Audi 2010 Annual Report Download - page 201

199
Consolidated Financial
Statements
184 Income Statement
185 Statement of Recognized
Income and Expense
186 Balance Sheet
187 Cash Flow Statement
188 Statement of Changes in Equity
Notes to the Consolidated
Financial Statements
190 Development of fixed assets
in the 2010 fiscal year
192 Development of fixed assets
in the 2009 fiscal year
194 General information
194 Accounting principles
196 Group of consolidated
companies
198 Consolidation principles
199 Foreign currency translation
200 Recognition and
measurement principles
207 Notes to the Income Statement
214 Notes to the Balance Sheet
223 Additional disclosures
242 Events occurring subsequent
to the balance sheet date
243 Statement of Interests
held by the Audi Group
The Consolidated Financial Statements also include securities funds whose assets are attributable
in substance to the Group.
Receivables and liabilities between consolidated companies are netted, and expenses and income
eliminated. Interim profits and losses are eliminated from Group inventories and fixed assets.
Consolidation processes affecting income are subject to deferrals of income taxes; deferred tax
assets and liabilities are offset where the term and tax creditor are the same.
The same accounting policies for determining the pro rata equity are applied to Audi Group
companies accounted for using the equity method. This is done on the basis of the last set of
audited financial statements of the company in question.
FOREIGN CURRENCY TRANSLATION
The currency of the Audi Group is the euro (EUR). Foreign currency transactions in the individual
financial statements of AUDI AG and the subsidiaries are translated on the basis of the exchange
rates at the time of the transaction. Monetary items in foreign currencies are translated at the
exchange rate applicable on the balance sheet date. Exchange differences are recognized in the
current-period income statements of the respective Group companies.
The foreign companies belonging to the Audi Group are foreign entities and prepare their finan-
cial statements in their local currency. The only exceptions are AUDI HUNGARIA MOTOR Kft.,
Győr (Hungary), and Audi Volkswagen Middle East FZE, Dubai (United Arab Emirates), which
prepare their annual financial statements in euros and U.S. dollars respectively rather than in
local currency. The concept of the “functional currency” is applied when translating financial
statements prepared in foreign currency. Assets and liabilities are, with the exception of equity,
translated at the year-end exchange rate. The effects of foreign currency translation on equity
are reported in the currency exchange reserve with no effect on income. The items in the Income
Statement are translated using weighted average monthly rates. Currency translation variances
arising from the differing exchange rates used in the Balance Sheet and Income Statement are
recognized in equity, without affecting income, until the disposal of the subsidiary.
The development of the exchange rates serving as the basis for currency translation is
shown below:
1 EUR in foreign currency Dec. 31, 2010 Dec. 31, 2009 2010 2009
Year-end exchange rate Average exchange rate
Australia AUD 1.3136 1.6008 1.4423 1.7727
Brazil BRL 2.2177 2.5113 2.3314 2.7674
Japan JPY 108.6500 133.1600 116.2386 130.3366
Canada CAD 1.3322 1.5128 1.3651 1.5850
South Korea KRW 1,499.0600 1,666.9700 1,531.8212 1,772.9039
USA USD 1.3362 1.4406 1.3257 1.3948
People’s Republic of China CNY 8.8220 9.8350 8.9712 9.5277