Chrysler 2007 Annual Report Download - page 125

124 Fiat Group Consolidated Financial Statements at December 31, 2007 - Notes
The increase in net deferred tax assets, as analysed in the following table, is mainly due to:
■the recognition of deferred tax assets of 114 million euros, net of the realisation of deferred tax assets net of the release to
income of deferred tax liabilities recognised in prior years; in particular, the reduction of the tax rates applied in the calculation of
deferred tax balances at December 31, 2007 in certain countries, including Italy, led to a significant reduction in the theoretical
deferred tax benefit deriving from unused tax losses and in the deferred tax assets and liabilities arising from temporary
differences (approximately 750 million euros). However since the total future theoretical tax benefits arising from temporary
differences (3,824 million euros at December 31, 2006) and tax losses (5,701 million euros at December 31, 2006) had been written
down considerably over time, by 5,372 million euros, applying the new rates led to a corresponding reduction in this write-down
without therefore having any significant effect on the net result;
■the corresponding tax effect of items recorded directly in equity amounting to 2 million euros;
■changes in the scope of consolidation due to the acquisition of I.T.C.A. group, Teksid Aluminum S.r.l. and of the After Market
Parts & Services business, for an amount of 11 million euros;
■negative exchange differences and other changes amounting to 25 million euros;
Deferred tax assets and deferred tax liabilities may be analysed by source as follows:
Translation
At Recognised Changes in differences At
December 31, in Income Charged the scope of and other December 31,
(in millions of euros) 2006 statement to equity consolidation changes 2007
Deferred tax assets arising from:
- Taxed provisions 1,489 (1) – 4 (3) 1,489
- Inventories 220 (36) – 2 (3) 183
- Taxed allowances for doubtful accounts 172 (11) – 2 (1) 162
- Employee benefits 611 (54) – – (56) 501
- Write-downs of financial assets 466 (299) – – (2) 165
- Measurement of derivative financial instruments 120 38 (5) – (12) 141
- Other 746 (149) – – (9) 588
Total Deferred tax assets 3,824 (512) (5) 8 (86) 3,229
Deferred tax liabilities arising from:
- Accelerated depreciation (488) (171) – (4) 5 (658)
- Deferred tax on gains on disposal (14) 6 – – – (8)
- Capital investment grants (17) 4 – – – (13)
- Employee benefits (31) 4 – – – (27)
- Capitalisation of development costs (906) 82 – – 2 (822)
- Other (1,100) 400 15 (8) 51 (642)
Total Deferred tax liabilities (2,556) 325 15 (12) 58 (2,170)
Theoretical tax benefit arising from tax loss carryforwards 5,701 (1,167) – 41 (144) 4,431
Adjustments for assets whose recoverability is not probable (5,372) 1,468 (8) (26) 147 (3,791)
Total Deferred tax assets, net of Deferred tax liabilities 1,597 114 2 11 (25) 1,699