured on first-time recogni-
tion
at cost, which is equivalent to the fair value of the con-
sideration given. Transaction costs are included in this
initial measurement. Subsequent to initial recognition, lia-
bilities are, with the exception of derivative financial
instru-
ments, measured at amortised 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 other financial lia-
bilities.
The preparation of the Group Financial Statements in ac-
cordance
with IFRSs requires management to make cer-
tain assumptions and estimates that affect the reported
amounts of assets and liabilities, revenues and expenses
and contingent liabilities. The assumptions and estimates
relate principally to the groupwide determination of eco-
nomic useful lives, the measurement of inventories, the
recognition and measurement of provisions and the re-
coverability
of future tax benefits. All assumptions and
estimates are based on factors known at the end of the
reporting period. 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. Estimates and under-
lying
assumptions are checked regularly. Actual amounts
could differ from those assumptions and estimates if
business conditions develop differently to the Group’s ex-
pectations at the end of the reporting period. Where new
information comes to light, differences are reflected in
the
income statement and assumptions changed accord-
ingly. As a result of improvements in use of estimation to
measure the manufacturing cost of inventories, an addi-
tional expense of euro 174 million was recognised in 2009
in cost of sales.
New financial reporting rules
(a) Financial reporting rules applied for the first time in the financial year 2009
The following Standards and Revised Standards were applied for the first time in the financial year 2009:
7
Standard / Interpretation Date of Endorsed Impact on BMW Group
mandatory by EU at
application
31. 12. 2009
IFRS 1 and
IAS 27 Acquisition cost of subsidiaries,
joint and associated entities 1. 1. 2009 Ye s None
IFRS 2 Share-based remuneration:
Vesting conditions and cancellations 1. 1. 2009 Yes None
IFRS 7 Improved disclosures on
financial instruments 1. 1. 2009 Ye s Significant in principle: extended disclosures on the fair
value measurement of financial
instruments and on liquidity risks
IAS 1 Presentation of Financial Statements 1. 1. 2009 Ye s Significant in principle:
Change in presentation of
financial statements and
extended notes disclosures