Chrysler 2009 Annual Report Download - page 132

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PRINCIPAL ACTIVITIES
Fiat S.p.A. is a corporation organised under the laws of the Republic of Italy. Fiat S.p.A. and its subsidiaries (the “Group”)
operate in approximately 50 countries. The Group is engaged principally in the manufacture and sale of automobiles, agricultural
and construction equipment and commercial vehicles. It also manufactures other products and systems, principally engines,
transmission systems, automotive-related components, metallurgical products and production systems. In addition, it is
involved in certain other sectors, including publishing and communications, which represent a small portion of its activities. The
head office of the Group is located in Turin, Italy.
The consolidated financial statements are presented in euros, that is the currency of the primary economic environment in which
the Group operates.
SIGNIFICANT ACCOUNTING POLICIES
Basis of preparation
The 2009 consolidated financial statements have been prepared in accordance with the International Financial Reporting
Standards (the “IFRS”) issued by the International Accounting Standards Board (“IASB”) and adopted by the European Union,
and with the provisions implementing article 9 of Legislative Decree no. 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”).
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, the Group’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 undertaken by the Group to adapt to the changed
levels of demand and the Group’s industrial and financial flexibility.
Format of the financial statements
The Group presents an income statement using a classification based on the function of expenses (otherwise known as the “cost of
sales” method), rather than based on their nature, as this is believed to provide information that is more relevant. The format selected
is that used for managing the business and for management reporting purposes and is consistent with international practice in
the automotive sector. In this income statement, in which the classification of expenses is based on their function, the Trading
profit/(loss) is reported specifically as part of Operating profit/(loss) and separate from the income and expense resulting from the
non-recurring operations of the business, such as Gains (losses) on the sale of investments, Restructuring costs and any Other
income (expenses) defined as unusual and of a similar nature to these items. By doing this, it is believed that the Group’s actual
performance from normal trading operations may be measured in a better way, while disclosing specific details of unusual income
and expenses. Consequently, the definition of unusual transaction adopted by the Group differs from that provided in the Consob
Communication of 28 July, 2006, under which unusual and abnormal transactions are those which, because of their significance
or importance, the nature of the parties involved, the object of the transaction, the methods of determining the transfer price or the
timing of the event (close to the year end), may give rise to doubts regarding the accuracy/completeness of the information in the
financial statements, conflicts of interest, the safeguarding of an entity’s assets or the protection of non-controlling interests.
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
FIAT GROUP
CONSOLIDATED
FINANCIAL
STATEMENTS
AT 31 DECEMBER
2009
NOTES