Annual Reports of the Year 2014 from Bmw and Apple Inc

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International Financial Reporting Standards

Case 1

IAS 1 | Apple and BMW

Professor: Cristina Neto de Carvalho

Monday, 14th September 2015

Case 1 – Presentation of Financial Reports | IAS 1

Question 1.2

This question is about comparing the two Annual Reports of the year 2014 from BMW and Apple Inc. The first company, BMW, is an automobile company located in Germany and the latter one is a technological company located in the US. Therefore, the financial statements of BMW follows the rules and standards of IFRS and Apple Inc. applies the US GAAP.

The annual reports, which were used to answer the question, were downloaded from Apple’s webpage (investor’s relation) and BMW’s Annual Report was available on the Moodle platform.

In the following table, we compare the two annual reports for both companies, focusing on Annual Report Structure, Group Financial Statements and Format/Layout.

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       Question 1.3

According to IAS 1

The main objective of IAS1 is to ensure comparability, prescribing the basis of presentation for financial position, financial performance and cash flow of an entity.

Therefore, in order to meet that objective, every entity must provide information about their:

• Assets;
• Liabilities;
• Equity;
• Income and expenses (Gains and Losses);
• Contribution by and distributions to owners;
• Cash flow.

First, we tried to identify whether the final report fulfill a complete set of financial statements or not and we clearly identified all the required statements. Within this set of statements we found:

• Statement of financial position (Balance sheet);
• Statement of Profit and loss and other comprehensive income for the period;
• Statement of changes in equity for the period;
• Statement of cash flow for the period;
• Explanatory Notes;
• Comparative information.

By observing BMW financial statements we saw a consistent presentation along the years, provided comparative information from the previous years and also used an accrual basis accounting policy.

Regarding BMW Final Report structure and content, they clearly distinguish their financial statements from other information, it contains explanatory notes and the information is displayed prominently. This is, identifies the reported entity, distinguishes whether the financial statement is about a group or individual entity, give us the information about the reported period, currency and level of rounding used.

According to the financial position statement, it fulfills the IAS1 requirement where it separates Current from Non-Current assets and liabilities. The line items to be included in the financial position, regarding IAS1.54 are: