Chrysler 2015 Annual Report Download - page 148

148 2015 | ANNUAL REPORT
Consolidated
Financial Statements
Notes to the Consolidated
Financial Statements
Financial instruments
Presentation
Financial instruments held by the Group are presented in the Consolidated Financial Statements as described in the
following paragraphs.
Investments and other non-current financial assets consist of investments in unconsolidated companies and other
non-current financial assets (held-to-maturity securities, non-current loans and receivables and other non-current
available-for-sale financial assets).
Current financial assets, as defined in IAS 39 – Financial Instruments: Recognition and Measurement, include Trade
receivables, Receivables from financing activities, Current investments, Current securities and Other financial assets
(which include derivative financial instruments stated at fair value), as well as Cash and cash equivalents. Cash and cash
equivalents include cash at banks, units in money market funds and other money market securities, primarily comprised
of commercial paper and certificates of deposit that are readily convertible into cash and are subject to an insignificant
risk of changes in value. Money market funds consist of investments in high quality, short-term, diversified financial
instruments which can generally be liquidated on demand. Current securities include short-term or marketable securities
which represent temporary investments of available funds and do not satisfy the requirements for being classified as cash
equivalents. Current securities include both available-for-sale and held-for-trading securities.
Financial liabilities consist of Debt and Other financial liabilities (which include derivative financial instruments measured
at fair value), Trade payables and Other current liabilities.
Measurement
Non-current financial assets other than Investments, as well as current financial assets and financial liabilities, are
accounted for in accordance with IAS 39 – Financial Instruments: Recognition and Measurement.
Current financial assets and held-to-maturity securities are recognized on the basis of the settlement date and, on
initial recognition, are measured at acquisition cost, including transaction costs. Subsequent to initial recognition,
available-for-sale and held-for-trading financial assets are measured at fair value. When market prices are not directly
available, the fair value of available-for-sale financial assets is measured using appropriate valuation techniques (e.g.
discounted cash flow analysis based on market information available at the balance sheet date).
Gains and losses on available-for-sale financial assets are recognized in Other comprehensive income/(loss) until
the financial asset is disposed of or is impaired. When the asset is disposed of, the cumulative gains or losses,
including those previously recognized in Other comprehensive income/(loss), are reclassified to the Consolidated
Income Statement during the period and are recognized within Net financial expenses. When the asset is impaired,
accumulated losses are recognized in the Consolidated Income Statement. Gains and losses arising from changes in
the fair value of held-for-trading financial instruments are recognized in the Consolidated Income Statement.
Loans and receivables which are not held by the Group for trading (loans and receivables originating in the ordinary
course of business), held-to-maturity securities and equity investments whose fair value cannot be determined reliably,
are measured, to the extent that they have a fixed term, at amortized cost, using the effective interest method. When
the financial assets do not have a fixed term, they are measured at acquisition cost. Receivables with maturities of over
one year which bear no interest, or have an interest rate significantly lower than market rates, are discounted using
market rates. Assessments are made regularly as to whether there is any objective evidence that a financial asset or
group of assets may be impaired. If any such evidence exists, the impairment loss is recognized in the Consolidated
Income Statement.
Except for derivative instruments, financial liabilities are measured at amortized cost using the effective interest method.
Financial assets and liabilities hedged against changes in fair value (fair value hedges) are measured in accordance
with hedge accounting principles: gains and losses arising from remeasurement at fair value, due to changes in the
respective hedged risk, are recognized in the Consolidated Income Statement and are offset by the effective portion of
the gain or loss arising from remeasurement at fair value of the hedging instrument.