Chrysler 2013 Annual Report Download - page 142

141
Consolidated
Financial Statements
at 31 December 2013
Employee benefits
Defined contribution plans
Costs arising from defined contribution plans are recognized as an expense as incurred.
Defined benefit plans
The Group net obligations are determined separately for each plan by estimating the present value of future benefits that employees have
earned in the current and prior periods, and deducting the fair value of any plan assets. The present value of the defined benefit obligation is
measured using actuarial techniques and actuarial assumptions that are unbiased and mutually compatible and attributes benefits to periods
in which the obligation to provide post-employment benefits arise by using the Projected Unit Credit Method. Plan assets are recognized and
measured at fair value.
When the net obligation is a potential asset, the recognized amount is limited to the present value of any economic benefits available in the form
of future refunds or reductions in future contributions to the plan (asset ceiling).
The components of the defined benefit cost are recognized as follows:
the service costs are recognized in Income statement by function and presented in the respective line items (Cost of sales, Selling general
and administrative costs, Research and development costs, etc.);
the net interests on the defined benefit liability or asset are recognized in the Income statement as Financial income (expenses), and
is determined by multiplying the net liability/(asset) by the discount rate used to discount obligations taking into account the effect of
contributions and benefit payments made during the year;
the remeasurement components of the net obligations, which comprise actuarial gains and losses, the return on plan assets (excluding
interest income recognized in the Income statement) and any change in the effect of the asset ceiling are recognized immediately in Other
comprehensive income/(losses). These remeasurement components are not reclassified in Income statement in a subsequent period.
Past service costs arising from plan amendments and curtailments are recognized immediately in the Income statement within Other unusual
income and expenses. Gains and losses on the settlement of a plan are recognized in the Income statement within Other unusual income and
expenses when the settlement occurs.
Other long term employee benefits
The Group obligations represent the present value of future benefits that employees have earned in return for their service during the current
and prior periods. Remeasurement components on other long term employee benefits are recognized in the Income statements in the period
in which they arise.
Termination benefits
Termination benefits are expensed at the earlier of when the Group can no longer withdraw the offer of those benefits and when the Group
recognizes costs for a restructuring.
Provisions
Provisions are recognized when the Group has a present obligation, legal or constructive, as a result of a past event, it is probable that
an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate of the amount of the
obligation can be made.
Changes in estimates of provisions are reflected in the Income statement in the period in which the change occurs.