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1、470 Consolidated Financial Statements Income Statement Income Statement of the Volkswagen Group for the period January 1 to December 31,2024 million Note 2024 2023 Sales revenue 1 324,656 322,284 Cost of sales 2 265,184 261,299 Gross result 59,472 60,985 Distribution expenses 3 22,320 21,345 Adminis

2、trative expenses 4 12,754 12,729 Other operating income 5 14,974 15,152 Other operating expenses 6 20,312 19,534 Operating result 19,060 22,528 Share of the result of equity-accounted investments 7 375 2,291 Interest income 8 2,419 2,658 Interest expenses 8 3,446 3,640 Other financial result 9 1,602

3、 739 Financial result 2,255 570 Earnings before tax 16,806 23,099 Income tax income/expense 10 4,411 5,237 Current 5,858 6,791 Deferred 1,447 1,554 Earnings after tax 12,394 17,861 of which attributable to Non-controlling interests 1,043 1,329 Volkswagen AG hybrid capital investors 630 586 Volkswage

4、n AG shareholders 10,721 15,947 Basic/diluted earnings per ordinary share in 11 21.36 31.79 Basic/diluted earnings per preferred share in 11 21.42 31.85 1 Prior-year figures adjusted(see disclosures on IAS 8 in the“Prior-year corrections in accordance with IAS 8”section).471 Consolidated Financial S

5、tatements Statement of Comprehensive Income Statement of Comprehensive Income Changes in comprehensive income for the period January 1 to December 31,2024 million Total Income attributable to Volkswagen AG shareholders Income attributable to Volkswagen AG hybrid capital investors Income attributable

6、 to non-controlling interests Earnings after tax 12,394 10,721 630 1,043 Pension plan remeasurements recognized in other comprehensive income Pension plan remeasurements recognized in other comprehensive income,before tax 2,158 2,086 72 Deferred taxes relating to pension plan remeasurements recogniz

7、ed in other comprehensive income 514 497 17 Pension plan remeasurements recognized in other comprehensive income,net of tax 1,644 1,589 55 Fair value valuation of equity instruments that will not be reclassified to profit or loss Fair value valuation of equity instruments that will not be reclassifi

8、ed to profit or loss,before tax 20 18 3 Deferred taxes relating to fair value valuation of equity instruments that will not be reclassified to profit or loss 29 28 1 Fair Value valuation of equity instruments that will not be reclassified to profit or loss,net of tax 8 11 2 Share of other comprehens

9、ive income of equity-accounted investments that will not be reclassified to profit or loss,net of tax 60 60 0 Items that will not be reclassified to profit or loss 1,592 1,540 52 Exchange differences on translating foreign operations Gains/losses on currency translation recognized in other comprehen

10、sive income 893 988 96 Transferred to profit or loss 286 286 Exchange differences on translating foreign operations,before tax 1,179 1,275 96 Deferred taxes relating to exchange differences on translating foreign operations 1 1 0 Exchange differences on translating foreign operations,net of tax 1,18

11、0 1,275 96 Hedging Fair value changes recognized in other comprehensive income(OCI I)622 453 169 Transferred to profit or loss or inventories(OCI I)1,072 957 114 Cash flow hedges(OCI I),before tax 1,694 1,410 284 Deferred taxes relating to cash flow hedges(OCI I)490 404 85 Cash flow hedges(OCI I),ne

12、t of tax 1,204 1,006 198 Fair value changes recognized in other comprehensive income(OCI II)471 420 51 Transferred to profit or loss or inventories(OCI II)1,121 990 131 Cash flow hedges(OCI II),before tax 650 569 81 Deferred taxes relating to cash flow hedges(OCI II)185 161 24 Cash flow hedges(OCI I

13、I),net of tax 465 409 56 Fair value valuation of debt instruments that may be reclassified to profit or loss Fair value changes recognized in other comprehensive income 80 80 Transferred to profit or loss 7 7 Fair value valuation of debt instruments that may be reclassified to profit or loss,before

14、tax 73 73 Deferred taxes relating to fair value valuation of debt instruments recognized in other comprehensive income 22 22 Fair value valuation of debt instruments that may be reclassified to profit or loss,net of tax 51 51 Share of other comprehensive income of equity-accounted investments that m

15、ay be reclassified to profit or loss,net of tax 113 114 2 Items that may be reclassified to profit or loss 379 614 236 Other comprehensive income,before tax 2,173 2,401 228 Deferred taxes relating to other comprehensive income 202 246 45 Other comprehensive income,net of tax 1,971 2,154 183 Total co

16、mprehensive income 14,365 12,875 630 860 472 Consolidated Financial Statements Statement of Comprehensive Income Changes in comprehensive income for the period January 1 to December 31,20231 million Total Income attributable to Volkswagen AG shareholders Income attributable to Volkswagen AG hybrid c

17、apital investors Income attributable to non-controlling interests Earnings after tax 17,861 15,947 586 1,329 Pension plan remeasurements recognized in other comprehensive income Pension plan remeasurements recognized in other comprehensive income,before tax 1,871 1,763 107 Deferred taxes relating to

18、 pension plan remeasurements recognized in other comprehensive income 642 610 32 Pension plan remeasurements recognized in other comprehensive income,net of tax 1,229 1,153 76 Fair value valuation of equity instruments that will not be reclassified to profit or loss Fair value valuation of equity in

19、struments that will not be reclassified to profit or loss,before tax 96 97 1 Deferred taxes relating to fair value valuation of equity instruments that will not be reclassified to profit or loss 22 23 0 Fair Value valuation of equity instruments that will not be reclassified to profit or loss,net of

20、 tax 73 74 1 Share of other comprehensive income of equity-accounted investments that will not be reclassified to profit or loss,net of tax 7 7 0 Items that will not be reclassified to profit or loss 1,309 1,234 74 Exchange differences on translating foreign operations Gains/losses on currency trans

21、lation recognized in other comprehensive income 1,653 1,556 97 Transferred to profit or loss 395 395 Exchange differences on translating foreign operations,before tax 1,258 1,160 97 Deferred taxes relating to exchange differences on translating foreign operations 3 3 Exchange differences on translat

22、ing foreign operations,net of tax 1,260 1,163 97 Hedging Fair value changes recognized in other comprehensive income(OCI I)747 428 320 Transferred to profit or loss or inventories(OCI I)748 674 75 Cash flow hedges(OCI I),before tax 1 246 245 Deferred taxes relating to cash flow hedges(OCI I)20 95 75

23、 Cash flow hedges(OCI I),net of tax 19 151 170 Fair value changes recognized in other comprehensive income(OCI II)404 359 45 Transferred to profit or loss or inventories(OCI II)1,055 915 140 Cash flow hedges(OCI II),before tax 651 556 95 Deferred taxes relating to cash flow hedges(OCI II)184 155 29

24、Cash flow hedges(OCI II),net of tax 467 401 66 Fair value valuation of debt instruments that may be reclassified to profit or loss Fair value changes recognized in other comprehensive income 176 176 Transferred to profit or loss 6 6 Fair value valuation of debt instruments that may be reclassified t

25、o profit or loss,before tax 170 170 Deferred taxes relating to fair value valuation of debt instruments recognized in other comprehensive income 44 44 Fair value valuation of debt instruments that may be reclassified to profit or loss,net of tax 126 126 Share of other comprehensive income of equity-

26、accounted investments that may be reclassified to profit or loss,net of tax 382 381 1 Items that may be reclassified to profit or loss 1,030 1,168 138 Other comprehensive income,before tax 2,792 2,929 136 Deferred taxes relating to other comprehensive income 454 526 73 Other comprehensive income,net

27、 of tax 2,339 2,402 64 Total comprehensive income 15,523 13,544 586 1,393 1 Prior-year figures adjusted(see disclosures on IAS 8 in the“Prior-year corrections in accordance with IAS 8”section).473 Consolidated Financial Statements Balance Sheet Balance Sheet of the Volkswagen Group as of December 31

28、,2024 million Note Dec.31,2024 Dec.31,2023 Assets Non-current assets Intangible assets 12 93,333 89,109 Property,plant and equipment 13,33 71,452 66,880 Lease assets 14,33 73,193 64,094 Investment property 14 622 632 Equity-accounted investments 15 10,269 12,239 Other equity investments 15 5,731 4,4

29、31 Financial services receivables 16 101,087 94,474 Other financial assets 17 12,129 11,757 Other receivables 18 2,868 2,702 Tax receivables 19 409 437 Deferred tax assets 19 16,581 14,251 387,674 361,005 Current assets Inventories 20 56,720 53,601 Trade receivables 21 21,130 21,849 Financial servic

30、es receivables 16 68,855 66,381 Other financial assets 17 18,649 16,953 Other receivables 18 10,217 8,799 Tax receivables 19 2,038 1,649 Marketable securities and time deposits 22 27,326 26,772 Cash and cash equivalents 23 40,296 43,449 Assets held for sale 190 245,231 239,644 Total assets 632,905 6

31、00,649 1 Prior-year figures adjusted(see disclosures on IAS 8 in the“Prior-year corrections in accordance with IAS 8”section).474 Consolidated Financial Statements Balance Sheet million Note Dec.31,2024 Dec.31,2023 Equity and liabilities Equity 24 Subscribed capital 1,283 1,283 Capital reserve 14,55

32、1 14,551 Retained earnings 155,130 147,104 Other reserves 2,560 3,125 Equity attributable to Volkswagen AG hybrid capital investors 13,890 15,155 Equity attributable to Volkswagen AG shareholders and hybrid capital investors 182,294 174,968 Non-controlling interests 14,437 14,218 196,731 189,186 Non

33、-current liabilities Financial liabilities 25 137,061 122,323 Other financial liabilities 26 6,548 6,968 Other liabilities 27 10,584 9,885 Deferred tax liabilities 28 10,900 9,781 Provisions for pensions 29 27,602 29,672 Provisions for taxes 28 4,084 4,287 Other provisions 30 22,355 22,511 219,134 2

34、05,427 Current liabilities Financial liabilities 25 117,020 110,476 Trade payables 31 29,772 30,901 Tax payables 28 724 556 Other financial liabilities 26 14,364 14,022 Other liabilities 27 24,752 24,345 Provisions for taxes 28 1,698 1,663 Other provisions 30 28,709 24,042 Liabilities associated wit

35、h assets held for sale 31 217,039 206,036 Total equity and liabilities 632,905 600,649 1 Prior-year figures adjusted(see disclosures on IAS 8 in the“Prior-year corrections in accordance with IAS 8”section).475 Consolidated Financial Statements Statement of Changes in Equity Statement of Changes in E

36、quity of the Volkswagen Group for the period January 1 to December 31,20241 OTHER RESERVES HEDGING million Subscribed capital Capital reserve Retained earnings Currency translation reserve Cash flow hedges(OCI I)Deferred costs of hedging(OCI II)Equity and debt instruments Equity-accounted investment

37、s Equity attributable to Volkswagen AG hybrid capital investors Equity attributable to Volkswagen AG shareholders and hybrid capital investors Non-controlling interests Total equity Balance at Jan.1,2023 1,283 14,551 137,272 2,256 1,623 1,077 1,005 864 14,121 165,376 12,952 178,328 Prior-year correc

38、tions in accordance with IAS 8 659 659 659 Adjusted balance at Jan.1,2023 1,283 14,551 136,613 2,256 1,623 1,077 1,005 864 14,121 164,717 12,952 177,669 Earnings after tax 15,947 586 16,533 1,329 17,861 Other comprehensive income,net of tax 1,153 1,163 151 401 52 388 2,402 64 2,339 Total comprehensi

39、ve income 14,794 1,163 151 401 52 388 586 14,130 1,393 15,523 Disposal of equity instruments 13 13 Capital increases/Capital decreases 1,004 1,004 3 1,008 Dividends payment 4,374 556 4,930 54 4,984 Capital transactions involving a change in ownership interest 42 11 54 27 80 Other changes 100 100 50

40、51 Balance at Dec.31,2023 1,283 14,551 147,104 3,431 1,472 676 966 476 15,155 174,968 14,218 189,186 Balance at Jan.1,2024 1,283 14,551 147,830 3,431 1,472 676 966 476 15,155 175,694 14,218 189,912 Prior-year corrections in accordance with IAS 8 726 726 726 Adjusted balance at Jan.1,2024 1,283 14,55

41、1 147,104 3,431 1,472 676 966 476 15,155 174,968 14,218 189,186 Earnings after tax 10,721 630 11,351 1,043 12,394 Other comprehensive income,net of tax 1,589 1,275 1,006 409 61 174 2,154 183 1,971 Total comprehensive income 12,310 1,275 1,006 409 61 174 630 13,505 860 14,365 Disposal of equity instr

42、uments 1 1 Capital increases/Capital decreases 1,244 1,244 106 1,138 Dividends payment 4,524 651 5,175 604 5,779 Capital transactions involving a change in ownership interest 4 0 4 4 Other changes 243 1 244 147 97 Balance at Dec.31,2024 1,283 14,551 155,130 2,156 466 267 906 303 13,890 182,294 14,43

43、7 196,731 1 Prior-year figures adjusted(see disclosures on IAS 8 in the“Prior-year corrections in accordance with IAS 8”section).Explanatory notes on equity are presented in the note relating to equity.476 Consolidated Financial Statements Cash flow statement Cash flow statement of the Volkswagen Gr

44、oup for the period January 1 to December 31,2024 million 2024 2023 Cash and cash equivalents at beginning of period 43,522 29,738 Earnings before tax 16,806 23,099 Income taxes paid 6,187 7,716 Depreciation and amortization of,and impairment losses on,intangible assets,property,plant and equipment,a

45、nd investment property 12,858 11,727 Amortization of and impairment losses on capitalized development costs 7,209 5,184 Impairment losses on equity investments 710 717 Depreciation of and impairment losses on lease assets 11,279 10,655 Gain/loss on disposal of non-current assets and equity investmen

46、ts 110 208 Share of the result of equity-accounted investments 2,362 271 Other non-cash expense/income 903 3,953 Change in inventories 2,695 2,071 Change in receivables(excluding financial services)2,083 4,361 Change in liabilities(excluding financial liabilities)52 5,272 Change in provisions 4,247

47、715 Change in lease assets 19,358 14,964 Change in financial services receivables 9,061 13,332 Cash flows from operating activities 17,151 19,356 Investments in intangible assets(excluding development costs),property,plant and equipment,and investment property 17,202 14,653 Additions to capitalized

48、development costs 10,244 11,142 Acquisition of subsidiaries 284 675 Acquisition of other equity investments 2,152 2,041 Disposal of subsidiaries 148 63 Disposal of other equity investments 231 41 Proceeds from disposal of intangible assets,property,plant and equipment,and investment property 947 501

49、 Change in investments in securities and time deposits 203 11,273 Change in loans 2,517 3,054 Cash flows from investing activities 31,573 19,812 Capital contributions/capital redemptions 1,144 1,003 Dividends paid 5,779 11,732 Capital transactions with non-controlling interest shareholders 8 Proceed

50、s from issuance of bonds 38,420 37,740 Repayments of bonds 32,617 32,582 Proceeds from issuance of unlisted notes 13,122 15,790 Repayments of unlisted notes 8,341 8,981 Changes in other financial liabilities 8,813 15,967 Repayments of lease liabilities 1,334 1,190 Cash flows from financing activitie

51、s 11,140 16,008 Effect of exchange rate changes on cash and cash equivalents 55 1,764 Change of loss allowance within cash and cash equivalents 1 2 Net change in cash and cash equivalents 3,226 13,785 Cash and cash equivalents at end of period 40,296 43,522 Cash and cash equivalents at end of period

52、 40,296 43,522 Securities and time deposits and loans 44,662 41,858 Gross liquidity 84,959 85,380 Total third-party borrowings 254,081 232,813 Net liquidity 169,122 147,433 1 Net of impairment reversals.2 Prior-year figures adjusted(see disclosures on IAS 8 in the“Prior-year corrections in accordanc

53、e with IAS 8”section).Explanatory notes on the cash flow statement are presented in the section relating to the cash flow statement.477 Consolidated Financial Statements Notes Notes to the Consolidated Financial Statements of the Volkswagen Group as of December 31,2024 Basis of presentation Volkswag

54、en AG is domiciled in Wolfsburg,Germany,and entered in the commercial register at the Braunschweig Local Court under No.HRB 100484.The fiscal year corresponds to the calendar year.In accordance with Regulation No.1606/2002 of the European Parliament and of the Council,Volkswagen AG prepared its cons

55、olidated financial statements for 2024 in compliance with the IFRS Accounting Standards(IFRSs),as adopted by the European Union.All IFRSs adopted by the EU whose application is mandatory have been complied with.The accounting policies applied in the previous year were generally retained.The only cha

56、nges required resulted from new or amended standards.Moreover,all the provisions of German commercial law that Volkswagen is additionally required to apply,as well as the German Corporate Governance Code,have been complied with in the preparation of the consolidated financial statements.The consolid

57、ated financial statements were prepared in euros.Unless otherwise stated,all amounts are given in millions of euros(million).All figures shown are rounded,so minor discrepancies may arise from addition of these amounts.The income statement was prepared using the internationally accepted cost of sale

58、s method.Preparation of the consolidated financial statements in accordance with the aforementioned standards requires management to make estimates that affect the reported amounts of certain items in the consolidated balance sheet and in the consolidated income statement,as well as the related disc

59、losure of contingent assets and liabilities.The consolidated financial statements provide a true and fair view of the net assets,financial posi-tion and results of operations as well as the cash flows of the Volkswagen Group.The Board of Management completed preparation of the consolidated financial

60、 statements on February 25,2025.On that date,the period ended in which adjusting events after the reporting period are recognized.Effects of new and amended IFRSs Volkswagen AG has applied all accounting pronouncements adopted by the EU and effective for periods begin-ning in fiscal year 2024.Since

61、January 1,2024,amendments to IAS 1 clarifying the classification of liabilities as current or non-current have had to be applied.This affects in particular liabilities whose due date is linked to certain covenants.A decisive criterion for classification is whether there is a contractual right as of

62、the reporting date to defer settlement by at least 12 months.Amendments to IAS 7/IFRS 7 have also been applicable since January 1,2024;these require additional dis-closures in the notes on supplier finance arrangements in particular reverse factoring arrangements.The inten-tion is to make the effect

63、 of these arrangements on liabilities,cash flows and liquidity risks more transparent.In 2024,the first year of application,no disclosures had to be made or adjusted in relation to prior years.No such disclosures had to be included in the interim financial reports either,meaning that they were made

64、to the extent required for the first time as of December 31,2024.Further information on reverse factoring can be found in the“Accounting policies”,“Trade payables”and“Financial risk management and financial instruments”sections.In addition to this,amendments were made to IFRS 16 and have also been a

65、pplicable since January 1,2024.In essence,the purpose of these amendments is to require variable lease payments under a sale and leaseback transaction that are not based on an index or interest rate to be recognized as a lease liability.The amendments referred to above do not materially affect the V

66、olkswagen Groups net assets,financial posi-tion and results of operations.478 Consolidated Financial Statements Notes New and amended IFRSs not applied In its 2024 consolidated financial statements,Volkswagen AG did not apply the following accounting pronounce-ments that have been adopted by the IAS

67、B until December 31,2024,but were not yet required to be applied for the fiscal year.Standard/Interpretation Published by the IASB Application mandatory1 Adopted by the EU Expected impact IFRS 9/IFRS 7 Classification and Measurement of Financial Instruments May 30,2024 Jan.1,2026 No No material impa

68、ct IFRS 9/IFRS 7 Contracts Referencing Nature-dependent Electricity Dec.18,2024 Jan.1,2026 No No material impact IFRS 18 Presentation and Disclosure in Financial Statements Apr.9,2024 Jan.1,2027 No Impact currently being analyzed.IFRS 19 Subsidiaries without Public Accountability:Disclosures May 9,2

69、024 Jan.1,2027 No No impact IAS 21 Currency translation if currency is inconvertible Aug.15,2023 Jan.1,2025 Yes No material impact Annual Improvements to IFRS Accounting Standards-Volume 11 Jul.28,2024 Jan.1,2026 No No material impact 1 Effective date from Volkswagen AGs perspective.2 Minor amendmen

70、ts to a number of IFRSs(IFRS 1,IFRS 7,IFRS 9,IFRS 10 and IAS 7).479 Consolidated Financial Statements Notes Prior-year corrections in accordance with IAS 8 It was found during the reporting year that obligations related to the granting of fringe benefits had not been included in full when calculatin

71、g the provision for time assets.The error was corrected in accordance with IAS 8 by adjusting the affected items accordingly in the consolidated financial statements for the prior years.The retrospective correction resulted in a change in equity as of December 31,2023/January 1,2024 and January 1,20

72、23,respectively.This is attributable to the increase in other provisions and the recognition of de-ferred tax assets.The recognition of the additional fringe benefits did not have a material impact on the income statement,the statement of comprehensive income,or the cash flow statement.The prior-yea

73、r figures have been adjusted accordingly.The tables below summarize the effects on the balance sheet.EFFECTS OF PRIOR-YEAR CORRECTIONS AS OF JANUARY 1,2023 million Previously reported Adjustment Adjusted Non-current assets 339,853 283 340,136 Deferred tax assets 12,929 283 13,212 Equity 178,328 659

74、177,669 Retained earnings 137,272 659 136,613 Non-current liabilities 202,961 796 203,757 Other provisions 21,283 796 22,079 Current liabilities 182,723 146 182,869 Other provisions 24,596 146 24,742 EFFECTS OF PRIOR-YEAR CORRECTIONS AS OF DECEMBER 31,2023 million Previously reported Adjustment Adju

75、sted Non-current assets 360,694 311 361,005 Deferred tax assets 13,940 311 14,251 Equity 189,912 726 189,186 Retained earnings 147,830 726 147,104 Non-current liabilities 204,552 875 205,427 Other provisions 21,636 875 22,511 Current liabilities 205,874 162 206,036 Other provisions 23,881 162 24,042

76、 480 Consolidated Financial Statements Notes Key events DIESEL ISSUE On September 18,2015,the US Environmental Protection Agency(EPA)publicly announced in a“Notice of Vio-lation”that irregularities in relation to nitrogen oxide(NOx)emissions had been discovered in emissions tests on certain Volkswag

77、en Group vehicles with 2.0 l diesel engines in the USA.In this context,Volkswagen AG an-nounced that noticeable discrepancies between the figures recorded in testing and those measured in actual road use had been identified in type EA 189 diesel engines and that this engine type had been installed i

78、n roughly eleven million vehicles worldwide.On November 2,2015,the EPA issued a“Notice of Violation”alleging that irregularities had also been discovered in the software installed in US vehicles with type V6 3.0 l diesel engines.The so-called diesel issue is rooted in a modification of parts of the

79、software of the relevant engine control units which,according to Volkswagen AGs legal position,is only unlawful under US law for the type EA 189 diesel engines that Volkswagen AG was developing at that time.This software function was developed and implemented from 2006 on without knowledge at the le

80、vel of the Board of Management.Members of the Board of Management did not learn of the development and implementation of this software function until the summer of 2015.There are furthermore no findings that,following the publication in May 2014 of the study by the International Council on Clean Tra

81、nsportation,an unlawful“defeat device”under US law was disclosed to the persons respon-sible for preparing the 2014 annual and consolidated financial statements as the cause of the high NOx emissions in certain US vehicles with 2.0 l type EA 189 diesel engines.Rather,at the time the 2014 annual and

82、consolidated financial statements were being prepared,the persons responsible for preparing these financial statements remained under the impression that the issue could be resolved with comparatively little expense.In the course of the summer of 2015,however,it became progressively apparent to indi

83、vidual members of Volkswagen AGs Board of Management that the cause of the discrepancies in the USA was a modification of parts of the software of the engine control unit that was later identified as an unlawful“defeat device”as defined by US law.This culminated in Volkswagens disclosure of a“defeat

84、 device”to the EPA and the California Air Resources Board(CARB),a department of the Environmental Protection Agency of the State of California,on September 3,2015.According to the assessment at the time by the responsible persons dealing with the matter,the magnitude of the costs expected to result

85、for the Volkswagen Group(recall costs,retrofitting costs,and financial penalties)was not fun-damentally dissimilar to that in previous cases involving other vehicle manufacturers.It therefore appeared to be manageable overall considering the business activities of the Volkswagen Group.This assessmen

86、t by Volkswagen AG was based,among other things,on the advice of a law firm engaged in the USA for regulatory approval issues,according to which similar cases had in the past been amicably resolved with the US authorities.The EPAs publication of the“Notice of Violation”on September 18,2015,which the

87、 Board of Management had not expected,especially at that time,then presented the situation in an entirely different light.In fiscal year 2024,there were no material special items in connection with the diesel issue.Further information on the litigation in connection with the diesel issue can be foun

88、d in the“Litigation”section.481 Consolidated Financial Statements Notes ANTITRUST INVESTIGATIONS In 2011,the European Commission conducted searches at European truck manufacturers for suspected unlawful exchange of information during the period from 1997 to 2011;in November 2014,the Commission issue

89、d a state-ment of objections to MAN,Scania,and the other truck manufacturers concerned.In its settlement decision of July 2016,the European Commission assessed fines against five European truck manufacturers.MANs fine was waived in full as the company had informed the European Commission about the i

90、rregularities as a key witness.In September 2017,the European Commission fined Scania 0.88 billion.In a judgment rendered in February 2022,the European General Court(Court of First Instance)rejected in its entirety the appeal filed by Scania in this connection.Scanias April 2022 appeal against this

91、judgment was rejected in full by the ECJ,the court of last resort,in February 2024.Furthermore,antitrust lawsuits seeking damages have been received from customers.As is the case in any antitrust proceedings,this may result in further lawsuits for damages.No provisions have been recognized for a lar

92、ge number of these legal disputes as they are not expected to result in final damage awards at the highest appeals level.For those actions in which,after reassessing the risks,the final outcome at the highest appeals level appears more likely than not to result in the payment of damages by MAN or Sc

93、ania,provisions have been recog-nized in an amount of 162 million.In March 2022,the European Commission and the Competition and Markets Authority(CMA),the English antitrust authorities,searched the premises of various automotive manufacturers and automotive industry organizations and/or served them

94、with formal requests for information.In the Volkswagen Group,the investigation affects Volkswagen Group UK,which was searched by the CMA,and Volkswagen AG,which has received a Group-wide information request from the European Commission.The investigation relates to European,Japanese,and Korean manufa

95、cturers as well as national organizations operating in such countries and the European organization Euro-pean Automobile Manufacturers Association(ACEA),which are suspected of having agreed from 2001/2002 to the initiation of the proceedings to avoid paying for the services of recycling companies th

96、at dispose of end-of-life vehicles(ELV)(specifically passenger cars and light utility vehicles).Also alleged is an agreement to refrain from competitive use of ELV issues,that is,not to publicize relevant recycling data(recyclates,recyclability,re-covery)for competitive purposes.The violation under

97、investigation is alleged to have taken place in particular in the ACEA Working Group Recycling and related sub-groups thereof.Volkswagen AG is responding to the Euro-pean Commissions information requests.In June 2024,the Chinese competition authorities also served Volkswagen AG with a request for in

98、formation in this matter.The Korean competition authority KFTC also carried out a search of Volkswagen Group Korea in the same context.Volkswagen Group UK is cooperating with the CMA.In this matter,CMA furthermore issued requests for information to Volkswagen AG.In July 2022,Volkswagen AG filed an a

99、ction for judical review challenging the CMAs requests for information in particular because Volkswagen AG believes that they exceed the CMAs jurisdiction.In February 2023,the court granted the claim.The CMA appealed this judgment in April 2023,and in January 2024 the appellate court ruled in the CM

100、As favor.Volkswagen AG has appealed this decision to the Supreme Court.Concurrent therewith,Volkswagen AG con-tinues to examine the possibilities for reasonable cooperation with the CMA.In addition,a few national and international authorities initiated antitrust investigations.Volkswagen is cooperat

101、ing closely with the responsible authorities in these investigations.An assessment of the underlying situation is not possible at this early stage.482 Consolidated Financial Statements Notes RESTRUCTURING MEASURES IN THE VOLKSWAGEN GROUP In fiscal year 2024,the Volkswagen Group recognized restructur

102、ing expenses of 3.0 billion,mostly in other op-erating expenses,which are primarily attributable to Volkswagen AG and the Audi Group.To bring about a long-term reduction in personnel costs in the administrative areas of Volkswagen AG,the Board of Management resolved in April 2024 to support the down

103、sizing activities by offering selective severance agreements.Expenses of 0.9 billion were recognized for this.Against the backdrop of trends in demand for the Audi Q8 e-tron model family,which is manufactured in Brus-sels,the Board of Management of Audi Brussels S.A./N.V.,Brussels/Belgium(Audi Bruss

104、els),conducted an infor-mation and consultation process with the competent social partners under Belgian law for the restructuring of the site from July to December 2024.The process plans to discontinue the operations as of February 28,2025.A social plan was approved in January 2025.Expenses totalin

105、g 1.6 billion were recognized in fiscal year 2024 in connec-tion with this restructuring.They include,among other items,anticipated amortization and depreciation charges on inventories and non-current assets,expenses from a change in the production process,legal and consulting costs,as well as emplo

106、yee-related expenses for the social plan.Furthermore,restructuring programs were also introduced in other Group companies.EFFECTS OF THE COLLECTIVE BARGAINING AGREEMENT On the basis of the collective bargaining agreement entered into between Volkswagen AG and the employee rep-resentatives in Decembe

107、r 2024,it was necessary to adjust the calculation of various personnel-related provisions.This resulted in income of around 1 billion,which is largely presented in cost of sales.In addition,various as-sumptions about expected developments had to be adjusted when measuring pension obligations.This re

108、sulted in an actuarial gain of 0.2 billion,which was recognized in equity.483 Consolidated Financial Statements Notes MATERIAL TRANSACTIONS OF THE CURRENT FISCAL YEAR COOPERATION WITH RIVIAN Volkswagen Group(Volkswagen)and US electric vehicle manufacturer Rivian Automotive,Inc.,Irvine/USA(Rivian),an

109、nounced their intention to establish a joint venture in June 2024.After reaching technical milestones and ob-taining the necessary official approvals,Rivian and VW Group Technology,LLC,Palo Alto/USA(Rivian and Volkswagen Group Technologies)commenced activities on November 13,2024.The two partners ho

110、ld equal shares in the joint venture,which functions as an independent company.It is included in the consolidated financial statements as a joint venture using the equity method.The aim of the partnership is to develop next generation software-defined vehicle(SDV)architectures to be used in future v

111、ehicles of both companies.The joint venture builds on Rivians software and electronic architecture to facilitate the joint development of best-in-class architectures and software for the SDVs of both partners.Volkswagen is planning to invest up to USD 5.8 billion in Rivian and the Rivian and Volkswa

112、gen Group Tech-nologies joint venture by no later than January 2028.An initial investment in Rivian was made in June 2024,taking the form of an unsecured convertible note of USD 1 billion,which was converted into 95,377,269 ordinary shares of Rivian on December 3,2024.Volkswagen thus holds around 8.

113、6%of the outstanding class A shares of Rivian,representing a share of around 8%of the voting rights.The investment in Rivian is measured at fair value through other comprehensive income in the consolidated financial statements.When Rivian and Volkswagen Group Tech-nologies commenced operations,Volks

114、wagen invested a further USD 1.3 billion,in particular for the acquisition of the licenses in Rivians existing architecture technology and for the 50%share of the joint venture.When certain financial and technical milestones are reached in 2025,2026 and 2027,Volkswagen expects to make further in-ves

115、tments of up to USD 3.5 billion in the form of equity and debt,of which up to USD 2.5 billion will be for ordinary shares of Rivian;these investments are expected to be made in two tranches of USD 1 billion each in 2025 and 2026 and a third tranche of USD 0.5 billion in 2027 or,at the latest,at the

116、beginning of January 2028.The price of the shares is to be determined ahead of each purchase date on the basis of a defined average market price for the ordinary shares of Rivian plus a premium.In 2026,an additional amount of USD 1 billion can be drawn as a loan by Rivian and Volkswagen Group Techno

117、logies and passed on to Rivian.In fiscal year 2024,the conditional commitment to purchase additional ordinary shares of Rivian resulted in an expense from the measurement of a derivative of 409 million.This was set against a gain of 126 million on the measurement of the convertible note due to the p

118、ositive performance of the Rivian share price.These non-cash amounts were recognized in the other financial result.ARGO AI The process of winding down Argo AI,LLC,Pittsburgh/USA(Argo AI)initiated in the third quarter of 2022 was completed in the third quarter of 2024.The inclusion of the investment

119、in the consolidated financial statements using the equity method was ended as of September 30,2024.This resulted in a gain of 265 million,which is reported in the share of the result of equity-accounted investments.The gain is the result of realizing currency translation effects,which had previously

120、 been recognized directly in equity.They were reclassified from other reserves attributable to equity-accounted investments to the share of the result of equity-accounted investments.484 Consolidated Financial Statements Notes NORTHVOLT AB The Swedish company Northvolt AB,Stockholm/Sweden(Northvolt)

121、,in which the Volkswagen Group holds an equity investment,filed for bankruptcy protection under US law in November 2024.This had been preceded by reports regarding financial difficulties at the company.When the bankruptcy protection proceedings opened,the remaining net carrying amounts of the equity

122、 investment and the loan receivables from Northvolt were written down in full.Exempted are loan receivables from funds granted to Northvolt only after the opening of bankruptcy protection proceedings and backed by separate collateral.The write-down resulted in a non-cash expense total-ing 661 millio

123、n in fiscal year 2024;it is presented in the other financial result.MATERIAL TRANSACTIONS OF THE PREVIOUS FISCAL YEAR SCOUT MOTORS INC.Under the Volkswagen Groups North America strategy,Scout Motors Inc.,Tysons/USA,a wholly owned subsid-iary in the Volkswagen Group,was established in fiscal year 202

124、2.A new vehicle brand is to be created under the name of Scout to manufacture electrified all-terrain vehicles and pickups in the USA from 2027.In order to finance the creation of the Scout brand,as well as vehicle development and production planning,an amount of USD 493 million was contributed to t

125、he company in fiscal year 2023.The company has been included in the Volkswagen consolidated financial statements since January 1,2023.QUANTUMSCAPE CORPORATION Due to the share price performance,the Volkswagen Group conducted an impairment test on the shares in Quan-tumScape Corporation,San Jos/USA(Q

126、uantumScape).The carrying amount was adjusted on the basis of the impairment test.This adjustment led to a non-cash expense of 0.4 billion in fiscal year 2023 which was pre-sented in the other financial result.XPENG INC.On December 6,2023,Volkswagen acquired 4.99%of the ordinary shares of the electr

127、ic vehicle company XPeng Inc.,Cayman Islands(XPeng),at a purchase price totaling USD 706 million.The realization of a forward transaction dating from July 26,2023 resulted in a non-cash gain of 74.2 million in fiscal year 2023,which was recognized in the other financial result under gains and losses

128、 from fair value changes of hedging instruments/derivatives not included in hedge accounting.Along with the agreement to acquire the shares,a technological framework agreement was signed with Guangdong Xiaopeng Motors Technology Co.Ltd.,Guangzhou/China,a subsidiary of XPeng,for the joint development

129、 of electric vehicles in China,among other things.The investment in XPeng is measured at fair value through other comprehensive income.485 Consolidated Financial Statements Notes AUDI FAW NEV CO.On September 27,2023,the shareholders AUDI AG,Ingolstadt,Volkswagen(China)Investment Co.,Ltd.,Bei-jing/Ch

130、ina and China FAW Corporation Limited,Changchun/China resolved amendments to the Articles of Asso-ciation of Audi FAW NEV Co.,Ltd.,Changchun/China(Audi FAW NEV Co.),effective from October 1,2023.With equity interests unchanged,the amendments led to a loss of control over the company by the Volkswage

131、n Group and resulted in its deconsolidation.The company has been jointly controlled within the meaning of IFRS 11 since October 1,2023.Following on from this,the investment in Audi FAW NEV Co.is included in the consolidated financial statements as a joint venture using the equity method.As a result

132、of the change to the way the invest-ment is accounted for,the cash and cash equivalents declined by a low three-digit-million euro amount in fiscal year 2023.Other than that,there were no material effects on the Volkswagen Groups net assets,financial posi-tion and results of operations.HORIZON ROBOT

133、ICS INC.On December 7,2023,Volkswagen acquired preferred shares of Horizon Robotics Inc.,Cayman Islands(Horizon Robotics),a leading provider of energy-efficient computing platforms for autonomous driving in China,from Hori-zon Robotics at a purchase price of USD 200 million and issued a convertible

134、loan to Horizon Robotics in an amount of USD 800 million.Both investments were initially classified as debt instruments in the financial state-ments and measured at fair value through profit or loss.The measurement resulted in non-cash gains of 0.7 mil-lion in fiscal year 2023,which were recognized

135、in the other financial result under gains and losses from marketable securities and loans.Since the IPO of Horizon Robotics in October 2024,the shares in the equity investment have been classified as an equity instrument and measured at fair value through other comprehensive income.To promote the de

136、velopment of highly automated and autonomous driving in China,Volkswagen has also agreed the establishment of a joint venture with Horizon Robotics.On December 14,2023,Volkswagen invested an amount of CNY 2 billion to this end in exchange for an ownership interest of 60%in the new company,CARIZON(Be

137、ijing)Technology Company Limited,Beijing/China(CARIZON).In addition,Volkswagen has committed to con-tribute capital in the future of up to CNY 8.4 billion to the joint venture.486 Consolidated Financial Statements Notes Effects of climate change Against the backdrop of climate change and the resulti

138、ng tightening of emissions regulations,the transformation of the automotive industry towards e-mobility and further digitalization continues to move forwards.The Volks-wagen Group has firmly embedded the transformation toward e-mobility in its Group strategy.In the preparation of the consolidated fi

139、nancial statements,the Board of Management took into account the potential effects of climate change and future regulatory requirements,and especially the corresponding trans-formation towards e-mobility.Potential effects,especially on non-current assets,provisions for emissions levies and future ca

140、sh flows were,as far as possible,incorporated into the significant estimates and assumptions in-cluded in the consolidated financial statements.As part of its electrification campaign,the Volkswagen Group aims to offer its customers worldwide an increas-ing choice of battery-electric models by 2030,

141、ranging from volume modules to premium vehicles.The effects of the transformation towards e-mobility and the planned increase in the share of all-electric vehicles planned in this context are taken into account in the medium-term planning and therefore in the calculation of future cash flows used to

142、 determine recoverable amounts in impairment tests of goodwill and intangible assets with indefinite use-ful lives,especially when planning future vehicle models,development costs and production facilities.An amount in the low triple-digit-billion euro range has been earmarked for this purpose in th

143、e medium-term planning.In addition,Volkswagen regularly assesses whether these developments give rise to the need for ad hoc impairment tests or for adjustments to the useful lives of other non-current non-financial assets.No material effects on the useful lives of capitalized development costs or p

144、roperty,plant and equipment were identified,given the periods under consideration for the regulatory requirements and due to the parallel production of battery-electric vehicles and vehicles with combustion engines in the coming years.With reference to increasingly stringent emissions regulations,it

145、 is ensured that the various international regulations are taken into account and that any obligations are recognized appropriately.In this context,an amount in the mid-three-digit-million euro range was added to provisions in the fiscal year.The increase in development costs in the areas of e-mobil

146、ity and digitalization have,however,led to a corresponding increase in internally generated intangible assets.For more information,please refer to the“Accounting policies”section.For a detailed presentation of how sustainability is taken into account within the Group strategy,in the manage-ment of t

147、he Group and in Group planning,please refer to the sections entitled“Goals and Strategies”and“Sustainable Value Enhancement”,as well as the“Environmental Information”section in the“Sustainability report”chapter of the group management report.487 Consolidated Financial Statements Notes Basis of conso

148、lidation In addition to Volkswagen AG,the consolidated financial statements comprise all significant German and non-German subsidiaries,including structured entities that are controlled directly or indirectly by Volkswagen AG.The structured entities are used primarily to enter into asset-backed secu

149、rities transactions to refinance the financial services business and to invest surplus liquidity in special securities funds.Subsidiaries whose business is dormant or insignificant,both individually and in the aggregate,for the fair presentation of the net assets,financial position and results of op

150、erations as well as the cash flows of the Volkswagen Group are not consolidated.They are carried in the consolidated financial statements at cost net of any impairment losses and reversals of impairment losses required to be recognized.Significant companies where Volkswagen AG is able,directly or in

151、directly,to significantly influence financial and operating policy decisions(associates),or that are directly or indirectly jointly controlled(joint ventures),are accounted for using the equity method.Joint ventures also include companies in which the Volkswagen Group holds the majority of voting ri

152、ghts,but whose articles of association or partnership agreements stipulate that important decisions may only be resolved unanimously.Insignificant associates and joint ventures are carried at cost net of any impairment losses and reversals of impairment losses required to be recognized.The compositi

153、on of the Volkswagen Group is shown in the following table:2024 2023 Volkswagen AG and consolidated subsidiaries Germany 141 143 Abroad 805 810 Subsidiaries carried at cost Germany 90 91 Abroad 269 287 At equity accounted associates and joint ventures and at fair value accounted other equity investm

154、ents Germany 54 50 Abroad 124 111 Associates and joint ventures carried at cost Germany 51 52 Abroad 54 56 1,588 1,600 The list of all shareholdings that forms part of the annual financial statements of Volkswagen AG can be down-loaded from the electronic company register at www.unternehmensregister

155、.de and from www.volkswagen- Consolidated Financial Statements Notes The following consolidated German subsidiaries with the legal form of a corporation or partnership have met the criteria set out in section 264(3)or section 264b of the Handelsgesetzbuch(HGB German Commercial Code)and have as far a

156、s possible exercised the option not to publish annual financial statements:AUDI AG,Ingolstadt Audi Berlin GmbH,Berlin Audi Frankfurt GmbH,Frankfurt am Main Audi Hamburg GmbH,Hamburg Audi Hannover GmbH,Hanover Audi Leipzig GmbH,Leipzig Audi Mnchen GmbH,Munich Audi Sport GmbH,Neckarsulm Audi Stuttgart

157、 GmbH,Stuttgart Auto&Service PIA GmbH,Munich Autostadt GmbH,Wolfsburg Bugatti Engineering GmbH,Wolfsburg CARIAD SE,Wolfsburg dx.one GmbH,Wolfsburg Eberhardt Kraftfahrzeug GmbH+Co.KG,Ulm GETAS Verwaltung GmbH&Co.Objekt Heinrich-von-Buz-Strae KG,Pullach i.Isartal HABAMO Verwaltung GmbH&Co.Objekt Sterk

158、rade KG,Pullach i.Isartal Haberl Beteiligungs-GmbH,Munich Held&Strhle GmbH&Co.KG,Ulm MAHAG Automobilhandel und Service GmbH&Co.oHG,Munich MAHAG GmbH,Munich MAHAG Sportwagen Zentrum Albrechtstrae GmbH,Munich MAN Energy Solutions SE,Augsburg MOIA GmbH,Berlin MOIA Operations Germany GmbH,Hanover Porsch

159、e Holding Stuttgart GmbH,Stuttgart Porsche Niederlassung Mannheim GmbH,Mannheim PowerCo SE,Salzgitter PSW automotive engineering GmbH,Gaimersheim PZ Leipzig GmbH,Leipzig Quest One GmbH,Augsburg Schwaba GmbH,Augsburg SEAT Deutschland Niederlassung GmbH,Weiterstadt SKODA AUTO Deutschland GmbH,Weiterst

160、adt SZM Sportwagen Zentrum Mnchen GmbH,Munich VfL Wolfsburg-Fuball GmbH,Wolfsburg VGRB GmbH,Berlin VGRD GmbH,Wolfsburg VGRDD GmbH,Dresden VGRHH GmbH,Hamburg Volkswagen ADMT Hannover GmbH,Hanover Volkswagen AirService GmbH,Braunschweig Volkswagen Automobile Berlin GmbH,Berlin Volkswagen Automobile Ch

161、emnitz GmbH,Chemnitz Volkswagen Automobile Frankfurt GmbH,Frankfurt am Main Volkswagen Automobile Hamburg GmbH,Hamburg 489 Consolidated Financial Statements Notes Volkswagen Automobile Hannover GmbH,Hanover VOLKSWAGEN Automobile Leipzig GmbH,Leipzig Volkswagen Automobile Rhein-Neckar GmbH,Mannheim V

162、olkswagen Automobile Stuttgart GmbH,Stuttgart Volkswagen Deutschland GmbH&Co.KG,Wolfsburg Volkswagen Deutschland Verwaltungs GmbH,Wolfsburg Volkswagen Gebrauchtfahrzeughandels und Service GmbH,Langenhagen Volkswagen Group AI Lab GmbH,Braunschweig Volkswagen Group Beteiligungen GmbH,Wolfsburg Volkswa

163、gen Group IT Solutions GmbH,Wolfsburg Volkswagen Group Real Estate GmbH&Co.KG,Wolfsburg Volkswagen Group Services GmbH,Wolfsburg Volkswagen Immobilien GmbH,Wolfsburg Volkswagen Konzernlogistik GmbH&Co.OHG,Wolfsburg Volkswagen Leasingobjekt GmbH,Braunschweig Volkswagen Original Teile Logistik GmbH&Co

164、.KG,Baunatal Volkswagen Osnabrck GmbH,Osnabrck Volkswagen Sachsen GmbH,Zwickau Volkswagen Software Asset Management GmbH,Wolfsburg Volkswagen Vermgensverwaltungs-GmbH,Wolfsburg Volkswagen Zubehr GmbH,Dreieich 490 Consolidated Financial Statements Notes CONSOLIDATED SUBSIDIARIES The fiscal years chan

165、ges in the consolidated Group are shown in the following table:Number Germany Abroad Initially consolidated Subsidiaries previously carried at cost 2 21 Newly formed subsidiaries 14 Other 1 2 36 Deconsolidated Mergers 3 7 Liquidations 23 Sales/other 1 11 4 41 The initial consolidation or deconsolida

166、tion of these subsidiaries,either individually or collectively,did not have a significant effect on the presentation of the net assets,financial position and results of operations.The uncon-solidated structured entities are immaterial from a Group perspective.In particular,they do not give rise to a

167、ny significant risks to the Group.491 Consolidated Financial Statements Notes INVESTMENTS IN ASSOCIATES From a Group perspective,the associates QuantumScape,Gotion High-Tech Co.,Ltd.,Hefei/China(Gotion)and Sinotruk(Hong Kong)Ltd.,Hongkong/China(Sinotruk),were material as of the balance sheet date.In

168、 the previous year,the equity investment in Northvolt had been included in the disclosures.Further disclosures on Northvolt can be found in the“Key events”section.QuantumScape QuantumScape is a US-based start-up for solid-state lithium-metal batteries.An agreement to industrialize QuantumScapes next

169、-generation solid-state lithium-metal technology exists between Group companies and QuantumScape.QuantumScapes principal place of business is in San Jos/USA.As of December 31,2024,the quoted market price of the shares in QuantumScape amounted to 430 million(previous year:541 million).Gotion Gotion i

170、s a Chinese technology company that engages primarily in research and development,production and sales of lithium-ion batteries and in electric transmission and transformation businesses.Group companies and Gotion have agreed upon a strategic framework for cooperation in the development,manufacture

171、and distribution of battery cells.Gotions principal place of business is in Hefei/China.As of December 31,2024,the quoted market price of the shares in Gotion amounted to 1.2 billion(previous year:1.2 billion).Sinotruk Sinotruk is one of the largest truck manufacturers in the Chinese market.Sinotruk

172、s principal place of business is in Hongkong/China.As of December 31,2024,the quoted market price of the shares in Sinotruk amounted to 1,947 million(pre-vious year:1,222 million).492 Consolidated Financial Statements Notes SUMMARIZED FINANCIAL INFORMATION ON MATERIAL ASSOCIATES ON A 100%BASIS milli

173、on QuantumScape Gotion Sinotruk 2024 Equity interest in%16 24 25 Non-current assets 553 8,479 4,922 Current assets 763 6,110 12,144 Non-current liabilities 137 3,408 174 Current liabilities 54 6,631 10,708 Net assets 1,124 4,550 6,183 Sales revenue 4,347 11,893 Earnings after tax from continuing ope

174、rations 442 69 874 Earnings after tax from discontinued operations Other comprehensive income 7 112 4 Total comprehensive income 436 180 870 Dividends received 6 138 2023 Equity interest in%17 25 25 Non-current assets 586 7,449 4,072 Current assets 1,072 5,628 10,165 Non-current liabilities 149 3,20

175、6 154 Current liabilities 44 5,202 8,414 Net assets 1,466 4,668 5,669 Sales revenue 3,183 9,836 Earnings after tax from continuing operations 429 301 425 Earnings after tax from discontinued operations Other comprehensive income 15 16 2 Total comprehensive income 414 317 423 Dividends received 25 1

176、Balance sheet amounts refer to the September 30 reporting date and income statement amounts refer to the period from October 1 to September 30.The disclosures are presented after the purchase price adjustment.2 Balance sheet amounts refer to the September 30 reporting date and income statement amoun

177、ts refer to the period from October 1 to September 30.The disclosures are presented after the purchase price adjustment.3 Balance sheet amounts refer to the June 30 reporting date and income statement amounts refer to the period from July 1 to June 30.4 Proportionate dividends are shown net of withh

178、olding tax.493 Consolidated Financial Statements Notes RECONCILIATION OF THE FINANCIAL INFORMATION TO THE CARRYING AMOUNT OF THE EQUITY-ACCOUNTED INVESTMENTS million QuantumScape Gotion Sinotruk 2024 Net assets at January 1 1,466 4,668 5,669 Profit or loss 442 69 874 Other comprehensive income 7 112

179、 4 Changes in share capital 0 2 Changes in reserves 155 127 63 Foreign exchange differences 62 43 82 Dividends 23 375 Net assets at December 31 1,124 4,550 6,183 Proportionate equity 179 1,069 1,561 Consolidation/Goodwill/Others 269 275 613 Carrying amount of equity-accounted investments 448 794 949

180、 2023 Net assets at January 1 1,572 5,039 6,105 Profit or loss 429 301 425 Other comprehensive income 15 16 2 Changes in share capital 0 0 Changes in reserves 416 110 7 Foreign exchange differences 108 165 735 Dividends 118 Net assets at December 31 1,466 4,668 5,669 Proportionate equity 256 1,111 1

181、,417 Consolidation/Goodwill/Others 370 209 504 Carrying amount of equity-accounted investments 626 902 913 1 The disclosures are presented after the purchase price adjustment.2 Dividends are shown before withholding tax.SUMMARIZED FINANCIAL INFORMATION ON INDIVIDUALLY IMMATERIAL ASSOCIATES ON THE BA

182、SIS OF THE VOLKSWAGEN GROUPS PROPORTIONATE INTEREST million 2024 2023 Earnings after tax from continuing operations 507 17 Earnings after tax from discontinued operations Other comprehensive income 14 0 Total comprehensive income 521 16 Carrying amount of equity-accounted investments 2,381 1,965 The

183、re are unrecognized losses of 636 million(previous year:million)relating to investments in associates in the current fiscal year.Financial guarantees have been issued to associates in an amount of 1 million(previous year:1 million).494 Consolidated Financial Statements Notes INTERESTS IN JOINT VENTU

184、RES From a Group perspective,the joint ventures FAW-Volkswagen Automotive Company Ltd.,Changchun/China,SAIC-Volkswagen Automotive Company Ltd.,Shanghai/China,and SAIC-Volkswagen Sales Company Ltd.,Shanghai/China,were material at the reporting date.FAW-Volkswagen Automotive Company FAW-Volkswagen Aut

185、omotive Company develops,produces and sells passenger cars.There is an agreement in place between Group companies and the joint venture partner China FAW Corporation Limited regarding a long-term strategic partnership.The principal place of business is in Changchun/China.SAIC-Volkswagen Automotive C

186、ompany SAIC-Volkswagen Automotive Company develops and produces passenger cars.There is an agreement in place between Group companies and the joint venture partner Shanghai Automotive Industry Corporation regarding a long-term strategic partnership.The principal place of business is in Shanghai/Chin

187、a.SAIC-Volkswagen Sales Company SAIC-Volkswagen Sales Company sells passenger cars for SAIC-Volkswagen Automotive Company.There is an agreement in place between Group companies and the joint venture partner Shanghai Automotive Industry Cor-poration regarding a long-term strategic partnership.The pri

188、ncipal place of business is in Shanghai/China.495 Consolidated Financial Statements Notes SUMMARIZED FINANCIAL INFORMATION ON THE MATERIAL JOINT VENTURES ON A 100%BASIS million FAW-Volkswagen Automotive Company SAIC-Volkswagen Automotive Company1 SAIC-Volkswagen Sales Company 2024 Equity interest in

189、%40 50 30 Non-current assets 9,124 6,390 809 Current assets 13,162 7,568 3,161 of which cash and cash equivalents 8,773 2,167 262 Non-current liabilities 726 1,859 102 of which financial liabilities 9 2 3 Current liabilities 15,189 9,740 3,775 of which financial liabilities 61 1,346 Net assets 6,372

190、 2,359 93 Sales revenue 39,166 17,293 19,012 Depreciation and amortization 1,900 1,205 11 Interest income 170 28 4 Interest expenses 1 29 1 Earnings before tax from continuing operations 3,301 686 100 Income tax expense 658 95 22 Earnings after tax from continuing operations 2,643 591 78 Earnings af

191、ter tax from discontinued operations Other comprehensive income 108 4 Total comprehensive income 2,535 596 78 Dividends received 1,787 190 96 2023 Equity interest in%40 50 30 Non-current assets 9,465 6,006 820 Current assets 17,346 7,369 4,229 of which cash and cash equivalents 12,319 2,029 330 Non-

192、current liabilities 727 528 103 of which financial liabilities 11 2 21 Current liabilities 17,808 10,759 4,617 of which financial liabilities 12 1,394 21 Net assets 8,276 2,088 329 Sales revenue 46,846 18,728 21,754 Depreciation and amortization 1,857 1,406 34 Interest income 196 28 5 Interest expen

193、ses 5 37 2 Earnings before tax from continuing operations 4,918 293 433 Income tax expense 1,294 64 109 Earnings after tax from continuing operations 3,624 357 324 Earnings after tax from discontinued operations Other comprehensive income 152 13 Total comprehensive income 3,472 344 324 Dividends rec

194、eived 1,407 548 105 1 SAIC-Volkswagen Sales Company sells passenger cars for SAIC-Volkswagen Automotive Company.Therefore,the sales revenue reported for SAIC-Volkswagen Automotive Company was mostly generated from its business with SAIC-Volkswagen Sales Company.2 Excluding trade liabilities.3 Propor

195、tionate dividends are shown net of withholding tax.496 Consolidated Financial Statements Notes RECONCILIATION OF THE FINANCIAL INFORMATION TO THE CARRYING AMOUNT OF THE EQUITY-ACCOUNTED INVESTMENTS million FAW-Volkswagen Automotive Company SAIC-Volkswagen Automotive Company SAIC-Volkswagen Sales Com

196、pany 2024 Net assets at January 1 8,276 2,088 329 Profit or loss 2,643 591 78 Other comprehensive income 108 4 Changes in share capital Changes in reserves Foreign exchange differences 228 71 6 Dividends 4,666 396 320 Net assets at December 31 6,372 2,359 93 Proportionate equity 2,549 1,180 28 Conso

197、lidation/Goodwill/Others 776 882 Carrying amount of equity-accounted investments 1,772 297 28 2023 Net assets at January 1 9,018 3,039 374 Profit or loss 3,624 357 324 Other comprehensive income 152 13 Changes in share capital Changes in reserves Foreign exchange differences 534 149 17 Dividends 3,6

198、81 1,145 351 Net assets at December 31 8,276 2,088 329 Proportionate equity 3,310 1,044 99 Consolidation/Goodwill/Others 738 463 Carrying amount of equity-accounted investments 2,572 581 99 1 Dividends are shown before withholding tax.SUMMARIZED FINANCIAL INFORMATION ON INDIVIDUALLY IMMATERIAL JOINT

199、 VENTURES ON THE BASIS OF THE VOLKSWAGEN GROUPS PROPORTIONATE INTEREST million 2024 2023 Earnings after tax from continuing operations 141 332 Earnings after tax from discontinued operations Other comprehensive income 62 90 Total comprehensive income 79 242 Carrying amount of equity-accounted invest

200、ments 3,600 3,887 The carrying amount of equity-accounted investments includes the equity investment in Green Mobility Holding S.A.,Strassen/Luxembourg.There were no unrecognized losses relating to investments in joint ventures in the fiscal year or the previous year.Contingent liabilities to joint

201、ventures amounted to 228 million(previous year:219 million);there were no financial guarantees(previous year:70 million).Cash funds of joint ventures amounting to 162 million(previous year:150 million)are deposited as collateral for asset-backed securities transactions and are therefore not freely a

202、vailable.497 Consolidated Financial Statements Notes IFRS 5 NON-CURRENT ASSETS HELD FOR SALE As of December 31,2024,the Volkswagen Group did not hold any assets and liabilities classified as held for sale.Transactions completed/discontinued in the current fiscal year In accordance with the requireme

203、nts of IFRS 5,the consolidated subsidiaries OOO Volkswagen Group Finanz,Moscow/Russia,OOO Volkswagen Financial Services RUS,Moscow/Russia and OOO Volkswagen Bank RUS,Moscow/Russia have been classified as a disposal group held for sale since fiscal year 2022.In this context,im-pairment losses of 186

204、million were recognized in fiscal year 2023.The shares in OOO Volkswagen Group Finanz,Moscow/Russia and OOO Volkswagen Financial Services RUS,Moscow/Russia were sold to an external investor on January 18,2024.In particular due to the reclassification of foreign exchange differences to the income sta

205、tement,the deconsolidation of the two companies resulted in a loss of 62 million,which was recognized in other operating expenses.In addition,impairment losses of 29 million were recognized for OOO Volkswagen Bank RUS,Moscow/Russia in fiscal year 2024.The company was deconsolidated as of June 30,202

206、4.Deconsolidation resulted in a loss of 184 million,which was recognized in other operating expenses;the amount includes in particular the reclassifi-cation of foreign exchange differences to the income statement.In its ruling of July 3,2024,the German Federal Ministry for Economic Affairs and Clima

207、te Action prohibited the sale of the MGT gas turbine business to CSIC Longjiang GH Gas Turbine Co.Ltd.,Harbin/China.The Federal Cab-inet approved the prohibition ruling.Following the prohibition,MAN Energy Solutions SE,Augsburg discontinued the development,manufacture and sales of MGT gas turbines.I

208、t will continue its service activities for MGT gas turbines.The prohibition of the planned sale and the discontinuation of the new-build business with MGT gas turbines means that these activities are no longer presented in line with IFRS 5,and led to the recognition of an impairment loss on the capi

209、talized development costs and inventories for MGT gas turbines as of June 30,2024.This resulted in an expense of 86 million,which is presented in cost of sales and in other operating expenses.There are three further types of gas turbines(THM,FT8 and S class)in addition to the MGT gas turbines.Busine

210、ss with these is not affected by this development.In accordance with the requirements of IFRS 5,two Russian sales companies in the Automotive segment,OOO Porsche Russland,Moscow/Russia and OOO Porsche Center Moscow,Moscow/Russia,and one Russian com-pany assigned to the Financial Services segment,OOO

211、 Porsche Financial Services Russland,Moscow/Russia,have been classified as a disposal group held for sale since September 2022.An impairment loss of 25 million was recognized for the disposal group in fiscal year 2022;another impairment loss and offsetting currency translation effects were identifie

212、d in fiscal year 2023.No further material adjustments were made in the first nine months of 2024.The Russian companies were deconsolidated in the fourth quarter of 2024.Deconsolida-tion resulted in a loss of 54 million,which was recognized in other operating expenses;the amount includes in particula

213、r the classification of foreign exchange differences to the income statement.498 Consolidated Financial Statements Notes Currency translation As standard,the Volkswagen Group uses the exchange rates of an external market data provider for translation.All exchange rates are based on the respective eu

214、ro translation rates,from which all non-euro rate combinations are derived.The rates applied are presented in the following table:BALANCE SHEET MIDDLE RATE ON DECEMBER 31 INCOME STATEMENT AVERAGE RATE 1=2024 2023 2024 2023 Argentina ARS 1,073.27110 894.99391 989.43391 317.91705 Australia AUD 1.67610

215、 1.62920 1.64013 1.62859 Brazil BRL 6.43140 5.37495 5.82618 5.40306 Canada CAD 1.49720 1.46810 1.48186 1.45957 Czech Republic CZK 25.15050 24.71800 25.11925 24.00353 India INR 89.10800 92.11700 90.53256 89.33732 Japan JPY 163.23000 156.79000 163.82257 151.93821 Mexico MXN 21.58915 18.76890 19.82192

216、19.19575 Peoples Republic of China CNY 7.59860 7.87000 7.78612 7.65984 Poland PLN 4.27185 4.34090 4.30632 4.54402 Republic of Korea KRW 1,534.32000 1,440.71500 1,475.43597 1,413.50465 Russia RUB 112.43840 99.96610 100.22625 92.29940 South Africa ZAR 19.62545 20.44415 19.83310 19.95520 Sweden SEK 11.

217、45005 11.08735 11.43291 11.47160 United Kingdom GBP 0.83020 0.86910 0.84667 0.87001 USA USD 1.04100 1.10770 1.08200 1.08170 499 Consolidated Financial Statements Notes Accounting policies MEASUREMENT PRINCIPLES With certain exceptions,such as financial instruments measured at fair value and provisio

218、ns for pensions and other post-employment benefits,items in the Volkswagen Group are accounted for under the historical cost con-vention(cost model).The methods used to measure the individual items are explained in more detail below.INTANGIBLE ASSETS Intangible assets are accounted for under the cos

219、t model.Purchased intangible assets are recognized at cost and if they have finite useful lives amortized over their useful lives using the straight-line method.This relates in particular to software,which is normally amortized over three years,or licenses,which are normally amortized over the term

220、of the license.Development costs for future series products and other internally generated intangible assets are capitalized,provided the cash-generating unit to which the respective intangible asset is attributable is not impaired and the other criteria for recognition as assets are met.The costs a

221、re amortized using the straight-line method from the start of use(e.g.start of production)over the expected life cycle of the models,powertrains or software developed generally between three and nine years.Amortization charges on intangible assets are allocated to the relevant functional areas in th

222、e income state-ment.Brand names from business combinations usually have an indefinite useful life and are therefore not amortized.An indefinite useful life is usually the result of a brands further use and maintenance.Goodwill,intangible assets with indefinite useful lives and intangible assets that

223、 are not yet available for use are tested for impairment at least once a year.Assets in use and other intangible assets with finite useful lives are tested for impairment only if there are specific indications that they may be impaired.To determine the recoverable amount of goodwill and intangible a

224、ssets with indefinite and finite useful lives,the respective brand is normally the cash-generating unit that is used as the testing level.Measurement of value in use is based on managements current medium-term planning(referred to as budget planning round).The planning period generally covers five y

225、ears.This planning is based on expectations regarding future global economic trends and on assumptions derived from those trends about the markets for passenger cars and commercial vehicles,expected trends in the Volkswagen Groups market shares,the timing and cost of the development of vehicle model

226、s and the amount of investments in production facilities,as well as changes in price and cost structures,taking particular account of the transformation to e-mobility and an increase in regulatory requirements.The planning for the Financial Ser-vices segment is likewise prepared on the basis of thes

227、e expectations,and also reflects the relevant market pen-etration rates of expected vehicle sales with finance or lease agreements and other services,as well as regulatory requirements.The planning for the Power Engineering segment reflects expectations about trends in the various individual markets

228、.The planning includes reasonable assumptions about macroeconomic trends(exchange rate,interest rate and commodity price trends)and historical developments.The Volkswagen Groups planning is based on the assumption that global economic output will grow overall in 2025 at a slightly slower pace than i

229、n 2024.Declining inflation in major economic regions and the resulting easing of monetary policy are expected to boost consumer demand.Risks continue to arise from increasing fragmentation of the global economy and protectionist tendencies,turbulence in the financial markets and structural deficits

230、in individual countries.In addition,growth prospects are weighed down by persistent geopolitical tensions and con-flicts;risks arise in particular from the Russia-Ukraine conflict,the confrontations in the Middle East,and the uncer-tainties regarding the future political orientation of the USA.The a

231、ssumption is that both the advanced economies and the emerging markets will record somewhat weaker momentum on average than that of the reporting year.500 Consolidated Financial Statements Notes The Volkswagen Groups automotive market and volume planning reflects the above regional differentiation a

232、nd takes account of the impact of regional conflicts.The projections also include the transformation towards e-mo-bility.The negative impact on earnings expected to arise from higher material costs and more stringent emission and fuel consumption legislation is to be more than offset by improvements

233、 in pricing and the product mix as well as corresponding programs to increase efficiency.In particular the beneficial outcome of collective bargaining for the Volkswagen brand is reflected in the projections used.The expectations for BEV market shares were also updated.Tariffs were in some cases int

234、egrated directly into the planning or,if material,included in an overlay planning or sensitivity-tested as part of the impairment tests.For information on the assumptions in the detailed planning period,please refer to the notes on management estimates and judgment.Further details can be found in th

235、e Report on Expected Developments,which is part of the management report.The planning assumptions are adapted to reflect the current state of knowledge.The estimation of cash flows is generally based on the expected growth trends for the markets concerned.The estimates for the cash flows following t

236、he end of the planning period are generally based on a growth rate of up to 1%p.a.(previous year:up to 1%p.a.)in the Passenger Cars,Power Engineering and Commercial Vehicles segments.Value in use is determined for the purpose of impairment testing of goodwill,indefinite-lived intangible assets and f

237、inite-lived intangible assets mainly capitalized development costs using the following pretax weighted average cost of capital(WACC)rates,which are adjusted if necessary for country-specific discount factors:WACC 2024 2023 Passenger Cars segment 10.8%10.7%Commercial Vehicles segment 10.4%12.1%Power

238、Engineering segment 14.1%15.7%The WACC rates are calculated based on the risk-free rate of interest,a market risk premium and the cost of debt.Additionally,specific peer group information on beta factors and leverage is taken into account.The composition of the peer groups used to determine beta fac

239、tors and leverage is continuously reviewed and adjusted if necessary.PROPERTY,PLANT AND EQUIPMENT Property,plant and equipment is accounted for under the cost model.Investment grants received are generally deducted from cost.Special operational equipment is reported under other equipment,operating a

240、nd office equip-ment.Property,plant and equipment is depreciated using the straight-line method over its estimated useful life.501 Consolidated Financial Statements Notes Depreciation is based mainly on the following useful lives:Useful life Buildings 20 to 50 years Site improvements 10 to 20 years

241、Technical equipment and machinery 6 to 12 years Other equipment,operating and office equipment,including special operational equipment 3 to 15 years Value in use of property,plant and equipment is determined using the principles described for intangible assets.The cost of capital for product-specifi

242、c tools and other investments is the same as the cost of capital for intangible assets given above for each segment.LEASES The right-of-use assets for leases are reported in the balance sheet under those items in which the assets under-lying the lease would have been recognized if the Volkswagen Gro

243、up had been their beneficial owner.For this reason,the right-of-use assets are presented under non-current assets,mostly in property,plant and equipment,as of the balance sheet date.Practical expedients are allowed for short-term and low-value leases;the Volkswagen Group makes use of this option and

244、 therefore does not recognize right-of-use assets or liabilities for these types of leases.In this respect,the lease payments are recognized as expenses in the income statement.Leases are accounted for being as of low value if the value of the leased asset when new is no higher than 5,000.Furthermor

245、e,the accounting rules of IFRS 16 are not applied to leases of intangible assets.A large number of leases contain extension and termination options.LEASE ASSETS Vehicles leased out under operating leases are recognized at cost and depreciated to their estimated residual value using the straight-line

246、 method over the term of the lease.The forecast residual values are adjusted to include constantly updated internal and external information on residual values,depending on specific local fac-tors and experience in the marketing of used cars.This requires management to make assumptions in particular

247、 about vehicle supply and demand in the future,as well as about vehicle price trends.Such assumptions are based either on qualified estimates or on data published by external experts.Qualified estimates are based on external data if available that reflects additional information that is available fr

248、om within the company,such as histor-ical experience and current sales data.INVESTMENT PROPERTY Real estate and buildings held in order to obtain rental income(investment property)are accounted for under the cost model;the depreciation method and the useful lives applied to depreciation generally co

249、rrespond to those of the property,plant and equipment used by the Company itself.The fair value of investment property is dis-closed in the notes.Fair value is generally estimated using an investment method based on internal calculations.This involves determining the income value for a specific buil

250、ding on the basis of gross income,taking into account additional factors such as land value,remaining useful life and a multiplier specific to property.502 Consolidated Financial Statements Notes CAPITALIZATION OF BORROWING COSTS Borrowing costs of qualifying assets are capitalized as part of the co

251、st of these assets.A qualifying asset is an asset that necessarily takes at least a year to get ready for its intended use.EQUITY-ACCOUNTED INVESTMENTS The cost of shares in associates and joint ventures is generally accounted for using the equity method.Testing the net investment for impairment,the

252、 recoverable amount is determined using the principles described for in-definite-lived intangible assets.FINANCIAL INSTRUMENTS Regular way purchases or sales of financial instruments are accounted for at the settlement date that is,at the date on which the asset is delivered.In the Volkswagen Group,

253、financial assets and liabilities are allocated to the“at amortized cost”and“at fair value”categories.FINANCIAL ASSETS AND LIABILITIES AT AMORTIZED COST Financial assets measured at amortized cost using the effective interest method relate to receivables from financing business;trade receivables;othe

254、r receivables and financial assets;time deposits;cash and cash equivalents.In contrast,financial liabilities measured at amortized cost using the effective interest method consist of trade payables;other financial liabilities;liabilities to banks;commercial paper and notes;loans.For reasons of mater

255、iality,discounting or unwinding of discounting is not applied to current receivables and lia-bilities(due within one year).FINANCIAL ASSETS AND LIABILITIES AT FAIR VALUE Financial assets measured at fair value through other comprehensive income relate firstly to non-derivative financial assets with

256、contractual cash flows that relate solely to payments of principal and interest on the princi-pal amount outstanding(debt instruments)that are held with the aim of both collecting contractual cash flows and selling financial assets(“hold and sell”business model).Certain changes in the fair value of

257、these debt instruments(impairment losses,foreign exchange gains and losses,interest calculated using the effective inter-est method)are recognized immediately in profit or loss.Secondly,those equity instruments not held for trading(“hold”business model)are measured at fair value through other compre

258、hensive income.Here,Volkswagen exercises the option to recognize changes in fair value always through other comprehensive income.503 Consolidated Financial Statements Notes At Volkswagen,the category of financial assets at fair value through profit or loss primarily comprises hedging relationships t

259、o which hedge accounting is not applied and investment fund units.All financial liabilities at fair value through profit or loss relate to derivatives not designated as hedging instru-ments in hedge accounting.Fair value generally corresponds to the market or quoted market price.If no active market

260、exists,fair value is determined using other observable inputs as far as possible.If no observable inputs are available,fair value is determined using valuation techniques,such as by discounting the future cash flows at the market interest rate,or by using recognized option pricing models,and,as far

261、as possible,verified by confirmations from the banks that handle the transactions.In the case of current financial receivables and liabilities,amortized cost generally corresponds to the principal or repayment amount.The fair value option for financial assets and financial liabilities is not used in

262、 the Volkswagen Group.Shares in subsidiaries,associates and joint ventures that are neither consolidated for reasons of materiality nor accounted for using the equity method do not fall within the scope of IFRS 9 and IFRS 7.DERIVATIVES AND HEDGE ACCOUNTING Volkswagen Group companies use derivatives

263、to hedge balance sheet items and future cash flows(hedged items).Appropriate derivatives such as swaps,forward transactions and options are used as hedging instruments.The accounting treatment of changes in the fair value of hedging instruments depends on the nature of the hedging relationship.In th

264、e case of hedges against the risk of change in the fair value of balance sheet items(fair value hedges),both the hedging instrument and the hedged risk portion of the hedged item are measured at fair value.If appropriate,several risk portions of the hedged items are combined into one portfolio.In a

265、portfolio fair value hedge,changes in fair values are recognized on the basis of the individual transaction in the same way as in fair value hedging.Gains or losses from the measurement of hedging instruments and hedged items are recog-nized in profit or loss.In addition to the guidance of IFRS 9,th

266、e Volkswagen Group applies the guidance of IAS 39 on portfolio hedging to hedge the interest rate risk in the Financial Services Division.In the case of hedges of future cash flows(cash flow hedges),the hedging instruments are also measured at fair value.The designated effective portion of the hedgi

267、ng instrument is accounted for through OCI I and the non-designated effective portion is accounted for through OCI II.They are only recognized in the income statement or reclassified to inventories when the hedged item is realized.The ineffective portion of cash flow hedges is recog-nized through pr

268、ofit or loss immediately.Derivatives used by the Volkswagen Group for financial management purposes to hedge against interest rate,foreign currency,commodity price,equity price,or fund price risks,but that do not meet the strict hedge account-ing criteria of IFRS 9,are classified as financial assets

269、 or liabilities at fair value through profit or loss(referred to below as derivatives to which hedge accounting is not applied).This also applies to options on shares.External hedging instruments of intragroup hedged items that are subsequently eliminated in the consolidated financial statements are

270、 also assigned to this category as a general rule.Assets and liabilities measured at fair value through profit or loss consist of derivatives or components of derivatives that are not included in hedge accounting.These relate for example to the non-designated currency forwards used to hedge sales re

271、venue,interest rate hedges,commodity forwards and swaps and currency forwards relating to commodity forwards and swaps.504 Consolidated Financial Statements Notes IMPAIRMENT LOSSES ON FINANCIAL INSTRUMENTS Financial assets are exposed to default risk,which is taken into account by recognizing loss a

272、llowances or,if losses have already been incurred,by recognizing impairment losses.Default risk on loans and receivables in the financial services segment is accounted for by recognizing specific loss allowances and general loss allowances.In particular,a loss allowance is recognized on these financ

273、ial assets in the amount of the expected loss in accordance with Group-wide standards.The actual specific loss allowances for the losses incurred are then charged to this loss allowance.A potential impairment is assumed not only for a number of situations such as delayed payment over a period of mor

274、e than 90 days,the institution of enforcement measures,the threat of insol-vency or overindebtedness,application for or the opening of bankruptcy proceedings,or the failure of reorganiza-tion measures,but also for receivables that are not past due.Insignificant receivables and significant individual

275、 receivables for which there is no indication of impairment are grouped into homogeneous portfolios on the basis of comparable credit risk features and allocated by risk class.Average historical default probabilities in combination with forward-looking parameters for the respective portfolio are the

276、n used to calculate the amount of the impairment loss.Credit risks must be considered for all financial assets measured at amortized cost or fair value through other comprehensive income(debt instruments),as well as for contract assets in accordance with IFRS 15 and lease receivables within the scop

277、e of IFRS 16.The rules on impairment also apply to risks from irrevocable credit com-mitments not recognized in the balance sheet and to the measurement of financial guarantees.As a matter of principle,a simplified process,which takes historical default rates and forward-looking infor-mation into ac

278、count,and specific loss allowances are used to account for impairment losses on receivables out-side the Financial Services segment.DEFERRED TAXES The tax consequences of dividend payments are generally not taken into account until the resolution on appro-priation of earnings available for distribut

279、ion has been adopted.Deferred tax assets that are unlikely to be realized within a clearly predictable period are not recognized in the year in which they arise.Loss allowances are recognized on deferred taxes recognized in prior years if the require-ments are met.Deferred tax assets for tax loss ca

280、rryforwards are usually measured on the basis of future taxable income over a planning period of five fiscal years.INVENTORIES Raw materials,consumables and supplies,merchandise,work in progress and self-produced finished goods re-ported in inventories are carried at the lower of cost or net realiza

281、ble value.Borrowing costs are not capitalized.The measurement of same or similar inventories is generally based on the weighted average method.SHARE-BASED PAYMENT Share-based payment in the Volkswagen Group comprises cash-settled performance share plans that are recog-nized in accordance with IFRS 2

282、.505 Consolidated Financial Statements Notes OTHER PROVISIONS Provisions not resulting in an outflow of resources within one year are recognized at their settlement value dis-counted to the balance sheet date.Discounting is based on market interest rates.An average discount rate of 2.6%(previous yea

283、r:2.9%)was used in the eurozone.The settlement value also reflects cost increases expected.OTHER LIABILITIES(NOT WITHIN THE SCOPE OF A SPECIFIC IFRS)Other non-current liabilities outside the scope of a specific IFRS are carried at amortized cost in the balance sheet.Differences between historical co

284、st and the repayment amount are amortized using the effective interest method.Other current liabilities outside the scope of a specific IFRS are recognized at their repayment or settlement amount.In cooperation with several partner banks,the Volkswagen Group offers reverse factoring programs that al

285、low participating suppliers to have their receivables from Volkswagen settled before the agreed due date and in this way to manage their liquidity position.Extended payment terms are normally agreed under the reverse factoring arrangement,whereby participating suppliers that have their receivables s

286、ettled early benefit from Volkswagens credit rating.This strengthens the supply chain in the long term.The Volkswagen Group assessed these programs on the basis of a variety of indicators and concluded that the liabilities concerned continue to have the characteristics of trade payables.Accordingly,

287、the associated payments to the partner banks must be classified as cash outflows from operating activities.REVENUE AND EXPENSE RECOGNITION Sales revenue,interest and commission income from financial services and other operating income are recognized only when the relevant services have been rendered

288、 or the goods have been delivered,i.e.when the customer has obtained control of the goods or services.Where new and used vehicles and original parts are sold,the Companys performance generally occurs upon delivery,because that is the point when control is transferred,and the inven-tory risk and,for

289、deliveries to a dealer,generally also the pricing decision pass to the customer.Revenue is reported net of sales allowances(discounts,customer bonuses,or rebates).The Volkswagen Group measures sales allowances and other variable consideration on the basis of experience and by taking account of curre

290、nt circumstances.Vehicles are normally sold to dealers on payment terms.A trade receivable is recognized for the period between vehicle delivery and receipt of payment.Any financing component included in the transaction is only recognized if the period between the transfer of the goods and the payme

291、nt of consideration is longer than one year and the amount to be accrued is significant.Income from financing and finance lease agreements is recognized using the effective interest method and included in sales revenue.If non-interest-bearing or low-interest vehicle financing arrangements are agreed

292、,sales revenue for the vehicles is reduced by the interest benefits granted.Sales revenue from operate leases is recog-nized over the term of the contract on a straight line basis.In contracts under which the goods or services are transferred over a period of time,revenue is recognized,depending on

293、the type of goods or services provided,either according to the stage of completion or,to simplify,on a straight-line basis;the latter is only allowed if revenue recognition on a straight-line basis does not differ materially from recognition according to the stage of completion.As a rule,the stage o

294、f completion is determined as the proportion that contract costs incurred by the end of the reporting period bear to the estimated total con-tract costs(cost-to-cost method).Contract costs incurred generally represent the best way to measure the stage of completion for the performance obligation.If

295、the outcome of a performance obligation satisfied over time is not sufficiently certain,but the Company expects,as a minimum,to recover its costs,revenue is only recognized in the amount of contract costs incurred(zero profit margin method).Since long-term construction contracts invariably give rise

296、 to contingent receivables from customers for the period to completion or payment by the customer,con-tract assets are recognized for the corresponding amounts.A trade receivable is recognized as soon as the Com-pany has transferred the goods or services in full.506 Consolidated Financial Statements

297、 Notes If services are sold to the customer at the same time as the vehicle,and the customer pays for them in advance,the Group recognizes a corresponding contract liability until the services have been transferred.Examples of ser-vices that customers pay for in advance are servicing,maintenance and

298、 certain warranty contracts as well as mobile online services.For extended warranties granted to all customers for a particular model,a provision is normally recognized in the same way as for statutory warranties.If the warranty is optional for the customer or includes an additional service componen

299、t,the related sales revenue is deferred and recognized over the term of the warranty.Income from the sale of assets for which a Group company has a buyback obligation is recognized only when the assets have definitively left the Group.If a fixed repurchase price was agreed when the contract was ente

300、red into,the difference between the selling price and the present value of the repurchase price is recognized ratably as income over the term of the contract.Prior to that time,the assets are carried as inventories in the case of short contract terms and as lease assets in the case of long contract

301、terms.Sales revenue is generally determined on the basis of the price stated in the contract.If variable consideration(e.g.volume-based bonus payments)has been agreed in a contract,the large number of contracts involved means that revenue has to be estimated using the expected value method.In except

302、ional cases,the most probable amount method may also be used.Once the expected sales revenue has been estimated,an additional check is carried out to determine whether there is any uncertainty that necessitates the reversal of the revenue initially recognized so that it can be virtually ruled out th

303、at sales revenue subsequently has to be adjusted downward.Provisions for reimbursements arise mainly from dealer bonuses.In multiple element arrangements,the transaction price is allocated to the different performance obligations of the contract on the basis of relative standalone selling prices.In

304、the Automotive Division,non-vehicle-related services are generally measured at their standalone selling prices for reasons of materiality.Cost of sales includes the costs incurred to generate the sales revenue and the cost of goods purchased for resale.This item also includes the costs of additions

305、to warranty provisions.Research and development costs not eligible for capitalization in the period and amortization of development costs are likewise carried under cost of sales.Reflecting the presentation of interest and commission income in sales revenue,the interest and commis-sion expenses attr

306、ibutable to the financial services business are presented in cost of sales.GOVERNMENT GRANTS Government grants related to assets are deducted when arriving at the carrying amount of the asset and are recognized in profit or loss over the life of the depreciable asset as a reduced depreciation expens

307、e.Government grants related to income,i.e.that compensate the Group for expenses incurred,are generally rec-ognized in profit or loss for the period and allocated to those items in which the expenses to be compensated by the grants are also recognized.Grants in the form of non-monetary assets(e.g.th

308、e use of land free of charge or the transfer of resources free of charge)are disclosed as a memo item.507 Consolidated Financial Statements Notes ESTIMATES AND ASSUMPTIONS BY MANAGEMENT Preparation of the consolidated financial statements requires management to make certain estimates and assumptions

309、 that affect the reported amounts of assets and liabilities,and income and expenses,as well as the related disclosure of contingent assets and liabilities of the reporting period.The estimates and assumptions relate largely to the following matters:The impairment testing of non-financial assets(espe

310、cially goodwill,brand names,capitalized development costs and special operational equipment)and equity-accounted investments,or investments accounted at cost,and the measurement of options on shares in companies that are not traded in an active market require assump-tions about the future cash flows

311、 during the planning period,and possibly beyond it,as well as about the discount rate to be applied.The estimates made in order to separate cash flows mainly relate to future market shares,the trend in the respective markets and the profitability of the Volkswagen Groups products.When determining ca

312、sh flows for conducting impairment tests on companies or equity investments with new technology operations,it is of particular importance to assess whether these new technologies are technically feasible and have the potential for industrial use.The recoverability of the Groups lease assets depends

313、in particular on the residual value of the leased vehicles after expiration of the lease term,because this represents a significant portion of the expected cash flows.More detailed information on impairment tests and the measurement parameters used for those tests can be found in the explanations ab

314、ove regarding intangible assets.If there are no observable market inputs,the fair values of assets acquired and liabilities assumed in a business combination are measured using recognized valuation techniques,such as the relief-from-royalty method or the residual method.Impairment testing of financi

315、al assets requires estimates about the extent and probability of occurrence of future events.As far as possible,estimates are derived from experience taking into account current market data as well as rating categories and scoring information.The sections entitled“IFRS 7(Financial Instruments)”and“F

316、inancial risk management and financial instruments”contain further details on how to determine loss allow-ances.Accounting for provisions is also based on estimates of the extent and probability of occurrence of future events,as well as estimates of the discount rate.As far as possible,these are als

317、o based on experience or external opinions.The assumptions applied in the measurement of pension provisions are described in the“Provisions for pensions and other post-employment benefits”section.Actuarial gains or losses arising from changes in meas-urement inputs are recognized in other comprehens

318、ive income and therefore do not affect profit or loss reported in the income statement.Any change in the estimates of the amount of other provisions is always recognized in profit or loss.The provisions are regularly adjusted to reflect new information obtained.The use of expected values invariably

319、means that unused provisions are reversed or additional amounts have to be recognized for provisions.Similarly to expenses for the recognition of provisions,income from the reversal of provisions is allocated to the respective functions.Warranty claims from sales transactions are calculated on the b

320、asis of losses to date,esti-mated future losses and the policy on ex gratia arrangements.In addition,assumptions must be made about the nature and extent of future warranty and ex gratia claims.For the provisions recognized in connection with the diesel issue,assumptions were made in particular for

321、working hours,material costs and hourly wage rates,depending on the series,model year and country concerned.In addition,assumptions were made for future resale prices of repurchased vehicles.These assumptions are based on qualified estimates,which are based in turn upon external data,and also reflec

322、t additional information available within the Company,such as values derived from past experience.Further information on the legal proceedings and on the legal risks associated with the diesel issue can be found in the“Litigation”section.508 Consolidated Financial Statements Notes Tax provisions wer

323、e recognized for potential future retrospective tax payments,while other provisions were rec-ognized for ancillary tax payments arising in this connection.Volkswagen AG and its subsidiaries have operations worldwide and are audited by local tax authorities on an ongoing basis.Amendments to tax laws

324、and changes in legal precedent and their interpretation by the tax authorities in the respective countries may lead to tax payments that differ from the estimates made in the finan-cial statements.The measurement of the tax provision is based on the most likely exposure resulting from this risk mate

325、rializing.Volkswagen decides whether to account for multiple tax uncertainties separately or in groups on the merits of each individual case considered,depending on which type of presentation is better suited to predicting the extent to which the tax risk will materialize.The pricing of individual p

326、roducts and services is complex,especially in rela-tion to contracts for the cross-border supply of intragroup goods and services,because it is in many cases not possible to observe market prices for internally generated products,or the use of market prices for similar products is subject to uncerta

327、inty because they are not comparable.In these cases,prices including for tax purposes are determined on the basis of standardized,generally accepted valuation techniques.If actual developments differ from the assumptions made for recognizing the provisions,the figures actually recorded may differ co

328、mpared to the estimates expected originally.An overview of other provisions can be found in the“Non-current and current other provisions”section.Government grants are recognized based on an assessment as to whether there is reasonable assurance that the Group companies will fulfill the conditions fo

329、r awarding the grants and that the grants will in fact be awarded.This assessment is based on the nature of the legal entitlement and past experience.Estimates of the useful life of finite-lived assets are based on experience and are reviewed regularly.Where estimates are modified,the residual usefu

330、l life is adjusted and an impairment loss is recognized if necessary.Estimates of lease terms under IFRS 16 are based on the non-cancelable period of a lease and an assessment of whether existing extension and termination options will be exercised.The determination of the lease term and the discount

331、 rates used impacts on the amounts to be recognized for right-of-use assets and lease liabilities.Measuring deferred tax assets requires assumptions regarding future taxable income and the timing of the realization of deferred tax assets.The estimates and assumptions are based on underlying assumpti

332、ons that reflect the current state of available knowledge.Specifically,the expected future development of business was based on the circumstances known at the date of preparation of these consolidated financial statements and a realistic assessment of the future devel-opment of the global and sector

333、-specific environment.Estimates and assumptions remain subject to a high degree of uncertainty because future business developments are subject to uncertainties that in part cannot be influenced by the Group.This applies in particular to short-and medium-term cash flow forecasts and to the discount rates used.Developments in this environment that differ from the assumptions and that cannot be infl