BMW 2003 Annual Report Download - page 64

63
BMW Anlagen Verwaltungs GmbH, Munich, BMW
Vertriebszentren Verwaltungs GmbH, Munich, Büro-
haus Petuelring GmbH, Munich, Bürohaus Petuelring
GmbH& Co. Vermietungs KG, Munich, Rolls-Royce
Motor Cars GmbH, Munich, Rolls-Royce Motor Cars
NA, LLC, Wilmington, Del., BMW Russland Trading
OOO, Moscow, Alphabet Fuhrparkmanagement
GmbH, Munich, Alphabet Belgium N.V., Bornem,
Alphabet France SAS, Guyancourt, Alphabet Italia
S.p.A., Milan, Alphabet B.V., Rijswijk, Alphabet
Fuhrparkmanagement (Schweiz) AG, Otelfingen,
and Alphabet Fleet Services España S.L., Madrid,
have all been consolidated for the first time with
effect from 1 January 2003.
BMW Maschinenfabrik Spandau GmbH& Co.
Anlagen und Betriebs oHG, Berlin, ceased to be
a consolidated group company as a result of the
The equity of subsidiaries is consolidated using the
purchase method, whereby investments in sub-
sidiaries are set off against the Group’s share of the
equity of consolidated subsidiaries at the date of
acquisition (IAS 22 Business Combinations). Any
difference between purchase cost and the Group’s
share of equity is allocated, on the basis of the
group’s shareholding, to the identifiable assets and
liabilities of the subsidiary where the difference re-
sults from previously undisclosed reserves or liabili-
ties. Any excess of cost over the amounts allocated
to identifiable assets and liabilities is recognised as
goodwill and is amortised over its future estimated
useful life (up to a maximum of 15 years) on a
straight-line basis. Amortisation is recognised as an
expense. Goodwill of euro 91 million which arose
prior to 1 January 1995 remains netted against re-
serves as permitted by IAS 22. When a Group com-
pany is deconsolidated, goodwill is removed from
the balance sheet with income statement effect.
reduction of the shareholding to 49% and softlab
Systems, Inc., San Francisco, Cal., ceased to be a
consolidated group company as a result of that
company’s sale.
Hireus Ltd., Bracknell, was renamed to Rolls-
Royce Motor Cars Ltd., Bracknell, and BMW Belgium
S.A./N.V., Bornem, was renamed to BMW Belgium
Luxembourg S.A./N.V., Bornem.
The group reporting entity also changed by
comparison to the previous year as a result of the
first-time consolidation of seven special purpose
entities and the deconsolidation of two special pur-
pose entities.
The changes in the composition of the Group
do not have a material impact on the assets, liabilities,
financial position and earnings of the Group.
Receivables, liabilities, provisions, income and
expenses and profits between consolidated com-
panies (inter-group profits) are eliminated on con-
solidation.
Investments in other companies are accounted
for using the equity method, when significant in-
fluence can be exercised (IAS 28 Accounting for
Investments in Associates). This is normally the
case when voting rights of between 20% and 50%
are held (associated companies). Under the equity
method, investments are measured at the group’s
share of equity taking account of fair value adjust-
ments on acquisition, based on the group’s share-
holding. Any difference between the cost of invest-
ment and the group’s share of equity is accounted
for in accordance with the purchase method. All
other investments in other companies are measured
at amortised cost.
Consolidation principles are unchanged from
the previous year.
[4]Consolidation
principles
[3]Changes in the
reporting entity