BMW 2008 Annual Report Download - page 105

106
72 Group Financial Statements
72 Income Statements
74 Balance Sheets
76 Cash Flow Statements
78 Statement of Income and
Expenses recognised
in Equity
79 Notes
79 Accounting Principles
and Policies
88 Notes to the Income
Statement
94
Notes to the Balance Sheet
1 1 5 Other Disclosures
1 2 9 Segment Information
 December Germany United Kingdom Other
in % 2008 2007 2008 2007 2008 2007
Discount rate 6.00 5.50 6.01 5.53 5.44 5.78
Salary level trend 3.25 3.25 4.01 4.39 3.58 3.36
Pension level trend 2.25 1.75 3.11 3.38 1.86 1.90
Germany United Kingdom Other Total
in euro million 2008 2007 2008 2007 2008 2007 2008 2007
Present value of
pension benefits covered by accounting provisions 31 3,849 – – 131 119 162 3,968
Present value of funded pension benefits 3,817 – 4,403 6,327 406 336 8,626 6,663
Defined benefit obligations 3,848 3,849 4,403 6,327 537 455 8,788 10,631
Fair value of plan assets 1,155 – 4,059 5,686 277 343 5,491 6,029
Net obligation 2,693 3,849 344 641 260 112 3,297 4,602
Income (+) expense (–) from past service cost
not yet recognised – – – – 4 – 2 4 – 2
Amount not recognised as an asset because of
the limit in IAS . – – 1 6 9 17 1 0 23
Balance sheet amounts at  December 2,693 3,849 345 647 273 127 3,311 4,623
thereof pension provision 2,693 3,849 345 651 276 127 3,314 4,627
thereof pension assets (–) – – – – 4 – 3 – – 3 – 4
scheme, into which employees can make contributions
in the form of salary conversion, was transferred in full
to BMW Trust e.V., Munich. Obligations not covered by
assets held by the fund are covered by pension provisions.
The main other countries with funded plans were the
United Kingdom, the USA, Switzerland, the Netherlands,
Belgium and Japan.
The salary level trend refers to the expected rate of salary
increase which is estimated annually depending on in-
flation and career development of employees within the
Group.
In the case of externally funded plans, the defined benefit
obligation is offset against plan assets measured at their
fair value. Where the plan assets exceed the pension obli-
gations and the enterprise has a right of reimbursement or
a right to reduce future contributions, the surplus amount
is recognised in accordance with IAS  as an asset under
sundry other assets. In the case of externally funded plans,
a liability is recognised under pension provisions where
the benefit obligation exceeds fund assets.
Pension obligations are computed on an actuarial basis at
the level of the defined benefit obligation. This computa-
tion requires the use of estimates. The main assumptions,
in addition to life expectancy, depend on the economic
situation in each particular country. The following weighted
average values are used in the United Kingdom and in the
other countries:
Actuarial gains or losses may result from increases or de-
creases in either the present value of the defined benefit
obligation or in the fair value of the plan assets. Causes of
actuarial gains or losses include the effect of changes in
the measurement parameters, changes in estimates caused
by the actual development of risks impacting on pension
obligations and differences between the actual and
ex-
pected return on plan assets. Past service cost arises where
a BMW Group company introduces a defined benefit plan
or changes the benefits payable under an existing plan.
Based on the measurement principles contained in IAS ,
the following funding status applies to the Group’s pen-
sion plans: