BMW 2015 Annual Report Download - page 109

109 GROUP FINANCIAL STATEMENTS
depending on the product and sales market concerned.
Warranty provisions are recognised when the risks and
rewards of ownership of the goods are transferred to
the dealer or retail customer or when a new category of
warranty is introduced. In order to determine the level
of the provision, various factors are taken into considera-
tion,
including estimations based on past experience
with the nature and amount of claims. These estima-
tions
also involve assessing the future level of potential
repair costs and price increases per product and mar-
ket. Provisions for warranties are adjusted regularly to
take account of new circumstances and the impact of
any changes recognised in the income statement. Further
information is provided in note 36. Similar estimates
are also made in conjunction with the measurement of
expected reimbursement claims.
In the event of involvement in legal proceedings or
when claims are brought against a Group entity, provi-
sions for litigation and liability risks are recognised
when an outflow of resources is probable and a reliable
estimate can be made of the amount of the obligation.
Management is required to make assumptions with re-
spect to the probability of occurrence, the amount
in-
volved and the duration of the legal dispute. For these
reasons, the recognition and measurement of provi-
sions
for litigation and liability risks are subject to un-
certainty. The outcome of legal proceedings is often
difficult to predict. Further information is provided in
note 36. If the recognition and measurement criteria
relevant for provisions are not fulfilled and the possi-
bility of any outflow in settlement is remote, the poten-
tial obligation is disclosed as a contingent liability.
In addition, judgement is required in particular when
assessing whether the risks and rewards incidental to
ownership of a leased asset have been transferred for
the purposes of determining the classification of leasing
arrangements.
Determining the scope of consolidated companies to be
included in the Group Financial Statements may involve
the use of judgement. In particular when the BMW
Group holds 50 % or less of the voting rights, a detailed
assessment must be made as to whether sole control,
joint control or significant influence applies. For instance,
other contractual rights and / or other matters and cir-
cumstances could result in the conclusion that the BMW
entity concerned controls or jointly controls an entity
in which it has a participation. In the latter case, it must
then be decided whether the joint arrangement is a joint
operation or a joint venture. In making its judgement,
the BMW Group must take all contractual arrangements
and other circumstances into account, and not just the
structure and legal form of the entity. A new assessment
is made in the event of any indication of changes in the
previous assessment of (joint) control. Further informa-
tion is provided in note 2.
Financial reporting rules
(a) Financial reporting rules applied for the first time in the financial year 2015
The following Standards, Revised Standards, Amendments and Interpretations were applied for the first time in
the financial year 2015:
8
Standard / Interpretation Date of Date of Date of Impact
issue by IASB mandatory mandatory on BMW Group
application application
IASB EU
IAS 19 Employment Benefits:
Employee Contributions (Amendments to
IAS 19)
21. 11. 2013 1. 7. 2014 1. 2. 20151 Insignificant
IFRIC 21 Levies 20. 5. 2013 1. 1. 2014 17. 6. 20142 Insignificant
Annual Improvements to IFRS 2010 – 2012 12. 12. 2013 1. 7. 2014 1. 2. 20151 Insignificant
Annual Improvements to IFRS 2011 – 2013 12. 12. 2013 1. 7. 2014 1. 1. 2015 Insignificant
1 Mandatory application in annual periods beginning on or after 1 February 2015.
2 Mandatory application in annual periods beginning on or after 17 June 2014.