BMW 2001 Annual Report Download - page 55

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
54
attributable to lease business and interest expense
arising from the refinancing of financial services.
Research costs and development costs
which are not capitalised are recognised as an
expense when incurred.
Basic Earnings per Share are computed in
accordance with IAS 33 (Earnings per Share). Undi-
luted earnings per share are calculated for ordinary
and preferred stock shares by dividing the net profit
attributable to each category of stock  net of mi-
nority interests  by the average number of issued
shares. The net profit is accordingly allocated to the
different categories of stock. The portion of the
group net profit for the year which is not being dis-
tributed is allocated to each category of stock based
on the number of issued shares. Net income paid
out as a dividend is allocated in accordance with the
actual payment. Diluted earnings per share would
have to be disclosed separately.
Purchased and self-generated intangible
assets are recognised as assets in accordance with
IAS 38 (Intangible Assets), where it is probable that
the use of the asset will generate future economic
benefits and where the costs of the asset can be
determined reliably. Such assets are measured at
purchase or production cost and amortised on a
straight-line basis over their estimated useful lives.
With the exception of goodwill and capitalised devel-
opment costs, intangible assets are generally amor-
tised over their estimated useful lives of between
three and five years.
Development costs for vehicle and engine
projects are capitalised at production costs, to the
extent that costs can be allocated reliably and the
technical feasibility and marketing are assured. It
must also be probable that the development activi-
ties will generate future economic benefits. Capi-
talised development costs comprise all expenditure
that can be attributed, directly and indirectly, to the
development process. Capitalised development
costs are amortised on a systematic basis following
the commencement of production over the estimat-
ed product life which is generally seven years.
All items of property, plant and equipment
are considered to have finite useful lives. They are
stated at acquisition or manufacturing cost less sys-
tematic depreciation based on the estimated useful
lives of the assets. Depreciation on property, plant
and equipment reflects the pattern of their usage
and is generally computed using the straight-line
method.
Expenditure on low value non-current assets is
written off in full in the year of acquisition.
Systematic depreciation is based on the follow-
ing useful lives, applied throughout the Group:
in years
Office and factory buildings, including utility distribution buildings 10 to 40
Residential buildings 40 to 50
Plant and machinery 5 to 10
Other facilities, factory and office equipment 3 to 10