Audi 2012 Annual Report Download - page 216

219
Consolidated Financial
Statements
202 Income Statement
203 Statement of Recognized
Income and Expense
204 Balance Sheet
205 Cash Flow Statement
206 Statement of Changes in Equity
Notes to the Consolidated
Financial Statements
208 Development of fixed assets
in the 2012 fiscal year
210 Development of fixed assets
in the 2011 fiscal year
212 General information
212 Accounting principles
214 Group of consolidated
companies
216 Consolidation principles
217 Foreign currency translation
218 Recognition and
measurement principles
218 Recognition of income
and expenses
218 Intangible assets
219 Property, plant
and equipment
220 Leasing and rental assets
220 Investment property
220 Investments accounted for
using the equity method
220 Impairment tests
221 Financial instruments
224 Other financial assets and
other receivables
224 Deferred tax
224 Inventories
225 Securities, cash and
cash equivalents
225 Provisions for pensions
225 Other provisions
225 Liabilities
226 Government grants
226 Management’s estimates
and assessments
227 Notes to the Income Statement
233 Notes to the Balance Sheet
244 Additional disclosures
266 Events occurring subsequent to
the balance sheet date
267 Statement of Interests
held by the Audi Group
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
of which customer bases 2–8 years
Capitalized development costs 5–9 years
The amortization is allocated to the corresponding functional areas.
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. These values are amortized in
the subsequent year. If the purchase price of the investment exceeds the fair value of the identi-
fied assets minus liabilities, goodwill is created.
The goodwill resulting from company acquisitions is assigned to the identifiable groups of assets
(cash generating units) that are expected to benefit from the synergies created by the acquisition.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are measured at acquisition cost or cost of construction, with
scheduled straight-line depreciation applied pro rata temporis over the expected useful life.
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
costs that must be capitalized, including pro rata depreciation. No interest was capitalized in rela-
tion 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 reassessed
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
In accordance with IAS 17, property, plant and equipment used on the basis of lease agreements
is capitalized in the Balance Sheet if the conditions of a finance lease are met (in other words, if
the significant risks and opportunities which result from its use have passed to the lessee). Capi-
talization is performed at the time of the agreement, at the lower of fair value or present value
of the minimum lease payments. The straight-line depreciation method is based on the shorter
of economic life or term of lease contract. The payment obligations resulting from the future
lease installments are recognized as a liability at the present value of the leasing installments.