Additional Income Statement Disclosures in Accordance with IAS 23 (Borrowing Costs)
Additional Income Statement Disclosures in Accordance with IAS 23 (Borrowing Costs)
Capitalized borrowing costs amounted to €55 million (previous year: €41 million) and related mainly to capitalized development costs. An average cost of debt of 3.0% (previous year: 3.6%) was used as a basis for capitalization in the Volkswagen Group.
Additional Income Statement Disclosures in Accordance with IFRS 7 (Financial Instruments)
CLASSES OF FINANCIAL INSTRUMENTS
Financial instruments are divided into the following classes at the Volkswagen Group: > financial instruments measured at fair value, > financial instruments measured at amortized cost and > financial instruments not falling within the scope of IFRS 7.
Financial instruments not falling within the scope of IFRS 7 include in particular investments in associates and joint ventures accounted for using the equity method.
N ET GAINS OR LOSSES FROM FINANCIAL I NSTRUMENTS BY MEASUREMENT CATEGORY UN DER IAS 39
2011 € million
Financial instruments at fair value through profit or loss
Loans and receivables
Available-for-sale financial assets
Financial liabilities measured at amortized cost
Net gains and losses from financial assets and liabilities at fair value through profit or loss are composed of the fair value measurement gains and losses on derivatives, including interest and gains and losses on currency translation.
Net gains and losses from available-for-sale financial assets primarily comprise income and expenses from marketable securities including disposal gains/losses, impairment losses on investments and currency translation effects.
Net gains and losses from loans and receivables and from financial liabilities carried at amortized cost comprise interest income and expenses in accordance with the effective interest method under IAS 39, including currency translation effects. Interest also includes interest income and expenses from the lending business of the financial services operations.
TOTAL INTEREST I NCOME AN D EXPENSES OF FINANCIAL INSTRUMENTS NOT MEASURED AT FAI R VALUE TH ROUGH PROFIT OR LOSS
€ million 2012 2011 Interest income
5,144 4,624 Interest expenses
IMPAIRMENT LOSSES ON FINANCIAL ASSETS BY CLASS
€ million 2012 2011 Measured at fair value
6 36 Measured at amortized cost
Impairment losses relate to write-downs of financial assets, such as valuation allowances on receivables, marketable securities and unconsolidated subsidiaries. Interest income on impaired financial assets amounted to €63 million in the fiscal year (previous year: €58 million).
In fiscal year 2012, €4 million (previous year: €3 million) was recognized as an expense and €49 million (previous year: €39 million) as income from fees and commissions for trust activities and from financial assets and liabilities not measured at fair value that are not accounted for using the effective interest method.
CONSOLI DATED FI NANC IAL STATEMENTS 295
Income Statement Statement of Comprehensive Income Balance Sheet Statement of Changes in Equity Cash Flow Statement Notes
Responsibility Statement Auditors’ Report
Balance Sheet Disclosures
12 | Intangible assets
CHANGES I N INTANGIBLE ASSETS BETWEEN JAN UARY 1 AN D DECEMBER 31, 2011
Capitalized
Capitalized costs
development
for products
costs for
Brand names
Goodwill*
development
currently in use
assets
Total*
Cost Balance at Jan. 1, 2011
Foreign exchange differences
64 –37 Changes in
consolidated Group
31,248 Amortization and
Balance at Dec. 31, 2011
impairment Balance at Jan. 1, 2011
Foreign exchange differences
3 –19 Changes in consolidated Group
57 57 Additions to cumulative
2,164 Additions to cumulative impairment losses
2,463 Reversal of impairment
9,073 Carrying amount at Dec. 31, 2011
Balance at Dec. 31, 2011
* Figures adjusted because of the updated purchase price allocation for MAN.
Other intangible assets comprise in particular concessions, purchased customer lists and dealer relationships, industrial and similar rights, and licenses in such rights and assets.
Sensitivity analyses have shown that it is unnecessary to recognize impairment losses on goodwill and other indefinite-lived intangible assets, including where realistic variations are applied to key assumptions.
CHANGES I N INTANGIBLE ASSETS BETWEEN JAN UARY 1 AN D DECEMBER 31, 2012
Capitalized
Capitalized costs
development
for products
costs for
Other
intangible € million
under
products
Brand names
Goodwill*
development
currently in use
assets Total*
Cost Balance at Jan. 1, 2012
Foreign exchange differences
25 –109 83 Changes in
consolidated Group
8,441 70,560 Amortization and
Balance at Dec. 31, 2012
impairment Balance at Jan. 1, 2012
Foreign exchange differences
0 16 –9 7 Changes in
consolidated Group
0 18 18 Additions to cumulative
amortization
1,591 3,517 Additions to cumulative impairment losses
271 1,210 Reversal of impairment losses
3,158 11,401 Carrying amount at Dec. 31, 2012
Balance at Dec. 31, 2012
* Figures adjusted because of the updated purchase price allocation for MAN.
The reported brand names mainly relate to Porsche (€13,823 million), Scania Vehicles and Services (€1,134 million), MAN Commercial Vehicles (€1,145 million), MAN Power Engineering (€470 million) and Ducati (€404 million).
€18,871 million of the goodwill recognized as of December 31, 2012 relates to Porsche, €3,260 million (previous year: €3,139 million) to Scania Vehicles and Services, €708 million (previous year: €505 million) to MAN Commercial Vehicles, €290 million to Ducati, €257 million (previous year: €254 million) to MAN Power Engineering, €161 million (previous year: €157 million) to ŠKODA and €152 million (previous year: €153 million) to Porsche Holding Salzburg. €176 million (previous year: €98 million) of the remaining amount relates to the Passenger Cars and Light Commercial Vehicles segment, €46 million (previous year: €15 million) to the Financial Services segment and €13 million (previous year: €13 million) to unallocated areas. The recoverability test for recognized goodwill is based on value in use and is not affected by a variation in the growth forecast or in the discount rate of +/–0.5 percentage points.
Of the total research and development costs incurred in 2012, €2,615 million (previous year: €1,666 million) met the criteria for capitalization under IFRS s.
CONSOLI DATED FI NANC IAL STATEMENTS 297
Income Statement Statement of Comprehensive Income Balance Sheet Statement of Changes in Equity Cash Flow Statement Notes
Responsibility Statement Auditors’ Report
The following amounts were recognized as expenses:
Research and noncapitalized development costs
Amortization of development costs
Research and development costs recognized in the income statement
13 | Property, plant and equipment
CHANGES I N PROPERTY, PLANT AN D EQUI PMENT BETWEEN JAN UARY 1 AN D DECEMBER 31, 2011
Land, land rights
and buildings,
Other
Payments on
account and
buildings on
equipment and
operating and
assets under
€ million
third-party land*
machinery
office equipment
construction
Total*
Cost Balance at Jan. 1, 2011
–576 Changes in consolidated Group
Foreign exchange differences
99,643 Depreciation and impairment Balance at Jan. 1, 2011
Balance at Dec. 31, 2011
–396 Changes in consolidated Group
Foreign exchange differences
22 Additions to cumulative depreciation
11 4,917 Additions to cumulative impairment losses
1 1,807 Reversal of impairment losses
39 67,767 Carrying amount at Dec. 31, 2011
Balance at Dec. 31, 2011
of which assets leased under finance lease contracts Carrying amount at Dec. 31, 2011
* Figures adjusted because of the updated purchase price allocation for MAN.
Future finance lease payments due, and their present values, are shown in the following table:
Total € million Finance lease payments
562 Interest component of finance lease payments
Carrying amount/present value
CHANGES I N PROPERTY, PLANT AN D EQUI PMENT BETWEEN JAN UARY 1 AN D DECEMBER 31, 2012
Land, land rights
and buildings,
Other
Payments on
account and
assets under € million
buildings on
equipment and
operating and
third-party land*
machinery
office equipment
construction Total*
Cost Balance at Jan. 1, 2012
Foreign exchange differences
–40 –397 Changes in consolidated Group
5,657 110,446 Depreciation and impairment Balance at Jan. 1, 2012
Balance at Dec. 31, 2012
Foreign exchange differences
–2 –268 Changes in consolidated Group
18 5 11 – 34 Additions to cumulative depreciation
12 5,969 Additions to cumulative impairment losses
0 2,500 Reversal of impairment losses
30 71,022 Carrying amount at Dec. 31, 2012
Balance at Dec. 31, 2012
of which assets leased under finance lease contracts Carrying amount at Dec. 31, 2012
* Figures adjusted because of the updated purchase price allocation for MAN.
Options to purchase buildings and plant leased under the terms of finance leases exist in most cases, and are also expected to be exercised. Interest rates on the leases vary between 1.6% and 11.0% (previous year: between 2.1% and 11.0%), depending on the market and the date of inception of the lease.
CONSOLI DATED FI NANC IAL STATEMENTS 299
Income Statement Statement of Comprehensive Income Balance Sheet Statement of Changes in Equity Cash Flow Statement Notes
Responsibility Statement Auditors’ Report
Future finance lease payments due, and their present values, are shown in the following table:
Finance lease payments
Interest component of finance lease payments
Carrying amount/present value
For assets leased under operating leases, payments recognized in the income statement amounted to €1,164 million (previous year: €794 million). With respect to internally used assets, €1,024 million (previous year: €690 million) of this figure is attributable to minimum lease payments and €41 million (previous year: €7 million) to contingent lease payments. The payments of €99 million (previous year: €97 million) under subleases primarily relate to minimum lease payments.
Government grants of €418 million (previous year: €530 million) were deducted from the cost of property, plant and equipment, and noncash benefits received amounting to €4 million (previous year: €1 million) were not capitalized as the cost of assets.
14 | Leasing and rental assets and investment property
CHANGES I N LEASING AN D RENTAL ASSETS AND I NVESTMENT PROPERTY BETWEEN JAN UARY 1 AN D DECEMBER 31, 2011
Leasing and
Investment
€ million
rental assets
property
Total
Cost Balance at Jan. 1, 2011
Foreign exchange differences
Changes in consolidated Group
Balance at Dec. 31, 2011
Depreciation and impairment Balance at Jan. 1, 2011
Foreign exchange differences
Changes in consolidated Group
Additions to cumulative depreciation
Additions to cumulative impairment losses
Reversal of impairment losses
Balance at Dec. 31, 2011
Carrying amount at Dec. 31, 2011
The following payments from noncancelable leases and rental agreements were expected to be received over the coming years:
€ million
from 2017 Total Lease payments
CHANGES I N LEASING AN D RENTAL ASSETS AND I NVESTMENT PROPERTY BETWEEN JAN UARY 1 AN D DECEMBER 31, 2012
Investment € million
Leasing and
rental assets
property Total
Cost Balance at Jan. 1, 2012
Foreign exchange differences
–5 –220 Changes in consolidated Group
626 26,079 Depreciation and impairment Balance at Jan. 1, 2012
Balance at Dec. 31, 2012
Foreign exchange differences
–1 –70 Changes in consolidated Group
8 2 10 Additions to cumulative depreciation
14 3,512 Additions to cumulative impairment losses
12 2,857 Reversal of impairment losses
194 5,612 Carrying amount at Dec. 31, 2012
Balance at Dec. 31, 2012
Leasing and rental assets include assets leased out under the terms of operating leases and assets covered by long-term buy-back agreements.
Investment property includes apartments rented out and leased dealerships with a fair value of €758 million (previous year: €642 million). Operating expenses of €50 million (previous year: €53 million) were incurred for the maintenance of investment property in use. Expenses of €1 million (previous year: €2 million) were incurred for unused investment property.
The following payments from noncancelable leases and rental agreements are expected to
be received over the coming years:
from 2018 Total
Lease payments
CONSOLI DATED FI NANC IAL STATEMENTS 301
Income Statement Statement of Comprehensive Income Balance Sheet Statement of Changes in Equity Cash Flow Statement Notes
Responsibility Statement Auditors’ Report
15 | Equity-accounted investments and other equity investments
CHANGES I N EQUITY-ACCOUNTED INVESTMENTS AN D OTHER EQUITY I NVESTMENTS BETWEEN JAN UARY 1 AN D DECEMBER 31, 2011
Equity-accounted
Other equity
Gross carrying amount at Jan. 1, 2011
Foreign exchange differences
Changes in consolidated Group
Changes recognized in profit or loss
Other changes recognized in other comprehensive income*
Balance at Dec. 31, 2011
Impairment losses Balance at Jan. 1, 2011
Foreign exchange differences
Changes in consolidated Group
Reversal of impairment losses
Balance at Dec. 31, 2011
Carrying amount at Dec. 31, 2011
* The presentation of the recognition of components of OCI in connection with changes in the basis of consolidation was adjusted.
CHANGES I N EQUITY-ACCOUNTED INVESTMENTS AN D OTHER EQUITY I NVESTMENTS BETWEEN JAN UARY 1 AN D DECEMBER 31, 2012
Other equity € million
Equity-accounted
investments
investments Total
Gross carrying amount at Jan. 1, 2012
–3 –28 Changes in consolidated Group
Foreign exchange differences
2 16 17 Changes recognized in profit or loss
– 3,226 Dividends
– –3,925 Other changes recognized in other comprehensive income
4,107 11,469 Impairment losses Balance at Jan. 1, 2012
Balance at Dec. 31, 2012
Foreign exchange differences 0 –1 –1 Changes in consolidated Group
0 0 Reversal of impairment losses
Balance at Dec. 31, 2012 53 236 290 Carrying amount at Dec. 31, 2012
Equity-accounted investments include joint ventures in the amount of €6,870 million (previous year: €9,713 million) and associates in the amount of €439 million (previous year: €536 million).
€12,566 million of the changes in the consolidated Group concerning equity-accounted investments relates to the reclassification of the shares of Porsche Holding Stuttgart because of the initial consolidation of that company. The income of €10,716 million from the remeasurement of the existing shares held resulting from discontinuation of equity-method accounting was reported under additions.
Of the other changes recognized in other comprehensive income, €–245 million (previous year: €45 million) is attributable to joint ventures and €2 million (previous year: €39 million) to associates. They are mainly the result of foreign exchange differences in the amount of €–48 million (previous year: €–195 million), actuarial gains/losses in the amount of €–135 million (previous year: €8 million) and losses on the fair value measurement of cash flow hedges in the amount of €–185 million (previous year: €–172 million).
CONSOLI DATED FI NANC IAL STATEMENTS 303
Income Statement Statement of Comprehensive Income Balance Sheet Statement of Changes in Equity Cash Flow Statement Notes
Responsibility Statement Auditors’ Report
16 | Noncurrent and current financial services receivables
Fair value
amount Fair value
Dec. 31, Dec. 31, € million
Receivables from financing business
44,995 46,092 Dealer financing
Customer financing
11,701 11,702 Direct banking
Receivables from operating leases
166 166 Receivables from finance leases
Noncurrent receivables from the customer financing business mainly bear fixed interest at rates of between 0.0% and 37.0% (previous year: 0.0% and 37.0%), depending on the market concerned. They have terms of up to 242 months (previous year: 242 months). The noncurrent portion of dealer financing is granted at interest rates of between 0.0% and 18.4% (previous year: 0.0% and 18.4%), depending on the country.
The receivables from customer financing and finance leases contained in financial services receivables of €86.7 billion (previous year: €76.2 billion) rose by €56 million as a result of a fair value adjustment from portfolio hedging (previous year: €46 million).
The receivables from customer and dealer financing are secured by vehicles or real property liens. The receivables from dealer financing include €124 million (previous year: €104 million) receivable from affiliated companies.
The receivables from finance leases – almost entirely in respect of vehicles – were or are expected to generate the following cash flows as of December 31, 2011 and December 31, 2012:
€ million
from 2017 Total Future payments from finance
129 20,789 Unearned finance income from finance leases (discounting)
lease receivables
Present value of minimum lease payments outstanding at the reporting date
from 2018 Total Future payments from finance
lease receivables
176 23,561 Unearned finance income from finance leases (discounting)
Present value of minimum lease payments outstanding at the reporting date
17 | Noncurrent and current other financial assets
Dec. 31, € million
Dec. 31,
Noncurrent 2011 Positive fair value
of derivatives
Marketable securities
Receivables from loans, bonds, profit participation rights (excluding Interest)
Miscellaneous financial assets
The noncurrent and current financial assets previously reported in the “Other receivables and financial assets” item are presented in greater detail in fiscal year 2012. The prior-period figures were reclassified accordingly.
Other financial assets include receivables from related parties of €5,033 million (previous year: €2,811 million) and €3,625 million (previous year: €2,858 million) of collateral furnished for financial liabilities and contingent liabilities. There is no original right of disposal or pledge for the furnished collateral on the part of the collateral taker.
With the exception of the noncurrent securities, there are no material restrictions on title or right of use in respect of the reported other financial assets. Default risks are accounted for by means of valuation allowances.
CONSOLI DATED FI NANC IAL STATEMENTS 305
Income Statement Statement of Comprehensive Income Balance Sheet Statement of Changes in Equity Cash Flow Statement Notes
Responsibility Statement Auditors’ Report
The positive fair values of derivatives relate to the following items:
Transactions for hedging foreign currency risk from assets using fair value hedges
foreign currency risk from liabilities using fair value hedges
interest rate risk using fair value hedges
interest rate risk using cash flow hedges
foreign currency and price risk from future cash flows (cash flow hedges)
Hedging transactions
Assets related to derivatives not included in hedging relationships
The positive fair value of transactions for hedging price risk from future cash flows (cash flow hedges) amounted to €76 million (previous year: €121 million).
Positive fair values of €41 million (previous year: €57 million) were recognized from transactions for hedging interest rate risk (fair value hedges) used in portfolio hedges. In the previous year, assets arising from derivatives not included in hedging relationships included in particular Volkswagen AG’s call options to acquire the outstanding shares of Porsche Holding Stuttgart in the amount of €8,409 million.
Further details on derivative financial instruments as a whole are given in note 33 Financial risk management and financial instruments.
18 | Noncurrent and current other receivables
€ million Current
Recoverable income taxes
Miscellaneous receivables
Miscellaneous receivables include plan assets to fund post-employment benefits in the amount of €36 million (previous year: €48 million). This item also includes the share of the technical provisions attributable to reinsurers amounting to €131 million (previous year: €127 million).
There are no material restrictions on title or right of use in respect of the reported other receivables. Default risks are accounted for by means of valuation allowances. Current other receivables are predominantly non-interest-bearing.
19 | Tax assets
Carrying amount € million
Carrying amount
Noncurrent Dec. 31, 2011
Deferred tax assets
6,333 6,333 Tax receivables
€4,060 million (previous year: €3,553 million) of the deferred tax assets is due within one year.
20 | Inventories
3,429 Work in progress
Raw materials, consumables and supplies
3,324 Finished goods and purchased merchandise
17,383 Current leasing and rental assets
3,204 Payments on account
Of the total inventories, €3,576 million (previous year: €2,543 million) is recognized at net realizable value. At the same time as the relevant revenue was recognized, inventories in the amount of €150,121 million were included in cost of sales (previous year: €124,813 million). Valuation allowances recognized as expenses in the reporting period amounted to €748 million (previous year: €333 million). Vehicles amounting to €260 million (previous year: €227 million) were assigned as collateral for partial retirement obligations.
21 | Trade receivables
Trade receivables from
third parties
8,989 affiliated companies
196 joint ventures
33 25 other investees and investors
CONSOLI DATED FI NANC IAL STATEMENTS 307
Income Statement Statement of Comprehensive Income Balance Sheet Statement of Changes in Equity Cash Flow Statement Notes
Responsibility Statement Auditors’ Report
The fair values of the trade receivables correspond to the carrying amounts. The trade receivables include receivables from construction contracts accounted for using the percentage of completion method. These are calculated as follows:
Contract costs and proportionate contract profit/loss of construction contracts
of which billed to customers
Exchange rate effects
PoC receivables, gross
Prepayments received
PoC receivables, net
Other payments received on account of construction contracts in the amount of €407 million (previous year: €1 million), for which no construction costs have yet been incurred, are recognized under other liabilities.