Chrysler 2014 Annual Report Download - page 157

2014 | ANNUAL REPORT 155
Interests in Joint Operations
A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the
assets and obligations for the liabilities, relating to the arrangement. Joint control is the contractually agreed sharing
of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous
consent of the parties sharing control.
When the Group undertakes its activities under joint operations, it recognizes in relation to its interest in the joint
operation: (i) its assets, including its share of any assets held jointly, (ii) its liabilities, including its share of any liabilities
incurred jointly, (iii) its revenue from the sale of its share of the output arising from the joint operation (iv) its share of
the revenue from the sale of the output by the joint operation and (v) its expenses, including its share of any expenses
incurred jointly.
Interests in other companies
Interests in other companies are measured at fair value. Investments in equity investments that do not have a
quoted market price in an active market and whose fair value cannot be reliably measured are measured at cost.
For investments classified as available-for-sale, financial assets gains or losses arising from changes in fair value are
recognized in Other comprehensive income/(loss) until the assets are sold or are impaired; at that time, the cumulative
Other comprehensive income/(loss) is recognized in the Consolidated income statement. Interests in other companies
for which fair value is not available are stated at cost less any impairment losses.
Dividends received are included in Other income/(expenses) from investments.
Transactions eliminated in consolidation
All intra-group balances and transactions and any unrealized gains and losses arising from intra-group transactions
are eliminated in preparing the Consolidated financial statements.
Unrealized gains and losses arising from transactions with associates and joint ventures are eliminated to the extent of
the Group’s interest in those entities. Unrealized losses are also eliminated unless the transaction provides evidence of
an impairment of the asset transferred.
Foreign currency transactions
The functional currency of the Group’s entities is the currency of their primary economic environment. In individual
companies, transactions in foreign currencies are recorded at the exchange rate prevailing at the date of the
transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated
at the exchange rate prevailing at that date. Exchange differences arising on the settlement of monetary items or on
reporting monetary items at rates different from those at which they were initially recorded during the period or in
previous financial statements, are recognized in the Consolidated income statement.
Consolidation of foreign entities
All assets and liabilities of foreign consolidated companies with a functional currency other than the Euro are translated
using the closing rates at the date of the Consolidated statement of financial position. Income and expenses are
translated into Euro at the average exchange rate for the period. Translation differences resulting from the application
of this method are classified as Other comprehensive income/(loss) until the disposal of the investment. Average
exchange rates for the period are used to translate the cash flows of foreign subsidiaries in preparing the Consolidated
statement of cash flows.
Goodwill, assets acquired and liabilities assumed arising from the acquisition of entities with a functional currency
other than the Euro are recognized in the Consolidated financial statements in the functional currency and translated
at the exchange rate at the acquisition date. These balances are translated at subsequent balance sheet dates at the
relevant exchange rate.