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7 | Consolidated Financial Statements | Notes to the Consolidated Financial Statements
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 to sell
and value in use. An impairment loss or the reversal of such
a loss is recognized in the 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.
Subsidiaries and associated companies 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.
The aggregate balance sheet totals of these subsidiaries would
amount to approximately 1% of the Group’s balance sheet total;
the aggregate revenues and the aggregate profit/loss before
income taxes amount to approximately 1% of Group revenue and
profit before income taxes.
Table  7.06 shows the composition of the Group.
Business combinations are accounted for using the purchase
method.
Changes in equity interests in Group subsidiaries that reduce
or increase Daimler’s percentage ownership without loss
of control are accounted for as an equity transaction between
owners.
As an additional funding source, Daimler transfers finance
receivables, in particular receivables from the leasing and auto-
motive business, to special purpose entities. Daimler thereby
principally retains the significant risks of the transferred
receivables. According to IAS 27 Consolidated and Separate
Financial Statements and the Standing Interpretations Commit-
tee (SIC) Interpretation 12 Consolidation – Special Purpose
Entities, these special purpose entities have to be consolidated
by the transferor. The transferred financial assets remain in
Daimler’s consolidated statement of financial position.
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
goodwill 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.
In case an additional ownership interest in an existing asso-
ciated company is acquired while significant influence is still
maintained, goodwill is calculated only to the incremental
interest acquired. The pre-existing investment is not measured
anew at fair value.
Composition of the Group
2012 2011
Consolidated subsidiaries
Germany 50 74
International 287 286
Subsidiaries accounted for at cost
Germany 40 46
International 69 80
Subsidiaries accounted for
using the equity method
Germany 11
International 34
Associated companies and joint ventures
Germany 22 20
International 41 46
513 557
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