BMW 2010 Annual Report Download - page 130

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74 GROUP FINANCIAL STATEMENTS
74 Income Statements
74 Statement of
Comprehensive Income
76 Balance Sheets
78 Cash Flow Statements
80 Group Statement of Changes
in Equity
81 Notes
81 Accounting Principles
and Policies
89 Notes to the Income
Statement
95 Notes to the Statement
of Comprehensive Income
96 Notes to the Balance Sheet
117 Other Disclosures
133 Segment Information
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Explanatory notes to the cash flow statements
The cash flow statements show how the cash and cash
equivalents of the BMW Group and of the Automobiles
and Financial Services segments have changed in the
course of the year as a result of cash inflows and cash out-
flows. In accordance with IAS 7 (Statement of Cash Flows),
cash flows are classified into cash flows from operating,
investing and financing activities. The Group and segment
cash flow statements are presented on pages 78 et seq.
Cash and cash equivalents included in the cash flow
statement comprise cash in hand, cheques, and cash at
bank, to the extent that they are available within three
months from the end of the reporting period and are
subject to an insignificant risk of changes in value. The
positive impact of changes in cash and cash equivalents
due to the effect of exchange rate fluctuations in 2010
was euro 22 million (2009: euro 40 million).
The cash flows from investing and financial activities are
based on actual payments and receipts. By contrast, the
cash flow from operating activities is derived indirectly
from the net profit / loss for the year. Under this method,
changes in assets and liabilities relating to operating ac-
tivities are adjusted for currency translation effects and
changes in the composition of the Group. The changes in
Related party relationships
In accordance with IAS 24 (Related Party Disclosures),
related individuals or entities which have the ability to
control the BMW Group or which are controlled by the
BMW Group, must be disclosed unless such parties are
not already included in the consolidated financial state-
ments as consolidated companies. Control is defined as
ownership of more than one half of the voting power of
BMW AG or the power to direct, by statute or agreement,
the financial and operating policies of the management
of the Group.
In addition, the disclosure requirements of IAS 24 also
cover transactions with participations, joint ventures and
individuals that have the ability to exercise significant
influence over the financial and operating policies of the
BMW Group. This also includes close relatives and inter-
mediary entities. Significant influence over the financial
and operating policies of the BMW Group is presumed
when a party holds 20% or more of the voting power of
BMW AG. In addition, the requirements contained in
IAS 24 relating to key management personnel and close
members of their families or intermediary entities are
also applied. In the case of the BMW Group, this applies
balance sheet positions shown in the cash flow statement
do not therefore agree directly with the amounts shown
in the Group and segment balance sheets.
If the BMW Group acts as the lessor in a finance lease, the
relevant cash flows are reported in the cash flow state-
ments as part of the cash flow from investing activities. If
the BMW Group acts as the lessee in a finance lease, the
cash flows are reported as part of the cash flows from oper-
ating
and investing activities.
If the BMW Group acts as the lessor in an operating
lease, cash flows are reported as part of the cash flow
from investing activities. In the final case, where the
BMW Group acts as the lessee in an operating lease,
cash flows are reported as part of the cash flow from
operating activities.
Cash outflows for taxes on income and cash inflows for
interest are classified as cash flows from operating activi-
ties in accordance with IAS 7.31 and IAS 7.35. Cash out-
flows for interest are presented on a separate line within
cash flows from financing activities.
Cash flows from dividends received amounted to euro
5million (2009: euro 4 million).
to members of the Board of Management and Supervisory
Board.
For the financial year 2010, the disclosure requirements
contained in IAS 24 only affect the BMW Group with
regard to business relationships with affiliated, non-
consolidated entities, joint ventures and participations
aswell as members of BMW AG’s Board of Management
and Supervisory Board.
The BMW Group maintains normal business relation-
ships
with affiliated, non-consolidated entities. Trans-
actions with these entities are small in scale, arise in the
normal course of business and are conducted on the
basis of arm’s length principles.
Transactions of BMW Group companies with the joint
venture, BMW Brilliance Automotive Ltd., Shenyang, all
arise in the normal course of business and are conducted
on the basis of arm’s length principles. Group companies
sold goods and services to BMW Brilliance Automotive
Ltd., Shenyang, during 2010 for an amount of euro 1,046
million (2009: euro 532 million). At 31 December 2010,
receivables of Group companies from BMW Brilliance
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