Chrysler 2013 Annual Report Download - page 280

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Fiat S.p.A. Statutory
Financial Statements
at 31 December 2013
Defined benefit plans
The Company’s obligation is calculated separately for each plan by estimating the present value of future benefits that employees have earned
in the current and prior periods applying the projected unit credit method.
The components of defined benefit cost are recognized as follows:
remeasurement components of the obligation, including actuarial gains and losses, are recognized immediately in other comprehensive
income (OCI)
service costs are recognized in profit or loss
net interest on the defined benefit liability is recognized under financial expense in profit or loss
Remeasurement components recognized in OCI cannot be reclassified to profit or loss in a subsequent period.
Other long-term employee benefits
The Company’s net obligations are determined by estimating the present value of future benefits that employees have earned in exchange for
service in the current and prior periods. Remeasurement components on other long-term employee benefits are recognized in profit or loss in
the period in which they occur.
Termination benefits
Termination benefits are expensed at the earlier of: i) when the Company can no longer withdraw the offer of those benefits, and ii) when the
Company recognizes costs for a restructuring that includes payment of the termination benefits.
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 CNH Industrial N.V. (formerly 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 the 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.