annual report - FIAT SpA

conditions are met: that development costs can be measured reliably and that technical feasibility of the product,
volumes and pricing support the view that the development expenditure will generate future economic benefits.
Capitalised development costs include all direct and indirect costs that may be directly attributed to the development
process. Capitalised development costs are amortised on a systematic basis from the start of production of the related
product over the product‘s estimated average life, as follows:
N° of years
Cars 4 - 5
Trucks and Buses 8
Agricultural and Construction Equipment 5
Engines 8 - 10
Components and Production Systems 3 - 5
All other development costs are expensed as incurred.
Intangible assets with indefinite useful lives
Intangible assets with indefinite useful lives consist principally of acquired trademarks which have no legal,
contractual, competitive, economic, or other factors that limit their useful lives. Intangible assets with indefinite useful
lives are not amortised, but are tested for impairment annually or more frequently whenever there is an indication that
the asset may be impaired.
Other intangible assets
Other purchased and internally-generated intangible assets are recognised as assets in accordance with IAS 38 –
Intangible Assets, where it is probable that the use of the asset will generate future economic benefits and where the
costs of the asset can be determined reliably.
Such assets are measured at purchase or manufacturing cost and amortised on a straight-line basis over their
estimated useful lives, if these assets have finite useful lives.
Other intangible assets acquired as part of the acquisition of a business are capitalised separately from goodwill if
their fair value can be measured reliably.
Property, plant and equipment
Cost
Property, plant and equipment are stated at acquisition or production cost and are not revalued.
Subsequent expenditures and the cost of replacing parts of an asset are capitalised only if they increase the future
economic benefits embodied in that asset. All other expenditures are expensed as incurred. When such replacement
costs are capitalised, the carrying amount of the parts that are replaced is recognised in the income statement.
Property, plant and equipment also include vehicles sold with a buy-back commitment, which are recognised
according to the method described in the paragraph Revenue recognition if the buy-back commitment originates from
the Trucks and Commercial Vehicles sector.
Assets held under finance leases, which provide the Group with substantially all the risks and rewards of ownership,
are recognised as assets of the Group at their fair value or, if lower, at the present value of the minimum lease
payments. The corresponding liability to the lessor is included in the financial statement as a debt. The assets are
depreciated by the method and at the rates indicated below.
Leases where the lessor retains substantially all the risks and rewards of ownership of the assets are classified as
operating leases. Operating lease expenditures are expensed on a straight-line basis over the lease terms.
Fiat Group Consolidated Financial Statements at 31 December 2010 115