Chrysler 2009 Annual Report Download - page 146

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tax assets to the amount that it believes it is probable will be recovered. In making these adjustments, management has taken
into consideration figures from budgets and forecasts consistent with those used for impairment testing and discussed in the
preceding paragraph relating to the recoverable amount of non-current assets. Moreover, the adjustments that have been
recognised are considered to be sufficient to protect against the risk of a further deterioration of the assumptions in these
forecasts, taking account of the fact that the net deferred assets accordingly recognised relate to temporary differences and
tax losses which, to a significant extent, may be recovered over a very long period, and are therefore consistent with a situation
in which the time needed to exit from the crisis and for an economic recovery to occur extends beyond the term implicit in the
above-mentioned estimates.
Contingent liabilities
The Group is the subject of legal proceedings and tax issues covering a range of matters, which are pending in various
jurisdictions. Due to the uncertainty inherent in such matters, it is difficult to predict the final outcome of such matters. The cases
and claims against the Group often raise difficult and complex factual and legal issues, which are subject to many uncertainties,
including but not limited to the facts and circumstances of each particular case and claim, the jurisdiction and the differences
in applicable law. In the normal course of business management consults with legal counsel and certain other experts on
matter related to litigation and taxes. The Group accrues a liability when it is determined that an adverse outcome is probable
and the amount of the loss can be reasonably estimated. In the event an adverse outcome is possible or an estimate is not
determinable, the matter is disclosed.
Accounting principles, amendments and interpretations adopted from 1 January 2009
The Group has applied the following Standards, amendments and interpretations, which include those revised in conjunction
with the IASB’s 2008 annual improvements project, since 1 January 2009.
IAS 1 Revised – Presentation of Financial Statements
The revised version of IAS 1 - Presentation of Financial Statements does not permit the presentation of components of
comprehensive income (that is “non-owner changes in equity”) in the statement of changes in equity, requiring these to be
presented separately from owner changes in equity. Under the revised standard, all non-owner changes in equity are required
to be presented in one statement showing performance for the period (a statement of comprehensive income) or in two
statements (an income statement and a statement of comprehensive income). These changes are also required to be shown
separately in the Statement of changes in equity.
The Group has adopted the revised standard retrospectively from 1 January 2009, electing to present both the Income
statement and the Statement of comprehensive income and has consequently amended the presentation of the Statement of
changes in equity.
In addition, as part of its 2008 annual improvements project, the IASB published an amendment to IAS 1 (Revised) which
requires an entity to classify hedging derivative financial instruments between current and non-current assets and liabilities
in the Statement of financial position. Adopting this amendment did not lead to any effect on the presentation of derivative
financial instruments in the Statement of financial position as the Group uses the mixed current/non-current distinction format
for presentation that is permitted by IAS 1.
IAS 23 Revised – Borrowing Costs
The revised version of the standard removes the option previously available, and selected by the Group until 31 December
2008, of immediately recognising as an expense borrowing costs that relate to assets that take a substantial period of time
to get ready for use or sale (qualifying assets). As part of its 2008 annual improvements project the IASB also published an
amendment to IAS 23 (Revised) in order to revise the definition of the borrowing costs to be capitalised.
In accordance with the transition rules, the Group adopted the revised standard prospectively from 1 January 2009, capitalising
borrowing costs directly attributable to the acquisition, construction or production of qualifying assets for which it incurs