Fiat Group - Consolidated Financial Statements and Notes - Fiat SpA
Fiat Group - Consolidated Financial Statements and Notes - Fiat SpA
Fiat Group - Consolidated Financial Statements and Notes - Fiat SpA
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Receivables from financing activities are shown net of an allowance for doubtful accounts determined on the basis of specific insolvency risks. At 31<br />
December 2011, the allowance amounts to €101 million (€102 million at 31 December 2010 for Continuing Operations). Changes in the allowance<br />
accounts during the year are as follows:<br />
(€ million)<br />
Allowance for receivables regarding:<br />
At 31 December 2010 (*) Provision<br />
Use <strong>and</strong><br />
other changes At 31 December 2011<br />
Retail financing 21 17 (4) 34<br />
Finance leases 9 1 (1) 9<br />
Dealer financing 26 12 (13) 25<br />
Supplier financing 2 - - 2<br />
Other 44 - (13) 31<br />
Total allowance on Receivables from financing activities<br />
(*) The amounts relate to Continuing Operations.<br />
102 30 (31) 101<br />
Finance lease receivables refer to vehicles leased out under finance lease arrangements by the <strong>Fiat</strong> <strong>Group</strong> Automobiles <strong>and</strong> Ferrari sectors. The interest rate<br />
implicit in the lease is determined at the contract date for the whole of the lease term <strong>and</strong> is in line with market rates. This item may be analysed as follows,<br />
gross of an allowance of €9 million at 31 December 2011 (€9 million at 31 December 2010):<br />
At 31 December 2011 At 31 December 2010 (*)<br />
due due between<br />
due<br />
due due between<br />
due<br />
within one <strong>and</strong> five beyond<br />
within one <strong>and</strong> five beyond<br />
(€ million)<br />
one year years five years Total one year years five years Total<br />
Receivables for future minimum lease payments 110 216 9 335 75 177 6 258<br />
Less: unrealised interest income (5) (11) - (16) (3) (2) (1) (6)<br />
Present value of future minimum lease payments 105 205 9 319 72 175 5 252<br />
(*) The amounts relate to Continuing Operations.<br />
No contingent rents were recognised as finance leases during 2011 or 2010 <strong>and</strong> unguaranteed residual values at 31 December 2011 <strong>and</strong> 2010 are not<br />
significant.<br />
Receivables for dealer financing are typically generated by sales of vehicles <strong>and</strong> are generally managed under dealer network financing programs as a<br />
component of the portfolio of the financial services companies. These receivables are interest bearing, with the exception of an initial limited, non-interest<br />
bearing period. The contractual terms governing the relationships with the dealer networks vary from sector to sector <strong>and</strong> from country to country, although<br />
payment terms range from two to six months.<br />
The fair value of receivables from financing activities at 31 December 2011 amounts to approximately €3,956 million (€2,869 million at 31 December 2010<br />
for Continuing Operations). These fair values have been calculated using a discounted cash flow method based on the following discount rates, adjusted<br />
where necessary to take account of the specific insolvency risk of the underlying financial instrument.<br />
(In %) EUR USD GBP CAD AUD BRL PLN<br />
Interest rate for six months 1.62 0.81 1.38 1.45 4.43 10.16 5.00<br />
Interest rate for one year 1.95 1.13 1.87 1.65 3.88 10.04 4.88<br />
Interest rate for five years 1.73 1.23 1.57 1.46 4.31 10.74 4.81<br />
185<br />
<strong>Consolidated</strong><br />
<strong>Financial</strong> <strong>Statements</strong><br />
at 31 December 2011
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