BMW 2005 Annual Report Download - page 102

Capital reserves
The capital reserves comprise additional paid in capi-
tal on the issue of shares and remained unchanged
at euro1,971 million.
Revenue reserves
Revenue reserves comprise the post-acquisition
and non-distributed earnings of consolidated group
companies. In addition, revenue reserves include
both positive and negative goodwill arising on the
consolidation of group companies prior to 31 De-
cember 1994.
Revenue reserves increased during the year by
12.5% to euro 16,351 million. They were increased
in 2005 by the amount of the net profit for the year
of euro 2,239 million and were reduced by the
payment of the dividend for 2004 amounting to
euro 419 million.
The unappropriated profit of BMW AG of euro
424 million for 2005 will be proposed to the Annual
General Meeting for distribution. As in the previous
year, this will not give rise to a tax credit relating to
the corporation tax system applicable until 2001,
since, following the enactment of the Tax Preference
Reduction Act on 16 May 2003, the tax benefit on
distributed profits was suspended until the end
of 2005. Adjusted in the light of new information,
tax reduction benefits of euro 168 million (2004:
disclosed as euro133 million) which result from the
previous corporation tax system, can be realised
in specific annual amounts during the period from
2006 to 2019. On the basis of the proposed dividend,
a tax reduction benefit of euro 12 million arises for
2006. In the light of the maximum amount regulations
which apply for each dividend year, the total amount
will not be fully utilised before 2019.
Accumulated other equity
Accumulated other equity consists of all amounts
recognised directly in equity resulting from the
translation of the financial statements of foreign
subsidiaries, the effects of recognising changes in
the fair value of financial instruments directly in
equity, and actuarial gains and losses relating to de-
fined benefit pension plans and similar obligations.
At 31 December 2005, accumulated other equity
is increased by deferred taxes recognised directly
in equity amounting to euro 727 million (2004:
decreased by deferred taxes of euro 172 million*).
Minority interest
As a result of the insignificance of the minority share-
holders’ interest in the equity of the group’s sub-
sidiaries, minority interest is not reported separately.
Minority interest in the share capital of subsidi-
aries amounts to euro 0.188 million (2004: euro
0.312 million). Of this amount, euro 0.187 million
(2004: euro 0.311 million) relates to the minority
shareholder Euro Lloyd Reisebüro GmbH, Cologne,
and euro 0.001million (unchanged from the previous
year) relates to the minority shareholder Nord-
deutsche Landesbank Girozentrale, Braunschweig.
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[32]Pension provisions The BMW Group has elected to adopt early the new
optional accounting policy of recognising actuarial
gains and losses directly in equity and has applied
the new treatment in the Group financial statements
at 31 December 2005. Under the new rules, actuarial
gains and losses will no longer be recognised in
profit or loss over time.
Pension provisions are recognised as a result of
commitments to pay future vested pension benefits
and current pensions to present and former employ-
ees of the BMW Group and their dependants. De-
pending on the legal, economic and tax circum-
stances prevailing in each country, various pension
plans are used, based generally on the length of
service and salary of employees. Due to similarity
of nature, the obligations of BMW Group companies
in the U.S. and of BMW (South Africa) (Pty) Ltd.,
Pretoria, for post-employment medical care are
also disclosed as pension provisions. The provision
for these pension-like obligations amounts to euro
*adjusted in accordance with Note [8] (b)