BMW 2010 Annual Report Download - page 135

133 GROUP FINANCIAL STATEMENTS
BMW Group
Notes to the Group Financial Statements
Segment Information
46
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 IFRS 8 (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 organisational 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, Finan-
cial Services and Other Entities.
The Automobiles segment develops, manufactures,
assembles 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 markets, 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 and Husqvarna brand motor-
cycles as well as spare parts and accessories.
The principal lines of business of the Financial Services
segment are car leasing, fleet business, retail customer
and dealer financing, customer deposit business and in-
surance activities.
Holding and Group financing companies are included in
the Other Entities segment. This segment also includes
operating companies – BMW Services Ltd., Bracknell,
BMW (UK) Investments Ltd., Bracknell, Bavaria Lloyd
Reisebüro GmbH, Munich, and MITEC Mikroelektronik
Mikrotechnik Informatik GmbH, Dingolfing – which are
not allocated to one of the other segments.
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, income, ex-
penses and profits are eliminated in the column “Elimina-
tions”. Inter-segment sales take place at arm’s length prices.
The role of “chief operating decision maker” with respect
to resource allocation and performance assessment of the
reportable segment is embodied in the full Board of Man-
agement. In order to assist the decision-taking process,
various measures of segment profit or loss and of segment
assets have been set for the various operating segments.
The Automobiles and Motorcycles segments are managed
on the basis of the profit before financial result. Capital
employed is the corresponding measure of segment as-
sets used to determine how to allocate resources. Capital
employed comprises all current and non-current opera-
tional assets of the segment, after deduction of liabilities
used operationally which are not subject to interest e.g.
trade payables.
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 as-
sessed on the basis of profit or loss before tax. The corre-
sponding measure of segment assets used to manage
theOther Entities segment is total assets less tax receiv-
ables and investments.