Audi 2008 Annual Report Download - page 206

187
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
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
OTHER RECEIVABLES AND FINANCIAL ASSETS
Other receivables and financial assets (except for derivatives) are recognized at amortized cost.
Provision is made for discernible non-recurring risks and general credit risks in the form of cor-
responding value adjustments.
DEFERRED TAX
Pursuant to IAS 12, deferred tax is determined according to the balance sheet-focused liability
method. This method specifies that tax deferrals are to be created for all temporary differences
between the tax base of assets and liabilities and their carrying amounts in the Consolidated
Balance Sheet (temporary concept). Deferred tax assets relating to carryforward of unused tax
losses must also be recognized.
Deferrals amounting to the anticipated tax burden or tax relief in subsequent fiscal years are
created on the basis of the anticipated tax rate at the time of realization. In accordance with
IAS 12, the tax consequences of distributions of profit are not recognized until the resolution on
the appropriation of profits is adopted.
Deferred tax assets include future tax relief resulting from temporary differences between the
carrying amounts in the Consolidated Balance Sheet and the valuations in the Balance Sheet for
tax purposes. Deferred tax assets for carrying forward unused tax losses that can be realized in
the future and from tax relief must also be recognized.
Deferred tax assets and deferred tax liabilities are netted if the tax creditors and maturities are
identical.
Pursuant to IAS 1.70, deferred tax is reported as non-current.
The carrying amount is reduced for deferred tax assets that are unlikely to be realized.
INVENTORIES
Raw materials and supplies are measured at the lower of average cost of acquisition or fair value
(net realizable value). Generally, an average value or a value calculated on the basis of the FIFO
(first in, first out) process is used. Other costs of purchase and purchase cost reductions are
taken into account as appropriate.
Work in progress and finished goods are valued at the lower of cost of conversion or fair value.
Cost of conversion includes direct materials and direct productive wages, as well as a directly
attributable portion of the necessary indirect materials and indirect labor, production-related
depreciation and expenses attributable to the products from the amortization of capitalized
production development costs. Distribution costs, general administrative expenses and interest
on borrowings are not capitalized.
Merchandise is valued at the lower of cost of purchase or fair value.
Provision has been made for all discernible storage and inventory risks in the form of appropri-
ate reductions in the carrying amounts. Individual adjustments are made on all inventories as
soon as the probable proceeds realizable from their sale or use are lower than the carrying
amounts of the inventories. The fair value is deemed to be the estimated proceeds of sale less
the estimated costs incurred up until the sale.