Chrysler 2012 Annual Report Download - page 257

Fiat S.p.A.
Statutory
Financial
Statements
at 31 December
2012
Notes
256
Depreciation
Depreciation is calculated on a straight-line basis over the estimated useful life of an asset as follows:
Annual depreciation rate
Buildings 3%
Plants 10%
Furniture 12%
Fixtures 20%
Vehicles 25%
Land is not depreciated.
Impairment
At least annually, the Company evaluates recoverability of the value of intangible assets, tangible assets and investments in subsidiaries
and associates, in order to determine whether those assets have suffered a loss in value. If there are indications of impairment, the
carrying amount of the asset is reduced to its recoverable amount.
For investments in subsidiaries and associates that have distributed a dividend, the following are also considered indicators of
impairment:
if the carrying amount of the investee in the separate financial statements exceeds the book value of equity (including any associated
goodwill) as recognized in the consolidated financial statements
if dividends exceed the comprehensive income of the investee for the period to which the dividend relates
The recoverable amount of an asset is the higher of fair value less disposal costs and its value in use.
When testing for impairment of investments whose market value (fair value less disposal costs) cannot be reliably measured, the
recoverable amount is based on value in use, which – in line with the requirements of paragraph 33 of IAS 28 – is determined by
estimating the present value of future cash flows and a theoretical terminal value.
Where impairment of an asset subsequently reverses, the carrying amount of that asset is increased to the revised estimate of its
recoverable amount, not to exceed the carrying amount that would have been determined had no impairment loss been recognized.
A reversal of an impairment loss is recognized immediately in the income statement.
Financial instruments
Presentation
Financial instruments held by the Company are classified in the financial statements as follows:
Non-current assets: investments, other financial assets, other non-current assets
Current assets: trade receivables, current financial receivables, other current receivables, cash and cash equivalents
Non-current liabilities: non-current debt, other non-current liabilities
Current liabilities: trade payables, current debt (including asset-backed financing), other debt
Cash and cash equivalents includes bank deposits, units in liquidity funds and other money market securities that are readily convertible
into cash and for which the risk of changes in value is insignificant.
Non-current debt includes liabilities related to financial guarantees. Financial guarantees are contracts where the Company undertakes
to make specific payments to a counterparty for losses incurred as a result of the failure of a borrower to meet its payment obligations
for a given debt instrument. The present value of any related fees receivable is recognized under other non-current financial assets.