Chrysler 2010 Annual Report Download - page 311

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NOTES FIAT S.P.A.
STATUTORY
FINANCIAL
STATEMENTS AT
31 DECEMBER
2010
In compliance with European Regulation 1606 of 19 July 2002, beginning in 2005 the Fiat Group adopted the International
Financial Reporting Standards (“IFRS”), issued by the International Accounting Standards Board (“IASB”), for the preparation
of its consolidated financial statements. On the basis of national legislation implementing that Regulation, those accounting
standards were also used to prepare the separate financial statements of the Parent Company, Fiat S.p.A., for the first time
for the year ended 31 December 2006. The information required by IFRS 1 – First-time Adoption of International Financial
Reporting Standards relating to the effects of the transition to IFRS was provided in an Appendix to the 2006 separate financial
statements.
The financial statements are prepared under the historical cost convention, modified as required for the valuation of certain
financial instruments, as well as on the going concern assumption. In this respect, despite the continuing difficult economic and
financial environment, the Fiat Group’s assessment is that no material uncertainties (as defined in paragraph 25 of IAS 1) exist
about its ability to continue as a going concern, in view also of the measures already taken to adapt to the changed levels of
demand and Fiat Group’s industrial and financial flexibility.
Format of the financial statements
Presentation of Fiat S.p.A.’s Income Statement is based on the nature of its revenues and expenses, given the specific
activities carried out. Fiat Group’s Consolidated Income Statement is classified according to function, which is considered
more representative of the format used for management of the business sectors and internal reporting purposes and is in line
with international practice in the automotive sector. For the Statement of Financial Position, Fiat S.p.A. has elected the “current
and non-current” classification for the presentation of assets and liabilities. A mixed presentation has been selected for the
presentation of the Consolidated Statement of Financial Position, as permitted under IAS 1, with assets only being classified
between current and non-current. This election was made in view of the fact that the Consolidated Statement of Financial
Position includes both industrial companies and financial services companies. In the Consolidated Statement of Financial
Position, the portfolios of the financial services companies are included under current assets, as they will be realized in the
course of the normal operating cycle. In addition, the financial services companies only obtain a portion of their funding directly
from the market: the remainder is obtained from the Group’s treasury companies (included under industrial activities), which
provide funding both to industrial companies and financial services companies within the Group, on the basis of their specific
requirements.
Given the distribution of the financial services activities within the Group, any distinction between current and non-current
financial liabilities in the Consolidated Statement of Financial Position would not be meaningful. There is no impact, however, on
the presentation of liabilities for Fiat S.p.A.
The Statement of Cash Flows is presented using the indirect method.
In connection with the requirements of Consob Resolution 15519 of 27 July 2006 as to the format of the financial statements,
specific supplementary Income Statement, Statement of Financial Position and Statement of Cash Flows formats have been
added for related party transactions so as not to compromise an overall reading of the statements.
Intangible assets
Purchased or internally-generated intangible assets are recognized 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.
Intangible assets with finite useful lives are measured at purchase or manufacturing cost, net of amortization charged on a
straight-line basis over their estimated useful lives and of any impairment losses.