Chrysler 2005 Annual Report Download - page 149

148 Appendix 1 Transition to International Financial Reporting Standards (IFRS)
02 Fiat Group
Following the coming into force of European Regulation N o. 1606
dated July 19, 2002, starting from January 1, 2005, the Fiat Group
adopted International Financial Reporting Standards (IFRS) issued by
the International Accounting Standards Board (“IASB”).This Appendix
provides the IFRS reconciliations of balance sheet data as of January
1 and D ecember 31, 2004, and of income statement data for the
year ended D ecember 31, 2004 as required by IFRS 1 – First-time
Adoption of IFRS, together with the related explanatory notes.
This information has been prepared as part of the Group’s
conversion to IFRS and in connection with the preparation of its
2005 consolidated financial statements in accordance with IFRS, as
adopted by the European Union.
RECON CILIATIO N S REQ UIRED BY IFRS 1
As required by IFRS 1, this note describes the polices adopted in
preparing the IFRS opening consolidated balance sheet at January 1,
2004, the main differences in relation to Italian GAAP used to
prepare the consolidated financial statements until December 31,
2004, as well as the consequent reconciliations between the figures
already published, prepared in accordance with Italian GAAP, and the
corresponding figures remeasured in accordance with IFRS.
The 2004 restated IFRS consolidated balance sheet and income
statement have been prepared in accordance with IFRS 1 – First-time
Adoption of IFRS. In particular, the IFRS applicable from January 1,
2005, as published as of D ecember 31, 2004, have been adopted,
including the following:
IAS 39 – Financial Instruments: Recognition and M easurement in
its entirety. In particular, the Group adopted derecognition
requirements retrospectively from the date on which financial assets
and financial liabilities had been derecognized under Italian GAAP.
IFRS 2 – Share-based Payment, which was published by the IASB on
February 19, 2004 and adopted by the European Commission on
February 7, 2005.
FIRST-TIME ADO PTION O F IFRS
General principle
The Group applied the accounting standards in force at D ecember
31, 2004 retrospectively to all periods presented, and to the opening
balance sheet except for certain exemptions adopted by the Group
in accordance with IFRS 1, as described in the following paragraph.
The opening balance sheet at January 1, 2004 reflects the
following differences as compared to the consolidated balance sheet
prepared at December 31, 2003 in accordance with Italian GAAP:
all assets and liabilities qualifying for recognition under IFRS,
including assets and liabilities that were not recognized under
Italian GAAP, have been recognized and measured in accordance
with IFRS;
all assets and liabilities recognized under Italian GAAP that do not
qualify for recognition under IFRS have been eliminated;
certain balance sheet items have been reclassified in accordance
with IFRS.
The impact of these adjustments is recognised directly in opening
equity at the date of transition to IFRS (January 1, 2004).
Optional exemptions adopted by the Group
Business combinations:The Group elected not to apply IFRS 3 -
Business Combinations retrospectively to the business combinations
that occurred before the date of transition to IFRS.
Employee benefits:The Group elected to recognise all cumulative
actuarial gains and losses that existed at January 1, 2004, even though it
decided to use the corridor approach for later actuarial gains and losses.
Cumulative translation differences:The cumulative translation
differences arising from the consolidation of foreign operations have
been set at nil as at January 1, 2004;gains or losses on subsequent
disposal of any foreign operation shall only include accumulated
translation differences after January 1, 2004.