Chrysler 2011 Annual Report Download - page 287

Fiat S.p.A.
Statutory
Financial
Statements
at 31 December
2011
Notes
286
Net losses on derivative financial instruments of €108,073 thousand (net gain of €110,585 thousand for 2010) was essentially attributable to a loss arising
from fair value measurement of the two equity swaps entered into as hedges on the options granted to the Chief Executive Officer in 2004 and 2006
(see Note 19). The contracts in place at 31 December 2010 were renegotiated during the year and adjusted for the change in the underlying (consisting
of 16,920,000 Fiat and Fiat Industrial shares at year-end 2011) resulting from the Demerger. At 31 December 2011, the notional value of those equity
swaps, based on the contractual exercise prices, was €153,803 thousand. Although the swaps were entered into as hedges, they do not qualify for hedge
accounting under IFRS and, accordingly, are classified as held for trading.
8. Income taxes
A breakdown of taxes recognized in the income statement is provided below:
(€ thousand) 2011 2010
Current taxes:
- IRES (36,663) (39,619)
- IRAP --
- Other current taxes 253 -
Total current taxes (36,410) (39,619)
Deferred taxes for the period:
- IRAP 1,145 7,000
Total deferred taxes for the period 1,145 7,000
Taxes relating to prior periods (8,536) (1,159)
Total income taxes (43,801) (33,778)
Current IRES tax for 2011 relates to compensation receivable by Fiat S.p.A. (€36,663 thousand) for tax loss carryforwards contributed to the domestic tax
consolidation scheme.
Other current taxes for 2011 relate to withholdings for taxes incurred outside Italy.
Deferred IRAP tax totaled €1,145 thousand, resulting from the increase in the rate applied on temporary differences existing at 1 January 2011.
Taxes relating to prior periods (€8,536 thousand) represents income related to the prior year’s domestic tax consolidation.
A reconciliation between theoretical income taxes determined on the basis of tax rates applicable in Italy and income taxes reported in the financial
statements is as follows:
(€ thousand) 2011 2010
Theoretical income taxes 15,225 112,250
Tax effect of permanent differences (133,952) (148,589)
Taxes relating to prior periods (8,536) (1,159)
Other current taxes 253 -
Deferred taxes not recognized on tax loss for the year and other deferred taxes 82,064 -
Tax loss carryforwards utilized -(3,280)
Current and deferred income tax recognized in the financial statements, excluding IRAP (44,946) (40,778)
IRAP (current and deferred) 1,145 7,000
Income taxes reported in the income statement (current and deferred income taxes) (43,801) (33,778)
Theoretical income taxes are calculated by applying the IRES tax rate (27.5% for 2011 and 2010) to the result before taxes. To facilitate a better understanding
of the reconciliation between theoretical and reported income taxes, IRAP has been excluded, as it is calculated on a different tax base and would therefore
generate distortions between one year and another.