Chrysler 2008 Annual Report Download - page 113

Fiat Group Consolidated Financial Statements at 31 December 2008112
Leased assets
Leased assets include vehicles leased to retail customers by
the Group's leasing companies under operating lease
agreements. They are stated at cost and depreciated at annual
rates of between 20% and 33%.
Investment property
Real estate and buildings held in order to obtain rental
income are carried at cost less accumulated depreciation
(charged at annual rates of between 2.5% to 5%) and
impairment losses.
Impairment of assets
The Group reviews, at least annually, the recoverability of the
carrying amount of intangible assets (including capitalised
development costs) and tangible assets, in order to determine
whether there is any indication that those assets have suffered
an impairment loss. If indications of impairment are present,
the carrying amount of the asset is reduced to its recoverable
amount. An intangible asset with an indefinite useful life is
tested for impairment annually or more frequently, whenever
there is an indication that the asset may be impaired.
Where it is not possible to estimate the recoverable
amount of an individual asset, the Group estimates the
recoverable amount of the cash-generating unit to which
the asset belongs.
The recoverable amount of an asset is the higher of fair value
less disposal costs and its value in use. In assessing its value
in use, the pre-tax estimated future cash flows are discounted
to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and
the risks specific to the asset. An impairment loss is recognised
when the recoverable amount is lower than the carrying
amount. Where an impairment loss for assets other than
goodwill subsequently no longer exists or has decreased the
carrying amount of the asset or cash-generating unit 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 recognised. A reversal
of an impairment loss is recognised in the income statement
immediately.
Financial instruments
Presentation
Financial instruments held by the Group are presented
in the financial statements as described in the following
paragraphs.
Investments and other non-current financial assets comprise
investments in non-consolidated 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 include trade receivables, receivables
from financing activities (retail financing, dealer financing,
lease financing and other current loans to third parties), current
securities, and other current financial assets (which include
derivative financial instruments stated at fair value as assets),
as well as cash and cash equivalents.
In particular, Cash and cash equivalents include cash at banks,
units in liquidity funds and other money market securities that
are readily convertible into cash and are subject to an
insignificant risk of changes in value.
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 refer to debt, which includes asset-backed
financing, and other financial liabilities (which include
derivative financial instruments stated at fair value as
liabilities), trade payables and other payables.
Measurement
Investments in unconsolidated companies classified as non-
current financial assets are accounted for as described in the
section Basis of consolidation.
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
.