Chrysler 2013 Annual Report Download - page 319

318 Fiat S.p.A.
Statutory Financial
Statements
at 31 December 2013
Notes
Advances
This item represents the difference between the value of work completed for Treno Alta Velocità – T.A.V. S.p.A. (merged into Rete Ferroviaria
Italiana S.p.A. from 31 December 2010) and progress payments and contractual advances received, as follows:
(€ thousand) 31 December 2013 31 December 2012 Change
Contract work in progress 246,627 244,858 1,769
Less: Net advances for work completed 247,360 245,426 1,934
Gross amount due to the customer 733 568 165
Net contractual advances 131 132 (1)
Total advances 864 700 164
The item relates to contracts between Fiat S.p.A. and Treno Alta Velocità – T.A.V. S.p.A. (acting on behalf of F.S. S.p.A.) for engineering and
construction work on two lines forming part of the high-speed rail project in northern Italy (Bologna-Florence and Turin-Milan, consisting of the
Turin-Novara and Novara-Milan sub-lines). At 31 December 2013, the contractual amounts due (including additional work, monetary adjustments
and other contractual amounts) totaled €5,236 million for the Bologna-Florence line and €2,463 million for the Milan-Novara sub-line. The contract
amount for the Turin-Novara sub-line (completed and accounting closed at the end of 2009) was €4,669 million.
Fiat S.p.A., as general contractor, engaged CAV.E.T. and CAV.TO.MI. for the engineering and construction activities, retaining responsibility
for work coordination, organization and management activities. Contract work in progress therefore reflects the fees earned by Fiat S.p.A.
as a percentage (approximately 3.5%) of the total contractual amount for activities carried out directly. Progress payments are made by the
customer to Fiat S.p.A. based on the stage of completion of the works and advance payments, which Fiat S.p.A. then pays to CAV.E.T. and
CAV.TO.MI., net of its contractual percentage.
These amounts may be analyzed by line as follows:
(€ thousand) 31 December 2013 31 December 2012 Change
Contract work in progress 246,627 244,858 1,769
- Florence-Bologna line 161,906 162,212 (306)
- Novara-Milan line 84,721 82,646 2,075
Less: Net advances for work completed 247,360 245,426 1,934
- Florence-Bologna line 162,629 162,580 49
- Novara-Milan line 84,731 82,846 1,885
Gross amount due to the customer 733 568 165
- Florence-Bologna line 723 368 355
- Novara-Milan line 10 200 (190)
Contract work in progress is measured on the basis of the stage of completion in relation to the sales price, which in this case is the
consideration contractually agreed for the activities directly carried out by Fiat S.p.A. Contract costs relating to the contract revenue recognized
totaled €101,034 thousand at 31 December 2013 (€98,750 thousand at 31 December 2012). Changes in contract work in progress have
been recognized in the income statement under the item other operating income (see Note 4). When the lines are contractually completed, the
final contractual revenues for the activities directly carried out are recognized in the income statement under other operating income, net of any
decrease in inventories. At the same time, the accounts for inventories and amounts classified as advances are closed.