BMW 2001 Annual Report Download - page 51

001 BMW Group in figures
004 Report of the Supervisory Board
008 Supervisory Board
011 Board of Management
012 Group Management Report
029 BMW Stock
033 Group Financial Statements
098 BMW AG Financial Statements
104 BMW Group Annual Comparison
106 BMW Group Locations
108 Glossary
112 Index
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The consolidated financial statements of BMW AG
(BMW Group financial statements or Group finan-
cial statements) at 31 December 2001 have been
drawn up for the first time in accordance with the
standards valid on the balance sheet date issued
by the International Accounting Standards Board
(IASB), London. All International Accounting Stan-
dards (IAS) and interpretations of the Standing Inter-
pretations Committees (SIC) which were mandatory
for fiscal year 2001 were applied. In addition, the
following Standards, which were mandatory after
1 January 2001 were applied on a voluntary basis
for fiscal year 2000: IAS 12 Income Taxes (revised
2000); IAS 19 Employee Benefits (revised 2000);
IAS 39 Financial Instruments: Recognition and
Measurement (revised 2000) and IAS 40 Investment
Property.
The Group financial statements and Group
management report which are required to be filed
with the Commercial Register and published in the
Federal Gazette, also comply with the European
Union Directive on Consolidated Financial State-
ments (83/349/EEC), whereby this directive was
applied on the basis of the interpretation contained
in German Accounting Standard No. 1 (GAS 1)
Exempting Consolidated Financial Statements in
accordance with §292a of the German Commercial
Code issued by the German Accounting Standards
Committee e.V. (GASC). In order to meet the criteria
for the exemption to prepare Group financial state-
ments in accordance with German law, certain addi-
tional disclosures were made in the Group financial
statements as required by §292a of the German
Commercial Code.
In order to improve clarity, various items are
aggregated in the balance sheet and income state-
ment. These items are disclosed and analysed sep-
arately in the Notes.
In order to support the sale of the BMW prod-
ucts, the BMW Group provides various financial
services  mainly loan and lease financing  to its
customers. The inclusion of the financial services
activities of the Group also has a significant impact
on the Group financial statements. In order to pro-
vide a better insight into the assets, liabilities, finan-
cial position and performance of the Group, addi-
tional information has been presented in the BMW
Group financial statements on the industrial and
financial operations. Financial operations include
financial services and the activities of the Group
financing companies. The operating interest income
and expense of financial operations is included in
revenues and cost of sales. The holding companies
BMW (UK) Holdings Ltd., Bracknell, BMW Holding
B.V., The Hague, BMW Österreich Holding GmbH,
Steyr, and BMW (US) Holding Corp., Wilmington, are
allocated to industrial operations. The main business
transactions between the industrial and financial op-
erations, which are consolidated in the Group finan-
cial statements, are internal sales of products, the
provision of funds for Group companies and the re-
lated interest. These additional disclosures allow the
assets, liabilities, financial position and performance
of the industrial and financial operations to be pre-
sented, on an IAS basis, as if they were two separate
groups. This information, which has not been audit-
ed by the Group auditors, is provided on a voluntary
basis and does not form part of the mandatory dis-
closures required by IAS.
In conjunction with the refinancing of financial
services business, a significant volume of receiv-
ables arising from customer and dealer financing
are sold. Similarly rights and obligations relating to
leases are also sold. The sale of receivables is a well
established instrument used by industrial and finan-
cial companies. These transactions are usually in the
form of so-called asset backed financing. This in-
volves the sale of a portfolio of receivables to a trust
which, in turn, issues marketable securities to refi-
nance the purchase price. The BMW Group contin-
ues to service the receivables (including debt col-
lection) and receives an appropriate fee for these
services. In accordance with IAS 27 (Consolidated
Financial Statements and Accounting for Invest-
ments in Subsidiaries) and the interpretation in SIC
12 (Consolidation  Special Purpose Entities) such
BMW Group
Notes to the Group Financial Statements
Accounting principles and policies
[1]Basis of preparation