BMW 2014 Annual Report Download - page 98

98
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
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 De-
cember 2014 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 Commit-
tee (IFRICs) mandatory for the financial year 2014 are
also applied.
The Group Financial Statements comply with § 315 a 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 classi-
fication provisions contained in IAS 1 (Presentation of
Financial Statements).
In order to improve clarity, various items are aggregated
in the income statements and balance sheets presented.
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 (Operat-
ing Segments), the Group Financial Statements also
include balance sheets and income statements for the
Automotive, Motorcycles, Financial Services and Other
Entities segments. The Group Cash Flow Statement is
supplemented by statements of cash flows for the Auto-
motive and Financial Services segments. This supple-
mentary 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
description of the segments is provided in note 50.
In conjunction with the refinancing of financial services
business, a significant volume of receivables arising
from retail customer and dealer financing is sold. Simi-
larly, rights and obligations relating to leases are sold.
The sale of receivables is a well-established instrument
used by industrial companies. These transactions usu-
ally
take the form of asset-backed financing transac-
tions involving the sale of a portfolio of receivables to a
trust which, in turn, issues marketable securities to re-
finance the purchase price. The BMW Group continues
to “service” the receivables and receives an appropriate
fee for these services. In accordance with IFRS 10 (Con-
solidated Financial Statements) such assets remain in
the Group Financial Statements although they have been
legally sold, since all the conditions relevant for control
are met. Gains and losses relating to the sale of such
assets are not recognised until the assets are removed
from the Group balance sheet. The balance sheet value of
the assets sold at 31 December 2014 totalled € 10.9 bil-
lion (31 December 2013: € 10.1 billion).
In addition to credit financing and leasing contracts, the
Financial Services segment also brokers insurance busi-
ness via cooperation arrangements entered into with
local insurance companies. These activities are not ma-
terial 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
otherwise.
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.
All consolidated subsidiaries have the same year end as
BMW AG with the exception of BMW India Private
Ltd., Gurgaon, and BMW India Financial Services Private
Ltd., Gurgaon, both of whose year-ends are 31 March in
accordance with local legal requirements.
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