2006 Annual Report - Fiat SpA

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Appendix Transition of the Parent Company Fiat S.p.A. to International Financial Reporting Standards (IFRS) In compliance with European Regulation no. 1606 of July 19, 2002, starting from 2005 the Fiat Group has adopted the International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board (“IASB”) for the preparation of its consolidated financial statements. On the basis of national legislation implementing that Regulation, the annual statutory accounts of the Parent Company Fiat S.p.A. at December 31, 2006 have also been prepared using those accounting standards. As a consequence the Parent Company Fiat S.p.A. is presenting its financial statements for 2006 and its comparative figures for the prior year in accordance with IFRS. This Appendix provides reconciliations of the company’s Balance Sheets at January 1, 2005 and December 31, 2005 and its Income Statement for the year ended December 31, 2005, together with notes, as required by IAS 1 – Presentation of Financial Statements. This information has been prepared as part of the transition by Fiat S.p.A. to IFRS and in connection with the preparation of its statutory accounts for the year ending December 31, 2006 in accordance with IFRS; it does not include all of the disclosures which would be necessary for a full presentation of the financial position and results of operations of Fiat S.p.A. as of and for the year ended December 31, 2005 in conformity with IFRS. Reconciliations required by IFRS 1 As required by IFRS 1 – First-time Adoption of International Financial Reporting Standards, this Appendix describes the principles adopted in preparing the opening Balance Sheet at January 1, 2005 in accordance with IFRS and the main differences with the Italian accounting principles used to prepare the Italian financial statements for the year ended December 31, 2005, and provides reconciliations between the figures already published, prepared in accordance with Italian accounting principles, and the corresponding figures redetermined in accordance with IFRS. The Balance Sheet and Income Statement for the year ended December 31, 2005 have been prepared in accordance with the provisions of IFRS 1 on the basis of the IFRS already effective from January 1, 2006 as published at December 31, 2005. As a result in particular the amendment to IAS 39 issued in 2005 regarding the recognition and measurement of financial guarantee contracts in the financial statements of the guarantor and having effect from January 1, 2006 has been applied. First-time adoption of IFRS General principle In compliance with IFRS 1, Fiat S.p.A. has applied the accounting standards effective at the reporting date of its first IFRS financial statements to its opening Balance Sheet at January 1, 2005 and retrospectively throughout all the periods presented in those statements, except for the exemptions permitted by IFRS 1 and elected by the company as described in the following. In particular, as Fiat S.p.A. has adopted IFRS for its separate financial statements at a later date than for its consolidated financial statements (in which there was an opening IFRS Balance Sheet at January 1, 2004), it has measured assets and liabilities in accordance with IFRS at the same value in both Balance Sheets (separate and consolidated), with the exception of the items for which there are consolidating adjustments. There are the following differences in the opening Balance Sheet at January 1, 2005 compared to that included in the financial statements for the year ended December 31, 2004 prepared in accordance with Italian accounting principles: ■ all assets and liabilities whose recognition is required by IFRS, including those not permitted in the application of Italian accounting principles, have been recognised and measured in accordance with IFRS; ■ all assets and liabilities whose recognition is required by Italian accounting principles but is not permitted by IFRS have been derecognised; ■ certain Balance Sheet items have been reclassified in accordance with IFRS. The effects of these adjustments have been recognised directly in opening equity at January 1, 2005, the date of first-time adoption of IFRS. Appendix Transition of the Parent Company Fiat S.p.A. to International Financial Reporting Standards (IFRS) 301
Financial statement format Fiat S.p.A. has adopted the current/non-current distinction for the presentation of assets and liabilities in its Balance Sheet, leading to the need to reclassify the previous Balance Sheets presented in accordance with the formats required by Legislative Decree no. 127 of April 9, 1991 and subsequent modifications; the presentation of the Income Statement remains unchanged, with expenses classified on the basis of their nature. Optional exemptions elected by Fiat S.p.A In accordance with the optional exemption granted by IFRS 1, Fiat S.p.A. has elected to measure its assets and liabilities at January 1, 2005, the transition date, at the same amounts used in the preparation of the Group’s consolidated financial statements for the year ended December 31, 2004. In further detail: ■ Employee benefits: the Fiat Group elected to recognise all cumulative actuarial gains and losses at January 1, 2004 on transition to IFRS, even though it decided to use the “corridor approach” for later actuarial gains and losses. This exemption was applied from January 1, 2004, the date of first-time adoption of IFRS by the Fiat Group. There would not have been material differences if this had instead been applied from January 1, 2005. ■ Business combinations: Fiat S.p.A. has elected not to apply IFRS 3 – Business Combinations to business combinations that occurred before the date of transition to IFRS. 302 Appendix Transition of the Parent Company Fiat S.p.A. to International Financial Reporting Standards (IFRS) Effects of transition to IFRS on the Balance Sheet at January 1, 2005 (in millions of euros) Italian GAAP Reclassifications Adjustments IAS/IFRS Intangible assets 50 – (50) – Intangible assets Property, plant and equipment 43 (1) – 42 Property, plant and equipment Equity investments 5,249 – 75 5,324 Investments Other securities – – 7 7 Other financial assets 277 – 277 Deferred tax assets 2 – 2 Other non-current assets Total fixed assets 5,342 278 32 5,652 Total Non-current assets Inventories 7,145 (7,321) 176 – Inventories Trade receivables 351 6 – 357 Trade receivables Receivables from subsidiaries 25 (25) – Financial receivables from subsidiaries 2,321 2 – 2,323 Current financial receivables Taxes receivable 289 (289) – Deferred tax assets 277 (277) – Other receivables 33 312 359 704 Other current receivables Treasury stock 26 – (26) Cash on hand – – – – Cash and cash equivalents Total current assets 10,467 (7,592) 509 3,384 Total Current Assets Accrued income and prepaid expenses 7 (7) – – – – Assets held for sale TOTAL ASSETS 15,816 (7,321) 541 9,036 TOTAL ASSETS Total stockholders’ equity 4,466 – 190 4,656 Total stockholders’ equity Provisions for termination indemnities Provisions for employee and similar obligations 19 36 (3) 52 benefits and other non-current provisions Other provisions 30 (30) – – – – Deferred tax liabilities – 7 7 Non-current debt 13 – 13 Other non-current liabilities Total provisions for risks and charges 49 19 4 72 Total Non-current liabilities Provision for employee severance indemnities 12 (12) – Provisions for employees and 6 – 6 other current provisions Trade payables 502 11 – 513 Trade payables Payable to subsidiaries 223 (223) – Borrowings from banks 3,060 137 347 3,544 Current debt Advances 7,336 (7,336) – Payables to social security authorities 3 (3) – Other payables 26 219 – 245 Other payables Taxes payable 9 (9) – Total payables 11,159 (7,198) 347 4,308 Total Current Liabilities Accrued expenses and deferred income 130 (130) – – – – Liabilities held for sale TOTAL STOCKHOLDERS’ EQUITY AND LIABILITIES 15,816 (7,321) 541 9,036 TOTAL STOCKHOLDERS’ EQUITY AND LIABILITIES Appendix Transition of the Parent Company Fiat S.p.A. to International Financial Reporting Standards (IFRS) 303
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Annual Report Consolidated and Stat
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But it does move. Galileo Galilei
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Letter from the Chairman and the Ch
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The Fiat Group The Fiat Group perfo
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Stockholders Financial communicatio
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in 2003, and now the Panda Hydrogen
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The meeting with the EWC Selected C
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Revenues by Business Area (in milli
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The breakdown of trading profit by
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Investment income was 156 million e
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If working capital is restated to i
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Financial Services Revenues (in mil
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Statement of Changes in Net Industr
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strategic consistency, economic fea
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The Board of Directors, at its meet
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There can be no motion without some
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Fiat Auto - Fiat, Alfa Romeo, Lanci
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Maserati Operating Performance In 2
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Trucks and Commercial Vehicles Ivec
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Fiat Powertrain Technologies Operat
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Metallurgical Products - Teksid Pro
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Motion for Approval of the Financia
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Consolidated Income Statement (*) (
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Statement of Changes in Stockholder
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partially from the market: the rema
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Measurement Investments in unconsol
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charges for risk provisions and wri
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Union market for the Fiat Auto and
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Composition and principal changes I
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Net financial expenses in 2006 (exc
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Year of expiry Total at December Be
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The net carrying amount of Intangib
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14. Property, plant and equipment I
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In 2005 Changes in accumulated depr
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esulting in a reduction of 1,213 mi
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Receivables from financing activiti
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(the residual debt of the Exchangea
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The reconciliation of the number of
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A summary of outstanding stock opti
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Under the CNH EIP, performance-base
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26. Provisions for employee benefit
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Changes in the present value of Pos
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■ Commercial risks - This provisi
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31, 2006 (872 million euros at Dece
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Fidis Retail Italia (FRI) All the r
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Other and Magneti Business elimina-
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Credit risk The maximum credit risk
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The increase over the prior year re
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■ Current trade receivables of 78
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The book value at the disposal date
Page 101 and 102: 198 Appendix The Companies of the F
Page 103 and 104: Subsidiaries consolidated on a line
Page 111 and 112: % of Group % of consoli- Interest %
Page 113 and 114: Subsidiaries accounted for using th
Page 119 and 120: 234 Financial Review of Fiat S.p.A.
Page 121 and 122: (*) (*) Income Statement Balance Sh
Page 123 and 124: Income Statement pursuant to Consob
Page 125 and 126: When an impairment loss on assets s
Page 127 and 128: Provisions The company recognises p
Page 129 and 130: 4. Other operating income Other ope
Page 131 and 132: Net income from derivative financia
Page 133 and 134: 12. Property, plant and equipment T
Page 135 and 136: 15. Other non-current assets At Dec
Page 137 and 138: Regarding changes in 2005, the Mand
Page 139 and 140: A summary of outstanding stock opti
Page 141 and 142: The amounts recognised in the Incom
Page 143 and 144: The item Payables to Group companie
Page 145 and 146: These relate to: ■ guarantees of
Page 147 and 148: Counterparty Other Current Other No
Page 149 and 150: 32. Significant non-recurring trans
Page 151: Fees paid to Members of the Board o
Page 155 and 156: Deferred tax assets Reclassificatio
Page 157 and 158: Reconciliation of net profit (loss)
Page 159 and 160: B. Employee benefits The employees
Page 161 and 162: Auditors’ Reports Auditors’ Rep
Page 163 and 164: Reports of the Board of Statutory A
Page 165 and 166: that numerous transactions involvin
Page 167 and 168: Motion for Approval of the Financia
Page 169 and 170: Motion to amend Articles 9, 11, 12,
Page 171 and 172: Stockholders Meeting and will be ef
Page 173 and 174: Graphic design Atelier Roger Pfund,
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2006 Annual Report - Fiat SpA

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