BMW 2004 Annual Report Download - page 61

Group Financial Statements 50
Income Statements 51
Balance Sheets 52
Cash Flow Statements 54
Group Statement of
Changes in Equity 56
Notes 57
--Accounting Principles
and Policies 57
--Notes to the Income Statement 66
--Notes to the balance sheet 74
--Other Disclosures 93
--Segment Information 100
--Disclosures pursuant to
§292a HGB 104
Auditors’ Report 107
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exchange rates to translate the income statement
are also offset directly against accumulated other
equity.
Foreign currency receivables and payables in
the single entity accounts of BMW AG and sub-
sidiaries are recorded, at the date of the transaction,
The financial statements of BMW AG and of its
subsidiaries in Germany and elsewhere have been
prepared for consolidation purposes using uniform
accounting policies in accordance with IAS 27.
Revenues from the sale of products are recog-
nised when the risks and rewards of ownership of
the goods are transferred to the customer, the sales
price is agreed or determinable and receipt of pay-
ment can be assumed. Revenues are stated net of
discounts, allowances, settlement discount and
rebates. In the case of long-term construction work,
revenues are, in accordance with IAS 18 (Revenue)
and IAS 11 (Construction Contracts), not recognised
by reference to the stage of completion (stage of
completion method) since the effect on revenue
recognition is currently not material for the BMW
Group. Revenues also include lease rentals and
interest income from financial services. Revenues
for the financial operations sub-group also include
at cost. Exchange gains and losses computed at
the balance sheet date are recognised as income or
expense.
The exchange rates of those currencies which
have a material impact on the Group financial state-
ments have moved against the euro as follows:
the interest income earned by group financing com-
panies.
If the sale of products includes a determinable
amount for subsequent services (“multiple-com-
ponent contracts”), the related revenues are deferred
and recognised as income over the period of the
contract. Amounts are normally recognised as in-
come by reference to the expected pattern of related
expenditure.
Profits arising on the sale of vehicles for which
a group company retains a repurchase commitment
(buy-back contracts) are not recognised until such
profits have been realised. The vehicles are included
in inventories and stated at cost.
Cost of sales comprises the cost of
manufac-
turing products and the acquisition cost of purchased
merchandise which have been sold. It includes all
directly attributable material and production costs
and all production overheads. These include de-
[6]Accounting
Policies
Closing rate Average rate
31.12.2004 31. 12. 2003 2004 2003
US Dollar 1.36 1.25 1.24 1.13
British Pound 0.71 0.70 0.68 0.69
South African Rand 7.72 8.27 8.01 8.53
Japanese Yen 140.83 133.82 134.41 131.04
Australian Dollar 1.75 1.67 1.69 1.74