Chrysler 2013 Annual Report Download - page 134

133
Consolidated
Financial Statements
at 31 December 2013
Principal activities
Fiat S.p.A. is a corporation organized under the laws of the Republic of Italy. Fiat S.p.A. and its subsidiaries (the “Group”), among which the
most significant is Chrysler Group LLC (together with its subsidiaries, “Chrysler” or “Chrysler Group”), are engaged in the design, engineering,
manufacture, distribution and sale of automobiles and light commercial vehicles, engines, transmission systems, automotive-related
components, metallurgical products and production systems. In addition, the Group has for a long while also been involved in certain other
activities, including services (mainly captive) and publishing, which represent an insignificant portion of the Group core business.
Basis of preparation
The 2013 consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards (the “IFRS”)
issued by the International Accounting Standards Board (“IASB”) and adopted by the European Union, and with the provisions implementing
article 9 of Legislative Decree 38/2005. The designation “IFRS” also includes all valid International Accounting Standards (“IAS”), as well as
all interpretations of the IFRS Interpretations Committee, formerly the Standing Interpretations Committee (“SIC”) and then the International
Financial Reporting Interpretations Committee (“IFRIC”).
The financial statements are prepared under the historical cost method, modified as required for the measurement of certain financial
instruments, as well as on a going concern basis. In this respect, the Group’s assessment is that no material uncertainties (as defined in
paragraph 25 of IAS 1) exist about its ability to continue as a going concern, also considering the on going operational integration between Fiat
and Chrysler and the Group’s industrial and financial flexibility.
The Group’s presentation currency is Euro.
Format of the financial statements
For presentation of the Income statement, the Group uses a classification based on the function of expenses, rather than one based on their
nature, as it is more representative of the format used for internal reporting and management purposes and is consistent with international
practice in the automotive sector.
The Group measures its performance on the basis of Trading profit and Earnings before Interest and Taxes (EBIT). EBIT is the measure of
the Group profitability before interests and taxes; it includes all revenues and costs, income and expenses arising from the Group ongoing
operations, whether recurring or non-recurring. Trading profit reflects the result from ongoing operations before Result from investments and
unusual items that are separately reported in accordance with IAS 1 paragraph 85 which are:
Gains/(losses) on the disposal of investments in subsidiaries, jointly controlled entities and associates;
Restructuring costs;
Impairment of Property plant and equipment and Intangible assets arising from transactions that are only incidentally related to the ordinary
activities of the Group and are not expected to occur frequently (i.e. impairment or other losses as a consequence of change in strategy
related to products portfolio, manufacturing footprint, dealer network and suppliers);
Other items only incidentally related to the ordinary activities of the Group and not expected to occur frequently, such as the effect of defined
benefit plan amendments, including curtailments and settlements, and acquisition costs related to a business combination or costs arising
from operations terminated or disposed of in prior years.
Consolidated
Financial Statements
at 31 December 2013
Notes
Notes to the Consolidated Financial Statements