Mercedes 2012 Annual Report Download - page 211

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BBAC. The investment and the proportionate share
in the results of Beijing Benz Automotive Co., Ltd. (BBAC)
are allocated to the Mercedes-Benz Cars segment.
BFDA. Beijing Foton Daimler Automotive Co. Ltd. was
founded in December 2011 as a joint venture. In 2012, a capital
contribution of €344 million was made. The investment and
the proportionate share in the results of BFDA are included with
a time lag of three months in the consolidated financial
statements and are allocated to the Daimler Trucks segment.
Kamaz. Resulting from its representation on the board of
directors of Kamaz OAO (Kamaz) and its significant contractual
rights under the terms of a shareholder agreement, the Group
can exercise significant influence on Kamaz. Therefore, the
Group accounts for its equity interest in Kamaz using the equity
method; the investment and the proportionate share in the
results of Kamaz are allocated to the Daimler Trucks segment.
In 2012, the three-month time lag in the reporting of Kamaz
was abolished. The effect of this adjustment on the consolidated
financial statements was not significant.
In 2011, the Group recorded an impairment loss of €32 million
with respect to its investment in Kamaz. The loss is included
in the equity result of Kamaz. The impairment is based on Kamaz’s
expectation of reduced cash inflows.
Others. The Group’s investment in Fujian Benz Automotive
Co., Ltd. (FBAC) is included in other investments and is allo-
cated to the Mercedes-Benz Vans segment. In 2012, the Group
recorded an impairment loss of €64 million with respect to
its investment in FBAC. The loss is included in the equity result.
The impairment is based on FBAC’s expectation of reduced
cash inflows.
Moreover, the investment in Li-Tec Battery GmbH is reported
within other investments. In 2012, expenses of €83 million
resulted from this investment and are included in equity result.
The investment is allocated to the Mercedes-Benz Cars
segment.
The Group’s investment in Tesla Motors, Inc. (Tesla) is also
included in other investments. The shares in Tesla are held
by a 100%-consolidated Daimler subsidiary. At December 31,
2011, Daimler held 60% and Aabar Investments PJSC (Aabar)
held 40% of that subsidiary. In June 2012, Aabar exchanged its
40% interest in the holding subsidiary for 3.2% of Tesla’s
shares. In October 2012, Tesla issued approximately 8 million
new shares in the context of a capital increase in which
Daimler did not participate. As a result, Daimler now holds
a 4.3% equity interest in Tesla (2011: 7.8%). The fair value
and the carrying amount of its investment were €125 million
and €6 million as of December 31, 2012 respectively (December
31, 2011: €179 million and €32 million). Resulting from its
representation on the board of directors of Tesla and its signifi-
cant contractual rights under the terms of a shareholder
agreement, the Group can exercise a significant influence on
Tesla. Therefore, the Group accounts for its equity interest
in Tesla using the equity method; the investment and the propor-
tionate share in the results of Tesla are allocated to the
Mercedes-Benz Cars segment.
Further information on investments accounted for using
the equity method is included in Note 35.
14. Receivables from financial services
Table  7.32 shows the components of receivables from
financial services.
Types of receivables. Retail receivables include loans and
finance leases to end users of the Group’s products who
purchased their vehicle either from a dealer or directly from
Daimler.
Wholesale receivables represent loans for floor financing
programs for vehicles sold by the Group’s automotive
businesses to dealers or loans for assets purchased by dealers
from third parties, primarily used vehicles traded in by
dealers’ customer or real estate such as dealer showrooms.
Other receivables mainly represent non-automotive assets
from contracts of the financial services business with third
parties.
All cash flow effects attributable to receivables from financial
services are presented within cash provided by/used for
operating activities in the consolidated statement of cash flows.
Allowances. Changes in the allowance account for receivables
from financial services are included in table  7.33.
The total expense of impairment losses on receivables
from financial services amounted to €390 million in 2012
(2011: €417 million).
Credit risks. Table  7. 3 4 gives an overview of credit risks
included in receivables from financial services.
Receivables not subject to an individual impairment assess-
ment are grouped and subject to collective impairment allow-
ances to cover credit losses.
Further information on financial risks and nature of risks
is provided in Note 31.