Annual Report 2012 - Knorr-Bremse AG.

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Notes to the Consolidated Financial Statements
During fiscal year 2012 the Group founded the following companies, which are included in consolidation:
Knorr-Bremse Pensionsgesellschaft mbH, Munich/Germany
Knorr-Bremse Systeme für Nutzfahrzeuge Pensionsgesellschaft mbH, Munich/Germany
Knorr-Bremse Technology Center India Private Limited, Pune/India
The following company has been renamed:
Knorr-Bremse Railway Technologies (Shanghai) Co., Ltd., Shanghai/China
(formerly Merak Railway Technologies (Shanghai) Co., Ltd., Shanghai/China)
The following companies have been merged or sold:
Gorilla Brake & Components, Inc., Brantford, Ontario/Canada
ITERIS Europe GmbH, Bietigheim-Bissingen/Germany
Stahlwerk Volmarstein GmbH, Wetter (Ruhr)/Germany
This means that compared to the previous year, the number of companies included in consolidation
has increased by one German company and one foreign company. On the following pages, a detailed
list of affiliated and associated companies appears in a separate breakdown of the Group’s shareholdings.
The above-mentioned changes in the scope of consolidation had no significant impact on the
Group’s net assets, financial position and operating results. The newly consolidated companies did
not bring about any change in the balance sheet total.
Principles of consolidation
Until December 31, 2009, the book value method was used to consolidate investments in subsidiaries.
This entailed offsetting book values against the value of our interests in the shareholders’ equity
of the subsidiaries at the time of the initial consolidation. Companies were included in consolidation
at the date of acquisition or at the balance sheet date. Since fiscal year 2010, investments in subsidiaries
have been consolidated using the revaluation method. This entails reporting shareholders’ equity
at the value corresponding to the market value of the assets and borrowings to be included in
the consolidated financial statements. Companies are included in consolidation at the date of acquisition.
Since 2002, any resulting goodwill has been capitalized in compliance with GAS standards.
Scheduled amortization is applied on the basis of operational considerations relating to useful life;
within the Group, this may not exceed 20 years. The useful life of goodwill is determined using the
subsidiaries’ longer-term, strategic business models.
Wherever possible, a negative goodwill resulting from the consolidation in investments is released for
the year in which it arises, as permitted by German commercial law and accounting standards.
Associated companies are consolidated using the equity method, with goodwill generally included
as part of the cost of acquiring interests in associated and related companies. Associated companies
acquired prior to January 2010 were consolidated at the date of acquisition or the balance sheet date.
As from fiscal year 2010, companies are included in consolidation at the date of acquisition.