Chrysler 2011 Annual Report Download - page 141

Notes
140 Consolidated
Financial
Statements
at 31 December
2011
For the Statement of financial position, a mixed format has been selected to present current and non-current assets and liabilities, as
permitted by IAS 1. In more detail, both companies carrying out industrial activities and financial service companies continue to be
consolidated in the Group’s financial statements also after the Demerger. The investment portfolios of financial services companies are
included in current assets, as the investments will be realised in their normal operating cycle. Financial services companies, though,
obtain funds only partially from the market: the remaining are obtained from Fiat S.p.A. through the Group’s treasury companies
(included in industrial companies), which lend funds both to industrial Group companies and to financial services companies as
the need arises. Chrysler, on the other hand continues to remain separate from a financial management standpoint and manages
its treasury services (including cash management and financing activities) on its own, obtaining funds in the market and managing
cash directly. This financial service structure within the Group means that any attempt to separate current and non-current debt in
the consolidated Statement of financial position cannot be meaningful. Suitable disclosure as to the due date of liabilities is moreover
provided in the notes.
The Statement of Cash Flows is presented using the indirect method.
In connection with the requirements of the Consob Resolution No. 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 the overall reading of the statements.
Basis of consolidation
Subsidiaries
Subsidiaries are enterprises controlled by the Group, as defined in IAS 27 – Consolidated and Separate Financial Statements. Control
exists when the Group has the power, directly or indirectly, to govern the financial and operating policies of an enterprise so as to obtain
benefits from its activities. The financial statements of subsidiaries are combined in the consolidated financial statements from the date
that control commences until the date that control ceases. Non-controlling interests in the net assets of consolidated subsidiaries and
non-controlling interests in the profit or loss of consolidated subsidiaries are presented separately from the interests of the owners of
the parent in the consolidated statement of financial position and income statement respectively. Losses applicable to non-controlling
interests which exceed the minority’s interests in the subsidiary’s equity are allocated against the non-controlling interests.
Changes in the Group’s ownership interests in subsidiaries that do not result in the loss of control are accounted for as equity
transactions. The carrying amounts of the Equity attributable to owners of the parent and Non-controlling interests are adjusted to
reflect the changes in their relative interests in the subsidiaries. Any difference between the book value of the non-controlling interests
and the fair value of the consideration paid or received is recognised directly in the equity attributable to the owners of the parent.
If the Group loses control of a subsidiary, a gain or loss is recognised in profit or loss and is calculated as the difference between (i) the
aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the carrying amount of the
assets (including goodwill) and liabilities of the subsidiary and any non-controlling interests. Any profits or losses recognised in other
comprehensive income in respect of the measurement of the assets of the subsidiary are accounted for as if the subsidiary had been
sold (i.e. reclassified to profit or loss or transferred directly to retained earnings depending on the applicable IFRS). The fair value of
any investment retained in the former subsidiary is measured in accordance with IAS 39, IAS 28 or IAS 31, depending on the type of
investment.
Jointly controlled entities
Jointly controlled entities are enterprises in which the Group has contractually agreed sharing of control or for which a contractual
arrangement exists whereby two or more parties undertake an economic activity that is subject to joint control. Investments in jointly
controlled entities are accounted for using the equity method from the date that joint control commences until the date that joint control
ceases.