Mercedes 2013 Annual Report Download - page 192

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Investments in associated companies and joint ventures.
Associated companies and joint ventures are generally
accounted for using the equity method.
At the acquisition date, the excess of the cost of Daimler’s
initial investment in an associate or joint venture and the share
of the net fair value of the associate’s or joint venture’s iden-
tifiable assets and liabilities is recognized as investor level good-
will and is included in the carrying amount of the investment
accounted for using the equity method. Step acquisitions, through
which significant influence or joint control is obtained for
the first time, are generally accounted for in accordance with
IFRS 3 Business Combinations, which means the previously
held equity interest is remeasured at its acquisition-date fair
value; resulting gains and losses are recognized in profit
or loss. If an additional ownership interest is acquired in an exist-
ing associated company while significant influence is main-
tained, goodwill is calculated only on the incremental interest
acquired. The pre-existing investment is not measured
anew at fair value.
When the status of an investment changes from joint venture
to associated company, Daimler continues to apply the equity
method and recognizes any gain or loss only to the extent
of the reduction in ownership interest.
Daimler assesses at each reporting date whether objective
evidence of impairment is present with regard to its investments
in associated companies and joint ventures. If such indication
exists, the Group determines the impairment. If the carrying
amount exceeds the recoverable amount of an investment,
the carrying amount is reduced to the recoverable amount.
The recoverable amount is the higher of fair value less costs
of disposal and value in use. An impairment loss or the reversal
of such a loss is recognized in the consolidated statement
of income in the line item “Share of profit/loss from investments
accounted for using the equity method, net”. Income and
expenses from the sale of investments accounted for using
the equity method are shown in the same line item.
Profits and losses from transactions with associated
companies and joint ventures are eliminated by adjusting
the carrying amount of the investment accordingly.
Daimler’s share of any dilution gains and losses resulting
from capital increases by its investees accounted for using
the equity method in which the Group or other shareholders
do not participate are recognized in “Share of profit/loss
from investments accounted for using the equity method, net.”
In the special event that the financial statements of associated
companies or joint ventures should not be available in good
time, the Group’s proportionate share of the results of operations
is included in Daimler’s consolidated financial statements
with a one to three-month time lag. Adjustments are made
for all significant events or transactions that occur during
the time lag (see also Note 13).
Foreign currency translation. Transactions in foreign
currency are translated at the relevant foreign exchange rates
prevailing at the transaction date. In subsequent periods,
assets and liabilities denominated in foreign currency are trans-
lated into euros using period-end exchange rates; gains and
losses from this measurement are recognized in profit and loss
(except for gains and losses resulting from the translation
of available-for-sale equity instruments, which are recognized
in other comprehensive income/loss).
Assets and liabilities of foreign companies for which the
functional currency is not the euro are translated into
euros using period-end exchange rates. The translation adjust-
ments are presented in other comprehensive income/loss.
The components of equity are translated using historical rates.
The statements of income and cash flows are translated
into euros using average exchange rates during the respective
periods.
The exchange rates of the US dollar and the Japanese Yen,
the most significant foreign currencies for Daimler, were as
shown in table  F.11.
Exchange rates of the US dollar
2013 2012
€1 = €1 =
Average exchange rate on December 31 1.3791 1.3194
Average exchange rates during the respective period
First quarter 1.3206 1.3108
Second quarter 1.3062 1.2826
Third quarter 1.3242 1.2502
Fourth quarter 1.3610 1.2967
Exchange rates of the Japanese yen
2013 2012
€1 = €1 =
Average exchange rate on December 31 144.7200 113.6100
Average exchange rates during the respective period
First quarter 121.7900 103.9900
Second quarter 129.0700 102.7400
Third quarter 131.0200 98.3000
Fourth quarter 136.4800 105.1200
F.11