Audi 2008 Annual Report Download - page 202

183
Consolidated Financial
Statements
170 Income Statement
171 Balance Sheet
172 Cash Flow Statement
173 Statement of Changes in Equity
Notes to the Consolidated
Financial Statements
174 Development of
fixed assets 2008
176 Development of
fixed assets 2007
178 General information
178 Accounting principles
180 Group of consolidated
companies
181 Key effects of changes to
the group of consolidated
companies on the opening
balance sheet for 2008
182 Consolidation principles
182 Foreign currency translation
183 Recognition and
measurement principles
183 Recognition of income
and expenses
183 Intangible assets
184 Property, plant
and equipment
184 Investment property
184 Investments accounted for
using the equity method
185 Impairment tests
185 Financial instruments
187 Other receivables and
financial assets
187 Deferred tax
187 Inventories
188 Securities, cash and
cash equivalents
188 Provisions for pensions
188 Other provisions
188 Management’s estimates
and assessments
189 Notes to the Income
Statement
196 Notes to the Balance Sheet
209 Additional disclosures
227 Events occurring subsequent
to the balance sheet date
228 Statement of Interests
held by the Audi Group
1 EUR in foreign currency Dec. 31, 2008 Dec. 31, 2007 2008 2007
Year-end exchange rate Average exchange rate
Australia AUD 2.0274 1.6757 1.7416 1.6356
Brazil BRL 3.2436 2.6145 2.6743 2.6632
Japan JPY 126.1400 164.9300 152.4541 161.2406
Canada CAD 1.6998 1.4449 1.5594 1.4690
South Korea KRW 1,839.1300 1,377.9600 1,606.0872 1,273.3329
USA USD 1.3917 1.4721 1.4710 1.3706
People’s Republic of China CNY 9.4956 10.7524 10.2236 10.4186
As all consolidated subsidiaries have their registered offices in countries in which there is
currently no hyperinflation, IAS 29 does not apply.
RECOGNITION AND MEASUREMENT PRINCIPLES
RECOGNITION OF INCOME AND EXPENSES
Revenue, interest income and other operating income are always recorded when the services are
rendered or the goods or products are delivered, in other words transfer of risk and reward to
the customer.
Proceeds from the sale of vehicles for which buy-back agreements exist are not realized imme-
diately, but on a straight-line basis over the period between sale and buy-back, on the basis of
the difference between the selling price and the anticipated buy-back price. These vehicles are
reported under inventories.
Operating expenses are recognized as income when the service is used or at the time they are
economically incurred.
INTANGIBLE ASSETS
Intangible assets acquired for consideration are recognized at cost of purchase, taking into
account ancillary costs and cost reductions, and are amortized on a scheduled straight-line basis
over their useful life.
Concessions, rights and licenses relate to purchased computer software and subsidies paid.
Research costs are treated as current expenses in accordance with IAS 38. The development
costs for products going into series production are capitalized, provided that production of
these products is likely to bring economic benefit to the Audi Group. If the conditions stated in
IAS 38 for capitalization are not met, the costs are expensed in the Income Statement in the
year in which they occur.
Capitalized development costs encompass all direct and indirect costs that can be directly allo-
cated to the development process. Financing costs are not capitalized. Amortization is per-
formed on a straight-line basis from the start of production, over the anticipated model life of
the developed products.
The amortization plan is based principally on the following useful lives:
Useful life
Concessions, industrial property rights and similar rights and assets 3–15 years
of which software 3–5 years
Capitalized development costs 5–9 years