annual report - FIAT SpA

� As a result of the Demerger, on 1 January 2011 the net assets of Fiat S.p.A. were reduced by €3,750 million
(including a €1,913 million reduction in share capital) and the net assets of Fiat Industrial S.p.A. were increased
by an equivalent amount, corresponding to the value of net assets referred to above. Consequently,
Shareholders received, for no consideration, one share in Fiat Industrial S.p.A. for each share of the same
class already held in Fiat S.p.A. Since 3 January 2011, Fiat S.p.A. and Fiat Industrial S.p.A. have been quoted
separately on the MTA and operate as independent listed companies, each with its own management and
Board of Directors.
As the transaction took effect on 1 January 2011, the consolidated financial statements for the year ended 31
December 2010 relate to Fiat Group Pre-Demerger (hereinafter the Fiat Group). Moreover, in accordance with IFRS 5
– Non-current Assets Held for Sale and Discontinued Operations, as the Demerger became highly probable in
December (when the above authorisations were obtained), all businesses to be transferred to the new Fiat Industrial
Group are classified and presented as Discontinued Operations in these consolidated financial statements. This
presentation has resulted in the following:
� For both 2010 and 2009 (the latter presented for comparative purposes), all revenues and costs relating to
Discontinued Operations are reported in the Income Statement as Profit/(Loss) from Discontinued Operations.
� All current and non-current assets relating to Discontinued Operations at December 2010 have been
reclassified in the Statement of Financial Position as Assets Held for Sale and Discontinued Operations.
� All liabilities (excluding equity) relating to Discontinued Operations at December 2010 have been reclassified in
the Statement of Financial Position as Liabilities Held for Sale and Discontinued Operations.
� For both 2010 and 2009 (the latter presented for comparative purposes), all cash flows arising from
Discontinued Operations have been presented in the Statement of Cash Flows as separate line items under
cash flows from operating, investing and financing activities.
In other words, the Fiat Group consolidated financial statements are based on the full consolidation of subsidiaries
that are to remain within the scope of operations of Fiat Group Post-Demerger (i.e. Continuing Operations) and those
that will be transferred to Fiat Industrial Group (i.e., Discontinued Operations), with the separate presentation for each
group of activities.
For additional detail of items presented under Discontinued Operations in the Consolidated Statements of Income,
Financial Position and Cash Flows, reference should be made to the section Assets and liabilities held for sale and
Discontinued Operations. Furthermore, given the significance of the group of activities classified as Discontinued
Operations, it was considered appropriate, for each individual line item, to provide the same level of information for
Discontinued Operations as required by the accounting standards for Continuing Operations.
Additionally, as the Demerger is considered a “business combination involving entities or businesses under common
control”, it is outside the scope of application of IFRS 3 and IFRIC 17. Accordingly, in the 2011 consolidated financial
statements for Fiat S.p.A. Post-Demerger and Fiat Industrial S.p.A., the opening position for items in the statement of
financial position will be equivalent to the carrying amounts reported in the consolidated financial statements of Fiat
Group prior to the Demerger.
SIGNIFICANT ACCOUNTING POLICIES
Basis of preparation
The 2010 consolidated financial statements have been prepared in accordance with the International Financial
Reporting Standards (the “IFRS”) issued by the International Accounting Standards Board (“IASB”) and adopted by
the European Union, and with the provisions implementing article 9 of Legislative Decree no. 38/2005. The
designation “IFRS” also includes all valid International Accounting Standards (“IAS”), as well as all interpretations of
the International Financial Reporting Interpretations Committee (“IFRIC”), formerly the Standing Interpretations
Committee (“SIC”).
The financial statements are prepared under the historical cost convention, modified as required for the valuation of
certain financial instruments, as well as on the going concern assumption. In this respect, despite operating in a
continuingly difficult economic and financial environment, the Group’s assessment is that no material uncertainties (as
defined in paragraph 25 of IAS 1) exist about its ability to continue as a going concern, in view also of the measures
already undertaken by the Group to adapt to the changed levels of demand and the Group’s industrial and financial
flexibility.
Fiat Group Consolidated Financial Statements at 31 December 2010 111