Chrysler 2011 Annual Report Download - page 278

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Fiat S.p.A. - Statutory
Financial Statements
at 31 December 2011
Upon first-time adoption of IFRS, the Company elected to recognize all cumulative actuarial gains and losses existing at 1 January
2004, despite having elected the corridor approach for recognition of subsequent actuarial gains and losses.
For defined benefit plans, any costs associated with the increase in present value of the liability nearer to the payment date are
recognized under financial expense.
Liabilities associated with defined benefit plans are recognized in the statement of financial position at their present value adjusted
for unrecognized actuarial gains and losses, arising from application of the corridor approach, and unrecognized past service costs.
Other long-term employee benefits
The accounting treatment for other long-term benefits is the same as for post-employment benefit plans except that actuarial gains and
losses and past service costs are fully recognized in the income statement in the year in which they arise and the corridor approach is
not applied.
Equity-based compensation
Share-based compensation plans settled by the delivery of Fiat S.p.A. shares are measured at fair value at the grant date. That fair
value is expensed over the vesting period of the benefit with a corresponding increase in equity. Periodically, the Company reviews
its estimate of the benefits expected to vest through the plan and recognizes any difference in estimate in profit or loss, with a
corresponding increase or decrease in equity.
Share-based compensation plans settled through delivery of Fiat Industrial shares are recognized as a liability and measured at fair
value at the end of each reporting period until settled. Any subsequent changes in fair value are recognized in profit or loss.
The compensation component from stock option plans based on Fiat S.p.A. shares relating to employees of other Group companies is
recognized as a capital contribution to the subsidiaries which employ beneficiaries of the stock option plans, in accordance with IFRIC
11 and, as a result, is recorded as an increase in the carrying amount of the investment, with a balancing entry recognized directly in
equity.
Provisions
The Company recognizes provisions when it has a legal or constructive obligation to third parties, when it is probable that an outflow
of resources will be required to satisfy that obligation and when a reliable estimate of the amount can be made.
Changes in estimates are reflected in the income statement in the period in which they occur.
Own shares
Own shares are recognized as a deduction from equity. The original cost of own shares, proceeds of any subsequent sale and other
changes are presented as movements in equity.
Dividends received
Dividends from investees are recognized in the income statement when the right to receive the dividend is established.
Revenue recognition
Revenue is recognized when it is probable that economic benefits associated with a transaction will flow to the Company and the
amount can be reliably measured. Revenue is presented net of any adjusting items.
Revenue from services and from construction contracts are recognized using the percentage completion method described under
inventory.