Chrysler 2012 Annual Report Download - page 264

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Fiat S.p.A. - Statutory
Financial Statements
at 31 December 2012
On 12 May 2011, the IASB issued IFRS 12 – Disclosure of Interests in Other Entities, a new and comprehensive standard on disclosure
requirements for all forms of interests in other entities, including subsidiaries, joint arrangements, associates, special purpose vehicles and
other unconsolidated vehicles. The standard is effective at the latest for annual reporting periods beginning on or after 1 January 2014.
On 12 May 2011, the IASB issued IFRS 13 – Fair Value Measurement, clarifying the determination of the fair value for the purpose
of the financial statements and applying to all IFRS standards permitting or requiring a fair value measurement or the presentation of
disclosures based on fair value. The standard is effective prospectively from 1 January 2013. The application of this new standard is
not expected to have any significant effects on the Company’s financial statement.
On 16 June 2011, the IASB issued an amendment to IAS 1 – Presentation of Financial Statements requiring companies to group
together items within other comprehensive income that may be reclassified to the profit or loss section of the income statement. The
amendment is applicable for periods beginning on or after 1 July 2012. The application of this amendment is not expected to have any
significant effects on the measurement of items in the Group’s financial statement.
On 16 June 2011, the IASB issued an amendment to IAS 19 – Employee Benefits applicable retrospectively for the year beginning
1 January 2013. The amendment modifies the requirements for recognizing defined benefit plans and termination benefits. The main
changes concerning defined benefit plans regard the recognition of the plan deficit or surplus in the balance sheet, the introduction of
net interest expense and the classification of net interest expense arising from defined benefit plans. In details:
Recognition of the plan deficit or surplus: the amendment removes the previous option of being able to defer actuarial gains and
losses under the off-balance sheet “corridor method”, requiring these to be recognized directly in other comprehensive income. In
addition, the amendment requires the immediate recognition of past service costs in profit or loss
Net interest expense: the concepts of interest expense and expected return on defined benefit plans are replaced by the concept
of net interest expense on defined benefit plans, which consists of:
the interest expense calculated on the present value of the liability for defined benefit plans
the interest income arising from the valuation of the plan assets, and
the interest expense or income arising from any limits to the recognition of the plan surplus
Net interest expense is calculated for all components by using the discount rate applied for valuing the obligation for defined benefit
plans at the beginning of the period. In accordance with the present version of IAS 19, the expected return on assets is calculated
by using a long-term expected rate of return.
Classification of net interest expense: in accordance with the new definition of net interest expense set out in the standard, net
interest expense on defined benefit plans will be recognized as financial income/(expense) in the income statement
In accordance with the transitional rules included in paragraph 173 of IAS 19, the Company will apply the standard retrospectively from
1 January 2013, adjusting the opening balance sheet at 1 January 2012 and the income statement for 2012 as if the amendments to IAS
19 had already been applied. At the reporting date, the Company estimated that adoption of the revised standard from 1 January 2012
would lead to an increase in the liability for employee benefits of approximately €0.4 million and €1.1 million at 31 December 2011 and
2012, respectively, and decreases in net equity (other comprehensive gains and losses) of the same amounts. The estimated impact on
the income statement for 2012 is a reduction in costs of approximately €0.1 million.
On 16 December 2011, the IASB issued certain amendments to IAS 32 – Financial Instruments: Presentation to clarify the application of
certain offsetting criteria for financial assets and financial liabilities in IAS 32. The amendments are effective for annual periods beginning
on or after 1 January 2014 and are required to be applied retrospectively.
On 16 December 2011, the IASB issued certain amendments to IFRS 7 – Financial Instruments: Disclosures. The amendments require
information about the effect or potential effect of netting arrangements for financial assets and liabilities on an entity’s financial position.
Entities are required to apply the amendments for annual reporting periods beginning on or after 1 January 2013, and interim periods
within those annual periods. The required disclosures should be provided retrospectively. The application of this interpretation is not
expected to have any significant effects on the Company’s financial statement.