Chrysler 2012 Annual Report Download - page 141

Notes
140 Consolidated
Financial
Statements
at 31 December
2012
Earnings per share
Basic earnings per share are calculated by dividing the profit/(loss) attributable to owners of the parent entity by the weighted average
number of shares outstanding during the year. For diluted earnings per share, the weighted average number of shares outstanding is
adjusted assuming conversion of all dilutive potential shares and financial instruments.
Use of estimates
The consolidated financial statements are prepared in accordance with IFRS which require the use of estimates, judgements and
assumptions that affect the carrying amount of assets and liabilities, the disclosures relating to contingent assets and liabilities and the
amounts of income and expense reported for the period.
The estimates and associated assumptions are based on elements that are known when the financial statements are prepared, on
historical experience and on any other factors that are considered to be relevant.
In this respect, the situation caused by the persisting difficulties of the economic and financial environment in the Eurozone led
to the need to make assumptions regarding future performance which are characterised by significant levels of uncertainty; as a
consequence, therefore, it cannot be excluded that results may arise in the future which differ from estimates, and which therefore
might require adjustments, even significant, to be made to the carrying amount of assets and liabilities, which at the present moment
can clearly neither be estimated nor predicted. The main items affected by these situations of uncertainty are non-current assets
(tangible and intangible assets), deferred tax assets, provision for employee benefits and allowances for inventories (including vehicles
sold under buy-back agreement).
The estimates and underlying assumptions are reviewed periodically and continuously by the Group. If the items considered in this
process perform differently, then the actual results could differ from the estimates, which would accordingly require adjustment. The
effects of any changes in estimate are recognised in profit or loss in the period in which the adjustment is made if it only affects that
period, or in the period of the adjustment and future periods if it affects both current and future periods.
The following are the critical measurement processes and key assumptions used by the Group in applying IFRS which may have
significant effects on the amounts recognised in the consolidated financial statements or for which there is a risk that a significant
difference may arise in respect to the carrying amounts of assets and liabilities in the future.