BMW 2008 Annual Report Download - page 128

129 Group Financial Statements
BMW Group
Notes to the Group Financial Statements
Segment Information
46 Explanatory notes to segment information
Information on reportable segments
For the purposes of presenting segment information, the
activities of the BMW Group are divided into operating
segments in accordance with the rules contained in IFRS 
(Operating Segments). Operating segments are identified
on the same basis that is used internally to manage and
report on performance and takes account of the organisa-
tional structure of the BMW Group based on the various
products and services of the reportable segments.
The activities of the BMW Group are broken down into the
operating segments Automobiles, Motorcycles, Financial
Services and Other Entities.
The Automobiles segment develops, manufactures, as-
sembles
and sells cars and off-road vehicles, under the
brands BMW, MINI and Rolls-Royce as well as spare parts
and accessories. BMW and MINI brand products are sold in
Germany through branches of BMW AG and by independent,
authorised dealers. Sales outside Germany are handled
primarily by subsidiary companies and, in a number of mar-
kets, by independent import companies. Rolls-Royce brand
vehicles are sold in the USA via a subsidiary company and
elsewhere by independent, authorised dealers.
The Motorcycles segment develops, manufactures, as-
sembles and sells BMW brand motorcycles as well as
spare parts and accessories.
The Financial Services segment focuses primarily on car
leasing, fleet business, retail customer and dealer financing,
customer deposit business and insurance activities.
Holding and Group financing companies are included in
the Other Entities segment. This segment also includes
the operating companies (BMW Services Ltd., Bracknell,
and BMW (UK) Investments Ltd., Bracknell) which are
not
allocated to one of the other segments. It also includes
the income and expenses recorded by the Cirquent Group
in the first nine months of .
Eliminations comprise the effects of eliminating business
relationships between the operating segments.
Internal management and reporting
Segment information is prepared in conformity with the
accounting policies adopted for preparing and presenting
the Group Financial Statements. There were no changes
in accounting policies compared to previous periods.
Inter-segment receivables and payables, provisions, in-
come, expenses and profits are eliminated in the column
“Eliminations”. Inter-segment sales take place at arm’s
length prices.
The role of “chief operating decision maker” with re-
spect
to resource allocation and performance assess-
ment of
reportable segments is embodied in the full
Board of
Management. In order to assist the decision-
taking
process, various measures of segment result and
of segment assets have been set for the different operat-
ing
segments.
The Automobiles and Motorcycles segments are man-
aged on the basis of the profit before financial result. Capi-
tal employed is the corresponding measure of segment
assets used to determine how to allocate resources. Capi-
tal employed comprises all current and non-current opera-
tional assets of the segment, adjusted for liabilities used
operationally which are not subject to interest.
The performance of the Financial Services segment is
measured on the basis of profit or loss before tax. Net
assets, defined as all assets less all liabilities, are used as
the basis for assessing the allocation of resources.
The performance of the Other Entities segment is assessed
on the basis of profit or loss before tax. The corresponding
measure of segment assets used to manage the Other
Entities segment is total assets less tax-related assets and
investments.