Chrysler 2006 Annual Report Download - page 70

IN 2005 the column Change in the scope of consolidation included the effect resulting from consolidating Leasys S.p.A. on a line-
by-line basis.
At December 31, 2006, minimum lease payments from non-cancellable operating leases amount to 192 million euros (420 million
euros at December 31, 2005) and fall due as follows:
(in millions of euros) At December 31, 2006 At December 31, 2005
Within one year 81 215
Between one and five years 107 200
Beyond five years 45
Total Minimum lease payments 192 420
18. Inventories
(in millions of euros) At December 31, 2006 At December 31, 2005
Raw materials, supplies and finished goods 8,240 7,499
Work in progress 2,493 2,550
Advances on contract work (2,286) (2,168)
Total Inventories 8,447 7,881
At December 31, 2006, inventories include assets sold with a buy-back commitment by Fiat Auto for 894 million euros (748 million
euros at December 31, 2005). Net of this amount, inventories show an increase of 420 million euros in 2006, due primarily to an
increase in the level of activities of Fiat Auto.
At December 31, 2006, Inventories include inventories measured at their net realisable value (estimated selling price less the
estimated costs of completion and the estimated costs necessary to make the sale) amounting to 1,677 million euros (1,614 million
euros at December 31, 2005).
The amount of inventory write-downs recognised as an expense during 2006 is 386 million euros (251 million euros in 2005).
Amounts recognised as income from the reversal of write-downs on items sold during the year were not significant.
At December 31, 2005, the carrying amount of inventories pledged as security for loans to the Group was 463 million euros,
the loans were repaid in 2006. There were no inventories pledged as security at December 31, 2006.
The majority of Work in progress and Advances on contract work relates to the Production Systems Sector and can be analysed
as follows:
(in millions of euros) At December 31, 2006 At December 31, 2005
Gross amount due from customers for contract work as an asset 308 469
Less: Gross amount due to customers for contract work as a liability (101) (87)
Work in progress, net of advances on contract work 207 382
Aggregate amount of costs incurred and recognised profits (less recognised losses) to date 2,493 2,550
Less: Progress billings (2,286) (2,168)
Work in progress, net of advances on contract work 207 382
Fiat Group Consolidated Financial Statements at December 31, 2006 -Notes 137
At December 31, 2006, the amount of retentions by customers on contract work in progress was not significant (9 million euros at
December 31, 2005).
19. Current receivables
The composition of the caption and the analysis by due date is as follows:
At December 31, 2006 At December 31, 2005
due between due between
due within one and due beyond due within one and due beyond
(in millions of euros) one year five years five years Total one year five years five years Total
Trade receivables 4,843 70 31 4,944 4,871 66 32 4,969
Receivables from financing activities 7,065 4,469 209 11,743 10,796 5,007 170 15,973
Other receivables 2,303 397 139 2,839 2,600 292 192 3,084
Total Current receivables 14,211 4,936 379 19,526 18,267 5,365 394 24,026
At December 31, 2006, Current receivables include receivables sold and financed through both securitisation and factoring
transactions of 7,717 millions of euros (10,123 millions of euros at December 31, 2005) which do not meet IAS 39 derecognition
requirements. These receivables are recognised as such in the Group financial statements even though they have been legally
sold; a corresponding financial liability is recorded in the consolidated balance sheet as Asset-backed financing (see Note 28).
Trade receivables
Trade receivables are shown net of allowances for doubtful accounts of 514 million euros at December 31, 2006 (524 million euros
at December 31, 2005), determined on the basis of historical losses on receivables. Movements in the allowance accounts during
the year are as follows:
At Change in the At
December 31, Use and other scope of December 31,
(in millions of euros) 2005 Provision changes consolidation 2006
Allowances for doubtful accounts 524 116 (108) (18) 514
The carrying amount of Trade receivables is considered in line with their fair value at the date.
At December 31, 2006, trade receivables of 42 million euros were pledged as security for loans obtained (153 million euros at
December 31, 2005).
Fiat Group Consolidated Financial Statements at December 31, 2006 -Notes 136