Chrysler 2010 Annual Report Download - page 354

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Advances relate to amounts received as down payments from the customer T.A.V. S.p.A. at the commencement of the contracts, which are then recovered
as the work progresses. Amounts were as follows:
Contractual advances received from customers Contractual advances paid to suppliers Net contractual advances
31 December 31 December 31 December 31 December 31 December 31 December
(€ thousand) 2010 2009 2010 2009 2010 2009
Florence-Bologna line 993 2,184 955 2,101 38 83
Novara-Milan line 7,914 19,630 7,713 18,964 201 666
Contractual advances 8,907 21,814 8,668 21,065 239 749
At 31 December 2010, bank guarantees and sureties totaling €907 million were given by Fiat S.p.A. to T.A.V. S.p.A. against contractual advances received,
performance of the work and withholding amounts on progress payments. Under agreements entered into with the consortia mentioned and the institutions
issuing the guarantees, €875 million of the total represents direct liability of the consortia towards the issuing banks and insurance companies, with no joint
responsibility on the part Fiat S.p.A.
More specifically, €498 million in guarantees provided by Fiat S.p.A. to T.A.V. S.p.A. relate to the Bologna-Florence line, €398 million to the Novara-Milan
sub-line and €11 million to the Turin-Novara sub-line (two-year guarantees issued on the final work subject to testing in 2009).
Indemnities assumed directly by the CAV.E.T. consortium amounted to €481 million, while those for the CAV.TO.MI. consortium totaled €383 million for
the Novara-Milan sub-line and €11 million for the Turin-Novara sub-line.
Release of these guarantees is generally linked to the formal testing (Final Test Certificates) required contractually for acceptance of the work by the
customer, except where other specific conditions have been stipulated.
Finally, for those lines where work was still in progress at year end (Bologna-Florence and Novara-Milan) the lines were formally handed over to T.A.V. S.p.A.
in 2009 and the high-speed line was opened to the public, following the favorable technical opinion received from the Testing Commission. However, since
at 31 December 2010 (as also at 31 December 2009), activities to complete the ancillary work and cleanup, in addition to the contractual obligation for
final approval of the work (Final Principal and/or Secondary Test Certificates) and to release the bank guarantees were still in progress, from an accounting
perspective the project remained open at that date.
Tax payables and other payables
The main components of these items are as follows.
At 31 December 2010, intercompany payables for consolidated VAT of €131,408 thousand (€124,348 thousand at 31 December 2009) relate to the VAT
credits of Italian subsidiaries transferred to Fiat S.p.A. as part of the consolidated VAT procedure.
At 31 December 2010, payables to Group companies in connection with the IRES tax consolidation amounted to €211,576 thousand (€133,806 thousand
at 31 December 2009) and represent the remuneration due for the tax losses contributed by the Italian subsidiaries to the domestic tax consolidation for
2010, the IRES tax credits of the Italian subsidiaries transferred to Fiat S.p.A. as part of the tax consolidation procedure for 2010 and payables relating to
the domestic tax consolidation for 2009.
Tax payables and other payables are all due within one year and their carrying amount is deemed to approximate their fair value.