General
Information
Last Update:
March 1, 2012
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1.1 – Group accounting principles

Accounting standards applied: The Consolidated Financial Statements of BASF SE as of December 31, 2011, have been prepared in accordance with International Financial Reporting Standards (IFRS) and Section 315a (1) of the German Commercial Code (HGB). BASF SE is a publicly-listed corporation based in Ludwigshafen am Rhein. Its official address is Carl-Bosch-Str. 38, 67056 Ludwigshafen am Rhein, Germany.

The individual financial statements of the companies included in the Consolidated Financial Statements of the BASF Group (hereinafter referred to as “consolidated companies”) are generally prepared as of the balance sheet date of the Consolidated Financial Statements. All binding International Financial Reporting Standards (IFRS) and pronouncements of the International Financial Reporting Interpretations Committee (IFRIC) for the 2011 fiscal year were applied. The IFRS are applied as soon as they have been endorsed by the European Union.

The accounting policies applied are the same as those in 2010. Exceptions to this are changes required by the application of new or revised reporting standards. In 2011 there were no significant changes in this regard.

The Consolidated Financial Statements are prepared in euros, and all amounts, including the figures for previous years, are given in million euros unless otherwise indicated.

On February 20, 2012, the Consolidated Financial Statements were prepared and authorized for release by the Board of Executive Directors and submitted for approval by the Audit Committee to the Supervisory Board of BASF SE at its meeting on February 23, 2012.

Scope of consolidation: The Consolidated Financial Statements include BASF SE as well as all material subsidiaries. BASF controls these companies or exercises a majority of the voting rights, either directly or indirectly.

Material, jointly controlled entities are included on a proportional consolidation basis.

Associated companies are accounted for using the equity method. These are companies in which the Company has a participation of at least 20% and can exercise a significant influence over the operating and financial policies.

Subsidiaries whose business is dormant or of low volume and that is insignificant for the presentation of a true and fair view of the net assets, financial position and results of operations as well as the cash flows are not consolidated. These companies are carried at amortized cost and are written down in the case of an impairment. The sum of these subsidiaries’ assets and equity amounts to less than 1% of the corresponding value at the Group level.

Consolidation method: Assets and liabilities of consolidated companies are accounted for and valued uniformly in accordance with the principles described herein. For companies accounted for using the equity method, material deviations from our accounting policies are adjusted for.

Transactions between consolidated companies as well as inter-company profits resulting from sales and services rendered between consolidated companies are eliminated in full; for jointly controlled entities, they are proportionally eliminated. Material inter-company profits related to companies accounted for using the equity method are eliminated.

Capital consolidation at the acquisition date is based on the purchase method. Initially, all assets, liabilities and additional intangible assets that are to be capitalized are valued at fair value. Finally, the acquisition cost is compared with the proportionate share of the net assets acquired at fair value. The resulting positive differences are capitalized as goodwill.

The incidental acquisition costs of a business combination are recognized in the income statement.

Translation of foreign currency financial statements: The translation of foreign currency financial statements depends on the functional currency of the consolidated companies. For companies whose functional currency is not the euro, translation into the reporting currency is based on the closing rate method: Balance sheet items are translated into euros at closing rates on the balance sheet date; expenses and income are translated into euros at monthly average rates and accumulated for the year. The translation adjustments due to the use of the closing rate method are shown under currency translation adjustments as a component of other comprehensive income in equity and are recognized in income only upon the disposal of a company.

For certain companies outside the euro or U.S. dollar zone, the euro or U.S. dollar is the functional currency.

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Selected exchange rates

 

 

 

 

Closing rates

 

Average rates

1 EUR equals

31.12.2011

31.12.2010

 

2011

2010

Brazil (BRL)

2.42

2.22

 

2.33

2.33

China (CNY)

8.16

8.82

 

9.00

8.97

Great Britain (GBP)

0.84

0.86

 

0.87

0.86

Japan (JPY)

100.20

108.65

 

110.96

116.24

Malaysia (MYR)

4.11

4.10

 

4.26

4.27

Mexico (MXN)

18.05

16.55

 

17.29

16.74

The Russian Federation (RUB)

41.77

40.82

 

40.88

40.26

Switzerland (CHF)

1.22

1.25

 

1.23

1.38

South Korea (KRW)

1,498.69

1,499.06

 

1,541.23

1,531.82

United States (USD)

1.29

1.34

 

1.39

1.33

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