Chrysler 2005 Annual Report Download - page 101

100 Fiat Group Consolidated Financial Statements at D ecember 31, 2005 - N otes to the Consolidated Financial Statements
02 Fiat Group
Deferred tax assets, net of D eferred tax liabilities, can be analysed as follows:
Translation
At Recognised Changes in differences At
December in income Charged the scope of and other D ecember
(in millions of euros) 31, 2004 statement to equity consolidation changes 31, 2005
Deferred tax assets arising from:
Taxed provisions 1,057 261 – 13 65 1,396
Inventories 132 72 – 10 9 223
Taxed allowances for doubtful accounts 149 (7) – (2) 2 142
Employee benefits 630 (19) – (21) 85 675
W rite-downs of financial assets 1,660 (566) – (20) (1) 1,073
Measurement of derivative financial instruments 14 4 14 – (10) 22
O ther 998 (25) – – 126 1,099
Total Deferred tax assets 4,640 (280) 14 (20) 276 4,630
Deferred tax liabilities arising from:
Accelerated depreciation (405) (34) – (32) (62) (533)
Deferred tax on gains (171) 91 – – (3) (83)
Capital investment grants (24) (3) – – – (27)
Employee benefits (9) (4) – (11) – (24)
Capitalisation of development costs (692) (84) – – (46) (822)
O ther (872) (159) 9 78 (67) (1,011)
Total Deferred tax liabilities (2,173) (193) 9 35 (178) (2,500)
Theoretical tax benefit arising from tax loss carryforwards 4,591 469 – (182) 133 5,011
Adjustments for assets whose recoverability is not probable (5,178) (421) – 244 (87) (5,442)
Total Deferred tax assets, net of Deferred tax liabilities 1,880 (425)23 77 144 1,699
The decision to recognise deferred tax assets is taken by each company in the Group by assessing critically whether the conditions exist for
the future recoverability of such assets on the basis of updated strategic plans, accompanied by the related tax plans. For this reason, the total
theoretical future tax benefits deriving from deductible temporary differences (4,630 million euros at December 31, 2005 and 4,640 million
euros at D ecember 31, 2004) and tax loss carryforwards (5,011 million euros at December 31, 2005 and 4,591 million euros at December 31,
2004) have been reduced by a total of 5,442 million euros at D ecember 31, 2005 and 5,178 million euros at December 31, 2004.
In particular, Deferred tax assets, net of Deferred tax liabilities, include 965 million euros at D ecember 31, 2005 (1,208 million euros at
December 31, 2004) of tax benefits arising from tax loss carryforwards.At December 31, 2005, a further tax amount of 4,046 million euros
(3,383 million euros at D ecember 31, 2004) arising from tax loss carryforwards has not been recognised.
Deferred taxes have not been provided on the undistributed earnings of subsidiaries since the Group is able to control the timing of the
distribution of these reserves and it is probable that they will not be distributed in the foreseeable future.