Chrysler 2010 Annual Report Download - page 149

FIAT GROUP
CONSOLIDATED
FINANCIAL
STATEMENTS
AT 31 DECEMBER
2010
NOTES
148
Following receipt of the above authorisations in December 2010, the deed of Demerger was executed on 16 December
2010, with legal effect from 1 January 2011.
As a result of the Demerger, on 1 January 2011 the net assets of Fiat S.p.A. were reduced by €3,750 million (including a
€1,913 million reduction in share capital) and the net assets of Fiat Industrial S.p.A. were increased by an equivalent amount,
corresponding to the value of net assets referred to above. Consequently, Shareholders received, for no consideration, one
share in Fiat Industrial S.p.A. for each share of the same class already held in Fiat S.p.A. Since 3 January 2011, Fiat S.p.A.
and Fiat Industrial S.p.A. have been quoted separately on the MTA and operate as independent listed companies, each with
its own management and Board of Directors.
As the transaction took effect on 1 January 2011, the consolidated financial statements for the year ended 31 December 2010
relate to Fiat Group Pre-Demerger (hereinafter the Fiat Group). Moreover, in accordance with IFRS 5 – Non-current Assets Held
for Sale and Discontinued Operations, as the Demerger became highly probable in December (when the above authorisations
were obtained), all businesses to be transferred to the new Fiat Industrial Group are classified and presented as Discontinued
Operations in these consolidated financial statements. This presentation has resulted in the following:
For both 2010 and 2009 (the latter presented for comparative purposes), all revenues and costs relating to Discontinued
Operations are reported in the Income Statement as Profit/(Loss) from Discontinued Operations.
All current and non-current assets relating to Discontinued Operations at December 2010 have been reclassified in the
Statement of Financial Position as Assets Held for Sale and Discontinued Operations.
All liabilities (excluding equity) relating to Discontinued Operations at December 2010 have been reclassified in the Statement
of Financial Position as Liabilities Held for Sale and Discontinued Operations.
For both 2010 and 2009 (the latter presented for comparative purposes), all cash flows arising from Discontinued Operations
have been presented in the Statement of Cash Flows as separate line items under cash flows from operating, investing and
financing activities.
In other words, the Fiat Group consolidated financial statements are based on the full consolidation of subsidiaries that are
to remain within the scope of operations of Fiat Group Post-Demerger (i.e. Continuing Operations) and those that will be
transferred to Fiat Industrial Group (i.e., Discontinued Operations), with the separate presentation for each group of activities.
For additional detail of items presented under Discontinued Operations in the Consolidated Statements of Income, Financial
Position and Cash Flows, reference should be made to the section Assets and liabilities held for sale and Discontinued
Operations. Furthermore, given the significance of the group of activities classified as Discontinued Operations, it was
considered appropriate, for each individual line item, to provide the same level of information for Discontinued Operations as
required by the accounting standards for Continuing Operations.
Additionally, as the Demerger is considered a “business combination involving entities or businesses under common control”,
it is outside the scope of application of IFRS 3 and IFRIC 17. Accordingly, in the 2011 consolidated financial statements for
Fiat S.p.A. Post-Demerger and Fiat Industrial S.p.A., the opening position for items in the statement of financial position will
be equivalent to the carrying amounts reported in the consolidated financial statements of Fiat Group prior to the Demerger.