BMW 2013 Annual Report Download - page 96

96
88 GROUP FINANCIAL STATEMENTS
88 Income Statements
88 Statement of
Comprehensive Income
90 Balance Sheets
92 Cash Flow Statements
94 Group Statement of Changes in
Equity
96 Notes
96 Accounting Principles and
Policies
114 Notes to the Income Statement
121 Notes to the Statement
of Comprehensive Income
122
Notes to the Balance Sheet
145 Other Disclosures
161 Segment Information
BMW Group
Notes to the Group Financial Statements
Accounting Principles and Policies
Basis of preparation
The consolidated financial statements of Bayerische
Motoren Werke Aktiengesellschaft (BMW Group Finan-
cial Statements or Group Financial Statements) at 31
December 2013 have been drawn up in accordance with
International Financial Reporting Standards (IFRSs)
as endorsed by the EU. The designation “IFRSs” also in-
cludes all valid International Accounting Standards
(IASs). All Interpretations of the IFRS Interpretations
Committee (IFRICs) mandatory for the financial year
2013 are also applied.
The Group Financial Statements comply with § 315a of
the German Commercial Code (HGB). This provision,
in conjunction with the Regulation (EC) No. 1606 / 2002
of the European Parliament and Council of 19 July
2002, relating to the application of International Finan-
cial Reporting Standards, provides the legal basis for
preparing consolidated financial statements in
accord-
ance with international standards in Germany and applies
to financial years beginning on or after 1 January 2005.
The BMW Group and segment income statements are
presented using the cost of sales method. The Group
and segment balance sheets correspond to the classifi-
cation
provisions contained in IAS 1 (Presentation of
Financial Statements).
In order to improve clarity, various items are aggregated
in the income statement and balance sheet. These items
are disclosed and analysed separately in the notes.
A Statement of Comprehensive Income is presented at
Group level reconciling the net profit to comprehensive
income for the year.
In order to provide a better insight into the net assets,
financial position and performance of the BMW Group
and going beyond the requirements of IFRS 8 (Operating
Segments), the Group Financial Statements also include
balance sheets and income statements for the Automo-
tive, Motorcycles, Financial Services and Other Entities
segments. The Group Cash Flow Statement is supple-
mented by statements of cash flows for the Automotive
and Financial Services segments. This supplementary
information is unaudited.
In order to facilitate the sale of its products, the BMW
Group provides various financial services – mainly loan
and lease financing – to both retail customers and
dealers. The inclusion of the financial services activities
of the Group therefore has an impact on the Group
Financial Statements.
Inter-segment transactions – relating primarily to inter-
nal sales of products, the provision of funds and the
related interest – are eliminated in the “Eliminations”
column. Further information regarding the allocation
of activities of the BMW Group to segments and a de-
scription of the segments is provided in note 49.
In conjunction with the refinancing of financial ser-
vices business, a significant volume of receivables
arising from retail customer and dealer financing is
sold. Similarly, rights and obligations relating to leases
are sold. The sale of receivables is a well-established
instrument used by industrial companies. These trans-
actions usually take the form of asset-backed financing
transactions involving the sale of a portfolio of receiv-
ables to a trust which, in turn, issues marketable
se-
curities to refinance the purchase price. The BMW Group
continues to “service” the receivables and receives an
appropriate fee for these services. In accordance with
IAS 27 (Consolidated and Separate Financial State-
ments) and Interpretation SIC-12 (Consolidation –
Spe-
cial Purpose Entities) such assets remain in the Group
Financial Statements although they have been legally
sold. Gains and losses relating to the sale of such assets
are not recognised until the assets are removed from
the Group balance sheet on transfer of the related sig-
nificant risks and rewards. The balance sheet volume of
the assets sold at 31 December 2013 totalled € 10.1 bil-
lion (2012: € 9.4 billion).
In addition to credit financing and leasing contracts,
the Financial Services segment also brokers insurance
business via cooperation arrangements entered into
with local insurance companies. These activities are not
material to the BMW Group as a whole.
The Group currency is the euro. All amounts are dis-
closed in millions of euros (€ million) unless stated other-
wise.
Bayerische Motoren Werke Aktiengesellschaft has its
seat in Munich, Petuelring 130, and is registered in the
Commercial Register of the District Court of Munich
under the number HRB 42243.
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