Chrysler 2007 Annual Report Download - page 259

Fiat S.p.A. Financial Statements at December 31, 2007 - Notes to the Financial Statements258
differ from those estimates. Estimates are used in accounting
for depreciation and amortisation, impairment losses and
reversals of impairment losses on investments, the margins
earned on construction contracts, employee benefits, taxes and
provisions. Estimates and assumptions are reviewed
periodically and the effects of any changes are recognised in
the period in which the estimate is revised if the revision affects
only that period, or in the period of the revision and future
periods if the revision affects both current and future periods.
Accounting principles, amendments and
interpretations adopted from January 1, 2007
On November 2, 2006, the IFRIC issued IFRIC Interpretation 11 –
IFRS 2-Group and Treasury Share Transactions in order to
address the accounting treatment of share-based payment
arrangements under which an entity chooses or is required to
buy treasury stock to satisfy its obligations and those under
which the employees of a Group company are granted rights to
the shares of another (such as the parent company). Fiat S.p.A.
started applying this interpretation to the new stock option
plan for which rights were granted in November 2006. The
effects arising on the adoption of this interpretation are
discussed in Note 5 and Note 11.
In August 2005, the IASB issued IFRS 7 –
Financial Instruments:
Disclosures
and a complementary amendment to
IAS 1 -
Presentation of Financial Statements – Capital Disclosures ,
which became effective January 1, 2007. IFRS 7 requires
disclosures about the significance of financial instruments for an
entity’s financial position and performance and was early adopted
by the Group for the annual period beginning January 1, 2005.
The amendment to IAS 1 introduces requirements for disclosures
about an entity’s capital, without any effect on classification or
measurement of capital items. The Group adopted this
amendment for the annual period beginning January 1, 2007.
Interpretations effective from January 1, 2007
but not applicable to the Company
The following interpretations, effective for the annual period
beginning January 1, 2007, relate to matters that are not
applicable to the Company.
■IFRIC 7 – Applying the Restatement approach under
IAS 29 - Financial reporting in Hyperinflationary economies
;
■IFRIC 8 – Scope of IFRS 2 ;
■IFRIC 9 – Reassessment of Embedded Derivatives .
Accounting principles, amendments
and interpretations not applicable and not early
adopted by the Company
On March 29, 2007 the IASB issued a revised version of
IAS 23 -
Borrowing costs . The standard shall be applied for
annual periods beginning after 1 January, 2009. The main
change from the previous version is the removal of the option
of immediately recognising as an expense borrowing costs that
relate to assets that take a substantial period of time to get
ready for use or sale. The standard shall be applied to borrowing
costs relating to qualifying assets for which the commencement
date for capitalisation is on or after January 1, 2009. At the
date of this report this document has not yet been endorsed by
the European Union.
On July 5, 2007 IFRIC issued the interpretation IFRIC 14 – IAS 19 -
The Limit on a Defined Benefit Asset, Minimum Funding
Requirements and their Interaction
. The interpretation is
mandatory from January 1, 2008. The interpretation provides
general guidance on how to assess the limit in IAS 19
Employee Benefits on the amount of the surplus that can be
recognised as an asset. It also explains how the pension asset
or liability may be affected when there is a statutory or
contractual minimum funding requirement. At the balance
sheet date, this interpretation had not yet been endorsed by
the European Union.
On September 6, 2007 the IASB issued a revised version of
IAS 1 -
Presentation of Financial Statements that is effective for
annual periods beginning on or after 1 January 2009. The
revised standard requires an entity to present changes in its
equity resulting from transactions with owners in a statement of
changes in equity. All non-owner changes (meaning changes in
comprehensive income) are required to be presented either in a
single statement of comprehensive income or in two statements
(a separate income statement and a statement of comprehensive
income). Transactions with non-owners may not be presented in
the statement of changes in equity. This standard had not yet
been endorsed by the European Union at the balance sheet date.
The following standards and interpretations have also been
issued, but are not applicable to the Company: