BMW 2003 Annual Report Download - page 115

The consolidated financial statements of BMW AG
have been drawn up in accordance with the standards
valid at the balance sheet date issued by the IASB.
In accordance with §292a HGB, these consolidated
financial statements exempt BMW AG from drawing
up consolidated financial statements in accordance
with German commercial law (HGB). The BMW
Group financial statements and Group management
report also comply with the European Union Direc-
tive on Group Accounting (83/349/EEC), whereby
this directive has been interpreted along the lines of
the interpretation contained in Standard no.1 ( GAS 1)
“Exempting Consolidated Financial Statements
in accordance with §292a HGB”issued by the
German Accounting Standards Committee (GASC).
The accounting policies and consolidation
methods applied in accordance with IFRSs for the
Group financial statements of BMW AG differ from
German accounting rules in the following main areas:
Non-current assets
Under IFRSs, under certain circumstances, internally
generated intangible assets must be recognised
as an asset. In the case of the BMW Group, this is
mainly relevant for development costs incurred for
vehicle and engine projects. Under German ac-
counting rules, it is prohibited to recognise internally
generated intangible items as an asset.
Furthermore, non-current assets are generally
depreciated for IFRSs purposes over their useful
economic lives using the straight-line method and
not using the reducing balance method.
Lease transactions
IAS 17 prescribes the accounting rules for lease
transactions. Under these rules, an enterprise which
bears the risks and enjoys the rewards of using a
leased item, is required, as the economic owner, to
recognise that item in its balance sheet. Many leases
have therefore been reclassified from operating
leases to finance leases in accordance with IAS 17.
The accounting treatment of leases is not specifically
dealt with by German accounting rules. In the
absence of such accounting rules, it is therefore
common to apply the treatment prescribed by the
German tax authorities.
Inventories
Under IFRSs, inventory must be measured on a con-
sistent basis at fully absorbed production cost. In
compliance with German accounting law, inventories
of the Group’s production companies were measured
for HGB purposes at the lower direct production
cost. Inventories held by all other group companies
were measured at production cost including a pro-
portion of direct overheads. In addition, in line with
the prudence principle, it was permitted under
HGB to recognise a higher level of write-downs than
under IFRSs. Advance payments received cannot
be offset against inventories under IFRSs.
[44]Disclosures
pursuant to §292a HGB
114
001 BMW Group in figures
004 Report of the Supervisory Board
008 Supervisory Board
011 Board of Management
012 Group Management Report
12 A Review of the Financial Year
29 Outlook
30 Financial Analysis
44 Risk Management
047 BMW Stock
050 Corporate Governance
054 Group Financial Statements
118 BMW AG Principal Subsidiaries
120 BMW Group10-year Comparison
122 BMW Group Locations
124 Glossary, Index
BMW Group
Notes to the Group Financial Statements
Disclosures pursuant to § 292a HGB