Chrysler 2008 Annual Report Download - page 261

Fiat S.p.A. Statutory Financial Statements at 31 December 2008260
financial services companies as the need arises.
Given the distribution of the financial services within the Group
any distinction between current and non-current financial
liabilities in the consolidated Balance Sheet would not be
meaningful. There is no impact, however, on the presentation of
liabilities for Fiat S.p.A.
The Cash Flow Statement is presented using the indirect
method.
In connection with the requirements of Consob Resolution
15519 of 27 July 2006 as to the format of the financial
statements, specific supplementary Income Statement, Balance
Sheet and Consolidated Statement of Cash Flows formats have
been added for related party transactions so as not to
compromise an overall reading of the statements.
Intangible assets
Purchased or internally-generated intangible assets are
recognised as assets in accordance with IAS 38 –
Intangible
Assets
, where it is probable that the use of the asset will
generate future economic benefits and where the costs of the
asset can be determined reliably.
Intangible assets with finite useful lives are measured at
purchase or manufacturing cost, net of amortisation charged
on a straight-line basis over their estimated useful lives and of
any impairment losses.
Property, plant and equipment
Cost
Property, plant and equipment are stated at acquisition or
production cost, net of accumulated depreciation and any
impairment losses, and are not revalued.
Subsequent expenditures are capitalised only if they increase
the future economic benefits embodied in that asset. All other
expenditures are expensed as incurred.
The assets are depreciated by the method and at the rates
indicated below.
Leases where the lessor retains substantially all the risks and
rewards of ownership of the assets are classified as operating
leases. Operating lease expenditures are expensed on a
straight-line basis over the lease terms.
Depreciation
Depreciation is calculated on a straight-line basis over the
estimated useful life of an asset as follows:
Annual depreciation rate
Buildings 3%
Plant 10%
Furniture 12%
Fixtures 20%
Vehicles 25%
Land is not depreciated.
Impairment of assets
The Company reviews, at least annually, the recoverability of
the carrying amount of intangible assets, tangible assets and
investments in subsidiaries and associate companies, in order
to determine whether there is any indication that those assets
have suffered an impairment loss. If indications of impairment
are present, the carrying amount of the asset is reduced to its
recoverable amount.
The recoverable amount of an asset is the higher of fair value
less disposal costs and its value in use.
In particular, in assessing whether investments in subsidiaries
and associate companies are impaired, as their market value
(fair value less costs to sell) cannot be reliably measured, the
recoverable amount is considered to be their value in use,
which is determined by estimating the present value of the
estimated future cash flows based on expected profit or loss
and a theoretical ultimate disposal, in line with the
requirements of paragraph 33 of IAS 28.
Where an impairment loss for assets subsequently no longer
exists or has decreased the carrying amount of the asset is
increased to the revised estimate of its recoverable amount,
but not in excess of the carrying amount that would have been
recorded had no impairment loss been recognised. A reversal
of an impairment loss is recognised in the income statement
immediately.