Audi 2010 Annual Report Download - page 200

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The gross carrying amount of the acquired claims at the time of purchase totaled EUR 42 million,
with the net carrying amount (corresponding to fair value) amounting to EUR 39 million.
The inclusion of the company increased the Audi Group’s revenue by EUR 37 million and reduced
its profit after tax by EUR 4 million. If Italdesign Giugiaro S.p.A. had been included with effect
from January 1, 2010, Group sales before consolidation would have been EUR 57 million higher;
profit after tax would have risen by EUR 3 million.
The fair values of the assets and liabilities were primarily determined using observable market
prices. Where it was not possible to determine a market price based on observable market values,
processes based on income value were used to measure the acquired assets and assumed
liabilities.
Participating interests in associated companies
As of the balance sheet date, FAW-Volkswagen Automotive Company, Ltd., Changchun (China),
in which an interest of 10 percent is held, is accounted for using the equity method. The holding
is accounted for in accordance with the requirements of IAS 28.7 (a).
On the basis of this interest, the following values are attributable to the Audi Group:
EUR million 2010 2009
Non-current assets 252 187
Current assets 733 404
Non-current liabilities 67 53
Current liabilities 592 324
Revenues 1,748 1,232
Net profit for the period 220 110
CONSOLIDATION PRINCIPLES
The assets and liabilities of the domestic and foreign companies included in the Consolidated
Financial Statements are recognized in accordance with the standard accounting and measure-
ment 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. Any realized hidden reserves and
expenses are amortized, depreciated or reversed in accordance with the development of the
corresponding assets and liabilities as part of the subsequent consolidation process. Where the
acquisition values of the investments exceed the Group share in the equity of the relevant com-
pany as calculated in this manner, goodwill is created. Goodwill acquired in a business combina-
tion is tested for impairment regularly at the balance sheet date, and an impairment loss is
recognized if necessary. Within the Audi Group, the predecessor method is applied in relation to
common control transactions. Under this method, the assets and liabilities of the acquired com-
pany or business operations are measured at the gross carrying amounts of the previous parent
company. The predecessor method thus means that no adjustment to the fair value of the ac-
quired assets and liabilities is performed at the time of acquisition; any goodwill arising during
initial consolidation is adjusted against equity, without affecting income.