Siemens 2006 Annual Report Download - page 162

Notes to Consolidated Financial Statements
(in millions of €, except where otherwise stated and per share amounts)
158
1Basis of presentation
The accompanying Consolidated Financial Statements present the operations of Siemens AG
and its subsidiaries, (the Company or Siemens). The Consolidated Financial Statements have
been prepared in accordance with United States Generally Accepted Accounting Principles
(U.S. GAAP).
Siemens has prepared and reported its Consolidated Financial Statements in euros (€).
Siemens is a German based multinational corporation with a balanced business portfolio of
activities predominantly in the field of electronics and electrical engineering (for further
information see Note 30).
In order to comply with Section 57 and 58 of the EGHGB (Introductory Law to German Com-
mercial Code) in conjunction with §292a of the German Commercial Code (HGB, in the version
effective until December 9, 2004), the Consolidated Financial Statements were supplemented
with Management’s Discussion and Analysis on a consolidated basis and additional explana-
tions. Therefore, the Consolidated Financial Statements, which have to be filed with the Com-
mercial Registry and published in the German Federal Gazette (Bundesanzeiger), comply with
the Fourth and Seventh Directives of the European Community. For the interpretation of these
directives, the Company relied on Article 2 of the German Amendment Accounting Standard
No. 2 issued by the German Accounting Standards Committee.
The Consolidated Financial Statements and Management’s Discussion and Analysis as of
September 30, 2006, prepared in accordance with Section 57 and 58 of the EGHGB in conjunc-
tion with §292a of the HGB (in the version effective until December 9, 2004), are being filed
with the Commercial Registries of the Berlin-Charlottenburg and Munich District Courts
under the numbers HRB 12300 and HRB 6684, respectively.
Financial statement presentation
The presentation of the Company’s worldwide financial data is accompanied by a component
model presentation breaking down Siemens’ financial position, results of operations and cash
flows into three components (see below). These components contain the Company’s reportable
segments (also referred to as Groups).
■Siemens – Represents the Consolidated Financial Statements of the Company.
■Operations – Defined as Siemens’ eleven operating Groups and certain operating activities
not associated with these Groups, as well as centrally managed items including corporate
headquarters, but excluding the activities of the Financing and Real Estate Groups and
the Corporate Treasury.
■Financing and Real Estate – Siemens’ Financing and Real Estate Groups are responsible
for the Company’s international leasing, finance, credit and real estate management
activities.
■Eliminations, reclassifications and Corporate Treasury – Captures separately the con-
solidation of transactions among Operations and Financing and Real Estate, as well as
certain reclassifications. This component also includes the Company’s Corporate Treasury
activities.
The Company’s presentation of Operations, Financing and Real Estate and Corporate
Treasury reflects the management of these components as distinctly different business activi-
ties, with different goals and requirements. Management believes that this presentation pro-
vides a clearer understanding of the components of the Company’s financial position, results
of operations and cash flows. The accounting principles applied to these components are gen-
erally the same as those used for Siemens. The Company has allocated shareholders’ equity to
the Financing and Real Estate business based on a management approach which takes into
Notes