Chrysler 2013 Annual Report Download - page 144

143
Consolidated
Financial Statements
at 31 December 2013
of goodwill or the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction,
affects neither accounting profit nor taxable profit. Deferred tax assets and liabilities are measured at the substantively enacted tax rates in the
respective jurisdictions in which the Group operates that are expected to apply to the period when the asset is realized or liability is settled.
The Group recognizes deferred tax liabilities associated with the existence of a subsidiary’s undistributed profits, except when it is able to
control the timing of the reversal of the temporary difference; and it is probable that this temporary difference will not reverse in the foreseeable
future. The Group recognizes deferred tax assets associated with the deductible temporary differences on investments in subsidiaries only to
the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which
the temporary difference can be utilized.
Deferred tax assets relating to the carry-forward of unused tax losses and tax credits, as well as those arising from deductible temporary
differences, are recognized to the extent that it is probable that future profits will be available against which they can be utilized. The Group
reassesses unrecognized deferred tax assets at the end of each year and recognizes a previously unrecognized deferred tax asset to the extent
that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.
Current income taxes and deferred taxes are offset when they relate to the same taxation authority and there is a legally enforceable right of
offset.
Other taxes not based on income, such as property taxes and capital taxes, are included in Other income/(expenses).
Segment reporting
The organization of the Group, with reference to the car mass-market brands, is based on four operating regions (the “regions”) that deal with the
development, production and sale of “mass-market brand” passenger cars, light commercial vehicles and related parts and services in specific
geographical areas: NAFTA (U.S., Canada and Mexico), LATAM (South and Central America, excluding Mexico), APAC (Asia and Pacific countries)
and EMEA (Europe, Middle East and Africa). The Group also includes two additional operating segments (Luxury Brands and Components), the
first which designs, manufactures and sells luxury cars (Ferrari and Maserati) and the other that produces and sells components and production
systems for the automotive industry (Magneti Marelli, Teksid and Comau). Both segments operate on a worldwide basis.
In more detail, the regions and the operating segments identified by the Group are the following:
NAFTA mainly earns its revenues from the design, development, production, distribution and sale of automobiles under the Chrysler, Jeep,
Dodge, Ram, SRT and Fiat brand names, and from sales of the related parts and accessories (under the Mopar brand name) in the United
States, Canada and Mexico.
LATAM mainly earns its revenues from the production and sale of passenger cars and light commercial vehicles and related spare parts
under the Fiat and Fiat Professional brand names in South and Central America, excluding Mexico, and from the distribution of Chrysler
group brand cars in the same region; in addition, it provides financial services to the dealer network in Brazil and Argentina, and to the dealer
network and end customers of CNH Industrial group for the sale of trucks and commercial vehicles in the same countries.
APAC mainly earns its revenues from the sale of cars, engines and transmissions and related spare parts under the Chrysler and Fiat brands
mostly in China, Japan, Australia, South Korea and India. These activities are carried out by the region through both subsidiaries and joint
ventures.
EMEA mainly earns its revenues from the design, development, production and sale of passenger cars and light commercial vehicles under
the Fiat, Alfa Romeo, Lancia/Chrysler, Abarth and Fiat Professional brand names and the sale of the related spare parts in Europe, Middle
East and Africa, and from the distribution of Chrysler group vehicles in the same areas. In addition, the region provides financial services
related to the sale of cars and light commercial vehicles in Europe, primarily through the 50/50 joint venture FGA Capital set up with the
Crédit Agricole group included within entities accounted for using the equity method.