Audi 2009 Annual Report Download - page 196

193
Consolidated Financial
Statements
178 Income Statement
179 Statement of Recognized
Income and Expense
180 Balance Sheet
181 Cash Flow Statement
182 Statement of Changes in Equity
Notes to the Consolidated
Financial Statements
184 Development of fixed assets
in the 2009 fiscal year
186 Development of fixed assets
in the 2008 fiscal year
188 General information
188 Accounting principles
190 Group of consolidated
companies
191 Key effects of changes to
the group of consolidated
companies on the opening
balance sheet for 2009
191 Consolidation principles
192 Foreign currency translation
192 Recognition and
measurement principles
192 Recognition of income
and expenses
193 Intangible assets
193 Property, plant
and equipment
194 Investment property
194 Investments accounted for
using the equity method
194 Impairment tests
195 Financial instruments
197 Other receivables and
financial assets
197 Deferred tax
197 Inventories
198 Securities, cash and
cash equivalents
198 Provisions for pensions
198 Other provisions
198 Management’s estimates
and assessments
199 Notes to the Income Statement
205 Notes to the Balance Sheet
215 Additional disclosures
236 Events occurring subsequent
to the balance sheet date
237 Statement of Interests
held by the Audi Group
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, rights of use and subsi-
dies paid.
Research costs are treated as current expenses in accordance with IAS 38. The development
expenditure for products going into series production is recognized as an intangible asset, pro-
vided 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. No interest was capitalized in relation to borrowing costs due
to the fact that there were no significant borrowings as defined in the criteria of IAS 23 given
that the Audi Group maintains sufficient levels of net liquidity at all times. Capitalized develop-
ment costs are amortized on a straight-line basis from the start of production over the antici-
pated 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 years
Capitalized development costs 5–9 years
The amortization is allocated to the corresponding functional areas.
Goodwill created or acquired in a business combination is recognized and tested for impairment
regularly, as of the balance sheet date, pursuant to IAS 36. If necessary, an impairment loss
resulting from this test is recognized.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are measured at acquisition cost or cost of construction, with
scheduled straight-line depreciation applied according to the pro rata temporis method.
The costs of purchase include the purchase price, ancillary costs and cost reductions.
In the case of self-constructed fixed assets, the cost of construction includes both the directly
attributable cost of materials and cost of labor as well as indirect materials and indirect labor,
which must be capitalized, together with pro rata depreciation. No interest was capitalized in
relation to borrowing costs due to the fact that there were no significant borrowings as defined
in the criteria of IAS 23 given that the Audi Group maintains sufficient levels of net liquidity at
all times. The depreciation plan is generally based on the following useful lives, which are re-
assessed yearly:
Useful life
Buildings 14–50 years
Land improvements 10–33 years
Plant and machinery 6–12 years
Plant and office equipment including special tools 3–15 years