Chrysler 2010 Annual Report Download - page 153

FIAT GROUP
CONSOLIDATED
FINANCIAL
STATEMENTS
AT 31 DECEMBER
2010
NOTES
152
Goodwill is measured as the excess of the aggregate of the consideration transferred in the business combination, the amount
of any non-controlling interest in the acquiree and the fair value of the acquirer’s previously held equity interest in the acquiree (if
any) over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. If the net of the
acquisition-date amounts of the identifiable assets acquired and liabilities assumed exceeds the aggregate of the consideration
transferred, the amount of any non-controlling interest in the acquiree and the fair value of the acquirer’s previously held interest
in the acquiree (if any), the excess is recognised immediately in profit or loss as a bargain purchase gain.
Non-controlling interest is initially measured either at fair value or at the non-controlling interest’s proportionate share of the
acquiree’s identifiable net assets. The selection of the measurement method is made on a transaction-by-transaction basis.
Any contingent consideration arrangement in the business combination is measured at its acquisition-date fair value and
included as part of the consideration transferred in the business combination in order to determine goodwill. Changes in the
fair value of the contingent consideration that qualify as measurement period adjustments are recognised retrospectively,
with corresponding adjustments to goodwill. Measurement period adjustments are adjustments that arise from additional
information obtained during the ‘measurement period’ (which may not exceed one year from the acquisition date) about facts
and circumstances that existed as of the acquisition date.
When a business combination is achieved in stages, the Group’s previously held equity interest in the acquiree is remeasured
at its acquisition-date fair value and the resulting gain or loss, if any, is recognised in profit or loss. Changes in the equity interest
in the acquiree that have been recognised in Other comprehensive income in prior reporting periods are reclassified to profit or
loss as if the interest had been disposed of.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination
occurs, the Group reports provisional amounts for the items for which the accounting is incomplete in the consolidated financial
statements. Those provisional amounts are adjusted during the measurement period to reflect new information obtained about
facts and circumstances that existed at the acquisition date which, if known, would have affected the amounts recognised at
that date.
Business combinations that took place prior to 1 January 2010 were accounted for in accordance with the previous version of
IFRS 3.
Intangible assets
Goodwill
Goodwill arising on business combinations is initially measured at cost as established at the acquisition date, as defined in the
above paragraph. Goodwill is not amortised, but is tested for impairment annually or more frequently if events or changes in
circumstances indicate that it might be impaired. After initial recognition, goodwill is measured at cost less any accumulated
impairment losses.
On disposal of part or whole of a business which was previously acquired and which gave rise to the recognition of goodwill,
the remaining amount of the related goodwill is included in the determination of the gain or loss on disposal.
In the context of IFRS First-time Adoption, the Group elected not to apply IFRS 3 – Business Combinations retrospectively to
the business combinations that occurred before 1 January 2004; as a consequence, goodwill arising on acquisitions before the
date of transition to IFRS has been retained at the previous Italian GAAP amounts, subject to impairment testing at that date.