Mercedes 2015 Annual Report Download - page 199

206 E | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Accounting policies
Revenue recognition
Revenue from sales of vehicles, service parts and other related
products is recognized when the risks and rewards of owner-
ship of the goods are transferred to the customer, the amount
of revenue can be estimated reliably and collectability is rea-
sonably assured. Revenue is recognized net of sales reductions
such as cash discounts and sales incentives granted.
Daimler uses a variety of sales promotion programs dependent
on various market conditions in individual countries as well
as the respective product life cycles and product-related factors
(such as amounts of discounts offered by competitors, excess
industry production capacity, the intensity of market competition
and consumer demand for the products). These programs
comprise cash offers to dealers and customers as well as lease
subsidies or loans at reduced interest rates.
Revenue also includes revenue from the rental and leasing
business as well as interest from the financial services
business at Daimler Financial Services. The revenue from the
rental and leasing business results from operating leases
and is recognized on a straight-line basis over the periods
of the contracts. In addition, sales revenue is generated
at the end of lease contracts from the subsequent sale of the
vehicles. Revenue from receivables from financial services
is recognized using the effective interest method. When loans
are issued below market rates, related receivables are recog-
nized at present value and revenue is reduced for the interest
incentive granted. If subsidized leasing fees are agreed upon
in connection with finance leases, revenue from the sale of
a vehicle is reduced by the amount of the interest incentive
granted.
In the special event that the financial statements of associated
companies, joint ventures or joint operations 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).
Subsidiaries measured at amortized cost
Subsidiaries, associated companies, joint ventures and joint
operations whose business is non-active or of low volume
and that are not material for the Group and the fair presentation
of financial position, liquidity and capital resources, and
profitability are generally measured at amortized cost in the
consolidated financial statements.
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 translated 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 adjustments
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, the British pound, the
Japanese yen, the Chinese renminbi and the Russian ruble
– the most significant foreign currencies for Daimler – were
as shown in table  E.06.
Exchange rates
2015 2014
USD GBP JPY CNY RUB USD GBP JPY CNY RUB
1 € = 1 € = 1 € = 1 € = 1 € = 1 € = 1 € = 1 € = 1 € = 1 € =
Average exchange
rate on December 31
1.0887 0.7340 131.0700 7.0608 80.6736
1.2141 0.7789 145.2300 7.5358 72.3370
Average exchange rates
during the respective period
First quarter 1.1261 0.7434 134.1200 7.0231 70.9608 1.3696 0.8279 140.8000 8.3576 48.0425
Second quarter 1.1053 0.7211 134.2900 6.8572 58.2187 1.3711 0.8147 140.0000 8.5438 47.9415
Third quarter 1.1116 0.7173 135.8600 7.0083 70.3033 1.3256 0.7938 137.7500 8.1734 48.0583
Fourth quarter 1.0953 0.7220 132.9500 7.0003 72.4051 1.2498 0.7891 142.7500 7.6824 59.7160
E.06