Chrysler 2008 Annual Report Download - page 260

Notes to the Statutory
Financial Statements
Fiat S.p.A. Statutory Financial Statements at 31 December 2008 259
Principal activities
Fiat S.p.A. (the “Company”) is a corporation organised under
the laws of the Republic of Italy and is the Parent Company of
the Fiat Group, holding interests, either directly or indirectly
through sub-holdings, in the parent companies of business
Sectors through which the Fiat Group operates.
The head office of the company is in Turin, Italy.
The financial statements of Fiat S.p.A. are prepared in euros
which is the company’s functional currency.
The Balance Sheet and Income Statement are presented in
euros, while the Cash Flow Statement, the Statement of
Changes in Equity, the Statement of Total Recognised Income
and Expense and amounts provided in the Notes are in
thousands of euros, unless otherwise stated.
As the Parent Company, Fiat S.p.A. has also prepared
consolidated financial statements for the Fiat Group for the
year ended 31 December 2008.
Significant accounting policies
Basis of preparation
These 2008 financial statements are the separate financial
statements of the Parent Company, Fiat S.p.A., and have been
prepared in accordance with the International Financial
Reporting Standards (“IFRS”) issued by the International
Accounting Standards Board (“IASB”) and adopted by the
European Union, and with provisions implementing Article 9 of
Legislative Decree 38/2005. The designation “IFRS” also
includes all valid International Accounting Standards (“IAS”),
as well as all interpretations of the International Financial
Reporting Interpretations Committee (“IFRIC”), formerly the
Standing Interpretations Committee (“SIC”).
In compliance with European Regulation 1606 of 19 July 2002,
beginning in 2005 the Fiat Group adopted the International
Financial Reporting Standards (“IFRS”), issued by the
International Accounting Standards Board (“IASB”), for the
preparation of its consolidated financial statements. On the
basis of national legislation implementing that Regulation,
those accounting standards were also used to prepare the
separate financial statements of the Parent Company, Fiat
S.p.A., for the first time for the year ended 31 December 2006.
The information required by IFRS 1:
First-time Adoption of
International Financial Reporting Standards
relating to the
effects of the transition to IFRS was provided in an Appendix to
the 2006 separate financial statements.
The financial statements have been prepared under the historic
cost convention, modified as required for the valuation of
certain financial instruments.
The financial statements are prepared under the historical cost
convention, modified as required for the valuation of certain
financial instruments, as well as on the going concern
assumption. In this respect, despite operating in a difficult
economic and financial environment, Fiat’s assessment is that
no material uncertainties (as defined in paragraph 25 of IAS 1)
exist about its ability to continue as a going concern, in view
also of the measures already identified to adapt to the changed
levels of demand and Fiat Group’s industrial and financial
flexibility.
Format of the financial statements
Presentation of Fiat S.p.A.’s Income Statement is based on the
nature of its revenues and expenses, given the specific
activities carried out. Fiat Group’s consolidated Income
Statement is classified according to function, which is
considered more representative of the format used for
management of the business sectors and internal reporting
purposes and is in line with international practice in the
automotive sector. For the Balance Sheet, Fiat S.p.A. has
elected the ‘current and non-current’ classification for the
presentation of assets and liabilities. A mixed presentation has
been selected for the presentation of the Consolidated Balance
Sheet, as permitted under IAS 1, with assets only being
classified between current and non-current. This election has
been made in view of the fact that the consolidated balance
sheet includes both industrial companies and financial services
companies. The investment portfolios of financial services are
included in current assets in the consolidated balance sheet, as
the investments will be realised in their normal operating cycle.
Financial services companies, though, obtain funds only
partially from the market: the remaining are obtained from the
Group’s treasury companies (included in industrial companies),
which lend funds both to industrial Group companies and to