Chrysler 2012 Annual Report Download - page 134

133
Consolidated
Financial Statements
at 31 December 2012
Intangible assets
Goodwill
Goodwill arising on business combinations is initially measured at cost as established at the acquisition date, as defined in the above
paragraph. Goodwill is not amortised, but is tested for impairment annually or more frequently if events or changes in circumstances
indicate that it might be impaired. After initial recognition, goodwill is measured at cost less any accumulated impairment losses.
On the loss of control of a previously acquired entity, any outstanding goodwill balance is included in the determination of the gain or
loss on disposal.
In the context of IFRS First-time adoption, the Group elected not to apply IFRS 3 – Business Combinations retrospectively to the
business combinations that occurred before 1 January 2004; as a consequence, goodwill arising on acquisitions before the date of
transition to IFRS has been retained at the previous Italian GAAP amounts, subject to impairment testing at that date.
Development costs
Development costs for vehicle project production and related components, engines and production systems are recognised as an
asset if and only if both of the following conditions are met: that development costs can be measured reliably and that the technical
feasibility of the product, volumes and pricing support the view that the development expenditure will generate future economic
benefits. Capitalised development costs include all direct and indirect costs that may be directly attributed to the development process.
Capitalised development costs are amortised on a systematic basis from the start of production of the related product over the
product‘s estimated average life, as follows:
N° of years
Vehicles (including Engines) 3 -12
Components and Production Systems 2 - 15
All other development costs are expensed as incurred.
Intangible assets with indefinite useful lives
Intangible assets with indefinite useful lives consist principally of acquired brands which have no legal, contractual, competitive,
economic, or other factors that limit their useful lives. Intangible assets with indefinite useful lives are not amortised, but are tested for
impairment annually or more frequently whenever there is an indication that the asset may be impaired.
Other intangible assets
Other purchased and internally-generated intangible assets are recognised as assets in accordance with IAS 38 – Intangible Assets,
where it is probable that the use of the asset will generate future economic benefits and where the costs of the asset can be determined
reliably.
Such assets are measured at purchase or manufacturing cost and amortised on a straight-line basis over their estimated useful lives.
Other intangible assets acquired as part of the acquisition of a business are capitalised separately from goodwill if their fair value can
be measured reliably.