Chrysler 2007 Annual Report Download - page 145

144 Fiat Group Consolidated Financial Statements at December 31, 2007 - Notes
The increase of 525 million euros in Receivables from financing activities is principally due to an increase of an overall amount of
512 million euros in the retail financing and dealer financing receivables arising in the financial services subsidiaries that continue
to be consolidated (in particular attributable to the increase in the financing given by CNH – Case New Holland financial services
companies), net of a decrease of 469 million euros arising from exchange rate differences (mainly connected with US dollars).
Receivables from jointly controlled financial services entities include financial receivables due to Fiat entities by the FAFS group.
Receivables from financing activities are shown net of an allowance for doubtful accounts determined on the basis of specific
insolvency risks. At December 31, 2007 the allowance amounts to 339 million euros (331 million euros at December 31, 2006).
Changes in the allowance accounts during the year are as follows:
At At
December 31, Use and December 31,
(in millions of euros) 2006 Provision other changes 2007
Allowance for receivables regarding:
- Retail financing 134 40 (38) 136
- Finance leases 78 19 (6) 91
- Dealer financing 54 6 (8) 52
- Supplier financing 11 – ( 2 ) 9
- Financial receivables from companies under joint control, associates
and unconsolidated subsidiaries ––––
- Other 54 – (3) 51
Total allowance on Receivables from financing activities 331 65 (57) 339
Finance lease receivables mainly relate to vehicles of Trucks and Commercial Vehicles and Agricultural and Construction equipment
Sectors leased out under finance lease arrangements. The interest rate implicit in the lease is determined at the commencement of
the lease for the whole lease term. The average interest rate implicit in total finance lease receivables vary depending on prevailing
market interest rates.
The item may be analysed as follows stated gross of an allowance of 91 million euros at December 31, 2007 (78 million euros at
December 31, 2006):
At December 31, 2007 At December 31, 2006
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
Receivables for future minimum lease payments 356 509 21 886 328 403 21 752
Less: unrealised interest income (46) (57) (2) (105) (42) (50) (2) (94)
Present value of future minimum lease payments 310 452 19 781 286 353 19 658
There are no contingent rents as finance lease recognised income during 2007 or 2006 and unguaranteed residual values at
December 31, 2007 and 2006 are not significant.