Audi 2007 Annual Report Download - page 186

183
EUR million Audi of
America, LLC
Audi Canada
Inc.
Non-current assets 143 13
Current assets 538 72
of which inventories 357 46
Equity 4 1
Non-current liabilities 101 18
Current liabilities 576 66
Balance sheet total 681 85
The effect on the opening balance sheet of the other companies included in the consolida-
tion for the first time (Audi Zentrum Hannover GmbH, Audi Retail GmbH and VOLKSWAGEN
GROUP FIRENZE S.P.A.) amounts to EUR 23 million. The carrying amounts correspond to the
fair values.
The first-time consolidation of VOLKSWAGEN GROUP FIRENZE S.P.A. increased revenue
marginally in the 2007 fiscal year by EUR 29 million. Similarly the inclusion of the company
had only minor impact on consolidated net profit.
In connection with the initial consolidation as of January 1, 2007 of Audi Zentrum Han-
nover GmbH, following its acquisition from Volkswagen Retail GmbH, and the inclusion of
Audi of America, LLC and Audi Canada Inc. in the Consolidated Financial Statements pursu-
ant to IAS 27.13, Sentence 2, the predecessor method was applied for the first time within
the Audi Group. Revenue in the prior-year period of 2006 would have been EUR 21 million
higher if Audi Zentrum Hannover GmbH had been included.
The assets and liabilities of the domestic and foreign companies included in the Consoli-
dated Financial Statements are accounted for in accordance with the standard accounting
policies of the Audi Group.
In the case of subsidiaries that are being consolidated for the first time, the assets and
liabilities are to be measured at their fair value at the time of acquisition. Thus, differences
between pre-acquisition carrying amounts and fair values of assets acquired and liabilities
assumed are carried, depreciated or dissolved in accordance with the corresponding assets
and liabilities. If the purchase prices of the shares exceed the Group’s interest in the equity
calculated in this manner for the individual company, goodwill arises. Goodwill acquired in a
business combination is tested for impairment regularly, at the balance sheet date, and an
impairment loss recognized if necessary.
The predecessor method was applied within the Audi Group in fiscal 2007 for common
control transactions. Under this method, the assets and liabilities of the acquiree are meas-
ured at the gross carrying amounts of the previous parent company. The predecessor
method thus means that no adjustment to the fair value of the acquired assets and liabilities
is performed at the time of acquisition; any goodwill arising during initial consolidation is
adjusted against equity, with no effect on income.
The Consolidated Financial Statements furthermore include securities funds whose as-
sets are attributable in substance to the Group.
Receivables and liabilities between consolidated companies are netted, and expenses
and income eliminated. Intra-group profits and losses are eliminated from Group inventories
and fixed assets.
Principal influences of
changes to the group on
the opening balance sheet
for 2007
Consolidation principles