Chrysler 2012 Annual Report Download - page 261

Fiat S.p.A.
Statutory
Financial
Statements
at 31 December
2012
Notes
260
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 S.p.A. 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.
Financial income and expense
Financial income and expense are recognized in the income statement in the period in which they are earned or incurred.
Finance costs related to investments in qualifying assets that require a substantial period of time to prepare for their intended future use
or sale are capitalized and amortized over the useful life of the asset.
Income taxes
The tax charge for the period is determined on the basis of existing law. Taxes on income are recognized in profit and loss, except
where they relate to items charged or credited directly to equity, in which case the tax effect is also recognized directly in equity.
For deferred tax assets and liabilities, determination is based on the temporary differences existing between the carrying amount of
an asset or liability in the statement of financial position and its corresponding tax basis. Deferred tax assets resulting from unused tax
losses and temporary differences are recognized to the extent that it is probable that future taxable profit will be available against which
they can be utilized.