BMW 2014 Annual Report Download - page 112

112
90 GROUP FINANCIAL STATEMENTS
90 Income Statements
90 Statement of
Comprehensive Income
92 Balance Sheets
94 Cash Flow Statements
96 Group Statement of Changes in
Equity
98 Notes
98 Accounting Principles and
Policies
116 Notes to the Income Statement
123 Notes to the Statement
of Comprehensive Income
124
Notes to the Balance Sheet
149 Other Disclosures
165 Segment Information
between two types of joint arrangements, namely joint
operations and joint ventures, and therefore results in
a change in the classification of joint arrangements. A
joint operation is a joint arrangement whereby the
par-
ties that have joint control of the arrangement have
rights to the assets, and obligations for the liabilities, re-
lating to the arrangement. A joint venture is a joint
ar-
rangement whereby the parties that have joint control
of the arrangement have rights to the net assets result-
ing from the arrangement. IFRS 11 requires joint opera-
tors to account for their share of assets and liabilities in
the joint operation (and their share of income and ex-
penses). Joint venturers are required to account for their
investment using the equity method. The withdrawal
of
IAS 31 means the removal of the option to account
for joint ventures using either the proportionate consoli-
dation or the equity method. The equity method must
be applied in accordance with amended IAS 28.
IFRS 12 sets out the requirements for disclosures relating
to all types of interests in other entities, including joint
arrangements, associated companies, structured entities
and unconsolidated entities.
Application of IFRS 10 has no impact on the scope of
entities included in the Group Financial Statements.
The removal of the option for accounting for joint ven-
tures (as stipulated by IFRS 11) does not have any im-
pact since the BMW Group already accounted for joint
ventures using the equity method. By contrast, the
classification of joint arrangements in accordance with
IFRS 11 has changed. The investments in SGL Automo-
tive
Carbon Fibers GmbH & Co. KG, Munich, SGL
Automotive Carbon Fibers Verwaltungs GmbH, Munich,
and SGL Automotive Carbon Fibers LLC, Dover, DE –
previously accounted for at equity – have been classi-
fied with effect from the first quarter of the financial
year
2014 as joint operations and consolidated propor-
tionately on the basis of the BMW Group’s 49 % share-
holding. This change in classification reflects the fact
that the arrangement is primarily designed to provide
the joint operators with an output (i. e. production) as
well as the fact that settlement of the liabilities relating
to the activities conducted through the arrangement
depends on both parties on a continuous basis.
Appli-
cation of IFRS 12 impacts the scope of disclosures
required to be made in the notes to the BMW Group
Financial Statements, in particular the requirement to
disclose more detailed financial information with
re-
spect to significant joint ventures. Further details can be
found in note 26.
The new requirements pertaining to IFRS 10, IFRS 11
and IFRS 12 are required to be applied retrospectively.
In accordance with IAS 8.14, the resulting adjustments
relating to the financial year 2013 are presented in the
tables at the end of this section. The transition
require-
ments contained in these new Standards were com-
plied with and, accordingly, the impact on the Group’s
Balance Sheet, Income Statement and Cash
Flow State-
ment is not presented separately for the financial year
2014.
Restatement of income taxes in conjunction with leased
products in the USA
In previous years, there had been a misallocation between
current and deferred income taxes for leased products
in the USA. The figures have been restated in accordance
with IAS 8.41 et seq., involving a reclassification from
deferred tax liabilities to current tax payables. The
re-
lated interest and penalty charges up to 31 December
2012 were recorded directly in equity (in revenue re-
serves). Interest relating to the financial year 2013 is
reported as an expense for that period (in financial
result).
Prior year figures in the Balance Sheet, Income State-
ment, Statement of Comprehensive Income, Statement
of Changes in Equity, Cash Flow Statement and Notes
to the Group Financial Statements have been restated
retrospectively. The restatements also impacted the
figures reported for the Financial Services and Other
Entities segments. The Financial Service’s segment re-
sult for 2013 was reduced by € 20 million and amounted
to € 1,619 million after restatement, while segment as-
sets were reduced by € 19 million to € 8,388 million. Seg-
ment
assets reported for the Other Entities segment
amounted to € 55,300 million at the end of the financial
year 2013, correcting the previously reported amount
by € 1,050 million. The tables at the end of this section
show the impact for the Group.
Change in presentation of term deposits within the Cash
Flow Statement
The BMW Group uses a broad range of instruments on
international capital markets to manage its liquidity.
Due to the situation on the financial markets, the BMW
Group is increasingly investing in term deposits with
longer terms (i. e. money deposits that mature after more
than three months). Term deposits were previously re-
ported in the Cash Flow Statement on the line “Change
in other operating assets and liabilities” within operating
cash flows. Since the payments related to these money
deposits qualify as instruments pursuant to IAS 7.16 c – d,
they are required to be presented as cash flows from
investing activities. In accordance with IAS 8.41 et seq.,
these amounts have been reclassified to the line items
“Investments in marketable securities and term deposits”