Porsche 2007 Annual Report Download - page 135

132
To our shareholders
The Company
The new Panamera
Financials
 Consolidation principles
The financial statements of the subsidiaries are prepared as of the balance sheet date of the
consolidated financial statements, which is the balance sheet date of Porsche SE. For associates,
available information, i.e. the most recently audited financial statements and the published interim
report as of 30 June, is used as a basis.
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 sub-
sidiary. Any remaining positive difference from offsetting the purchase price against the identified
assets and liabilities is shown as goodwill under intangible assets.
To the extent that the purchase price of the business combination falls short of the identified
assets, liabilities and contingent liabilities, the identified assets, liabilities and contingent liabilities
as well as the acquisition costs are revalued and posted immediately to profit or loss 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 consolidation
entries with effect on income taxes. In addition, guarantees and warranties assumed by Porsche
SE 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 unamortized goodwill is recognized in profit or loss.
Investment in associates included using the equity method is carried at cost at the time of first-
time consolidation. 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 impairment 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.