Chrysler 2008 Annual Report Download - page 110

Fiat Group Consolidated Financial Statements at 31 December 2008 109
lend funds both to industrial Group companies and to financial
services companies as the need arises. This financial service
structure within the Group means that any attempt to separate
current and non-current debt in the Consolidated balance sheet
cannot be meaningful. Suitable disclosure on the due dates
of liabilities is moreover provided in the notes.
The Cash Flow Statement is presented using the indirect
method.
In connection with the requirements of the Consob Resolution
No. 15519 of 27 July 2006 as to the format of the financial
statements, specific supplementary Income Statement, Balance
Sheet and Consolidated Cash Flow Statement formats have
been added for related party transactions so as not to
compromise an overall reading of the statements.
Basis of consolidation
Subsidiaries
Subsidiaries are enterprises controlled by the Group, as
defined in IAS 27 –
Consolidated and Separate Financial
Statements
. Control exists when the Group has the power,
directly or indirectly, to govern the financial and operating
policies of an enterprise so as to obtain benefits from its
activities. The financial statements of subsidiaries are included
in the Consolidated financial statements from the date that
control commences until the date that control ceases. The
equity and net profit or loss attributable to minority interests
are shown separately in the Consolidated balance sheet and
income statement, respectively. When losses in a consolidated
subsidiary pertaining to the minority exceed the minority
interest in the subsidiary’s equity, the excess is charged against
the Group’s interest, unless the minority shareholders have
a binding obligation to reimburse the losses and are able to
make an additional investment to cover the losses, in which
case the excess is recorded as an asset in the Consolidated
financial statements. If no such obligation exists, should profits
be realised in the future, the minority interests’ share of those
profits is attributed to the Group, up to the amount necessary
to recover the losses previously absorbed by the Group.
Subsidiaries that are either dormant or generate a negligible
volume of business, are not consolidated. Their impact on the
Group’s assets, liabilities, financial position and earnings
is immaterial.
Jointly controlled entities
Jointly controlled entities are enterprises over whose activities
the Group has joint control, as defined in IAS 31 –
Interests in
Joint Ventures
. The Consolidated financial statements include
the Group’s share of the earnings of jointly controlled entities
using the equity method, from the date that joint control
commences until the date that joint control ceases.
Associates
Associates are enterprises over which the Group has
significant influence, but no control or joint control, over the
financial and operating policies, as defined in IAS 28 –
Investments in Associates . The Consolidated financial
statements include the Group’s share of the earnings of
associates using the equity method, from the date that
significant influence commences until the date that significant
influence ceases. When the Group’s share of losses of an
associate, if any, exceeds the carrying amount of the associate
in the Group’s balance sheet, the carrying amount is reduced
to nil and recognition of further losses is discontinued except
to the extent that the Group has incurred obligations in
respect of the associate.
Investments in other companies
Investments in other companies that are available-for-sale
financial assets are measured at fair value, when this can be
reliably determined. Gains or losses arising from changes in
fair value are recognised directly in equity until the assets are
sold or are impaired, when the cumulative gains and losses
previously recognised in equity are recognised in the income
statement of the period.
Investments in other companies for which fair value is not
available are stated at cost less any impairment losses.
Dividends received from these investments are included in
Other income (expenses) from investments.