Chrysler 2013 Annual Report Download - page 281

280 Fiat S.p.A.
Statutory Financial
Statements
at 31 December 2013
Notes
Own shares
Own shares are recognized as a deduction from equity. The original cost of own shares, proceeds of any subsequent sale and other changes
are presented as movements in equity.
Dividends received
Dividends from investees are recognized in the income statement when the right to receive the dividend is established.
Revenue recognition
Revenue is recognized when it is probable that economic benefits associated with a transaction will flow to the Company and the amount can
be reliably measured. Revenue is presented net of any adjusting items.
Revenue from services and from construction contracts are recognized using the percentage completion method described under inventory.
Financial income and expense
Financial income and expense are recognized in the income statement in the period in which they are earned or incurred.
Finance costs related to investments in qualifying assets that require a substantial period of time to prepare for their intended future use or sale
are capitalized and amortized over the useful life of the asset.
Income taxes
The tax charge for the period is determined on the basis of existing law. Taxes on income are recognized in profit and loss, except where they
relate to items charged or credited directly to equity, in which case the tax effect is also recognized directly in equity.
For deferred tax assets and liabilities, determination is based on the temporary differences existing between the carrying amount of an asset
or liability in the statement of financial position and its corresponding tax basis. Deferred tax assets resulting from unused tax losses and
temporary differences are recognized to the extent that it is probable that future taxable profit will be available against which they can be utilized.
Current and deferred income taxes and liabilities are offset when there is a legal right to do so. Deferred tax assets and liabilities are measured
at the tax rates that are expected to apply to the period when the temporary difference is reversed.
Fiat S.p.A. and almost all its Italian subsidiaries elected to take part in the domestic tax consolidation program pursuant to Articles 117/129
of Presidential Decree 917/1986 for a three-year period beginning in 2004. The election was renewed in 2007 and again in 2010, on both
occasions for a minimum three-year period.
Under the program, Fiat S.p.A. is the consolidating company and calculates a single taxable base for the group of companies taking part,
enabling benefits from offsetting taxable income and tax losses in a combined tax return. Each company participating in the consolidation
transfers its taxable income or tax loss to the consolidating company. Fiat S.p.A. recognizes a receivable for companies contributing taxable
income, corresponding to the amount of IRES (corporate income tax) payable on their behalf. For companies contributing a tax loss, Fiat S.p.A.
recognizes a payable for the amount of the loss actually set off at group level.
Dividends payable
Dividends payable are recognized as changes in equity in the period in which they are approved by shareholders.