Running head: BMW ANNUAL REPORT ANALYSIS 1 BMW ANNUAL REPORT ANALYSIS 2 BMW’s Annual Report Analysis Author Note Analysis of BMW’s Annual Report Introduction Financial statements refer to collections of reports about the financial results of every organization, the economic conditions and the cash flow trends in the entity. BMW, just like any other entity, is on the forefront in reflecting transparency and increased the level of accountability towards its stakeholders. The financial report concerning BMW as an organization shows historical data and the transactions which have been embraced by the entity. This paper provides background information about BMW and the quality of financial reporting provided by the organization. A comparison of the GAAP to US GAAP. The United States standards and reporting tiles values and biases have also been presented, as well as a comparison of the same in Germany. Financial reporting is all about openness, responsibility, and accountability in the organizations, to maintain an ethical competition platform. Quality of information provided by the company Companies come out with reports which highlight their annual performance to the shareholders. In the case of BMW, the report provided is the primary source of intimation for any investor to be able it understand the organization, management and analyze the financials of the organization. Annual reports can be acquired from the group website under the investor relations section. BMW has managed to provide quality financial data based on ten significant aspects; a) Vision and mission statements of the organization In this section, you get to read the mission and vision statement of BMW. The comments provided are general in nature and help provide guidance on the objectives which are to be achieved. b) Corporate information BMW has provided the shareholders with details of all the directors, the bankers, and all auditors to the company. Board members can be easily analyzed, and auditors assessed by the investors. c) Product Overview The organization has provided financial highlights and the products which are manufactured by the entity, segment wise and performance wise over a period. Some organizations have the tendency of publishing financial highlights of five to ten years in their annual reports. This encourages easier analysis of revenues, earnings and the interest before tax. This ensures that one can get a glimpse of the assets, debtors, and liabilities in the organization. Financial ratios are also presented. d) Director’s report BMW financial record has provided a brief summary of the financials, the results and the explanation of all transactions made within the organization. The major elements of importance, in this case, include the operational parameters such as capacity additions and occupancy rates as well as production levels. e) Management discussion and analysis The section is keen to highlight the major trends in the ind ...

1. Running head: BMW ANNUAL REPORT ANALYSIS 1
BMW ANNUAL REPORT ANALYSIS 2
BMW’s Annual Report Analysis
Author Note
Analysis of BMW’s Annual Report
Introduction
Financial statements refer to collections of reports about the
financial results of every organization, the economic conditions
and the cash flow trends in the entity. BMW, just like any other
entity, is on the forefront in reflecting transparency and
increased the level of accountability towards its stakeholders.
The financial report concerning BMW as an organization shows
historical data and the transactions which have been embraced
by the entity. This paper provides background information about
BMW and the quality of financial reporting provided by the
organization. A comparison of the GAAP to US GAAP. The
United States standards and reporting tiles values and biases

2. have also been presented, as well as a comparison of the same
in Germany. Financial reporting is all about openness,
responsibility, and accountability in the organizations, to
maintain an ethical competition platform.
Quality of information provided by the company
Companies come out with reports which highlight their annual
performance to the shareholders. In the case of BMW, the report
provided is the primary source of intimation for any investor to
be able it understand the organization, management and analyze
the financials of the organization. Annual reports can be
acquired from the group website under the investor relations
section. BMW has managed to provide quality financial data
based on ten significant aspects;
a) Vision and mission statements of the organization
In this section, you get to read the mission and vision statement
of BMW. The comments provided are general in nature and help
provide guidance on the objectives which are to be achieved.
b) Corporate information
BMW has provided the shareholders with details of all the
directors, the bankers, and all auditors to the company. Board
members can be easily analyzed, and auditors assessed by the
investors.
c) Product Overview
The organization has provided financial highlights and the
products which are manufactured by the entity, segment wise
and performance wise over a period. Some organizations have
the tendency of publishing financial highlights of five to ten
years in their annual reports. This encourages easier analysis of
revenues, earnings and the interest before tax. This ensures that
one can get a glimpse of the assets, debtors, and liabilities in
the organization. Financial ratios are also presented.
d) Director’s report
BMW financial record has provided a brief summary of the
financials, the results and the explanation of all transactions
made within the organization. The major elements of
importance, in this case, include the operational parameters

3. such as capacity additions and occupancy rates as well as
production levels.
e) Management discussion and analysis
The section is keen to highlight the major trends in the industry,
and the major elements which affect the operational
effectiveness of the organization. This section analysis is the
entity regarding its strengths, weaknesses, threats and
opportunities, as well as the risk elements of concern affecting
performance at BMW in Germany.
f) Corporate governance report
Insight has been provided on corporate governance and the
composition of the board of directors. Important things to look
at are the selection of the board of trustees, subcommittees and
attendance are also provided.
Background information on BMW
BMW was formed as a business entity after the restructuring of
the Rapp Motorenwerke aircraft in 1917. BMW was forced to
cease aircraft engine production after the Second World War,
and this led to the shift of the organization to motorcycle
production. The first car to be produced by BMW is the BMW
all, with a significant craft engine in 1918. The availability of
German rearmament in 1930 provided adequate resources and
labor for the organization.
By the year 1958, BMW had undergone a significant
transformation in its automotive division and was in financial
difficulties. Shareholders meeting were held to decide on
whether liquidation is to be instituted, or an alternative needed
to be sought. Since then, BMW has significantly prospered, and
increased efficiency has led to the increased competitive edge
of the entity in the automotive sector.
Comparison of German GAAP to US GAAP
The accepted accounting principles refer to the accounting
standards which have been fully implemented in the United
States. GAAP is more of a rule-based system. There are
significant differences between the United States GAAP and the
German GAAP. US GAAP makes use of the revenues,

4. expenditures, and liabilities. In US GAAP, inventory reversals
are made under specific criteria. In both countries, the
principles are acceptable, while the main aim in the United
States is to enhance standardization of the entire process. The
German accounting sector is more of a rule-based industry as
well but permits implementation of exceptions where the need
arises.
US standards and reporting rules, values and biases
Reporting standards in the United States are extremely clear a
compared to German standards and values which are
emphasized concerning reporting standards. US GAAP has a
minimal bias because organizations in Germany are keen to
make profits. The United States accounting system requires that
all entities comply with the rules and regulations set by the
accounting body.
Comparison of US standards and reporting rules, values and
biases to Germany
Different accounting systems are used both in the United States
and Germany. However, the overall interpretation of the data
obtained is similar which enhances the standardization of the
global financial and accounting platform. In the United States,
the accounting systems are influenced by social and economic
factors. In Germany, social factors have the minimal impact of
the accounting standards and their application. German GAAP
and US GAAP have entirely different objectives. German
accounting prioritizes more on carefully calculated profits,
while the United States accounting system relies more on
classifications and obtaining proper financial records.
Critique of bias regarding issues of reporting standards of
Germany and the US standards
If CEOs do not portray high-level professionalism and
accountability in their respective duties, especially in the
provision of financial statements, financial records are bound to
contain biases which are open to interpretation.
a) PR vs. Progress
Company executives want to portray their business activities in

5. a positive way. The information described in the financial
reports might be altered to suggest a good performance to cater
for the interests of the executives.
b) Buried in the numbers
Investors get lost if the financial reports rely heavily on the
charts, graphs, and mathematical presentations. Companies need
to have simple and clear objectives to portray themselves as
viable. Savvy investors might turn to more substantial income
reports such as poor stock values.
c) Covered concerns
Bias could be noted if executives have diverted their interests
from the future of the company. This is evident in both
Germany and the United States, considering the high number of
profit making institutions.
Conclusion
Currently, BMW has launched its smallest car, the 1 Series, the
two series and the three series (Keith, 2007). The motorcycle
industry is a fast developing segment and a large contributor to
the economy. In 2015, the greatest breakthrough was when
BMW launched its customer portal in the Australian market
which included integrated access to the new services and
application in the entity. BMW has received numerous
sponsorships over the years. The financial transparency and
accountability which has been reflected by the organization
have contributed so much to its success and overwhelming
productivity for an extended period. Financial statement
provision and annual reports are a mandatory requirement
(Giep, 2008). All profit making entities, primarily publicly
traded entities should be provided such data to the interested
users and stakeholders. Other businesses should emulate
BMW’s accountability and responsibility in the manufacturing
industry.
References
BMW Group. The Next 100 Years: Annual Report 2015.
Bayerische Germany

6. Keith, H. (2007). Elements of Multinational Strategy. New
York: Springer Science and Business Media
Giep, F. (2008). The Science and Art of Branding. Germany: M.
E. Sharpe
Don, H. (2008). Organization Behavior. New York: John Wiley
and Sons
Running head: ANALYZING BMW WITH ACCOUNTING
STANDARDS IN GERMANY 1
ANALYZING BMW WITH ACCOUNTING STANDARDS IN
GERMANY 2
Analyzing BMW with Accounting Standards in Germany
Author Note
Analyzing BMW with Accounting Standards in Germany

7. There have been numerous reports of scandals that have
arisen due to companies that have not been in compliance with
the accounting standards that have been put in place. These
scandals have always caught most people unawares and there
exists a need to understand why accounting standards should be
followed for improved performance by companies and the
respective economies in general.
Germany is one of the countries that has continued to post
impressive economic results and was not much great depression
that has been going on in Europe. In fact, it has been one of the
countries that are a major player in the European Union and has
been at the forefront in insisting that countries such as Greece
and Spain that have been hard hit by slow economic growth
should be bailed out by the rest of the countries in the European
Union. This is my primary rationale which made me choose to
accept it. The BMW is a global leader with unbelievable
revenues with economists projecting that it still has the
potential for growth. I want to understand whether this company
is a direct reflection of the German accounting laws. It must be
noted that the BMW group came into being in 1917, and there is
a need to understand how this group has survived two world
wars, political volatility for over a hundred years and finally
become a world leader. This is despite that in Germany, there
were sharp divisions between the East and West Germany before
the collapse of the Berlin wall.
BMW released its annual 2015 report which showed that all its
leading brands increased in sales. This is the Rolls-Royce,
MINI, and the BMW and projected that more growth would be
achieved moving forward. There was also the examination of
their financial reports by both the internal and external auditors.
This analysis showed that there were no disparities in both
reports, and hence they were adopted. There was also a
breakdown of how taxes were paid after it attained a before tax
profit of 1.98 billion before tax.
The continued adherence to accounting standards set in
Germany and adoption of others established by the European

8. Union has been one of the primary drivers of the growth of
BMW Group, and there is a need for other countries to copy the
German model so that accounting standards can lead to the
production of global leaders.
References
BMW. (n.d.). BMW Group - English. Retrieved July 12, 2016,
from BMW Group: https://www.bmwgroup.com/en.html
Deloitte. (2008). International Financial Reporting Standards.
Retrieved July 12, 2016, from IAS Plus:
http://www.iasplus.com/en/binary/dttpubs/0901ifrsautomotive.p
df/view
German Tax Consultants. (n.d.). German tax consultants::
WW+KN:: VAT registration Germany:: company formation
Germany:: German tax return. Retrieved July 12, 2016, from
WW+KN German Tax Advisors: http://www.german-tax-
consultants.com/
Running head: GERMANY’S ACCOUNTING SYSTEM 1
GERMANY’S ACCOUNTING SYSTEM 5
Germany’s Accounting System

9. Author Note
An accounting system refers to the system that is used to
manage the income, expenses and other items related to the
financial aspects of business. The accounting system gives the
company a sense of control over all of its financial transactions
and is also used as a tool for generating the relevant financial,
statistical data to aid in the decision-making process (Leuz,
2003). The country of choice for this assignment is Germany. In
the following paper, I will address the accounting system that
Germany uses, about what most of the businesses in Germany
use as an accounting system.
Germany is Accounting System
The Germany accounting system is described as being one that
is conservative. Also, the country’s accounting system is
described to be based on law and tax codes. Being a member
state of the European Union (EU), Germany uses the
International Financial Reporting Standards – IFRS – as its
accounting system. The IFRS provides a robust framework
which the companies are required to use when they are
preparing their financial statements. Germany uses this kind of
an accounting system because it is the system that is broadly
adopted by the EU and also because for some other reasons.
Also, Germany also allows for the use of the U.S. Generally
Accepted Accounting Principles, (U.S. GAAP) as an alternative
accounting principle, though the IFRS is the primary system in
use.
How Accounting Standards Are Set
The main aim of an accounting system is to provide the

10. means by which, information about the financial aspect of a
system can be set.
For the longest time now, the accounting standards, under
the broader wing of the IFRS, has been set through the use of
meetings in which, all the interested individuals are welcome to
join. In this meetings, much is discussed on the way forward, as
pertains to the adoption of the IFRS in the country. Such
meetings are called the "due process." The meeting is also
known as the consultation process, and it involves people from
all across the world.
Influenced by cultural, economic and social factors, the
due process has six stages in which, various regulations are
discussed and set. The first stage is the setting of the agenda.
Here, the particular standard to be addressed is brought forward,
giving the participants enough time to conduct their research on
the subject matter. Secondly, the planning of the project is
done, followed by development and publishing of the discussion
paper and the public consultation. Then, the development and
publishing of the exposure draft, including the public meeting,
is conducted. Following this, the standard is developed and
published and finally, the procedures following the standards
are issued (Haller, 2004).
The economic, financial, cultural and political factors
affect how the different stages are conducted, and more so, the
public consultation. With the onset of technological
advancements, the stakeholders concerned with the creation of
IFRS standards are going to be made more efficient through
enhanced communication between the various parties, and a
bigger pool of free individuals to be reached out to for their
input.
Potential Impact of Ethical Issues on Stakeholders
In an instance when the company does not act according to
the laws of the country, there is a very high likelihood that the
stakeholders will be in for a colossal loss, both financially and
even socially. The IFRS allows for the efficient comparison
between a business and other similar companies which act as

11. competitors. Therefore, when a corporation does not conform to
the laws, it puts itself in a situation where it can be punished
directly by the country, or it will not receive apt comparison,
and therefore, it does not know how well or not it fairs when
compared to the other businesses. As such, the future of the
stakeholders is then not assured, and they can be thrown out of
business at any time.
In conclusion, the IFRS is an adamant accounting system, and
its adoption by Germany predisposes the country to enjoy the
benefits that the system has to offer. This accounting system
presents the country with the ability to creatively present its
financial elements, and therefore, gain more by the ease of
analysis that follows. Decision-making processes are also more
structured towards improving the failing parts of the business
and by giving a good angle through which the comparison with
the competitors is made, the country can move forward
efficiently.
References
Leuz, C., & Wüstemann, J. (2003). The role of accounting in the
German financial system.
Haller, A., & Eierle, B. (2004). The adaptation of German
accounting rules to IFRS: a legislative balancing
act. Accounting in Europe, 1(1), 27-50.