Chrysler 2010 Annual Report Download - page 353

FIAT S.P.A.
STATUTORY
FINANCIAL
STATEMENTS AT
31 DECEMBER
2010
NOTES
352
As part of such project, Fiat S.p.A., as the general contractor, engaged CAV.E.T. and CAV.TO.MI. for the engineering and construction activities, retaining
all work coordination, organizational and management activities. Contract work in progress therefore reflects the fees earned by Fiat S.p.A. in the form of a
percentage (approximately 3.5%) of the contractual amounts, for the activities directly carried out. The work is paid through progress payments made by
T.A.V. S.p.A. to Fiat S.p.A. based on the stage of completion of the works and advance payments, which Fiat S.p.A. then pays over to CAV.E.T. and CAV.
TO.MI. net of its contractual percentage earned.
These amounts may be analyzed by line as follows:
(€ thousand) 31 December 2010 31 December 2009 Change
Contract work in progress 242,709 237,254 5,455
Florence-Bologna line 161,110 159,355 1,755
Novara-Milan line 81,599 77,899 3,700
Less: Progress payments for work completed 244,479 242,370 2,109
Florence-Bologna line 161,829 160,580 1,249
Novara-Milan line 82,650 81,790 860
Gross amount due to the customer 1,770 5,116 (3,346)
Florence-Bologna line 719 1,225 (506)
Novara-Milan line 1,051 3,891 (2,840)
Contract work in progress is measured on the basis of the stage of completion in relation to the sales price, which in this case is the consideration
contractually agreed for the activities directly carried out by Fiat S.p.A. Contract costs relating to the contract revenue recognized totaled €97,258 thousand
at 31 December 2010 (€95,589 thousand at 31 December 2009). Changes in contract work in progress have been recognized in the income statement
under the item other operating income (see Note 4). When the lines are contractually completed, the final contractual revenues for the activities directly
carried out are recognized in the income statement under other operating income, net of any decrease in inventories. At the same time the accounts for
inventories and amounts classified as advances are closed.
In 2009, the Secondary Final Test Certificate relating to the completion of residual work on the Turin-Novara line was signed (the Principal Final Test
Certificate, relating to approximately 94% of the total value of the line had already been signed in 2006), representing the final contractual document for the
work on the Turin-Novara line, and the project was closed from an accounting perspective.
Net advances for work completed were as follows:
Net advances
Advances received from customers Advances paid to suppliers for work completed
31 December 31 December 31 December 31 December 31 December 31 December
(€ thousand) 2010 2009 2010 2009 2010 2009
Florence-Bologna line 5,177,313 5,086,961 5,015,484 4,926,381 161,829 160,580
Novara-Milan line 2,268,473 2,245,905 2,185,823 2,164,115 82,650 81,790
Progress payments for work completed 7,445,786 7,332,866 7,201,307 7,090,496 244,479 242,370