Mercedes 2009 Annual Report Download - page 184

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In March 2007, the IASB issued an amendment of IAS 23 Borrow-
ing Costs. The amendment removes the option of immediately
recognizing borrowing costs as an expense. The amended stan-
dard requires capitalization of borrowing costs that are directly
attributable to the acquisition, construction or production of
qualifying assets. Assets are considered qualifying when a sub-
stantial period of time is necessary to get them ready for use
or sale. Adoption of the amendment is required prospectively as
of January 1, 2009 for qualifying assets whose construction or
production started after that date. In 2009, the Group capitalized
borrowing costs of €1 million resulting from long-term develop-
ment projects.
With the amendment of IAS 1 Presentation of Financial State-
ments, the consolidated financial statements contain in addition
to the consolidated statement of income (loss) a consolidated
statement of comprehensive income (loss). The latter comprises
the profit or loss of the reporting period as well as equity changes
other than those changes resulting from transactions with own-
ers in their capacity as owners that are not recognized in profit or
loss (other comprehensive income or loss).
The IASB issued amendments to IFRS 7 Financial Instruments:
Disclosures which require enhanced disclosures about fair value
measurement and liquidity risk. The amendments have no influ-
ence on the Group’s financial position, financial performance or
statement of cash flows.
IFRSs issued and EU endorsed but not yet adopted. In Janu-
ary 2008, the IASB published revisions of IFRS 3 Business
Combinations and IAS 27 Consolidated and Separate Financial
Statements. Major changes are: (a) the requirement that the
assets acquired, the liabilities assumed and the equity interests
be consistently measured at fair value on the acquisition date;
(b) costs incurred in an acquisition are to be recognized in the
income statement of the period; (c) option of measuring any
non-controlling interest in the entity acquired at fair value; and
(d) once control is obtained, all other increases and decreases
in ownership interest are reported in equity. Adoption of the stan-
dard is required prospectively for annual periods beginning on
or after July 1, 2009, with earlier adoption permitted. Daimler will
adopt the standards as of January 1, 2010.
IFRSs issued but neither EU endorsed nor yet adopted. In
November 2009, the IASB published IFRS 9 Financial Instru-
ments as part of its project of a revision of the accounting guid-
ance for financial instruments. The new standard provides
guidance on the accounting of financial assets as far as classifi-
cation and measurement are concerned. The standard will be
effective for annual periods beginning on or after January 1, 2013.
Earlier application is permitted. The Group will not early adopt
IFRS 9 Financial Instruments for 2010. Daimler will determine
the expected effects on the Groups’ consolidated financial
statements.
Other IFRSs issued but not required to be adopted are not
expected to have significant influence on the Group’s financial
position, financial performance or statement of cash flows.
Presentation. Presentation in the statement of financial position
differentiates between current and non-current assets and lia-
bilities. Assets and liabilities are classified as current if they mature
within one year or within a longer operating cycle. Deferred tax
assets and liabilities as well as assets and provisions for pensions
and similar obligations are presented as non-current items. The
consolidated statement of income (loss) is presented using the
cost-of-sales method.
Commercial practices with respect to certain products manufac-
tured by the Group necessitate that sales financing, including
leasing alternatives, be made available to the Group’s customers.
Accordingly, the Group’s consolidated financial statements
are also significantly influenced by the activities of its financial
services business.
To enhance readers’ understanding of the Group’s consolidated
financial statements, the accompanying financial statements
present, in addition to the audited consolidated financial state-
ments, unaudited information with respect to the results of
operations and financial position of the Group’s industrial and
financial services business activities. Such information, how-
ever, is not required by IFRS and is not intended to, and does not
represent the separate IFRS results of operations and financial
position of the Group’s industrial or financial services business
activities. Eliminations of the effects of transactions between
the industrial and financial services businesses have generally
been allocated to the industrial business columns.
Measurement. The consolidated financial statements have been
prepared on the historical cost basis with the exception of cer-
tain items such as available-for-sale financial assets, derivative
financial instruments or hedged items as well as pensions and
similar obligations. Measurement models applied to those excep-
tions are described below.