The document discusses understanding the financial statements of Siemens AG, a German company. It begins by explaining that Siemens prepares consolidated financial statements according to IFRS/IAS standards. It then reviews key components of the balance sheet, including cash/cash equivalents, financial assets, goodwill from acquisitions, and investments accounted for using the equity method. Next, it mentions moving to the liabilities side of the balance sheet, as well as discussing the profit and loss account and cash flow statement. The document concludes by asking what is next on the agenda.

1. Next in Agenda is to understand Financial Statements of Foreign Companies…

3. But, first a curiosity … Siemens AG Wittelsbacherplatz 2 D-80333 Munich Germany What is it? Aktiengesellschaft??

4. Let’s proceed for understanding financial statements of SIEMENS …

5. Siemens AG follows… IFRS/IAS for preparing consolidated financial statements which we are going to discuss. German GAAP - Short for “Generally Accepted Accounting Principles in Germany.” The accounting concepts, measurements, techniques and standards of presentation used in financial statements in Germany pursuant to the German Commercial Code (HGB).

6. First, we take Balance sheet … … Assets Side

7. Reducing Liquidity

9. Cash and Cash Equivalents… Cash includes money an entity holds and money deposited with financial institutions that can be withdrawn without notice. Cash equivalents are defined as short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. The "short-term" characteristic of a cash equivalent is generally taken as a maturity of three months from the date of acquisition.

11. Financial Assets … All financial assets are to classified as … (a) FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (b) HELD-TO-MATURITY INVESTMENTS (c) LOANS AND RECEIVABLES, (d) AVAILABLE-FOR-SALE … Available for Sale Financial Assets are those financial assets that are designated as available for sale or are not classified as (a), (b) or (c).

22. Goodwill…? Goodwill is defined as the excess of cost of an acquired entity over the amounts assigned to assets acquired and liabilities assumed. On January 2, 2007, Siemens completed the acquisition of the diagnostics division of Bayer Aktiengesellschaft (Bayer). On May 4, 2007, Siemens completed the acquisition of U.S.-based UGS Corp. (UGS), one of the leading providers of product lifecycle management (PLM) software and services for manufacturers.

26. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD… In its consolidated financial statements, an investor should use the equity method of accounting for investments in associates . [IAS-28] Under the equity method of accounting, an equity investment is initially recorded at cost and is subsequently adjusted to reflect the investor's share of the net profit or loss of the associate. [IAS 28]

28. Now, let’s move to … … Liabilities Side

33. Now, let’s move towards understanding of …… PROFIT AND LOSS ACCOUNT…

35. Now, we move to … CASH FLOW STATEMENT …

37. All this is ………… our story about understanding financial statements

38. WHAT NEXT IN OUR AGENDA?