Chrysler 2009 Annual Report Download - page 326

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Advances relate to amounts received as down payments from the customer T.A.V. S.p.A. at the commencement of the contracts, which are then recovered
as the work progresses. Amounts were as follows:
Contractual advances received from customers Contractual advances paid to suppliers Net contractual advances
At 31 At 31 At 31 At 31 At 31 At 31
December December December December December December
(€ thousand) 2009 2008 2009 2008 2009 2008
Florence-Bologna line 2,184 19,092 2,101 18,358 83 734
Turin-Novara line - - - - - -
Novara-Milan line 19,630 42,311 18,964 40,792 666 1,519
Contractual advances 21,814 61,403 21,065 59,150 749 2,253
At 31 December 2009, bank guarantees and sureties totalling €1,001 million were given by Fiat S.p.A. to T.A.V. S.p.A. against contractual advances
received, performance of the work and withholding amounts on progress payments. Under agreements entered into with the consortia mentioned and the
institutions issuing the guarantees, €965 million of the total represents direct liability of the consortia towards the issuing banks and insurance companies,
with no joint responsibility on the part Fiat S.p.A.
More specifically, €542 million in guarantees provided by Fiat S.p.A. to T.A.V. S.p.A. relate to the Bologna-Florence line, €51 million to the Turin-Novara
sub-line and €408 million to the Novara-Milan sub-line.
Indemnities assumed directly by the CAV.E.T. consortium amounted to €522 million, while those for the CAV.TO.MI. consortium totalled €49 million for the
Turin-Novara sub-line and €394 million for the Novara-Milan sub-line.
Release of a large portion of these guarantees is linked to the formal testing (Final Test Certificates) stipulated in the contractual agreements as formal
acceptance of the work by the customer.
Finally, for those lines where work is still in progress at year end:
in accordance with the terms of the contract, work on the Bologna-Florence line was formally handed over to T.A.V. S.p.A. at the end of June 2009 for
RFI - Rete Ferroviaria Italiana S.p.A. to begin pre-operational testing, upon completion of which, following the receipt of a favourable technical opinion
from the Testing Commission, the high-speed line was opened to the public at the beginning of December. Since, at 31 December 2009, the activities to
complete the ancillary work and cleanup, in addition to the contractual obligation for final approval of the work (Final Test Certificates) and to release the
bank guarantees were still in progress, at that date the project remained open from an accounting perspective;
similarly, in accordance with the terms of the contract, the work on the Novara-Milan line was formally handed over to T.A.V. S.p.A. at the end of August
2009 for RFI - Rete Ferroviaria Italiana S.p.A. to begin pre-operational testing, upon completion of which, following the receipt of a favourable technical
opinion from the Testing Commission, the high-speed line was opened to the public at the beginning of November. Since, at 31 December 2009, the
activities to complete the ancillary work and cleanup, in addition to the contractual obligation for final approval of the work (Final Test Certificates) and to
release the bank guarantees were still in progress, at that date the project remained open from an accounting perspective.
Tax payables and other payables
The main components of these items are as follows.
At 31 December 2009, intercompany payables for consolidated VAT of €124,348 thousand (€229,084 thousand at 31 December 2008) relate to the VAT
credits of Italian subsidiaries transferred to Fiat S.p.A. as part of the consolidated VAT procedure.
At 31 December 2009, payables to Group companies in connection with the IRES tax consolidation amounted to €133,806 thousand (€316,607 thousand
at 31 December 2008) and represent the remuneration due for the tax losses contributed by the Italian subsidiaries to the domestic tax consolidation for
2009, payables relating to the domestic tax consolidation for 2008 still to be settled and the IRES tax credits of the Italian subsidiaries transferred to Fiat
S.p.A. as part of the tax consolidation procedure.
Income tax payable at 31 December 2008 represented the balance of IRAP payable in 2009 and relating to 2008 (see Note 9).
Tax payables and other payables are all due within one year and their carrying amount is deemed to approximate their fair value.