Audi 2015 Annual Report Download - page 231

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
GENERAL INFORMATION
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to identifiable groups of assets (cash-generating units) which
should benefit from the synergies of the acquisition. Goodwill
at this level is regularly subject to impairment testing as of the
balance sheet date, with an impairment loss being 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 company 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 acquired assets and
liabilities is performed at the time of acquisition; any differ-
ence arising during initial consolidation is adjusted against
equity, without affecting profit or loss.
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 profit or loss
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 recognition and measurement principles for deter-
mining the pro rata equity as applied to subsidiaries are, as a
general rule, 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 ques-
tion. Any investments in companies accounted for using the
equity method and acquired in conjunction with a common
control transaction are also included using the predecessor
method. There is therefore no adjustment to the fair values at
the time of acquisition. Any difference between the purchase
price and share of equity is adjusted against equity, without
affecting profit or loss.
/FOREIGN CURRENCY TRANSLATION
The currency of the Audi Group is the euro (EUR). Foreign cur-
rency transactions in the separate financial statements of
AUDI AG and the subsidiaries are translated at the prevailing
exchange rate at the time of the transaction in each case.
Monetary items in foreign currencies are translated at the
exchange rate applicable on the balance sheet date. Exchange
differences are recognized in the income statements of the
respective Group companies.
The foreign companies belonging to the Audi Group are inde-
pendent entities and prepare their financial statements in
their local currency. Only AUDI HUNGARIA MOTOR Kft., Győr
(Hungary), AUDI HUNGARIA SERVICES Zrt., Győr (Hungary),
AUDI MÉXICO S.A. de C.V., San José Chiapa (Mexico), and AUDI
VOLKSWAGEN MIDDLE EAST FZE, Dubai (United Arab Emirates),
issue their annual financial statements in EUR or USD rather
than in their national currencies. The concept of the “functional
currency” is applied when translating financial statements
prepared in a foreign currency. Assets and liabilities, with the
exception of equity, are translated at the closing rate. The
effects of foreign currency translation on equity are reported in
the reserve for currency translation differences with no effect
on profit or loss. The items in the Income Statement are trans-
lated using weighted average monthly rates. Currency transla-
tion differences arising from the varying exchange rates used
in the Balance Sheet and Income Statement are recognized in
equity, without affecting profit or loss, until the disposal of the
subsidiary.
// DEVELOPMENT OF THE EXCHANGE RATES SERVING AS THE BASIS FOR CURRENCY TRANSLATION
1 EUR in foreign currency Year-end exchange rate Average exchange rate
Dec. 31, 2015 Dec. 31, 2014 2015 2014
Australia AUD 1.4897 1.4829 1.4777 1.4719
Brazil BRL 4.3117 3.2207 3.7004 3.1211
United Kingdom GBP 0.7340 0.7789 0.7259 0.8061
Japan JPY 131.0700 145.2300 134.3140 140.3061
Canada CAD 1.5116 1.4063 1.4186 1.4661
Mexico MXN 18.9145 17.8679 17.6161 17.6550
Switzerland CHF 1.0835 1.2024 1.0679 1.2146
Singapore SGD 1.5417 1.6058 1.5255 1.6824
South Korea KRW 1,280.7800 1,324.8000 1,256.5444 1,398.1424
Taiwan TWD 35.8543 38.4259 35.2497 40.2518
Thailand THB 39.2480 39.9100 38.0278 43.1469
USA USD 1.0887 1.2141 1.1095 1.3285
People’s Republic of China CNY 7.0608 7.5358 6.9733 8.1858