THE FIAT GROUP IN - Fiat SpA

Fair value of securities and bonds – US accounting principles establish different categories of securities depending on their
intended use: held to maturity, acquired for trading purposes, or available for sale. The securities included in financial fixed assets
(including listed stocks) have been classified in the latter category, and in accordance with US accounting principles they must
be stated at fair value. At the end of the year, the difference between the fair value and the carrying value, according to such
principles, must be shown as an adjustment to stockholders’ equity; according to the same principles, any differences between
the purchase price and the fair value at the date of purchase must be recorded in the statement of operations.
Deferred gains on disposals of fixed assets – US accounting principles require that when property, plant and equipment are sold
and are subsequently leased back, the gain on the sale must be deferred over the term of the lease, if certain conditions are met.
Deferred revenue recognition – Certain transactions which are recognized as sales under Italian GAAP on the basis of passage
of title are accounted for under US GAAP as financing or operating lease arrangements until the buyer resells or subsequently
consumes or uses the product, and the risks and rewards of ownership are effectively transferred, deferring the moment at which
revenues and margins are recognized.
Write-off of capitalized costs – The accounting principle of US GAAP, SOP 98-5, effective from 1999, requires that start-up
costs cannot be capitalized.
Accounting for derivative financial instruments and hedging activities – US GAAP require that an entity recognize all
derivatives as either assets or liabilities in the balance sheet and measure those instruments at fair value. If certain conditions are
met, a derivative may be specifically designated as (a) a fair value hedge with the changes in fair value recorded to income (which
for the effective portion would directly offset any changes in the hedged item), (b) a cash flow hedge with the changes in fair
value recorded directly to other comprehensive income (equity) and subsequently reclassified into earnings when the forecasted
transaction affects earnings. However, under Italian GAAP, for cash flow hedges, the derivatives are not marked to fair value.
Deferred income taxes – Commencing in 1998, the accounting principles applied by the Group for deferred income taxes are
substantially the same as US accounting principles, therefore, deferred income tax differences mainly pertain to those calculated
on other reconciliation adjustments, where applicable.
The reconciliations of Stockholders’ Equity and Net Income (Loss) to US accounting principles, based on the aforementioned
differences, are set forth as follows:
Reconciliation of Stockholders’ Equity in consolidated financial statements
(in millions of euros) At 12/31/2001 At 12/31/2000
Stockholders’ Equity in the consolidated financial statements 12,170 13,320
Revaluation of property, plant and equipment reversed (322) (375)
Goodwill 913 869
Treasury stock (282) (50)
Provision for restructuring reserve not consistent with EITF 94-3 296 452
Securities and bonds valued at fair value (637) (419)
Deferred gains on disposals of fixed assets (119) (67)
Deferred revenue recognition (164) –
Write off capitalized costs (179) (127)
Accounting for Derivative Instruments and Hedging Activities (SFAS 133) (212) –
Other differences (134) 15
Deferred income taxes (107) (104)
Total differences (947) 194
Stockholders’ Equity according to US GAAP 11,223 13,514
Consolidated Financial Statements at December 31, 2001 – Notes to the Consolidated Financial Statements 43
43