BMW 2004 Annual Report Download - page 63

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
62
For machinery used in multiple-shift operations,
depreciation rates are increased to account for the
additional utilisation.
The cost of internally constructed plant and
equipment comprises all costs which are directly
attributable to the manufacturing process and an
appropriate portion of production-related overheads.
This includes production-related depreciation and
an appropriate proportion of administrative and social
costs.
Financing costs are not included in acquisition
or manufacturing costs.
Non-current assets also include assets relating
to leases. The BMW Group uses property, plant
and equipment as lessee and also leases assets,
mainly vehicles manufactured by the Group, as les-
sor. IAS 17 (Leases) contains rules for determining,
on the basis of the risks and rewards of the lease,
the economic owner of the assets. In the case of
finance leases, the assets are attributed to the lessee
and in the case of operating leases, the assets are
attributed to the lessor.
In accordance with IAS 17, assets leased under
finance leases are measured at their fair value at the
Expenditure on low value non-current assets is
written off in full in the year of acquisition.
inception of the lease or at the present value of the
lease payments, if lower. The assets are depreciated
using the straight-line method over their estimated
useful lives or over the lease period, if shorter. The
obligations for future lease instalments are recog-
nised as liabilities within debt.
Where Group products are recognised by
BMW Group leasing companies as leased assets
under operating leases, they are measured at manu-
facturing cost. All other leased products are meas-
ured at acquisition cost. All leased products are
depreciated using the straight-line method over the
period of the lease to the lower of their imputed
residual value or estimated fair value.
The recoverability of the carrying amount of
intangible assets (including capitalised develop-
ment costs and goodwill) and property, plant and
equipment is tested regularly for impairment in
accordance with IAS 36 (Impairment of Assets) on
the basis of cash generating units. An impairment
loss is recognised when the recoverable amount
(defined as the higher of the asset’s net selling
price and its value in use) is lower than the carrying
amount. If the reason for the previously recognised
in years
Residential buildings 40 to 50
Office and factory buildings, including utility distribution buildings 10 to 40
Plant and machinery 5 to 10
Other facilities, factory and office equipment 3 to 10
Systematic depreciation is based on the fol-
lowing useful lives, applied throughout the Group: