Chrysler 2005 Annual Report Download - page 82

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Fiat Group Consolidated Financial Statements at December 31, 2005 - N otes to the Consolidated Financial Statements
portfolios of financial services companies are included in current
assets, as the investments will be realised in their normal operating
cycle. Financial services companies, though, obtain funds only partially
from the market:the remaining are obtained from Fiat S.p.A. through
the Group’s treasury companies (included in industrial companies),
which lend funds both to industrial Group companies and to financial
services companies as the need arises.This financial service structure
within the Group means that any attempt to separate current and
non-current debt in the consolidated balance sheet cannot be
meaningful. Suitable disclosure on the due dates of liabilities is
moreover provided in the notes.
Basis of consolidation
Subsidiaries
Subsidiaries are enterprises controlled by the Group, as defined
in IAS 27 - Consolidated and Separate Financial Statements.
Control exists when the Group has the power, directly or indirectly,
to govern the financial and operating policies of an enterprise so as
to obtain benefits from its activities.The financial statements of
subsidiaries are included in the consolidated financial statements from
the date that control commences until the date that control ceases.
The equity and net result attributable to minority stockholders’
interests are shown separately in the consolidated balance sheet
and income statement, respectively.W hen losses in a consolidated
subsidiary pertaining to the minority exceed the minority interest
in the subsidiary’s equity, the excess is charged against the Group’s
interest, unless the minority stockholders have a binding obligation to
reimburse the losses and are able to make an additional investment
to cover the losses, in which case the excess is recorded as an asset
in the consolidated financial statements. If no such obligation exists,
should profits be realised in the future, the minority interests’ share of
those profits is attributed to the Group, up to the amount necessary
to recover the losses previously absorbed by the Group.
Subsidiaries either dormant or generating a negligible volume
of business are not included in the consolidated financial statements.
Their influence on the Group’s assets, liabilities, financial position and
earnings is immaterial.
Jointly controlled entities
Jointly controlled entities are enterprises over whose activities the
Group has joint control, as defined in IAS 31 - Interests in Joint
Ventures.The consolidated financial statements include the Group’s
share of the earnings of jointly controlled entities using the equity
method, from the date that joint control commences until the date
that joint control ceases.
Associates
Associates are enterprises over which the Group has
significant influence, but no control or joint control, over the
financial and operating policies, as defined in IAS 28 - Investments
in Associates.The consolidated financial statements include
the Group’s share of the earnings of associates using the equity
method, from the date that significant influence commences
until the date that significant influence ceases.W hen the Group’s
share of losses of an associate, if any, exceeds the carrying
amount of the associate in the Group’s balance sheet, the
carrying amount is reduced to nil and recognition of further
losses is discontinued except to the extent that the Group
has incurred obligations in respect of the associate.
Investments in other companies
Equity investments in other companies that are available-for-
sale financial assets are measured at fair value, when this can be
reliably determined. Gains or losses arising from changes in fair
value are recognised directly in equity until the assets are sold or
are impaired, when the cumulative gains and losses previously
recognised in equity are recognised in the income statement
of the period.
Investments in other companies for which fair value is not available
are stated at cost less any impairment losses.
Dividends received from these investments are included in Result
from equity investments.
Transactions eliminated on consolidation
All significant intragroup balances and transactions and any
unrealised gains and losses arising from intragroup transactions, are
eliminated in preparing the consolidated financial statements.
Unrealised gains and losses arising from transactions with associates
and jointly controlled entities are eliminated to the extent of the
Group’s interest in those entities.