Chrysler 2015 Annual Report Download - page 142

142 2015 | ANNUAL REPORT
Consolidated
Financial Statements
Notes to the Consolidated
Financial Statements
SIGNIFICANT ACCOUNTING POLICIES
Authorization of Consolidated Financial Statements and Compliance with International Financial Reporting
Standards
The Consolidated Financial Statements, together with notes thereto of FCA, at December31, 2015 were authorized
for issuance on February 29, 2016 and have been prepared in accordance with the International Financial Reporting
Standards (“IFRS”) as adopted by the European Union (“EU-IFRS”) and Part 9 of Book 2 of the Dutch Civil Code. The
designation “IFRS” also includes International Accounting Standards (“IAS”) as well as all interpretations of the IFRS
Interpretations Committee (“IFRIC”).
Basis of Preparation
The Consolidated Financial Statements are prepared under the historical cost method, modified as required for
the measurement of certain financial instruments, as well as on a going concern basis. In this respect, the Group’s
assessment is that no material uncertainties (as defined in paragraph 25 of IAS 1- Presentation of Financial Statements)
exist about its ability to continue as a going concern.
Format of the Consolidated Financial Statements
For presentation of the Consolidated Income Statement, the Group uses a classification based on the function of
expenses, rather than based on their nature, as it is more representative of the format used for internal reporting and
management purposes and is consistent with international practice in the automotive sector. The Group also presents
a subtotal for Earnings before Interest and Taxes (“EBIT”). EBIT distinguishes between the Profit before taxes arising
from operating activities and those arising from financing activities.
For the Consolidated Statement of Financial Position, a mixed format has been selected to present current and
non-current assets and liabilities, as permitted by IAS 1 paragraph 60. More specifically, the Group’s Consolidated
Financial Statements include both industrial and financial services companies. The investment portfolios of the financial
services companies are included in current assets, as the investments will be realized in their normal operating cycle.
However, the financial services companies obtain only a portion of their funding from the market while the remainder
is obtained from Group operating companies through the Group’s treasury companies (included within the industrial
companies), which provide funding to both industrial and financial services companies in the Group as the need
arises. This financial services structure within the Group does not allow the separation of financial liabilities funding
the financial services operations (whose assets are reported within current assets) and those funding the industrial
operations. Presentation of financial liabilities as current or non-current based on their date of maturity would not
facilitate a meaningful comparison with financial assets, which are categorized on the basis of their normal operating
cycle. Disclosure as to the due date of the financial liabilities is provided in Note 23.
The Consolidated Statement of Cash Flows is presented using the indirect method.