Chrysler 2008 Annual Report Download - page 311

As part of such project, Fiat S.p.A., as the general contractor, engaged CAV.E.T. and CAV.TO.MI. for the engineering and
construction activities, retaining all work coordination, organisational and management activities. Contract work in progress
therefore reflects the fees earned by Fiat S.p.A. in the form of a percentage (roughly 3.6%) of the contractual amounts, for the
activities directly carried out. The work is paid through progress payments made by T.A.V. S.p.A. to Fiat S.p.A. based on the stage
of completion of the works and advance payments, which Fiat S.p.A. then pays over to CAV.E.T. and CAV.TO.MI. net of its
contractual percentage earned.
These amounts may be analysed by line as follows:
At At
(€ thousands) 31 December 2008 31 December 2007 Change
Contract work in progress 401,508 381,649 19,859
- Florence-Bologna line 150,597 140,212 10,385
- Turin-Novara line 181,915 181,463 452
- Novara-Milan line 68,996 59,974 9,022
Less: Progress payments for work completed 409,864 389,956 19,908
- Florence-Bologna line 152,832 143,156 9,676
- Turin-Novara line 181,991 181,775 216
- Novara-Milan line 75,041 65,025 10,016
Gross amount due to the customer 8,356 8,307 49
- Florence-Bologna line 2,235 2,944 (709)
- Turin-Novara line 76 312 (236)
- Novara-Milan line 6,045 5,051 994
Contract work in progress is measured on the basis of the stage of completion in relation to the sales price, which in this case is
the consideration contractually agreed for the activities directly carried out by Fiat S.p.A. Contract costs relating to the contract
revenue recognised totalled €133,819 thousand at 31 December 2008 (€126,267 thousand at 31 December 2007). Changes in
contract work in progress have been recognised in the income statement under the item Other operating income (see Note 4).
When the lines are contractually completed, the final contractual revenue for the activities directly carried out will be recognised in
the income statement under Other operating income, net of any decrease in inventories. At the same time the accounts for
inventories and amounts classified as advances will be closed.
Net advances relating to work completed may be analysed as follows:
Net advances for
Advances received from customers Advances paid to suppliers work completed
(€ thousands) At 31 December 2008 At 31 December 2007 At 31 December 2008 At 31 December 2007 At 31 December 2008 At 31 December 2007
Florence-Bologna line 4,684,585 4,240,523 4,531,753 4,097,367 152,832 143,156
Turin-Novara line 4,666,913 4,659,581 4.484,922 4,477,806 181,991 181,775
Novara-Milan line 2,061,138 1,767,093 1,986,097 1,702,068 75,041 65,025
Progress payments for work completed 11,412,636 10,667,197 11,002,772 10,277,241 409,864 389,956
Fiat S.p.A. Statutory Financial Statements at 31 December 2008310