Chrysler 2010 Annual Report Download - page 154

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Development costs
Development costs for vehicle project production (cars, trucks, buses, agricultural and construction equipment, related
components, engines, and production systems) are recognised as an asset if and only if both of the following conditions are
met: that development costs can be measured reliably and that technical feasibility of the product, volumes and pricing support
the view that the development expenditure will generate future economic benefits. Capitalised development costs include
all direct and indirect costs that may be directly attributed to the development process. Capitalised development costs are
amortised on a systematic basis from the start of production of the related product over the product‘s estimated average life,
as follows:
N° of years
Cars 4 - 5
Trucks and Buses 8
Agricultural and Construction Equipment 5
Engines 8 - 10
Components and Production Systems 3 - 5
All other development costs are expensed as incurred.
Intangible assets with indefinite useful lives
Intangible assets with indefinite useful lives consist principally of acquired trademarks which have no legal, contractual,
competitive, economic, or other factors that limit their useful lives. Intangible assets with indefinite useful lives are not amortised,
but are tested for impairment annually or more frequently whenever there is an indication that the asset may be impaired.
Other intangible assets
Other purchased and internally-generated intangible assets are recognised as assets in accordance with IAS 38 – Intangible
Assets, where it is probable that the use of the asset will generate future economic benefits and where the costs of the asset
can be determined reliably.
Such assets are measured at purchase or manufacturing cost and amortised on a straight-line basis over their estimated useful
lives, if these assets have finite useful lives.
Other intangible assets acquired as part of the acquisition of a business are capitalised separately from goodwill if their fair value
can be measured reliably.
Property, plant and equipment
Cost
Property, plant and equipment are stated at acquisition or production cost and are not revalued.
Subsequent expenditures and the cost of replacing parts of an asset are capitalised only if they increase the future economic
benefits embodied in that asset. All other expenditures are expensed as incurred. When such replacement costs are capitalised,
the carrying amount of the parts that are replaced is recognised in the income statement.
Property, plant and equipment also include vehicles sold with a buy-back commitment, which are recognised according to
the method described in the paragraph Revenue recognition if the buy-back commitment originates from the Trucks and
Commercial Vehicles sector.