BMW 2005 Annual Report Download - page 79

(a) Financial reporting standards applied for
the first time in the financial year 2005
The following Standards, as revised in conjunction
with the IASB’s Improvement Project, have been
applied for the first time in the Group financial state-
ments at 31 December 2005:
–IAS 1 (Presentation of Financial Statements)*
–IAS 2 (Inventories)
–IAS 8
(Accounting Policies, Changes in Accounting
Estimates and Errors)
–IAS 10 (Events after the Balance Sheet Date)
–IAS 16 (Property, Plant and Equipment)
–IAS 17 (Leases)
–IAS 21 (The Effects of Changes in Foreign
Exchange Rates)
–IAS 24 (Related Party Disclosures)
–IAS 27 (Consolidated and Separate Financial
Statements)
–IAS 28 (Investments in Associates)
–IAS 31 (Interests in Joint Ventures)
–IAS 33 (Earnings per Share)
–IAS 32 (Financial Instruments – Disclosure and
Presentation)
–IAS 39 (Financial Instruments – Recognition and
Measurement)
–IAS 40 (Investment Property).
In addition, the following new or revised Standards
of the IASB have been applied for the first time:
–IFRS 2 (Share-based Payment)
–IFRS 3 (Business Combinations)
–IFRS 4 (Insurance Contracts)
–IFRS 5 (Non-current Assets Held for Sale and
Discontinued Operations)
–IAS 36 (Impairment of Assets)
–IAS 38 (Intangible Assets)
– Amendment to IAS 19 (Employee Benefits:
Actuarial Gains and Losses, Group Plans and Dis-
closure)**
– Amendment to IAS 39 (Financial Instruments:
Recognition and Measurement on Fair Value
Hedge Accounting for a Portfolio Hedge of Inter-
est Rate Risk)
– Amendment to IAS 39 (Financial Instruments:
Transition and Initial Recognition of Financial
Assets and Financial Liabilities)
– Amendment to IAS 39 (Cash Flow Hedge
Accounting of Forecast Intragroup Transactions)
[7]New financial
reporting rules
78
Non-current provisions with a remaining period of
more than one year are discounted to the present
value of the expenditures expected to settle the
obligation at the balance sheet date.
Financial liabilities are measured on first-time
recognition at cost, which is equivalent to the fair value
of the consideration given. Transaction costs are in-
cluded in this initial measurement. Subsequent to
initial recognition, liabilities are, with the exception of
derivative financial instruments, measured at amor-
tised cost. The BMW Group has no liabilities which
are held for trading. Liabilities from finance leases are
stated at the present value of the future lease pay-
ments and disclosed under financial liabilities.
The preparation of the Group financial state-
ments in accordance with IFRSs requires manage-
ment to make certain assumptions and estimates
that affect the reported amounts of assets and lia-
bilities, revenues and expenses and contingent liabil-
ities. The assumptions and estimates relate princi-
pally to the group-wide determination of economic
useful lives, the recognition and measurement of
provisions and the recoverability of future tax bene-
fits. Actual amounts could in certain cases differ
from those assumptions and estimates. Where new
information comes to light, differences are reflected
in the income statement.
*see also Note [8](a)
** see also Note [8](b)
Group Financial Statements 62
Income Statements 63
Balance Sheets 64
Cash Flow Statements 66
Group Statement of
Changes in Equity 68
Statement of Income and Expenses
recognised directly in Equity 69
Notes 70
--Accounting Principles
and Policies 70
--Notes to the Income Statement 81
--Notes to the balance sheet 90
--Other Disclosures 114
--Segment Information 121
Auditors’ Report 125