2 Cost of sales

Cost of sales includes interest expenses of €2,705 million (previous year: €2,270 million) attributable to the financial services business.

This item also includes impairment losses on intangible assets (primarily development costs), property, plant and equipment (primarily other equipment, operating and office equipment), and lease assets in the amount of €830 million (previous year: €1,165 million). The impairment losses totaling €295 million (previous year: €631 million) recognized during the reporting period on intangible assets and items of property, plant and equipment result in particular from lower values in use of various products in the Passenger Cars segment, from market and exchange rate risks, and in particular from expected declines in volumes. The impairment losses on lease assets in the amount of €535 million (previous year: €534 million) are predominantly attributable to the Financial Services segment. They are based on constantly updated internal and external information that is factored into the forecast residual values of the vehicles. Thereof, €25 million (previous year: €24 million) are reported in current lease assets.

Government grants related to income amounted to €657 million in the fiscal year (previous year: €466 million) and were generally allocated to the functional areas.