2. Cost of sales

Cost of sales includes interest expenses of €10,485 million (previous year: €7,968 million) attributable to the financial services business.

This item also includes impairment losses on intangible assets (primarily development costs), property, plant and equipment (primarily technical equipment and machinery, and land and buildings), and lease assets in the amount of €1,887 million (previous year: €1,335 million). The impairment losses totaling €914 million (previous year: €388 million) recognized during the reporting period on intangible assets and items of property, plant and equipment result primarily from lower values in use of various products in the Passenger Cars and Light Commercial Vehicles segment, due to market and exchange rate risks, and in particular from expected declines in volumes. The impairment losses on lease assets in the amount of €974 million (previous year: €947 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. €194 million (previous year: €138 million) of this figure is reported in current lease assets.

Government grants related to income amounted to €324 million in the fiscal year (previous year: €292 million) and were generally allocated to the functional areas.