Porsche 2006 Annual Report Download - page 132

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Volkswagen AG, Wolfsburg, is included as an associate in the consolidated financial statements.
Based on its shareholding, the following assets, liabilities, revenues and profits of the Volkswagen group
are allocated to Porsche AG as of July 31, 2007:
The pro rata assets, liabilities, revenues and profits are determined using uniform group accounting
policies and disclosed hidden reserves and burdens.
The 200-day average market price of Volkswagen AG is around 8,766 million Euro
(previous year: 3,152 million Euro) for the shares held by Porsche AG.
Consolidation Principles
Capital consolidation is performed in accordance with the purchase method pursuant to IFRS 3
(“Business Combinations”). Purchased assets and liabilities are measured at their fair value on the date
of acquisition. The purchase costs of the shares acquired are then offset against pro rata revalued
equity of the subsidiary. Any remaining positive difference from offsetting the purchase price against
the identified assets and liabilities is shown as goodwill under the intangible assets. To the extent
that the purchase price of the investment exceeds the identified assets and liabilities, it is recorded
in the income statement immediately in the year of acquisition.
Expenses and income as well as receivables, liabilities and provisions between the consolidated entities
are offset. Intercompany profits from the disposal of assets within the Group which have not yet been
resold to third parties are eliminated. Deferred taxes are recognized for consolidations with effect on
income taxes. In addition, guarantees and warranties assumed by Porsche AG or one of its consolidated
subsidiaries in favor of other subsidiaries are eliminated.
When subsidiaries are sold, the difference between the selling price and the net assets plus cumulative
translation differences and any goodwill is recognized in the income statement.
Investments in associates included using the equity method are carried at cost at the time of first-time
inclusion. The rulings for full consolidation apply by analogy to the measurement using the equity method.
In subsequent periods, the carrying amount is rolled forward to reflect changes in equity of the associate
on the Porsche Group. An impairment test is carried out if there is any indication that that investment is
impaired.
At least once a year, the company checks whether there is any indication that the reason for an impair-
ment no longer exists or an impairment amount has decreased. In this case, the recoverable amount is
recalculated and the previous impairment reversed.
Due to immateriality, the company elects not to eliminate intercompany profits from trade relations
with associates.
2006/07 2005/06
T€ T€
Non-current assets 17,536,593 11,047,770
Current assets 14,893,196 9,701,676
Non-current liabilities 13,520,247 8,126,237
Current liabilities 12,374,081 8,830,796
Revenues 24,346,507 7,993,436
Profit 702,406 182,852