Chrysler 2004 Annual Report Download - page 116

FIAT GROUP
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Reserve for pensions and similar obligations
The reserve includes provisions for pensions and similar obligations determined on an actuarial basis, where applicable, and payable
to employees and former employees according to contractual agreements or by law, where applicable.
Income tax reserves
The Deferred income tax reserve at December 31, 2004 includes deferred tax liabilities, net of deferred tax assets, which have been
offset where possible by the individual companies. The Deferred income tax reserve, net of Deferred tax assets recorded under
Receivables (Note 5), is composed as follows:
(in millions of euros) At 12/31/2004 At 12/31/2003 Change
Deferred income tax reserve 197 211 (14)
Deferred tax assets (2,161) (1,879) (282)
Total (1,964) (1,668) (296)
The net change of 296 million euros compared to December 31, 2003 is mainly due to the recording of deferred tax assets (written
down in previous years as the conditions for recording them were not met), the recoverability of which became highly probable in
view of the change in the prospects of future earnings. In particular, due to the settlement paid to Fiat by General Motors in February
2005, deferred tax assets of 277 million euros relating to the benefit of tax loss carryforwards and temporary differences relating to
Fiat S.p.A. became reasonably certain of recovery.
The Deferred income tax reserve, net of Deferred tax assets recorded under Other receivables from others, can be analyzed as
follows:
(in millions of euros) At 12/31/2004 At 12/31/2003
Deferred tax liabilities for:
Accelerated depreciation 402 492
Deferred tax on gains 171 493
Capital investment grants 17 18
Other 694 684
Total Deferred tax liabilities 1,284 1,687
Deferred tax assets for:
Taxed reserves for risks and charges (1,076) (1,021)
Inventories (126) (126)
Taxed allowances for doubtful accounts (137) (86)
Pension funds (338) (289)
Adjustments to financial assets (1,717) (2,056)
Other (812) (680)
Total Deferred tax assets (4,206) (4,258)
Theoretical tax benefit connected to tax loss carryforwards (4,591) (4,313)
Adjustments for assets whose recoverability is not reasonably certain 5,549 5,216
Total Deferred income tax reserve, net of Deferred tax assets (1,964) (1,668)