Audi 2008 Annual Report Download - page 224

205
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
189 Notes to the Income
Statement
196 Notes to the Balance Sheet
200 Equity
203 Liabilities
209 Additional disclosures
227 Events occurring subsequent
to the balance sheet date
228 Statement of Interests
held by the Audi Group
28 Provisions for pensions
Provisions for pensions are created on the basis of plans to provide retirement, disability and
surviving dependant benefits. The benefit amounts are generally contingent on the length of
service and the remuneration of the employees.
Both defined contribution and defined benefit plans exist within the Audi Group for retirement
benefit arrangements. In the case of defined contribution plans, the Company pays contribu-
tions to public or private-sector pension plans on the basis of statutory or contractual require-
ments, or on a voluntary basis. Payment of the contributions releases the Company from any
other benefit obligations. Current contribution payments are reported as an expense for the
year in question. With regard to the Audi Group they total EUR 258 (237) million. Of this, con-
tributions of EUR 239 (220) million were paid in Germany towards statutory pension insurance.
The retirement benefit systems are based predominantly on defined benefit plans, with a dis-
tinction being made between systems based on provisions and externally financed benefit
systems.
The domestic and foreign benefit claims of those with entitlement to a pension from the com-
pany pension scheme are calculated in accordance with IAS 19 (Employee Benefits) on the basis
of the Projected Unit Credit Method. This measures future obligations on the basis of the pro
rata benefit entitlements acquired as of the balance sheet date. For purposes of measurement,
trend assumptions are used for the relevant variables affecting the level of benefits.
The retirement benefit scheme within the Audi Group was evolved into a pension fund model in
Germany on January 1, 2001. The retirement benefit commitments for this model are also clas-
sified as defined benefits in accordance with the requirements of IAS 19. The remuneration-
based annual cost of providing employee benefits is invested in mutual funds on a fiduciary
basis by Volkswagen Pension Trust e.V. (Wolfsburg). This model offers employees the opportu-
nity of increasing their pension entitlements, while providing full risk coverage. As the mutual
fund units administered on a fiduciary basis satisfy the requirements of IAS 19 as plan assets,
these funds were offset against the derived retirement benefit obligations.
The amounts recorded in the Balance Sheet for benefit commitments are presented in the fol-
lowing table:
EUR million Dec. 31, 2008 Dec. 31, 2007
Present value of externally funded defined benefit obligations 464 368
Fair value of plan assets 471 368
Financing status (balance) – 7–
Due to the limit on a defined benefit asset amount not capitalized
under IAS 19 7–
Present value of defined benefit obligations not externally funded 1,946 1,957
Provisions for pensions recognized in the Balance Sheet 1,946 1,957