Chrysler 2009 Annual Report Download - page 286

285
The compensation component from stock option plans based on Fiat S.p.A. shares relating to employees of other Group
companies is recognised as a capital contribution to the subsidiaries which employ beneficiaries of the stock option plans,
in accordance with IFRIC 11 and, as a result, is recorded as an increase in the carrying amount of the investment, with the
offsetting credit being recognized directly in equity.
Provisions
The Company recognises provisions when it has a legal or constructive obligation to third parties, when it is probable that an
outflow of resources will be required to satisfy the obligation and when a reliable estimate of the amount can be made.
Changes in estimates are reflected in the income statement in the period in which the change occurs.
Treasury shares
Treasury shares are presented as a deduction from equity. The original cost of treasury shares and the proceeds of any
subsequent sale are presented as movements in equity.
Dividends received and receivable
Dividends from investees are recognised in the income statement when the right to receive the dividend is established.
Revenue recognition
Revenue is recognised if it is probable that economic benefits associated with the transaction will flow to the company and the
revenue can be measured reliably. Revenue is presented net of any adjusting items.
Revenue from services and revenue from construction contracts are recognised using the percentage completion method
described under inventory.
Financial income and expense
Financial income and expense are recognised in the income statement in the period in which they become receivable or
payable.
Finance costs attributable to investments in assets that necessarily require a substantial period of time to get ready for their intended
use or sale (qualifying assets) are capitalised and amortised over the useful life of the class of assets to which they relate.
Income taxes
The tax charge for the period is determined on the basis of prevailing laws and regulations. Taxes on income are recognised
in the income statement except to the extent that they relate to items directly charged or credited to equity, in which case the
related income tax effect is recognised in equity.
Deferred tax assets and liabilities are determined on the basis of all the temporary differences between the carrying amount
of an asset or liability in the statement of financial position and its corresponding tax basis. Deferred tax assets resulting from
unused tax losses and temporary differences are recognised to the extent that it is probable that future taxable profit will be
available against which they can be utilised.
Current and deferred income taxes and liabilities are offset when there is a legally enforceable right to offset. Deferred tax assets
and liabilities are measured at the substantively enacted tax rates that are expected to apply to taxable income in the periods
in which temporary differences will be reversed.