Chrysler 2007 Annual Report Download - page 264

IAS 28 (paragraph 33). In calculating this value in use, the forecast included in the business plans of the individual Group Sectors
are taken into consideration, as attributed to the investments, and increased by their terminal value, adjusted to take into account
the risks and uncertainties inherent in the assumptions on which these plans are based. These results and the terminal value are
then discounted to present value by applying a rate that is representative of the cost of equity, which varies between 11% and 15%
(between 11% and 16% in 2006) depending on the characteristics of the Sector under consideration.
With reference to the investment in Fiat Partecipazioni S.p.A., the historical cost was impaired in previous years until 2005 mainly
as a result of the losses incurred by Fiat Group Automobiles S.p.A. (at the time named Fiat Auto S.p.A.) which is held as an
investment by Fiat Partecipazioni S.p.A. The residual part of the accumulated impairment loss which were available for reversal
amounted to 4,015,000 thousand euros at December 31, 2006. Given the results achieved and the confirmed positive outlook for
the coming years, taking into consideration the above-mentioned adjustments, at December 31, 2007 the value in use of the
investment in Fiat Group Automobiles S.p.A. was estimated at 4.7 billion euros, which was then compared with the corresponding
figure at December 31, 2006 of approximately 3.3 billion euros. The difference of approximately 1.4 billion euros, taken together
with the operating cash flows generated during the year by Fiat Partecipazioni S.p.A. and net of the dividend distributed to
Fiat S.p.A. in 2007, gave rise to a reversal of a total amount of 1,308,000 thousand euros of the previous impairment losses.
The residual part of the accumulated impairment loss recognised in prior years which is available for reversal in future years
amounts to 2,707,000 thousand euros at December 31, 2007, as reported in Note 11.
Considerations similar to those for Fiat Group Automobiles S.p.A. in 2007 were made in 2006 with regard to the investments in
Iveco S.p.A. and Fiat Netherlands Holding N.V. (and the investment of the latter company in CNH Global N.V.) and, as a result,
historic cost was fully reinstated and the impairment losses recognised in previous years for those investments were reversed.
The write-down of the investment in Comau S.p.A. has been determined using the same method.
3. Gains (losses) on the disposal of investments
Net gains amount to 118,471 thousand euros in 2007, representing an increase of 118,046 thousand euros compared to 2006 and
relate, for 118,462 thousand euros, to the gain realised on the sale of the Company’s 1.83% investment in Mediobanca S.p.A. in
September 2007, as discussed further in Note 11.
Net gains of 425 thousand euros in 2006 were realised from the sale of minor investments within the Group.
4. Other operating income
Other operating income can be analysed as follows:
(in thousands of euros) 2007 2006
Revenues from services rendered to Group companies 67,855 29,513
Changes in construction contract work in progress 28,770 44,376
Other revenues and income from Group companies 3,616 3,687
Other revenues and income from third parties 20,081 1,662
Total Other operating income 120,322 79,238
Fiat S.p.A. Financial Statements at December 31, 2007 - Notes to the Financial Statements 263