Annual Report - Miba

The results of the consolidation group changes are immaterial, since they relate to new
business start-ups and the three companies included for the first time still show very
limited business activity.
2. Consolidation Methods
For the financial statements of January 31, 2005 the reporting standard IFRS 3 on
“Business Combinations” and the revision of the standards IAS 36 “Impairment of
assets” and IAS 38 “Intangible assets” were applied ahead of schedule as of February 1,
2004 according to IFRS 3.85.
Accordingly, as of February 1, 2004, the consolidation of capital took place based on the
new valuation method. According to this method, the book value of an investment is offset
against the pro rata reassessed equity of the subsidiary (purchase accounting). Any
remaining differences in the assets are capitalized as goodwill, and are no longer subject
to regular amortization in the future. Instead, they are annually subjected to an impairment
test and only amortized in case of unscheduled value losses. Accordingly, existing goodwill
is not subject to annual amortization. The last amortization for the 2003/04 fiscal year
amounted to TEUR 1,791. Company acquisitions up to January 31, 2004 were
consolidated based on the book value method.
Differences in liabilities in the context of initial consolidation have been effected according
to IFRS 3 since February 1, 2004 and are accordingly recognized as income in the consolidated
income statement in the year of origination. In the context of initial consolidations
for 2004/05, there were no differences in liabilities.
For the at equity valued included associated companies, the same equity consolidation
rules as the ones used in the context of full consolidation apply, using the last available
annual financial statements as a reference.
All receivables and liabilities as well as expenses and income from settlements between
the companies of the consolidation group are consolidated. Inter-company profits from
inter-company sales are also consolidated, unless they are immaterial.
Inter-company profits related to Mahle Metal Leve Miba Sinterizados Ltda., Sao Paulo,
Brazil, which is valued at equity, are not consolidated, since they are immaterial with
regard to the financial position and earnings situation.
Required taxes are accrued on the consolidation activities that effect on net income.
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