Audi 2011 Annual Report Download - page 206

203
Consolidated Financial
Statements
188 Income Statement
189 Statement of Recognized
Income and Expense
190 Balance Sheet
191 Cash Flow Statement
192 Statement of Changes in Equity
Notes to the Consolidated
Financial Statements
194 Development of fixed assets
in the 2011 fiscal year
196 Development of fixed assets
in the 2010 fiscal year
198 General information
198 Accounting principles
201 Group of consolidated
companies
202 Consolidation principles
203 Foreign currency translation
204 Recognition and
measurement principles
212 Notes to the Income Statement
218 Notes to the Balance Sheet
227 Additional disclosures
248 Events occurring subsequent
to the balance sheet date
249 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 independent entities and prepare their
financial statements in their local currency. The only exceptions are AUDI HUNGARIA SERVICES
Zrt., Győr (Hungary), 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,
with the exception of equity, are 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, 2011 Dec. 31, 2010 2011 2010
Year-end exchange rate Average exchange rate
Australia AUD 1.2723 1.3136 1.3484 1.4423
Brazil BRL 2.4159 2.2177 2.3265 2.3314
Japan JPY 100.2000 108.6500 110.9586 116.2386
Canada CAD 1.3215 1.3322 1.3761 1.3651
Singapore SGD 1.6819 1.7136 1.7489 1.8055
South Korea KRW 1,498.6900 1,499.0600 1,541.2341 1,531.8212
Taiwan TWD 39.2297 38.9450 40.9119 41.7924
USA USD 1.2939 1.3362 1.3920 1.3257
People’s Republic of China CNY 8.1588 8.8220 8.9960 8.9712