Notes to the Consolidated Financial Statements
Leased equipment is valued at ac•
quisition or manufacturing costs, and
is depreciated using the declining-
balance method. We change from the
declining-balance-method to the
straight-line method of calculating de•
preciation allowances when the equal
distribution of the remaining net book
value over the remaining useful life
leads to higher depreciation amounts.
The option to exercise tax-deductible
depreciation, as per Section 14 of the
Berlin Development Law, was used.
Raw materials and supplies as
well as goods purchased for resale are
valued at the lower of cost or market.
Finished goods are valued at
manufacturing costs which comprise,
apart from direct material and direct
labor, applicable manufacturing over•
heads including depreciation charges.
To the extent that inventory risks are
determinable, i.e. for reduced usability
Companies Included in
Consolidation
At the end of 1991, the helicopter
activities of MBB and of the French
Aerospatiale were merged into the
The companies included in consol• newly-founded Eurocopter group in or•
idation encompass, apart from
Daimler-Benz AG, 255 (1990: 269)
domestic and foreign subsidiaries and
7 joint venture companies.
der to form a strategic alliance. MBB
holds 40 % of the share capital in the
new joint venture company Eurocopter
Holding S.A., Paris. Because of the rel•
atively short group affiliation, only the
consolidated balance sheets, but not
the statements of income of Eurocop•
ter Holding S.A., and its subsidiaries,
are included pro rata. The income and
expenses for 1991 derived from the
German helicopter activities are still
During the reporting year, 33
companies have, for the first time,
been added to consolidation. More•
over, 7 joint venture companies were
included pro rata, for the first time,
pursuant to Section 310 of the Com•
mercial Code. A total of 47 subsid•
iaries were deleted from consolidation. included in the income statement of
The profit and loss accounts of 8
domestic and 19 foreign companies,
which were deleted from the circle of
consolidated companies at the end of
the year, were still included in the
consolidated statement of income.
The deletions from consolidation,
MBB. Comparability of the consoli•
dated accounts against the previous
year has not been impaired.
Principles of Consolidation
Capital consolidation was effected
according to the book value method
where the parent's acquisition costs
are eliminated against the relevant
share capital and retained earnings at
the time of acquisition or first-time
inclusion in consolidation. This applies
analogously to the joint venture com•
panies that are included pro rata.
The differences resulting from the
capital consolidation (debit balance)
are, as far as possible, allocated to the
relevant balance sheet items and are
written off to income over their useful
lives. For the treatment of the remain•
after prolonged storage or after design resulting from the sale of AEG Kabel
changes, reasonable deductions are
Aktiengesellschaft, of AEG Elektro-
made, which are calculated based on a werkzeuge GmbH and their sub•
free-of-loss-valuation.
Receivables and other assets - if
non-interest bearing - are reduced to
sidiaries, as well as the withdrawal
from the office and communicaion
field, do have consequences in the
their present value at the balance sheet consolidated balance sheet. The
date, and are valued taking into ac•
count all known risks. A lump-sum
allowance for doubtful accounts on a
material consequences are explained
under the relevant balance sheet
captions. In contrast, there are nearly
country-specific scale is deducted from no consequences in the consolidated
the receivables in recognition of the
general risk inherent in receivables.
Treasury stock is valued at the ex•
pected selling price to employees of
the Daimler-Benz group. Securities are
valued at the lower of cost or market
value at the balance sheet date.
statement of income because the
expenses and income items of the
above companies are still included.
Not included are 199 subsidiaries, ing differences (goodwill), see our ex•
whose effect on the consolidated finan• planations under "accounting princi•
cial statements is not material (their
total sales volume is less than 1 % of
ples and valuation methods". The DM
275 million goodwill resulting from
the addition of the joint venture com•
panies of the Eurocopter group is
shown under "intangible assets". Be•
ginning in 1992, the portion applica•
ble to the group's expansion will, anal•
ogously to the acquired goodwill in the
individual financials, be written off to
income over a useful life of 10 years.
The remaining portion will be charged
to retained earnings in 1992, without
affecting income.
Provisions for old-age pensions and consolidated sales) and 11 companies
similar obligations are actuarially de•
termined on the basis of an assumed
interest rate of 6 % using the Entry
Age Actuarial Cost Method. The regu•
lations of the 1992 Pension Reform
Act have been taken into account in
calculating the provision amount.
administering pension funds whose
assets are subject to restrictions.
In accordance with Section 296,
Subsection 1, No. 1 of the Commercial
Code, Deutsche Airbus GmbH is not
consolidated because Messerschmitt-
Bölkow-Blohm GmbH, in its relation•
Provisions for taxes and other provi• ship with this company, is restricted
sions are determined on the basis of
fair and reasonable business judge•
ments. The obligations in the person•
in exercising its rights, on account of
agreements with the Federal Republic
of Germany and of rules in the bylaws
nel and social area are reflected in the with regard to resolutions.
financial statements at non-discounted
values expected to be paid in the
future as benefits are vested.
Liabilities are shown at their
repayment amounts.
