Chrysler 2014 Annual Report Download - page 160

158 2014 | ANNUAL REPORT
Consolidated
Financial Statements
Notes to the Consolidated
Financial Statements
Depreciation
Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets during years ended
December 31, 2014, 2013 and 2012, as follows:
Depreciation rates
Buildings 3% - 8%
Plant, machinery and equipment 3% - 33%
Other assets 5% - 33%
Borrowing Costs
Borrowing costs that are directly attributable to the acquisition, construction or production of property, plant or
equipment or an intangible asset that is deemed to be a qualifying asset as defined in IAS 23 - Borrowing Costs
are capitalized. The amount of borrowing costs eligible for capitalization corresponds to the actual borrowing costs
incurred during the period less any investment income on the temporary investment of any borrowed funds not yet
used. The amount of borrowing costs capitalized as of December 31, 2014 and 2013 was €256 million and €230
million, respectively.
Impairment of assets
At the end of each reporting period, the Group assesses whether there is any indication that its Intangible assets
(including development costs) and its Property, plant and equipment may be impaired. Goodwill and Intangible assets
with indefinite useful lives are tested for impairment annually or more frequently, if there is an indication that an asset
may be impaired.
If indications of impairment are present, the carrying amount of the asset is reduced to its recoverable amount which
is the higher of fair value less costs to sell and its value in use. The recoverable amount is determined for the individual
asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or
groups of assets, in which case the asset is tested as part of the cash-generating unit (“CGU”) to which the asset
belongs. A CGU is the smallest identifiable group of assets that generates cash inflows that are largely independent
of the cash inflows from other assets or groups of assets. In assessing the value in use of an asset or CGU, the
estimated future cash flows are discounted to their present value using a discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset or CGU. An impairment loss is recognized
if the recoverable amount is lower than the carrying amount. Impairment of Property plant and equipment and
Intangible assets arising from transactions that are only incidentally related to the ordinary activities of the Group and
that are not expected to occur frequently, are considered to hinder comparability of the Group’s year-on-year financial
performance and are recognized within Other unusual expenses.
When an impairment loss for assets, other than Goodwill no longer exists or has decreased, the carrying amount of
the asset or CGU is increased to the revised estimate of its recoverable amount, but not in excess of the carrying
amount that would have been recorded had no impairment loss been recognized. The reversal of an impairment loss
is recognized in the Consolidated income statement.