Chrysler 2011 Annual Report Download - page 142

141
Consolidated
Financial Statements
at 31 December 2011
Associates
Associates are enterprises over which the Group has significant influence, as defined in IAS 28 – Investments in Associates, but not
control or joint control over the financial and operating policies. Investments in associates are accounted for using the equity method
from the date that significant influence commences until the date it ceases. When the Group’s share of losses of an associate, if any,
exceeds the carrying amount of the associate in the Group’s balance sheet, the carrying amount is reduced to nil and recognition of
further losses is discontinued except to the extent that the Group has incurred obligations in respect of the associate.
Investments in other companies
Investments in other companies that are available-for-sale financial assets are measured at fair value, when this can be reliably
determined. Gains or losses arising from changes in fair value are recognised directly in other comprehensive income until the assets
are sold or are impaired, when the cumulative gains and losses previously recognised in equity are recognised in the income statement
of the period.
Investments in other companies for which fair value is not available are stated at cost less any impairment losses.
Dividends received from Investment in other companies are included in Other income (expenses) from investments.
Transactions eliminated on consolidation
All significant intragroup balances and transactions and any unrealised gains and losses arising from intragroup transactions are
eliminated in preparing the consolidated financial statements. Unrealised gains and losses arising from transactions with associates
and jointly controlled entities are eliminated to the extent of the Group’s interest in those entities.
Foreign currency transactions
Transactions in foreign currencies are recorded at the foreign exchange rate prevailing at the date of the transaction. Monetary assets
and liabilities denominated in foreign currencies at the balance sheet date are translated at the exchange rate prevailing at that date.
Exchange differences arising on the settlement of monetary items or on reporting monetary items at rates different from those at which
they were initially recorded during the period or in previous financial statements, are recognised in the income statement.
Consolidation of foreign entities
All assets and liabilities of foreign consolidated companies with a functional currency other than the Euro are translated using the
exchange rates in effect at the balance sheet date. Income and expenses are translated at the average exchange rate for the period.
Translation differences resulting from the application of this method are classified as equity until the disposal of the investment. Average
rates of exchange are used to translate the cash flows of foreign subsidiaries in preparing the consolidated statement of cash flows.
The goodwill, assets acquired and liabilities assumed arising from the acquisition of entities with a functional currency other than
the Euro are recognised in the functional currency and translated at the exchange rate at the acquisition date. These balances are
translated at subsequent balance sheet dates at relevant exchange rate.
The principal exchange rates used to translate into Euros the financial statements prepared in currencies other than the Euro were as
follows:
Average 2011 At 31 December 2011 Average 2010 At 31 December 2010
U.S. dollar 1.392 1.294 1.326 1.336
Pound sterling 0.868 0.835 0.858 0.861
Swiss franc 1.233 1.216 1.380 1.250
Polish zloty 4.121 4.458 3.995 3.975
Brazilian real 2.327 2.416 2.331 2.218
Argentine peso 5.742 5.561 5.183 5.303