BMW 2001 Annual Report Download - page 78

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Capital reserves
Capital reserves comprise additional paid in capital
on the issue of shares. The addition to capital re-
serves of euro 23 million (2000: euro 21 million)
arose in the year from the subscription of employee
shares.
Revenue reserves
Revenue reserves are disclosed in accordance with
the disclosure requirements contained in German
commercial law. They comprise the post-acquisition
and non-distributed earnings of consolidated group
companies. In addition, revenue reserves include
both positive and negative goodwill arising on the
consolidation of group companies prior to 31 De-
cember 1994 and including the effect, recognised
as an adjustment of the opening balance of revenue
reserves, of the first-time application of IAS.
Accumulated other equity
Accumulated other equity consists of all amounts
recognised directly in equity resulting from the
translation of foreign subsidiaries and the effects
(net of tax) of financial instruments recognised
Pension provisions are recognised as a result of
commitments to pay future vested pension benefits
and current pensions to present and former employ-
ees of the BMW Group and their dependants. De-
pending on the legal, economic and tax circum-
stances prevailing in each country, various pension
plans are used, based generally on the length of
service and salary of employees. Due to similarity of
nature, the obligations of BMW Group companies in
the U.S. for post-employment medical care are also
disclosed as pension provisions. These pension-like
obligations amount to euro 21 million (2000: euro
19 million) and are measured in accordance with
IAS 19. In the case of post-employment medical
care, it is assumed that the costs will increase on a
long-term basis by 5% p.a. (2000: 5%). The ex-
pense for medical care costs in the fiscal year 2001
amounted to euro 2 million (2000: euro 1 million).
directly in equity. Deferred taxes recognised directly
in equity amounted to euro 414 million (2000: euro
458 million).
Minority interest
Minority interest in the share capital of subsidiaries
relates to Euro Lloyd Reisebüro GmbH, Cologne.
Other
Under the German Stock Corporation Act, the divi-
dend available for distribution to the shareholders
must be computed on the basis of the unappropriat-
ed profit available for distribution disclosed in the fi-
nancial statements of BMW AG. The unappropriated
profit of the BMW AG of euro 350 million will be pro-
posed to the Annual General Meeting for distribu-
tion. The tax reduction of euro 58 million (2000: euro
66 million) relating to the proposed dividend pay-
ment will be recognised as a tax benefit in fiscal year
2002. Additional claims to tax reductions of euro
133 million (2000: euro 191 million) arising under
the old income tax system can be made by BMW AG
during the transition period of 15 years on dividends
paid out.
Post-employment benefit plans are classified as
either defined contribution or defined benefit plans.
Under defined contribution plans, an enterprise pays
fixed contributions into a separate entity or fund and
does not assume any other obligations. The total
pension expense for all defined contribution plans of
the BMW Group amounted to euro 8 million (2000:
euro 14 million).
Under defined benefit plans, the enterprise is
required to pay the benefits granted to present and
past employees. Defined benefit plans may be fund-
ed or unfunded, the latter sometimes financed by
means of accounting provisions. Most of the pen-
sion commitments of the BMW Group in Germany
relate to BMW AG, whose pension plans, like the
majority of other German enterprises, are unfunded
and financed by means of accounting provisions.
The main funded plans of the BMW Group are in
[27]Pension provisions