BMW 2004 Annual Report Download - page 87
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86
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
The defined benefit plans of the BMW Group
gave rise to an expense from pension obliga-
tions in the financial year 2004 of euro 433 million
The expense from reversing the discounting of
pension obligations and the income from the ex-
pected return on plan assets are reported as part of
the financial result. All other components of pension
expense are included in the relevant costs by func-
tion in the income statement.
The actual return from external pension funds
was euro 536 million (2003: euro 407 million).The
variance of the actual return to the expected return,
as in the previous year, was mainly due to the fact
that pension fund assets generated a higher return
than planned. This was principally as a result of
the recovery of the international capital markets,
particularly in the United Kingdom.The difference
between actual and expected return from external
(2003: euro 339 million), comprising the following
components:
pension funds leads to actuarial gains or losses.
Actuarial gains or losses, to the extent that they lie
outside a corridor of 10% of the present value of the
defined benefit obligations, are recognised as income
or expense over the expected remaining working
lives of the employees participating in the plans.
The level of the pension obligations differs de-
pending on the pension system applicable in each
country. Since the state pension system in the United
Kingdom only provides a basic fixed amount benefit,
retirement benefits are largely organised in the form
of company pensions and arrangements financed
by the individual. The pension benefits in the United
Kingdom therefore contain contributions made by
the employee.
in euro million Germany UK Other countries Total
2004 2003 2004 2003 2004 2003 2004 2003
Current service cost 91 81 54 48 31 39 176 168
Expense from reversing the
discounting of pension obligations 132 122 303 273 15 15 450 410
Past service cost 49 ––––149 1
Expected return on plan assets (–) – –– 261 – 239 –10 –10 – 271 – 249
Actuarial gains (–) and losses (+) – –27 62329 9
Expense from pension
obligations 272 203 123 88 38 48 433 339