Chrysler 2010 Annual Report Download - page 168

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On 26 November 2009, the IFRIC issued the interpretation IFRIC 19 – Extinguishing Financial Liabilities with Equity Instruments
that provides guidance on how to account for the extinguishment of a financial liability by the issue of equity instruments. The
interpretation clarifies that when an entity renegotiates the terms of a financial liability with its creditor and the creditor agrees
to accept the entity’s shares or other equity instruments to settle the financial liability fully or partially, then the entity’s equity
instruments issued to a creditor are part of the consideration paid to extinguish the financial liability and are measured at their
fair value. The difference between the carrying amount of the financial liability extinguished and the initial measurement amount
of the equity instruments issued is included in profit or loss for the period. The interpretation has an effective date for mandatory
adoption of 1 January 2011. Application of this interpretation is not expected to have any significant effects on the Group’s
financial statements.
On 6 May 2010, the IASB issued a set of amendments to IFRSs (“Improvements to IFRSs”) that are applicable from 1 January
2011; set out below are those that will lead to changes in the presentation, recognition or measurement of financial statement
items, excluding those that only regard changes in terminology or editorial changes having a limited accounting effect and those
that affect standards or interpretations that are not applicable to the Fiat Group.
IFRS 3 (2008) – Business Combinations: this amendment clarifies that the components of non-controlling interests that do
not entitle their holders to a proportionate share of the entity’s net assets must be measured at fair value or as required by
the applicable accounting standards. For example, therefore, stock options granted to employees must be measured in
accordance with the requirements of IFRS 2 in the case of a business combination, while the equity portion of a convertible
debt instrument must be measured in accordance with IAS 32. In addition, the Board goes into further detail on the question
of share-based payment plans that are replaced as part of a business combination by adding specific guidance to clarify the
accounting treatment.
IFRS 7 – Financial Instruments: Disclosures: this amendment emphasises the interaction between the qualitative and
quantitative disclosures required by the standard concerning the nature and extent of risks arising from financial instruments.
This should assist users of financial statements to link related disclosures and hence form an overall picture of the nature
and extent of risks arising from financial statements. In addition, the disclosure requirement concerning financial assets that
are past due or impaired but whose terms have been renegotiated, and that relating to the fair value of collateral have been
eliminated.
IAS 1 – Presentation of Financial Statements: the amendment requires the reconciliation in the changes of each component
of equity to be presented in the notes or in the primary statements.
IAS 34 – Interim Financial Reporting: by using a series of examples certain clarifications are provided concerning the additional
disclosures that must be presented in interim financial reports.
Application of this improvements is not expected to have any significant effects on the Group’s financial statements.
On 7 October 2010, the IASB issued amendments to IFRS 7 – Financial Instruments: Disclosures. Entities are required to apply
the amendments for annual periods beginning on or after 1 July 2011.The amendments will allow users of financial statements
to improve their understanding of transfers of financial assets, including an understanding of the possible effects of any risks that
may remain with the entity that transferred the assets. The amendments also require additional disclosures if a disproportionate
amount of a transfer transaction is undertaken at the end of a reporting period. The amendments had not yet been endorsed
by the European Union at the date of these financial statements.
On 20 December 2010, the IASB issued amendments to IFRS 1 – First-time Adoption of International Financial Reporting
Standards. The first amendment replaces references to a fixed date of “1 January 2004” with the date of transition to IFRSs.
The second amendment provides guidance on how an entity should resume presenting financial statements in accordance
with IFRSs after a period when the entity was unable to comply with IFRSs because its functional currency was subject to
severe hyperinflation. These amendments are effective from 1 July 2011. The amendments had not yet been endorsed by the
European Union at the date of these financial statements.