BMW 2005 Annual Report Download - page 74

73
Closing rate Average rate
31.12.2005 31.12.2004 2005 2004
US Dollar 1.18 1.36 1.24 1.24
British Pound 0.69 0.71 0.68 0.68
South African Rand 7.47 7.72 7 .91 8.01
Japanese Yen 139.11 140.83 136.83 134.41
Australian Dollar 1.61 1.75 1.63 1.69
The financial statements of BMW AG and of its sub-
sidiaries 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 IAS11 (Construction Contracts), not recognised
using the stage of completion method since the
ef-
fect on revenue recognition is at present 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 the interest income earned by group
financing companies.
If the sale of products includes a determinable
amount for subsequent services (“multiple-compo-
nent 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 manufactur-
ing products sold and the acquisition cost of pur-
chased merchandise sold. It includes all directly
attributable material and production costs and pro-
duction overheads, including depreciation/amortisa-
tion of property, plant and equipment and intangible
assets relating to production and write-downs on
inventories. Cost of sales also includes freight and
insurance costs relating to deliveries to dealers and
agency fees on direct sales. Expenses which are
directly attributable to financial services business
and interest expense from refinancing the entire
financial services business, including the expense
of risk provisions and write-downs, are reported in
cost of sales. Cost of sales for the financial opera-
tions sub-group also includes the interest expense
of group financing companies.
[6]Accounting
policies
The exchange rates of those currencies which have a material impact on the Group financial statements were
as follows: