BMW 2008 Annual Report Download - page 59

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14 Group Management Report
14 A Review of the Financial Year
16 General Economic Environment
20 Review of Operations
42 BMW Stock and Bonds
45 Disclosures pursuant to § 289 (4)
and § 315 (4) HGB
47 Financial Analysis
47 Internal Management System
49 Earnings Performance
51 Financial Position
52 Net Assets Position
55 Subsequent Events Report
55 Value Added Statement
57 Key Performance Figures
58 Comments on BMW AG
62 Risk Management
68 Outlook
BMW AG Income Statement
in euro million
2008 2007
Revenues 44,313 48,310
Cost of sales – 37,833 – 41,448
Gross profit 6,480 6,862
Sales costs – 3,085 – 2,786
Administrative costs –1,366 – 881
Research and development costs – 2,646 – 2,828
Other operating income and expenses – 641 731
Result on investments 1,807 255
Financial result –154 – 38
Profit from ordinary activities 395 1,315
Income taxes 3 –115
Other taxes – 14 –16
Net profit 384 1,184
Profit carried over from previous year – 1
Transfer to revenue reserves – 187 – 491
Unappropriated profit available for distribution 197 694
Revenues from the sale of vehicles to car rental companies
are not recognised when there is an obligation to take
back the vehicles. In accordance with the draft financial re-
porting pronouncement “Specific Issues relating to the
Transfer of Beneficial Ownership and Profit Realisation in
accordance with HGB” (IDW ERS HFA  revised version
dated  November ) issued by the German Institute
of Public Accountants (IDW), vehicles remain on the
balance sheet, measured at amortised cost, because, on
the basis of the criteria set out in the pronouncement,
beneficial ownership has not been transferred to the car
rental companies.