Chrysler 2009 Annual Report Download - page 157

156 FIAT GROUP
CONSOLIDATED
FINANCIAL
STATEMENTS
AT 31 DECEMBER
2009
NOTES
The main aggregate amounts related to the Group interests in associates measured at cost are as follows:
(€ million) At 31 December 2009 At 31 December 2008
Total assets 108 114
Liabilities 78 76
(€ million) 2009 2008
Net revenues 73 65
Profit/(loss) 2 4
In connection with the scope of consolidation:
In the fourth quarter of 2009 Fiat Group Automobiles acquired the assets and liabilities of the Bertone Group, while the Fiat
Group Automobiles Sector acquired an investment of 100% in a minor company in Brazil that has been classified as held for
sale.
Fiat Automobiles Serbia Doo Kragujevac has been consolidated on a line-by-line basis since 1 January 2009.
The Components Sector disposed of its investment in the subsidiary Ergom France S.a.S. on 30 January 2009.
During the year certain wholly owned investments in minor subsidiaries held by the Comau and Ferrari Sectors were sold; further
details of this may be found in Note 36.
Chrysler transaction
On 10 June 2009 Fiat Group acquired, without cash consideration, an initial 20% interest in Chrysler Group LLC which, in
accordance with IAS 28 - Investments in Associates, will be accounted for using the equity method. Fiat is also entitled to
receive an additional interest in Chrysler of up to 15% (both by value and voting rights), on a fully diluted basis. This further
interest will be granted to Fiat (with no cash consideration required) in three tranches of 5% each, subject to certain pre-
established industrial and commercial targets being achieved. Should one or more of those targets not be reached, Fiat shall,
in any event, have the option to purchase, at a price determined using a pre-established market-based formula, the percentage
interest corresponding to the objective(s) not reached.
As part of the transaction, the Fiat Group has transferred specific technologies to the new Chrysler group in the form of licenses
for the NAFTA area. An unusual gain arose in relation to the transfer, accounted for at fair value, with counter entries being
made, of equal value, in part for the cost of the equity interest acquired and the initial value of the option for the further 15%, after
offsetting the total portion of the gain (35%) not realised with third parties. Additionally, pursuant to IFRS (see IAS 18 – Revenue
recognition in this respect) the residual portion of that gain (65%) must be considered unrealised as it is not currently possible to
estimate when the economic benefits of the transaction will flow to the Fiat Group. In fact, Chrysler may only distribute dividends
after the loans from the US Treasury and the Canadian government has been fully repaid. This portion of the gain was, therefore,
also written off immediately against the carrying amount of the initial interest acquired and the options referred to above and, as
a result, are valued in the accounts at zero.
For completeness, it should also be noted that, pursuant to Paragraphs 29 and 30 of IAS 28, the Fiat Group is not required
to recognise any portion of future losses which this associate may incur since, while the investment in Chrysler remains
an associate carried at zero in the statement of financial position, it has no obligation to cover such losses. For any profit
subsequently reported by Chrysler, the Fiat Group may only recognise the portion of profit which is in excess of losses not
recognised in prior periods.