Siemens 2008 Annual Report Download - page 222

126 Notes to Consolidated Financial Statements
(in millions of €, except where otherwise stated and per share amounts)
Notes
1 Basis of presentation
The accompanying Consolidated Financial Statements present the operations of Siemens AG and its subsidiaries
(the Company or Siemens). They are prepared in accordance with International Financial Reporting Standards
and its interpretations effective as of September 30, 2008 as issued by the International Accounting Standards
Board (IASB). The Consolidated Financial Statements also include all information required by the IFRS as
endorsed by the European Union (EU), as well as the additional requirements set forth in Par. 315a(1) of the
German Commercial Code (HGB). Certain pronouncements have been early adopted, as described in Note 2.
Consolidated Financial Statements and Management’s Discussion and Analysis as of September 30, 2008, pre-
pared in accordance with Par. 315a(1) of the HGB are being led with and published in the German Electronic
Federal Gazette (elektronischer Bundesanzeiger).
Siemens prepares and reports its Consolidated Financial Statements in euros (€). Siemens is a German based
multinational corporation with a balanced business portfolio of activities predominantly in the eld of electron-
ics and electrical engineering (for further information see Note 37).
A separate List of subsidiaries and associated companies pursuant to Par. 313(4) HGB will be submitted to the
operator of the electronic version of the German Electronic Federal Gazette.
The Consolidated Financial Statements were authorised for issue by the Managing Board on November 21, 2008.
Financial statement presentation
In scal 2008, Siemens rearranged its organization and, as a result, removed its previous component model
reporting. For further information see Note 37.
2 Summary of significant accounting policies
The accounting policies set out below have been applied consistently to all periods presented in these Consoli-
dated Financial Statements.
Basis of consolidation – The Consolidated Financial Statements include the accounts of Siemens AG and its sub-
sidiaries which are directly or indirectly controlled. Control is generally conveyed by ownership of the majority
of voting rights. Additionally, the Company consolidates special purpose entities (SPE’s) when, based on the
evaluation of the substance of the relationship with Siemens, the Company concludes that it controls the SPE.
Associated companies are recorded in the Consolidated Financial Statements using the equity method of
accounting. Companies in which Siemens has joint control are also recorded using the equity method.
Business combinations – All business combinations are accounted for under the purchase method. The cost of
an acquisition is measured at the fair value of the assets given and liabilities incurred or assumed at the date of
exchange plus costs directly attributable to the acquisition. Identiable assets acquired and liabilities assumed
in a business combination (including contingent liabilities) are measured initially at their fair values at the
acquisition date, irrespective of the extent of any minority interest. The excess of the cost of acquisition over the
fair value of the Company’s share of the identiable net assets acquired is recorded as goodwill.