BMW 2015 Annual Report Download - page 101

101 GROUP FINANCIAL STATEMENTS
Accounting policies
The financial statements of BMW AG and of its subsidi-
aries in Germany and elsewhere have been prepared for
consolidation purposes using uniform accounting poli-
cies in accordance with IFRS 10 (Consolidated Financial
Statements).
Revenues from the sale of products are recognised
when the risks and rewards of ownership of the goods
are transferred to the dealer or customer, provided that
the amount of revenue can be measured reliably, it is
probable that the economic benefits associated with the
transaction will flow to the entity and costs incurred or
to be incurred in respect of the sale can be measured
reliably. Revenues are stated net of settlement discount,
bonuses and rebates. Revenues also include lease rentals
and interest income earned in conjunction with
finan-
cial services. Revenues from leasing instalments relate
to operating leases and are recognised in the income
statement on a straight line basis over the relevant term
Investments accounted for using the equity method
(joint ventures and associated companies) are meas-
ured at the BMW Group’s share of equity, taking
account of fair value adjustments. Any difference be-
tween the cost of investment and the Group’s share of
equity is accounted for in accordance with the acquisi-
tion method. Investments in other companies are
ac-
Foreign currency translation
The financial statements of consolidated companies
which are drawn up in a foreign currency are translated
using the functional currency concept (IAS 21 The
Effects of Changes in Foreign Exchange Rates) and the
modified closing rate method. The functional currency
of a subsidiary is determined as a general rule on the
basis of the primary economic environment in which it
operates and corresponds therefore usually to the rele-
vant local currency. Income and expenses of foreign
subsidiaries are translated in the Group Financial
State-
ments at the average exchange rate for the year, and
assets and liabilities are translated at the closing rate.
Exchange differences arising from the translation of
shareholders’ equity are recognised directly in
accumu-
lated other equity. Exchange differences arising from
the
use of different exchange rates to translate the income
counted for as a general rule using the equity method
when significant influence can be exercised (IAS 28
Investments in Associates and Joint Ventures). As a
general rule, there is a rebuttable assumption that the
Group has significant influence if it holds between 20 %
and 50 % of the associated company’s or joint venture’s
voting power.
statement are also recognised directly in accumulated
other equity.
Foreign currency receivables and payables in the single
entity accounts of BMW AG and subsidiaries are re-
corded, at the date of the transaction, at cost. At the end
of the reporting period, foreign currency receivables
and payables are translated at the closing exchange rate.
The resulting unrealised gains and losses as well as the
subsequent realised gains and losses arising on settle-
ment are recognised in the income statement in
accord-
ance with the underlying substance of the relevant
transactions.
The exchange rates of those currencies which have a
material impact on the Group Financial Statements
were as follows:
Closing rate Average rate
31.12. 2015 31.12. 2014 2015 2014
US Dollar 1.09 1.21 1.11 1.33
British Pound 0.74 0.78 0.73 0.81
Chinese Renminbi 7.07 7.53 6.97 8.19
Japanese Yen 130.74 144.95 134.28 140.38
Russian Rouble 79.91 70.98 68.01 51.03
Korean Won 1,278.92 1,324.84 1,255.38 1,397.80
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