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| | |
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| | Due within one\u00a0year (current) | | Due between one and five\u00a0years | | Due beyond five\u00a0years | | | | | | Due within one\u00a0year (current) | | Due between one and five\u00a0years | | | | | | |
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that are generally applicable to securities of a similar type. A breach of these covenants may require the early repayment of
the notes. As of December 31, 2022, Stellantis was in compliance with the covenants under the MTN Programme.
From time to time, Stellantis may buy back notes in the market. Such buybacks, if made, depend upon market
conditions, the Company's financial situation and other factors which could affect such decisions.
Other Notes
On September 12, 2022, Stellantis Finance US issued US$0.6\u00a0billion 5.625 percent Senior Notes due January 12,
2028 and US$0.7\u00a0billion 6.375 percent Senior Notes due September 12, 2032, both guaranteed by Stellantis N.V.
As at December 31, 2022, all the Notes were rated Baa2 by Moody\u2019s Investors Service, BBB by S&P Global
Ratings and BBB by Fitch Ratings.
The Notes impose covenants on Stellantis N.V. including: (i)\u00a0negative pledge clauses which require that in the case
that any security interest upon assets of Stellantis N.V. is granted in connection with other notes or debt securities having the
same ranking, such a security should be equally and ratably extended to the outstanding Notes; (ii)\u00a0pari passu clauses, under
which the Notes rank and will rank pari passu with all other present and future unsubordinated and unsecured obligations of
Stellantis N.V.; (iii)\u00a0periodic disclosure obligations; (iv)\u00a0cross-default clauses which require immediate repayment of the
Notes under certain events of default on other financial instruments issued by Stellantis\u2019 main entities; and (v)\u00a0other clauses
that are generally applicable to securities of a similar type. A breach of these covenants may require the early repayment of
the Notes. As of December\u00a031, 2022, Stellantis was in compliance with the covenants of the Notes.
Borrowings from banks
European Investment Bank Borrowings
Stellantis had financing agreements with the European Investment Bank (\u201cEIB\u201d) for a total of \u20ac1.0 billion
outstanding at December\u00a031, 2022 (\u20ac1.5 billion at December 31, 2021), which were entered into to finance specific projects
and investment plans among which: the manufacturing of PHEV vehicles at production plant in Melfi (Italy), the
manufacturing of battery electric vehicles at the production plant in Mirafiori (Italy), the research, development and
innovation for electrification, connectivity and self-driving technologies mainly conducted at laboratories in Turin (Italy) and
the development of low emissions and fuel efficient propulsion systems in PSA Automobiles SA plants. In July 2022,
Stellantis repaid at maturity a \u20ac420\u00a0million four-year loan granted in 2018 by EIB to support research and development
projects.
Brazil
Stellantis\u2019 Brazilian subsidiaries have access to various local bank facilities in order to fund investments and
operations. Total debt outstanding under those facilities amounted to a principal amount of \u20ac0.6 billion at December\u00a031, 2022
(\u20ac0.9 billion at December\u00a031, 2021). The loans primarily include subsidized loans granted by public financing institutions,
such as Banco Nacional do Desenvolvimento, with the aim to support industrial projects in certain areas. This provided the
Company with the opportunity to fund large investments in Brazil with loans of sizeable amounts at attractive rates. At
December\u00a031, 2022, outstanding subsidized loans amounted to \u20ac0.3 billion (\u20ac0.4 billion at December\u00a031, 2021), of which
approximately \u20ac0.2 billion (\u20ac0.3 billion at December\u00a031, 2021) related to the construction of the plant in Pernambuco
(Brazil), which was supported by subsidized credit lines totaling Brazilian Real (\u201cBRL\u201d) 6.5 billion (\u20ac1.2 billion).
Intesa Sanpaolo Credit Facility
On January 28, 2022, Stellantis repaid early the \u20ac6.3\u00a0billion credit facility entered in June 2020 with Intesa Sanpaolo
and maturity in March 2023. The facility was structured to support the restart and transformation of Italy\u2019s automotive sector
after the COVID-19 outbreak by providing liquidity to the Company\u2019s business in Italy and to its Italian suppliers.
Undrawn committed credit lines
On July 23, 2021, Stellantis announced that it had signed a new syndicated revolving credit facility (\u201cRCF\u201d) of
\u20ac12.0\u00a0billion, with a group of 29 relationship banks. This new RCF replaces the existing syndicated RCFs from the PSA
Group (\u20ac3.0\u00a0billion) and FCA Group (\u20ac6.25\u00a0billion), thereby providing an increase in the Company\u2019s overall liquidity and an
extension of the duration of the facility and is available for use in general corporate purposes. The credit facility is structured
in two tranches: \u20ac6.0\u00a0billion, with a 3 year tenor, and \u20ac6.0\u00a0billion, with a 5 year tenor, each tranche benefiting from two
further extension options, each of 1-year. In June 2022, the first 1-year extension option has been exercised. Current
maturities are July, 2025 and July, 2027 respectively for the two tranches.
At December\u00a031, 2022, undrawn committed credit lines of \u20ac12.7\u00a0billion include the syndicated revolving credit
facility of \u20ac12.0\u00a0billion, signed in 2021.
The covenants of the RCF include negative pledge, pari passu, cross-default and change of control clauses. Failure
to comply with these covenants, and in certain cases if not suitably remedied, can lead to the requirement of early repayment
of any outstanding amounts. As of December\u00a031, 2022, Stellantis was in compliance with the covenants of the RCF.
Mexico Bank Loan
FCA Mexico, S.A. de C.V. (\u201cFCA Mexico\u201d), Stellantis\u2019 principal operating subsidiary in Mexico, had a non-
revolving loan agreement (\u201cMexico Bank Loan\u201d), which was fully repaid on maturity on March 20, 2022.
Asset-backed financing
Asset-backed financing primarily represented the amount of financing received by Stellantis Financial Services U.S.
through securitization programs of \u20ac1,527 million, that will be settled through the collection of a portfolio of receivables
which originate from consumers.
The retail consumer contracts are pledged to special purpose entities as collateral.
The following table summarizes the asset-back financing amounts at December\u00a031, 2022 and 2021:
| | | | | | | | | | |
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Warehouse Credit Facilities: | | | | | | | | | | |
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________________________________________________________________________________________________________________________________________________
(1) Final maturity of the commitment for the warehouse credit facilities and the expected date of the last payment for the Term Notes
Warehouse Credit Facilities
There are three revolving warehouse credit facilities used to finance loan originations by Stellantis Financial
Services U.S. The Company believes that the credit facilities will continue to be renewed or replaced, and that it will be able
to secure additional sources of financing on satisfactory terms; however, there can be no assurance that it will be able to do
so. In the event that the Company is unable to renew its facilities, the receivables pledged would amortize over time to pay
down the warehouse credit facilities; however, the Company would not be able to finance new receivables without alternative
sources of funding. Stellantis Financial Services U.S. uses interest rate derivatives in order to reduce the interest rate risk of
certain warehouse credit facilities.
The Company has three separate USD warehouse credit facilities. First Investors Auto Receivables Corporation
(\u201cFIARC\u201d) was implemented on August 31, 2012 and has a commitment through June 2023. The FIARC facility has a
capacity of \u20ac281\u00a0million ($300\u00a0million) and bears interest based on one month LIBOR plus a spread. Stellantis Financial
Services U.S. has also implemented two additional separate warehouse credit facilities. The first Stellantis Financial Services
U.S. facility, SFS Funding, LLC, was implemented on August 18, 2022 and matures on August 18, 2024. The \u20ac2.3\u00a0billion
($2.5\u00a0billion) commitment bears interest based on variable commercial paper rates plus a spread or one month term SOFR,
plus a spread. The second Stellantis Financial Services U.S. facility, SFS Funding II, LLC, was implemented on August 31,
2022 and matures on August 31, 2024. The \u20ac469\u00a0million ($500\u00a0million) commitment bears interest based on variable
commercial paper rates plus a spread or one month term SOFR, plus a spread.
ABS Term Notes
ABS Term Notes are issued in various classes ranging from Class A to Class E Notes. These notes are sequentially
paid with Class A Notes paid first. The range in interest rates depends on the level of risk of loss and is determined by
investor interest in each class of the notes.
The terms governing the warehouse credit facilities and ABS Term Notes contains numerous covenants relating to
the issuer\u2019s business, the observance of certain financial covenants, the avoidance of certain levels of delinquency experience
and other matters. A breach of a covenant, if not cured within the time limits specified, could precipitate events of default that
might result in the acceleration of the ABS Term Notes or warehouse credit facilities. The Company was not in default with
respect to any financial and non-financial covenants governing these financing arrangements at December 31, 2022.
Refer to Note 24, Fair value measurement for further information on fair and carrying values of assigned receivables
and related liabilities.
Other
Additionally, there is \u20ac128 million of debt relating to factoring transactions which do not meet the IFRS 9
derecognition requirements and are recognized within assets of the same amount as of December\u00a031, 2022 (\u20ac149 million at
December\u00a031, 2021) in the Consolidated Statement of Financial Position, refer to Note 16, Trade receivables, other assets,
prepaid expenses and tax receivables.
Other debt
Other debt also includes funds raised from financial services companies and deposits from dealers in South America,
primarily in Brazil.
Lease liabilities
The following table summarizes the Company's current and non-current lease liabilities:
Lease liabilities included in the Statement of Financial Position
| | | | |
| | |
| | | | |
| | |
Long-term debt (non-current) | | | | |
Short-term debt and current portion of long-term debt (current) | | | | |
Maturity analysis - contractual undiscounted cash flows
| | |
| | |
| | |
| | |
Due between one and five years | | |
| | |
Total undiscounted lease liabilities | | |
In addition, the Company entered into commitments relating to leases not yet commenced of \u20ac70 million, of which
the most significant relating to contracts in the U.S. and in Italy. In addition to the above, the Company entered into non-
cancellable short-term leases, which have not been classified as lease liabilities, of \u20ac28 million which is expected to be settled
within the next 12 months.
Debt secured by assets
At December\u00a031, 2022, debt secured by assets of the Company amounted to \u20ac176 million (\u20ac366 million at
December\u00a031, 2021), excluding the Lease liabilities and Asset-backed financing as described above, mainly related to
subsidized financing in South America and India & Asia Pacific.
The total carrying amount of assets acting as security for loans for the Company amounted to \u20ac1,360 million,
excluding the Right-of-use assets as described in Note 11, Property, plant and equipment, at December\u00a031, 2022 (\u20ac1,311
million at December\u00a031, 2021).
Other liabilities consisted of the following:
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| | |
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| | |
Payables for buy-back agreements | | | | | | | | | | | | |
Accrued expenses and deferred income | | | | | | | | | | | | |
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| | | | | | | | | | | | |
| | | | | | | | | | | | |
Construction contract liabilities (Note 14) | | | | | | | | | | | | |
Service contract liability | | | | | | | | | | | | |
Derivatives operating liability | | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
Other liabilities (excluding Accrued expenses, Deferred income and Service contract liability) by due date were as
follows:
| | | | | | | | | | | | | | | | | | | | |
| | |
| | | | |
| | Total due\u00a0within one year (Current) | | Due between one\u00a0and five years | | | | Total due after one year (Non- Current) | | | | Total due\u00a0within one year (Current) | | Due between one\u00a0and five years | | | | Total due after one year (Non- Current) | | |
| | |
Other liabilities (excluding Accrued expenses, deferred income and service contract liability) | | | | | | | | | | | | | | | | | | | | |
Payables for buy-back agreements include the price received for the product, recognized as an advance at the date of
the sale and, subsequently, the repurchase price and the remaining lease installments yet to be recognized.
During 2017, the Brazilian Supreme Court ruled that the state value added tax should be excluded from the basis for
calculating a federal tax on revenue. The Brazilian government appealed this decision, and in May 2021, the Brazilian
Supreme Court rendered a final and definitive decision confirming the 2017 decision. Certain of Stellantis\u2019 companies in
Brazil had previously filed individual lawsuits on this matter.
During the year ended December 31, 2021, as a result of the Supreme Court ruling, the previously recognized
provision of \u20ac166\u00a0million related to PSA was no longer considered probable and was reversed. Corresponding deposits of
approximately \u20ac180\u00a0million remain recorded within Other receivables pending release by the courts. Refer to Note 16, Trade
receivables, other assets, prepaid expenses and tax receivables.
During the year ended December 31, 2021, other receivables of \u20ac113\u00a0million of which \u20ac87\u00a0million were recognized
within Net revenues and \u20ac26\u00a0million within Net financial results for previously paid amounts that have not yet been
recovered as these amounts are now virtually certain. The Company also expects to recognize approximately additional
\u20ac48\u00a0million of previously paid taxes pending full resolution of these related cases.
During the year ended December 31, 2022, deposits of \u20ac144\u00a0million were released and received. The remaining
amount of approximately \u20ac70\u00a0million is recorded within Other receivables.
Service contract liability
The service contract liability was mainly comprised of maintenance plans and extended warranties. Changes in the
Company's service contract liability for the year ended December\u00a031, 2022, were as follows:
| | | | | | | | | | | | |
| | | | Advances received from customers | | Amounts recognized within revenue | | Transfers to Assets/ (Liabilities) held for sale | | | | |
| | |
Service contract liability | | | | | | | | | | | | |
The fair value of derivative financial assets and liabilities was measured by taking into consideration market
parameters at the balance sheet date and using valuation techniques widely accepted in the financial business environment, as
described below:
\u2022the fair value of forward contracts, swaps and options hedging currency risk was determined by using valuation
techniques common in the financial markets and taking market parameters at the balance sheet date (in
particular, exchange rates, interest rates and volatility rates);
\u2022the fair value of interest rate swaps and forward rate agreements was determined by taking the prevailing
interest rates at the balance sheet date and using the discounted expected cash flow method;
\u2022the fair value of combined interest rate and currency swaps was determined using the exchange and interest
rates prevailing at the balance sheet date and the discounted expected cash flow method; and
\u2022the fair value of swaps and options hedging commodity price risk was determined by using valuation techniques
common in the financial markets and taking market parameters at the balance sheet date (in particular,
underlying prices, interest rates and volatility rates).
The fair value of money market securities was also based on available market quotations. Where appropriate, the fair
value of cash equivalents was determined with discounted expected cash flow techniques using observable market yields
(categorized as Level 2).
The fair value of Receivables from financing activities, which are classified in Level 3 of the fair value hierarchy,
was estimated using discounted cash flow models. The most significant inputs used in this measurement were market
discount rates that reflected conditions applied in various reference markets on receivables with similar characteristics,
adjusted in order to take into account the credit risk of the counterparties.
The fair value of Other receivables is classified in Level 3 of the fair value hierarchy and was estimated using
discounted cash flow models. The most significant inputs used in this measurement were market discount rates.
For assets and liabilities recognized in the financial statements at fair value on a recurring basis, the Company
determined whether transfers occurred between levels in the hierarchy by re-assessing categorization at the end of each
reporting period.
The following table provides a reconciliation of the changes in items measured at fair value and categorized within
Level 3:
| | | | | | | | | | | | |
| | Receivables from financing activities | | | | Derivative\u00a0 financial assets/ (liabilities) | | | | | | |
| | |
| | | | | | | | | | | | |
Gains/(Losses) recognized in Consolidated Income Statement | | | | | | | | | | | | |
Losses recognized in Other comprehensive income/(loss) | | | | | | | | | | | | |
| | | | | | | | | | | | |
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Transfers to Assets/(Liabilities) held for sale | | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | Receivables from financing activities | | | | Derivative\u00a0 financial assets/ (liabilities) | | | | | | |
| | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
Losses recognized in Consolidated Income Statement | | | | | | | | | | | | |
Gains recognized in Other comprehensive income/(loss) | | | | | | | | | | | | |
| | | | | | | | | | | | |
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| | | | | | | | | | | | |
| | | | | | | | | | | | |
The gains/(losses) included in the Consolidated Income Statements were recognized within Cost of revenues and
Net financial expenses. Of the total gains/(losses) recognized in Other comprehensive income, \u20ac41\u00a0million were recognized
within Cash flow reserves (nil at December 31, 2021) and\u00a0no amounts were recognized within Currency translation
differences (nil at December 31, 2021).
Assets and liabilities not measured at fair value on recurring basis
The carrying value of debt securities measured at amortized cost, current receivables and payables was a reasonable
approximation of fair value as the present value of future cash flows did not differ significantly from the carrying amount.
The carrying value of Cash at banks and Other cash equivalents usually approximated fair value due to the short
maturity of these instruments (refer to Note 18, Cash and cash equivalents).
The following table provides the carrying amount and fair value of financial assets and liabilities not measured at
fair value on a recurring basis:
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| | | | | | | | | |
Other receivables from financing activities | | | | | | | | | |
Total Receivables from financing activities(1) | | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
Borrowings from banks & Other debt | | | | | | | | | |
Total Debt, excluding Lease liabilities | | | | | | | | | |
________________________________________________________________________________________________________________________________________________
(1) Net revenues for the years ended December 31, 2021 and 2020 previously reported have been increased by \u20ac2,563\u00a0million and \u20ac2,540\u00a0million respectively to reflect the sales of
vehicles in certain markets that pass through a financial services joint venture before being directed to the independent dealer network
Assets and liabilities from significant transactions with related parties were as follows:
| | | | | | | | | | | | | | | | |
| | |
| | | | |
| | Trade and other receivables | | Trade payables and other liabilities | | | | | | Trade and other receivables | | Trade payables and other liabilities | | | | |
| | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Dongfeng Peugeot Citro\u00ebn Automobiles | | | | | | | | | | | | | | | | |
Partnership with Santander | | | | | | | | | | | | | | | | |
Partnership with BNP Paribas Personal Finance | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
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| | | | | | | | | | | | | | | | |
Total CNHI, Ferrari N.V. and other | | | | | | | | | | | | | | | | |
Total unconsolidated subsidiaries | | | | | | | | | | | | | | | | |
Total originating from related parties | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
In December 2019, the Company committed to pay \u20ac198\u00a0million over an 18 year period to Dongfeng Peugeot
Citro\u00ebn Automobiles for the promotion of the Company's brands, subject to presentation of detailed plans of use and
effectiveness. The residual commitment at December 31, 2022 amounts to \u20ac150\u00a0million. As of December\u00a031, 2022, the future
minimum expected obligations were as follows:
For commitments related to joint ventures for battery production, refer to Note 26, Guarantees granted,
commitments and contingent liabilities for additional information.
Compensation to Directors and Key Management
The fees of the Directors of the Company for carrying out their respective functions were \u20ac31\u00a0million and
\u20ac29\u00a0million for the year ended December 31, 2022 and 2021, respectively.
The aggregate compensation expense for remaining executives with strategic responsibilities was approximately \u20ac44
million for 2022 (\u20ac44 million for 2021), which in addition to base compensation, included:
\u2022\u20ac16 million in 2022 (\u20ac19 million in 2021) for share-based compensation expense;
\u2022\u20ac14 million in 2022 (\u20ac12 million in 2021) for short-term employee benefits; and
\u2022\u20ac3 million in 2022 (\u20ac4 million in 2021) for pension and similar benefits.
Refer to Note 19, Share-based compensation, for information related to the PSU and RSU awards granted to
certain key employees.
| |
| Guarantees granted, commitments and contingent liabilities |
Guarantees granted
At December\u00a031, 2022, the Company had pledged guarantees on the debt or commitments of third parties totaling
\u20ac24\u00a0million (\u20ac25\u00a0million at December\u00a031, 2021), as well as guarantees on related party debt and commitments of
\u20ac248\u00a0million at December\u00a031, 2022 (\u20ac161\u00a0million at December\u00a031, 2021).
SCUSA Private-label financing agreement
In February 2013, FCA US entered into a private-label financing agreement (the \u201cSCUSA Agreement\u201d) with
Santander Consumer USA Inc. (\u201cSCUSA\u201d), an affiliate of Banco Santander, which launched on May\u00a01, 2013. Under the
SCUSA Agreement, SCUSA provides a wide range of wholesale and retail financing services to FCA US's dealers and
consumers in accordance with its usual and customary lending standards, under the Chrysler Capital brand name.
The SCUSA Agreement has a ten-year term expiring in April 2023, subject to early termination in certain
circumstances, including the failure by a party to comply with certain of its ongoing obligations under the SCUSA
Agreement. In accordance with the terms of the agreement, SCUSA provided an upfront, non-refundable payment of \u20ac109
million (U.S.$150 million) in May 2013, which was recognized as deferred revenue and is amortized over ten years. At
December\u00a031, 2022, \u20ac12\u00a0million (U.S.$12\u00a0million) remained in deferred revenue.
On June 28, 2019, FCA US entered into an amendment (the \u201cAmendment\u201d) to the SCUSA Agreement. The
Amendment modified certain terms of the agreement, with the remaining term unchanged through to April 2023, and in
connection with its execution, SCUSA made a one-time, nonrefundable, non-contingent, cash payment of U.S. $60 million
(\u20ac53 million) to FCA US as part of a negotiated resolution of open matters. This amount was recognized by FCA during
2019. The duration of the agreement remained unchanged. In April 2022 the SCUSA Agreement was amended and extended
through 2025, allowing SCUSA to serve a complementary role to Stellantis Financial Services. Under the SCUSA
Agreement, SCUSA has certain rights, including limited exclusivity to participate in specified minimum percentages of
certain retail financing subvention programs.
From time to time, FCA US worked with certain lenders to subsidize interest rates or cash payments at the inception
of a financing arrangement to incentivize customers to purchase its vehicles, a practice known as \u201csubvention\u201d. FCA US has
provided SCUSA with limited exclusivity rights to participate in specified minimum percentages of certain of its retail
financing rate subvention programs. SCUSA has committed to certain revenue sharing arrangements, as well as to consider
future revenue sharing opportunities. SCUSA bears the risk of loss on loans contemplated by the SCUSA Agreement. The
parties share in any residual gains and losses in respect of consumer leases, subject to specific provisions in the SCUSA
Agreement, including limitations on FCA US participation in gains and losses.
Other repurchase obligations
In accordance with the terms of other wholesale financing arrangements in Mexico, Stellantis Mexico was required
to repurchase dealer inventory financed under these arrangements, upon certain triggering events and with certain exceptions,
including in the event of an actual or constructive termination of a dealer\u2019s franchise agreement. These obligations exclude
certain vehicles including, but not limited to, vehicles that have been damaged or altered, that are missing equipment or that
have excessive mileage or an original invoice date that is more than one year prior to the repurchase date. In December 2015,
Stellantis Mexico entered into a ten-year private label financing agreement with STM Financial, S.A De C.V., Sofom, E.R.,
Grupo Financiaro Inbursa (\u201cSTM Financial\u201d), a wholly owned subsidiary of Banco Inbursa, under which STM Financial
provides a wide range of financial wholesale and retail financial services to Stellantis Mexico's dealers and retail customers
under the Stellantis Financial Mexico brand name. The wholesale repurchase obligation under the new agreement will be
limited to wholesale purchases in case of actual or constructive termination of a dealer's franchise agreement.
At December\u00a031, 2022, the maximum potential amount of future payments required to be made in accordance with
these wholesale financing arrangements was approximately \u20ac264\u00a0million ($282\u00a0million) and was based on the aggregate
repurchase value of eligible vehicles financed through such arrangements in the respective dealer's stock. If vehicles are
required to be repurchased through such arrangements, the total exposure would be reduced to the extent the vehicles can be
resold to another dealer. The fair value of the guarantee was nil at December\u00a031, 2022.
Arrangements with key suppliers
From time to time and in the ordinary course of business, the Company entered into various arrangements with key
third party suppliers in order to establish strategic and technological advantages. A limited number of these arrangements
contained unconditional purchase obligations to purchase a fixed or minimum quantity of goods and/or services with fixed
and determinable price provisions. Future minimum purchase obligations under these arrangements at December\u00a031, 2022
were as follows for the Company's continuing operations:
In December 2022, the Company committed to the purchase of batteries for the amount of \u20ac3,568\u00a0million over a 9
year period starting from 2025 with StarPlus Energy LLC. The residual commitment at December 31, 2022 amounts to
\u20ac3,568\u00a0million. This commitment is included in the table above.
Other commitments, arrangements and contractual rights
On March 23, 2022, Stellantis announced that it will support ACC growth plans as it intends to build a third
production site transforming Stellantis\u2019 existing Termoli (Italy) plant into a new electric vehicle battery facility and finalized
the agreement to add Mercedes-Benz AG as a new, equal partner with TotalEnergies/Saft and Stellantis. The partners have
also committed to increase ACC\u2019s total industrial capacity to at least 120 gigawatt hours (GWh) by 2030 and to scale up
development and production of next-generation high-performance battery cells and modules.
On May 24, 2022, Stellantis and Samsung SDI Co., Ltd announced their plan to invest over \u20ac2.4\u00a0billion
($2.5\u00a0billion) in a joint venture, that was incorporated in December 2022 under the name of StarPlus Energy LLC for a
lithium-ion battery production plant in Kokomo, Indiana, U.S. Refer to Note 3, Scope of consolidation for additional
information.
On March 23, 2022, Stellantis and LG Energy Solution announced their plan to invest over \u20ac3.7\u00a0billion ($5\u00a0billion
CAD) in a joint venture for Canada\u2019s first large scale lithium-ion battery production plant, which will be built in Windsor,
Canada. The agreement is subject to customary closing conditions, including regulatory approvals.
At December 31, 2022, total capital commitments related to the above were \u20ac2.2\u00a0billion for the period 2023 through
to 2025.
European leasing agreements
On December 17, 2021, Stellantis announced the intention to reorganize its leasing activities in Europe with the
intention to create a European multi-brand operational leasing company with CACF, (with each of Stellantis and CACF
holding a 50 percent interest) that would result from the combination of the leasing activities of Leasys, a subsidiary
transferred at December 31, 2022, from FCA Bank to LeaseCo, a joint venture held 50 percent by both Stellantis and CACF,
and the activities of F2ML, a business unit created within the former Groupe PSA and which aims to develop the B2B long-
term leasing activity. In addition, the joint ventures with BNPP PF and SCF are planned to be reorganized so the joint
ventures with BNPP PF will operate financing activities in Germany, Austria and in the UK and joint ventures with SCF will
operate financing activities in France, Italy, Spain, Belgium, Poland, the Netherlands and through a commercial agreement
with SCF in Portugal. The joint ventures\u2019 financing activities will cover all Stellantis brands. The binding agreements
governing this reorganization were signed on March 31, 2022 between Stellantis and each of BNP Paribas Personal Finance,
Cr\u00e9dit Agricole Consumer Finance and Santander Consumer Finance and the proposed transactions are targeted to be
completed during the first half of 2023, subject to regulatory approvals including from relevant authorities and market
regulators. Refer to Note 3, Scope of consolidation for additional information.
Contingent liabilities
In connection with significant asset divestitures carried out in prior years, the Company provided indemnities to
purchasers with the maximum amount of potential liability under these contracts generally capped at a percentage of the
purchase price. These liabilities refer principally to potential liabilities arising from possible breaches of representations and
warranties provided in the contracts and, in certain instances, environmental or tax matters, generally for a limited period of
time. Potential obligations with respect to these indemnities were nil as of December\u00a031, 2022 (\u20ac5 million as of December 31,
2021). The Company provided certain other indemnifications that do not limit potential payment and as such, it was not
possible to estimate the maximum amount of potential future payments that could result from claims made under these
indemnities.
Takata airbag inflators
Putative class action lawsuits were filed in March 2018 against FCA US LLC (\u201cFCA US\u201d), a wholly owned
subsidiary of Stellantis, in the U.S. District Courts for the Southern District of Florida and the Eastern District of Michigan,
asserting claims under federal and state laws alleging economic loss due to Takata airbag inflators installed in certain of our
vehicles. The cases were subsequently consolidated in the Southern District of Florida. On November 8, 2022, the Court
granted summary judgement in FCA US\u2019s favor against all claimants except those in Georgia and North Carolina. FCA US
has moved to dismiss all remaining claims and decisions on those motions are pending. At this stage of the proceedings, we
are unable to reliably evaluate the likelihood that a loss will be incurred or estimate a range of possible loss.
Emissions Matters
On January 10, 2019, FCA US announced it had reached final settlements on civil environmental and consumer
claims with the U.S. Environmental Protection Agency (\u201cEPA\u201d), the Civil Division of the U.S. Department of Justice
(\u201cDoJ\u201d), the California Air Resources Board (\u201cCARB\u201d), the State of California, 49 other States and U.S. Customs and Border
Protection, for which we accrued \u20ac748\u00a0million during the year ended December 31, 2018. Approximately \u20ac350\u00a0million of the
amount accrued by FCA US, which was prior to the merger, was related to civil penalties to resolve differences over diesel
emissions requirements. A portion of the amount accrued, prior to the merger, was attributable to settlement of a putative
class action on behalf of consumers in connection with which FCA US agreed to pay an average of $2,800 per vehicle to
eligible customers affected by the recall. That settlement received final court approval on May 3, 2019. On April 9, 2021,
FCA US reached an agreement with substantially all of the approximately 3,200 consumers that exercised their right to opt
out of the class action settlement to settle their claims for an amount that is not material to the Company. As of December 31,
2022, our best estimate of a probable loss is reflected in the amount previously accrued prior to the merger.
In September 2019, the DoJ filed criminal charges against an employee of FCA US for, among other things, fraud,
conspiracy, false statements and violations of the Clean Air Act primarily in connection with efforts to obtain regulatory
approval of the vehicles that were the subject of the civil settlements described above. In April 2021, two additional
employees of a Stellantis subsidiary were indicted by the DoJ on similar charges. The three employees were placed on
administrative leave following their indictments. On June 3, 2022, FCA US announced that it had agreed to a settlement to
resolve the DoJ, Criminal Division\u2019s investigation as it relates to FCA US. The settlement, which received court approval,
includes a guilty plea, a fine of approximately $96\u00a0million, and the forfeiture of approximately $204\u00a0million in gains. Prior to
the merger, we accrued approximately \u20ac200\u00a0million during the three months ended September 30, 2020 as our best estimate
of probable loss with regard to matters under discussion. In light of subsequent progress in our discussions with the DoJ,
Criminal Division, we increased our accrual for this matter to approximately \u20ac266\u00a0million as of December 31, 2021, which is
sufficient to cover the forfeiture and penalty imposed by the plea agreement. We remain subject to a number of related
private lawsuits (the \u201cNon Opt-Out Litigation\u201d).
We have also received inquiries from other regulatory authorities in a number of jurisdictions as they examine the
on-road tailpipe emissions of several automakers\u2019 vehicles and, when jurisdictionally appropriate, we continue to cooperate
with these governmental agencies and authorities.
In Europe, we have continued to work with the Italian Ministry of Transport (\u201cMIT\u201d) and the Dutch Vehicle
Regulator (\u201cRDW\u201d), the authorities that certified FCA diesel vehicles for sale in the European Union, and the UK Driver and
Vehicle Standards Agency in connection with their review of several diesel models.
We also responded to inquiries from the German authority, the Kraftfahrt-Bundesamt (\u201cKBA\u201d), regarding emissions
test results for FCA diesel vehicles, and discussed the KBA reported test results, our emission control calibrations and the
features of the vehicles in question. After these initial discussions, the MIT, which has sole authority for regulatory
compliance of the vehicles it has certified, asserted its exclusive jurisdiction over the matters raised by the KBA, tested the
vehicles, determined that the vehicles complied with applicable European regulations and informed the KBA of its
determination. Thereafter, mediations were held under European Commission (\u201cEC\u201d) rules, between the MIT and the
German Ministry of Transport and Digital Infrastructure, which oversees the KBA, in an effort to resolve their differences.
The mediation concluded and no action was taken with respect to FCA. In May 2017, the EC announced its intention to open
an infringement procedure against Italy regarding Italy's alleged failure to respond to EC's concerns regarding certain FCA
emission control calibrations. The MIT responded to the EC's allegations by confirming that the vehicles' approval process
was properly performed. On December 2, 2021, the EC notified Italy of its position that Italy did not comply with its
obligation to enforce EU emission type approval rules.
In December 2019, the MIT notified FCA of communications with the Dutch Ministry of Infrastructure and Water
Management (\u201cI&W\u201d) regarding certain irregularities allegedly found by the RDW and the Dutch Center of Research TNO in
the emission levels of certain Jeep Grand Cherokee Euro 5 models and a vehicle model of another OEM containing a Euro 6
diesel engine supplied by FCA. In January 2020, the Dutch Parliament published a letter from the I&W summarizing the
conclusions of the RDW regarding those vehicles and engines and indicating an intention to order a recall and report their
findings to the Public Prosecutor, the EC and other Member States. FCA engaged with the RDW to present our positions and
cooperate to reach an appropriate resolution of this matter. FCA proposed certain updates to the relevant vehicles that have
been tested and approved by the RDW and are now being implemented. Nevertheless, this matter is still pending.
In addition, as part of the judicial investigation of several automakers in France, commencing in 2016 and 2017,
Automobiles Peugeot and Automobiles Citro\u00ebn were placed under examination by the Judicial Court of Paris in June 2021 on
allegations of consumer fraud in connection with the sale of Euro 5 diesel vehicles in France between 2009 and 2015. In July
2021, FCA Italy was placed under examination by the same court for possible consumer fraud in connection with the sale of
Euro 6 diesel vehicles in France between 2014 and 2017. FCA Italy was also designated as a material witness in connection
with allegations of obstruction of the actions of an economy ministry antifraud inspector in 2016 and 2017. As is typical in a
French criminal inquiry, each of the companies were required to pay bail for the potential payment of damages and fines and
to ensure representation in court, and to provide a guarantee for the potential compensation of losses. None of these amounts
were, individually or in the aggregate, material to the Company.
In July 2020, unannounced inspections took place at several of FCA\u2019s sites in Germany, Italy and the UK at the
initiative of the Public Prosecutors of Frankfurt am Main and of Turin, as part of their investigations of potential violations of
diesel emissions regulations and consumer protection laws. In April 2022, former FCA companies received an order to
produce documents to the Public Prosecutors. In October 2022, inspections took place at the Italian offices of FCA Italy and
Maserati and at the German office of Maserati Deutschland. The Public Prosecutor of Frankfurt has also informed us that it is
conducting a criminal investigation regarding the emissions of certain PSA diesel engines installed in approximately 1,000
PSA vehicles and 29,000 Mitsubishi vehicles sold in Germany. We continue to cooperate with these investigations.
We also face class actions and individual claims in several European countries. Several former FCA and PSA
companies and our Dutch dealers have been served with two class actions filed in the Netherlands by Dutch foundations
seeking monetary damages and vehicle buybacks in connection with alleged emissions non-compliance of certain diesel
vehicles. We have also been notified of a potential class action on behalf of Dutch consumers alleging emissions non-
compliance of certain former FCA vehicles sold as recreational vehicles, as well as a securities class action in the
Netherlands, alleging misrepresentations by FCA, now Stellantis. A class action alleging emissions non-compliance has also
been filed in Portugal regarding former FCA vehicles and similar claims in the UK regarding former FCA and PSA vehicles
are in a pre-litigation phase. We are also defending approximately 11,300 individual consumer claims alleging emissions
non-compliance of certain former FCA vehicles in Germany and approximately 150 in Austria.
In December 2018, the Korean Ministry of Environment (\u201cMOE\u201d) announced its determination that approximately
2,400 FCA vehicles imported into Korea during 2015, 2016 and 2017 were not emissions compliant and that the vehicles
with a subsequent update of the emission control calibrations voluntarily performed by FCA, although compliant, would have
required re-homologation of the vehicles concerned. In May 2019, the MOE revoked certification of the above-referenced
vehicles and announced an administrative fine for an amount not material to the Company which has been paid by our
Korean subsidiary. Our appeal of the MOE\u2019s decision was rejected and we are no longer pursuing appeals other than in
connection with calculation of the fine. Our Korean subsidiary has also paid an administrative fine, in an amount not material
to the Company, imposed by the Korean Fair Trade Commission for a purported breach of the Act on Fair Labeling and
Advertisement in connection with these vehicles.
In November 2021, the MOE issued notice of its intention to impose a recall order, revocation of certification and an
administrative fine on the basis of the alleged non-compliance of approximately 2,250 other FCA vehicles. The amount of the
administrative fine is not material to the Company. We are waiting for the MOE to issue the final disposition on this matter.
Our subsidiary in Seoul, Korea is also cooperating with local criminal authorities in connection with their review of these
matters. In both cases, the authorities decided to not refer the matter to prosecutors, as they had found no evidence of
wrongdoing by our Korean subsidiary.
The results of the unresolved governmental inquiries and private litigation related to the emissions matters disclosed
above cannot be predicted at this time and these inquiries and litigation may lead to further enforcement actions, penalties or
damage awards, any of which may have a material adverse effect on our business, financial condition and results of
operations. It is also possible that these matters and their ultimate resolution may adversely affect our reputation with
consumers, which may negatively impact demand for our vehicles and consequently could have a material adverse effect on
our business, financial condition and results of operations. At this stage, we are unable to evaluate the likelihood that a loss
will be incurred with regard to the unresolved inquiries, Non Opt-Out Litigation and other private litigation or estimate a
range of possible loss.
National Training Center
On January 27, 2021, FCA US announced an agreement with the U.S. Attorney\u2019s Office for the Eastern District of
Michigan to resolve its investigation into past misconduct of certain former FCA US employees involving the UAW-Chrysler
National Training Center (\u201cNTC\u201d). Pursuant to the agreement, which received court approval on July 19, 2021, FCA US
agreed to plead guilty to a single count of conspiracy to violate the Labor Management Relations Act and the payment of a
fine in an amount that is not material to the Company and which was accrued prior to the merger. FCA US also agreed to
implement an independent compliance monitor for three years with respect to the dissolution of the NTC and internal controls
as they relate to the trusts being implemented to replace the NTC.
Several putative class action lawsuits have been filed against FCA US in U.S. federal court alleging harm to UAW
workers as a result of these acts. Those actions have been dismissed both at the trial court stage and on appeal. Three
plaintiffs in these lawsuits also filed charges alleging unfair labor practices with the U.S. National Labor Relations Board (the
\u201cBoard\u201d). The Board issued a complaint regarding these allegations and sought a cease and desist order as well as the posting
of a notification with respect to the alleged practices, but subsequently dismissed the charges.
On July 20, 2020, a group of employees in FCA\u2019s Toledo, Ohio Jeep plant filed a lawsuit in U.S. District Court for
the Northern District of Ohio against FCA US, the UAW and certain individuals claiming violations of the Racketeer
Influenced and Corrupt Organizations (RICO) Act and civil conspiracy. On October 20, 2020, FCA US filed a motion to
dismiss. Plaintiffs filed their second amended complaint on June 25, 2021. Briefing on the motion to dismiss has been stayed
pending decisions on motions to dismiss in two related cases in the U.S. District Court for the Eastern District of Michigan.
At this stage, we are unable to reliably evaluate the likelihood that a loss will be incurred or estimate a range of possible loss.
On October 16, 2020 and February 28, 2021, lawsuits were filed in U.S. District Court for the Eastern District of
Michigan, by groups of current and former employees making similar claims. The court granted our motion to dismiss one of
the cases and that decision has been appealed by plaintiffs. Our motion to dismiss the other case remains pending. At this
stage, we are unable to reliably evaluate the likelihood that a loss will be incurred or estimate a range of possible loss with
regard to these lawsuits.
General Motors Litigation
On November 20, 2019, General Motors LLC and General Motors Company (collectively, \u201cGM\u201d) filed a lawsuit in
the U.S. District Court for the Eastern District of Michigan against FCA US, FCA N.V., now Stellantis N.V., and certain
individuals, claiming violations of the RICO Act, unfair competition and civil conspiracy in connection with allegations that
FCA US made payments to UAW officials that corrupted the bargaining process with the UAW and as a result FCA US
enjoyed unfair labor costs and operational advantages that caused harm to GM. GM also claimed that FCA US had made
concessions to the UAW in collective bargaining that the UAW was then able to extract from GM through pattern bargaining
which increased costs to GM and that this was done by FCA US in an effort to force a merger between GM and FCA N.V.
The court dismissed GM\u2019s lawsuit with prejudice. GM subsequently appealed the dismissal to the U.S. Court of Appeals for
the Sixth Circuit the court affirmed the dismissal of GM\u2019s complaint. On January 9, 2023, GM filed a petition with the U.S.
Supreme Court, seeking review of the Sixth Circuit\u2019s decision.
Following dismissal of its Federal court case, GM filed an action against FCA US and FCA N.V., now Stellantis
N.V., in Michigan state court, making substantially the same claims as it made in the federal litigation. On October 15, 2021,
the court granted Stellantis N.V. and FCA US\u2019s motion for summary disposition. GM filed a motion for reconsideration and
on December 6, 2021, the court granted GM\u2019s motion, permitting GM to amend its complaint. GM filed a second amended
complaint on December 23, 2021. On May 16, 2022, the court denied FCA US\u2019s motion for summary disposition and
permitted discovery to proceed against FCA US. On July 20, 2022, the court granted Stellantis N.V.\u2019s motion for summary
disposition, but on November 28, 2022 the court granted GM\u2019s motion for reconsideration and permitted jurisdictional
discovery to proceed against Stellantis N.V. At this stage, we are unable to reliably evaluate the likelihood that a loss will be
incurred or estimate a range of possible loss.
Tigershark Engine \u2013 EPA Matter
In connection with internal testing, FCA US determined that approximately 935,000 vehicles equipped with the 2.4L
Tigershark engine may have excess tailpipe emissions. FCA US discussed this issue and reviewed the proposed solution with
the EPA and CARB. Prior to the merger, FCA US increased its warranty campaign provision by approximately \u20ac200\u00a0million
associated with a recall campaign to implement this solution.
Tigershark Engine \u2013 Litigation
In addition, putative class action lawsuits have been filed against FCA US and consolidated into a single action in
U.S. District court in Michigan asserting claims under federal and state laws claiming manufacturing and design defects in
certain vehicles equipped with the 2.4L Tigershark engine, which has been installed in approximately 1.6\u00a0million vehicles
sold in the U.S. The claims allege excessive oil consumption and related excess emissions. In November 2021, we entered
into an agreement in principle to settle the litigation, contingent on court approval, for an amount that is not material to the
Company. The court granted final approval of the settlement in December 2022.
Other matters
Corporate Average Fuel Economy (\u201cCAFE\u201d) standards
On August 31, 2020, the U.S. Court of Appeals for the Second Circuit vacated a final rule published by NHTSA in
July 2019 that had reversed NHTSA\u2019s 2016 increase to the base rate of the CAFE penalty from $5.50 to $14.00. The base
rate applies to each tenth of a mile per gallon that a manufacturer\u2019s fleet-wide average fuel efficiency is below the CAFE
standard, and is multiplied by the number of vehicles in the manufacturer\u2019s fleet to arrive at an aggregate penalty. On January
14, 2021, NHTSA published an interim final rule with immediate effect, the result of which was to apply the increased fine
rate that resulted from the Second Circuit\u2019s ruling to future model years. In particular, NHTSA\u2019s interim rule imposed a
CAFE penalty base rate of $5.50 through 2021 Model Year and increased the CAFE penalty base rate to $14.00 prospectively
from the 2022 Model Year. FCA accrued estimated amounts for any probable CAFE penalty based on the $5.50 rate for
Model Years 2021 and earlier. In addition, as a result of the acquisition, and in accordance with IFRS 3, we recognized an
incremental contingent liability of \u20ac163\u00a0million for the potentially higher fine rate on vehicle shipments prior to the merger
date.
On April 1, 2022, NHTSA published a final rule repealing the interim final rule issued in January 2021 and reverting
to the December 2016 final rule which increased the CAFE civil penalty rate from $5.00 to $14.00, beginning with 2019
Model Year. NHTSA is expected to continue to make mandatory inflation adjustments to the CAFE civil penalty rate, as
required by law for all civil monetary penalties. Applying the annual inflation adjustment procedures did not result in an
increase in the $14.00 rate through 2021 Model Year, but did result in an increased fine rate to $15.00 for 2022 Model Year
vehicles. An additional accrual of \u20ac655\u00a0million has been recognized resulting from an increase in the provision related to the
Model Year 2019-2021 penalty rate adjustment. In addition, an accrual of \u20ac5\u00a0million has been recognized to reflect the Model
Year 2022 inflation adjustment for vehicles sold in 2021, and penalties for Model Year 2022 vehicles sold in the current year
have been accrued based on a penalty rate of $15.00.
Greenhouse Gas Standards
On March 9, 2022, the EPA reinstated California\u2019s authority\u202funder the Clean Air Act\u202fto enforce its own, more
stringent, greenhouse gas (\u201cGHG\u201d) emission standards for passenger vehicles and light duty trucks (the \u201cCalifornia Waiver\u201d).
California emission standards covered by the California Waiver may be adopted by other states and to date 17 other states
and the District of Columbia (the \u201cCalifornia Waiver States\u201d) have adopted California\u2019s GHG emissions standards under the
California Waiver.
\u202fPrior to the EPA\u2019s withdrawal of the California Waiver, automotive\u202fOEMs were deemed to be compliant with
California\u2019s GHG emissions standards if they were compliant with the EPA\u2019s GHG standards.\u202fThis \u201cdeemed to comply\u201d
mechanism was removed from the California regulation prior to the reinstatement of the California Waiver.\u202fAs interpreted by
CARB, the EPA\u2019s reinstatement of the California Waiver together with the removal of the \u201cdeemed to comply\u201d mechanism
means that automotive OEMs are\u202fretroactively\u202fsubject to the separate California GHG standards beginning with the model
year 2021\u202ffleet.\u202fOEMs\u202fmay achieve\u202fcompliance with the California GHG emission standards in several ways, including
through the sale of emission-compliant vehicles within\u202ftheir\u202ffleet for a given model year, through the carryforward or
carryback of excess credits generated by a compliant fleet in past or future years,\u202fby the purchase of California-specific
regulatory credits from third parties\u202for by a combination of the foregoing.
\u202fWe\u202fdid not meet\u202fthe California GHG targets for model year\u202f2021\u202fand do not expect to meet the California GHG
targets for model year 2022,\u202fas\u202fin planning both\u202fmodel years prior to reinstatement of the California Waiver we assumed the
ability to utilize existing credits based on regulations in force at the time. We intend to be compliant with the California GHG
program, and for those years and any other model year with deficits, we intend to seek to cover such deficits with excess
credits generated through our compliance in model years within the applicable five-year carryback period.
While we are executing on several important steps to ensure our carryback strategy, the success of our carryback
strategy depends on future levels and mix of production and sales, as well as general market demand for battery electric
vehicles, all of\u202fwhich are inherently speculative.\u202fAs we are unable to reliably estimate the cost of compliance, we have not
recognized a provision.
\u202fWe understand that certain other automobile OEMs are subject to less stringent California GHG emissions standards
pursuant to settlement agreements entered into with CARB on terms that are not available us.\u202fWe are currently evaluating the
enforceability of the California GHG emissions standards as applied by CARB, particularly in light of their retroactive
application following the EPA\u2019s reinstatement of the California Waiver, as well as the disparate treatment of other
automotive OEMs which are not subject to the same standards.
U.S. Import Duties
Historically, FCA paid a 2.5 percent duty on Ram ProMaster City vehicles imported into the U.S. as passenger
vehicles rather than the 25 percent duty applicable to vehicles that are imported into the U.S. as cargo vans. The vast majority
of these vehicles are converted into cargo vans after importation. Federal litigation against a competitor in a similar case
resulted in the application of the 25 percent duty rate to the competitor\u2019s vehicles. We believe there are facts that distinguish
our case from that of the competitor. However, U.S Customs and Border Protection may seek to recover increased duties for
our prior imports, plus interest, and may assert a claim for penalties. At this stage, we are unable to reliably evaluate the
likelihood that a loss will be incurred or estimate a range of possible loss.
Share capital
At December\u00a031, 2022, the authorized share capital of Stellantis was ninety million Euro (\u20ac90,000,000), divided into
4.5\u00a0billion (4,500,000,000) Stellantis common shares, nominal value of one Euro cent (\u20ac0.01) per share and 4.5\u00a0billion
(4,499,750,000) class A special voting shares, nominal value of one Euro cent (\u20ac0.01) per share each and two hundred and
fifty thousand (250,000) class B special voting shares with a nominal value of one euro cent (\u20ac0.01) each.
At December\u00a031, 2022, fully paid-up share capital of Stellantis amounted to \u20ac32 million (\u20ac31 million at
December\u00a031, 2021) and consisted of 3,213,372,229 common shares (3,132,618,655 at December\u00a031, 2021). This included
69,125,544 common shares held in Treasury (refer to Exercise of GM Warrants for further information) and therefore at
December 31, 2022 there were 3,144,246,685 outstanding common shares. On December 21, 2022, all the outstanding
special voting shares B were exchanged with newly issued special voting shares A in accordance with article 7.5 of the terms
and conditions of the special voting shares. As a result all the 208,622 issued special voting shares B are held in the
Company\u2019s treasury. At December\u00a031, 2022 there were 178,790 issued special voting shares A and 208,622 issued special
voting shares B (208,622 at December\u00a031, 2021), all with a par value of \u20ac0.01 each.
In accordance with IFRS 3 - Business Combinations, as applied to a reverse acquisition, the share capital of
Stellantis reflects the share capital of the legal acquirer, FCA N.V. with the difference between share capital of the legal
acquirer and the accounting acquirer, PSA, being aggregated and shown as part of retained earnings and other reserves.
The following table summarizes the changes in the number of outstanding common shares and special voting shares
of Stellantis during the year ended December\u00a031, 2022:
| | | | | | | | |
| | | | | | | | |
Balance at January 1, 2022 | | | | | | | | |
Issuance of Special Voting Shares | | | | | | | | |
Issuance upon the exercise of GM warrants | | | | | | | | |
Purchase of Treasury shares | | | | | | | | |
Shares issued to serve Long Term Incentive Plans | | | | | | | | |
Balance at December 31, 2022 | | | | | | | | |
In June 2021, one of the Company's consolidated subsidiaries, ARAMIS SAS (\"Aramis\") listed a portion of its
shares on the Euronext Paris stock exchange. Prior to the listing, the Company held a 70 percent interest in Aramis, and as a
result of the IPO, the Company\u2019s interest has been diluted to 61 percent. As there was no loss of control as a result of the
listing, the transaction has been accounted for as an equity transaction with \u20ac178\u00a0million recognized as an increase in non-
controlling interest and \u20ac121\u00a0million recognized as additional retained earnings.
In the context of the contemplated merger with FCA, on December 17, 2019, DFG agreed to sell, and Groupe PSA
agreed to buy, up to 30.7\u00a0million shares of PSA prior to the earlier of the closing of the merger or December 31, 2020 at a
price based on the market price of PSA share when PSA is notified to effect a sale by DFG (those shares will be cancelled).
On the date of commitment, a current financial liability of \u20ac685\u00a0million was initially recognized against equity to reflect the
PSA repurchase obligation with subsequent remeasurement of the liability recorded as financial income (expense). At
December 31, 2019, this liability was remeasured at \u20ac668\u00a0million against a net financial income (expense) of \u20ac17\u00a0million. On
September 23, 2020, PSA repurchased 10\u00a0million of its own shares from DFG for a total purchase price of \u20ac164\u00a0million
(excluding costs) that were subsequently cancelled and PSA and DFG agreed to amend the original agreement so that the
remaining 20.7\u00a0million shares would have been sold by DFG to third parties by December 31, 2022 in the event those shares
have not been sold to PSA by December 31, 2020. As under the amended agreement, as of December 15, 2020 the current
financial liability was remeasured to \u20ac446\u00a0million and reversed against equity as PSA no longer had the obligation to
repurchase these 20.7\u00a0million shares.
Pursuant to the Articles of Association, the Board of Directors is irrevocably authorized to issue shares (common
and special voting shares) and to grant rights to subscribe for shares in the capital of the Company. This authorization is up to
a maximum aggregate amount of shares as set out in the Articles of Association, as amended from time to time, and limits or
excludes the right of pre-emption with respect to common shares.
Exercise of GM Warrants
As part of the acquisition of Opel/Vauxhall by Groupe PSA, on July 31, 2017, PSA issued warrants to Adam Opel
GmbH (a GM company), hereafter referred to as \u201cGM\u201d. The equity warrants entitled the holder to subscribe for 39,727,324
shares in Peugeot S.A. with a par value of \u20ac1 per warrant, and each warrant being eligible for one share in PSA Automobiles
S.A. (\u201cPSA\u201d). The warrants were exercisable between the 5th and the 9th year following issuance, meaning that the exercise
window opened on July 31, 2022. On the merger date, each of the warrants issued by PSA to GM was converted into one
equity warrant, each of which entitled the holder to subscribe for 1.74 Stellantis shares (same conversion ratio as for all other
PSA shares), with an exercise price equal to \u20ac1 per original warrant (\u20ac39,727,324).
On September 15, 2022, upon the exercise of the warrants above by GM we issued 69,125,544 common shares,
representing approximately 2.2 percent of Stellantis\u2019 share capital (on a diluted basis) and with a cash proceed of \u20ac40\u00a0million.
Following the agreement entered into with GM, we immediately repurchased all the shares issued with a cash disbursement
of \u20ac923\u00a0million corresponding to \u20ac13.36 per share (such amount was based on the volume weighted average price of one
Stellantis common share on the regulated market of Euronext in Milan over the previous five trading days). The issuance and
subsequent share buy-back have been accounted for as separate transactions within equity.
In addition, the warrant agreement noted that in case of transactions including dividends, allocation of shares to
shareholders, merger or spin-off, where the date for determining the shareholders entitlement to benefit from or participate in
the transaction, the warrant holders rights are protected until the delivery date. Such transactions included cash dividends
payable to GM by PSA prior to the merger and paid by Stellantis since the merger, the Faurecia spin-off in 2021 and the 2021
Faurecia dividends payable. The amounts paid were previously recognized as liabilities when such dividends were declared.
The payments reduced the liability for the dividends declared in years prior to 2022 and recognized against equity for the
dividends declared during 2022.
Equity Incentive Plans
On April 15, 2021, the Annual General Meeting of Shareholders (\u201cAGM\u201d) resolved to authorize, under certain
conditions, the Board of Directors to issue common shares, to grant rights to subscribe for shares under the LTIP and its sub-
plans, up to maximum of 100\u00a0million common shares, and to exclude pre-emptive rights of shareholders in that regard, both
for a period of five years.
Furthermore, the AGM authorized the Board of Directors, for a period of 18 months from the date of the AGM, to
repurchase up to a maximum of 10 percent of the Company\u2019s common shares issued as of the date of the AGM. Pursuant to
the authorization, which does not entail any obligation for the Company but is designed to provide additional flexibility, the
Board of Directors may repurchase common shares in compliance with applicable regulations, subject to certain maximum
and minimum price thresholds.
Other reserves:
Other reserves comprised the following:
\u2022legal reserves of \u20ac18,037 million at December\u00a031, 2022 (\u20ac13,030 million at December\u00a031, 2021) determined in
accordance with Dutch law and primarily relating to development expenditures capitalized by subsidiaries and
their earnings, subject to certain restrictions on distributions to Stellantis;
\u2022capital reserves of \u20ac20,119 million at December\u00a031, 2022 (\u20ac20,840 million at December\u00a031, 2021);
\u2022retained earnings, after the separation of the legal reserve, of positive \u20ac13,873 million (positive \u20ac5,664 million
at December\u00a031, 2021); and
\u2022profit attributable to owners of the parent of \u20ac16,799 million for the year ended December\u00a031, 2022 (\u20ac14,200
million for the year ended December\u00a031, 2021).
Other comprehensive income
Other comprehensive income was as follows:
| | | | | | |
| | |
| | | | | | |
| | |
Fair value remeasurement of cash flow hedges | | | | | | |
of which, reclassified to the income statement | | | | | | |
of which, recognized in equity during the period | | | | | | |
Gains and losses from remeasurement of financial assets | | | | | | |
of which, reclassified to the income statement | | | | | | |
of which, recognized in equity during the period | | | | | | |
Exchange differences on translating foreign operations | | | | | | |
Share of Other comprehensive income/(loss) for equity method investees | | | | | | |
Items relating to discontinued operations | | | | | | |
Total amounts to be potentially reclassified to profit or loss | | | | | | |
| | | | | | |
Actuarial gains and losses on defined benefit pension obligations | | | | | | |
Share of Other comprehensive income for equity method investees | | | | | | |
Items relating to discontinued operations | | | | | | |
Amounts not to be reclassified to profit or loss | | | | | | |
| | | | | | |
Total Other comprehensive income/(loss) for the period | | | | | | |
Income tax benefit (expense) | | | | | | |
Income tax benefit (expense) - discontinued operations | | | | | | |
Total Other comprehensive income/(loss) for the period, net of tax | | | | | | |
Gains and losses arising from the remeasurement of defined benefit plans primarily include actuarial gains and
losses arising during the period, the return on plan assets (net of interest income recognized in the Consolidated Income
Statement) and any changes in the effect of the asset ceiling. These gains and losses are offset against the related defined
benefit plan's net liabilities or assets (Note 20, Employee benefits liabilities).
The following table summarizes the tax effect relating to Other comprehensive income:
| | | | | | | | | | | | | | | | | | |
| | |
| | | | | | |
| | | | | | | | | | | | | | | | | | |
| | |
Fair value remeasurement of cash flow hedges | | | | | | | | | | | | | | | | | | |
Gains and losses from remeasurement of financial assets | | | | | | | | | | | | | | | | | | |
Actuarial gains and losses on defined benefit pension obligations | | | | | | | | | | | | | | | | | | |
Exchange differences on translating foreign operations | | | | | | | | | | | | | | | | | | |
Share of Other comprehensive income/(loss) for equity method investees | | | | | | | | | | | | | | | | | | |
Items relating to discontinued operations | | | | | | | | | | | | | | | | | | |
Total Other comprehensive income/(loss) | | | | | | | | | | | | | | | | | | |
Policies and processes for managing capital
The objectives identified by the Company for managing capital were to create value for shareholders as a whole,
safeguard business continuity and support the growth of the Company. As a result, the Company endeavored to maintain an
adequate level of capital that, at the same time, enables it to obtain a satisfactory economic return for its shareholders and
guarantee economic access to external sources of funds, including by means of achieving an adequate credit rating.
The Company constantly monitors its net financial position in comparison with net equity and the generation of cash
from its industrial activities. In order to reach these objectives, the Company continues to aim for improvement in the
profitability of its operations. Furthermore, the Board of Directors may make proposals to Stellantis shareholders at a general
meeting to reduce or increase share capital or, where permitted by law, to distribute reserves. The Company may also make
purchases of treasury shares, without exceeding the limits authorized at a general meeting of Stellantis shareholders, under
the same logic of creating value, compatible with the objectives of achieving financial equilibrium and an improvement in the
Company's rating.
Dividends proposed, declared and paid
On April 13, 2022, the AGM approved an ordinary dividend distribution of \u20ac1.04 per common share corresponding
to a total distribution of approximately \u20ac3.3\u00a0billion, that was paid on April 29, 2022.
On February 22, 2023, the Company announced an ordinary dividend of \u20ac4.2\u00a0billion corresponding to \u20ac1.34 per
share to be paid, subject to shareholder approval. The expected dates for NYSE, Euronext Milan and Euronext Paris will be
as follows: (i) ex-date April 24, 2023, (ii) record date April 25, 2023, and (iii) payment date May 4, 2023.
Dividend policy
Common shares
The Company\u2019s dividend policy contemplates an annual ordinary dividend to the holders of common shares
targeting a payout ratio of 25 percent - 30 percent of the Company\u2019s Net profit for the relevant prior financial year.
The actual level of dividend to be distributed by the Company will be determined by the Board of Directors in its
sole discretion and will be subject to earnings, cash balances, commitments, strategic plans and any other factors that the
Board of Directors may deem relevant at the time of a dividend distribution, including adjustments for income or costs that
are significant in nature but expected to occur infrequently.
Special voting shares
The holders of special voting shares are not entitled to any distributions. However, pursuant to article 29.4 of the
Company's articles of association, from any amount of profits not reserved by the Board of Directors, first an amount shall be
allocated and added to a separate special voting shares dividend reserve for the benefit of the holders of special voting shares
(the \"Special Voting Shares Dividend Reserve\"). The Company has no intention to propose any distribution from the Special
Voting Shares Dividend Reserve.
Basic earnings per share
Basic earnings per share for the years ended December 31, 2022, 2021 and 2020 was determined by dividing the
Net profit attributable to the equity holders of the parent by the weighted average number of shares outstanding during each
period.
The following tables provide the amounts used in the calculation of basic earnings per share:
| | | | | | | |
| | | |
| | | | | | | |
Net profit attributable to owners of the parent | | | | | | | |
Weighted average number of shares outstanding | | | | | | | |
| | | | | | | |
| | | | | | | |
| | | |
| | | | | | | |
Net profit from continuing operations attributable to owners of the parent | | | | | | | |
Weighted average number of shares outstanding | | | | | | | |
Basic earnings per share from continuing operations | | | | | | | |
| | | | | | | |
| | | |
| | | | | | | |
Net profit from discontinued operations attributable to owners of the parent | | | | | | | |
Weighted average number of shares outstanding | | | | | | | |
Basic earnings per share from discontinued operations | | | | | | | |
Diluted earnings per share
In order to calculate the diluted earnings per share, the weighted average number of shares outstanding was
increased to take into consideration the theoretical effect of potential common shares that would be issued for the restricted
and performance share units outstanding and unvested at December 31, 2022, 2021 and 2020 (Note 19, Share-based
compensation), as determined using the treasury stock method. Additionally, in 2021 and in 2020 the weighted average
number of shares outstanding was increased to reflect the 39,727,324 GM warrants issued by PSA in 2017, that became
exercisable in July 2022.
2020 weighted average number of shares of former PSA have been adjusted by the exchange ratio of 1.742 to
provide comparability in accordance with IFRS 3 - Business Combinations.
There were no instruments excluded from the calculation of diluted earnings per share because of an anti-dilutive
impact for the years ended December 31, 2022, 2021 and 2020 except for the calculation of diluted earnings per share from
discontinued operations which reported a loss in 2020.
The following tables provide the amounts used in the calculation of diluted earnings per share:
| | | | | | | |
| | | |
| | | | | | | |
Net profit attributable to owners of the parent | | | | | | | |
Weighted average number of shares outstanding | | | | | | | |
Number of shares deployable for share-based compensation | | | | | | | |
Equity warrants delivered to GM | | | | | | | |
Weighted average number of shares outstanding for diluted earnings per share | | | | | | | |
Diluted earnings per share | | | | | | | |
| | | | | | | |
| | | |
| | | | | | | |
Net profit from continuing operations attributable to owners of the parent | | | | | | | |
Weighted average number of shares outstanding | | | | | | | |
Number of shares deployable for share-based compensation | | | | | | | |
Equity warrants delivered to GM | | | | | | | |
Weighted average number of shares outstanding for diluted earnings per share | | | | | | | |
Diluted earnings per share from continuing operations | | | | | | | |
| | | | | | | |
| | | |
| | | | | | | |
Net profit from discontinued operations attributable to owners of the parent | | | | | | | |
Weighted average number of shares outstanding | | | | | | | |
Number of shares deployable for share-based compensation | | | | | | | |
Equity warrants delivered to GM | | | | | | | |
Weighted average number of shares outstanding for diluted earnings per share(1) | | | | | | | |
Diluted earnings per share from discontinued operations | | | | | | | |
________________________________________________________________________________________________________________________________________________
(1) Number of shares deployable for share-based compensation and equity warrants delivered to GM have not been taken into consideration in the calculation of diluted loss per
share for the year ended December 31, 2020 as this would have had an anti-dilutive effect
Prior to the merger, PSA\u2019s four reportable segments were the Automotive division, consisting of the historical
Peugeot Citro\u00ebn DS business segment and of the Opel Vauxhall business segment, the Automotive Equipment segment,
corresponding to the Faurecia Group (refer to Note 3, Scope of consolidation for additional detail), and the Finance segment,
corresponding to the Banque PSA Finance group, which provides exclusively retail financing to customers of the Peugeot,
Citro\u00ebn, DS, Opel and Vauxhall brands, as well as wholesale financing to the brands' dealer networks through joint ventures.
Subsequent to the completion of the merger, the historical results of the Company have been re-presented to reflect the six
reportable segments presented by Stellantis and include the impact of reclassifications made to align the previously reported
results of PSA to the presentation adopted by Stellantis and the presentation of Faurecia as a discontinued operation.
The Company\u2019s activities are carried out through six reportable segments: five regional vehicle segments (North
America, Enlarged Europe, Middle East & Africa, South America and China and India & Asia Pacific) and Maserati, our
global luxury brand segment. These reportable segments reflect the operating segments of the Company that are regularly
reviewed by the Chief Executive Officer, who is the \u201cchief operating decision maker\u201d, for making strategic decisions,
allocating resources and assessing performance, and that exceed the quantitative threshold provided in IFRS 8 \u2013 Operating
Segments (\u201cIFRS 8\u201d), or whose information is considered useful for the users of the financial statements.
The Company\u2019s five regional vehicle reportable segments deal with the design, engineering, development,
manufacturing, distribution and sale of passenger cars, light commercial vehicles and related parts and services in specific
geographic areas: North America (U.S., Canada and Mexico), Enlarged Europe (primarily the countries of the European
Union and United Kingdom), Middle East & Africa (primarily Turkey, Morocco, Egypt and Algeria), South America
(including Central America and the Caribbean islands), and China and India & Asia Pacific (Asia and Pacific countries). The
Company's global luxury brand reportable segment, Maserati, deals with the design, engineering, development,
manufacturing, worldwide distribution and sale of luxury vehicles under the Maserati brand.
Transactions among the mass-market vehicle segments generally are presented on a \u201cwhere-sold\u201d basis, which
reflect the profit/(loss) on the ultimate sale to third party customer within the segment. This presentation generally eliminates
the effect of the legal entity transfer price within the segments. Revenues of the other segments, aside from the mass-market
vehicle segments, are those directly generated by or attributable to the segment as the result of its usual business activities
and includes revenues from transactions with third parties as well as those arising from transactions with segments,
recognized at normal market prices.
Other activities includes the results of our industrial automation systems design and production business, our cast
iron and aluminum components business, our mobility businesses, our software and data businesses and our financial services
activities, as well as the activities and businesses that are not operating segments under IFRS 8. In addition, Unallocated
items and eliminations includes consolidation adjustments and eliminations. Financial income and expenses, income taxes
and share of the profit of equity method investees are not attributable to the performance of the segments as they do not fall
under the scope of their operational responsibilities.
Adjusted operating income is the measure used by the chief operating decision maker to assess performance,
allocate resources to the Company's operating segments and to view operating trends, perform analytical comparisons and
benchmark performance between periods and among the segments. Adjusted operating income/(loss) excludes from Net
profit/(loss) from continuing operations adjustments comprising restructuring, impairments, asset write-offs, disposals of
investments and unusual operating income/(expense) that are considered rare or discrete events and are infrequent in nature,
as inclusion of such items is not considered to be indicative of the Company's ongoing operating performance, and also
excludes Net financial expenses/(income), Tax expense/(benefit) and Share of the profit/(loss) of equity method investees.
Unusual operating income/(expense) are impacts from strategic decisions as well as events considered rare or
discrete and infrequent in nature, as inclusion of such items is not considered to be indicative of the Company's ongoing
operating performance. Unusual operating income/(expense) includes, but may not be limited to:
\u2022Impacts from strategic decisions to rationalize Stellantis\u2019 core operations;
\u2022Facility-related costs stemming from Stellantis\u2019 plans to match production capacity and cost structure to market
demand; and
\u2022Convergence and integration costs directly related to significant acquisitions or mergers.
For the year ended December 31, 2021, Pro Forma Adjusted operating income includes the Adjusted operating
income of FCA for the period January 1 - January 16, 2021. For the year ended December 31, 2020, Pro Forma Adjusted
operating income includes the Adjusted operating income result of FCA for the period January 1 - December 30, 2020. See
below for a reconciliation of Net profit from continuing operations, which is the most directly comparable measure included
in our Consolidated Income Statement, to Adjusted operating income. Operating assets are not included in the data reviewed
by the chief operating decision maker, and as a result and as permitted by IFRS 8, the related information is not provided.
The following tables summarize selected financial information by segment for the years ended December 31, 2022,
2021 and 2020:
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | China and India & Asia Pacific | | | | | | Unallocated items & eliminations | | |
| | |
Net revenues from external customers | | | | | | | | | | | | | | | | | | |
Net revenues from transactions with other segments | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Net profit/(loss) from continuing operations | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Share of the profit of equity method investees | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Restructuring costs and other costs, net of reversals(1) | | | | | | | | | | | | | | | | | | |
Takata recall campaign(2) | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Change in estimate of non- contractual warranties(4) | | | | | | | | | | | | | | | | | | |
Impairment expense and supplier obligations(5) | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Total adjustments Jan 1 - Dec 31, 2022 | | | | | | | | | | | | | | | | | | |
Adjusted Operating income | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Share of profit of equity method investees | | | | | | | | | | | | | | | | | | |
______________________________________________________________________________________________________________________________
(1) Refers to the geographical area and not our North America reporting segment
| |
| Explanatory notes to the Consolidated Statement of Cash Flows |
Non-cash items
For the year ended December\u00a031, 2022, non-cash items of \u20ac6,285 million primarily included: (i) \u20ac6,797 million for
depreciation and amortization expense, partially offset by (ii) a \u20ac711 million change in deferred taxes resulting primarily
from the recognition of deferred tax assets previously unrecognized (Refer to Note 7, Tax expense/(benefit) for additional
detail).
For the year ended December 31, 2021, non-cash items of \u20ac5,195\u00a0million primarily included: (i) \u20ac5,871\u00a0million for
depreciation and amortization expense and (ii) a \u20ac654\u00a0million change in deferred taxes impacted by the recognition of
deferred tax assets previously unrecognized primarily in France and Germany (Refer to Note 7, Tax expense/(benefit) for
additional detail).
For the year ended December 31, 2020, non-cash items of \u20ac2,362\u00a0million primarily included \u20ac2,376\u00a0million of
depreciation and amortization expense.
Operating activities
For the year ended December\u00a031, 2022, net cash from operating activities of \u20ac19,959 million was primarily the
result of: (i) net profit from continuing operations of \u20ac16,779 million adjusted by: (1) non-cash items of \u20ac6,285 million, (2)
net increase in provisions of \u20ac1,906 million mainly attributable to product warranty, sales incentives and accruals for
restructuring and CAFE penalty rates, (3) the negative effect of the change in working capital of \u20ac4,481\u00a0million, which was
mainly driven by (i) an increase of \u20ac5,606\u00a0million in inventories, reflecting increases in raw materials and components costs
and safety stock, as well as an increase in new vehicle inventory levels mainly as a result of logistic challenges, (ii) an
increase of \u20ac1,986\u00a0million in trade receivables primarily due to a reduction in level of factoring, (iii) an increase of
\u20ac1,054\u00a0million in other receivables net of other payables mainly due to advances to suppliers and indirect taxes in Enlarged
Europe, partially offset by (iv) an increase of \u20ac4,165\u00a0million in trade payables, primarily reflecting increases in both
inventories and costs of raw materials and components.
For the year ended December 31, 2021, net cash from operating activities of \u20ac18,646\u00a0million was primarily the
result of: (i) net profit from continuing operations of \u20ac13,218\u00a0million adjusted by: (1) non-cash items of \u20ac5,195\u00a0million, (2)
the positive effect of the change in working capital of \u20ac1,212\u00a0million, which was mainly driven by (i) a decrease of
\u20ac2,201\u00a0million in inventories, primarily in Enlarged Europe and North America, (ii) a decrease of \u20ac246\u00a0million in trade
receivables, partially offset by (iii) a decrease of \u20ac1,273\u00a0million in trade payables, primarily due to reduced volumes of
production in Enlarged Europe and North America.
For the year ended December 31, 2020, net cash from operating activities of \u20ac6,241\u00a0million was primarily the result
of: (i) net profit from continuing operations of \u20ac2,338\u00a0million adjusted by: (1) non-cash items of \u20ac2,362\u00a0million, (2)
\u20ac1,136\u00a0million of cash from operating activities of discontinued operations and (4) the positive effect of the change in
working capital of \u20ac1,300\u00a0million, which was primarily driven by (i) a decrease of \u20ac844\u00a0million in inventories as a result of
stock management, (ii) an increase of \u20ac218\u00a0million in trade payables and (iii) a decrease of \u20ac191\u00a0million of trade receivables.
Investing activities
For the year ended December\u00a031, 2022, net cash from investing activities of \u20ac10,531 million was primarily the result
of (1) \u20ac8,615\u00a0million of investment in property, plant and equipment and intangible assets, including \u20ac3,487 million of
capitalized development expenditures, (2) \u20ac399\u00a0million decrease in payables related to the investments in properties, plant
and equipment and intangible assets, (3) an increase in receivables from financing activities of \u20ac1,413\u00a0million, which was
mainly attributable to increased retail financing of Stellantis Financial Services U.S. and dealer financing in Brazil, (4)
acquisitions of consolidated subsidiaries and equity method investments for \u20ac666\u00a0million including primarily the controlling
interest in aiMotive, Share Now and Stimcar Holding and the capital contribution paid to StarPlus Energy LLC (Refer to
Note 3, Scope of consolidation for additional detail), partially offset by the disposal of property, plant and equipment of \u20ac545
million and of investments in subsidiaries and associates of \u20ac235 million.
For the year ended December 31, 2021, net cash from investing activities of \u20ac8,674\u00a0million was primarily the result
of (1) cash and cash equivalents of FCA at the date of the merger of \u20ac22,514\u00a0million, (2) \u20ac8,687\u00a0million of investment in
property, plant and equipment and intangible assets, including \u20ac3,116\u00a0million of capitalized development expenditures, (2)
\u20ac1,426\u00a0million decrease in payables related to the investments in properties, plant and equipment and intangible assets, and
(3) an increase in receivables from financing activities of \u20ac306\u00a0million, which was mainly attributable to higher volumes of
activity in South America and China, and (4) \u20ac726\u00a0million of acquisitions of consolidated subsidiaries net of their cash and
equity method investments, including \u20ac147\u00a0million relating to the acquisition of First Investors Financial Services Group and
\u20ac196\u00a0million capital injection in GAC-Stellantis JV. Investing activities also include the reduction of \u20ac3,115\u00a0million in cash
and cash equivalents held by Faurecia at loss of control.
For the year ended December 31, 2020, net cash used in investing activities of \u20ac3,899\u00a0million was primarily the
result of (1) \u20ac2,733\u00a0million of investment in properties, plant and equipment and intangible assets, including \u20ac1,238\u00a0million
of capitalized development expenditures, (2) \u20ac217\u00a0million decrease in payables related to the investments in property, plant
and equipment and intangible assets and (3) \u20ac1,359\u00a0million of cash used by discontinued operations, partially offset by (4)
\u20ac359\u00a0million proceeds from disposal of consolidated subsidiaries and equity method investments.
Financing activities
For the year ended December\u00a031, 2022, net cash used in financing activities of \u20ac13,167 million resulted primarily
from (1) the net decrease in long-term debt of \u20ac6,480 million including (i) the repayment of \u20ac6,300\u00a0million Intesa San Paolo
credit facility and of other long-term debt for \u20ac1,448 million, (ii) the repayment of bonds at maturity for \u20ac1,350 million,
partially offset by the issuance of bonds for \u20ac2,231 million and new long-term debt for \u20ac387 million, (2) the distribution of
dividends to Shareholders of \u20ac3,353 million, (3) the increase in securities of \u20ac2,069 million mainly driven by the investment
of liquidity in financial assets which do not meet all the condition to be classified as cash equivalents, (4) the purchase of
treasury shares for \u20ac923 million as a result of the exercise of GM Warrants (Refer to Note 27, Equity for additional detail),
and (5) the changes in short-term debt and other financial assets and liabilities for negative \u20ac400 million.
For the year ended December 31, 2021, net cash used in financing activities of \u20ac1,366\u00a0million resulted primarily
from (1) the distribution to Shareholders of \u20ac4,204\u00a0million, including (i) \u20ac2,897\u00a0million for an extraordinary distribution to
FCA shareholders in accordance with the merger agreement, (ii) \u20ac1,000\u00a0million extraordinary distribution to Stellantis
shareholders and (iii) \u20ac302\u00a0million distributed in cash as part of the Faurecia distribution (refer to Note 3, Scope of
consolidation included elsewhere in this report), (2) the repayment at maturity of a bond issued by FCA for \u20ac1,000\u00a0million,
(3) the repayment of other long-term debt for \u20ac637\u00a0million, (4) \u20ac610\u00a0million increase in investments in securities primarily by
the treasury companies in North America, and (5) \u20ac846\u00a0million in net decrease in short-term debt. These were partially offset
by the proceed from the issuance of notes under the EMTN Program for \u20ac3,671\u00a0million (\u20ac3,750\u00a0million nominal) and in
North America for \u20ac1,770\u00a0million (US$2.0\u00a0billion) (Refer to Note 22, Debt for further information) and from new long term
debt for \u20ac309\u00a0million.
For the year ended December 31, 2020, net cash from financing activities of \u20ac3,116\u00a0million resulted primarily from
the issuance of a note of \u20ac1,000\u00a0million, changes in short-term debt and other financial assets and liabilities of \u20ac529\u00a0million,
decrease in securities held by central treasuries of \u20ac686\u00a0million and cash flows from financing activities of discontinued
operations of \u20ac1,091\u00a0million.
The following is a reconciliation of liabilities arising from financing activities for the years ended December 31,
2022 and 2021:
| | | | |
| | |
| | | | |
| | |
| | | | |
Add: Derivative (assets)/liabilities and collateral at January 1 | | | | |
Add: Securities at January 1 | | | | |
Total Liabilities from financing activities at January 1 | | | | |
| | | | |
| | | | |
Add: Derivative (assets)/liabilities and collateral from FCA-PSA merger | | | | |
Add: Securities from FCA-PSA merger | | | | |
| | | | |
| | | | |
| | | | |
Changes in scope of consolidation | | | | |
Transfer to (Assets)/Liabilities held for sale | | | | |
| | | | |
| | | | |
Total Liabilities from financing activities at December 31 | | | | |
Less: Derivative (assets)/liabilities and collateral at December 31 | | | | |
Less: Securities at December 31 | | | | |
Total Debt at December 31 | | | | |
Interest expense and taxes paid
During the years ended December 31, 2022, 2021 and 2020, the Company paid interest of \u20ac937\u00a0million and received
interest of \u20ac1,201\u00a0million, \u20ac1,185\u00a0million and \u20ac347\u00a0million, \u20ac88\u00a0million and \u20ac76\u00a0million, respectively. Amounts indicated are
also inclusive of interest rate differentials paid or received on interest rate derivatives.
During the years ended December 31, 2022, 2021 and 2020, the Company made income tax payments, net of
refunds, totaling \u20ac2,860\u00a0million, \u20ac2,170\u00a0million and \u20ac385\u00a0million, respectively.
Amounts relating to IFRS 16 recognized in Consolidated Statement of Cash Flows
During the year ended December 31, 2022, 2021 and 2020, the total cash outflow for leases recognized in
accordance with IFRS 16 was \u20ac626 million, \u20ac616\u00a0million and \u20ac178\u00a0million, respectively, of which \u20ac568 million, \u20ac566
million and \u20ac177\u00a0million, respectively, related to cash payments for the principal portion of lease liabilities (recognized
within Cash flows from financing activities in the Consolidated Statement of cash flows) and \u20ac58 million, \u20ac50 million and \u20ac1
million, respectively, related to cash payments for interest expense related to lease liabilities (recognized within Cash flows
from operating activities in the Consolidated Statement of cash flows).
| |
| Qualitative and quantitative information on financial risks |
The Company is exposed to the following financial risks connected with its operations:
\u2022credit risk, principally arising from its normal commercial relations with final customers and dealers, and its
financing activities;
\u2022liquidity risk, with particular reference to the availability of funds and access to the credit market and to
financial instruments in general;
\u2022financial market risk (primarily relating to exchange rates, interest rates and commodity prices), since the
Company operates at an international level in different currencies, uses financial instruments which generate
interest and is exposed to the risk of changes in the price of certain commodities which are used in the
production processes.
These risks could significantly affect the Company\u2019s financial position and results and for this reason, the Company
systematically identifies and monitors these risks in order to detect potential negative effects in advance and take the
necessary action to mitigate them, primarily through its operating and financing activities and if required, through the use of
derivative financial instruments in accordance with established risk management policies.
Financial instruments held by the funds that manage the Company\u2019s pension plan assets are not included in this
analysis (refer to Note 20, Employee benefits liabilities).
The following section provides qualitative and quantitative disclosures on the effect that these risks could have upon
the Company. The quantitative data reported in the following does not have any predictive value, in particular the sensitivity
analysis on finance market risks does not reflect the complexity of the market or the reaction which may result from any
changes that were assumed to take place.
Credit risk
Overall, the credit risk regarding the Company\u2019s trade receivables and receivables from financing activities is
concentrated mainly in North America, Enlarged Europe and South America.
The maximum credit risk to which the Company is potentially exposed at December 31, 2022 is represented by the
carrying amounts of financial assets in the financial statements discussed in Note 16, Trade receivables, other assets, prepaid
expenses and Tax receivables and the nominal value of the guarantees provided on liabilities and commitments to third
parties discussed in Note 26, Guarantees granted, commitments and contingent liabilities.
In addition, the Company is exposed to credit risk in relation to the investment of cash and to transaction with
derivatives counterparties, as disclosed in Note 17, Derivative financial and operating assets and liabilities and in the Note
18, Cash and cash equivalents.
The Company\u2019s exposure to credit risk is influenced mainly by the individual characteristics of each counterparty.
The Company monitors these exposures and established credit lines with single or homogeneous categories of counterparties.
Dealers and final customers for which the Company provides financing are subject to specific assessments of their
creditworthiness under a detailed scoring system. To mitigate this risk, the Company could obtain financial and non-financial
guarantees. These guarantees are further strengthened where possible by reserve of title clauses on financed vehicle sales to
the sales network made by the Company financial service companies and on vehicles assigned under finance and operating
lease agreements.
For further information regarding the exposure to credit risk and ECLs of Trade receivables, other receivables and
financial receivables at December 31, 2022 and 2021, refer to Note 16, Trade receivables, other assets, prepaid expenses and
tax receivables.
The Company differentiates Cash investments with primary bank counterparties and high rated liquid financial
instruments. The investments are actively managed and constantly monitored, in compliance with policies that establish
limits of concentration and duration, taking into account the creditworthiness of the counterparties and of the various
countries in which the cash is invested. The policies also define limits in the operations with Derivatives counterparties. Even
though the Company\u2019s current securities and Cash and cash equivalents consist of balances spread across various primary
national and international banking institutions and money market funds that were measured at fair value, there was no
exposure to sovereign debt securities at December 31, 2022 and 2021 which could lead to significant risk of repayment.
Liquidity risk
Liquidity risk represents the risk the Company is unable to obtain the funds needed to carry out its operations and
meet its obligations. Any actual or perceived limitations on the Company\u2019s liquidity could affect the ability of counterparties
to do business with the Company or may require additional amounts of cash and cash equivalents to be allocated as collateral
for outstanding obligations.
The continuation of challenging economic conditions in the markets in which the Company operates and the
uncertainties that characterize the financial markets, necessitate special attention to the management of liquidity risk. In that
sense, measures taken to generate funds through operations and to maintain a conservative level of available liquidity are
important factors for ensuring operational flexibility and addressing strategic challenges over the next few years.
The main factors that determined the Company\u2019s liquidity situation are the funds generated by or used in operating
and investing activities, the debt lending period and its renewal features or the liquidity of the funds employed and market
terms and conditions.
The Company adopted a series of policies and procedures whose purpose was to optimize the management of funds
and to reduce liquidity risk as follows:
\u2022centralizing the management of receipts and payments where it may be economical in the context of the local
civil, currency and fiscal regulations of the countries in which the Company was present;
\u2022maintaining a conservative level of available liquidity;
\u2022diversifying the means by which funds were obtained and maintaining a continuous and active presence in the
capital markets;
\u2022obtaining adequate credit lines; and
\u2022monitoring future liquidity on the basis of business planning.
The Company manages liquidity risk by monitoring cash flows and keeping an adequate level of funds at its
disposal. The operating cash management and liquidity investment of the Company are centrally coordinated in the
Company\u2019s treasury companies, with the objective of ensuring effective and efficient management of the Company\u2019s funds.
These entities obtain funds in the financial markets from various funding sources.
Certain notes issued by the Company and its treasury subsidiaries include covenants which could be affected by
circumstances related to certain subsidiaries; in particular, there are cross-default clauses which could accelerate repayments
in the event that such subsidiaries fail to pay certain of their debt obligations.
Details of the repayment structure of the Company\u2019s financial assets and liabilities are provided in Note 16, Trade
receivables, other assets, prepaid expenses and Tax receivables and Note 23, Other liabilities and in Note 22, Debt. Details
of the repayment structure of derivative financial instruments are provided in Note 17, Derivative financial and operating
assets and liabilities.
Financial market risks
Due to the nature of the Company\u2019s business, the Company is exposed to a variety of market risks, primarily foreign
currency exchange rate risk, interest rate risk and commodity price risk.
The Company\u2019s exposure to foreign currency exchange rate risk arises both in connection with the geographical
distribution of the Company\u2019s industrial activities compared to the markets in which it sells its products, and in relation to the
use of external borrowing denominated in foreign currencies.
The Company\u2019s exposure to interest rate risk arises from the need to fund industrial and financial operating activities
and the necessity to invest surplus funds. Changes in market interest rates could have the effect of either increasing or
decreasing the Company\u2019s Net profit, thereby indirectly affecting the costs and returns of financing and investing
transactions.
The Company\u2019s exposure to commodity price risk arises from the risk of changes in the price of certain raw
materials and energy used in production. Changes in the price of raw materials could have a significant effect on the
Company\u2019s results by indirectly affecting costs and product margins.
These risks could significantly affect the Company\u2019s financial position and results and for this reason, these risks
were systematically identified and monitored, in order to detect potential negative effects in advance and take the necessary
actions to mitigate them, primarily through its operating and financing activities and if required, through the use of derivative
financial instruments in accordance with its established risk management policies.
The Company\u2019s policy permit derivatives to be used only for managing the exposure to fluctuations in foreign
currency exchange rates and interest rates as well as commodities prices connected with future cash flows and assets and
liabilities.
The Company utilizes derivative financial instruments designated as fair value hedges mainly to hedge:
\u2022the foreign currency exchange rate risk on financial instruments denominated in foreign currency; and
\u2022the interest rate risk on fixed rate loans and borrowings.
The instruments used for these hedges are mainly foreign currency forward contracts, interest rate swaps and
combined interest rate and foreign currency financial instruments.
The Company uses derivative financial instruments as cash flow hedges for the purpose of pre-determining:
\u2022the exchange rate at which forecasted transactions denominated in foreign currencies would be accounted for;
\u2022the interest paid on borrowings, both to match the fixed interest received on loans (customer financing activity),
and to achieve a targeted mix of floating versus fixed rate funding structured loans; and
\u2022the price of certain commodities and components.
The foreign currency exchange rate exposure on forecasted commercial flows is hedged by foreign currency swaps
and forward contracts. Interest rate exposures are usually hedged by interest rate swaps and, in limited cases, by forward rate
agreements. Exposure to changes in the price of commodities is generally hedged by using commodity swaps and commodity
options. Counterparties to these agreements are major financial institutions.
Information on the fair value of derivative financial instruments held at the balance sheet date is provided in Note
17, Derivative financial and operating assets and liabilities.
Quantitative information on foreign currency exchange rate risk
The Company is exposed to risk resulting from changes in foreign currency exchange rates, which could affect its
earnings and equity. In particular:
\u2022where a Stellantis company incurred costs in a currency different from that of its revenues, any change in
exchange rates could affect the operating results of that company;
\u2022the principal exchange rates to which the Company is exposed are:
\u25e6EUR/GBP, relating to sales in the UK of vehicles produced in the Euro zone;
\u25e6CNY and JPY in relation to costs paid to Chinese and Japanese suppliers net of sales in China and
Japan respectively originating from European and North America entities;
\u25e6U.S.$/CAD and U.S.$/MXP, primarily relating to sales in Canada and Mexico of produced vehicles,
net of local cost and import in U.S. of Canadian produced vehicles;
\u25e6EUR/U.S.$, relating to sales and purchases (mainly linked to commodity) in U.S.$ made by European
entities and to sales and purchases in Euro made by U.S. entities;
\u25e6TRY and PLN, in relation to sales in Turkish and Poland markets, net of manufacturing costs incurred
in Turkey and Poland; and
\u25e6U.S.$/BRL and EUR/BRL, relating to Brazilian manufacturing operations and the related import and
export flows.
The Company\u2019s policy is to use derivative financial instruments to hedge a percentage of certain exposures subject
to foreign currency exchange rate risk for the upcoming twenty-four months (including such risk before or beyond that date
where it is deemed appropriate in relation to the characteristics of the business) and to hedge the exposure resulting from firm
commitments unless not deemed appropriate.
The Stellantis entities could have trade receivables or payables denominated in a currency different from their
respective functional currency. In addition, in a limited number of cases, it could be convenient from an economic point of
view, or it could be required under local market conditions, for the Stellantis entities to obtain financing or invest funds in a
currency different from their respective functional currency, e.g. Argentinean industrial companies (with U.S.$ as functional
currency) invest a significant amount of cash denominated in Argentinean Pesos. Changes in exchange rates could result in
exchange gains or losses arising from these situations. The Company\u2019s policy is to hedge, whenever deemed appropriate, the
exposure resulting from receivables, payables, cash and securities denominated in foreign currencies different from the
respective Stellantis entity\u2019s functional currency.
Certain of the Stellantis entities are located in countries which are outside of the Eurozone, primarily the U.S.,
Brazil, Canada, Poland, Serbia, Turkey, Mexico, Argentina, India, China. As the Company's reporting currency is the Euro,
the income statements of those entities that have a reporting currency other than the Euro are translated into Euro using the
average exchange rate for the period. In addition, the assets and liabilities of those consolidated entities are translated into
Euro at the period-end foreign exchange rate. The effects of these changes in foreign exchange rates are recognized directly
in the Cumulative translation adjustments reserve included in Other comprehensive income. Changes in exchange rates could
lead to effects on the translated balances of revenues, costs and assets and liabilities reported in Euro, even when
corresponding items are unchanged in the respective local currency of these entities.
The Company monitors its principal exposure to conversion exchange risk and, in certain circumstances, enters into
derivatives for the purpose of hedging the specific risk.
The potential loss in fair value of derivative financial instruments held for foreign currency exchange rate risk
management (currency swaps/forwards) at December 31, 2022 resulting from a 10 percent change in the exchange rates
would have been approximately \u20ac197\u00a0million on the Consolidated Income Statement and \u20ac1,404\u00a0million in Other
comprehensive income.
This analysis assumes that a hypothetical, unfavorable 10 percent change in exchange rates as at year-end is applied
in the measurement of the fair value of derivative financial instruments.
Receivables, payables and future trade flows whose hedging transactions have been analyzed were not included in
this analysis. It is reasonable to assume that changes in market exchange rates would produce the opposite effect, of an equal
or greater amount, on the underlying transactions that have been hedged.
Quantitative information on interest rate risk
The manufacturing companies and treasuries of the Company make use of external borrowings and invest in
monetary and financial market instruments. In addition, the Stellantis entities sell receivables resulting from their trading
activities on a continuing basis. Changes in market interest rates could affect the cost of the various forms of financing,
including the sale of receivables, or the return on investments and the employment of funds, thus negatively impacting the net
financial expenses incurred by the Company.
In addition, the financial services companies provide loans (mainly to customers and dealers), financing themselves
using various forms of direct debt or asset-backed financing (e.g., factoring of receivables or securitizations). Where the
characteristics of the variability of the interest rate applied to loans granted differ from those of the variability of the cost of
the financing obtained, changes in the current level of interest rates could affect the operating result of those entities and the
Company as a whole.
In order to manage these risks, the Company uses interest rate derivative financial instruments, mainly interest rate
swaps and forward rate agreements, when available in the market, with the objective of mitigating, under economically
acceptable conditions, the potential variability of interest rates on the Company's Net profit.
In assessing the potential impact of changes in interest rates, the Company segregated fixed rate financial
instruments (for which the impact was assessed in terms of fair value) from floating rate and short term financial instruments
(for which the impact was assessed in terms of cash flows).
The fixed rate financial instruments used by the Company consisted principally of part of the portfolio of the
financial services companies (primarily customer financing and financial leases) and part of debt (including subsidized loans
and notes). These instruments are measured at amortized cost and changes in market interest rates for these instruments do
not affect Net profit or Equity. Certain financial securities are accounted for at FVPL. The impact of an unfavorable 50 basis
points change in interest rate levels would result in increase in financial expenses of \u20ac13\u00a0million due to the change in fair
values of these securities.
The Company entered in certain derivatives in order to manage interest rate risk on underlying debt exposures. A 50
basis points change in interest rates level applied to the interest rate derivatives outstanding at December 31, 2022 would
have an immaterial impact on financial expenses, and a negative impact of \u20ac3\u00a0million on the Other comprehensive income.
In addition, financial services companies use derivatives in order to hedge the interest rate risk arising from the
mismatch between financial receivables and related funding. A 50 basis points change in interest rates level applied to the
interest rate derivatives outstanding at December 31, 2022 would have a negative impact of \u20ac6\u00a0million in the operating
income. This impact would be offset by a corresponding effect on the underlying positions.
Floating rate financial instruments consisted principally of cash and cash equivalents, loans provided by the financial
services companies to the sales network and part of debt. The effect of the sale of receivables was also considered in the
sensitivity analysis.
A hypothetical 50 basis points change in short-term interest rates at December 31, 2022, applied to floating rate
financial assets and liabilities, operations for the sale of receivables and derivative financial instruments, would result in
increased net financial expenses, on an annual basis, of approximately \u20ac191\u00a0million.
This analysis is based on the assumption that there is an unfavorable change of 50 basis points of interest rate levels
across homogeneous categories. A homogeneous category is defined on the basis of the currency in which the financial assets
and liabilities are denominated. In addition, the sensitivity analysis applied to floating rate financial instruments assumes that
cash and cash equivalents and other short-term financial assets and liabilities which expire during the projected 12-month
period will be renewed or reinvested in similar instruments, that will reflect the hypothetical 50 basis points change in short-
term interest rates.
Quantitative information on commodity price risk
The Company, in addition to supply agreements that provide protections to the price increases and supply shortages,
entered into derivative contracts for certain commodities to hedge its exposure to commodity price risk associated with
buying raw materials and energy used in its normal operations, primarily base metals and PGM (platinum, palladium and
rhodium).
In connection with the commodity price derivative contracts outstanding at December 31, 2022, a hypothetical 10
percent change in the price of the commodities at that date would have caused a negative impact on the Other comprehensive
income of \u20ac654\u00a0million. Future trade flows whose hedging transactions have been analyzed were not considered in this
analysis. It is reasonable to assume that changes in commodity prices would produce the opposite effect, of an equal or
greater amount, on the underlying transactions that have been hedged.
On February 21, 2023, a share buyback of up to \u20ac1.5\u00a0billion was approved, to be executed by end of 2023 in the
open market.
The Company has evaluated subsequent events through February\u00a024, 2023, which is the date the financial statements
were authorized for issuance.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfNotesAndOtherExplanatoryInformationExplanatory",
"language": "en",
"entity": "scheme:549300LKT9PW7ZIBDF31",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjhlODFkMTZmNGE0NDRkZjdhYjBlZjJkODE2MjY0ZGUwL3NlYzo4ZTgxZDE2ZjRhNDQ0ZGY3YWIwZWYyZDgxNjI2NGRlMF80ODEvZnJhZzpiOGRiMzQ0MmJhNzQ0NDZjYTdkNDQ3NmJhZjcwMGE0OS90ZXh0cmVnaW9uOmI4ZGIzNDQyYmE3NDQ0NmNhN2Q0NDc2YmFmNzAwYTQ5XzMwNzg2MzI1NTgxMTQ4_1d25cdce-34d9-467f-a31c-fefad1492e61": {
"value": "
On January 16, 2021, Peugeot S.A. (\u201cPSA\u201d) merged with and into Fiat Chrysler Automobiles N.V. (\u201cFCA N.V.\u201d),
with FCA N.V. as the surviving company in the merger (the \u201cmerger\u201d). On January 17, 2021, the current members of the
board of directors were appointed, the Stellantis articles of association became effective and the combined company was
renamed Stellantis N.V. On this date, the Stellantis management and board of directors collectively obtained the power and
ability to control the assets, liabilities and operations of both FCA and PSA. As such, under IFRS 3, Business Combinations,
January 17, 2021 is the acquisition date for the business combination. Stellantis N.V. was established as a public limited
liability company (naamloze vennootschap), organized in the Netherlands, as the parent of Stellantis with its principal
executive offices located at Taurusavenue 1, 2132LS, Hoofddorp, the Netherlands.
In 2021, the merger was accounted for by Stellantis using the acquisition method of accounting in accordance with
IFRS 3, which requires the identification of the acquirer and the acquiree for accounting purposes. Based on the assessment
of the indicators under IFRS 3 and consideration of all pertinent facts and circumstances, management determined that PSA
is the acquirer for accounting purposes and as such, the merger has been accounted for as a reverse acquisition. As a result,
the financial statements of Stellantis N.V. will represent the historical financial statements of PSA. Refer to Note 3, Scope of
consolidation, included elsewhere in these financial statements for additional detail.
Stellantis and its subsidiaries are engaged in the design, engineering, manufacturing, distribution and sale of
automobiles and light commercial vehicles, engines, transmission systems, mobility services, metallurgical products and
production systems. In addition, Stellantis is also involved in certain other activities, including software and data businesses
and financial services activities relating to dealer and customer financing.
Unless otherwise specified, the terms \u201cwe\u201d, \u201cour\u201d, \u201cus\u201d, the \u201cCompany\u201d and \u201cStellantis\u201d refer to Stellantis N.V.,
together with its consolidated subsidiaries, or any one or more of them, as the context may require. References to \u201cFCA\u201d,
\u201cFCA N.V.\u201d and \u201cFCA Group\u201d mean Fiat Chrysler Automobiles N.V. or Fiat Chrysler Automobiles N.V. together with its
consolidated subsidiaries, or any one or more of them, as the context may require. References to \u201cPSA\u201d and \u201cGroupe PSA\u201d
mean Peugeot S.A. or Peugeot S.A. together with its consolidated subsidiaries, or any one or more of them, as the context
may require. References to the \u201cmerger\u201d refer to the merger between PSA and FCA completed on January 17, 2021 and
resulting in the creation of Stellantis.
All references in this report to \u201cEuro\u201d and \u201c\u20ac\u201d refer to the currency introduced at the start of the third stage of
European Economic and Monetary Union pursuant to the Treaty on the Functioning of the European Union, as amended.
Stellantis financial information is presented in Euro. All references to \u201cU.S. Dollars\u201d, \u201cU.S. Dollar\u201d, \u201cU.S.$\u201d and \u201c$\u201d refer to
the currency of the United States of America (\u201cU.S.\u201d).
Stellantis has filed a list of subsidiaries and associated companies, prepared in accordance with Sections 379 and
414, Book 2, Dutch Civil Code, at the Dutch trade register of Amsterdam.
",
"dimensions": {
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"language": "en",
"entity": "scheme:549300LKT9PW7ZIBDF31",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjhlODFkMTZmNGE0NDRkZjdhYjBlZjJkODE2MjY0ZGUwL3NlYzo4ZTgxZDE2ZjRhNDQ0ZGY3YWIwZWYyZDgxNjI2NGRlMF80ODEvZnJhZzpiOGRiMzQ0MmJhNzQ0NDZjYTdkNDQ3NmJhZjcwMGE0OS90ZXh0cmVnaW9uOmI4ZGIzNDQyYmE3NDQ0NmNhN2Q0NDc2YmFmNzAwYTQ5XzMzNzY_fbe41efa-18a0-4054-a832-5b7d87c83f8b": {
"value": "Stellantis and its subsidiaries are engaged in the design, engineering, manufacturing, distribution and sale of automobiles and light commercial vehicles, engines, transmission systems, mobility services, metallurgical products and production systems. In addition, Stellantis is also involved in certain other activities, including software and data businesses and financial services activities relating to dealer and customer financing.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfNatureOfEntitysOperationsAndPrincipalActivities",
"language": "en",
"entity": "scheme:549300LKT9PW7ZIBDF31",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjhlODFkMTZmNGE0NDRkZjdhYjBlZjJkODE2MjY0ZGUwL3NlYzo4ZTgxZDE2ZjRhNDQ0ZGY3YWIwZWYyZDgxNjI2NGRlMF80ODQvZnJhZzoyNjRhNmM2NDM3YWE0ODcyOTdjOWFlYTlmYTU1YjQzNi90ZXh0cmVnaW9uOjI2NGE2YzY0MzdhYTQ4NzI5N2M5YWVhOWZhNTViNDM2XzMwNzg2MzI1NTc3NzM0_7a2f91d0-ae5b-443a-a2b6-ef3e4b83fc5e": {
"value": "
Basis of preparation
The Consolidated Financial Statements are prepared under the historical cost method, modified for the measurement
of certain financial instruments as required, as well as on a going concern basis. In this respect, the Company\u2019s assessment is
that no material uncertainties (as defined in IAS 1 - Presentation of Financial Statements) exist about its ability to continue as
a going concern.
For the presentation of the Consolidated Income Statement, Stellantis uses a classification based on the function of
expenses rather than based on their nature as it is considered more representative of the format used for internal reporting and
management purposes and is consistent with international practice in the automotive sector.
",
"dimensions": {
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"language": "en",
"entity": "scheme:549300LKT9PW7ZIBDF31",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjhlODFkMTZmNGE0NDRkZjdhYjBlZjJkODE2MjY0ZGUwL3NlYzo4ZTgxZDE2ZjRhNDQ0ZGY3YWIwZWYyZDgxNjI2NGRlMF80ODcvZnJhZzo3Nzg2OWQ1NWVmMDE0OWI5YTdhZmE2YjFiYjBlYWUwYy90ZXh0cmVnaW9uOjc3ODY5ZDU1ZWYwMTQ5YjlhN2FmYTZiMWJiMGVhZTBjXzMwNzg2MzI1NjY3Mzcx_5170a494-518b-4596-aaca-af5b6cc4c5a2": {
"value": "
Authorization of Consolidated Financial Statements and compliance with International Financial Reporting
Standards
The Consolidated Financial Statements, together with the notes thereto, of Stellantis as of and for the year ended
December\u00a031, 2022 (\u201cThe Consolidated Financial Statements\u201d) were authorized for issuance by the Stellantis Board of
Directors on February\u00a024, 2023 and have been prepared in accordance with the International Financial Reporting Standards
(\u201cIFRS\u201d) as issued by the International Accounting Standards Board (\u201cIASB\u201d), as well as IFRS as adopted by the European
Union. There is no effect on these consolidated financial statements resulting from differences between IFRS as issued by the
IASB and IFRS as adopted by the European Union. The designation \u201cIFRS\u201d includes International Accounting Standards
(\u201cIAS\u201d) as well as all interpretations of the IFRS Interpretations Committee (\u201cIFRIC\u201d).
",
"dimensions": {
"concept": "ifrs-full:StatementOfIFRSCompliance",
"language": "en",
"entity": "scheme:549300LKT9PW7ZIBDF31",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjhlODFkMTZmNGE0NDRkZjdhYjBlZjJkODE2MjY0ZGUwL3NlYzo4ZTgxZDE2ZjRhNDQ0ZGY3YWIwZWYyZDgxNjI2NGRlMF80ODcvZnJhZzo3Nzg2OWQ1NWVmMDE0OWI5YTdhZmE2YjFiYjBlYWUwYy90ZXh0cmVnaW9uOjc3ODY5ZDU1ZWYwMTQ5YjlhN2FmYTZiMWJiMGVhZTBjXzMwNzg2MzI1NjY3Mzcx_f2a0eae1-7d67-472c-8b06-8e88887e28aa": {
"value": "
Authorization of Consolidated Financial Statements and compliance with International Financial Reporting
Standards
The Consolidated Financial Statements, together with the notes thereto, of Stellantis as of and for the year ended
December\u00a031, 2022 (\u201cThe Consolidated Financial Statements\u201d) were authorized for issuance by the Stellantis Board of
Directors on February\u00a024, 2023 and have been prepared in accordance with the International Financial Reporting Standards
(\u201cIFRS\u201d) as issued by the International Accounting Standards Board (\u201cIASB\u201d), as well as IFRS as adopted by the European
Union. There is no effect on these consolidated financial statements resulting from differences between IFRS as issued by the
IASB and IFRS as adopted by the European Union. The designation \u201cIFRS\u201d includes International Accounting Standards
(\u201cIAS\u201d) as well as all interpretations of the IFRS Interpretations Committee (\u201cIFRIC\u201d).
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfAuthorisationOfFinancialStatementsExplanatory",
"language": "en",
"entity": "scheme:549300LKT9PW7ZIBDF31",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
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"value": "
The Consolidated Financial Statements are prepared under the historical cost method, modified for the measurement
of certain financial instruments as required, as well as on a going concern basis. In this respect, the Company\u2019s assessment is
that no material uncertainties (as defined in IAS 1 - Presentation of Financial Statements) exist about its ability to continue as
a going concern.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfGoingConcernExplanatory",
"language": "en",
"entity": "scheme:549300LKT9PW7ZIBDF31",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
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"value": "
Significant accounting policies
Basis of consolidation
Subsidiaries
Subsidiaries are entities over which the Company has control. Control is achieved when the Company has power
over the investee, when it was exposed to, or has rights to, variable returns from its involvement with the investee and has the
ability to use its power over the investee to affect the amount of the investor\u2019s returns. Subsidiaries are consolidated on a line
by line basis from the date which control is achieved by the Company. The Company reassesses whether or not it controls an
investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above.
The Company recognizes a non-controlling interest in the acquiree on a transaction-by-transaction basis, either at
fair value or at the non-controlling interest\u2019s share of the recognized amounts of the acquiree\u2019s identifiable net assets. Net
profit or loss and each component of Other comprehensive income/(loss) are attributed to Equity attributable to owners of the
parent and to Non-controlling interests. Total comprehensive income/(loss) of subsidiaries is attributed to Equity attributable
to the owners of the parent and to the non-controlling interest even if this results in a deficit balance in Non-controlling
interests.
Changes in the Company\u2019s ownership interests in a subsidiary that do not result in the Company losing control over
the subsidiary are accounted for as equity transactions. The carrying amounts of Equity attributable to owners of the parent
and Non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary. Any difference
between the carrying amount of the non-controlling interests and the fair value of the consideration paid or received in the
transaction is recognized directly in Equity attributable to the owners of the parent.
Subsidiaries are deconsolidated from the date on which control ceases. When the Company ceases to have control
over a subsidiary, it derecognizes the assets (including any goodwill) and liabilities of the subsidiary at their carrying
amounts, derecognizes the carrying amount of non-controlling interests in the former subsidiary if any and recognizes the fair
value of any consideration received from the transaction. Any gain or loss is recognized in the Consolidated Income
Statement. Any retained interest in the former subsidiary is then remeasured to its fair value.
All intra-group balances and transactions, and any unrealized gains and losses arising from intra-group transactions,
are eliminated in preparing the Consolidated Financial Statements.
Interests in Joint Ventures and Associates
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to
the net assets of the arrangement. Joint control is the contractually agreed sharing of control of an arrangement which exist
only when decisions about the relevant activities require the unanimous consent of the parties sharing the control.
An associate is an entity over which the Company has significant influence. Significant influence is the power to
participate in the financial and operating policy decisions of the investee but does not have control or joint control over those
policies.
Joint ventures and associates are accounted for using the equity method of accounting from the date joint control or
significant influence is obtained. On acquisition, any excess of the investment over the share of the net fair value of the
investee's identifiable assets and liabilities is recognized as goodwill and is included in the carrying amount of the investment.
Any excess of the Company\u2019s share of the net fair value of the investee\u2019s identifiable assets and liabilities over the cost of the
investment is included as income in the determination of the Company\u2019s share of the investee\u2019s profit/(loss) in the acquisition
period.
Under the equity method, investments are initially recognized at cost and adjusted thereafter to recognize the
Company\u2019s share of the profit/(loss) and other comprehensive income/(loss) of the investee. The Company\u2019s share of the
investee\u2019s profit/(loss) is recognized in the Consolidated Income Statement. Distributions received from an investee reduce
the carrying amount of the investment. Post-acquisition movements in Other comprehensive income/(loss) are recognized in
Other comprehensive income/(loss) with a corresponding adjustment to the carrying amount of the investment.
Unrealized gains arising on transactions between the Company and its joint ventures and associates are eliminated to
the extent of the Company\u2019s interest in the joint venture or associate. Unrealized losses are also eliminated unless the
transaction provided evidence of an impairment of the asset transferred.
When the Company\u2019s share of the losses of a joint venture or associate exceeds its interest in that joint venture or
associate, the Company discontinues recognizing its share of further losses. Additional losses are provided for and a liability
is recognized only to the extent that the Company has incurred legal or constructive obligations or made payments on behalf
of the joint venture or associate.
The Company discontinues the use of the equity method from the date the investment ceases to be an associate or a
joint venture, or when it is classified as held for sale.
Interests in Joint Operations
A joint operation is a type of joint arrangement whereby the parties that have joint control have rights to the assets
and obligations for the liabilities relating to the arrangement. Joint control is the contractually agreed sharing of control of an
arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties
sharing control.
The Company recognizes its related interest in the joint operation including: (i)\u00a0its assets, including its share of any
assets held jointly, (ii)\u00a0its liabilities, including its share of any liabilities incurred jointly, (iii)\u00a0its revenue from the sale of its
share of the output arising from the joint operation, (iv)\u00a0its share of the revenue from the sale of the output by the joint
operation and (v)\u00a0its expenses, including its share of any expenses incurred jointly.
Assets held for sale, Assets held for distribution and Discontinued Operations
Pursuant to IFRS 5 - Non-current Assets Held for Sale and Discontinued Operations, non-current assets and disposal
groups are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather
than through continuing use. This condition is regarded as met only when the asset or disposal group is available for
immediate sale in its present condition, subject only to terms that are usual and customary for sales of such an asset or
disposal group, and the sale is highly probable, with the sale expected to be completed within one year from the date of
classification.
Non-current assets and disposal groups classified as held for sale are measured at the lower of their carrying amount
and fair value less costs to sell and are presented separately in the Consolidated Statement of Financial Position. Non-current
assets and disposal groups are not classified as held for sale within the comparative period presented for the Consolidated
Statement of Financial Position.
A discontinued operation is a component of the Company that either has been disposed of or is classified as held for
sale and (i) represents either a separate major line of business or a geographical area of operations, (ii) is part of a single
coordinated plan to dispose of a separate major line of business or geographical area of operations, or (iii) is a subsidiary
acquired exclusively with a view to resell and the disposal involves loss of control.
Classification as a discontinued operation occurs upon disposal or, if earlier, when the asset or disposal group meets
the criteria to be classified as held for sale. When the asset or disposal group is classified as a discontinued operation, the
comparative information is reclassified within the Consolidated Income Statement and the Consolidated Statement of Cash
Flows as if the asset or disposal group had been discontinued from the start of the earliest comparative period presented. In
addition, when an asset or disposal group is classified as held for sale, depreciation and amortization cease.
The classification, presentation and measurement requirements of IFRS 5 - Non-current Assets Held for Sale and
Discontinued Operations outlined above also apply to an asset or disposal group that is classified as held for distribution to
owners, whereby there must be commitment to the distribution, the asset or disposal group must be available for immediate
distribution and the distribution must be highly probable.
Foreign currency
The functional currency of the Company\u2019s entities is the currency used in their respective primary economic
environments. In individual companies, transactions in foreign currencies are recorded at the exchange rate prevailing at the
date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the exchange rate
prevailing at the date of the Consolidated Statement of Financial Position. Exchange differences arising on the settlement of
monetary items or on reporting monetary items at rates different from those initially recorded, are recognized in the
Consolidated Income Statement.
All assets and liabilities of foreign consolidated companies with a functional currency other than the Euro are
translated using the closing rates as at the date of the Consolidated Statement of Financial Position. Income and expenses are
translated into Euro on a monthly basis at the average exchange rate for each month. Translation differences arising from the
application of this method are classified within Other comprehensive income/(loss) until the disposal of the subsidiary.
Average exchange rates for the period are used in preparing the Consolidated Statement of Cash Flows to translate
the cash flows of foreign subsidiaries.
The principal exchange rates used to translate other currencies into Euro were as follows:
____________________________________________________________________________________________________
n.a. = not applicable
(1) From July 1, 2018, Argentina\u2019s economy was considered to be hyperinflationary. Transactions after July 1, 2018 for entities with the Argentinian Peso as the functional
currency were translated using the spot rate at the end of the period. The price indices used are published by the Insituto Nacional de Estadistica y Censos de la Republica
Argentina
(2) From April 1, 2022, Turkey\u2019s economy was considered to be hyperinflationary. Transactions after January 1, 2022 for entities with the Turkish Lira as the functional currency
were translated using the spot rate at the end of the period. The price indices used are published by the Turkish Statistical Institute
Intangible assets
Goodwill
Goodwill represents the excess of the fair value of consideration paid in a business combination over the fair value
of net tangible and identifiable intangible assets acquired. Goodwill is not amortized but is tested for impairment annually or
more frequently if events or changes in circumstances indicated that it might be impaired. After initial recognition, goodwill
is measured at cost less any accumulated impairment losses.
Intangible assets with indefinite useful lives
Intangible assets with indefinite useful lives consist principally of brands which have no legal, contractual,
competitive, economic or other factors that limit their useful lives. Intangible assets with indefinite useful lives are not
amortized but are tested for impairment annually, or more frequently if events or changes in circumstances indicated that the
asset may be impaired.
Development expenditures
Development expenditures for vehicle production and related components, engines and production systems are
recognized as an asset if all of the following conditions within IAS 38 \u2013 Intangible assets are met: (i) development
expenditures can be measured reliably, (ii) technical feasibility of the product, projected volumes and pricing support the
view that the development expenditure will generate future economic benefits and (iii) the intention to complete the
intangible asset as well as the availability of adequate technical, financial and other resources for this purpose. Capitalized
development expenditures include all costs that could be directly attributed to the development process. All other
development expenditures are expensed as incurred.
Capitalized development expenditures are amortized on a straight-line basis from when the related asset is available
for use, generally from the beginning of production, over the expected life cycle of the models (generally 5-7 years) or
propulsion systems (generally 10-12 years) developed.
Refer to Note 2, Basis of preparation - Recoverability of non-current assets with definite useful lives for additional
information on the effects of climate change.
Other internally developed or purchased intangible assets, excluding development expenditures
The portion of development expenditures relating to software for internal use that corresponds to directly
attributable internal or external costs necessary to create the software or improve its performance is recognized as an
intangible asset when it is probable that these costs will generate future economic benefits. Other software acquisition and
developments costs are expensed as incurred.
Other intangible assets (consisting principally of patents) are amortized on a straight line basis over the estimated
useful life, not to exceed twenty years.
Property, plant and equipment
Cost
Property, plant and equipment is initially recognized at cost and includes the purchase price, any costs directly
attributable to bringing the assets to the location and condition necessary to be capable of operating in the manner intended by
management and any initial estimate of the costs of dismantling and removing the asset and restoring the site on which it is
located. Self-constructed assets are initially recognized at production cost. Subsequent expenditures and the cost of replacing
parts of an asset are capitalized only if they increased the future economic benefits embodied in that asset. All other
expenditures are expensed as incurred. When such replacement costs are capitalized, the carrying amount of the parts that are
replaced is expensed to the Consolidated Income Statement.
Depreciation
During the years ended December\u00a031, 2022, 2021 and 2020, assets depreciated on a straight-line basis over their
estimated useful lives as follows:
| |
| |
| |
Plant, machinery and equipment | |
| |
Borrowing Costs
Borrowing costs that are directly attributable to the acquisition, construction or production of property, plant or
equipment or an intangible asset that is deemed to be a qualifying asset as defined in IAS 23 - Borrowing Costs are
capitalized. Only assets with a construction period of 12 months or longer are considered. The amount of borrowing costs
eligible for capitalization corresponds to the actual borrowing costs incurred during the period, less any investment income on
the temporary investment of any borrowed funds not yet used. The amount of borrowing costs capitalized in the years ended
December\u00a031, 2022 and 2021 was \u20ac189 million and \u20ac262 million, respectively.
Leases
As a Lessee
At the inception of a contract, the Company assesses whether the contract has, or contains, a lease. A contract has, or
contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for
consideration.
At inception or on reassessment of a contract that contains a lease component, the Company allocates the
consideration in the contract to each lease component on the basis of their relative stand-alone prices.
Right-of-use asset
The Company recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use
asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments
made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and
remove the underlying asset or restore the underlying asset or the site on which it is located if required by the lease, less any
lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to
the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful life of the
right-of-use asset is determined based on the nature of the asset, taking into consideration the lease term. In addition, the
right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain corresponding
remeasurements of the lease liability.
Lease liability
The lease liability is initially measured at the present value of the lease payments that have not been paid at the
commencement date, discounted using the interest rate implicit in the lease or, if that rate is not be readily determined, the
Company's incremental borrowing rate. The incremental borrowing rate is determined considering macro-economic factors
such as the risk free rate based on the relevant currency and term, as well as Stellantis specific factors contributing to
Stellantis\u2019 credit spread, including the impact of security. The Company primarily uses the incremental borrowing rate as the
discount rate for its lease liabilities.
Lease payments used to measure the lease liability include the following, if appropriate:
\u2022fixed payments, including in-substance fixed payments;
\u2022variable lease payments that depend on an index or a rate, initially measured using the index or rate applicable
as at the commencement date;
\u2022amounts expected to be payable under a residual value guarantee;
\u2022if reasonably certain to exercise, the exercise price under a purchase option, or lease payments in an optional
renewal period; and
\u2022penalties for early termination of a lease unless the Company was reasonably certain not to terminate early.
The lease liability is subsequently measured at amortized cost using the effective interest method. It is remeasured
when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the
Company's estimate of the amount expected to be payable under a residual value guarantee, or if the Company changes its
assessment of whether it would exercise a purchase, extension or termination option. When the lease liability is remeasured in
this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss
if the carrying amount of the right-of-use asset has been reduced to zero.
The Company presents right-of-use assets that do not meet the definition of investment property in Property, plant
and equipment and lease liabilities in Long-term debt and Short-term debt and current portion of long-term debt in the
Consolidated Statement of Financial Position.
The Company elects to not recognize right-of-use assets and lease liabilities for short-term leases and low-value
leases for all classes of leased assets. The Company recognizes the lease payments associated with these leases as an expense
on a straight-line basis over the lease term.
As a Lessor
When the Company acts as a lessor, it determines at lease inception whether each lease is a finance lease or an
operating lease.
To classify each lease, the Company makes an overall assessment of whether the lease transfers substantially all the
risks and rewards incidental to ownership of the underlying asset. If the risks and rewards are substantially transferred, then
the lease is a finance lease; if not, then it is an operating lease. As part of this assessment, the Company considers certain
indicators such as whether the lease is for the major part of the economic life of the asset.
Impairment of long-lived assets
Annually, or more frequently if facts or circumstances indicate otherwise, the Company assesses whether there is
any indication that its finite-lived intangible assets (including capitalized development expenditures) and its property, plant
and equipment may be impaired.
If indications of impairment are present, the carrying amount of the asset is reduced to its recoverable amount which
is the higher of fair value less costs of disposal and its value in use, if the carrying amount exceeds the recoverable amount.
The recoverable amount is determined for the individual asset, unless the asset does not generate cash inflows that are largely
independent of those from other assets or groups of assets, in which case the asset is tested as part of the cash-generating unit
(\u201cCGU\u201d) to which the asset belonged. A CGU is the smallest identifiable group of assets that generates cash inflows that are
largely independent of the cash inflows from other assets or groups of assets. In assessing the value in use of an asset or
CGU, the estimated future cash flows are discounted to their present value using a discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset or CGU.
When an impairment loss for assets, other than goodwill, no longer exists or has decreased, the carrying amount of
the asset or CGU is increased to the revised estimate of its recoverable amount but not in excess of the carrying amount that
would have been recorded had no impairment loss been recognized. The reversal of an impairment loss is recognized in the
Consolidated Income Statement. Refer to the section Use of estimates below for additional information.
Financial assets and liabilities
Financial assets primarily includes trade receivables, receivables from financing activities, investments in other
companies, derivative financial instruments, cash and cash equivalents, and other financial securities that do not satisfy the
requirements for being classified as cash equivalents.
Financial liabilities primarily consists of debt, derivative financial instruments, trade payables and other liabilities.
Receivables from dealer financing activities are typically generated by sales of vehicles and are generally managed
under dealer network financing programs as a component of the portfolio of the Company's financial services companies.
These receivables are interest bearing with the exception of an initial, limited, non-interest bearing period. The contractual
terms governing the relationships with the dealer networks vary according to market and payment terms, which generally
range from two to twelve months.
In addition, the Company generates receivables from financing activities related to installment sales contracts and
promissory notes originated through its automobile dealer relationships or directly with consumers. The Company utilizes
warehouse credit facilities with financial institutions to fund originations. When sufficient volume is originated, the Company
will complete an on-balance sheet securitization and issue term notes, thereby freeing up capacity in the warehouse credit
facilities.
In our securitizations, we transfer loans to securitization trusts (\u201cTrusts\u201d), which issue one or more classes of asset-
backed securities. These asset-backed securities are then sold to investors. These Trusts are included in our consolidated
financial statements, but they are separate legal entities. The assets held by these Trusts are legally owned by them and are
not available to the Company\u2019s creditors or creditors of our other Trusts. When the securitized assets are transferred to a
Trust, we make certain representations and warranties regarding the securitized assets. These representations and warranties
relate to specific aspects of the securitized assets, such as origination, obligors, accuracy, and security interest, but not the
underlying performance of the securitized asset. If a breach were to occur related to one or more of these representations that
materially affects the noteholders\u2019 interest, we would be obligated to repurchase the securitized assets.
The transfers of assets in the Company\u2019s securitization transactions do not qualify for derecognition. The Company
accounts for all securitization transactions as if they were secured financing and therefore the assets, liabilities, and related
activity of these transactions are consolidated in the financial statements. As the securitized receivables amortize, finance
charge collections are passed through to the investors at a specified rate for the life of the securitization and an interest in
collections exceeding the specified rate is retained by the Company. The majority of these securitization transactions are
within Stellantis Financial Services in the U.S.
Classification and measurement
The classification of a financial asset is dependent on the Company\u2019s business model for managing such financial
assets and their contractual cash flows. The Company considers whether the contractual cash flows represent solely payments
of principal and interest that are consistent with a basic lending arrangement. Where the contractual terms introduce exposure
to risk or volatility that are inconsistent with a basic lending arrangement, the related financial assets are classified and
measured at fair value through profit or loss (\u201cFVPL\u201d).
| | |
Financial asset cash flow business model | | |
Solely to collect the contractual cash flows (Held to Collect) | Fair Value including transaction costs | |
Collect both the contractual cash flows and generate cash flows arising from the sale of assets (Held to Collect and Sell) | Fair Value including transaction costs | Fair value through other comprehensive income (\u201cFVOCI\u201d) |
Generate cash flows primarily from the sale of assets (Held to Sell) | | |
______________________________________________________________________________________________________________________________
(1) Trade receivables without a significant financing component, as defined by IFRS 15, are initially measured at the transaction price
(2) Receivables with maturities of over one year, which bear no interest or have an interest rate significantly lower than market rates were discounted using market rates
(3) On initial recognition, the Company could irrevocably designate a financial asset at FVPL that otherwise met the requirements to be measured at amortized cost or at FVOCI
if doing so eliminated or significantly reduced an accounting mismatch that would otherwise arise
Factors considered by the Company in determining the business model for a group of financial assets include:
\u2022past experience on how the cash flows for these assets were collected;
\u2022the frequency, volume and timing of sales of financial assets in prior periods, the reasons for such sales and
future sales activity expectations;
\u2022how the asset\u2019s performance is evaluated and reported to key management personnel; and
\u2022how risks are assessed and managed and how management is compensated.
Financial assets are not reclassified subsequent to their initial recognition unless the Company changes its business
model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first
reporting period following the change in the business model.
Cash and cash equivalents included cash at banks, units in money market funds and other money market securities,
commercial paper and certificate of deposits that are readily convertible into cash, with original maturities of three months or
less at the date of purchase. Cash and cash equivalents are subject to an insignificant risk of changes in value and consist of
balances across various primary national and international banks and of money market instruments. Money market funds
consist of investments in high quality, short-term, diversified financial instruments that can generally be liquidated on
demand and are measured at FVPL. Cash at banks and Other cash equivalents are measured at amortized cost.
Investments in other companies are measured at fair value. Equity investments for which there is no quoted market
price in an active market and there is insufficient financial information in order to determine fair value may be measured at
cost as an estimate of fair value, as permitted by IFRS 9 - Financial Instruments (\u201cIFRS 9\u201d). The Company may irrevocably
elect to present subsequent changes in the investment\u2019s fair value in Other comprehensive income (\u201cOCI\u201d) upon the initial
recognition of an equity investment that is not held to sell. This election is made on an investment-by-investment basis.
Generally, any dividends from these investments are recognized in Other income from investments within Result from
investments when the Company\u2019s right to receive payment is established. Other net gains and losses are recognized in OCI
and will not be reclassified to the Consolidated Income Statement in subsequent periods. Impairment losses (and the reversal
of impairment losses) on equity investments measured at FVOCI are not reported separately from other changes in fair value
in OCI.
Impairment of financial assets
The Company\u2019s credit risk differs in relation to the type of activity. In particular, receivables from financing
activities, such as dealer and retail financing that are carried out through the Company\u2019s financial services companies, are
exposed both to the direct risk of default and the deterioration of the creditworthiness of the counterparty, whereas trade
receivables arising from the sale of vehicles and spare parts, are mostly exposed to the direct risk of counterparty default.
These risks are mitigated by different kinds of securities received and the fact that collection exposure is spread across a large
number of counterparties.
The IFRS 9 impairment requirements are based on a forward-looking expected credit loss (\u201cECL\u201d) model. ECL is a
probability-weighted estimate of the present value of cash shortfalls.
The calculation of the amount of ECL is based on the risk of default by the counterparty, which is determined by
taking into account the information available at the end of each reporting period as to the counterparty\u2019s solvency, the fair
value of any guarantees and the Company\u2019s historical experience. The Company considers a financial asset to be in default
when: (i) the borrower is unlikely to pay its obligations in full and without consideration of compensating guarantees or
collateral (if any exist); or (ii) the financial asset is more than 90 days past due.
The Company applies two impairment models for financial assets as set out in IFRS 9: the simplified approach and
the general approach. The table below indicates the impairment model used for each of the Company\u2019s financial asset
categories. Impairment losses on financial assets are recognized in the Consolidated Income Statement within the
corresponding line items, based on the classification of the counterparty.
| |
| |
| |
Receivables from financing activities | |
| |
In order to test for impairment, individually significant receivables and receivables for which collectability is at risk
are assessed individually, while all other receivables are grouped into homogeneous risk categories based on shared risk
characteristics such as instrument type, industry or geographical location of the counterparty.
The simplified approach for determining the lifetime ECL allowance is performed in two steps:
\u2022All trade receivables that are in default, as defined above, are individually assessed for impairment; and
\u2022A general reserve is recognized for all other trade receivables (including those not past due) based on historical
loss rates.
The Company applies the general approach as determined by IFRS 9 by assessing at each reporting date whether
there has been a significant increase in credit risk on the financial instrument since initial recognition. The Company
considers receivables to have experienced a significant increase in credit risk when certain quantitative or qualitative
indicators have been met or the borrower was more than 30 days past due on its contractual payments.
The \u201cthree-stages\u201d for determining and measuring the impairment based on changes in credit quality since initial
recognition are summarized below:
| | |
| | Time period for measurement of ECL |
| A financial instrument that is not credit-impaired on initial recognition | |
| A financial instrument with a significant increase in credit risk since initial recognition | |
| A financial instrument that is credit-impaired or has defaulted | |
Considering forward-looking economic information, ECL is determined by projecting the probability of default,
exposure at default and loss given default for each future contractual period and for each individual exposure or collective
portfolio. The discount rate used in the ECL calculation is the stated effective interest rate or an approximation thereof. Each
reporting period, the assumptions underlying the ECL calculation are reviewed and updated as necessary. Since adoption,
there have been no significant changes in estimation techniques or significant assumptions that led to material changes in the
ECL allowance.
The gross carrying amount of a financial asset is written-off to the extent that there is no realistic prospect of
recovery. This is generally the case when the Company determined that a debtor does not have assets or sources of income
that could generate sufficient cash flows to repay the amounts subject to the write-off. However, financial assets that are
written off could still be subject to enforcement activities.
Derivative financial instruments
Derivative financial instruments are used for economic hedging purposes in order to reduce currency, interest rate
and market price risks (primarily related to commodities). In accordance with IFRS 9, derivative financial instruments are
recognized when we become a party to the contractual provisions of the instrument and, upon initial recognition, are
measured at fair value. Subsequent to initial recognition, all derivative financial instruments are measured at fair value.
Furthermore, derivative financial instruments qualify for hedge accounting when (i) there is formal designation and
documentation of the hedging relationship and the Company\u2019s risk management objective and strategy for undertaking the
hedge at inception of the hedge and (ii) the hedge is expected to be effective. If the hedging relationship ceases to meet the
hedge effectiveness requirement relating to the hedge ratio but the risk management objective for that designated hedging
relationship remains the same, this ratio must then be rebalanced. Rebalancing consists in adjusting either the designated
quantities of the hedged item or the hedging instrument of an already existing hedging relationship.
When derivative financial instruments qualify for hedge accounting, the following accounting treatments apply:
\u2022Fair value hedges - where a derivative financial instrument is designated as a hedge of the exposure to changes
in fair value of a recognized asset or liability attributable to a particular risk that could affect the Consolidated
Income Statement, the gain or loss from remeasuring the hedging instrument at fair value is recognized in the
Consolidated Income Statement. The gain or loss on the hedged item attributable to the hedged risk adjusts the
carrying amount of the hedged item and is recognized in the Consolidated Income Statement.
\u2022Cash flow hedges - where a derivative financial instrument is designated as a hedge of the exposure to
variability in future cash flows of a recognized asset or liability or a highly probable forecasted transaction and
could affect the Consolidated Income Statement, the effective portion of any gain or loss on the derivative
financial instrument is recognized directly in Other comprehensive income/(loss). When the hedged forecasted
transaction results in the recognition of a non-financial asset, the gains and losses previously deferred in Other
comprehensive income/(loss) are reclassified and included in the initial measurement of the cost of the non-
financial asset. The effective portion of any gain or loss is recognized in the Consolidated Income Statement at
the same time as the economic effect arising from the hedged item that affects the Consolidated Income
Statement. The gain or loss associated with a hedge or part of a hedge that has become ineffective is recognized
in the Consolidated Income Statement immediately.
When a hedging instrument or hedge relationship is terminated but the hedged transaction is still expected to
occur, the cumulative gain or loss realized to the point of termination remains and is recognized in the
Consolidated Income Statement at the same time as the underlying transaction occurred. If the hedged
transaction is no longer probable, the cumulative unrealized gain or loss held in Other comprehensive income/
(loss) is recognized in the Consolidated Income Statement immediately.
\u2022Hedges of a net investment - if a derivative financial instrument is designated as a hedging instrument for a net
investment in a foreign operation, the effective portion of the gain or loss on the derivative financial instrument
is recognized in Other comprehensive income/(loss). The cumulative gain or loss is reclassified from Other
comprehensive income/(loss) to the Consolidated Income Statement upon disposal of the foreign operation.
Hedge effectiveness is determined at the inception of the hedge relationship and through periodic prospective
effectiveness assessments to ensure the hedge relationships meet the effectiveness requirements (including the existence of an
economic relationship between\u00a0the hedged item and hedging instrument). The Company enters into hedge relationships where
the critical terms of the hedging instrument match closely or exactly with the terms of the hedged item, and so a qualitative
assessment of effectiveness is performed. In the event there was a hedge relationship where the critical terms of the hedged
item do not match closely or perfectly with the critical terms of the hedging instrument, the Company would perform a
quantitative assessment to assess effectiveness.
Ineffectiveness is measured by comparing the cumulative changes in fair value of the hedging instrument and
cumulative change in fair value of the hedged item arising from the designated risk. The primary potential sources of hedge
ineffectiveness are mismatches in timing or the critical terms of the hedged item and the hedging instrument.
The hedge ratio is the relationship between the quantity of the derivative and the hedged item. The Company\u2019s
derivatives have the same underlying quantity as the hedged items, therefore the hedge ratio is expected to be one for one.
If hedge accounting cannot be applied, the gains or losses from the fair value measurement of derivative financial
instruments are recognized immediately in the Consolidated Income Statement.
Refer to Note 17, Derivative financial and operating assets and liabilities, for additional information on fair value
measurements.
Transfers of financial assets
The Company derecognizes financial assets when the contractual rights to the cash flows arising from the asset are
no longer held or if it transfers substantially all the risks and rewards of ownership of the financial asset. On derecognition of
financial assets, the difference between the carrying amount of the asset and the consideration received or receivable for the
transfer of the asset is recognized in the Consolidated Income Statement.
The Company transfers certain of its financial, trade and tax receivables, mainly through factoring transactions.
Factoring transactions may be either with recourse or without recourse. Certain transfers include deferred payment clauses
requiring first loss cover (for example, when the payment by the factor of a minor part of the purchase price is dependent on
the total amount collected from the receivables), whereby the transferor has priority participation in the losses, or requires a
significant exposure to the variability of cash flows arising from the transferred receivables to be retained. These types of
transactions do not meet the requirements of IFRS 9 for the derecognition of the assets since the risks and rewards connected
with ownership of the financial asset are not substantially transferred, and accordingly the Company continues to recognize
these receivables within the Consolidated Statement of Financial Position and recognizes a financial liability for the same
amount under Asset-backed financing, which is included within Debt. These types of receivables are classified as held-to-
collect, since the business model is consistent with the Company\u2019s continuing recognition of the receivables.
Inventories
Raw materials, semi-finished products and finished goods inventories are stated at the lower of cost and net
realizable value, with cost being determined on a first-in, first-out (\u201cFIFO\u201d) basis. The measurement of Inventories includes
the direct cost of materials and labor as well as indirect costs (variable and fixed). A provision is made for obsolete and slow-
moving raw materials, finished goods, spare parts and other supplies based on their expected future use and realizable value.
Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion
and the estimated costs for sale and distribution.
The measurement of production systems construction contracts is based on the stage of completion, which is
determined as the proportion of cost incurred at the balance sheet date over the estimated total contract cost. These items are
presented net of progress billings received from customers. Any losses on such contracts are recorded in the Consolidated
Income Statement in the period in which they are identified.
Employee benefits
Defined contribution plans
Costs arising from defined contribution plans are expensed as incurred.
Defined benefit plans
The Company\u2019s net obligations are determined separately for each defined benefit plan by estimating the present
value of future benefits that employees have earned and deducting the fair value of any plan assets. The present value of
defined benefit obligations is measured using actuarial techniques and actuarial assumptions that are unbiased, mutually
compatible and attribute benefits to periods in which the obligation to provide post-employment benefits arise by using the
Projected Unit Credit Method. Plan assets are recognized and measured at fair value.
When the net obligation is a potential asset, the recognized amount is limited to the present value of any economic
benefits available in the form of future refunds or reductions in future contributions to the plan (asset ceiling).
The components of defined benefit cost are recognized as follows:
\u2022Service cost is recognized in the Consolidated Income Statement by function and is presented within the
relevant line items (Cost of revenues, Selling, general and other costs, and Research and development costs);
\u2022Net interest expense on the defined benefit liability/(asset) is recognized in the Consolidated Income Statement
within Net financial expenses and is determined by multiplying the net liability/(asset) by the discount rate used
to discount obligations taking into account the effect of contributions and benefit payments made during the
year; and
\u2022Remeasurement components of the net obligation, which comprise actuarial gains and losses, the return on plan
assets (excluding interest income recognized in the Consolidated Income Statement) and any change in the
effect of the asset ceiling are recognized immediately in Other comprehensive income/(loss). These
remeasurement components are not reclassified to the Consolidated Income Statement in a subsequent period.
Past service costs arising from plan amendments and curtailments and gains and losses on the settlement of a plan
are recognized immediately in the Consolidated Income Statement.
Other long term employee benefits
The Company\u2019s obligations represent the present value of future benefits that employees have earned in return for
their service. The effects of remeasuring other long-term employee benefits to the present value of future benefits are
recognized within the Consolidated Income Statement in the period in which they arise.
Share-based compensation
The Company has several compensation plans that provide for the granting of share-based compensation to certain
employees and directors. Share-based compensation plans are accounted for in accordance with IFRS 2 -Share-based
Payment, which requires the recognition of share-based compensation expense based on fair value.
For equity-settled transactions, the cost is determined by the fair value at the date when the grant is determined with
reference to the grant-date share price and, where applicable, using a Monte Carlo simulation model. Refer to Note 19, Share-
based compensation, for further information.
Share-based compensation expense is recognized within Selling, general and other costs within the Consolidated
Income Statement, together with a corresponding increase in equity, over the period in which the service and, where
applicable, the performance conditions are fulfilled (\u201cvesting period\u201d). The cumulative expense is recognized for equity-
settled transactions at each reporting date using the graded vesting method and reflected the Company\u2019s best estimate of the
number of equity instruments that will ultimately vest. The expense, or credit, in the Consolidated Income Statement for a
period represents the movement in cumulative expense recognized as at the beginning and end of that period.
Service and non-market performance conditions are not taken into account when determining the grant date fair
value of awards, but the likelihood of the conditions being met is assessed as part of the Company\u2019s best estimate of the
number of equity instruments that will ultimately vest. Market performance conditions are reflected within the grant date fair
value. Any other conditions attached to an award, but without an associated service requirement, are considered to be non-
vesting conditions. Non-vesting conditions are reflected in the fair value of an award and lead to an immediate expensing of
an award unless there were also service and/or performance conditions.
No expense is recognized for awards that do not ultimately vest because non-market performance and/or service
conditions have not been met. Where awards included a market or non-vesting condition, the transactions are treated as
vested irrespective of whether the market or non-vesting condition is satisfied, provided that all other performance and/or
service conditions are satisfied.
When the terms of an equity-settled award are modified, the minimum expense recognized is the grant date fair
value of the unmodified award, provided the original vesting terms of the award are met. Any incremental expense between
the original grant and the modified grant, measured at the date of modification, is recognized over the modified vesting terms.
Where an award is cancelled by the entity or by the counterparty, any unrecognized element of the fair value of the award is
expensed immediately through the Consolidated Income Statement.
For cash-settled transactions, a liability is recognized for the fair value measured initially and at each reporting date
up to and including the settlement date. The fair value is expensed over the period until the vesting date, with recognition of a
corresponding liability. The approach used to account for vesting conditions when measuring equity-settled transactions also
applies to cash-settled transactions.
Revenue recognition
Revenue is recognized when control of the Company\u2019s vehicles, services or parts has been transferred and the
Company\u2019s performance obligations to its customers have been satisfied. Revenue is measured as the amount of
consideration the Company expects to receive in exchange for transferring goods or providing services. The timing of when
the Company transfers the goods or services to the customer could differ from the timing of the customer\u2019s payment. The
Company recognizes a contract liability when it invoices an amount to a customer prior to the transfer of the goods or
services provided. When the Company gives its customers the right to return eligible goods, the Company estimates the
expected returns based on an analysis of historical experiences. Sales, value added and other taxes that the Company collects
on behalf of others concurrently with revenue generating activities are excluded from revenue and are recognized within the
Other liabilities and the Tax liabilities line items in the Consolidated Statement of Financial Position. Incidental items that are
immaterial in the context of the contract are recognized as expense.
The Company also enters into contracts with multiple performance obligations. For these contracts, the Company
allocates revenue from the transaction price to the distinct goods and services in the contract on a relative standalone selling
price basis. To the extent that the Company sells the good or service separately in the same market, the standalone selling
price is the observable price at which the Company sold the good or service separately. For all other goods or services, the
Company estimates the standalone selling price using a cost-plus-margin approach.
Shipments of vehicles and sales of other goods
The Company has determined that the Company\u2019s customers from the sale of vehicles and service parts are
generally dealers, distributors or fleet customers. Transfer of control, and therefore revenue recognition, generally
corresponds to the date when the vehicles or service parts are made available to the customer, or when the vehicles or service
parts are released to the carrier responsible for transporting them to the customer. This is also the point at which invoices are
issued, with payment for vehicles typically due immediately and payment for service parts typically due in the following
month. For component part sales, revenue recognition is consistent with that of service parts. In the case of service parts sold
that are expected to be used for repairs under warranty, no revenue is recognized upon shipment. The Company also sells
tooling, with control transferring at the point in time when the customer accepts the tooling.
The cost of incentives, if any, is estimated at the inception of a contract at the expected amount that will ultimately
be paid and is recognized as a reduction to revenue at the time of the sale. If a vehicle contract transaction has multiple
performance obligations, the cost of incentives is allocated entirely to the vehicle as the intent of the incentives is to
encourage sales of vehicles. If the estimate of the incentive changes following the sale to the customer, the change in estimate
is recognized as an adjustment to revenue in the period of the change. Refer to the Use of estimates - Sales incentives for
more information on these programs.
New vehicles sales with residual value guarantees provided by the Company are recognized as revenue when control
of the vehicle transfers to the customer, except in situations where the Company issues a put option for which there is a
significant economic incentive to exercise, as discussed below. Upon recognition of the vehicle revenue, the Company
established a liability equal to the estimated amount of any residual value guarantee.
The Company also sells vehicles where, the contract includes a put option whereby the customer may require the
Company to repurchase the vehicles. For these types of arrangements, the Company assesses whether a significant economic
incentive exists for the customer to exercise its put option. If the Company determines that a significant economic incentive
does not exist for the customer to exercise its put option, then revenue is recognized when control of the vehicle transferred to
the fleet customer and a liability is recognized equal to the estimated amount of the residual value guarantee if any. If the
Company determines that a significant economic incentive exists, then the arrangement is accounted for similarly to a
repurchase obligation, as described in Lease installments from assets sold with buy-back commitments.
Other services provided
Other revenues from services provided are primarily comprised of maintenance plans, extended warranties, and
connectivity services, and are recognized over the contract period in proportion to the costs expected to be incurred based on
the Company\u2019s historical experience. These services are either included in the selling price of the vehicle or separately priced.
Revenue for services is allocated based on the estimated stand-alone selling price. Costs associated with these services are
deferred and are subsequently amortized to expense consistent with how the related revenue is recognized. The Company had
\u20ac236 million of deferred costs related to these services at December 31, 2022 (\u20ac159 million at December 31, 2021) and
recognized \u20ac91 million of amortization expense during the year ended December\u00a031, 2022 (\u20ac58 million during the year ended
December\u00a031, 2021).
Contract revenues
Revenue from construction contracts, which is comprised of industrial automation systems, included within \u201cOther
activities\u201d, is recognized as revenue over the contract period in proportion to the costs expected to be incurred based on the
Company\u2019s historical experience. A loss is recognized if the sum of the expected costs for services under the contract exceeds
the transaction price.
Lease installments from assets sold with buy-back commitments
Vehicle sales to customers can include a repurchase obligation, whereby the Company is required to repurchase the
vehicles at a given point in time. The Company accounts for such sales as an operating lease. Upon the transfer of vehicles to
the customer, the Company records a liability equal to the proceeds received within Other liabilities in the Consolidated
Statement of Financial Position. The difference between the proceeds received and the guaranteed repurchase amount is
recognized as revenue over the contractual term on a straight-line basis. The cost of the vehicle is recorded within Assets sold
with a buy-back commitment if the contract term is 12 months or less, and recorded in Property, plant and equipment if the
contract term is greater than 12 months. The difference between the cost of the vehicle and the estimated residual value is
recognized within Cost of revenues in the Consolidated Income Statement over the contractual term.
Interest income of financial services activities
Interest income, which is primarily generated from the Company by providing dealer and retail financing, is
recognized using the effective interest method.
Cost of revenues
Cost of revenues comprises expenses incurred in the manufacturing and distribution of vehicles and parts.
Historically the most significant element is the cost of materials and components and the remaining costs included labor
(consisting of direct and indirect wages), transportation costs, depreciation of property, plant and equipment and amortization
of other intangible assets relating to production. In addition, expenses which are directly attributable to the consolidated
financial services companies, including interest expense related to their financing as a whole and provisions for risks and
write-downs of assets, are recorded within Cost of revenues (\u20ac289 million, \u20ac68 million and \u20ac5 million for the years ended
December 31, 2022, 2021 and 2020, respectively). Cost of revenues also included \u20ac31 million, \u20ac227 million and \u20ac74 million
related to the decrease in value for assets sold with buy-back commitments for the years ended December 31, 2022, 2021 and
2020, respectively. In addition, estimated costs related to product warranty and recall campaigns were recorded within Cost
of revenues (refer to the section Use of estimates below for further information).
Government Grants
Government grants are recognized in the Consolidated Financial Statements when there is reasonable assurance of
the Company's compliance with the conditions for receiving such grants and that the grants will be received. Government
grants are recognized as income over the same periods as the related costs which they are intended to offset.
Government grants are recognized as a reduction in the cost of the corresponding assets.
The benefit of a government loan at a below-market rate of interest is treated as a government grant. The benefit of
the below-market rate of interest is measured as the difference between the initial carrying amount of the loan (fair value plus
transaction costs) and the proceeds received, and it is accounted for in accordance with the policies used for the recognition
of government grants.
Taxes
Income taxes include all taxes which are based on the taxable profits of the Company. Current and deferred taxes are
recognized as a benefit or expense and are included in the Consolidated Income Statement for the period, except for tax
arising from (i)\u00a0a transaction or event which is recognized, in the same or a different period, either in Other comprehensive
income/(loss) or directly in Equity, or (ii)\u00a0a business combination.
Deferred taxes are accounted for under the full liability method. Deferred tax liabilities are recognized for all taxable
temporary differences between the carrying amounts of assets or liabilities and their tax base, except to the extent that the
deferred tax liabilities arise from the initial recognition of goodwill or the initial recognition of an asset or liability in a
transaction which is not a business combination and at the time of the transaction, affects neither accounting profit nor
taxable profit. Deferred tax assets are recognized for all deductible temporary differences to the extent that it was probable
that taxable profit will be available against which the deductible temporary differences can be utilized, unless the deferred tax
assets arise from the initial recognition of an asset or liability in a transaction that is not a business combination and at the
time of the transaction, affected neither accounting profit nor taxable profit.
Deferred tax assets and liabilities are measured at the substantively enacted tax rates in the respective jurisdictions in
which the Company operates that are expected to apply to the period when the asset is realized or liability is settled.
The Company recognizes deferred tax liabilities associated with the existence of a subsidiary\u2019s undistributed profits
when it is probable that this temporary difference will reverse in the foreseeable future, except when it is able to control the
timing of the reversal of the temporary difference. The Company recognizes deferred tax assets associated with the deductible
temporary differences on investments in subsidiaries only to the extent that it is probable that the temporary differences will
reverse in the foreseeable future and taxable profit will be available against which the temporary difference can be utilized.
Deferred tax assets relating to the carry-forward of unused tax losses and tax credits, as well as those arising from
deductible temporary differences, are recognized to the extent that it is probable that future profits will be available against
which they can be utilized. The Company monitors unrecognized deferred tax assets at each reporting date and recognizes a
previously unrecognized deferred tax asset to the extent that it has become probable that future taxable profit will allow the
deferred tax asset to be recovered. Refer to Use of estimates - Recoverability of deferred tax assets for additional detail.
Current income taxes and deferred taxes are offset when they relate to the same taxation jurisdiction and there is a
legally enforceable right of offset. Other taxes not based on income, such as property taxes and capital taxes, are included
within Cost of revenue, Selling, general and other costs and Research and development costs.
Refer to Note 7, Tax expense/(benefit), for additional information on tax expense and deferred tax assets.
Fair Value Measurement
Fair value for measurement and disclosure purposes is determined as the consideration that would be received to sell
an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date,
regardless of whether that price is directly observable or estimated using a valuation technique. Fair value measurement is
based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
\u2022in the principal market for the asset or liability; or
\u2022in the absence of a principal market, in the most advantageous market for the asset or liability.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when
pricing the asset or liability, assuming that market participants act in their own economic best interest. A fair value
measurement of a non-financial asset takes into account a market participant's ability to generate economic benefits by using
the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and
best use. In estimating fair value, the Company use market-observable data to the extent it is available. When market-
observable data is not available, the Company use valuation techniques that maximize the use of relevant observable inputs
and minimize the use of unobservable inputs.
IFRS 13 - Fair Value Measurement establishes a hierarchy which prioritizes the inputs used in measuring fair value.
The hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets and liabilities
(Level 1 inputs) and the lowest priority to unobservable inputs (level 3 inputs). In some cases, the inputs used to measure the
fair value of an asset or a liability might be categorized within different levels of the fair value hierarchy. In those cases, the
fair value measurement is categorized in its entirety in the same level of the fair value hierarchy at the lowest level input that
is significant to the entire measurement.
Levels used in the hierarchy are as follows:
\u2022Level 1 inputs include quoted prices (unadjusted) in active markets for identical assets and liabilities that the
Company can access at the measurement date. Level 1 primarily consists of financial instruments such as
certain held to collect and sell and held to sell securities;
\u2022Level 2 inputs include those which are directly or indirectly observable as of the measurement date. Level 2
instruments include commercial paper and non-exchange-traded derivatives such as over-the-counter currency
and commodity forwards, swaps and option contracts, which are valued using models or other valuation
methodologies. These models are primarily industry-standard models that consider various assumptions,
including quoted forward prices for similar instruments in active markets, quoted prices for identical or similar
inputs not in active markets, and observable inputs; and
\u2022Level 3 inputs are unobservable from objective sources in the market and reflect management judgment about
the assumptions market participants would use in pricing the instruments. Instruments in this category include
non-exchange-traded derivatives such as certain over-the-counter commodity option and swap contracts that are
complex or with non standard clauses.
Refer to Note 24, Fair value measurement, for additional information on fair value measurements.",
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"concept": "ifrs-full:DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory",
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"entity": "scheme:549300LKT9PW7ZIBDF31",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
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"value": "
Basis of consolidation
Subsidiaries
Subsidiaries are entities over which the Company has control. Control is achieved when the Company has power
over the investee, when it was exposed to, or has rights to, variable returns from its involvement with the investee and has the
ability to use its power over the investee to affect the amount of the investor\u2019s returns. Subsidiaries are consolidated on a line
by line basis from the date which control is achieved by the Company. The Company reassesses whether or not it controls an
investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above.
The Company recognizes a non-controlling interest in the acquiree on a transaction-by-transaction basis, either at
fair value or at the non-controlling interest\u2019s share of the recognized amounts of the acquiree\u2019s identifiable net assets. Net
profit or loss and each component of Other comprehensive income/(loss) are attributed to Equity attributable to owners of the
parent and to Non-controlling interests. Total comprehensive income/(loss) of subsidiaries is attributed to Equity attributable
to the owners of the parent and to the non-controlling interest even if this results in a deficit balance in Non-controlling
interests.
Changes in the Company\u2019s ownership interests in a subsidiary that do not result in the Company losing control over
the subsidiary are accounted for as equity transactions. The carrying amounts of Equity attributable to owners of the parent
and Non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary. Any difference
between the carrying amount of the non-controlling interests and the fair value of the consideration paid or received in the
transaction is recognized directly in Equity attributable to the owners of the parent.
Subsidiaries are deconsolidated from the date on which control ceases. When the Company ceases to have control
over a subsidiary, it derecognizes the assets (including any goodwill) and liabilities of the subsidiary at their carrying
amounts, derecognizes the carrying amount of non-controlling interests in the former subsidiary if any and recognizes the fair
value of any consideration received from the transaction. Any gain or loss is recognized in the Consolidated Income
Statement. Any retained interest in the former subsidiary is then remeasured to its fair value.
All intra-group balances and transactions, and any unrealized gains and losses arising from intra-group transactions,
are eliminated in preparing the Consolidated Financial Statements.
Interests in Joint Ventures and Associates
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to
the net assets of the arrangement. Joint control is the contractually agreed sharing of control of an arrangement which exist
only when decisions about the relevant activities require the unanimous consent of the parties sharing the control.
An associate is an entity over which the Company has significant influence. Significant influence is the power to
participate in the financial and operating policy decisions of the investee but does not have control or joint control over those
policies.
Joint ventures and associates are accounted for using the equity method of accounting from the date joint control or
significant influence is obtained. On acquisition, any excess of the investment over the share of the net fair value of the
investee's identifiable assets and liabilities is recognized as goodwill and is included in the carrying amount of the investment.
Any excess of the Company\u2019s share of the net fair value of the investee\u2019s identifiable assets and liabilities over the cost of the
investment is included as income in the determination of the Company\u2019s share of the investee\u2019s profit/(loss) in the acquisition
period.
Under the equity method, investments are initially recognized at cost and adjusted thereafter to recognize the
Company\u2019s share of the profit/(loss) and other comprehensive income/(loss) of the investee. The Company\u2019s share of the
investee\u2019s profit/(loss) is recognized in the Consolidated Income Statement. Distributions received from an investee reduce
the carrying amount of the investment. Post-acquisition movements in Other comprehensive income/(loss) are recognized in
Other comprehensive income/(loss) with a corresponding adjustment to the carrying amount of the investment.
Unrealized gains arising on transactions between the Company and its joint ventures and associates are eliminated to
the extent of the Company\u2019s interest in the joint venture or associate. Unrealized losses are also eliminated unless the
transaction provided evidence of an impairment of the asset transferred.
When the Company\u2019s share of the losses of a joint venture or associate exceeds its interest in that joint venture or
associate, the Company discontinues recognizing its share of further losses. Additional losses are provided for and a liability
is recognized only to the extent that the Company has incurred legal or constructive obligations or made payments on behalf
of the joint venture or associate.
The Company discontinues the use of the equity method from the date the investment ceases to be an associate or a
joint venture, or when it is classified as held for sale.
Interests in Joint Operations
A joint operation is a type of joint arrangement whereby the parties that have joint control have rights to the assets
and obligations for the liabilities relating to the arrangement. Joint control is the contractually agreed sharing of control of an
arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties
sharing control.
The Company recognizes its related interest in the joint operation including: (i)\u00a0its assets, including its share of any
assets held jointly, (ii)\u00a0its liabilities, including its share of any liabilities incurred jointly, (iii)\u00a0its revenue from the sale of its
share of the output arising from the joint operation, (iv)\u00a0its share of the revenue from the sale of the output by the joint
operation and (v)\u00a0its expenses, including its share of any expenses incurred jointly.
Assets held for sale, Assets held for distribution and Discontinued Operations
Pursuant to IFRS 5 - Non-current Assets Held for Sale and Discontinued Operations, non-current assets and disposal
groups are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather
than through continuing use. This condition is regarded as met only when the asset or disposal group is available for
immediate sale in its present condition, subject only to terms that are usual and customary for sales of such an asset or
disposal group, and the sale is highly probable, with the sale expected to be completed within one year from the date of
classification.
Non-current assets and disposal groups classified as held for sale are measured at the lower of their carrying amount
and fair value less costs to sell and are presented separately in the Consolidated Statement of Financial Position. Non-current
assets and disposal groups are not classified as held for sale within the comparative period presented for the Consolidated
Statement of Financial Position.
A discontinued operation is a component of the Company that either has been disposed of or is classified as held for
sale and (i) represents either a separate major line of business or a geographical area of operations, (ii) is part of a single
coordinated plan to dispose of a separate major line of business or geographical area of operations, or (iii) is a subsidiary
acquired exclusively with a view to resell and the disposal involves loss of control.
Classification as a discontinued operation occurs upon disposal or, if earlier, when the asset or disposal group meets
the criteria to be classified as held for sale. When the asset or disposal group is classified as a discontinued operation, the
comparative information is reclassified within the Consolidated Income Statement and the Consolidated Statement of Cash
Flows as if the asset or disposal group had been discontinued from the start of the earliest comparative period presented. In
addition, when an asset or disposal group is classified as held for sale, depreciation and amortization cease.
The classification, presentation and measurement requirements of IFRS 5 - Non-current Assets Held for Sale and
Discontinued Operations outlined above also apply to an asset or disposal group that is classified as held for distribution to
owners, whereby there must be commitment to the distribution, the asset or disposal group must be available for immediate
distribution and the distribution must be highly probable.
Foreign currency
The functional currency of the Company\u2019s entities is the currency used in their respective primary economic
environments. In individual companies, transactions in foreign currencies are recorded at the exchange rate prevailing at the
date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the exchange rate
prevailing at the date of the Consolidated Statement of Financial Position. Exchange differences arising on the settlement of
monetary items or on reporting monetary items at rates different from those initially recorded, are recognized in the
Consolidated Income Statement.
All assets and liabilities of foreign consolidated companies with a functional currency other than the Euro are
translated using the closing rates as at the date of the Consolidated Statement of Financial Position. Income and expenses are
translated into Euro on a monthly basis at the average exchange rate for each month. Translation differences arising from the
application of this method are classified within Other comprehensive income/(loss) until the disposal of the subsidiary.
Average exchange rates for the period are used in preparing the Consolidated Statement of Cash Flows to translate
the cash flows of foreign subsidiaries.
The principal exchange rates used to translate other currencies into Euro were as follows:
____________________________________________________________________________________________________
n.a. = not applicable
(1) From July 1, 2018, Argentina\u2019s economy was considered to be hyperinflationary. Transactions after July 1, 2018 for entities with the Argentinian Peso as the functional
currency were translated using the spot rate at the end of the period. The price indices used are published by the Insituto Nacional de Estadistica y Censos de la Republica
Argentina
(2) From April 1, 2022, Turkey\u2019s economy was considered to be hyperinflationary. Transactions after January 1, 2022 for entities with the Turkish Lira as the functional currency
were translated using the spot rate at the end of the period. The price indices used are published by the Turkish Statistical Institute",
"dimensions": {
"concept": "ifrs-full:DisclosureOfBasisOfConsolidationExplanatory",
"language": "en",
"entity": "scheme:549300LKT9PW7ZIBDF31",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjhlODFkMTZmNGE0NDRkZjdhYjBlZjJkODE2MjY0ZGUwL3NlYzo4ZTgxZDE2ZjRhNDQ0ZGY3YWIwZWYyZDgxNjI2NGRlMF80ODcvZnJhZzo3Nzg2OWQ1NWVmMDE0OWI5YTdhZmE2YjFiYjBlYWUwYy90ZXh0cmVnaW9uOjc3ODY5ZDU1ZWYwMTQ5YjlhN2FmYTZiMWJiMGVhZTBjXzMwNzg2MzI1NjY3NDE3_e8911921-bfcb-49ca-bf8a-8c406b7d00a0": {
"value": "
Subsidiaries
Subsidiaries are entities over which the Company has control. Control is achieved when the Company has power
over the investee, when it was exposed to, or has rights to, variable returns from its involvement with the investee and has the
ability to use its power over the investee to affect the amount of the investor\u2019s returns. Subsidiaries are consolidated on a line
by line basis from the date which control is achieved by the Company. The Company reassesses whether or not it controls an
investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above.
The Company recognizes a non-controlling interest in the acquiree on a transaction-by-transaction basis, either at
fair value or at the non-controlling interest\u2019s share of the recognized amounts of the acquiree\u2019s identifiable net assets. Net
profit or loss and each component of Other comprehensive income/(loss) are attributed to Equity attributable to owners of the
parent and to Non-controlling interests. Total comprehensive income/(loss) of subsidiaries is attributed to Equity attributable
to the owners of the parent and to the non-controlling interest even if this results in a deficit balance in Non-controlling
interests.
Changes in the Company\u2019s ownership interests in a subsidiary that do not result in the Company losing control over
the subsidiary are accounted for as equity transactions. The carrying amounts of Equity attributable to owners of the parent
and Non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary. Any difference
between the carrying amount of the non-controlling interests and the fair value of the consideration paid or received in the
transaction is recognized directly in Equity attributable to the owners of the parent.
Subsidiaries are deconsolidated from the date on which control ceases. When the Company ceases to have control
over a subsidiary, it derecognizes the assets (including any goodwill) and liabilities of the subsidiary at their carrying
amounts, derecognizes the carrying amount of non-controlling interests in the former subsidiary if any and recognizes the fair
value of any consideration received from the transaction. Any gain or loss is recognized in the Consolidated Income
Statement. Any retained interest in the former subsidiary is then remeasured to its fair value.
All intra-group balances and transactions, and any unrealized gains and losses arising from intra-group transactions,
are eliminated in preparing the Consolidated Financial Statements.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForSubsidiariesExplanatory",
"language": "en",
"entity": "scheme:549300LKT9PW7ZIBDF31",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjhlODFkMTZmNGE0NDRkZjdhYjBlZjJkODE2MjY0ZGUwL3NlYzo4ZTgxZDE2ZjRhNDQ0ZGY3YWIwZWYyZDgxNjI2NGRlMF80ODcvZnJhZzo3Nzg2OWQ1NWVmMDE0OWI5YTdhZmE2YjFiYjBlYWUwYy90ZXh0cmVnaW9uOjc3ODY5ZDU1ZWYwMTQ5YjlhN2FmYTZiMWJiMGVhZTBjXzMwNzg2MzI1NjY3NDE4_62ce28ea-152e-43f6-ae96-fad24f89f243": {
"value": "
Interests in Joint Ventures and Associates
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to
the net assets of the arrangement. Joint control is the contractually agreed sharing of control of an arrangement which exist
only when decisions about the relevant activities require the unanimous consent of the parties sharing the control.
An associate is an entity over which the Company has significant influence. Significant influence is the power to
participate in the financial and operating policy decisions of the investee but does not have control or joint control over those
policies.
Joint ventures and associates are accounted for using the equity method of accounting from the date joint control or
significant influence is obtained. On acquisition, any excess of the investment over the share of the net fair value of the
investee's identifiable assets and liabilities is recognized as goodwill and is included in the carrying amount of the investment.
Any excess of the Company\u2019s share of the net fair value of the investee\u2019s identifiable assets and liabilities over the cost of the
investment is included as income in the determination of the Company\u2019s share of the investee\u2019s profit/(loss) in the acquisition
period.
Under the equity method, investments are initially recognized at cost and adjusted thereafter to recognize the
Company\u2019s share of the profit/(loss) and other comprehensive income/(loss) of the investee. The Company\u2019s share of the
investee\u2019s profit/(loss) is recognized in the Consolidated Income Statement. Distributions received from an investee reduce
the carrying amount of the investment. Post-acquisition movements in Other comprehensive income/(loss) are recognized in
Other comprehensive income/(loss) with a corresponding adjustment to the carrying amount of the investment.
Unrealized gains arising on transactions between the Company and its joint ventures and associates are eliminated to
the extent of the Company\u2019s interest in the joint venture or associate. Unrealized losses are also eliminated unless the
transaction provided evidence of an impairment of the asset transferred.
When the Company\u2019s share of the losses of a joint venture or associate exceeds its interest in that joint venture or
associate, the Company discontinues recognizing its share of further losses. Additional losses are provided for and a liability
is recognized only to the extent that the Company has incurred legal or constructive obligations or made payments on behalf
of the joint venture or associate.
The Company discontinues the use of the equity method from the date the investment ceases to be an associate or a
joint venture, or when it is classified as held for sale.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentInAssociatesAndJointVenturesExplanatory",
"language": "en",
"entity": "scheme:549300LKT9PW7ZIBDF31",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjhlODFkMTZmNGE0NDRkZjdhYjBlZjJkODE2MjY0ZGUwL3NlYzo4ZTgxZDE2ZjRhNDQ0ZGY3YWIwZWYyZDgxNjI2NGRlMF80ODcvZnJhZzo3Nzg2OWQ1NWVmMDE0OWI5YTdhZmE2YjFiYjBlYWUwYy90ZXh0cmVnaW9uOjc3ODY5ZDU1ZWYwMTQ5YjlhN2FmYTZiMWJiMGVhZTBjXzMwNzg2MzI1Njc5MDI4_838a6619-b8da-47c7-bb75-0ccab181520f": {
"value": "
Interests in Joint Ventures and Associates
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to
the net assets of the arrangement. Joint control is the contractually agreed sharing of control of an arrangement which exist
only when decisions about the relevant activities require the unanimous consent of the parties sharing the control.
Joint ventures and associates are accounted for using the equity method of accounting from the date joint control or
significant influence is obtained. On acquisition, any excess of the investment over the share of the net fair value of the
investee's identifiable assets and liabilities is recognized as goodwill and is included in the carrying amount of the investment.
Any excess of the Company\u2019s share of the net fair value of the investee\u2019s identifiable assets and liabilities over the cost of the
investment is included as income in the determination of the Company\u2019s share of the investee\u2019s profit/(loss) in the acquisition
period.
Under the equity method, investments are initially recognized at cost and adjusted thereafter to recognize the
Company\u2019s share of the profit/(loss) and other comprehensive income/(loss) of the investee. The Company\u2019s share of the
investee\u2019s profit/(loss) is recognized in the Consolidated Income Statement. Distributions received from an investee reduce
the carrying amount of the investment. Post-acquisition movements in Other comprehensive income/(loss) are recognized in
Other comprehensive income/(loss) with a corresponding adjustment to the carrying amount of the investment.
Unrealized gains arising on transactions between the Company and its joint ventures and associates are eliminated to
the extent of the Company\u2019s interest in the joint venture or associate. Unrealized losses are also eliminated unless the
transaction provided evidence of an impairment of the asset transferred.
When the Company\u2019s share of the losses of a joint venture or associate exceeds its interest in that joint venture or
associate, the Company discontinues recognizing its share of further losses. Additional losses are provided for and a liability
is recognized only to the extent that the Company has incurred legal or constructive obligations or made payments on behalf
of the joint venture or associate.
The Company discontinues the use of the equity method from the date the investment ceases to be an associate or a
joint venture, or when it is classified as held for sale.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentsInJointVentures",
"language": "en",
"entity": "scheme:549300LKT9PW7ZIBDF31",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjhlODFkMTZmNGE0NDRkZjdhYjBlZjJkODE2MjY0ZGUwL3NlYzo4ZTgxZDE2ZjRhNDQ0ZGY3YWIwZWYyZDgxNjI2NGRlMF80ODcvZnJhZzo3Nzg2OWQ1NWVmMDE0OWI5YTdhZmE2YjFiYjBlYWUwYy90ZXh0cmVnaW9uOjc3ODY5ZDU1ZWYwMTQ5YjlhN2FmYTZiMWJiMGVhZTBjXzMwNzg2MzI1Njc5MDI4_0d3c21ff-7c41-4d9e-a5e6-d1208836a103": {
"value": "Interests in Joint Ventures and Associates
An associate is an entity over which the Company has significant influence. Significant influence is the power to
participate in the financial and operating policy decisions of the investee but does not have control or joint control over those
policies.
Joint ventures and associates are accounted for using the equity method of accounting from the date joint control or
significant influence is obtained. On acquisition, any excess of the investment over the share of the net fair value of the
investee's identifiable assets and liabilities is recognized as goodwill and is included in the carrying amount of the investment.
Any excess of the Company\u2019s share of the net fair value of the investee\u2019s identifiable assets and liabilities over the cost of the
investment is included as income in the determination of the Company\u2019s share of the investee\u2019s profit/(loss) in the acquisition
period.
Under the equity method, investments are initially recognized at cost and adjusted thereafter to recognize the
Company\u2019s share of the profit/(loss) and other comprehensive income/(loss) of the investee. The Company\u2019s share of the
investee\u2019s profit/(loss) is recognized in the Consolidated Income Statement. Distributions received from an investee reduce
the carrying amount of the investment. Post-acquisition movements in Other comprehensive income/(loss) are recognized in
Other comprehensive income/(loss) with a corresponding adjustment to the carrying amount of the investment.
Unrealized gains arising on transactions between the Company and its joint ventures and associates are eliminated to
the extent of the Company\u2019s interest in the joint venture or associate. Unrealized losses are also eliminated unless the
transaction provided evidence of an impairment of the asset transferred.
When the Company\u2019s share of the losses of a joint venture or associate exceeds its interest in that joint venture or
associate, the Company discontinues recognizing its share of further losses. Additional losses are provided for and a liability
is recognized only to the extent that the Company has incurred legal or constructive obligations or made payments on behalf
of the joint venture or associate.
The Company discontinues the use of the equity method from the date the investment ceases to be an associate or a
joint venture, or when it is classified as held for sale.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentInAssociates",
"language": "en",
"entity": "scheme:549300LKT9PW7ZIBDF31",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjhlODFkMTZmNGE0NDRkZjdhYjBlZjJkODE2MjY0ZGUwL3NlYzo4ZTgxZDE2ZjRhNDQ0ZGY3YWIwZWYyZDgxNjI2NGRlMF80ODcvZnJhZzo3Nzg2OWQ1NWVmMDE0OWI5YTdhZmE2YjFiYjBlYWUwYy90ZXh0cmVnaW9uOjc3ODY5ZDU1ZWYwMTQ5YjlhN2FmYTZiMWJiMGVhZTBjXzMwNzg2MzI1NjY3NDIw_59834eca-2976-4e19-8b7c-dcc8ba78dbfa": {
"value": "
Assets held for sale, Assets held for distribution and Discontinued Operations
Pursuant to IFRS 5 - Non-current Assets Held for Sale and Discontinued Operations, non-current assets and disposal
groups are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather
than through continuing use. This condition is regarded as met only when the asset or disposal group is available for
immediate sale in its present condition, subject only to terms that are usual and customary for sales of such an asset or
disposal group, and the sale is highly probable, with the sale expected to be completed within one year from the date of
classification.
Non-current assets and disposal groups classified as held for sale are measured at the lower of their carrying amount
and fair value less costs to sell and are presented separately in the Consolidated Statement of Financial Position. Non-current
assets and disposal groups are not classified as held for sale within the comparative period presented for the Consolidated
Statement of Financial Position.
A discontinued operation is a component of the Company that either has been disposed of or is classified as held for
sale and (i) represents either a separate major line of business or a geographical area of operations, (ii) is part of a single
coordinated plan to dispose of a separate major line of business or geographical area of operations, or (iii) is a subsidiary
acquired exclusively with a view to resell and the disposal involves loss of control.
Classification as a discontinued operation occurs upon disposal or, if earlier, when the asset or disposal group meets
the criteria to be classified as held for sale. When the asset or disposal group is classified as a discontinued operation, the
comparative information is reclassified within the Consolidated Income Statement and the Consolidated Statement of Cash
Flows as if the asset or disposal group had been discontinued from the start of the earliest comparative period presented. In
addition, when an asset or disposal group is classified as held for sale, depreciation and amortization cease.
The classification, presentation and measurement requirements of IFRS 5 - Non-current Assets Held for Sale and
Discontinued Operations outlined above also apply to an asset or disposal group that is classified as held for distribution to
owners, whereby there must be commitment to the distribution, the asset or disposal group must be available for immediate
distribution and the distribution must be highly probable.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForNoncurrentAssetsOrDisposalGroupsClassifiedAsHeldForSaleAndDiscontinuedOperationsExplanatory",
"language": "en",
"entity": "scheme:549300LKT9PW7ZIBDF31",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjhlODFkMTZmNGE0NDRkZjdhYjBlZjJkODE2MjY0ZGUwL3NlYzo4ZTgxZDE2ZjRhNDQ0ZGY3YWIwZWYyZDgxNjI2NGRlMF80ODcvZnJhZzo3Nzg2OWQ1NWVmMDE0OWI5YTdhZmE2YjFiYjBlYWUwYy90ZXh0cmVnaW9uOjc3ODY5ZDU1ZWYwMTQ5YjlhN2FmYTZiMWJiMGVhZTBjXzMwNzg2MzI1NjY3NDIw_7293e29f-41c8-4547-bb42-3782d270f07e": {
"value": "
Assets held for sale, Assets held for distribution and Discontinued Operations
Pursuant to IFRS 5 - Non-current Assets Held for Sale and Discontinued Operations, non-current assets and disposal
groups are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather
than through continuing use. This condition is regarded as met only when the asset or disposal group is available for
immediate sale in its present condition, subject only to terms that are usual and customary for sales of such an asset or
disposal group, and the sale is highly probable, with the sale expected to be completed within one year from the date of
classification.
Non-current assets and disposal groups classified as held for sale are measured at the lower of their carrying amount
and fair value less costs to sell and are presented separately in the Consolidated Statement of Financial Position. Non-current
assets and disposal groups are not classified as held for sale within the comparative period presented for the Consolidated
Statement of Financial Position.
A discontinued operation is a component of the Company that either has been disposed of or is classified as held for
sale and (i) represents either a separate major line of business or a geographical area of operations, (ii) is part of a single
coordinated plan to dispose of a separate major line of business or geographical area of operations, or (iii) is a subsidiary
acquired exclusively with a view to resell and the disposal involves loss of control.
Classification as a discontinued operation occurs upon disposal or, if earlier, when the asset or disposal group meets
the criteria to be classified as held for sale. When the asset or disposal group is classified as a discontinued operation, the
comparative information is reclassified within the Consolidated Income Statement and the Consolidated Statement of Cash
Flows as if the asset or disposal group had been discontinued from the start of the earliest comparative period presented. In
addition, when an asset or disposal group is classified as held for sale, depreciation and amortization cease.
The classification, presentation and measurement requirements of IFRS 5 - Non-current Assets Held for Sale and
Discontinued Operations outlined above also apply to an asset or disposal group that is classified as held for distribution to
owners, whereby there must be commitment to the distribution, the asset or disposal group must be available for immediate
distribution and the distribution must be highly probable.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForDiscontinuedOperationsExplanatory",
"language": "en",
"entity": "scheme:549300LKT9PW7ZIBDF31",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjhlODFkMTZmNGE0NDRkZjdhYjBlZjJkODE2MjY0ZGUwL3NlYzo4ZTgxZDE2ZjRhNDQ0ZGY3YWIwZWYyZDgxNjI2NGRlMF80ODcvZnJhZzo3Nzg2OWQ1NWVmMDE0OWI5YTdhZmE2YjFiYjBlYWUwYy90ZXh0cmVnaW9uOjc3ODY5ZDU1ZWYwMTQ5YjlhN2FmYTZiMWJiMGVhZTBjXzMwNzg2MzI1NjY3NDIw_ec448c9d-63e0-41bc-ac70-6c2beb98bec1": {
"value": "
Assets held for sale, Assets held for distribution and Discontinued Operations
Pursuant to IFRS 5 - Non-current Assets Held for Sale and Discontinued Operations, non-current assets and disposal
groups are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather
than through continuing use. This condition is regarded as met only when the asset or disposal group is available for
immediate sale in its present condition, subject only to terms that are usual and customary for sales of such an asset or
disposal group, and the sale is highly probable, with the sale expected to be completed within one year from the date of
classification.
Non-current assets and disposal groups classified as held for sale are measured at the lower of their carrying amount
and fair value less costs to sell and are presented separately in the Consolidated Statement of Financial Position. Non-current
assets and disposal groups are not classified as held for sale within the comparative period presented for the Consolidated
Statement of Financial Position.
A discontinued operation is a component of the Company that either has been disposed of or is classified as held for
sale and (i) represents either a separate major line of business or a geographical area of operations, (ii) is part of a single
coordinated plan to dispose of a separate major line of business or geographical area of operations, or (iii) is a subsidiary
acquired exclusively with a view to resell and the disposal involves loss of control.
Classification as a discontinued operation occurs upon disposal or, if earlier, when the asset or disposal group meets
the criteria to be classified as held for sale. When the asset or disposal group is classified as a discontinued operation, the
comparative information is reclassified within the Consolidated Income Statement and the Consolidated Statement of Cash
Flows as if the asset or disposal group had been discontinued from the start of the earliest comparative period presented. In
addition, when an asset or disposal group is classified as held for sale, depreciation and amortization cease.
The classification, presentation and measurement requirements of IFRS 5 - Non-current Assets Held for Sale and
Discontinued Operations outlined above also apply to an asset or disposal group that is classified as held for distribution to
owners, whereby there must be commitment to the distribution, the asset or disposal group must be available for immediate
distribution and the distribution must be highly probable.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForNoncurrentAssetsOrDisposalGroupsClassifiedAsHeldForSaleExplanatory",
"language": "en",
"entity": "scheme:549300LKT9PW7ZIBDF31",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjhlODFkMTZmNGE0NDRkZjdhYjBlZjJkODE2MjY0ZGUwL3NlYzo4ZTgxZDE2ZjRhNDQ0ZGY3YWIwZWYyZDgxNjI2NGRlMF80ODcvZnJhZzo3Nzg2OWQ1NWVmMDE0OWI5YTdhZmE2YjFiYjBlYWUwYy90ZXh0cmVnaW9uOjc3ODY5ZDU1ZWYwMTQ5YjlhN2FmYTZiMWJiMGVhZTBjXzMwNzg2MzI1NjY3NDIx_ef4bd6e6-9f47-49ea-8d8e-611fcf2ab9df": {
"value": "
Foreign currency
The functional currency of the Company\u2019s entities is the currency used in their respective primary economic
environments. In individual companies, transactions in foreign currencies are recorded at the exchange rate prevailing at the
date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the exchange rate
prevailing at the date of the Consolidated Statement of Financial Position. Exchange differences arising on the settlement of
monetary items or on reporting monetary items at rates different from those initially recorded, are recognized in the
Consolidated Income Statement.
All assets and liabilities of foreign consolidated companies with a functional currency other than the Euro are
translated using the closing rates as at the date of the Consolidated Statement of Financial Position. Income and expenses are
translated into Euro on a monthly basis at the average exchange rate for each month. Translation differences arising from the
application of this method are classified within Other comprehensive income/(loss) until the disposal of the subsidiary.
Average exchange rates for the period are used in preparing the Consolidated Statement of Cash Flows to translate
the cash flows of foreign subsidiaries.
The principal exchange rates used to translate other currencies into Euro were as follows:
____________________________________________________________________________________________________
n.a. = not applicable
(1) From July 1, 2018, Argentina\u2019s economy was considered to be hyperinflationary. Transactions after July 1, 2018 for entities with the Argentinian Peso as the functional
currency were translated using the spot rate at the end of the period. The price indices used are published by the Insituto Nacional de Estadistica y Censos de la Republica
Argentina
(2) From April 1, 2022, Turkey\u2019s economy was considered to be hyperinflationary. Transactions after January 1, 2022 for entities with the Turkish Lira as the functional currency
were translated using the spot rate at the end of the period. The price indices used are published by the Turkish Statistical Institute",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForForeignCurrencyTranslationExplanatory",
"language": "en",
"entity": "scheme:549300LKT9PW7ZIBDF31",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjhlODFkMTZmNGE0NDRkZjdhYjBlZjJkODE2MjY0ZGUwL3NlYzo4ZTgxZDE2ZjRhNDQ0ZGY3YWIwZWYyZDgxNjI2NGRlMF80ODcvZnJhZzo3Nzg2OWQ1NWVmMDE0OWI5YTdhZmE2YjFiYjBlYWUwYy90ZXh0cmVnaW9uOjc3ODY5ZDU1ZWYwMTQ5YjlhN2FmYTZiMWJiMGVhZTBjXzMwNzg2MzI1NjY3NDIy_60e37142-660f-4cd3-ae9a-7aceb0cabdc3": {
"value": "
Intangible assets
Goodwill
Goodwill represents the excess of the fair value of consideration paid in a business combination over the fair value
of net tangible and identifiable intangible assets acquired. Goodwill is not amortized but is tested for impairment annually or
more frequently if events or changes in circumstances indicated that it might be impaired. After initial recognition, goodwill
is measured at cost less any accumulated impairment losses.
Intangible assets with indefinite useful lives
Intangible assets with indefinite useful lives consist principally of brands which have no legal, contractual,
competitive, economic or other factors that limit their useful lives. Intangible assets with indefinite useful lives are not
amortized but are tested for impairment annually, or more frequently if events or changes in circumstances indicated that the
asset may be impaired.
Development expenditures
Development expenditures for vehicle production and related components, engines and production systems are
recognized as an asset if all of the following conditions within IAS 38 \u2013 Intangible assets are met: (i) development
expenditures can be measured reliably, (ii) technical feasibility of the product, projected volumes and pricing support the
view that the development expenditure will generate future economic benefits and (iii) the intention to complete the
intangible asset as well as the availability of adequate technical, financial and other resources for this purpose. Capitalized
development expenditures include all costs that could be directly attributed to the development process. All other
development expenditures are expensed as incurred.
Capitalized development expenditures are amortized on a straight-line basis from when the related asset is available
for use, generally from the beginning of production, over the expected life cycle of the models (generally 5-7 years) or
propulsion systems (generally 10-12 years) developed.
Refer to Note 2, Basis of preparation - Recoverability of non-current assets with definite useful lives for additional
information on the effects of climate change.
Other internally developed or purchased intangible assets, excluding development expenditures
The portion of development expenditures relating to software for internal use that corresponds to directly
attributable internal or external costs necessary to create the software or improve its performance is recognized as an
intangible asset when it is probable that these costs will generate future economic benefits. Other software acquisition and
developments costs are expensed as incurred.
Other intangible assets (consisting principally of patents) are amortized on a straight line basis over the estimated
useful life, not to exceed twenty years.
Recoverability of non-current assets with definite useful lives
Non-current assets with definite useful lives include property, plant and equipment, intangible assets and assets held
for sale. Intangible assets with definite useful lives mainly consist of capitalized development expenditures primarily related
to the North America and Enlarged Europe segments. The Company periodically reviews the carrying amount of non-current
assets with definite useful lives when events or circumstances indicate that an asset may be impaired. The Medium-Term
Plan (\u201cMTP\u201d) used to perform the impairment testing covers the period from 2023 to 2025. The recoverability of non-current
assets with definite useful lives is based on the estimated future cash flows, using the Company\u2019s MTP of the Cash
Generating Units (\u201cCGUs\u201d) to which the assets relate to. The lowest level of asset groups that generate largely independent
cash flows is the vehicle platform level, which is considered the CGU for impairment testing. Goodwill is allocated only to
the operating segment. As such, the operating segments are the CGU for impairment testing for Goodwill and Intangible
assets with indefinite useful lives.
The global automotive industry is experiencing significant change due to increased focus on climate change
resulting in evolving regulatory requirements for fuel efficiency, driving electrification as well as changes in fuel efficiency,
greenhouse gas emissions and other tailpipe emissions. This is in addition to technological changes, such as electrification
and autonomous driving. The Company has announced significant investments in electrification and software which are
reflected in the MTP. However, its business plans could change in response to these evolving requirements and technological
changes or in relation to any future business plans or strategies developed as part of partnerships and collaborations. As the
Company continues to assess the potential impacts of these evolving requirements, technological changes or future plans and
strategies, and of operationalizing and implementing the strategic targets set out in the MTP, including reallocation of our
resources, the recoverability of certain of the Company\u2019s assets or CGUs may be impacted in future periods. For example,
product development strategies may be affected by regulatory changes as well as changes in the expected costs of
implementing electrification, including the cost of batteries. As relevant circumstances change, the Company expects to
adjust its product plans which may result in changes to the expected use of certain of the Company\u2019s vehicle platforms and
propulsion systems.
These uncertainties may result in either impairments of, or reductions to the expected useful lives of, platforms and
propulsion systems, or both. Any change in recoverability would be accounted for at the time such change to the business
plan occurs. For the years ended December 31, 2022, 2021 and 2020, the impairment tests performed compared the carrying
amount of the assets included in the respective CGUs to their value-in-use. The value-in-use of the CGUs is determined using
a discounted cash flow methodology based on estimated pre-tax future cash flows attributable to the CGUs and a pre-tax
discount rate reflecting a current market assessment of the time value of money and the risks specific to the CGUs.
During the year ended December 31, 2022, impairment losses of \u20ac237\u00a0million were recognized, mainly related to
Enlarged Europe, primarily in Russia with \u20ac43\u00a0million related to inventories, \u20ac47\u00a0million related to tax assets and \u20ac47\u00a0million
related to other assets.
During the year ended December 31, 2021, impairment losses of \u20ac309\u00a0million were recognized, primarily in relation
to the impairment of certain vehicle platforms in the Enlarged Europe segment. These vehicle platforms were legacy
platforms on which there are a limited number of models. The impairments are generated mainly as a result of the projections
reflected in the MTP used to perform the impairment testing, in which these platforms had reduced volumes and profitability.
The impairment loss of \u20ac309\u00a0million mainly relate to Property, plant and equipment of \u20ac137\u00a0million and \u20ac151\u00a0million of
capitalized development expenditures.
During the year ended December 31, 2020, impairment losses totaling \u20ac202\u00a0million were recognized, mainly related
to \u20ac135\u00a0million impairment of research and development assets in China, India and Asia Pacific, a \u20ac15\u00a0million impairment in
South America CGU and a \u20ac53\u00a0million impairment in Enlarged Europe CGU, in each case due to decreased projections of
volumes and profit, in particular as a result of market disruption caused by the COVID-19 pandemic.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsAndGoodwillExplanatory",
"language": "en",
"entity": "scheme:549300LKT9PW7ZIBDF31",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjhlODFkMTZmNGE0NDRkZjdhYjBlZjJkODE2MjY0ZGUwL3NlYzo4ZTgxZDE2ZjRhNDQ0ZGY3YWIwZWYyZDgxNjI2NGRlMF80ODcvZnJhZzo3Nzg2OWQ1NWVmMDE0OWI5YTdhZmE2YjFiYjBlYWUwYy90ZXh0cmVnaW9uOjc3ODY5ZDU1ZWYwMTQ5YjlhN2FmYTZiMWJiMGVhZTBjXzMwNzg2MzI1NjY3NDIz_ff4f73fc-283e-4bf2-a5cc-7fc6d755c812": {
"value": "
Goodwill
Goodwill represents the excess of the fair value of consideration paid in a business combination over the fair value
of net tangible and identifiable intangible assets acquired. Goodwill is not amortized but is tested for impairment annually or
more frequently if events or changes in circumstances indicated that it might be impaired. After initial recognition, goodwill
is measured at cost less any accumulated impairment losses.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForGoodwillExplanatory",
"language": "en",
"entity": "scheme:549300LKT9PW7ZIBDF31",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjhlODFkMTZmNGE0NDRkZjdhYjBlZjJkODE2MjY0ZGUwL3NlYzo4ZTgxZDE2ZjRhNDQ0ZGY3YWIwZWYyZDgxNjI2NGRlMF80ODcvZnJhZzo3Nzg2OWQ1NWVmMDE0OWI5YTdhZmE2YjFiYjBlYWUwYy90ZXh0cmVnaW9uOjc3ODY5ZDU1ZWYwMTQ5YjlhN2FmYTZiMWJiMGVhZTBjXzMwNzg2MzI1NjY3NDI0_de15dfd0-c07d-4360-a4ea-02a6fe12cb81": {
"value": "
Intangible assets with indefinite useful lives
Intangible assets with indefinite useful lives consist principally of brands which have no legal, contractual,
competitive, economic or other factors that limit their useful lives. Intangible assets with indefinite useful lives are not
amortized but are tested for impairment annually, or more frequently if events or changes in circumstances indicated that the
asset may be impaired.
Development expenditures
Development expenditures for vehicle production and related components, engines and production systems are
recognized as an asset if all of the following conditions within IAS 38 \u2013 Intangible assets are met: (i) development
expenditures can be measured reliably, (ii) technical feasibility of the product, projected volumes and pricing support the
view that the development expenditure will generate future economic benefits and (iii) the intention to complete the
intangible asset as well as the availability of adequate technical, financial and other resources for this purpose. Capitalized
development expenditures include all costs that could be directly attributed to the development process. All other
development expenditures are expensed as incurred.
Capitalized development expenditures are amortized on a straight-line basis from when the related asset is available
for use, generally from the beginning of production, over the expected life cycle of the models (generally 5-7 years) or
propulsion systems (generally 10-12 years) developed.
Refer to Note 2, Basis of preparation - Recoverability of non-current assets with definite useful lives for additional
information on the effects of climate change.
Other internally developed or purchased intangible assets, excluding development expenditures
The portion of development expenditures relating to software for internal use that corresponds to directly
attributable internal or external costs necessary to create the software or improve its performance is recognized as an
intangible asset when it is probable that these costs will generate future economic benefits. Other software acquisition and
developments costs are expensed as incurred.
Other intangible assets (consisting principally of patents) are amortized on a straight line basis over the estimated
useful life, not to exceed twenty years.
Recoverability of non-current assets with definite useful lives
Non-current assets with definite useful lives include property, plant and equipment, intangible assets and assets held
for sale. Intangible assets with definite useful lives mainly consist of capitalized development expenditures primarily related
to the North America and Enlarged Europe segments. The Company periodically reviews the carrying amount of non-current
assets with definite useful lives when events or circumstances indicate that an asset may be impaired. The Medium-Term
Plan (\u201cMTP\u201d) used to perform the impairment testing covers the period from 2023 to 2025. The recoverability of non-current
assets with definite useful lives is based on the estimated future cash flows, using the Company\u2019s MTP of the Cash
Generating Units (\u201cCGUs\u201d) to which the assets relate to. The lowest level of asset groups that generate largely independent
cash flows is the vehicle platform level, which is considered the CGU for impairment testing. Goodwill is allocated only to
the operating segment. As such, the operating segments are the CGU for impairment testing for Goodwill and Intangible
assets with indefinite useful lives.
The global automotive industry is experiencing significant change due to increased focus on climate change
resulting in evolving regulatory requirements for fuel efficiency, driving electrification as well as changes in fuel efficiency,
greenhouse gas emissions and other tailpipe emissions. This is in addition to technological changes, such as electrification
and autonomous driving. The Company has announced significant investments in electrification and software which are
reflected in the MTP. However, its business plans could change in response to these evolving requirements and technological
changes or in relation to any future business plans or strategies developed as part of partnerships and collaborations. As the
Company continues to assess the potential impacts of these evolving requirements, technological changes or future plans and
strategies, and of operationalizing and implementing the strategic targets set out in the MTP, including reallocation of our
resources, the recoverability of certain of the Company\u2019s assets or CGUs may be impacted in future periods. For example,
product development strategies may be affected by regulatory changes as well as changes in the expected costs of
implementing electrification, including the cost of batteries. As relevant circumstances change, the Company expects to
adjust its product plans which may result in changes to the expected use of certain of the Company\u2019s vehicle platforms and
propulsion systems.
These uncertainties may result in either impairments of, or reductions to the expected useful lives of, platforms and
propulsion systems, or both. Any change in recoverability would be accounted for at the time such change to the business
plan occurs. For the years ended December 31, 2022, 2021 and 2020, the impairment tests performed compared the carrying
amount of the assets included in the respective CGUs to their value-in-use. The value-in-use of the CGUs is determined using
a discounted cash flow methodology based on estimated pre-tax future cash flows attributable to the CGUs and a pre-tax
discount rate reflecting a current market assessment of the time value of money and the risks specific to the CGUs.
During the year ended December 31, 2022, impairment losses of \u20ac237\u00a0million were recognized, mainly related to
Enlarged Europe, primarily in Russia with \u20ac43\u00a0million related to inventories, \u20ac47\u00a0million related to tax assets and \u20ac47\u00a0million
related to other assets.
During the year ended December 31, 2021, impairment losses of \u20ac309\u00a0million were recognized, primarily in relation
to the impairment of certain vehicle platforms in the Enlarged Europe segment. These vehicle platforms were legacy
platforms on which there are a limited number of models. The impairments are generated mainly as a result of the projections
reflected in the MTP used to perform the impairment testing, in which these platforms had reduced volumes and profitability.
The impairment loss of \u20ac309\u00a0million mainly relate to Property, plant and equipment of \u20ac137\u00a0million and \u20ac151\u00a0million of
capitalized development expenditures.
During the year ended December 31, 2020, impairment losses totaling \u20ac202\u00a0million were recognized, mainly related
to \u20ac135\u00a0million impairment of research and development assets in China, India and Asia Pacific, a \u20ac15\u00a0million impairment in
South America CGU and a \u20ac53\u00a0million impairment in Enlarged Europe CGU, in each case due to decreased projections of
volumes and profit, in particular as a result of market disruption caused by the COVID-19 pandemic.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsOtherThanGoodwillExplanatory",
"language": "en",
"entity": "scheme:549300LKT9PW7ZIBDF31",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjhlODFkMTZmNGE0NDRkZjdhYjBlZjJkODE2MjY0ZGUwL3NlYzo4ZTgxZDE2ZjRhNDQ0ZGY3YWIwZWYyZDgxNjI2NGRlMF80ODcvZnJhZzo3Nzg2OWQ1NWVmMDE0OWI5YTdhZmE2YjFiYjBlYWUwYy90ZXh0cmVnaW9uOjc3ODY5ZDU1ZWYwMTQ5YjlhN2FmYTZiMWJiMGVhZTBjXzMwNzg2MzI1Njc3Mzg4_3357dd34-eb2d-42eb-b161-6a907cc50356": {
"value": "
Development expenditures
Development expenditures for vehicle production and related components, engines and production systems are
recognized as an asset if all of the following conditions within IAS 38 \u2013 Intangible assets are met: (i) development
expenditures can be measured reliably, (ii) technical feasibility of the product, projected volumes and pricing support the
view that the development expenditure will generate future economic benefits and (iii) the intention to complete the
intangible asset as well as the availability of adequate technical, financial and other resources for this purpose. Capitalized
development expenditures include all costs that could be directly attributed to the development process. All other
development expenditures are expensed as incurred.
Capitalized development expenditures are amortized on a straight-line basis from when the related asset is available
for use, generally from the beginning of production, over the expected life cycle of the models (generally 5-7 years) or
propulsion systems (generally 10-12 years) developed.
Refer to Note 2, Basis of preparation - Recoverability of non-current assets with definite useful lives for additional
information on the effects of climate change.
Other internally developed or purchased intangible assets, excluding development expenditures
The portion of development expenditures relating to software for internal use that corresponds to directly
attributable internal or external costs necessary to create the software or improve its performance is recognized as an
intangible asset when it is probable that these costs will generate future economic benefits. Other software acquisition and
developments costs are expensed as incurred.
Other intangible assets (consisting principally of patents) are amortized on a straight line basis over the estimated
useful life, not to exceed twenty years.
Recoverability of non-current assets with definite useful lives
Non-current assets with definite useful lives include property, plant and equipment, intangible assets and assets held
for sale. Intangible assets with definite useful lives mainly consist of capitalized development expenditures primarily related
to the North America and Enlarged Europe segments. The Company periodically reviews the carrying amount of non-current
assets with definite useful lives when events or circumstances indicate that an asset may be impaired. The Medium-Term
Plan (\u201cMTP\u201d) used to perform the impairment testing covers the period from 2023 to 2025. The recoverability of non-current
assets with definite useful lives is based on the estimated future cash flows, using the Company\u2019s MTP of the Cash
Generating Units (\u201cCGUs\u201d) to which the assets relate to. The lowest level of asset groups that generate largely independent
cash flows is the vehicle platform level, which is considered the CGU for impairment testing. Goodwill is allocated only to
the operating segment. As such, the operating segments are the CGU for impairment testing for Goodwill and Intangible
assets with indefinite useful lives.
The global automotive industry is experiencing significant change due to increased focus on climate change
resulting in evolving regulatory requirements for fuel efficiency, driving electrification as well as changes in fuel efficiency,
greenhouse gas emissions and other tailpipe emissions. This is in addition to technological changes, such as electrification
and autonomous driving. The Company has announced significant investments in electrification and software which are
reflected in the MTP. However, its business plans could change in response to these evolving requirements and technological
changes or in relation to any future business plans or strategies developed as part of partnerships and collaborations. As the
Company continues to assess the potential impacts of these evolving requirements, technological changes or future plans and
strategies, and of operationalizing and implementing the strategic targets set out in the MTP, including reallocation of our
resources, the recoverability of certain of the Company\u2019s assets or CGUs may be impacted in future periods. For example,
product development strategies may be affected by regulatory changes as well as changes in the expected costs of
implementing electrification, including the cost of batteries. As relevant circumstances change, the Company expects to
adjust its product plans which may result in changes to the expected use of certain of the Company\u2019s vehicle platforms and
propulsion systems.
These uncertainties may result in either impairments of, or reductions to the expected useful lives of, platforms and
propulsion systems, or both. Any change in recoverability would be accounted for at the time such change to the business
plan occurs. For the years ended December 31, 2022, 2021 and 2020, the impairment tests performed compared the carrying
amount of the assets included in the respective CGUs to their value-in-use. The value-in-use of the CGUs is determined using
a discounted cash flow methodology based on estimated pre-tax future cash flows attributable to the CGUs and a pre-tax
discount rate reflecting a current market assessment of the time value of money and the risks specific to the CGUs.
During the year ended December 31, 2022, impairment losses of \u20ac237\u00a0million were recognized, mainly related to
Enlarged Europe, primarily in Russia with \u20ac43\u00a0million related to inventories, \u20ac47\u00a0million related to tax assets and \u20ac47\u00a0million
related to other assets.
During the year ended December 31, 2021, impairment losses of \u20ac309\u00a0million were recognized, primarily in relation
to the impairment of certain vehicle platforms in the Enlarged Europe segment. These vehicle platforms were legacy
platforms on which there are a limited number of models. The impairments are generated mainly as a result of the projections
reflected in the MTP used to perform the impairment testing, in which these platforms had reduced volumes and profitability.
The impairment loss of \u20ac309\u00a0million mainly relate to Property, plant and equipment of \u20ac137\u00a0million and \u20ac151\u00a0million of
capitalized development expenditures.
During the year ended December 31, 2020, impairment losses totaling \u20ac202\u00a0million were recognized, mainly related
to \u20ac135\u00a0million impairment of research and development assets in China, India and Asia Pacific, a \u20ac15\u00a0million impairment in
South America CGU and a \u20ac53\u00a0million impairment in Enlarged Europe CGU, in each case due to decreased projections of
volumes and profit, in particular as a result of market disruption caused by the COVID-19 pandemic.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForResearchAndDevelopmentExpenseExplanatory",
"language": "en",
"entity": "scheme:549300LKT9PW7ZIBDF31",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjhlODFkMTZmNGE0NDRkZjdhYjBlZjJkODE2MjY0ZGUwL3NlYzo4ZTgxZDE2ZjRhNDQ0ZGY3YWIwZWYyZDgxNjI2NGRlMF80ODcvZnJhZzo3Nzg2OWQ1NWVmMDE0OWI5YTdhZmE2YjFiYjBlYWUwYy90ZXh0cmVnaW9uOjc3ODY5ZDU1ZWYwMTQ5YjlhN2FmYTZiMWJiMGVhZTBjXzMwNzg2MzI1NjY3NDI1_ac83ad53-0686-4404-85f5-81ee426b8462": {
"value": "
Property, plant and equipment
Cost
Property, plant and equipment is initially recognized at cost and includes the purchase price, any costs directly
attributable to bringing the assets to the location and condition necessary to be capable of operating in the manner intended by
management and any initial estimate of the costs of dismantling and removing the asset and restoring the site on which it is
located. Self-constructed assets are initially recognized at production cost. Subsequent expenditures and the cost of replacing
parts of an asset are capitalized only if they increased the future economic benefits embodied in that asset. All other
expenditures are expensed as incurred. When such replacement costs are capitalized, the carrying amount of the parts that are
replaced is expensed to the Consolidated Income Statement.
Depreciation
During the years ended December\u00a031, 2022, 2021 and 2020, assets depreciated on a straight-line basis over their
estimated useful lives as follows:
| |
| |
| |
Plant, machinery and equipment | |
| |
Borrowing Costs
Borrowing costs that are directly attributable to the acquisition, construction or production of property, plant or
equipment or an intangible asset that is deemed to be a qualifying asset as defined in IAS 23 - Borrowing Costs are
capitalized. Only assets with a construction period of 12 months or longer are considered. The amount of borrowing costs
eligible for capitalization corresponds to the actual borrowing costs incurred during the period, less any investment income on
the temporary investment of any borrowed funds not yet used. The amount of borrowing costs capitalized in the years ended
December\u00a031, 2022 and 2021 was \u20ac189 million and \u20ac262 million, respectively.
Leases
As a Lessee
At the inception of a contract, the Company assesses whether the contract has, or contains, a lease. A contract has, or
contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for
consideration.
At inception or on reassessment of a contract that contains a lease component, the Company allocates the
consideration in the contract to each lease component on the basis of their relative stand-alone prices.
Right-of-use asset
The Company recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use
asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments
made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and
remove the underlying asset or restore the underlying asset or the site on which it is located if required by the lease, less any
lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to
the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful life of the
right-of-use asset is determined based on the nature of the asset, taking into consideration the lease term. In addition, the
right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain corresponding
remeasurements of the lease liability.
Lease liability
The lease liability is initially measured at the present value of the lease payments that have not been paid at the
commencement date, discounted using the interest rate implicit in the lease or, if that rate is not be readily determined, the
Company's incremental borrowing rate. The incremental borrowing rate is determined considering macro-economic factors
such as the risk free rate based on the relevant currency and term, as well as Stellantis specific factors contributing to
Stellantis\u2019 credit spread, including the impact of security. The Company primarily uses the incremental borrowing rate as the
discount rate for its lease liabilities.
Lease payments used to measure the lease liability include the following, if appropriate:
\u2022fixed payments, including in-substance fixed payments;
\u2022variable lease payments that depend on an index or a rate, initially measured using the index or rate applicable
as at the commencement date;
\u2022amounts expected to be payable under a residual value guarantee;
\u2022if reasonably certain to exercise, the exercise price under a purchase option, or lease payments in an optional
renewal period; and
\u2022penalties for early termination of a lease unless the Company was reasonably certain not to terminate early.
The lease liability is subsequently measured at amortized cost using the effective interest method. It is remeasured
when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the
Company's estimate of the amount expected to be payable under a residual value guarantee, or if the Company changes its
assessment of whether it would exercise a purchase, extension or termination option. When the lease liability is remeasured in
this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss
if the carrying amount of the right-of-use asset has been reduced to zero.
The Company presents right-of-use assets that do not meet the definition of investment property in Property, plant
and equipment and lease liabilities in Long-term debt and Short-term debt and current portion of long-term debt in the
Consolidated Statement of Financial Position.
The Company elects to not recognize right-of-use assets and lease liabilities for short-term leases and low-value
leases for all classes of leased assets. The Company recognizes the lease payments associated with these leases as an expense
on a straight-line basis over the lease term.
As a Lessor
When the Company acts as a lessor, it determines at lease inception whether each lease is a finance lease or an
operating lease.
To classify each lease, the Company makes an overall assessment of whether the lease transfers substantially all the
risks and rewards incidental to ownership of the underlying asset. If the risks and rewards are substantially transferred, then
the lease is a finance lease; if not, then it is an operating lease. As part of this assessment, the Company considers certain
indicators such as whether the lease is for the major part of the economic life of the asset.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForPropertyPlantAndEquipmentExplanatory",
"language": "en",
"entity": "scheme:549300LKT9PW7ZIBDF31",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjhlODFkMTZmNGE0NDRkZjdhYjBlZjJkODE2MjY0ZGUwL3NlYzo4ZTgxZDE2ZjRhNDQ0ZGY3YWIwZWYyZDgxNjI2NGRlMF80ODcvZnJhZzo3Nzg2OWQ1NWVmMDE0OWI5YTdhZmE2YjFiYjBlYWUwYy90ZXh0cmVnaW9uOjc3ODY5ZDU1ZWYwMTQ5YjlhN2FmYTZiMWJiMGVhZTBjXzMwNzg2MzI1Njc5MDI5_d8790251-4ad1-42d3-9593-9a63de919bac": {
"value": "Property, plant and equipment
Depreciation
During the years ended December\u00a031, 2022, 2021 and 2020, assets depreciated on a straight-line basis over their
estimated useful lives as follows:
| |
| |
| |
Plant, machinery and equipment | |
| |
Right-of-use asset
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to
the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful life of the
right-of-use asset is determined based on the nature of the asset, taking into consideration the lease term. In addition, the
right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain corresponding
remeasurements of the lease liability.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForDepreciationExpenseExplanatory",
"language": "en",
"entity": "scheme:549300LKT9PW7ZIBDF31",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjhlODFkMTZmNGE0NDRkZjdhYjBlZjJkODE2MjY0ZGUwL3NlYzo4ZTgxZDE2ZjRhNDQ0ZGY3YWIwZWYyZDgxNjI2NGRlMF80ODcvZnJhZzo3Nzg2OWQ1NWVmMDE0OWI5YTdhZmE2YjFiYjBlYWUwYy90ZXh0cmVnaW9uOjc3ODY5ZDU1ZWYwMTQ5YjlhN2FmYTZiMWJiMGVhZTBjXzMwNzg2MzI1NjY3NDI3_38ad91f8-9e4d-4ce4-a09d-9b4df3c93210": {
"value": "
Borrowing Costs
Borrowing costs that are directly attributable to the acquisition, construction or production of property, plant or
equipment or an intangible asset that is deemed to be a qualifying asset as defined in IAS 23 - Borrowing Costs are
capitalized. Only assets with a construction period of 12 months or longer are considered. The amount of borrowing costs
eligible for capitalization corresponds to the actual borrowing costs incurred during the period, less any investment income on
the temporary investment of any borrowed funds not yet used.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForBorrowingCostsExplanatory",
"language": "en",
"entity": "scheme:549300LKT9PW7ZIBDF31",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjhlODFkMTZmNGE0NDRkZjdhYjBlZjJkODE2MjY0ZGUwL3NlYzo4ZTgxZDE2ZjRhNDQ0ZGY3YWIwZWYyZDgxNjI2NGRlMF80ODcvZnJhZzo3Nzg2OWQ1NWVmMDE0OWI5YTdhZmE2YjFiYjBlYWUwYy90ZXh0cmVnaW9uOjc3ODY5ZDU1ZWYwMTQ5YjlhN2FmYTZiMWJiMGVhZTBjXzMwNzg2MzI1Njc5MDM0_06b45ff4-3c67-44cb-9046-6accc4f26543": {
"value": "The amount of borrowing costs capitalized in the years ended
December\u00a031, 2022 and 2021 was \u20ac189 million and \u20ac262 million, respectively.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfBorrowingCostsExplanatory",
"language": "en",
"entity": "scheme:549300LKT9PW7ZIBDF31",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjhlODFkMTZmNGE0NDRkZjdhYjBlZjJkODE2MjY0ZGUwL3NlYzo4ZTgxZDE2ZjRhNDQ0ZGY3YWIwZWYyZDgxNjI2NGRlMF80ODcvZnJhZzo3Nzg2OWQ1NWVmMDE0OWI5YTdhZmE2YjFiYjBlYWUwYy90ZXh0cmVnaW9uOjc3ODY5ZDU1ZWYwMTQ5YjlhN2FmYTZiMWJiMGVhZTBjXzMwNzg2MzI1NjY3NDI4_65a78e51-781e-49ec-8c68-f6a2123de4fe": {
"value": "
Leases
As a Lessee
At the inception of a contract, the Company assesses whether the contract has, or contains, a lease. A contract has, or
contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for
consideration.
At inception or on reassessment of a contract that contains a lease component, the Company allocates the
consideration in the contract to each lease component on the basis of their relative stand-alone prices.
Right-of-use asset
The Company recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use
asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments
made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and
remove the underlying asset or restore the underlying asset or the site on which it is located if required by the lease, less any
lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to
the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful life of the
right-of-use asset is determined based on the nature of the asset, taking into consideration the lease term. In addition, the
right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain corresponding
remeasurements of the lease liability.
Lease liability
The lease liability is initially measured at the present value of the lease payments that have not been paid at the
commencement date, discounted using the interest rate implicit in the lease or, if that rate is not be readily determined, the
Company's incremental borrowing rate. The incremental borrowing rate is determined considering macro-economic factors
such as the risk free rate based on the relevant currency and term, as well as Stellantis specific factors contributing to
Stellantis\u2019 credit spread, including the impact of security. The Company primarily uses the incremental borrowing rate as the
discount rate for its lease liabilities.
Lease payments used to measure the lease liability include the following, if appropriate:
\u2022fixed payments, including in-substance fixed payments;
\u2022variable lease payments that depend on an index or a rate, initially measured using the index or rate applicable
as at the commencement date;
\u2022amounts expected to be payable under a residual value guarantee;
\u2022if reasonably certain to exercise, the exercise price under a purchase option, or lease payments in an optional
renewal period; and
\u2022penalties for early termination of a lease unless the Company was reasonably certain not to terminate early.
The lease liability is subsequently measured at amortized cost using the effective interest method. It is remeasured
when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the
Company's estimate of the amount expected to be payable under a residual value guarantee, or if the Company changes its
assessment of whether it would exercise a purchase, extension or termination option. When the lease liability is remeasured in
this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss
if the carrying amount of the right-of-use asset has been reduced to zero.
The Company presents right-of-use assets that do not meet the definition of investment property in Property, plant
and equipment and lease liabilities in Long-term debt and Short-term debt and current portion of long-term debt in the
Consolidated Statement of Financial Position.
The Company elects to not recognize right-of-use assets and lease liabilities for short-term leases and low-value
leases for all classes of leased assets. The Company recognizes the lease payments associated with these leases as an expense
on a straight-line basis over the lease term.
As a Lessor
When the Company acts as a lessor, it determines at lease inception whether each lease is a finance lease or an
operating lease.
To classify each lease, the Company makes an overall assessment of whether the lease transfers substantially all the
risks and rewards incidental to ownership of the underlying asset. If the risks and rewards are substantially transferred, then
the lease is a finance lease; if not, then it is an operating lease. As part of this assessment, the Company considers certain
indicators such as whether the lease is for the major part of the economic life of the asset.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForLeasesExplanatory",
"language": "en",
"entity": "scheme:549300LKT9PW7ZIBDF31",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjhlODFkMTZmNGE0NDRkZjdhYjBlZjJkODE2MjY0ZGUwL3NlYzo4ZTgxZDE2ZjRhNDQ0ZGY3YWIwZWYyZDgxNjI2NGRlMF80ODcvZnJhZzo3Nzg2OWQ1NWVmMDE0OWI5YTdhZmE2YjFiYjBlYWUwYy90ZXh0cmVnaW9uOjc3ODY5ZDU1ZWYwMTQ5YjlhN2FmYTZiMWJiMGVhZTBjXzMwNzg2MzI1NjY3NDI5_d0124946-60d3-4386-9b94-78d6404cb41d": {
"value": "
Impairment of long-lived assets
Annually, or more frequently if facts or circumstances indicate otherwise, the Company assesses whether there is
any indication that its finite-lived intangible assets (including capitalized development expenditures) and its property, plant
and equipment may be impaired.
If indications of impairment are present, the carrying amount of the asset is reduced to its recoverable amount which
is the higher of fair value less costs of disposal and its value in use, if the carrying amount exceeds the recoverable amount.
The recoverable amount is determined for the individual asset, unless the asset does not generate cash inflows that are largely
independent of those from other assets or groups of assets, in which case the asset is tested as part of the cash-generating unit
(\u201cCGU\u201d) to which the asset belonged. A CGU is the smallest identifiable group of assets that generates cash inflows that are
largely independent of the cash inflows from other assets or groups of assets. In assessing the value in use of an asset or
CGU, the estimated future cash flows are discounted to their present value using a discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset or CGU.
When an impairment loss for assets, other than goodwill, no longer exists or has decreased, the carrying amount of
the asset or CGU is increased to the revised estimate of its recoverable amount but not in excess of the carrying amount that
would have been recorded had no impairment loss been recognized. The reversal of an impairment loss is recognized in the
Consolidated Income Statement. Refer to the section Use of estimates below for additional information.
Impairment of financial assets
The Company\u2019s credit risk differs in relation to the type of activity. In particular, receivables from financing
activities, such as dealer and retail financing that are carried out through the Company\u2019s financial services companies, are
exposed both to the direct risk of default and the deterioration of the creditworthiness of the counterparty, whereas trade
receivables arising from the sale of vehicles and spare parts, are mostly exposed to the direct risk of counterparty default.
These risks are mitigated by different kinds of securities received and the fact that collection exposure is spread across a large
number of counterparties.
The IFRS 9 impairment requirements are based on a forward-looking expected credit loss (\u201cECL\u201d) model. ECL is a
probability-weighted estimate of the present value of cash shortfalls.
The calculation of the amount of ECL is based on the risk of default by the counterparty, which is determined by
taking into account the information available at the end of each reporting period as to the counterparty\u2019s solvency, the fair
value of any guarantees and the Company\u2019s historical experience. The Company considers a financial asset to be in default
when: (i) the borrower is unlikely to pay its obligations in full and without consideration of compensating guarantees or
collateral (if any exist); or (ii) the financial asset is more than 90 days past due.
The Company applies two impairment models for financial assets as set out in IFRS 9: the simplified approach and
the general approach. The table below indicates the impairment model used for each of the Company\u2019s financial asset
categories. Impairment losses on financial assets are recognized in the Consolidated Income Statement within the
corresponding line items, based on the classification of the counterparty.
| |
| |
| |
Receivables from financing activities | |
| |
In order to test for impairment, individually significant receivables and receivables for which collectability is at risk
are assessed individually, while all other receivables are grouped into homogeneous risk categories based on shared risk
characteristics such as instrument type, industry or geographical location of the counterparty.
The simplified approach for determining the lifetime ECL allowance is performed in two steps:
\u2022All trade receivables that are in default, as defined above, are individually assessed for impairment; and
\u2022A general reserve is recognized for all other trade receivables (including those not past due) based on historical
loss rates.
The Company applies the general approach as determined by IFRS 9 by assessing at each reporting date whether
there has been a significant increase in credit risk on the financial instrument since initial recognition. The Company
considers receivables to have experienced a significant increase in credit risk when certain quantitative or qualitative
indicators have been met or the borrower was more than 30 days past due on its contractual payments.
The \u201cthree-stages\u201d for determining and measuring the impairment based on changes in credit quality since initial
recognition are summarized below:
| | |
| | Time period for measurement of ECL |
| A financial instrument that is not credit-impaired on initial recognition | |
| A financial instrument with a significant increase in credit risk since initial recognition | |
| A financial instrument that is credit-impaired or has defaulted | |
Considering forward-looking economic information, ECL is determined by projecting the probability of default,
exposure at default and loss given default for each future contractual period and for each individual exposure or collective
portfolio. The discount rate used in the ECL calculation is the stated effective interest rate or an approximation thereof. Each
reporting period, the assumptions underlying the ECL calculation are reviewed and updated as necessary. Since adoption,
there have been no significant changes in estimation techniques or significant assumptions that led to material changes in the
ECL allowance.
The gross carrying amount of a financial asset is written-off to the extent that there is no realistic prospect of
recovery. This is generally the case when the Company determined that a debtor does not have assets or sources of income
that could generate sufficient cash flows to repay the amounts subject to the write-off. However, financial assets that are
written off could still be subject to enforcement activities.
Recoverability of non-current assets with definite useful lives
Non-current assets with definite useful lives include property, plant and equipment, intangible assets and assets held
for sale. Intangible assets with definite useful lives mainly consist of capitalized development expenditures primarily related
to the North America and Enlarged Europe segments. The Company periodically reviews the carrying amount of non-current
assets with definite useful lives when events or circumstances indicate that an asset may be impaired. The Medium-Term
Plan (\u201cMTP\u201d) used to perform the impairment testing covers the period from 2023 to 2025. The recoverability of non-current
assets with definite useful lives is based on the estimated future cash flows, using the Company\u2019s MTP of the Cash
Generating Units (\u201cCGUs\u201d) to which the assets relate to. The lowest level of asset groups that generate largely independent
cash flows is the vehicle platform level, which is considered the CGU for impairment testing. Goodwill is allocated only to
the operating segment. As such, the operating segments are the CGU for impairment testing for Goodwill and Intangible
assets with indefinite useful lives.
The global automotive industry is experiencing significant change due to increased focus on climate change
resulting in evolving regulatory requirements for fuel efficiency, driving electrification as well as changes in fuel efficiency,
greenhouse gas emissions and other tailpipe emissions. This is in addition to technological changes, such as electrification
and autonomous driving. The Company has announced significant investments in electrification and software which are
reflected in the MTP. However, its business plans could change in response to these evolving requirements and technological
changes or in relation to any future business plans or strategies developed as part of partnerships and collaborations. As the
Company continues to assess the potential impacts of these evolving requirements, technological changes or future plans and
strategies, and of operationalizing and implementing the strategic targets set out in the MTP, including reallocation of our
resources, the recoverability of certain of the Company\u2019s assets or CGUs may be impacted in future periods. For example,
product development strategies may be affected by regulatory changes as well as changes in the expected costs of
implementing electrification, including the cost of batteries. As relevant circumstances change, the Company expects to
adjust its product plans which may result in changes to the expected use of certain of the Company\u2019s vehicle platforms and
propulsion systems.
These uncertainties may result in either impairments of, or reductions to the expected useful lives of, platforms and
propulsion systems, or both. Any change in recoverability would be accounted for at the time such change to the business
plan occurs. For the years ended December 31, 2022, 2021 and 2020, the impairment tests performed compared the carrying
amount of the assets included in the respective CGUs to their value-in-use. The value-in-use of the CGUs is determined using
a discounted cash flow methodology based on estimated pre-tax future cash flows attributable to the CGUs and a pre-tax
discount rate reflecting a current market assessment of the time value of money and the risks specific to the CGUs.
During the year ended December 31, 2022, impairment losses of \u20ac237\u00a0million were recognized, mainly related to
Enlarged Europe, primarily in Russia with \u20ac43\u00a0million related to inventories, \u20ac47\u00a0million related to tax assets and \u20ac47\u00a0million
related to other assets.
During the year ended December 31, 2021, impairment losses of \u20ac309\u00a0million were recognized, primarily in relation
to the impairment of certain vehicle platforms in the Enlarged Europe segment. These vehicle platforms were legacy
platforms on which there are a limited number of models. The impairments are generated mainly as a result of the projections
reflected in the MTP used to perform the impairment testing, in which these platforms had reduced volumes and profitability.
The impairment loss of \u20ac309\u00a0million mainly relate to Property, plant and equipment of \u20ac137\u00a0million and \u20ac151\u00a0million of
capitalized development expenditures.
During the year ended December 31, 2020, impairment losses totaling \u20ac202\u00a0million were recognized, mainly related
to \u20ac135\u00a0million impairment of research and development assets in China, India and Asia Pacific, a \u20ac15\u00a0million impairment in
South America CGU and a \u20ac53\u00a0million impairment in Enlarged Europe CGU, in each case due to decreased projections of
volumes and profit, in particular as a result of market disruption caused by the COVID-19 pandemic.
Recoverability of Goodwill and Intangible assets with indefinite useful lives
In accordance with IAS 36 - Impairment of Assets, Goodwill and intangible assets with indefinite useful lives are not
amortized and are tested for impairment annually or more frequently if facts or circumstances indicate that the asset may be
impaired.
Goodwill and intangible assets with indefinite useful lives are allocated to operating segments or to CGUs within the
operating segments. The impairment test is performed by comparing the carrying amount (which mainly comprises property,
plant and equipment, goodwill, brands, capitalized development expenditures, working capital and reserves) and the
recoverable amount of each CGU or group of CGUs to which Goodwill has been allocated. The recoverable amount of a
CGU is the higher of its fair value less costs of disposal and its value-in-use. The balance of Goodwill and intangible assets
with indefinite useful lives recognized by the Company primarily relate to the merger with FCA. Goodwill from the merger
with FCA is allocated to the North America, South America, Maserati, India and Asia Pacific and Enlarged Europe operating
segments. All other Goodwill balances relate primarily to Enlarged Europe, Other activities and to a lesser extent China.
The MTP is used as a basis to perform the Company\u2019s annual impairment test for Goodwill and intangible assets
with indefinite useful lives. The Company\u2019s Goodwill and intangible assets with indefinite useful lives were tested for
impairment on October 1, 2022, which is the new date the Company annually tests goodwill for impairment. In 2021, the
Company performed the test on October 31.
\u2022The estimate of the recoverable amount for purposes of performing the annual impairment test for each of the
operating segments is determined using value-in-use and was based on the following assumptions:
\u25e6The expected future cash flows covering the period from October 1, 2022 through December 31, 2025.
These expected cash flows reflect the current expectations regarding economic conditions and market
trends as well as the Company\u2019s initiatives for the period covered by the projections. These cash flows
relate to the respective CGUs in their current condition when preparing the financial statements and exclude
the estimated cash flows that might arise from restructuring plans or other structural changes. Volumes and
sales mix used for estimating the future cash flow are based on assumptions that are considered reasonable
and sustainable and represent the best estimate of expected conditions regarding market trends and
segment, brand and model share for the respective operating segment over the period considered.
\u25e6The expected future cash flows include a normalized terminal period to estimate the future result beyond
the time period explicitly considered which incorporated a long-term growth rate assumption of 1.4 percent
to 2.5 percent. The growth rate per region is determined by reference to the risk free rate and the rate of
inflation considered in the regional discount rate. The long-term AOI margins are set considering the
Company\u2019s long-term projections for each of the segments.
\u2022The estimated future cash flows are discounted to their present value using a discount rate that reflects current
market assessments of the time value of money and the risks specific to the asset or CGU that are not reflected
in the estimated future cash flows.
\u2022Pre-tax cash flows are discounted using a pre-tax discount rate which reflects the current market assessment of
the time value of money for the period being considered, and the risks specific to those cash flows under
consideration. The pre-tax Weighted Average Cost of Capital (\u201cWACC\u201d) discount rate applied ranged from
14.7 percent to 32.4 percent.
The values estimated as described above are determined to be in excess of the carrying amount for each operating
segment to which Goodwill is allocated. As such, no impairment charges were recognized for Goodwill and Intangible assets
with indefinite useful lives for the year ended December 31, 2022.
No impairment charges were recognized for Goodwill and Intangible assets with indefinite useful lives for the year
ended December 31, 2021.
There were impairment charges resulting from the impairment tests performed for the year ended December 31,
2020, of \u20ac150\u00a0million.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfAssetsExplanatory",
"language": "en",
"entity": "scheme:549300LKT9PW7ZIBDF31",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjhlODFkMTZmNGE0NDRkZjdhYjBlZjJkODE2MjY0ZGUwL3NlYzo4ZTgxZDE2ZjRhNDQ0ZGY3YWIwZWYyZDgxNjI2NGRlMF80ODcvZnJhZzo3Nzg2OWQ1NWVmMDE0OWI5YTdhZmE2YjFiYjBlYWUwYy90ZXh0cmVnaW9uOjc3ODY5ZDU1ZWYwMTQ5YjlhN2FmYTZiMWJiMGVhZTBjXzMwNzg2MzI1NjY3NDI5_f0e4ca5c-8978-4bd0-b0ba-dfa34f51d613": {
"value": "
Impairment of long-lived assets
Annually, or more frequently if facts or circumstances indicate otherwise, the Company assesses whether there is
any indication that its finite-lived intangible assets (including capitalized development expenditures) and its property, plant
and equipment may be impaired.
If indications of impairment are present, the carrying amount of the asset is reduced to its recoverable amount which
is the higher of fair value less costs of disposal and its value in use, if the carrying amount exceeds the recoverable amount.
The recoverable amount is determined for the individual asset, unless the asset does not generate cash inflows that are largely
independent of those from other assets or groups of assets, in which case the asset is tested as part of the cash-generating unit
(\u201cCGU\u201d) to which the asset belonged. A CGU is the smallest identifiable group of assets that generates cash inflows that are
largely independent of the cash inflows from other assets or groups of assets. In assessing the value in use of an asset or
CGU, the estimated future cash flows are discounted to their present value using a discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset or CGU.
When an impairment loss for assets, other than goodwill, no longer exists or has decreased, the carrying amount of
the asset or CGU is increased to the revised estimate of its recoverable amount but not in excess of the carrying amount that
would have been recorded had no impairment loss been recognized. The reversal of an impairment loss is recognized in the
Consolidated Income Statement. Refer to the section Use of estimates below for additional information.
Recoverability of non-current assets with definite useful lives
Non-current assets with definite useful lives include property, plant and equipment, intangible assets and assets held
for sale. Intangible assets with definite useful lives mainly consist of capitalized development expenditures primarily related
to the North America and Enlarged Europe segments. The Company periodically reviews the carrying amount of non-current
assets with definite useful lives when events or circumstances indicate that an asset may be impaired. The Medium-Term
Plan (\u201cMTP\u201d) used to perform the impairment testing covers the period from 2023 to 2025. The recoverability of non-current
assets with definite useful lives is based on the estimated future cash flows, using the Company\u2019s MTP of the Cash
Generating Units (\u201cCGUs\u201d) to which the assets relate to. The lowest level of asset groups that generate largely independent
cash flows is the vehicle platform level, which is considered the CGU for impairment testing. Goodwill is allocated only to
the operating segment. As such, the operating segments are the CGU for impairment testing for Goodwill and Intangible
assets with indefinite useful lives.
The global automotive industry is experiencing significant change due to increased focus on climate change
resulting in evolving regulatory requirements for fuel efficiency, driving electrification as well as changes in fuel efficiency,
greenhouse gas emissions and other tailpipe emissions. This is in addition to technological changes, such as electrification
and autonomous driving. The Company has announced significant investments in electrification and software which are
reflected in the MTP. However, its business plans could change in response to these evolving requirements and technological
changes or in relation to any future business plans or strategies developed as part of partnerships and collaborations. As the
Company continues to assess the potential impacts of these evolving requirements, technological changes or future plans and
strategies, and of operationalizing and implementing the strategic targets set out in the MTP, including reallocation of our
resources, the recoverability of certain of the Company\u2019s assets or CGUs may be impacted in future periods. For example,
product development strategies may be affected by regulatory changes as well as changes in the expected costs of
implementing electrification, including the cost of batteries. As relevant circumstances change, the Company expects to
adjust its product plans which may result in changes to the expected use of certain of the Company\u2019s vehicle platforms and
propulsion systems.
These uncertainties may result in either impairments of, or reductions to the expected useful lives of, platforms and
propulsion systems, or both. Any change in recoverability would be accounted for at the time such change to the business
plan occurs. For the years ended December 31, 2022, 2021 and 2020, the impairment tests performed compared the carrying
amount of the assets included in the respective CGUs to their value-in-use. The value-in-use of the CGUs is determined using
a discounted cash flow methodology based on estimated pre-tax future cash flows attributable to the CGUs and a pre-tax
discount rate reflecting a current market assessment of the time value of money and the risks specific to the CGUs.
During the year ended December 31, 2022, impairment losses of \u20ac237\u00a0million were recognized, mainly related to
Enlarged Europe, primarily in Russia with \u20ac43\u00a0million related to inventories, \u20ac47\u00a0million related to tax assets and \u20ac47\u00a0million
related to other assets.
During the year ended December 31, 2021, impairment losses of \u20ac309\u00a0million were recognized, primarily in relation
to the impairment of certain vehicle platforms in the Enlarged Europe segment. These vehicle platforms were legacy
platforms on which there are a limited number of models. The impairments are generated mainly as a result of the projections
reflected in the MTP used to perform the impairment testing, in which these platforms had reduced volumes and profitability.
The impairment loss of \u20ac309\u00a0million mainly relate to Property, plant and equipment of \u20ac137\u00a0million and \u20ac151\u00a0million of
capitalized development expenditures.
During the year ended December 31, 2020, impairment losses totaling \u20ac202\u00a0million were recognized, mainly related
to \u20ac135\u00a0million impairment of research and development assets in China, India and Asia Pacific, a \u20ac15\u00a0million impairment in
South America CGU and a \u20ac53\u00a0million impairment in Enlarged Europe CGU, in each case due to decreased projections of
volumes and profit, in particular as a result of market disruption caused by the COVID-19 pandemic.
Recoverability of Goodwill and Intangible assets with indefinite useful lives
In accordance with IAS 36 - Impairment of Assets, Goodwill and intangible assets with indefinite useful lives are not
amortized and are tested for impairment annually or more frequently if facts or circumstances indicate that the asset may be
impaired.
Goodwill and intangible assets with indefinite useful lives are allocated to operating segments or to CGUs within the
operating segments. The impairment test is performed by comparing the carrying amount (which mainly comprises property,
plant and equipment, goodwill, brands, capitalized development expenditures, working capital and reserves) and the
recoverable amount of each CGU or group of CGUs to which Goodwill has been allocated. The recoverable amount of a
CGU is the higher of its fair value less costs of disposal and its value-in-use. The balance of Goodwill and intangible assets
with indefinite useful lives recognized by the Company primarily relate to the merger with FCA. Goodwill from the merger
with FCA is allocated to the North America, South America, Maserati, India and Asia Pacific and Enlarged Europe operating
segments. All other Goodwill balances relate primarily to Enlarged Europe, Other activities and to a lesser extent China.
The MTP is used as a basis to perform the Company\u2019s annual impairment test for Goodwill and intangible assets
with indefinite useful lives. The Company\u2019s Goodwill and intangible assets with indefinite useful lives were tested for
impairment on October 1, 2022, which is the new date the Company annually tests goodwill for impairment. In 2021, the
Company performed the test on October 31.
\u2022The estimate of the recoverable amount for purposes of performing the annual impairment test for each of the
operating segments is determined using value-in-use and was based on the following assumptions:
\u25e6The expected future cash flows covering the period from October 1, 2022 through December 31, 2025.
These expected cash flows reflect the current expectations regarding economic conditions and market
trends as well as the Company\u2019s initiatives for the period covered by the projections. These cash flows
relate to the respective CGUs in their current condition when preparing the financial statements and exclude
the estimated cash flows that might arise from restructuring plans or other structural changes. Volumes and
sales mix used for estimating the future cash flow are based on assumptions that are considered reasonable
and sustainable and represent the best estimate of expected conditions regarding market trends and
segment, brand and model share for the respective operating segment over the period considered.
\u25e6The expected future cash flows include a normalized terminal period to estimate the future result beyond
the time period explicitly considered which incorporated a long-term growth rate assumption of 1.4 percent
to 2.5 percent. The growth rate per region is determined by reference to the risk free rate and the rate of
inflation considered in the regional discount rate. The long-term AOI margins are set considering the
Company\u2019s long-term projections for each of the segments.
\u2022The estimated future cash flows are discounted to their present value using a discount rate that reflects current
market assessments of the time value of money and the risks specific to the asset or CGU that are not reflected
in the estimated future cash flows.
\u2022Pre-tax cash flows are discounted using a pre-tax discount rate which reflects the current market assessment of
the time value of money for the period being considered, and the risks specific to those cash flows under
consideration. The pre-tax Weighted Average Cost of Capital (\u201cWACC\u201d) discount rate applied ranged from
14.7 percent to 32.4 percent.
The values estimated as described above are determined to be in excess of the carrying amount for each operating
segment to which Goodwill is allocated. As such, no impairment charges were recognized for Goodwill and Intangible assets
with indefinite useful lives for the year ended December 31, 2022.
No impairment charges were recognized for Goodwill and Intangible assets with indefinite useful lives for the year
ended December 31, 2021.
There were impairment charges resulting from the impairment tests performed for the year ended December 31,
2020, of \u20ac150\u00a0million.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfNonfinancialAssetsExplanatory",
"language": "en",
"entity": "scheme:549300LKT9PW7ZIBDF31",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjhlODFkMTZmNGE0NDRkZjdhYjBlZjJkODE2MjY0ZGUwL3NlYzo4ZTgxZDE2ZjRhNDQ0ZGY3YWIwZWYyZDgxNjI2NGRlMF80ODcvZnJhZzo3Nzg2OWQ1NWVmMDE0OWI5YTdhZmE2YjFiYjBlYWUwYy90ZXh0cmVnaW9uOjc3ODY5ZDU1ZWYwMTQ5YjlhN2FmYTZiMWJiMGVhZTBjXzMwNzg2MzI1Njc4NzYz_4d011f2d-b5f1-40ce-973c-45f31db0e8ab": {
"value": "
Financial assets and liabilities
Financial assets primarily includes trade receivables, receivables from financing activities, investments in other
companies, derivative financial instruments, cash and cash equivalents, and other financial securities that do not satisfy the
requirements for being classified as cash equivalents.
Financial liabilities primarily consists of debt, derivative financial instruments, trade payables and other liabilities.
Receivables from dealer financing activities are typically generated by sales of vehicles and are generally managed
under dealer network financing programs as a component of the portfolio of the Company's financial services companies.
These receivables are interest bearing with the exception of an initial, limited, non-interest bearing period. The contractual
terms governing the relationships with the dealer networks vary according to market and payment terms, which generally
range from two to twelve months.
In addition, the Company generates receivables from financing activities related to installment sales contracts and
promissory notes originated through its automobile dealer relationships or directly with consumers. The Company utilizes
warehouse credit facilities with financial institutions to fund originations. When sufficient volume is originated, the Company
will complete an on-balance sheet securitization and issue term notes, thereby freeing up capacity in the warehouse credit
facilities.
In our securitizations, we transfer loans to securitization trusts (\u201cTrusts\u201d), which issue one or more classes of asset-
backed securities. These asset-backed securities are then sold to investors. These Trusts are included in our consolidated
financial statements, but they are separate legal entities. The assets held by these Trusts are legally owned by them and are
not available to the Company\u2019s creditors or creditors of our other Trusts. When the securitized assets are transferred to a
Trust, we make certain representations and warranties regarding the securitized assets. These representations and warranties
relate to specific aspects of the securitized assets, such as origination, obligors, accuracy, and security interest, but not the
underlying performance of the securitized asset. If a breach were to occur related to one or more of these representations that
materially affects the noteholders\u2019 interest, we would be obligated to repurchase the securitized assets.
The transfers of assets in the Company\u2019s securitization transactions do not qualify for derecognition. The Company
accounts for all securitization transactions as if they were secured financing and therefore the assets, liabilities, and related
activity of these transactions are consolidated in the financial statements. As the securitized receivables amortize, finance
charge collections are passed through to the investors at a specified rate for the life of the securitization and an interest in
collections exceeding the specified rate is retained by the Company. The majority of these securitization transactions are
within Stellantis Financial Services in the U.S.
Classification and measurement
The classification of a financial asset is dependent on the Company\u2019s business model for managing such financial
assets and their contractual cash flows. The Company considers whether the contractual cash flows represent solely payments
of principal and interest that are consistent with a basic lending arrangement. Where the contractual terms introduce exposure
to risk or volatility that are inconsistent with a basic lending arrangement, the related financial assets are classified and
measured at fair value through profit or loss (\u201cFVPL\u201d).
| | |
Financial asset cash flow business model | | |
Solely to collect the contractual cash flows (Held to Collect) | Fair Value including transaction costs | |
Collect both the contractual cash flows and generate cash flows arising from the sale of assets (Held to Collect and Sell) | Fair Value including transaction costs | Fair value through other comprehensive income (\u201cFVOCI\u201d) |
Generate cash flows primarily from the sale of assets (Held to Sell) | | |
______________________________________________________________________________________________________________________________
(1) Trade receivables without a significant financing component, as defined by IFRS 15, are initially measured at the transaction price
(2) Receivables with maturities of over one year, which bear no interest or have an interest rate significantly lower than market rates were discounted using market rates
(3) On initial recognition, the Company could irrevocably designate a financial asset at FVPL that otherwise met the requirements to be measured at amortized cost or at FVOCI
if doing so eliminated or significantly reduced an accounting mismatch that would otherwise arise
Factors considered by the Company in determining the business model for a group of financial assets include:
\u2022past experience on how the cash flows for these assets were collected;
\u2022the frequency, volume and timing of sales of financial assets in prior periods, the reasons for such sales and
future sales activity expectations;
\u2022how the asset\u2019s performance is evaluated and reported to key management personnel; and
\u2022how risks are assessed and managed and how management is compensated.
Financial assets are not reclassified subsequent to their initial recognition unless the Company changes its business
model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first
reporting period following the change in the business model.
Cash and cash equivalents included cash at banks, units in money market funds and other money market securities,
commercial paper and certificate of deposits that are readily convertible into cash, with original maturities of three months or
less at the date of purchase. Cash and cash equivalents are subject to an insignificant risk of changes in value and consist of
balances across various primary national and international banks and of money market instruments. Money market funds
consist of investments in high quality, short-term, diversified financial instruments that can generally be liquidated on
demand and are measured at FVPL. Cash at banks and Other cash equivalents are measured at amortized cost.
Investments in other companies are measured at fair value. Equity investments for which there is no quoted market
price in an active market and there is insufficient financial information in order to determine fair value may be measured at
cost as an estimate of fair value, as permitted by IFRS 9 - Financial Instruments (\u201cIFRS 9\u201d). The Company may irrevocably
elect to present subsequent changes in the investment\u2019s fair value in Other comprehensive income (\u201cOCI\u201d) upon the initial
recognition of an equity investment that is not held to sell. This election is made on an investment-by-investment basis.
Generally, any dividends from these investments are recognized in Other income from investments within Result from
investments when the Company\u2019s right to receive payment is established. Other net gains and losses are recognized in OCI
and will not be reclassified to the Consolidated Income Statement in subsequent periods. Impairment losses (and the reversal
of impairment losses) on equity investments measured at FVOCI are not reported separately from other changes in fair value
in OCI.
Impairment of financial assets
The Company\u2019s credit risk differs in relation to the type of activity. In particular, receivables from financing
activities, such as dealer and retail financing that are carried out through the Company\u2019s financial services companies, are
exposed both to the direct risk of default and the deterioration of the creditworthiness of the counterparty, whereas trade
receivables arising from the sale of vehicles and spare parts, are mostly exposed to the direct risk of counterparty default.
These risks are mitigated by different kinds of securities received and the fact that collection exposure is spread across a large
number of counterparties.
The IFRS 9 impairment requirements are based on a forward-looking expected credit loss (\u201cECL\u201d) model. ECL is a
probability-weighted estimate of the present value of cash shortfalls.
The calculation of the amount of ECL is based on the risk of default by the counterparty, which is determined by
taking into account the information available at the end of each reporting period as to the counterparty\u2019s solvency, the fair
value of any guarantees and the Company\u2019s historical experience. The Company considers a financial asset to be in default
when: (i) the borrower is unlikely to pay its obligations in full and without consideration of compensating guarantees or
collateral (if any exist); or (ii) the financial asset is more than 90 days past due.
The Company applies two impairment models for financial assets as set out in IFRS 9: the simplified approach and
the general approach. The table below indicates the impairment model used for each of the Company\u2019s financial asset
categories. Impairment losses on financial assets are recognized in the Consolidated Income Statement within the
corresponding line items, based on the classification of the counterparty.
| |
| |
| |
Receivables from financing activities | |
| |
In order to test for impairment, individually significant receivables and receivables for which collectability is at risk
are assessed individually, while all other receivables are grouped into homogeneous risk categories based on shared risk
characteristics such as instrument type, industry or geographical location of the counterparty.
The simplified approach for determining the lifetime ECL allowance is performed in two steps:
\u2022All trade receivables that are in default, as defined above, are individually assessed for impairment; and
\u2022A general reserve is recognized for all other trade receivables (including those not past due) based on historical
loss rates.
The Company applies the general approach as determined by IFRS 9 by assessing at each reporting date whether
there has been a significant increase in credit risk on the financial instrument since initial recognition. The Company
considers receivables to have experienced a significant increase in credit risk when certain quantitative or qualitative
indicators have been met or the borrower was more than 30 days past due on its contractual payments.
The \u201cthree-stages\u201d for determining and measuring the impairment based on changes in credit quality since initial
recognition are summarized below:
| | |
| | Time period for measurement of ECL |
| A financial instrument that is not credit-impaired on initial recognition | |
| A financial instrument with a significant increase in credit risk since initial recognition | |
| A financial instrument that is credit-impaired or has defaulted | |
Considering forward-looking economic information, ECL is determined by projecting the probability of default,
exposure at default and loss given default for each future contractual period and for each individual exposure or collective
portfolio. The discount rate used in the ECL calculation is the stated effective interest rate or an approximation thereof. Each
reporting period, the assumptions underlying the ECL calculation are reviewed and updated as necessary. Since adoption,
there have been no significant changes in estimation techniques or significant assumptions that led to material changes in the
ECL allowance.
The gross carrying amount of a financial asset is written-off to the extent that there is no realistic prospect of
recovery. This is generally the case when the Company determined that a debtor does not have assets or sources of income
that could generate sufficient cash flows to repay the amounts subject to the write-off. However, financial assets that are
written off could still be subject to enforcement activities.
Derivative financial instruments
Derivative financial instruments are used for economic hedging purposes in order to reduce currency, interest rate
and market price risks (primarily related to commodities). In accordance with IFRS 9, derivative financial instruments are
recognized when we become a party to the contractual provisions of the instrument and, upon initial recognition, are
measured at fair value. Subsequent to initial recognition, all derivative financial instruments are measured at fair value.
Furthermore, derivative financial instruments qualify for hedge accounting when (i) there is formal designation and
documentation of the hedging relationship and the Company\u2019s risk management objective and strategy for undertaking the
hedge at inception of the hedge and (ii) the hedge is expected to be effective. If the hedging relationship ceases to meet the
hedge effectiveness requirement relating to the hedge ratio but the risk management objective for that designated hedging
relationship remains the same, this ratio must then be rebalanced. Rebalancing consists in adjusting either the designated
quantities of the hedged item or the hedging instrument of an already existing hedging relationship.
When derivative financial instruments qualify for hedge accounting, the following accounting treatments apply:
\u2022Fair value hedges - where a derivative financial instrument is designated as a hedge of the exposure to changes
in fair value of a recognized asset or liability attributable to a particular risk that could affect the Consolidated
Income Statement, the gain or loss from remeasuring the hedging instrument at fair value is recognized in the
Consolidated Income Statement. The gain or loss on the hedged item attributable to the hedged risk adjusts the
carrying amount of the hedged item and is recognized in the Consolidated Income Statement.
\u2022Cash flow hedges - where a derivative financial instrument is designated as a hedge of the exposure to
variability in future cash flows of a recognized asset or liability or a highly probable forecasted transaction and
could affect the Consolidated Income Statement, the effective portion of any gain or loss on the derivative
financial instrument is recognized directly in Other comprehensive income/(loss). When the hedged forecasted
transaction results in the recognition of a non-financial asset, the gains and losses previously deferred in Other
comprehensive income/(loss) are reclassified and included in the initial measurement of the cost of the non-
financial asset. The effective portion of any gain or loss is recognized in the Consolidated Income Statement at
the same time as the economic effect arising from the hedged item that affects the Consolidated Income
Statement. The gain or loss associated with a hedge or part of a hedge that has become ineffective is recognized
in the Consolidated Income Statement immediately.
When a hedging instrument or hedge relationship is terminated but the hedged transaction is still expected to
occur, the cumulative gain or loss realized to the point of termination remains and is recognized in the
Consolidated Income Statement at the same time as the underlying transaction occurred. If the hedged
transaction is no longer probable, the cumulative unrealized gain or loss held in Other comprehensive income/
(loss) is recognized in the Consolidated Income Statement immediately.
\u2022Hedges of a net investment - if a derivative financial instrument is designated as a hedging instrument for a net
investment in a foreign operation, the effective portion of the gain or loss on the derivative financial instrument
is recognized in Other comprehensive income/(loss). The cumulative gain or loss is reclassified from Other
comprehensive income/(loss) to the Consolidated Income Statement upon disposal of the foreign operation.
Hedge effectiveness is determined at the inception of the hedge relationship and through periodic prospective
effectiveness assessments to ensure the hedge relationships meet the effectiveness requirements (including the existence of an
economic relationship between\u00a0the hedged item and hedging instrument). The Company enters into hedge relationships where
the critical terms of the hedging instrument match closely or exactly with the terms of the hedged item, and so a qualitative
assessment of effectiveness is performed. In the event there was a hedge relationship where the critical terms of the hedged
item do not match closely or perfectly with the critical terms of the hedging instrument, the Company would perform a
quantitative assessment to assess effectiveness.
Ineffectiveness is measured by comparing the cumulative changes in fair value of the hedging instrument and
cumulative change in fair value of the hedged item arising from the designated risk. The primary potential sources of hedge
ineffectiveness are mismatches in timing or the critical terms of the hedged item and the hedging instrument.
The hedge ratio is the relationship between the quantity of the derivative and the hedged item. The Company\u2019s
derivatives have the same underlying quantity as the hedged items, therefore the hedge ratio is expected to be one for one.
If hedge accounting cannot be applied, the gains or losses from the fair value measurement of derivative financial
instruments are recognized immediately in the Consolidated Income Statement.
Refer to Note 17, Derivative financial and operating assets and liabilities, for additional information on fair value
measurements.
Transfers of financial assets
The Company derecognizes financial assets when the contractual rights to the cash flows arising from the asset are
no longer held or if it transfers substantially all the risks and rewards of ownership of the financial asset. On derecognition of
financial assets, the difference between the carrying amount of the asset and the consideration received or receivable for the
transfer of the asset is recognized in the Consolidated Income Statement.
The Company transfers certain of its financial, trade and tax receivables, mainly through factoring transactions.
Factoring transactions may be either with recourse or without recourse. Certain transfers include deferred payment clauses
requiring first loss cover (for example, when the payment by the factor of a minor part of the purchase price is dependent on
the total amount collected from the receivables), whereby the transferor has priority participation in the losses, or requires a
significant exposure to the variability of cash flows arising from the transferred receivables to be retained. These types of
transactions do not meet the requirements of IFRS 9 for the derecognition of the assets since the risks and rewards connected
with ownership of the financial asset are not substantially transferred, and accordingly the Company continues to recognize
these receivables within the Consolidated Statement of Financial Position and recognizes a financial liability for the same
amount under Asset-backed financing, which is included within Debt. These types of receivables are classified as held-to-
collect, since the business model is consistent with the Company\u2019s continuing recognition of the receivables.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory",
"language": "en",
"entity": "scheme:549300LKT9PW7ZIBDF31",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjhlODFkMTZmNGE0NDRkZjdhYjBlZjJkODE2MjY0ZGUwL3NlYzo4ZTgxZDE2ZjRhNDQ0ZGY3YWIwZWYyZDgxNjI2NGRlMF80ODcvZnJhZzo3Nzg2OWQ1NWVmMDE0OWI5YTdhZmE2YjFiYjBlYWUwYy90ZXh0cmVnaW9uOjc3ODY5ZDU1ZWYwMTQ5YjlhN2FmYTZiMWJiMGVhZTBjXzMwNzg2MzI1Njc4NzYz_9b5ce753-1a76-423b-b3da-649e70bf4040": {
"value": "
Financial assets and liabilities
Financial assets primarily includes trade receivables, receivables from financing activities, investments in other
companies, derivative financial instruments, cash and cash equivalents, and other financial securities that do not satisfy the
requirements for being classified as cash equivalents.
Financial liabilities primarily consists of debt, derivative financial instruments, trade payables and other liabilities.
Receivables from dealer financing activities are typically generated by sales of vehicles and are generally managed
under dealer network financing programs as a component of the portfolio of the Company's financial services companies.
These receivables are interest bearing with the exception of an initial, limited, non-interest bearing period. The contractual
terms governing the relationships with the dealer networks vary according to market and payment terms, which generally
range from two to twelve months.
In addition, the Company generates receivables from financing activities related to installment sales contracts and
promissory notes originated through its automobile dealer relationships or directly with consumers. The Company utilizes
warehouse credit facilities with financial institutions to fund originations. When sufficient volume is originated, the Company
will complete an on-balance sheet securitization and issue term notes, thereby freeing up capacity in the warehouse credit
facilities.
In our securitizations, we transfer loans to securitization trusts (\u201cTrusts\u201d), which issue one or more classes of asset-
backed securities. These asset-backed securities are then sold to investors. These Trusts are included in our consolidated
financial statements, but they are separate legal entities. The assets held by these Trusts are legally owned by them and are
not available to the Company\u2019s creditors or creditors of our other Trusts. When the securitized assets are transferred to a
Trust, we make certain representations and warranties regarding the securitized assets. These representations and warranties
relate to specific aspects of the securitized assets, such as origination, obligors, accuracy, and security interest, but not the
underlying performance of the securitized asset. If a breach were to occur related to one or more of these representations that
materially affects the noteholders\u2019 interest, we would be obligated to repurchase the securitized assets.
The transfers of assets in the Company\u2019s securitization transactions do not qualify for derecognition. The Company
accounts for all securitization transactions as if they were secured financing and therefore the assets, liabilities, and related
activity of these transactions are consolidated in the financial statements. As the securitized receivables amortize, finance
charge collections are passed through to the investors at a specified rate for the life of the securitization and an interest in
collections exceeding the specified rate is retained by the Company. The majority of these securitization transactions are
within Stellantis Financial Services in the U.S.
Classification and measurement
The classification of a financial asset is dependent on the Company\u2019s business model for managing such financial
assets and their contractual cash flows. The Company considers whether the contractual cash flows represent solely payments
of principal and interest that are consistent with a basic lending arrangement. Where the contractual terms introduce exposure
to risk or volatility that are inconsistent with a basic lending arrangement, the related financial assets are classified and
measured at fair value through profit or loss (\u201cFVPL\u201d).
| | |
Financial asset cash flow business model | | |
Solely to collect the contractual cash flows (Held to Collect) | Fair Value including transaction costs | |
Collect both the contractual cash flows and generate cash flows arising from the sale of assets (Held to Collect and Sell) | Fair Value including transaction costs | Fair value through other comprehensive income (\u201cFVOCI\u201d) |
Generate cash flows primarily from the sale of assets (Held to Sell) | | |
______________________________________________________________________________________________________________________________
(1) Trade receivables without a significant financing component, as defined by IFRS 15, are initially measured at the transaction price
(2) Receivables with maturities of over one year, which bear no interest or have an interest rate significantly lower than market rates were discounted using market rates
(3) On initial recognition, the Company could irrevocably designate a financial asset at FVPL that otherwise met the requirements to be measured at amortized cost or at FVOCI
if doing so eliminated or significantly reduced an accounting mismatch that would otherwise arise
Factors considered by the Company in determining the business model for a group of financial assets include:
\u2022past experience on how the cash flows for these assets were collected;
\u2022the frequency, volume and timing of sales of financial assets in prior periods, the reasons for such sales and
future sales activity expectations;
\u2022how the asset\u2019s performance is evaluated and reported to key management personnel; and
\u2022how risks are assessed and managed and how management is compensated.
Financial assets are not reclassified subsequent to their initial recognition unless the Company changes its business
model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first
reporting period following the change in the business model.
Cash and cash equivalents included cash at banks, units in money market funds and other money market securities,
commercial paper and certificate of deposits that are readily convertible into cash, with original maturities of three months or
less at the date of purchase. Cash and cash equivalents are subject to an insignificant risk of changes in value and consist of
balances across various primary national and international banks and of money market instruments. Money market funds
consist of investments in high quality, short-term, diversified financial instruments that can generally be liquidated on
demand and are measured at FVPL. Cash at banks and Other cash equivalents are measured at amortized cost.
Investments in other companies are measured at fair value. Equity investments for which there is no quoted market
price in an active market and there is insufficient financial information in order to determine fair value may be measured at
cost as an estimate of fair value, as permitted by IFRS 9 - Financial Instruments (\u201cIFRS 9\u201d). The Company may irrevocably
elect to present subsequent changes in the investment\u2019s fair value in Other comprehensive income (\u201cOCI\u201d) upon the initial
recognition of an equity investment that is not held to sell. This election is made on an investment-by-investment basis.
Generally, any dividends from these investments are recognized in Other income from investments within Result from
investments when the Company\u2019s right to receive payment is established. Other net gains and losses are recognized in OCI
and will not be reclassified to the Consolidated Income Statement in subsequent periods. Impairment losses (and the reversal
of impairment losses) on equity investments measured at FVOCI are not reported separately from other changes in fair value
in OCI.
Impairment of financial assets
The Company\u2019s credit risk differs in relation to the type of activity. In particular, receivables from financing
activities, such as dealer and retail financing that are carried out through the Company\u2019s financial services companies, are
exposed both to the direct risk of default and the deterioration of the creditworthiness of the counterparty, whereas trade
receivables arising from the sale of vehicles and spare parts, are mostly exposed to the direct risk of counterparty default.
These risks are mitigated by different kinds of securities received and the fact that collection exposure is spread across a large
number of counterparties.
The IFRS 9 impairment requirements are based on a forward-looking expected credit loss (\u201cECL\u201d) model. ECL is a
probability-weighted estimate of the present value of cash shortfalls.
The calculation of the amount of ECL is based on the risk of default by the counterparty, which is determined by
taking into account the information available at the end of each reporting period as to the counterparty\u2019s solvency, the fair
value of any guarantees and the Company\u2019s historical experience. The Company considers a financial asset to be in default
when: (i) the borrower is unlikely to pay its obligations in full and without consideration of compensating guarantees or
collateral (if any exist); or (ii) the financial asset is more than 90 days past due.
The Company applies two impairment models for financial assets as set out in IFRS 9: the simplified approach and
the general approach. The table below indicates the impairment model used for each of the Company\u2019s financial asset
categories. Impairment losses on financial assets are recognized in the Consolidated Income Statement within the
corresponding line items, based on the classification of the counterparty.
| |
| |
| |
Receivables from financing activities | |
| |
In order to test for impairment, individually significant receivables and receivables for which collectability is at risk
are assessed individually, while all other receivables are grouped into homogeneous risk categories based on shared risk
characteristics such as instrument type, industry or geographical location of the counterparty.
The simplified approach for determining the lifetime ECL allowance is performed in two steps:
\u2022All trade receivables that are in default, as defined above, are individually assessed for impairment; and
\u2022A general reserve is recognized for all other trade receivables (including those not past due) based on historical
loss rates.
The Company applies the general approach as determined by IFRS 9 by assessing at each reporting date whether
there has been a significant increase in credit risk on the financial instrument since initial recognition. The Company
considers receivables to have experienced a significant increase in credit risk when certain quantitative or qualitative
indicators have been met or the borrower was more than 30 days past due on its contractual payments.
The \u201cthree-stages\u201d for determining and measuring the impairment based on changes in credit quality since initial
recognition are summarized below:
| | |
| | Time period for measurement of ECL |
| A financial instrument that is not credit-impaired on initial recognition | |
| A financial instrument with a significant increase in credit risk since initial recognition | |
| A financial instrument that is credit-impaired or has defaulted | |
Considering forward-looking economic information, ECL is determined by projecting the probability of default,
exposure at default and loss given default for each future contractual period and for each individual exposure or collective
portfolio. The discount rate used in the ECL calculation is the stated effective interest rate or an approximation thereof. Each
reporting period, the assumptions underlying the ECL calculation are reviewed and updated as necessary. Since adoption,
there have been no significant changes in estimation techniques or significant assumptions that led to material changes in the
ECL allowance.
The gross carrying amount of a financial asset is written-off to the extent that there is no realistic prospect of
recovery. This is generally the case when the Company determined that a debtor does not have assets or sources of income
that could generate sufficient cash flows to repay the amounts subject to the write-off. However, financial assets that are
written off could still be subject to enforcement activities.
Derivative financial instruments
Derivative financial instruments are used for economic hedging purposes in order to reduce currency, interest rate
and market price risks (primarily related to commodities). In accordance with IFRS 9, derivative financial instruments are
recognized when we become a party to the contractual provisions of the instrument and, upon initial recognition, are
measured at fair value. Subsequent to initial recognition, all derivative financial instruments are measured at fair value.
Furthermore, derivative financial instruments qualify for hedge accounting when (i) there is formal designation and
documentation of the hedging relationship and the Company\u2019s risk management objective and strategy for undertaking the
hedge at inception of the hedge and (ii) the hedge is expected to be effective. If the hedging relationship ceases to meet the
hedge effectiveness requirement relating to the hedge ratio but the risk management objective for that designated hedging
relationship remains the same, this ratio must then be rebalanced. Rebalancing consists in adjusting either the designated
quantities of the hedged item or the hedging instrument of an already existing hedging relationship.
When derivative financial instruments qualify for hedge accounting, the following accounting treatments apply:
\u2022Fair value hedges - where a derivative financial instrument is designated as a hedge of the exposure to changes
in fair value of a recognized asset or liability attributable to a particular risk that could affect the Consolidated
Income Statement, the gain or loss from remeasuring the hedging instrument at fair value is recognized in the
Consolidated Income Statement. The gain or loss on the hedged item attributable to the hedged risk adjusts the
carrying amount of the hedged item and is recognized in the Consolidated Income Statement.
\u2022Cash flow hedges - where a derivative financial instrument is designated as a hedge of the exposure to
variability in future cash flows of a recognized asset or liability or a highly probable forecasted transaction and
could affect the Consolidated Income Statement, the effective portion of any gain or loss on the derivative
financial instrument is recognized directly in Other comprehensive income/(loss). When the hedged forecasted
transaction results in the recognition of a non-financial asset, the gains and losses previously deferred in Other
comprehensive income/(loss) are reclassified and included in the initial measurement of the cost of the non-
financial asset. The effective portion of any gain or loss is recognized in the Consolidated Income Statement at
the same time as the economic effect arising from the hedged item that affects the Consolidated Income
Statement. The gain or loss associated with a hedge or part of a hedge that has become ineffective is recognized
in the Consolidated Income Statement immediately.
When a hedging instrument or hedge relationship is terminated but the hedged transaction is still expected to
occur, the cumulative gain or loss realized to the point of termination remains and is recognized in the
Consolidated Income Statement at the same time as the underlying transaction occurred. If the hedged
transaction is no longer probable, the cumulative unrealized gain or loss held in Other comprehensive income/
(loss) is recognized in the Consolidated Income Statement immediately.
\u2022Hedges of a net investment - if a derivative financial instrument is designated as a hedging instrument for a net
investment in a foreign operation, the effective portion of the gain or loss on the derivative financial instrument
is recognized in Other comprehensive income/(loss). The cumulative gain or loss is reclassified from Other
comprehensive income/(loss) to the Consolidated Income Statement upon disposal of the foreign operation.
Hedge effectiveness is determined at the inception of the hedge relationship and through periodic prospective
effectiveness assessments to ensure the hedge relationships meet the effectiveness requirements (including the existence of an
economic relationship between\u00a0the hedged item and hedging instrument). The Company enters into hedge relationships where
the critical terms of the hedging instrument match closely or exactly with the terms of the hedged item, and so a qualitative
assessment of effectiveness is performed. In the event there was a hedge relationship where the critical terms of the hedged
item do not match closely or perfectly with the critical terms of the hedging instrument, the Company would perform a
quantitative assessment to assess effectiveness.
Ineffectiveness is measured by comparing the cumulative changes in fair value of the hedging instrument and
cumulative change in fair value of the hedged item arising from the designated risk. The primary potential sources of hedge
ineffectiveness are mismatches in timing or the critical terms of the hedged item and the hedging instrument.
The hedge ratio is the relationship between the quantity of the derivative and the hedged item. The Company\u2019s
derivatives have the same underlying quantity as the hedged items, therefore the hedge ratio is expected to be one for one.
If hedge accounting cannot be applied, the gains or losses from the fair value measurement of derivative financial
instruments are recognized immediately in the Consolidated Income Statement.
Refer to Note 17, Derivative financial and operating assets and liabilities, for additional information on fair value
measurements.
Transfers of financial assets
The Company derecognizes financial assets when the contractual rights to the cash flows arising from the asset are
no longer held or if it transfers substantially all the risks and rewards of ownership of the financial asset. On derecognition of
financial assets, the difference between the carrying amount of the asset and the consideration received or receivable for the
transfer of the asset is recognized in the Consolidated Income Statement.
The Company transfers certain of its financial, trade and tax receivables, mainly through factoring transactions.
Factoring transactions may be either with recourse or without recourse. Certain transfers include deferred payment clauses
requiring first loss cover (for example, when the payment by the factor of a minor part of the purchase price is dependent on
the total amount collected from the receivables), whereby the transferor has priority participation in the losses, or requires a
significant exposure to the variability of cash flows arising from the transferred receivables to be retained. These types of
transactions do not meet the requirements of IFRS 9 for the derecognition of the assets since the risks and rewards connected
with ownership of the financial asset are not substantially transferred, and accordingly the Company continues to recognize
these receivables within the Consolidated Statement of Financial Position and recognizes a financial liability for the same
amount under Asset-backed financing, which is included within Debt. These types of receivables are classified as held-to-
collect, since the business model is consistent with the Company\u2019s continuing recognition of the receivables.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialAssetsExplanatory",
"language": "en",
"entity": "scheme:549300LKT9PW7ZIBDF31",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
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"value": "Financial assets and liabilities
Cash and cash equivalents included cash at banks, units in money market funds and other money market securities,
commercial paper and certificate of deposits that are readily convertible into cash, with original maturities of three months or
less at the date of purchase. Cash and cash equivalents are subject to an insignificant risk of changes in value and consist of
balances across various primary national and international banks and of money market instruments. Money market funds
consist of investments in high quality, short-term, diversified financial instruments that can generally be liquidated on
demand and are measured at FVPL. Cash at banks and Other cash equivalents are measured at amortized cost.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyToDetermineComponentsOfCashAndCashEquivalents",
"language": "en",
"entity": "scheme:549300LKT9PW7ZIBDF31",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
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"value": "Financial assets and liabilities
Classification and measurement
The classification of a financial asset is dependent on the Company\u2019s business model for managing such financial
assets and their contractual cash flows. The Company considers whether the contractual cash flows represent solely payments
of principal and interest that are consistent with a basic lending arrangement. Where the contractual terms introduce exposure
to risk or volatility that are inconsistent with a basic lending arrangement, the related financial assets are classified and
measured at fair value through profit or loss (\u201cFVPL\u201d).
| | |
Financial asset cash flow business model | | |
Solely to collect the contractual cash flows (Held to Collect) | Fair Value including transaction costs | |
Collect both the contractual cash flows and generate cash flows arising from the sale of assets (Held to Collect and Sell) | Fair Value including transaction costs | Fair value through other comprehensive income (\u201cFVOCI\u201d) |
Generate cash flows primarily from the sale of assets (Held to Sell) | | |
______________________________________________________________________________________________________________________________
(1) Trade receivables without a significant financing component, as defined by IFRS 15, are initially measured at the transaction price
(2) Receivables with maturities of over one year, which bear no interest or have an interest rate significantly lower than market rates were discounted using market rates
(3) On initial recognition, the Company could irrevocably designate a financial asset at FVPL that otherwise met the requirements to be measured at amortized cost or at FVOCI
if doing so eliminated or significantly reduced an accounting mismatch that would otherwise arise
Factors considered by the Company in determining the business model for a group of financial assets include:
\u2022past experience on how the cash flows for these assets were collected;
\u2022the frequency, volume and timing of sales of financial assets in prior periods, the reasons for such sales and
future sales activity expectations;
\u2022how the asset\u2019s performance is evaluated and reported to key management personnel; and
\u2022how risks are assessed and managed and how management is compensated.
Financial assets are not reclassified subsequent to their initial recognition unless the Company changes its business
model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first
reporting period following the change in the business model.
Cash and cash equivalents included cash at banks, units in money market funds and other money market securities,
commercial paper and certificate of deposits that are readily convertible into cash, with original maturities of three months or
less at the date of purchase. Cash and cash equivalents are subject to an insignificant risk of changes in value and consist of
balances across various primary national and international banks and of money market instruments. Money market funds
consist of investments in high quality, short-term, diversified financial instruments that can generally be liquidated on
demand and are measured at FVPL. Cash at banks and Other cash equivalents are measured at amortized cost.
Investments in other companies are measured at fair value. Equity investments for which there is no quoted market
price in an active market and there is insufficient financial information in order to determine fair value may be measured at
cost as an estimate of fair value, as permitted by IFRS 9 - Financial Instruments (\u201cIFRS 9\u201d). The Company may irrevocably
elect to present subsequent changes in the investment\u2019s fair value in Other comprehensive income (\u201cOCI\u201d) upon the initial
recognition of an equity investment that is not held to sell. This election is made on an investment-by-investment basis.
Generally, any dividends from these investments are recognized in Other income from investments within Result from
investments when the Company\u2019s right to receive payment is established. Other net gains and losses are recognized in OCI
and will not be reclassified to the Consolidated Income Statement in subsequent periods. Impairment losses (and the reversal
of impairment losses) on equity investments measured at FVOCI are not reported separately from other changes in fair value
in OCI.
Fair Value Measurement
Fair value for measurement and disclosure purposes is determined as the consideration that would be received to sell
an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date,
regardless of whether that price is directly observable or estimated using a valuation technique. Fair value measurement is
based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
\u2022in the principal market for the asset or liability; or
\u2022in the absence of a principal market, in the most advantageous market for the asset or liability.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when
pricing the asset or liability, assuming that market participants act in their own economic best interest. A fair value
measurement of a non-financial asset takes into account a market participant's ability to generate economic benefits by using
the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and
best use. In estimating fair value, the Company use market-observable data to the extent it is available. When market-
observable data is not available, the Company use valuation techniques that maximize the use of relevant observable inputs
and minimize the use of unobservable inputs.
IFRS 13 - Fair Value Measurement establishes a hierarchy which prioritizes the inputs used in measuring fair value.
The hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets and liabilities
(Level 1 inputs) and the lowest priority to unobservable inputs (level 3 inputs). In some cases, the inputs used to measure the
fair value of an asset or a liability might be categorized within different levels of the fair value hierarchy. In those cases, the
fair value measurement is categorized in its entirety in the same level of the fair value hierarchy at the lowest level input that
is significant to the entire measurement.
Levels used in the hierarchy are as follows:
\u2022Level 1 inputs include quoted prices (unadjusted) in active markets for identical assets and liabilities that the
Company can access at the measurement date. Level 1 primarily consists of financial instruments such as
certain held to collect and sell and held to sell securities;
\u2022Level 2 inputs include those which are directly or indirectly observable as of the measurement date. Level 2
instruments include commercial paper and non-exchange-traded derivatives such as over-the-counter currency
and commodity forwards, swaps and option contracts, which are valued using models or other valuation
methodologies. These models are primarily industry-standard models that consider various assumptions,
including quoted forward prices for similar instruments in active markets, quoted prices for identical or similar
inputs not in active markets, and observable inputs; and
\u2022Level 3 inputs are unobservable from objective sources in the market and reflect management judgment about
the assumptions market participants would use in pricing the instruments. Instruments in this category include
non-exchange-traded derivatives such as certain over-the-counter commodity option and swap contracts that are
complex or with non standard clauses.
Refer to Note 24, Fair value measurement, for additional information on fair value measurements.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForFairValueMeasurementExplanatory",
"language": "en",
"entity": "scheme:549300LKT9PW7ZIBDF31",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
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"value": "
Classification and measurement
The classification of a financial asset is dependent on the Company\u2019s business model for managing such financial
assets and their contractual cash flows. The Company considers whether the contractual cash flows represent solely payments
of principal and interest that are consistent with a basic lending arrangement. Where the contractual terms introduce exposure
to risk or volatility that are inconsistent with a basic lending arrangement, the related financial assets are classified and
measured at fair value through profit or loss (\u201cFVPL\u201d).
| | |
Financial asset cash flow business model | | |
Solely to collect the contractual cash flows (Held to Collect) | Fair Value including transaction costs | |
Collect both the contractual cash flows and generate cash flows arising from the sale of assets (Held to Collect and Sell) | Fair Value including transaction costs | Fair value through other comprehensive income (\u201cFVOCI\u201d) |
Generate cash flows primarily from the sale of assets (Held to Sell) | | |
______________________________________________________________________________________________________________________________
(1) Trade receivables without a significant financing component, as defined by IFRS 15, are initially measured at the transaction price
(2) Receivables with maturities of over one year, which bear no interest or have an interest rate significantly lower than market rates were discounted using market rates
(3) On initial recognition, the Company could irrevocably designate a financial asset at FVPL that otherwise met the requirements to be measured at amortized cost or at FVOCI
if doing so eliminated or significantly reduced an accounting mismatch that would otherwise arise
Factors considered by the Company in determining the business model for a group of financial assets include:
\u2022past experience on how the cash flows for these assets were collected;
\u2022the frequency, volume and timing of sales of financial assets in prior periods, the reasons for such sales and
future sales activity expectations;
\u2022how the asset\u2019s performance is evaluated and reported to key management personnel; and
\u2022how risks are assessed and managed and how management is compensated.
Financial assets are not reclassified subsequent to their initial recognition unless the Company changes its business
model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first
reporting period following the change in the business model.
Cash and cash equivalents included cash at banks, units in money market funds and other money market securities,
commercial paper and certificate of deposits that are readily convertible into cash, with original maturities of three months or
less at the date of purchase. Cash and cash equivalents are subject to an insignificant risk of changes in value and consist of
balances across various primary national and international banks and of money market instruments. Money market funds
consist of investments in high quality, short-term, diversified financial instruments that can generally be liquidated on
demand and are measured at FVPL. Cash at banks and Other cash equivalents are measured at amortized cost.
Investments in other companies are measured at fair value. Equity investments for which there is no quoted market
price in an active market and there is insufficient financial information in order to determine fair value may be measured at
cost as an estimate of fair value, as permitted by IFRS 9 - Financial Instruments (\u201cIFRS 9\u201d). The Company may irrevocably
elect to present subsequent changes in the investment\u2019s fair value in Other comprehensive income (\u201cOCI\u201d) upon the initial
recognition of an equity investment that is not held to sell. This election is made on an investment-by-investment basis.
Generally, any dividends from these investments are recognized in Other income from investments within Result from
investments when the Company\u2019s right to receive payment is established. Other net gains and losses are recognized in OCI
and will not be reclassified to the Consolidated Income Statement in subsequent periods. Impairment losses (and the reversal
of impairment losses) on equity investments measured at FVOCI are not reported separately from other changes in fair value
in OCI.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentsOtherThanInvestmentsAccountedForUsingEquityMethodExplanatory",
"language": "en",
"entity": "scheme:549300LKT9PW7ZIBDF31",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjhlODFkMTZmNGE0NDRkZjdhYjBlZjJkODE2MjY0ZGUwL3NlYzo4ZTgxZDE2ZjRhNDQ0ZGY3YWIwZWYyZDgxNjI2NGRlMF80ODcvZnJhZzo3Nzg2OWQ1NWVmMDE0OWI5YTdhZmE2YjFiYjBlYWUwYy90ZXh0cmVnaW9uOjc3ODY5ZDU1ZWYwMTQ5YjlhN2FmYTZiMWJiMGVhZTBjXzMwNzg2MzI1NjY3NDM0_3e869f58-9a35-497d-95a5-5c3fc01787c3": {
"value": "
Impairment of financial assets
The Company\u2019s credit risk differs in relation to the type of activity. In particular, receivables from financing
activities, such as dealer and retail financing that are carried out through the Company\u2019s financial services companies, are
exposed both to the direct risk of default and the deterioration of the creditworthiness of the counterparty, whereas trade
receivables arising from the sale of vehicles and spare parts, are mostly exposed to the direct risk of counterparty default.
These risks are mitigated by different kinds of securities received and the fact that collection exposure is spread across a large
number of counterparties.
The IFRS 9 impairment requirements are based on a forward-looking expected credit loss (\u201cECL\u201d) model. ECL is a
probability-weighted estimate of the present value of cash shortfalls.
The calculation of the amount of ECL is based on the risk of default by the counterparty, which is determined by
taking into account the information available at the end of each reporting period as to the counterparty\u2019s solvency, the fair
value of any guarantees and the Company\u2019s historical experience. The Company considers a financial asset to be in default
when: (i) the borrower is unlikely to pay its obligations in full and without consideration of compensating guarantees or
collateral (if any exist); or (ii) the financial asset is more than 90 days past due.
The Company applies two impairment models for financial assets as set out in IFRS 9: the simplified approach and
the general approach. The table below indicates the impairment model used for each of the Company\u2019s financial asset
categories. Impairment losses on financial assets are recognized in the Consolidated Income Statement within the
corresponding line items, based on the classification of the counterparty.
| |
| |
| |
Receivables from financing activities | |
| |
In order to test for impairment, individually significant receivables and receivables for which collectability is at risk
are assessed individually, while all other receivables are grouped into homogeneous risk categories based on shared risk
characteristics such as instrument type, industry or geographical location of the counterparty.
The simplified approach for determining the lifetime ECL allowance is performed in two steps:
\u2022All trade receivables that are in default, as defined above, are individually assessed for impairment; and
\u2022A general reserve is recognized for all other trade receivables (including those not past due) based on historical
loss rates.
The Company applies the general approach as determined by IFRS 9 by assessing at each reporting date whether
there has been a significant increase in credit risk on the financial instrument since initial recognition. The Company
considers receivables to have experienced a significant increase in credit risk when certain quantitative or qualitative
indicators have been met or the borrower was more than 30 days past due on its contractual payments.
The \u201cthree-stages\u201d for determining and measuring the impairment based on changes in credit quality since initial
recognition are summarized below:
| | |
| | Time period for measurement of ECL |
| A financial instrument that is not credit-impaired on initial recognition | |
| A financial instrument with a significant increase in credit risk since initial recognition | |
| A financial instrument that is credit-impaired or has defaulted | |
Considering forward-looking economic information, ECL is determined by projecting the probability of default,
exposure at default and loss given default for each future contractual period and for each individual exposure or collective
portfolio. The discount rate used in the ECL calculation is the stated effective interest rate or an approximation thereof. Each
reporting period, the assumptions underlying the ECL calculation are reviewed and updated as necessary. Since adoption,
there have been no significant changes in estimation techniques or significant assumptions that led to material changes in the
ECL allowance.
The gross carrying amount of a financial asset is written-off to the extent that there is no realistic prospect of
recovery. This is generally the case when the Company determined that a debtor does not have assets or sources of income
that could generate sufficient cash flows to repay the amounts subject to the write-off. However, financial assets that are
written off could still be subject to enforcement activities.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfFinancialAssetsExplanatory",
"language": "en",
"entity": "scheme:549300LKT9PW7ZIBDF31",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
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"value": "
Derivative financial instruments
Derivative financial instruments are used for economic hedging purposes in order to reduce currency, interest rate
and market price risks (primarily related to commodities). In accordance with IFRS 9, derivative financial instruments are
recognized when we become a party to the contractual provisions of the instrument and, upon initial recognition, are
measured at fair value. Subsequent to initial recognition, all derivative financial instruments are measured at fair value.
Furthermore, derivative financial instruments qualify for hedge accounting when (i) there is formal designation and
documentation of the hedging relationship and the Company\u2019s risk management objective and strategy for undertaking the
hedge at inception of the hedge and (ii) the hedge is expected to be effective. If the hedging relationship ceases to meet the
hedge effectiveness requirement relating to the hedge ratio but the risk management objective for that designated hedging
relationship remains the same, this ratio must then be rebalanced. Rebalancing consists in adjusting either the designated
quantities of the hedged item or the hedging instrument of an already existing hedging relationship.
When derivative financial instruments qualify for hedge accounting, the following accounting treatments apply:
\u2022Fair value hedges - where a derivative financial instrument is designated as a hedge of the exposure to changes
in fair value of a recognized asset or liability attributable to a particular risk that could affect the Consolidated
Income Statement, the gain or loss from remeasuring the hedging instrument at fair value is recognized in the
Consolidated Income Statement. The gain or loss on the hedged item attributable to the hedged risk adjusts the
carrying amount of the hedged item and is recognized in the Consolidated Income Statement.
\u2022Cash flow hedges - where a derivative financial instrument is designated as a hedge of the exposure to
variability in future cash flows of a recognized asset or liability or a highly probable forecasted transaction and
could affect the Consolidated Income Statement, the effective portion of any gain or loss on the derivative
financial instrument is recognized directly in Other comprehensive income/(loss). When the hedged forecasted
transaction results in the recognition of a non-financial asset, the gains and losses previously deferred in Other
comprehensive income/(loss) are reclassified and included in the initial measurement of the cost of the non-
financial asset. The effective portion of any gain or loss is recognized in the Consolidated Income Statement at
the same time as the economic effect arising from the hedged item that affects the Consolidated Income
Statement. The gain or loss associated with a hedge or part of a hedge that has become ineffective is recognized
in the Consolidated Income Statement immediately.
When a hedging instrument or hedge relationship is terminated but the hedged transaction is still expected to
occur, the cumulative gain or loss realized to the point of termination remains and is recognized in the
Consolidated Income Statement at the same time as the underlying transaction occurred. If the hedged
transaction is no longer probable, the cumulative unrealized gain or loss held in Other comprehensive income/
(loss) is recognized in the Consolidated Income Statement immediately.
\u2022Hedges of a net investment - if a derivative financial instrument is designated as a hedging instrument for a net
investment in a foreign operation, the effective portion of the gain or loss on the derivative financial instrument
is recognized in Other comprehensive income/(loss). The cumulative gain or loss is reclassified from Other
comprehensive income/(loss) to the Consolidated Income Statement upon disposal of the foreign operation.
Hedge effectiveness is determined at the inception of the hedge relationship and through periodic prospective
effectiveness assessments to ensure the hedge relationships meet the effectiveness requirements (including the existence of an
economic relationship between\u00a0the hedged item and hedging instrument). The Company enters into hedge relationships where
the critical terms of the hedging instrument match closely or exactly with the terms of the hedged item, and so a qualitative
assessment of effectiveness is performed. In the event there was a hedge relationship where the critical terms of the hedged
item do not match closely or perfectly with the critical terms of the hedging instrument, the Company would perform a
quantitative assessment to assess effectiveness.
Ineffectiveness is measured by comparing the cumulative changes in fair value of the hedging instrument and
cumulative change in fair value of the hedged item arising from the designated risk. The primary potential sources of hedge
ineffectiveness are mismatches in timing or the critical terms of the hedged item and the hedging instrument.
The hedge ratio is the relationship between the quantity of the derivative and the hedged item. The Company\u2019s
derivatives have the same underlying quantity as the hedged items, therefore the hedge ratio is expected to be one for one.
If hedge accounting cannot be applied, the gains or losses from the fair value measurement of derivative financial
instruments are recognized immediately in the Consolidated Income Statement.
Refer to Note 17, Derivative financial and operating assets and liabilities, for additional information on fair value
measurements.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForHedgingExplanatory",
"language": "en",
"entity": "scheme:549300LKT9PW7ZIBDF31",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
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"value": "
Derivative financial instruments
Derivative financial instruments are used for economic hedging purposes in order to reduce currency, interest rate
and market price risks (primarily related to commodities). In accordance with IFRS 9, derivative financial instruments are
recognized when we become a party to the contractual provisions of the instrument and, upon initial recognition, are
measured at fair value. Subsequent to initial recognition, all derivative financial instruments are measured at fair value.
Furthermore, derivative financial instruments qualify for hedge accounting when (i) there is formal designation and
documentation of the hedging relationship and the Company\u2019s risk management objective and strategy for undertaking the
hedge at inception of the hedge and (ii) the hedge is expected to be effective. If the hedging relationship ceases to meet the
hedge effectiveness requirement relating to the hedge ratio but the risk management objective for that designated hedging
relationship remains the same, this ratio must then be rebalanced. Rebalancing consists in adjusting either the designated
quantities of the hedged item or the hedging instrument of an already existing hedging relationship.
When derivative financial instruments qualify for hedge accounting, the following accounting treatments apply:
\u2022Fair value hedges - where a derivative financial instrument is designated as a hedge of the exposure to changes
in fair value of a recognized asset or liability attributable to a particular risk that could affect the Consolidated
Income Statement, the gain or loss from remeasuring the hedging instrument at fair value is recognized in the
Consolidated Income Statement. The gain or loss on the hedged item attributable to the hedged risk adjusts the
carrying amount of the hedged item and is recognized in the Consolidated Income Statement.
\u2022Cash flow hedges - where a derivative financial instrument is designated as a hedge of the exposure to
variability in future cash flows of a recognized asset or liability or a highly probable forecasted transaction and
could affect the Consolidated Income Statement, the effective portion of any gain or loss on the derivative
financial instrument is recognized directly in Other comprehensive income/(loss). When the hedged forecasted
transaction results in the recognition of a non-financial asset, the gains and losses previously deferred in Other
comprehensive income/(loss) are reclassified and included in the initial measurement of the cost of the non-
financial asset. The effective portion of any gain or loss is recognized in the Consolidated Income Statement at
the same time as the economic effect arising from the hedged item that affects the Consolidated Income
Statement. The gain or loss associated with a hedge or part of a hedge that has become ineffective is recognized
in the Consolidated Income Statement immediately.
When a hedging instrument or hedge relationship is terminated but the hedged transaction is still expected to
occur, the cumulative gain or loss realized to the point of termination remains and is recognized in the
Consolidated Income Statement at the same time as the underlying transaction occurred. If the hedged
transaction is no longer probable, the cumulative unrealized gain or loss held in Other comprehensive income/
(loss) is recognized in the Consolidated Income Statement immediately.
\u2022Hedges of a net investment - if a derivative financial instrument is designated as a hedging instrument for a net
investment in a foreign operation, the effective portion of the gain or loss on the derivative financial instrument
is recognized in Other comprehensive income/(loss). The cumulative gain or loss is reclassified from Other
comprehensive income/(loss) to the Consolidated Income Statement upon disposal of the foreign operation.
Hedge effectiveness is determined at the inception of the hedge relationship and through periodic prospective
effectiveness assessments to ensure the hedge relationships meet the effectiveness requirements (including the existence of an
economic relationship between\u00a0the hedged item and hedging instrument). The Company enters into hedge relationships where
the critical terms of the hedging instrument match closely or exactly with the terms of the hedged item, and so a qualitative
assessment of effectiveness is performed. In the event there was a hedge relationship where the critical terms of the hedged
item do not match closely or perfectly with the critical terms of the hedging instrument, the Company would perform a
quantitative assessment to assess effectiveness.
Ineffectiveness is measured by comparing the cumulative changes in fair value of the hedging instrument and
cumulative change in fair value of the hedged item arising from the designated risk. The primary potential sources of hedge
ineffectiveness are mismatches in timing or the critical terms of the hedged item and the hedging instrument.
The hedge ratio is the relationship between the quantity of the derivative and the hedged item. The Company\u2019s
derivatives have the same underlying quantity as the hedged items, therefore the hedge ratio is expected to be one for one.
If hedge accounting cannot be applied, the gains or losses from the fair value measurement of derivative financial
instruments are recognized immediately in the Consolidated Income Statement.
Refer to Note 17, Derivative financial and operating assets and liabilities, for additional information on fair value
measurements.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForDerivativeFinancialInstrumentsExplanatory",
"language": "en",
"entity": "scheme:549300LKT9PW7ZIBDF31",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjhlODFkMTZmNGE0NDRkZjdhYjBlZjJkODE2MjY0ZGUwL3NlYzo4ZTgxZDE2ZjRhNDQ0ZGY3YWIwZWYyZDgxNjI2NGRlMF80ODcvZnJhZzo3Nzg2OWQ1NWVmMDE0OWI5YTdhZmE2YjFiYjBlYWUwYy90ZXh0cmVnaW9uOjc3ODY5ZDU1ZWYwMTQ5YjlhN2FmYTZiMWJiMGVhZTBjXzMwNzg2MzI1NjY3NDM1_dfb52277-9ef7-49ff-aea8-d4c02f96bc3c": {
"value": "
Derivative financial instruments
Derivative financial instruments are used for economic hedging purposes in order to reduce currency, interest rate
and market price risks (primarily related to commodities). In accordance with IFRS 9, derivative financial instruments are
recognized when we become a party to the contractual provisions of the instrument and, upon initial recognition, are
measured at fair value. Subsequent to initial recognition, all derivative financial instruments are measured at fair value.
Furthermore, derivative financial instruments qualify for hedge accounting when (i) there is formal designation and
documentation of the hedging relationship and the Company\u2019s risk management objective and strategy for undertaking the
hedge at inception of the hedge and (ii) the hedge is expected to be effective. If the hedging relationship ceases to meet the
hedge effectiveness requirement relating to the hedge ratio but the risk management objective for that designated hedging
relationship remains the same, this ratio must then be rebalanced. Rebalancing consists in adjusting either the designated
quantities of the hedged item or the hedging instrument of an already existing hedging relationship.
When derivative financial instruments qualify for hedge accounting, the following accounting treatments apply:
\u2022Fair value hedges - where a derivative financial instrument is designated as a hedge of the exposure to changes
in fair value of a recognized asset or liability attributable to a particular risk that could affect the Consolidated
Income Statement, the gain or loss from remeasuring the hedging instrument at fair value is recognized in the
Consolidated Income Statement. The gain or loss on the hedged item attributable to the hedged risk adjusts the
carrying amount of the hedged item and is recognized in the Consolidated Income Statement.
\u2022Cash flow hedges - where a derivative financial instrument is designated as a hedge of the exposure to
variability in future cash flows of a recognized asset or liability or a highly probable forecasted transaction and
could affect the Consolidated Income Statement, the effective portion of any gain or loss on the derivative
financial instrument is recognized directly in Other comprehensive income/(loss). When the hedged forecasted
transaction results in the recognition of a non-financial asset, the gains and losses previously deferred in Other
comprehensive income/(loss) are reclassified and included in the initial measurement of the cost of the non-
financial asset. The effective portion of any gain or loss is recognized in the Consolidated Income Statement at
the same time as the economic effect arising from the hedged item that affects the Consolidated Income
Statement. The gain or loss associated with a hedge or part of a hedge that has become ineffective is recognized
in the Consolidated Income Statement immediately.
When a hedging instrument or hedge relationship is terminated but the hedged transaction is still expected to
occur, the cumulative gain or loss realized to the point of termination remains and is recognized in the
Consolidated Income Statement at the same time as the underlying transaction occurred. If the hedged
transaction is no longer probable, the cumulative unrealized gain or loss held in Other comprehensive income/
(loss) is recognized in the Consolidated Income Statement immediately.
\u2022Hedges of a net investment - if a derivative financial instrument is designated as a hedging instrument for a net
investment in a foreign operation, the effective portion of the gain or loss on the derivative financial instrument
is recognized in Other comprehensive income/(loss). The cumulative gain or loss is reclassified from Other
comprehensive income/(loss) to the Consolidated Income Statement upon disposal of the foreign operation.
Hedge effectiveness is determined at the inception of the hedge relationship and through periodic prospective
effectiveness assessments to ensure the hedge relationships meet the effectiveness requirements (including the existence of an
economic relationship between\u00a0the hedged item and hedging instrument). The Company enters into hedge relationships where
the critical terms of the hedging instrument match closely or exactly with the terms of the hedged item, and so a qualitative
assessment of effectiveness is performed. In the event there was a hedge relationship where the critical terms of the hedged
item do not match closely or perfectly with the critical terms of the hedging instrument, the Company would perform a
quantitative assessment to assess effectiveness.
Ineffectiveness is measured by comparing the cumulative changes in fair value of the hedging instrument and
cumulative change in fair value of the hedged item arising from the designated risk. The primary potential sources of hedge
ineffectiveness are mismatches in timing or the critical terms of the hedged item and the hedging instrument.
The hedge ratio is the relationship between the quantity of the derivative and the hedged item. The Company\u2019s
derivatives have the same underlying quantity as the hedged items, therefore the hedge ratio is expected to be one for one.
If hedge accounting cannot be applied, the gains or losses from the fair value measurement of derivative financial
instruments are recognized immediately in the Consolidated Income Statement.
Refer to Note 17, Derivative financial and operating assets and liabilities, for additional information on fair value
measurements.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForDerivativeFinancialInstrumentsAndHedgingExplanatory",
"language": "en",
"entity": "scheme:549300LKT9PW7ZIBDF31",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjhlODFkMTZmNGE0NDRkZjdhYjBlZjJkODE2MjY0ZGUwL3NlYzo4ZTgxZDE2ZjRhNDQ0ZGY3YWIwZWYyZDgxNjI2NGRlMF80ODcvZnJhZzo3Nzg2OWQ1NWVmMDE0OWI5YTdhZmE2YjFiYjBlYWUwYy90ZXh0cmVnaW9uOjc3ODY5ZDU1ZWYwMTQ5YjlhN2FmYTZiMWJiMGVhZTBjXzMwNzg2MzI1NjY3NDM2_0c202518-2e14-43e1-bb27-41425433a90e": {
"value": "
Inventories
Raw materials, semi-finished products and finished goods inventories are stated at the lower of cost and net
realizable value, with cost being determined on a first-in, first-out (\u201cFIFO\u201d) basis. The measurement of Inventories includes
the direct cost of materials and labor as well as indirect costs (variable and fixed). A provision is made for obsolete and slow-
moving raw materials, finished goods, spare parts and other supplies based on their expected future use and realizable value.
Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion
and the estimated costs for sale and distribution.
The measurement of production systems construction contracts is based on the stage of completion, which is
determined as the proportion of cost incurred at the balance sheet date over the estimated total contract cost. These items are
presented net of progress billings received from customers. Any losses on such contracts are recorded in the Consolidated
Income Statement in the period in which they are identified.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForMeasuringInventories",
"language": "en",
"entity": "scheme:549300LKT9PW7ZIBDF31",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
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"value": "
Employee benefits
Defined contribution plans
Costs arising from defined contribution plans are expensed as incurred.
Defined benefit plans
The Company\u2019s net obligations are determined separately for each defined benefit plan by estimating the present
value of future benefits that employees have earned and deducting the fair value of any plan assets. The present value of
defined benefit obligations is measured using actuarial techniques and actuarial assumptions that are unbiased, mutually
compatible and attribute benefits to periods in which the obligation to provide post-employment benefits arise by using the
Projected Unit Credit Method. Plan assets are recognized and measured at fair value.
When the net obligation is a potential asset, the recognized amount is limited to the present value of any economic
benefits available in the form of future refunds or reductions in future contributions to the plan (asset ceiling).
The components of defined benefit cost are recognized as follows:
\u2022Service cost is recognized in the Consolidated Income Statement by function and is presented within the
relevant line items (Cost of revenues, Selling, general and other costs, and Research and development costs);
\u2022Net interest expense on the defined benefit liability/(asset) is recognized in the Consolidated Income Statement
within Net financial expenses and is determined by multiplying the net liability/(asset) by the discount rate used
to discount obligations taking into account the effect of contributions and benefit payments made during the
year; and
\u2022Remeasurement components of the net obligation, which comprise actuarial gains and losses, the return on plan
assets (excluding interest income recognized in the Consolidated Income Statement) and any change in the
effect of the asset ceiling are recognized immediately in Other comprehensive income/(loss). These
remeasurement components are not reclassified to the Consolidated Income Statement in a subsequent period.
Past service costs arising from plan amendments and curtailments and gains and losses on the settlement of a plan
are recognized immediately in the Consolidated Income Statement.
Other long term employee benefits
The Company\u2019s obligations represent the present value of future benefits that employees have earned in return for
their service. The effects of remeasuring other long-term employee benefits to the present value of future benefits are
recognized within the Consolidated Income Statement in the period in which they arise.
Employee Benefits
The Company provides post-employment benefits for certain of its active employees and retirees, which vary
according to the legal, fiscal and economic conditions of each country in which the Company operates and changes
periodically. The plans are classified by the Company on the basis of the type of benefit provided as follows: pension
benefits, health care and life insurance plans and other post-employment benefits.
The Company provides certain post-employment benefits, such as pension or health care benefits, to their employees
under defined contribution plans whereby the Company pays contributions to public or private plans on a legally mandatory,
contractual, or voluntary basis. The Company recognizes the cost for defined contribution plans as incurred and classifies this
by function within Cost of revenues, Selling, general and other costs, and Research and development costs in the
Consolidated Income Statement.
Pension plans
The Company sponsored both non-contributory and contributory defined benefit pension plans primarily in the U.S.,
Canada, the UK and Germany, the majority of which were funded. Non-contributory pension plans cover certain hourly and
salaried employees and the benefits are based on a fixed rate for each year of service. Additionally, contributory benefits are
provided to certain salaried employees under the salaried employees\u2019 retirement plans.
The Company\u2019s defined benefit pension plans are accounted for on an actuarial basis, which requires the use of
estimates and assumptions to determine the net liability or net asset. The Company estimates the present value of the
projected future payments to all participants by taking into consideration parameters of a financial nature such as discount
rates, the rate of salary increases and the likelihood of potential future events estimated by using demographic assumptions,
which may have an effect on the amount and timing of future payments, such as mortality, dismissal and retirement rates,
which are developed to reflect actual and projected plan experience. Mortality rates are developed using Stellantis plan-
specific populations where appropriate as well as recent mortality information published by recognized experts in this field
such as the U.S. Society of Actuaries and the Canadian Institute of Actuaries and other data where appropriate to reflect
actual and projected plan experience. Comparable country specific sources and methods are used for all other countries. The
expected amount and timing of contributions is based on an assessment of minimum funding requirements. From time to
time, contributions are made beyond those that are legally required.
Plan obligations and costs are based on existing retirement plan provisions. Assumptions regarding any potential
future changes to benefit provisions beyond those to which the Company is presently committed are not made. Significant
differences in actual experience or significant changes in the following key assumption may affect the pension obligations
and pension expense:
\u2022Discount rates. The Company\u2019s discount rates are based on yields of high-quality (AA-rated) fixed income
investments for which the timing and amounts of maturities match the timing and amounts of the projected
benefit payments.
The effects of actual results differing from assumptions and of amended assumptions are included in Other
comprehensive income/(loss). The weighted average discount rates used to determine the defined benefit obligation for the
defined benefit plans were 5.14 percent and 2.60 percent at December\u00a031, 2022 and 2021, respectively.
At December\u00a031, 2022, the effect on the defined benefit obligation of an increase in the discount rate, holding all
other assumptions constant, is as follows:
| | | | | | | | | |
| Effect on pension benefit obligation increase/ (decrease) in Net liability | | | | | | | | |
| |
25 basis point decrease in discount rate | | | | | | | | | |
25 basis point increase in discount rate | | | | | | | | | |
for additional information on the Company\u2019s OPEB liabilities.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForEmployeeBenefitsExplanatory",
"language": "en",
"entity": "scheme:549300LKT9PW7ZIBDF31",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjhlODFkMTZmNGE0NDRkZjdhYjBlZjJkODE2MjY0ZGUwL3NlYzo4ZTgxZDE2ZjRhNDQ0ZGY3YWIwZWYyZDgxNjI2NGRlMF80ODcvZnJhZzo3Nzg2OWQ1NWVmMDE0OWI5YTdhZmE2YjFiYjBlYWUwYy90ZXh0cmVnaW9uOjc3ODY5ZDU1ZWYwMTQ5YjlhN2FmYTZiMWJiMGVhZTBjXzMwNzg2MzI1NjY3NDM3_2e3d7d45-a2f0-4b0a-aa55-296550d44faf": {
"value": "
Share-based compensation
The Company has several compensation plans that provide for the granting of share-based compensation to certain
employees and directors. Share-based compensation plans are accounted for in accordance with IFRS 2 -Share-based
Payment, which requires the recognition of share-based compensation expense based on fair value.
For equity-settled transactions, the cost is determined by the fair value at the date when the grant is determined with
reference to the grant-date share price and, where applicable, using a Monte Carlo simulation model. Refer to Note 19, Share-
based compensation, for further information.
Share-based compensation expense is recognized within Selling, general and other costs within the Consolidated
Income Statement, together with a corresponding increase in equity, over the period in which the service and, where
applicable, the performance conditions are fulfilled (\u201cvesting period\u201d). The cumulative expense is recognized for equity-
settled transactions at each reporting date using the graded vesting method and reflected the Company\u2019s best estimate of the
number of equity instruments that will ultimately vest. The expense, or credit, in the Consolidated Income Statement for a
period represents the movement in cumulative expense recognized as at the beginning and end of that period.
Service and non-market performance conditions are not taken into account when determining the grant date fair
value of awards, but the likelihood of the conditions being met is assessed as part of the Company\u2019s best estimate of the
number of equity instruments that will ultimately vest. Market performance conditions are reflected within the grant date fair
value. Any other conditions attached to an award, but without an associated service requirement, are considered to be non-
vesting conditions. Non-vesting conditions are reflected in the fair value of an award and lead to an immediate expensing of
an award unless there were also service and/or performance conditions.
No expense is recognized for awards that do not ultimately vest because non-market performance and/or service
conditions have not been met. Where awards included a market or non-vesting condition, the transactions are treated as
vested irrespective of whether the market or non-vesting condition is satisfied, provided that all other performance and/or
service conditions are satisfied.
When the terms of an equity-settled award are modified, the minimum expense recognized is the grant date fair
value of the unmodified award, provided the original vesting terms of the award are met. Any incremental expense between
the original grant and the modified grant, measured at the date of modification, is recognized over the modified vesting terms.
Where an award is cancelled by the entity or by the counterparty, any unrecognized element of the fair value of the award is
expensed immediately through the Consolidated Income Statement.
For cash-settled transactions, a liability is recognized for the fair value measured initially and at each reporting date
up to and including the settlement date. The fair value is expensed over the period until the vesting date, with recognition of a
corresponding liability. The approach used to account for vesting conditions when measuring equity-settled transactions also
applies to cash-settled transactions.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForSharebasedPaymentTransactionsExplanatory",
"language": "en",
"entity": "scheme:549300LKT9PW7ZIBDF31",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjhlODFkMTZmNGE0NDRkZjdhYjBlZjJkODE2MjY0ZGUwL3NlYzo4ZTgxZDE2ZjRhNDQ0ZGY3YWIwZWYyZDgxNjI2NGRlMF80ODcvZnJhZzo3Nzg2OWQ1NWVmMDE0OWI5YTdhZmE2YjFiYjBlYWUwYy90ZXh0cmVnaW9uOjc3ODY5ZDU1ZWYwMTQ5YjlhN2FmYTZiMWJiMGVhZTBjXzMwNzg2MzI1NjY3NDQw_4b30c5d7-ad06-4ef2-adaa-59e9b2c87b6d": {
"value": "
Revenue recognition
Revenue is recognized when control of the Company\u2019s vehicles, services or parts has been transferred and the
Company\u2019s performance obligations to its customers have been satisfied. Revenue is measured as the amount of
consideration the Company expects to receive in exchange for transferring goods or providing services. The timing of when
the Company transfers the goods or services to the customer could differ from the timing of the customer\u2019s payment. The
Company recognizes a contract liability when it invoices an amount to a customer prior to the transfer of the goods or
services provided. When the Company gives its customers the right to return eligible goods, the Company estimates the
expected returns based on an analysis of historical experiences. Sales, value added and other taxes that the Company collects
on behalf of others concurrently with revenue generating activities are excluded from revenue and are recognized within the
Other liabilities and the Tax liabilities line items in the Consolidated Statement of Financial Position. Incidental items that are
immaterial in the context of the contract are recognized as expense.
The Company also enters into contracts with multiple performance obligations. For these contracts, the Company
allocates revenue from the transaction price to the distinct goods and services in the contract on a relative standalone selling
price basis. To the extent that the Company sells the good or service separately in the same market, the standalone selling
price is the observable price at which the Company sold the good or service separately. For all other goods or services, the
Company estimates the standalone selling price using a cost-plus-margin approach.
Shipments of vehicles and sales of other goods
The Company has determined that the Company\u2019s customers from the sale of vehicles and service parts are
generally dealers, distributors or fleet customers. Transfer of control, and therefore revenue recognition, generally
corresponds to the date when the vehicles or service parts are made available to the customer, or when the vehicles or service
parts are released to the carrier responsible for transporting them to the customer. This is also the point at which invoices are
issued, with payment for vehicles typically due immediately and payment for service parts typically due in the following
month. For component part sales, revenue recognition is consistent with that of service parts. In the case of service parts sold
that are expected to be used for repairs under warranty, no revenue is recognized upon shipment. The Company also sells
tooling, with control transferring at the point in time when the customer accepts the tooling.
The cost of incentives, if any, is estimated at the inception of a contract at the expected amount that will ultimately
be paid and is recognized as a reduction to revenue at the time of the sale. If a vehicle contract transaction has multiple
performance obligations, the cost of incentives is allocated entirely to the vehicle as the intent of the incentives is to
encourage sales of vehicles. If the estimate of the incentive changes following the sale to the customer, the change in estimate
is recognized as an adjustment to revenue in the period of the change. Refer to the Use of estimates - Sales incentives for
more information on these programs.
New vehicles sales with residual value guarantees provided by the Company are recognized as revenue when control
of the vehicle transfers to the customer, except in situations where the Company issues a put option for which there is a
significant economic incentive to exercise, as discussed below. Upon recognition of the vehicle revenue, the Company
established a liability equal to the estimated amount of any residual value guarantee.
The Company also sells vehicles where, the contract includes a put option whereby the customer may require the
Company to repurchase the vehicles. For these types of arrangements, the Company assesses whether a significant economic
incentive exists for the customer to exercise its put option. If the Company determines that a significant economic incentive
does not exist for the customer to exercise its put option, then revenue is recognized when control of the vehicle transferred to
the fleet customer and a liability is recognized equal to the estimated amount of the residual value guarantee if any. If the
Company determines that a significant economic incentive exists, then the arrangement is accounted for similarly to a
repurchase obligation, as described in Lease installments from assets sold with buy-back commitments.
Other services provided
Other revenues from services provided are primarily comprised of maintenance plans, extended warranties, and
connectivity services, and are recognized over the contract period in proportion to the costs expected to be incurred based on
the Company\u2019s historical experience. These services are either included in the selling price of the vehicle or separately priced.
Revenue for services is allocated based on the estimated stand-alone selling price. Costs associated with these services are
deferred and are subsequently amortized to expense consistent with how the related revenue is recognized. The Company had
\u20ac236 million of deferred costs related to these services at December 31, 2022 (\u20ac159 million at December 31, 2021) and
recognized \u20ac91 million of amortization expense during the year ended December\u00a031, 2022 (\u20ac58 million during the year ended
December\u00a031, 2021).
Contract revenues
Revenue from construction contracts, which is comprised of industrial automation systems, included within \u201cOther
activities\u201d, is recognized as revenue over the contract period in proportion to the costs expected to be incurred based on the
Company\u2019s historical experience. A loss is recognized if the sum of the expected costs for services under the contract exceeds
the transaction price.
Lease installments from assets sold with buy-back commitments
Vehicle sales to customers can include a repurchase obligation, whereby the Company is required to repurchase the
vehicles at a given point in time. The Company accounts for such sales as an operating lease. Upon the transfer of vehicles to
the customer, the Company records a liability equal to the proceeds received within Other liabilities in the Consolidated
Statement of Financial Position. The difference between the proceeds received and the guaranteed repurchase amount is
recognized as revenue over the contractual term on a straight-line basis. The cost of the vehicle is recorded within Assets sold
with a buy-back commitment if the contract term is 12 months or less, and recorded in Property, plant and equipment if the
contract term is greater than 12 months. The difference between the cost of the vehicle and the estimated residual value is
recognized within Cost of revenues in the Consolidated Income Statement over the contractual term.
Interest income of financial services activities
Interest income, which is primarily generated from the Company by providing dealer and retail financing, is
recognized using the effective interest method.
Sales incentives
The Company records the estimated cost of sales incentive programs offered to dealers and consumers as a reduction
to revenue at the time of sale to the dealer. This estimated cost represents the incentive programs offered to dealers and
consumers, as well as the expected modifications to these programs in order to facilitate sales of the dealer inventory.
Subsequent adjustments to sales incentive programs related to vehicles previously sold to dealers are recognized as an
adjustment to Net revenues in the period the adjustment is determinable.
The Company uses price discounts to adjust vehicle pricing in response to a number of market and product factors,
including pricing actions and incentives offered by competitors, economic conditions, the amount of excess industry
production capacity, the intensity of market competition, consumer demand for the product and the desire to support
promotional campaigns. The Company may offer a variety of sales incentive programs at any given point in time, including
cash offers to dealers and consumers and subvention programs offered to customers, or lease subsidies, which reduce the
retail customer\u2019s monthly lease payment or cash due at the inception of the financing arrangement, or both. Sales incentive
programs are generally brand, model and region specific for a defined period of time.
Multiple factors are used in estimating the future incentive expense by vehicle line, including the current incentive
programs in the market, planned promotional programs and the normal incentive escalation incurred as the model year ages.
The estimated incentive rates are reviewed monthly and changes to planned rates are adjusted accordingly, thereby impacting
revenues. As there are a multitude of inputs affecting the calculation of the estimate for sales incentives, an increase or
decrease of any of these variables could have a significant effect on Net revenues.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForRecognitionOfRevenue",
"language": "en",
"entity": "scheme:549300LKT9PW7ZIBDF31",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjhlODFkMTZmNGE0NDRkZjdhYjBlZjJkODE2MjY0ZGUwL3NlYzo4ZTgxZDE2ZjRhNDQ0ZGY3YWIwZWYyZDgxNjI2NGRlMF80ODcvZnJhZzo3Nzg2OWQ1NWVmMDE0OWI5YTdhZmE2YjFiYjBlYWUwYy90ZXh0cmVnaW9uOjc3ODY5ZDU1ZWYwMTQ5YjlhN2FmYTZiMWJiMGVhZTBjXzMwNzg2MzI1Njc4NzY3_7ded2cdd-62f6-4c92-8271-ab29dfffe977": {
"value": "
Cost of revenues
Cost of revenues comprises expenses incurred in the manufacturing and distribution of vehicles and parts.
Historically the most significant element is the cost of materials and components and the remaining costs included labor
(consisting of direct and indirect wages), transportation costs, depreciation of property, plant and equipment and amortization
of other intangible assets relating to production. In addition, expenses which are directly attributable to the consolidated
financial services companies, including interest expense related to their financing as a whole and provisions for risks and
write-downs of assets, are recorded within Cost of revenues (\u20ac289 million, \u20ac68 million and \u20ac5 million for the years ended
December 31, 2022, 2021 and 2020, respectively). Cost of revenues also included \u20ac31 million, \u20ac227 million and \u20ac74 million
related to the decrease in value for assets sold with buy-back commitments for the years ended December 31, 2022, 2021 and
2020, respectively. In addition, estimated costs related to product warranty and recall campaigns were recorded within Cost
of revenues (refer to the section Use of estimates below for further information).
Product warranties, recall campaigns and product liabilities
The Company establishes reserves for product warranties at the time the related sale is recognized. The Company
issues various types of product warranties under which the performance of products delivered is generally guaranteed for a
certain period or term. The accrual for product warranties includes the expected costs of warranty obligations imposed by law
or contract, as well as the expected costs for policy coverage, recall actions and buyback commitments. The estimated future
costs of these actions are principally based on assumptions regarding the lifetime warranty costs of each vehicle line and each
model year of that vehicle line, as well as historical claims experience for the Company\u2019s vehicles. In addition, the number
and magnitude of additional service actions expected to be approved and policies related to additional service actions are
taken into consideration. Due to the uncertainty and potential volatility of these estimated factors, changes in the assumptions
used could materially affect the results of operations.
The Company periodically initiates voluntary service and recall actions to address various customer satisfaction as
well as safety and emissions issues related to vehicles sold. Included in the reserve is the estimated cost of these service and
recall actions. The Company accrues estimated costs for recalls when they are probable of occurring and a reliable estimate of
the costs can be made.
Estimates of the future costs of these actions are subject to numerous uncertainties, including the enactment of new
laws and regulations, the number of vehicles affected by a service or recall action and the nature of the corrective action. It is
reasonably possible that the ultimate cost of these service and recall actions may require the Company to make expenditures
in excess of (or less than) established reserves over an extended period of time and in a range of amounts that cannot be
reasonably estimated. The estimate of warranty and additional service and recall action obligations is periodically reviewed
during the year. Experience has shown that initial data for any given model year can be volatile; therefore, the Company\u2019s
process relies upon long-term historical averages until sufficient data is available. As actual experience becomes available, it
is used to modify the historical averages to ensure that the forecast is within the range of likely outcomes. Resulting accruals
are then compared with current spending rates to ensure that the balances are adequate to meet expected future obligations.
In addition, the Company makes provisions for estimated product liability costs arising from property damage and
personal injuries including wrongful death, and potential exemplary or punitive damages alleged to be the result of product
defects. By nature, these costs can be infrequent, difficult to predict and have the potential to vary significantly in amount.
The valuation of the reserve is actuarially determined on an annual basis based on, among other factors, the number of
vehicles sold and product liability claims incurred. Costs associated with these provisions are recorded in the Consolidated
Income Statement and any subsequent adjustments are recorded in the period in which the adjustment is determined.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForExpensesExplanatory",
"language": "en",
"entity": "scheme:549300LKT9PW7ZIBDF31",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjhlODFkMTZmNGE0NDRkZjdhYjBlZjJkODE2MjY0ZGUwL3NlYzo4ZTgxZDE2ZjRhNDQ0ZGY3YWIwZWYyZDgxNjI2NGRlMF80ODcvZnJhZzo3Nzg2OWQ1NWVmMDE0OWI5YTdhZmE2YjFiYjBlYWUwYy90ZXh0cmVnaW9uOjc3ODY5ZDU1ZWYwMTQ5YjlhN2FmYTZiMWJiMGVhZTBjXzMwNzg2MzI1NjY3NDQz_567b7da7-5099-4c9f-a9ef-6640eea1b26f": {
"value": "
Government Grants
Government grants are recognized in the Consolidated Financial Statements when there is reasonable assurance of
the Company's compliance with the conditions for receiving such grants and that the grants will be received. Government
grants are recognized as income over the same periods as the related costs which they are intended to offset.
Government grants are recognized as a reduction in the cost of the corresponding assets.
The benefit of a government loan at a below-market rate of interest is treated as a government grant. The benefit of
the below-market rate of interest is measured as the difference between the initial carrying amount of the loan (fair value plus
transaction costs) and the proceeds received, and it is accounted for in accordance with the policies used for the recognition
of government grants.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForGovernmentGrants",
"language": "en",
"entity": "scheme:549300LKT9PW7ZIBDF31",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjhlODFkMTZmNGE0NDRkZjdhYjBlZjJkODE2MjY0ZGUwL3NlYzo4ZTgxZDE2ZjRhNDQ0ZGY3YWIwZWYyZDgxNjI2NGRlMF80ODcvZnJhZzo3Nzg2OWQ1NWVmMDE0OWI5YTdhZmE2YjFiYjBlYWUwYy90ZXh0cmVnaW9uOjc3ODY5ZDU1ZWYwMTQ5YjlhN2FmYTZiMWJiMGVhZTBjXzMwNzg2MzI1NjY3NDQ0_8bcd11e8-72c0-4bcc-b7a6-ddacda409876": {
"value": "
Taxes
Income taxes include all taxes which are based on the taxable profits of the Company. Current and deferred taxes are
recognized as a benefit or expense and are included in the Consolidated Income Statement for the period, except for tax
arising from (i)\u00a0a transaction or event which is recognized, in the same or a different period, either in Other comprehensive
income/(loss) or directly in Equity, or (ii)\u00a0a business combination.
Deferred taxes are accounted for under the full liability method. Deferred tax liabilities are recognized for all taxable
temporary differences between the carrying amounts of assets or liabilities and their tax base, except to the extent that the
deferred tax liabilities arise from the initial recognition of goodwill or the initial recognition of an asset or liability in a
transaction which is not a business combination and at the time of the transaction, affects neither accounting profit nor
taxable profit. Deferred tax assets are recognized for all deductible temporary differences to the extent that it was probable
that taxable profit will be available against which the deductible temporary differences can be utilized, unless the deferred tax
assets arise from the initial recognition of an asset or liability in a transaction that is not a business combination and at the
time of the transaction, affected neither accounting profit nor taxable profit.
Deferred tax assets and liabilities are measured at the substantively enacted tax rates in the respective jurisdictions in
which the Company operates that are expected to apply to the period when the asset is realized or liability is settled.
The Company recognizes deferred tax liabilities associated with the existence of a subsidiary\u2019s undistributed profits
when it is probable that this temporary difference will reverse in the foreseeable future, except when it is able to control the
timing of the reversal of the temporary difference. The Company recognizes deferred tax assets associated with the deductible
temporary differences on investments in subsidiaries only to the extent that it is probable that the temporary differences will
reverse in the foreseeable future and taxable profit will be available against which the temporary difference can be utilized.
Deferred tax assets relating to the carry-forward of unused tax losses and tax credits, as well as those arising from
deductible temporary differences, are recognized to the extent that it is probable that future profits will be available against
which they can be utilized. The Company monitors unrecognized deferred tax assets at each reporting date and recognizes a
previously unrecognized deferred tax asset to the extent that it has become probable that future taxable profit will allow the
deferred tax asset to be recovered. Refer to Use of estimates - Recoverability of deferred tax assets for additional detail.
Current income taxes and deferred taxes are offset when they relate to the same taxation jurisdiction and there is a
legally enforceable right of offset. Other taxes not based on income, such as property taxes and capital taxes, are included
within Cost of revenue, Selling, general and other costs and Research and development costs.
Refer to Note 7, Tax expense/(benefit), for additional information on tax expense and deferred tax assets.
Recoverability of deferred tax assets Deferred tax assets are recognized to the extent that it is probable that sufficient taxable profit will be available to
allow the benefit of part or all of the deferred tax assets to be utilized. The recoverability of deferred tax assets is dependent
on the Company\u2019s ability to generate sufficient future taxable income in the period in which it is assumed that the deductible
temporary differences reverse and tax losses carried forward can be utilized. In making this assessment, the Company
considers future taxable income arising based on the most recent business plan. Moreover, the Company estimates the impact
of the reversal of taxable temporary differences on earnings and it also considers the period over which these deferred tax
assets could be recovered. The estimates and assumptions used in the assessment are subject to uncertainty especially related
to the Company\u2019s future performance as compared to the business plan. Therefore, changes in current estimates due to
unanticipated events could have a significant impact on the Consolidated Financial Statements. Refer to Note 7, Tax expense/
(benefit) for additional detail.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForDeferredIncomeTaxExplanatory",
"language": "en",
"entity": "scheme:549300LKT9PW7ZIBDF31",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjhlODFkMTZmNGE0NDRkZjdhYjBlZjJkODE2MjY0ZGUwL3NlYzo4ZTgxZDE2ZjRhNDQ0ZGY3YWIwZWYyZDgxNjI2NGRlMF80ODcvZnJhZzo3Nzg2OWQ1NWVmMDE0OWI5YTdhZmE2YjFiYjBlYWUwYy90ZXh0cmVnaW9uOjc3ODY5ZDU1ZWYwMTQ5YjlhN2FmYTZiMWJiMGVhZTBjXzMwNzg2MzI1NjY3NDQ0_8d77bbe8-574a-4da0-b89d-54a9e991b9fe": {
"value": "
Taxes
Income taxes include all taxes which are based on the taxable profits of the Company. Current and deferred taxes are
recognized as a benefit or expense and are included in the Consolidated Income Statement for the period, except for tax
arising from (i)\u00a0a transaction or event which is recognized, in the same or a different period, either in Other comprehensive
income/(loss) or directly in Equity, or (ii)\u00a0a business combination.
Deferred taxes are accounted for under the full liability method. Deferred tax liabilities are recognized for all taxable
temporary differences between the carrying amounts of assets or liabilities and their tax base, except to the extent that the
deferred tax liabilities arise from the initial recognition of goodwill or the initial recognition of an asset or liability in a
transaction which is not a business combination and at the time of the transaction, affects neither accounting profit nor
taxable profit. Deferred tax assets are recognized for all deductible temporary differences to the extent that it was probable
that taxable profit will be available against which the deductible temporary differences can be utilized, unless the deferred tax
assets arise from the initial recognition of an asset or liability in a transaction that is not a business combination and at the
time of the transaction, affected neither accounting profit nor taxable profit.
Deferred tax assets and liabilities are measured at the substantively enacted tax rates in the respective jurisdictions in
which the Company operates that are expected to apply to the period when the asset is realized or liability is settled.
The Company recognizes deferred tax liabilities associated with the existence of a subsidiary\u2019s undistributed profits
when it is probable that this temporary difference will reverse in the foreseeable future, except when it is able to control the
timing of the reversal of the temporary difference. The Company recognizes deferred tax assets associated with the deductible
temporary differences on investments in subsidiaries only to the extent that it is probable that the temporary differences will
reverse in the foreseeable future and taxable profit will be available against which the temporary difference can be utilized.
Deferred tax assets relating to the carry-forward of unused tax losses and tax credits, as well as those arising from
deductible temporary differences, are recognized to the extent that it is probable that future profits will be available against
which they can be utilized. The Company monitors unrecognized deferred tax assets at each reporting date and recognizes a
previously unrecognized deferred tax asset to the extent that it has become probable that future taxable profit will allow the
deferred tax asset to be recovered. Refer to Use of estimates - Recoverability of deferred tax assets for additional detail.
Current income taxes and deferred taxes are offset when they relate to the same taxation jurisdiction and there is a
legally enforceable right of offset. Other taxes not based on income, such as property taxes and capital taxes, are included
within Cost of revenue, Selling, general and other costs and Research and development costs.
Refer to Note 7, Tax expense/(benefit), for additional information on tax expense and deferred tax assets.
Recoverability of deferred tax assets
Deferred tax assets are recognized to the extent that it is probable that sufficient taxable profit will be available to
allow the benefit of part or all of the deferred tax assets to be utilized. The recoverability of deferred tax assets is dependent
on the Company\u2019s ability to generate sufficient future taxable income in the period in which it is assumed that the deductible
temporary differences reverse and tax losses carried forward can be utilized. In making this assessment, the Company
considers future taxable income arising based on the most recent business plan. Moreover, the Company estimates the impact
of the reversal of taxable temporary differences on earnings and it also considers the period over which these deferred tax
assets could be recovered. The estimates and assumptions used in the assessment are subject to uncertainty especially related
to the Company\u2019s future performance as compared to the business plan. Therefore, changes in current estimates due to
unanticipated events could have a significant impact on the Consolidated Financial Statements. Refer to Note 7, Tax expense/
(benefit) for additional detail.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForIncomeTaxExplanatory",
"language": "en",
"entity": "scheme:549300LKT9PW7ZIBDF31",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjhlODFkMTZmNGE0NDRkZjdhYjBlZjJkODE2MjY0ZGUwL3NlYzo4ZTgxZDE2ZjRhNDQ0ZGY3YWIwZWYyZDgxNjI2NGRlMF80OTAvZnJhZzo2MWU3MDM3NTEyZWY0ZDg5OTlkOWY4OWRhM2M5NGYzZi90ZXh0cmVnaW9uOjYxZTcwMzc1MTJlZjRkODk5OWQ5Zjg5ZGEzYzk0ZjNmXzMwNzg2MzI1NjA2NDY1_1afa6e67-579b-409b-9fd8-154144b78efc": {
"value": "
Use of estimates
The Consolidated Financial Statements are prepared in accordance with IFRS which requires the use of estimates,
judgments and assumptions that affect the carrying amount of assets and liabilities, the disclosure of contingent assets and
liabilities and the amounts of income and expenses recognized. The estimates and associated assumptions are based on
management's best judgment of elements that were known when the financial statements are prepared, on historical
experience and on any other factors that are considered to be relevant.
Estimates and underlying assumptions are reviewed by the Company periodically and when circumstances require.
Actual results could differ from the estimates, which would require adjustment accordingly. The effects of any changes in
estimates are recognized in the Consolidated Income Statement in the period in which the adjustment is made, or in future
periods.
Items requiring estimates for which there is a risk that a material difference could arise in the future in respect of the
carrying amounts of assets and liabilities are discussed below.
Employee Benefits
The Company provides post-employment benefits for certain of its active employees and retirees, which vary
according to the legal, fiscal and economic conditions of each country in which the Company operates and changes
periodically. The plans are classified by the Company on the basis of the type of benefit provided as follows: pension
benefits, health care and life insurance plans and other post-employment benefits.
The Company provides certain post-employment benefits, such as pension or health care benefits, to their employees
under defined contribution plans whereby the Company pays contributions to public or private plans on a legally mandatory,
contractual, or voluntary basis. The Company recognizes the cost for defined contribution plans as incurred and classifies this
by function within Cost of revenues, Selling, general and other costs, and Research and development costs in the
Consolidated Income Statement.
Pension plans
The Company sponsored both non-contributory and contributory defined benefit pension plans primarily in the U.S.,
Canada, the UK and Germany, the majority of which were funded. Non-contributory pension plans cover certain hourly and
salaried employees and the benefits are based on a fixed rate for each year of service. Additionally, contributory benefits are
provided to certain salaried employees under the salaried employees\u2019 retirement plans.
The Company\u2019s defined benefit pension plans are accounted for on an actuarial basis, which requires the use of
estimates and assumptions to determine the net liability or net asset. The Company estimates the present value of the
projected future payments to all participants by taking into consideration parameters of a financial nature such as discount
rates, the rate of salary increases and the likelihood of potential future events estimated by using demographic assumptions,
which may have an effect on the amount and timing of future payments, such as mortality, dismissal and retirement rates,
which are developed to reflect actual and projected plan experience. Mortality rates are developed using Stellantis plan-
specific populations where appropriate as well as recent mortality information published by recognized experts in this field
such as the U.S. Society of Actuaries and the Canadian Institute of Actuaries and other data where appropriate to reflect
actual and projected plan experience. Comparable country specific sources and methods are used for all other countries. The
expected amount and timing of contributions is based on an assessment of minimum funding requirements. From time to
time, contributions are made beyond those that are legally required.
Plan obligations and costs are based on existing retirement plan provisions. Assumptions regarding any potential
future changes to benefit provisions beyond those to which the Company is presently committed are not made. Significant
differences in actual experience or significant changes in the following key assumption may affect the pension obligations
and pension expense:
\u2022Discount rates. The Company\u2019s discount rates are based on yields of high-quality (AA-rated) fixed income
investments for which the timing and amounts of maturities match the timing and amounts of the projected
benefit payments.
The effects of actual results differing from assumptions and of amended assumptions are included in Other
comprehensive income/(loss). The weighted average discount rates used to determine the defined benefit obligation for the
defined benefit plans were 5.14 percent and 2.60 percent at December\u00a031, 2022 and 2021, respectively.
At December\u00a031, 2022, the effect on the defined benefit obligation of an increase in the discount rate, holding all
other assumptions constant, is as follows:
| | | | | | | | | |
| Effect on pension benefit obligation increase/ (decrease) in Net liability | | | | | | | | |
| |
25 basis point decrease in discount rate | | | | | | | | | |
25 basis point increase in discount rate | | | | | | | | | |
Refer to Note 20, Employee benefits liabilities, for additional information on the Company\u2019s OPEB liabilities.
Recoverability of non-current assets with definite useful lives
Non-current assets with definite useful lives include property, plant and equipment, intangible assets and assets held
for sale. Intangible assets with definite useful lives mainly consist of capitalized development expenditures primarily related
to the North America and Enlarged Europe segments. The Company periodically reviews the carrying amount of non-current
assets with definite useful lives when events or circumstances indicate that an asset may be impaired. The Medium-Term
Plan (\u201cMTP\u201d) used to perform the impairment testing covers the period from 2023 to 2025. The recoverability of non-current
assets with definite useful lives is based on the estimated future cash flows, using the Company\u2019s MTP of the Cash
Generating Units (\u201cCGUs\u201d) to which the assets relate to. The lowest level of asset groups that generate largely independent
cash flows is the vehicle platform level, which is considered the CGU for impairment testing. Goodwill is allocated only to
the operating segment. As such, the operating segments are the CGU for impairment testing for Goodwill and Intangible
assets with indefinite useful lives.
The global automotive industry is experiencing significant change due to increased focus on climate change
resulting in evolving regulatory requirements for fuel efficiency, driving electrification as well as changes in fuel efficiency,
greenhouse gas emissions and other tailpipe emissions. This is in addition to technological changes, such as electrification
and autonomous driving. The Company has announced significant investments in electrification and software which are
reflected in the MTP. However, its business plans could change in response to these evolving requirements and technological
changes or in relation to any future business plans or strategies developed as part of partnerships and collaborations. As the
Company continues to assess the potential impacts of these evolving requirements, technological changes or future plans and
strategies, and of operationalizing and implementing the strategic targets set out in the MTP, including reallocation of our
resources, the recoverability of certain of the Company\u2019s assets or CGUs may be impacted in future periods. For example,
product development strategies may be affected by regulatory changes as well as changes in the expected costs of
implementing electrification, including the cost of batteries. As relevant circumstances change, the Company expects to
adjust its product plans which may result in changes to the expected use of certain of the Company\u2019s vehicle platforms and
propulsion systems.
These uncertainties may result in either impairments of, or reductions to the expected useful lives of, platforms and
propulsion systems, or both. Any change in recoverability would be accounted for at the time such change to the business
plan occurs. For the years ended December 31, 2022, 2021 and 2020, the impairment tests performed compared the carrying
amount of the assets included in the respective CGUs to their value-in-use. The value-in-use of the CGUs is determined using
a discounted cash flow methodology based on estimated pre-tax future cash flows attributable to the CGUs and a pre-tax
discount rate reflecting a current market assessment of the time value of money and the risks specific to the CGUs.
During the year ended December 31, 2022, impairment losses of \u20ac237\u00a0million were recognized, mainly related to
Enlarged Europe, primarily in Russia with \u20ac43\u00a0million related to inventories, \u20ac47\u00a0million related to tax assets and \u20ac47\u00a0million
related to other assets.
During the year ended December 31, 2021, impairment losses of \u20ac309\u00a0million were recognized, primarily in relation
to the impairment of certain vehicle platforms in the Enlarged Europe segment. These vehicle platforms were legacy
platforms on which there are a limited number of models. The impairments are generated mainly as a result of the projections
reflected in the MTP used to perform the impairment testing, in which these platforms had reduced volumes and profitability.
The impairment loss of \u20ac309\u00a0million mainly relate to Property, plant and equipment of \u20ac137\u00a0million and \u20ac151\u00a0million of
capitalized development expenditures.
During the year ended December 31, 2020, impairment losses totaling \u20ac202\u00a0million were recognized, mainly related
to \u20ac135\u00a0million impairment of research and development assets in China, India and Asia Pacific, a \u20ac15\u00a0million impairment in
South America CGU and a \u20ac53\u00a0million impairment in Enlarged Europe CGU, in each case due to decreased projections of
volumes and profit, in particular as a result of market disruption caused by the COVID-19 pandemic.
Recoverability of Goodwill and Intangible assets with indefinite useful lives
In accordance with IAS 36 - Impairment of Assets, Goodwill and intangible assets with indefinite useful lives are not
amortized and are tested for impairment annually or more frequently if facts or circumstances indicate that the asset may be
impaired.
Goodwill and intangible assets with indefinite useful lives are allocated to operating segments or to CGUs within the
operating segments. The impairment test is performed by comparing the carrying amount (which mainly comprises property,
plant and equipment, goodwill, brands, capitalized development expenditures, working capital and reserves) and the
recoverable amount of each CGU or group of CGUs to which Goodwill has been allocated. The recoverable amount of a
CGU is the higher of its fair value less costs of disposal and its value-in-use. The balance of Goodwill and intangible assets
with indefinite useful lives recognized by the Company primarily relate to the merger with FCA. Goodwill from the merger
with FCA is allocated to the North America, South America, Maserati, India and Asia Pacific and Enlarged Europe operating
segments. All other Goodwill balances relate primarily to Enlarged Europe, Other activities and to a lesser extent China.
The MTP is used as a basis to perform the Company\u2019s annual impairment test for Goodwill and intangible assets
with indefinite useful lives. The Company\u2019s Goodwill and intangible assets with indefinite useful lives were tested for
impairment on October 1, 2022, which is the new date the Company annually tests goodwill for impairment. In 2021, the
Company performed the test on October 31.
\u2022The estimate of the recoverable amount for purposes of performing the annual impairment test for each of the
operating segments is determined using value-in-use and was based on the following assumptions:
\u25e6The expected future cash flows covering the period from October 1, 2022 through December 31, 2025.
These expected cash flows reflect the current expectations regarding economic conditions and market
trends as well as the Company\u2019s initiatives for the period covered by the projections. These cash flows
relate to the respective CGUs in their current condition when preparing the financial statements and exclude
the estimated cash flows that might arise from restructuring plans or other structural changes. Volumes and
sales mix used for estimating the future cash flow are based on assumptions that are considered reasonable
and sustainable and represent the best estimate of expected conditions regarding market trends and
segment, brand and model share for the respective operating segment over the period considered.
\u25e6The expected future cash flows include a normalized terminal period to estimate the future result beyond
the time period explicitly considered which incorporated a long-term growth rate assumption of 1.4 percent
to 2.5 percent. The growth rate per region is determined by reference to the risk free rate and the rate of
inflation considered in the regional discount rate. The long-term AOI margins are set considering the
Company\u2019s long-term projections for each of the segments.
\u2022The estimated future cash flows are discounted to their present value using a discount rate that reflects current
market assessments of the time value of money and the risks specific to the asset or CGU that are not reflected
in the estimated future cash flows.
\u2022Pre-tax cash flows are discounted using a pre-tax discount rate which reflects the current market assessment of
the time value of money for the period being considered, and the risks specific to those cash flows under
consideration. The pre-tax Weighted Average Cost of Capital (\u201cWACC\u201d) discount rate applied ranged from
14.7 percent to 32.4 percent.
The values estimated as described above are determined to be in excess of the carrying amount for each operating
segment to which Goodwill is allocated. As such, no impairment charges were recognized for Goodwill and Intangible assets
with indefinite useful lives for the year ended December 31, 2022.
No impairment charges were recognized for Goodwill and Intangible assets with indefinite useful lives for the year
ended December 31, 2021.
There were impairment charges resulting from the impairment tests performed for the year ended December 31,
2020, of \u20ac150\u00a0million.
Recoverability of deferred tax assets
Deferred tax assets are recognized to the extent that it is probable that sufficient taxable profit will be available to
allow the benefit of part or all of the deferred tax assets to be utilized. The recoverability of deferred tax assets is dependent
on the Company\u2019s ability to generate sufficient future taxable income in the period in which it is assumed that the deductible
temporary differences reverse and tax losses carried forward can be utilized. In making this assessment, the Company
considers future taxable income arising based on the most recent business plan. Moreover, the Company estimates the impact
of the reversal of taxable temporary differences on earnings and it also considers the period over which these deferred tax
assets could be recovered. The estimates and assumptions used in the assessment are subject to uncertainty especially related
to the Company\u2019s future performance as compared to the business plan. Therefore, changes in current estimates due to
unanticipated events could have a significant impact on the Consolidated Financial Statements. Refer to Note 7, Tax expense/
(benefit) for additional detail.
Sales incentives
The Company records the estimated cost of sales incentive programs offered to dealers and consumers as a reduction
to revenue at the time of sale to the dealer. This estimated cost represents the incentive programs offered to dealers and
consumers, as well as the expected modifications to these programs in order to facilitate sales of the dealer inventory.
Subsequent adjustments to sales incentive programs related to vehicles previously sold to dealers are recognized as an
adjustment to Net revenues in the period the adjustment is determinable.
The Company uses price discounts to adjust vehicle pricing in response to a number of market and product factors,
including pricing actions and incentives offered by competitors, economic conditions, the amount of excess industry
production capacity, the intensity of market competition, consumer demand for the product and the desire to support
promotional campaigns. The Company may offer a variety of sales incentive programs at any given point in time, including
cash offers to dealers and consumers and subvention programs offered to customers, or lease subsidies, which reduce the
retail customer\u2019s monthly lease payment or cash due at the inception of the financing arrangement, or both. Sales incentive
programs are generally brand, model and region specific for a defined period of time.
Multiple factors are used in estimating the future incentive expense by vehicle line, including the current incentive
programs in the market, planned promotional programs and the normal incentive escalation incurred as the model year ages.
The estimated incentive rates are reviewed monthly and changes to planned rates are adjusted accordingly, thereby impacting
revenues. As there are a multitude of inputs affecting the calculation of the estimate for sales incentives, an increase or
decrease of any of these variables could have a significant effect on Net revenues.
Product warranties, recall campaigns and product liabilities
The Company establishes reserves for product warranties at the time the related sale is recognized. The Company
issues various types of product warranties under which the performance of products delivered is generally guaranteed for a
certain period or term. The accrual for product warranties includes the expected costs of warranty obligations imposed by law
or contract, as well as the expected costs for policy coverage, recall actions and buyback commitments. The estimated future
costs of these actions are principally based on assumptions regarding the lifetime warranty costs of each vehicle line and each
model year of that vehicle line, as well as historical claims experience for the Company\u2019s vehicles. In addition, the number
and magnitude of additional service actions expected to be approved and policies related to additional service actions are
taken into consideration. Due to the uncertainty and potential volatility of these estimated factors, changes in the assumptions
used could materially affect the results of operations.
The Company periodically initiates voluntary service and recall actions to address various customer satisfaction as
well as safety and emissions issues related to vehicles sold. Included in the reserve is the estimated cost of these service and
recall actions. The Company accrues estimated costs for recalls when they are probable of occurring and a reliable estimate of
the costs can be made.
Estimates of the future costs of these actions are subject to numerous uncertainties, including the enactment of new
laws and regulations, the number of vehicles affected by a service or recall action and the nature of the corrective action. It is
reasonably possible that the ultimate cost of these service and recall actions may require the Company to make expenditures
in excess of (or less than) established reserves over an extended period of time and in a range of amounts that cannot be
reasonably estimated. The estimate of warranty and additional service and recall action obligations is periodically reviewed
during the year. Experience has shown that initial data for any given model year can be volatile; therefore, the Company\u2019s
process relies upon long-term historical averages until sufficient data is available. As actual experience becomes available, it
is used to modify the historical averages to ensure that the forecast is within the range of likely outcomes. Resulting accruals
are then compared with current spending rates to ensure that the balances are adequate to meet expected future obligations.
In addition, the Company makes provisions for estimated product liability costs arising from property damage and
personal injuries including wrongful death, and potential exemplary or punitive damages alleged to be the result of product
defects. By nature, these costs can be infrequent, difficult to predict and have the potential to vary significantly in amount.
The valuation of the reserve is actuarially determined on an annual basis based on, among other factors, the number of
vehicles sold and product liability claims incurred. Costs associated with these provisions are recorded in the Consolidated
Income Statement and any subsequent adjustments are recorded in the period in which the adjustment is determined.
Litigation
Various legal proceedings, claims and governmental investigations are pending against the Company on a wide
range of topics, including vehicle safety, emissions and fuel economy, competition, tax and securities matters, alleged
violations of law, labor, dealer, supplier and other contractual relationships, intellectual property rights, product warranties
and environmental matters. Some of these proceedings allege defects in specific component parts or systems (including
airbags, seats, seat belts, brakes, ball joints, transmissions, engines and fuel systems), in various vehicle models or allege
general design defects relating to vehicle handling and stability, sudden unintended movement or crashworthiness. These
proceedings seek recovery for damage to property, personal injuries or wrongful death and in some cases include a claim for
exemplary or punitive damages. Adverse decisions in one or more of these proceedings could require the Company to pay
substantial damages, or undertake service actions, recall campaigns or other costly actions.
Litigation is subject to many uncertainties, and the outcome of individual matters is not predictable with assurance.
Moreover, the cases and claims against the Company are often derived from complex legal issues that are subject to differing
degrees of uncertainty, including the facts and circumstances of each particular case, the manner in which the applicable law
is likely to be interpreted and applied and the jurisdiction and the different laws involved. A provision is established in
connection with pending or threatened litigation if it is probable there would be an outflow of funds and when the amount can
be reasonably estimated. If an outflow of funds becomes probable, but the amount cannot be estimated, the matter is
disclosed in the notes to the Consolidated Financial Statements. Since these provisions represent estimates, the resolution of
some of these matters could require the Company to make payments in excess of the amounts accrued or may require the
Company to make payments in an amount or range of amounts that could not be reasonably estimated.
The Company monitors the status of pending legal proceedings and consults with experts on legal and tax matters on
a regular basis. As such, the provisions for the Company\u2019s legal proceedings and litigation may vary as a result of future
developments in pending matters.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfAccountingJudgementsAndEstimatesExplanatory",
"language": "en",
"entity": "scheme:549300LKT9PW7ZIBDF31",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjhlODFkMTZmNGE0NDRkZjdhYjBlZjJkODE2MjY0ZGUwL3NlYzo4ZTgxZDE2ZjRhNDQ0ZGY3YWIwZWYyZDgxNjI2NGRlMF80OTAvZnJhZzo2MWU3MDM3NTEyZWY0ZDg5OTlkOWY4OWRhM2M5NGYzZi90ZXh0cmVnaW9uOjYxZTcwMzc1MTJlZjRkODk5OWQ5Zjg5ZGEzYzk0ZjNmXzMwNzg2MzI1NjA2NDY1_5dc0f8d0-ed71-45eb-b2c2-91204304f4c2": {
"value": "Use of estimates The Consolidated Financial Statements are prepared in accordance with IFRS which requires the use of estimates, judgments and assumptions that affect the carrying amount of assets and liabilities, the disclosure of contingent assets and liabilities and the amounts of income and expenses recognized. The estimates and associated assumptions are based on management's best judgment of elements that were known when the financial statements are prepared, on historical experience and on any other factors that are considered to be relevant. Estimates and underlying assumptions are reviewed by the Company periodically and when circumstances require. Actual results could differ from the estimates, which would require adjustment accordingly. The effects of any changes in estimates are recognized in the Consolidated Income Statement in the period in which the adjustment is made, or in future periods.Items requiring estimates for which there is a risk that a material difference could arise in the future in respect of the carrying amounts of assets and liabilities are discussed below. Employee BenefitsThe Company provides post-employment benefits for certain of its active employees and retirees, which vary according to the legal, fiscal and economic conditions of each country in which the Company operates and changes periodically. The plans are classified by the Company on the basis of the type of benefit provided as follows: pension benefits, health care and life insurance plans and other post-employment benefits. The Company provides certain post-employment benefits, such as pension or health care benefits, to their employees under defined contribution plans whereby the Company pays contributions to public or private plans on a legally mandatory, contractual, or voluntary basis. The Company recognizes the cost for defined contribution plans as incurred and classifies this by function within Cost of revenues, Selling, general and other costs, and Research and development costs in the Consolidated Income Statement.Pension plans The Company sponsored both non-contributory and contributory defined benefit pension plans primarily in the U.S., Canada, the UK and Germany, the majority of which were funded. Non-contributory pension plans cover certain hourly and salaried employees and the benefits are based on a fixed rate for each year of service. Additionally, contributory benefits are provided to certain salaried employees under the salaried employees\u2019 retirement plans. The Company\u2019s defined benefit pension plans are accounted for on an actuarial basis, which requires the use of estimates and assumptions to determine the net liability or net asset. The Company estimates the present value of the projected future payments to all participants by taking into consideration parameters of a financial nature such as discount rates, the rate of salary increases and the likelihood of potential future events estimated by using demographic assumptions, which may have an effect on the amount and timing of future payments, such as mortality, dismissal and retirement rates, which are developed to reflect actual and projected plan experience. Mortality rates are developed using Stellantis plan-specific populations where appropriate as well as recent mortality information published by recognized experts in this field such as the U.S. Society of Actuaries and the Canadian Institute of Actuaries and other data where appropriate to reflect actual and projected plan experience. Comparable country specific sources and methods are used for all other countries. The expected amount and timing of contributions is based on an assessment of minimum funding requirements. From time to time, contributions are made beyond those that are legally required.Plan obligations and costs are based on existing retirement plan provisions. Assumptions regarding any potential future changes to benefit provisions beyond those to which the Company is presently committed are not made. Significant differences in actual experience or significant changes in the following key assumption may affect the pension obligations and pension expense:\u2022Discount rates. The Company\u2019s discount rates are based on yields of high-quality (AA-rated) fixed income investments for which the timing and amounts of maturities match the timing and amounts of the projected benefit payments. The effects of actual results differing from assumptions and of amended assumptions are included in Other comprehensive income/(loss). The weighted average discount rates used to determine the defined benefit obligation for the defined benefit plans were 5.14 percent and 2.60 percent at December\u00a031, 2022 and 2021, respectively. At December\u00a031, 2022, the effect on the defined benefit obligation of an increase in the discount rate, holding all other assumptions constant, is as follows:Effect on pension benefitobligation increase/(decrease) in Net liabilityGermany and FranceUKUS and CanadaOther(\u20ac million)25 basis point decrease in discount rate6099651455725 basis point increase in discount rate(580)(91)(48)(435)(6)Refer to Note 20, Employee benefits liabilities, for additional information on the Company\u2019s pension plans. Other post-employment benefitsThe Company provides health care, legal, severance, indemnity life insurance benefits and other post-retirement benefits to certain hourly and salaried employees. Upon retirement, these employees may become eligible for a continuation of certain benefits. Benefits and eligibility rules may be modified periodically. These other post-employment benefits (\u201cOPEB\u201d) are accounted for on an actuarial basis, which requires the selection of various assumptions. The estimation of the Company\u2019s obligations, costs and liabilities associated with OPEB requires the use of estimates of the present value of the projected future payments to all participants, taking into consideration the likelihood of potential future events estimated by using demographic assumptions, which may have an effect on the amount and timing of future payments, such as mortality, dismissal and retirement rates, which are developed to reflect actual and projected plan experience, as well as legal requirements for retirement in respective countries. Mortality rates are developed using plan-specific populations, recent mortality information published by recognized experts in this field and other data where appropriate to reflect actual and projected plan experience.Plan obligations and costs are based on existing plan provisions. Assumptions regarding any potential future changes to benefit provisions beyond those to which the Company are presently committed are not made. Significant differences in actual experience or significant changes in the following key assumptions may affect the OPEB obligation and expense:\u2022Discount rates. Stellantis\u2019 discount rates are based on yields of high-quality (AA-rated) fixed income investments for which the timing and amounts of maturities matched the timing and amounts of the projected benefit payments. \u2022Health care cost trends. The Company\u2019s health care cost trend assumptions are developed based on historical cost data, the near-term outlook and an assessment of likely long-term trends. At December\u00a031, 2022, the effect of a decrease or increase in the key assumptions affecting the health care and life insurance plans, holding all other assumptions constant, is shown below: Effect\u00a0on\u00a0health care, life insurance and OPEB obligation(\u20ac million)25 basis point decrease in discount rate7025 basis point increase in discount rate(67)100 basis point decrease in health care cost trend rate(18)100 basis point increase in health care cost trend rate20Refer to Note 20, Employee benefits liabilities, for additional information on the Company\u2019s OPEB liabilities. Recoverability of non-current assets with definite useful livesNon-current assets with definite useful lives include property, plant and equipment, intangible assets and assets held for sale. Intangible assets with definite useful lives mainly consist of capitalized development expenditures primarily related to the North America and Enlarged Europe segments. The Company periodically reviews the carrying amount of non-current assets with definite useful lives when events or circumstances indicate that an asset may be impaired. The Medium-Term Plan (\u201cMTP\u201d) used to perform the impairment testing covers the period from 2023 to 2025. The recoverability of non-current assets with definite useful lives is based on the estimated future cash flows, using the Company\u2019s MTP of the Cash Generating Units (\u201cCGUs\u201d) to which the assets relate to. The lowest level of asset groups that generate largely independent cash flows is the vehicle platform level, which is considered the CGU for impairment testing. Goodwill is allocated only to the operating segment. As such, the operating segments are the CGU for impairment testing for Goodwill and Intangible assets with indefinite useful lives. The global automotive industry is experiencing significant change due to increased focus on climate change resulting in evolving regulatory requirements for fuel efficiency, driving electrification as well as changes in fuel efficiency, greenhouse gas emissions and other tailpipe emissions. This is in addition to technological changes, such as electrification and autonomous driving. The Company has announced significant investments in electrification and software which are reflected in the MTP. However, its business plans could change in response to these evolving requirements and technological changes or in relation to any future business plans or strategies developed as part of partnerships and collaborations. As the Company continues to assess the potential impacts of these evolving requirements, technological changes or future plans and strategies, and of operationalizing and implementing the strategic targets set out in the MTP, including reallocation of our resources, the recoverability of certain of the Company\u2019s assets or CGUs may be impacted in future periods. For example, product development strategies may be affected by regulatory changes as well as changes in the expected costs of implementing electrification, including the cost of batteries. As relevant circumstances change, the Company expects to adjust its product plans which may result in changes to the expected use of certain of the Company\u2019s vehicle platforms and propulsion systems. These uncertainties may result in either impairments of, or reductions to the expected useful lives of, platforms and propulsion systems, or both. Any change in recoverability would be accounted for at the time such change to the business plan occurs. For the years ended December 31, 2022, 2021 and 2020, the impairment tests performed compared the carrying amount of the assets included in the respective CGUs to their value-in-use. The value-in-use of the CGUs is determined using a discounted cash flow methodology based on estimated pre-tax future cash flows attributable to the CGUs and a pre-tax discount rate reflecting a current market assessment of the time value of money and the risks specific to the CGUs.During the year ended December 31, 2022, impairment losses of \u20ac237\u00a0million were recognized, mainly related to Enlarged Europe, primarily in Russia with \u20ac43\u00a0million related to inventories, \u20ac47\u00a0million related to tax assets and \u20ac47\u00a0million related to other assets.During the year ended December 31, 2021, impairment losses of \u20ac309\u00a0million were recognized, primarily in relation to the impairment of certain vehicle platforms in the Enlarged Europe segment. These vehicle platforms were legacy platforms on which there are a limited number of models. The impairments are generated mainly as a result of the projections reflected in the MTP used to perform the impairment testing, in which these platforms had reduced volumes and profitability. The impairment loss of \u20ac309\u00a0million mainly relate to Property, plant and equipment of \u20ac137\u00a0million and \u20ac151\u00a0million of capitalized development expenditures.During the year ended December 31, 2020, impairment losses totaling \u20ac202\u00a0million were recognized, mainly related to \u20ac135\u00a0million impairment of research and development assets in China, India and Asia Pacific, a \u20ac15\u00a0million impairment in South America CGU and a \u20ac53\u00a0million impairment in Enlarged Europe CGU, in each case due to decreased projections of volumes and profit, in particular as a result of market disruption caused by the COVID-19 pandemic.Recoverability of Goodwill and Intangible assets with indefinite useful lives In accordance with IAS 36 - Impairment of Assets, Goodwill and intangible assets with indefinite useful lives are not amortized and are tested for impairment annually or more frequently if facts or circumstances indicate that the asset may be impaired. Goodwill and intangible assets with indefinite useful lives are allocated to operating segments or to CGUs within the operating segments. The impairment test is performed by comparing the carrying amount (which mainly comprises property, plant and equipment, goodwill, brands, capitalized development expenditures, working capital and reserves) and the recoverable amount of each CGU or group of CGUs to which Goodwill has been allocated. The recoverable amount of a CGU is the higher of its fair value less costs of disposal and its value-in-use. The balance of Goodwill and intangible assets with indefinite useful lives recognized by the Company primarily relate to the merger with FCA. Goodwill from the merger with FCA is allocated to the North America, South America, Maserati, India and Asia Pacific and Enlarged Europe operating segments. All other Goodwill balances relate primarily to Enlarged Europe, Other activities and to a lesser extent China.The MTP is used as a basis to perform the Company\u2019s annual impairment test for Goodwill and intangible assets with indefinite useful lives. The Company\u2019s Goodwill and intangible assets with indefinite useful lives were tested for impairment on October 1, 2022, which is the new date the Company annually tests goodwill for impairment. In 2021, the Company performed the test on October 31. \u2022The estimate of the recoverable amount for purposes of performing the annual impairment test for each of the operating segments is determined using value-in-use and was based on the following assumptions:\u25e6The expected future cash flows covering the period from October 1, 2022 through December 31, 2025. These expected cash flows reflect the current expectations regarding economic conditions and market trends as well as the Company\u2019s initiatives for the period covered by the projections. These cash flows relate to the respective CGUs in their current condition when preparing the financial statements and exclude the estimated cash flows that might arise from restructuring plans or other structural changes. Volumes and sales mix used for estimating the future cash flow are based on assumptions that are considered reasonable and sustainable and represent the best estimate of expected conditions regarding market trends and segment, brand and model share for the respective operating segment over the period considered. \u25e6The expected future cash flows include a normalized terminal period to estimate the future result beyond the time period explicitly considered which incorporated a long-term growth rate assumption of 1.4 percent to 2.5 percent. The growth rate per region is determined by reference to the risk free rate and the rate of inflation considered in the regional discount rate. The long-term AOI margins are set considering the Company\u2019s long-term projections for each of the segments. \u2022The estimated future cash flows are discounted to their present value using a discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU that are not reflected in the estimated future cash flows.\u2022Pre-tax cash flows are discounted using a pre-tax discount rate which reflects the current market assessment of the time value of money for the period being considered, and the risks specific to those cash flows under consideration. The pre-tax Weighted Average Cost of Capital (\u201cWACC\u201d) discount rate applied ranged from 14.7 percent to 32.4 percent.The values estimated as described above are determined to be in excess of the carrying amount for each operating segment to which Goodwill is allocated. As such, no impairment charges were recognized for Goodwill and Intangible assets with indefinite useful lives for the year ended December 31, 2022.No impairment charges were recognized for Goodwill and Intangible assets with indefinite useful lives for the year ended December 31, 2021.There were impairment charges resulting from the impairment tests performed for the year ended December 31, 2020, of \u20ac150\u00a0million. Recoverability of deferred tax assets Deferred tax assets are recognized to the extent that it is probable that sufficient taxable profit will be available to allow the benefit of part or all of the deferred tax assets to be utilized. The recoverability of deferred tax assets is dependent on the Company\u2019s ability to generate sufficient future taxable income in the period in which it is assumed that the deductible temporary differences reverse and tax losses carried forward can be utilized. In making this assessment, the Company considers future taxable income arising based on the most recent business plan. Moreover, the Company estimates the impact of the reversal of taxable temporary differences on earnings and it also considers the period over which these deferred tax assets could be recovered. The estimates and assumptions used in the assessment are subject to uncertainty especially related to the Company\u2019s future performance as compared to the business plan. Therefore, changes in current estimates due to unanticipated events could have a significant impact on the Consolidated Financial Statements. Refer to Note 7, Tax expense/(benefit) for additional detail.Sales incentives The Company records the estimated cost of sales incentive programs offered to dealers and consumers as a reduction to revenue at the time of sale to the dealer. This estimated cost represents the incentive programs offered to dealers and consumers, as well as the expected modifications to these programs in order to facilitate sales of the dealer inventory. Subsequent adjustments to sales incentive programs related to vehicles previously sold to dealers are recognized as an adjustment to Net revenues in the period the adjustment is determinable. The Company uses price discounts to adjust vehicle pricing in response to a number of market and product factors, including pricing actions and incentives offered by competitors, economic conditions, the amount of excess industry production capacity, the intensity of market competition, consumer demand for the product and the desire to support promotional campaigns. The Company may offer a variety of sales incentive programs at any given point in time, including cash offers to dealers and consumers and subvention programs offered to customers, or lease subsidies, which reduce the retail customer\u2019s monthly lease payment or cash due at the inception of the financing arrangement, or both. Sales incentive programs are generally brand, model and region specific for a defined period of time. Multiple factors are used in estimating the future incentive expense by vehicle line, including the current incentive programs in the market, planned promotional programs and the normal incentive escalation incurred as the model year ages. The estimated incentive rates are reviewed monthly and changes to planned rates are adjusted accordingly, thereby impacting revenues. As there are a multitude of inputs affecting the calculation of the estimate for sales incentives, an increase or decrease of any of these variables could have a significant effect on Net revenues.Product warranties, recall campaigns and product liabilitiesThe Company establishes reserves for product warranties at the time the related sale is recognized. The Company issues various types of product warranties under which the performance of products delivered is generally guaranteed for a certain period or term. The accrual for product warranties includes the expected costs of warranty obligations imposed by law or contract, as well as the expected costs for policy coverage, recall actions and buyback commitments. The estimated future costs of these actions are principally based on assumptions regarding the lifetime warranty costs of each vehicle line and each model year of that vehicle line, as well as historical claims experience for the Company\u2019s vehicles. In addition, the number and magnitude of additional service actions expected to be approved and policies related to additional service actions are taken into consideration. Due to the uncertainty and potential volatility of these estimated factors, changes in the assumptions used could materially affect the results of operations. The Company periodically initiates voluntary service and recall actions to address various customer satisfaction as well as safety and emissions issues related to vehicles sold. Included in the reserve is the estimated cost of these service and recall actions. The Company accrues estimated costs for recalls when they are probable of occurring and a reliable estimate of the costs can be made.Estimates of the future costs of these actions are subject to numerous uncertainties, including the enactment of new laws and regulations, the number of vehicles affected by a service or recall action and the nature of the corrective action. It is reasonably possible that the ultimate cost of these service and recall actions may require the Company to make expenditures in excess of (or less than) established reserves over an extended period of time and in a range of amounts that cannot be reasonably estimated. The estimate of warranty and additional service and recall action obligations is periodically reviewed during the year. Experience has shown that initial data for any given model year can be volatile; therefore, the Company\u2019s process relies upon long-term historical averages until sufficient data is available. As actual experience becomes available, it is used to modify the historical averages to ensure that the forecast is within the range of likely outcomes. Resulting accruals are then compared with current spending rates to ensure that the balances are adequate to meet expected future obligations. In addition, the Company makes provisions for estimated product liability costs arising from property damage and personal injuries including wrongful death, and potential exemplary or punitive damages alleged to be the result of product defects. By nature, these costs can be infrequent, difficult to predict and have the potential to vary significantly in amount. The valuation of the reserve is actuarially determined on an annual basis based on, among other factors, the number of vehicles sold and product liability claims incurred. Costs associated with these provisions are recorded in the Consolidated Income Statement and any subsequent adjustments are recorded in the period in which the adjustment is determined. Litigation Various legal proceedings, claims and governmental investigations are pending against the Company on a wide range of topics, including vehicle safety, emissions and fuel economy, competition, tax and securities matters, alleged violations of law, labor, dealer, supplier and other contractual relationships, intellectual property rights, product warranties and environmental matters. Some of these proceedings allege defects in specific component parts or systems (including airbags, seats, seat belts, brakes, ball joints, transmissions, engines and fuel systems), in various vehicle models or allege general design defects relating to vehicle handling and stability, sudden unintended movement or crashworthiness. These proceedings seek recovery for damage to property, personal injuries or wrongful death and in some cases include a claim for exemplary or punitive damages. Adverse decisions in one or more of these proceedings could require the Company to pay substantial damages, or undertake service actions, recall campaigns or other costly actions. Litigation is subject to many uncertainties, and the outcome of individual matters is not predictable with assurance. Moreover, the cases and claims against the Company are often derived from complex legal issues that are subject to differing degrees of uncertainty, including the facts and circumstances of each particular case, the manner in which the applicable law is likely to be interpreted and applied and the jurisdiction and the different laws involved. A provision is established in connection with pending or threatened litigation if it is probable there would be an outflow of funds and when the amount can be reasonably estimated. If an outflow of funds becomes probable, but the amount cannot be estimated, the matter is disclosed in the notes to the Consolidated Financial Statements. Since these provisions represent estimates, the resolution of some of these matters could require the Company to make payments in excess of the amounts accrued or may require the Company to make payments in an amount or range of amounts that could not be reasonably estimated. The Company monitors the status of pending legal proceedings and consults with experts on legal and tax matters on a regular basis. As such, the provisions for the Company\u2019s legal proceedings and litigation may vary as a result of future developments in pending matters.",
"dimensions": {
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"value": "
Use of estimates
The Consolidated Financial Statements are prepared in accordance with IFRS which requires the use of estimates,
judgments and assumptions that affect the carrying amount of assets and liabilities, the disclosure of contingent assets and
liabilities and the amounts of income and expenses recognized. The estimates and associated assumptions are based on
management's best judgment of elements that were known when the financial statements are prepared, on historical
experience and on any other factors that are considered to be relevant.
Estimates and underlying assumptions are reviewed by the Company periodically and when circumstances require.
Actual results could differ from the estimates, which would require adjustment accordingly. The effects of any changes in
estimates are recognized in the Consolidated Income Statement in the period in which the adjustment is made, or in future
periods.
Items requiring estimates for which there is a risk that a material difference could arise in the future in respect of the
carrying amounts of assets and liabilities are discussed below.
Employee Benefits
The Company provides post-employment benefits for certain of its active employees and retirees, which vary
according to the legal, fiscal and economic conditions of each country in which the Company operates and changes
periodically. The plans are classified by the Company on the basis of the type of benefit provided as follows: pension
benefits, health care and life insurance plans and other post-employment benefits.
The Company provides certain post-employment benefits, such as pension or health care benefits, to their employees
under defined contribution plans whereby the Company pays contributions to public or private plans on a legally mandatory,
contractual, or voluntary basis. The Company recognizes the cost for defined contribution plans as incurred and classifies this
by function within Cost of revenues, Selling, general and other costs, and Research and development costs in the
Consolidated Income Statement.
Pension plans
The Company sponsored both non-contributory and contributory defined benefit pension plans primarily in the U.S.,
Canada, the UK and Germany, the majority of which were funded. Non-contributory pension plans cover certain hourly and
salaried employees and the benefits are based on a fixed rate for each year of service. Additionally, contributory benefits are
provided to certain salaried employees under the salaried employees\u2019 retirement plans.
The Company\u2019s defined benefit pension plans are accounted for on an actuarial basis, which requires the use of
estimates and assumptions to determine the net liability or net asset. The Company estimates the present value of the
projected future payments to all participants by taking into consideration parameters of a financial nature such as discount
rates, the rate of salary increases and the likelihood of potential future events estimated by using demographic assumptions,
which may have an effect on the amount and timing of future payments, such as mortality, dismissal and retirement rates,
which are developed to reflect actual and projected plan experience. Mortality rates are developed using Stellantis plan-
specific populations where appropriate as well as recent mortality information published by recognized experts in this field
such as the U.S. Society of Actuaries and the Canadian Institute of Actuaries and other data where appropriate to reflect
actual and projected plan experience. Comparable country specific sources and methods are used for all other countries. The
expected amount and timing of contributions is based on an assessment of minimum funding requirements. From time to
time, contributions are made beyond those that are legally required.
Plan obligations and costs are based on existing retirement plan provisions. Assumptions regarding any potential
future changes to benefit provisions beyond those to which the Company is presently committed are not made. Significant
differences in actual experience or significant changes in the following key assumption may affect the pension obligations
and pension expense:
\u2022Discount rates. The Company\u2019s discount rates are based on yields of high-quality (AA-rated) fixed income
investments for which the timing and amounts of maturities match the timing and amounts of the projected
benefit payments.
The effects of actual results differing from assumptions and of amended assumptions are included in Other
comprehensive income/(loss). The weighted average discount rates used to determine the defined benefit obligation for the
defined benefit plans were 5.14 percent and 2.60 percent at December\u00a031, 2022 and 2021, respectively.
At December\u00a031, 2022, the effect on the defined benefit obligation of an increase in the discount rate, holding all
other assumptions constant, is as follows:
| | | | | | | | | |
| Effect on pension benefit obligation increase/ (decrease) in Net liability | | | | | | | | |
| |
25 basis point decrease in discount rate | | | | | | | | | |
25 basis point increase in discount rate | | | | | | | | | |
Refer to Note 20, Employee benefits liabilities, for additional information on the Company\u2019s OPEB liabilities.
Recoverability of non-current assets with definite useful lives
Non-current assets with definite useful lives include property, plant and equipment, intangible assets and assets held
for sale. Intangible assets with definite useful lives mainly consist of capitalized development expenditures primarily related
to the North America and Enlarged Europe segments. The Company periodically reviews the carrying amount of non-current
assets with definite useful lives when events or circumstances indicate that an asset may be impaired. The Medium-Term
Plan (\u201cMTP\u201d) used to perform the impairment testing covers the period from 2023 to 2025. The recoverability of non-current
assets with definite useful lives is based on the estimated future cash flows, using the Company\u2019s MTP of the Cash
Generating Units (\u201cCGUs\u201d) to which the assets relate to. The lowest level of asset groups that generate largely independent
cash flows is the vehicle platform level, which is considered the CGU for impairment testing. Goodwill is allocated only to
the operating segment. As such, the operating segments are the CGU for impairment testing for Goodwill and Intangible
assets with indefinite useful lives.
The global automotive industry is experiencing significant change due to increased focus on climate change
resulting in evolving regulatory requirements for fuel efficiency, driving electrification as well as changes in fuel efficiency,
greenhouse gas emissions and other tailpipe emissions. This is in addition to technological changes, such as electrification
and autonomous driving. The Company has announced significant investments in electrification and software which are
reflected in the MTP. However, its business plans could change in response to these evolving requirements and technological
changes or in relation to any future business plans or strategies developed as part of partnerships and collaborations. As the
Company continues to assess the potential impacts of these evolving requirements, technological changes or future plans and
strategies, and of operationalizing and implementing the strategic targets set out in the MTP, including reallocation of our
resources, the recoverability of certain of the Company\u2019s assets or CGUs may be impacted in future periods. For example,
product development strategies may be affected by regulatory changes as well as changes in the expected costs of
implementing electrification, including the cost of batteries. As relevant circumstances change, the Company expects to
adjust its product plans which may result in changes to the expected use of certain of the Company\u2019s vehicle platforms and
propulsion systems.
These uncertainties may result in either impairments of, or reductions to the expected useful lives of, platforms and
propulsion systems, or both. Any change in recoverability would be accounted for at the time such change to the business
plan occurs. For the years ended December 31, 2022, 2021 and 2020, the impairment tests performed compared the carrying
amount of the assets included in the respective CGUs to their value-in-use. The value-in-use of the CGUs is determined using
a discounted cash flow methodology based on estimated pre-tax future cash flows attributable to the CGUs and a pre-tax
discount rate reflecting a current market assessment of the time value of money and the risks specific to the CGUs.
During the year ended December 31, 2022, impairment losses of \u20ac237\u00a0million were recognized, mainly related to
Enlarged Europe, primarily in Russia with \u20ac43\u00a0million related to inventories, \u20ac47\u00a0million related to tax assets and \u20ac47\u00a0million
related to other assets.
During the year ended December 31, 2021, impairment losses of \u20ac309\u00a0million were recognized, primarily in relation
to the impairment of certain vehicle platforms in the Enlarged Europe segment. These vehicle platforms were legacy
platforms on which there are a limited number of models. The impairments are generated mainly as a result of the projections
reflected in the MTP used to perform the impairment testing, in which these platforms had reduced volumes and profitability.
The impairment loss of \u20ac309\u00a0million mainly relate to Property, plant and equipment of \u20ac137\u00a0million and \u20ac151\u00a0million of
capitalized development expenditures.
During the year ended December 31, 2020, impairment losses totaling \u20ac202\u00a0million were recognized, mainly related
to \u20ac135\u00a0million impairment of research and development assets in China, India and Asia Pacific, a \u20ac15\u00a0million impairment in
South America CGU and a \u20ac53\u00a0million impairment in Enlarged Europe CGU, in each case due to decreased projections of
volumes and profit, in particular as a result of market disruption caused by the COVID-19 pandemic.
Recoverability of Goodwill and Intangible assets with indefinite useful lives
In accordance with IAS 36 - Impairment of Assets, Goodwill and intangible assets with indefinite useful lives are not
amortized and are tested for impairment annually or more frequently if facts or circumstances indicate that the asset may be
impaired.
Goodwill and intangible assets with indefinite useful lives are allocated to operating segments or to CGUs within the
operating segments. The impairment test is performed by comparing the carrying amount (which mainly comprises property,
plant and equipment, goodwill, brands, capitalized development expenditures, working capital and reserves) and the
recoverable amount of each CGU or group of CGUs to which Goodwill has been allocated. The recoverable amount of a
CGU is the higher of its fair value less costs of disposal and its value-in-use. The balance of Goodwill and intangible assets
with indefinite useful lives recognized by the Company primarily relate to the merger with FCA. Goodwill from the merger
with FCA is allocated to the North America, South America, Maserati, India and Asia Pacific and Enlarged Europe operating
segments. All other Goodwill balances relate primarily to Enlarged Europe, Other activities and to a lesser extent China.
The MTP is used as a basis to perform the Company\u2019s annual impairment test for Goodwill and intangible assets
with indefinite useful lives. The Company\u2019s Goodwill and intangible assets with indefinite useful lives were tested for
impairment on October 1, 2022, which is the new date the Company annually tests goodwill for impairment. In 2021, the
Company performed the test on October 31.
\u2022The estimate of the recoverable amount for purposes of performing the annual impairment test for each of the
operating segments is determined using value-in-use and was based on the following assumptions:
\u25e6The expected future cash flows covering the period from October 1, 2022 through December 31, 2025.
These expected cash flows reflect the current expectations regarding economic conditions and market
trends as well as the Company\u2019s initiatives for the period covered by the projections. These cash flows
relate to the respective CGUs in their current condition when preparing the financial statements and exclude
the estimated cash flows that might arise from restructuring plans or other structural changes. Volumes and
sales mix used for estimating the future cash flow are based on assumptions that are considered reasonable
and sustainable and represent the best estimate of expected conditions regarding market trends and
segment, brand and model share for the respective operating segment over the period considered.
\u25e6The expected future cash flows include a normalized terminal period to estimate the future result beyond
the time period explicitly considered which incorporated a long-term growth rate assumption of 1.4 percent
to 2.5 percent. The growth rate per region is determined by reference to the risk free rate and the rate of
inflation considered in the regional discount rate. The long-term AOI margins are set considering the
Company\u2019s long-term projections for each of the segments.
\u2022The estimated future cash flows are discounted to their present value using a discount rate that reflects current
market assessments of the time value of money and the risks specific to the asset or CGU that are not reflected
in the estimated future cash flows.
\u2022Pre-tax cash flows are discounted using a pre-tax discount rate which reflects the current market assessment of
the time value of money for the period being considered, and the risks specific to those cash flows under
consideration. The pre-tax Weighted Average Cost of Capital (\u201cWACC\u201d) discount rate applied ranged from
14.7 percent to 32.4 percent.
The values estimated as described above are determined to be in excess of the carrying amount for each operating
segment to which Goodwill is allocated. As such, no impairment charges were recognized for Goodwill and Intangible assets
with indefinite useful lives for the year ended December 31, 2022.
No impairment charges were recognized for Goodwill and Intangible assets with indefinite useful lives for the year
ended December 31, 2021.
There were impairment charges resulting from the impairment tests performed for the year ended December 31,
2020, of \u20ac150\u00a0million.
Recoverability of deferred tax assets
Deferred tax assets are recognized to the extent that it is probable that sufficient taxable profit will be available to
allow the benefit of part or all of the deferred tax assets to be utilized. The recoverability of deferred tax assets is dependent
on the Company\u2019s ability to generate sufficient future taxable income in the period in which it is assumed that the deductible
temporary differences reverse and tax losses carried forward can be utilized. In making this assessment, the Company
considers future taxable income arising based on the most recent business plan. Moreover, the Company estimates the impact
of the reversal of taxable temporary differences on earnings and it also considers the period over which these deferred tax
assets could be recovered. The estimates and assumptions used in the assessment are subject to uncertainty especially related
to the Company\u2019s future performance as compared to the business plan. Therefore, changes in current estimates due to
unanticipated events could have a significant impact on the Consolidated Financial Statements. Refer to Note 7, Tax expense/
(benefit) for additional detail.
Sales incentives
The Company records the estimated cost of sales incentive programs offered to dealers and consumers as a reduction
to revenue at the time of sale to the dealer. This estimated cost represents the incentive programs offered to dealers and
consumers, as well as the expected modifications to these programs in order to facilitate sales of the dealer inventory.
Subsequent adjustments to sales incentive programs related to vehicles previously sold to dealers are recognized as an
adjustment to Net revenues in the period the adjustment is determinable.
The Company uses price discounts to adjust vehicle pricing in response to a number of market and product factors,
including pricing actions and incentives offered by competitors, economic conditions, the amount of excess industry
production capacity, the intensity of market competition, consumer demand for the product and the desire to support
promotional campaigns. The Company may offer a variety of sales incentive programs at any given point in time, including
cash offers to dealers and consumers and subvention programs offered to customers, or lease subsidies, which reduce the
retail customer\u2019s monthly lease payment or cash due at the inception of the financing arrangement, or both. Sales incentive
programs are generally brand, model and region specific for a defined period of time.
Multiple factors are used in estimating the future incentive expense by vehicle line, including the current incentive
programs in the market, planned promotional programs and the normal incentive escalation incurred as the model year ages.
The estimated incentive rates are reviewed monthly and changes to planned rates are adjusted accordingly, thereby impacting
revenues. As there are a multitude of inputs affecting the calculation of the estimate for sales incentives, an increase or
decrease of any of these variables could have a significant effect on Net revenues.
Product warranties, recall campaigns and product liabilities
The Company establishes reserves for product warranties at the time the related sale is recognized. The Company
issues various types of product warranties under which the performance of products delivered is generally guaranteed for a
certain period or term. The accrual for product warranties includes the expected costs of warranty obligations imposed by law
or contract, as well as the expected costs for policy coverage, recall actions and buyback commitments. The estimated future
costs of these actions are principally based on assumptions regarding the lifetime warranty costs of each vehicle line and each
model year of that vehicle line, as well as historical claims experience for the Company\u2019s vehicles. In addition, the number
and magnitude of additional service actions expected to be approved and policies related to additional service actions are
taken into consideration. Due to the uncertainty and potential volatility of these estimated factors, changes in the assumptions
used could materially affect the results of operations.
The Company periodically initiates voluntary service and recall actions to address various customer satisfaction as
well as safety and emissions issues related to vehicles sold. Included in the reserve is the estimated cost of these service and
recall actions. The Company accrues estimated costs for recalls when they are probable of occurring and a reliable estimate of
the costs can be made.
Estimates of the future costs of these actions are subject to numerous uncertainties, including the enactment of new
laws and regulations, the number of vehicles affected by a service or recall action and the nature of the corrective action. It is
reasonably possible that the ultimate cost of these service and recall actions may require the Company to make expenditures
in excess of (or less than) established reserves over an extended period of time and in a range of amounts that cannot be
reasonably estimated. The estimate of warranty and additional service and recall action obligations is periodically reviewed
during the year. Experience has shown that initial data for any given model year can be volatile; therefore, the Company\u2019s
process relies upon long-term historical averages until sufficient data is available. As actual experience becomes available, it
is used to modify the historical averages to ensure that the forecast is within the range of likely outcomes. Resulting accruals
are then compared with current spending rates to ensure that the balances are adequate to meet expected future obligations.
In addition, the Company makes provisions for estimated product liability costs arising from property damage and
personal injuries including wrongful death, and potential exemplary or punitive damages alleged to be the result of product
defects. By nature, these costs can be infrequent, difficult to predict and have the potential to vary significantly in amount.
The valuation of the reserve is actuarially determined on an annual basis based on, among other factors, the number of
vehicles sold and product liability claims incurred. Costs associated with these provisions are recorded in the Consolidated
Income Statement and any subsequent adjustments are recorded in the period in which the adjustment is determined.
Litigation
Various legal proceedings, claims and governmental investigations are pending against the Company on a wide
range of topics, including vehicle safety, emissions and fuel economy, competition, tax and securities matters, alleged
violations of law, labor, dealer, supplier and other contractual relationships, intellectual property rights, product warranties
and environmental matters. Some of these proceedings allege defects in specific component parts or systems (including
airbags, seats, seat belts, brakes, ball joints, transmissions, engines and fuel systems), in various vehicle models or allege
general design defects relating to vehicle handling and stability, sudden unintended movement or crashworthiness. These
proceedings seek recovery for damage to property, personal injuries or wrongful death and in some cases include a claim for
exemplary or punitive damages. Adverse decisions in one or more of these proceedings could require the Company to pay
substantial damages, or undertake service actions, recall campaigns or other costly actions.
Litigation is subject to many uncertainties, and the outcome of individual matters is not predictable with assurance.
Moreover, the cases and claims against the Company are often derived from complex legal issues that are subject to differing
degrees of uncertainty, including the facts and circumstances of each particular case, the manner in which the applicable law
is likely to be interpreted and applied and the jurisdiction and the different laws involved. A provision is established in
connection with pending or threatened litigation if it is probable there would be an outflow of funds and when the amount can
be reasonably estimated. If an outflow of funds becomes probable, but the amount cannot be estimated, the matter is
disclosed in the notes to the Consolidated Financial Statements. Since these provisions represent estimates, the resolution of
some of these matters could require the Company to make payments in excess of the amounts accrued or may require the
Company to make payments in an amount or range of amounts that could not be reasonably estimated.
The Company monitors the status of pending legal proceedings and consults with experts on legal and tax matters on
a regular basis. As such, the provisions for the Company\u2019s legal proceedings and litigation may vary as a result of future
developments in pending matters.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfAssetsAndLiabilitiesWithSignificantRiskOfMaterialAdjustmentExplanatory",
"language": "en",
"entity": "scheme:549300LKT9PW7ZIBDF31",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjhlODFkMTZmNGE0NDRkZjdhYjBlZjJkODE2MjY0ZGUwL3NlYzo4ZTgxZDE2ZjRhNDQ0ZGY3YWIwZWYyZDgxNjI2NGRlMF80OTAvZnJhZzo2MWU3MDM3NTEyZWY0ZDg5OTlkOWY4OWRhM2M5NGYzZi90ZXh0cmVnaW9uOjYxZTcwMzc1MTJlZjRkODk5OWQ5Zjg5ZGEzYzk0ZjNmXzMwNzg2MzI1NjA2NDY4_4cca0dfb-8278-424e-b055-5d839a412d69": {
"value": "
Recoverability of non-current assets with definite useful lives
Non-current assets with definite useful lives include property, plant and equipment, intangible assets and assets held
for sale. Intangible assets with definite useful lives mainly consist of capitalized development expenditures primarily related
to the North America and Enlarged Europe segments. The Company periodically reviews the carrying amount of non-current
assets with definite useful lives when events or circumstances indicate that an asset may be impaired. The Medium-Term
Plan (\u201cMTP\u201d) used to perform the impairment testing covers the period from 2023 to 2025. The recoverability of non-current
assets with definite useful lives is based on the estimated future cash flows, using the Company\u2019s MTP of the Cash
Generating Units (\u201cCGUs\u201d) to which the assets relate to. The lowest level of asset groups that generate largely independent
cash flows is the vehicle platform level, which is considered the CGU for impairment testing. Goodwill is allocated only to
the operating segment. As such, the operating segments are the CGU for impairment testing for Goodwill and Intangible
assets with indefinite useful lives.
The global automotive industry is experiencing significant change due to increased focus on climate change
resulting in evolving regulatory requirements for fuel efficiency, driving electrification as well as changes in fuel efficiency,
greenhouse gas emissions and other tailpipe emissions. This is in addition to technological changes, such as electrification
and autonomous driving. The Company has announced significant investments in electrification and software which are
reflected in the MTP. However, its business plans could change in response to these evolving requirements and technological
changes or in relation to any future business plans or strategies developed as part of partnerships and collaborations. As the
Company continues to assess the potential impacts of these evolving requirements, technological changes or future plans and
strategies, and of operationalizing and implementing the strategic targets set out in the MTP, including reallocation of our
resources, the recoverability of certain of the Company\u2019s assets or CGUs may be impacted in future periods. For example,
product development strategies may be affected by regulatory changes as well as changes in the expected costs of
implementing electrification, including the cost of batteries. As relevant circumstances change, the Company expects to
adjust its product plans which may result in changes to the expected use of certain of the Company\u2019s vehicle platforms and
propulsion systems.
These uncertainties may result in either impairments of, or reductions to the expected useful lives of, platforms and
propulsion systems, or both. Any change in recoverability would be accounted for at the time such change to the business
plan occurs. For the years ended December 31, 2022, 2021 and 2020, the impairment tests performed compared the carrying
amount of the assets included in the respective CGUs to their value-in-use. The value-in-use of the CGUs is determined using
a discounted cash flow methodology based on estimated pre-tax future cash flows attributable to the CGUs and a pre-tax
discount rate reflecting a current market assessment of the time value of money and the risks specific to the CGUs.
During the year ended December 31, 2022, impairment losses of \u20ac237\u00a0million were recognized, mainly related to
Enlarged Europe, primarily in Russia with \u20ac43\u00a0million related to inventories, \u20ac47\u00a0million related to tax assets and \u20ac47\u00a0million
related to other assets.
During the year ended December 31, 2021, impairment losses of \u20ac309\u00a0million were recognized, primarily in relation
to the impairment of certain vehicle platforms in the Enlarged Europe segment. These vehicle platforms were legacy
platforms on which there are a limited number of models. The impairments are generated mainly as a result of the projections
reflected in the MTP used to perform the impairment testing, in which these platforms had reduced volumes and profitability.
The impairment loss of \u20ac309\u00a0million mainly relate to Property, plant and equipment of \u20ac137\u00a0million and \u20ac151\u00a0million of
capitalized development expenditures.
During the year ended December 31, 2020, impairment losses totaling \u20ac202\u00a0million were recognized, mainly related
to \u20ac135\u00a0million impairment of research and development assets in China, India and Asia Pacific, a \u20ac15\u00a0million impairment in
South America CGU and a \u20ac53\u00a0million impairment in Enlarged Europe CGU, in each case due to decreased projections of
volumes and profit, in particular as a result of market disruption caused by the COVID-19 pandemic.
Recoverability of Goodwill and Intangible assets with indefinite useful lives
In accordance with IAS 36 - Impairment of Assets, Goodwill and intangible assets with indefinite useful lives are not
amortized and are tested for impairment annually or more frequently if facts or circumstances indicate that the asset may be
impaired.
Goodwill and intangible assets with indefinite useful lives are allocated to operating segments or to CGUs within the
operating segments. The impairment test is performed by comparing the carrying amount (which mainly comprises property,
plant and equipment, goodwill, brands, capitalized development expenditures, working capital and reserves) and the
recoverable amount of each CGU or group of CGUs to which Goodwill has been allocated. The recoverable amount of a
CGU is the higher of its fair value less costs of disposal and its value-in-use. The balance of Goodwill and intangible assets
with indefinite useful lives recognized by the Company primarily relate to the merger with FCA. Goodwill from the merger
with FCA is allocated to the North America, South America, Maserati, India and Asia Pacific and Enlarged Europe operating
segments. All other Goodwill balances relate primarily to Enlarged Europe, Other activities and to a lesser extent China.
The MTP is used as a basis to perform the Company\u2019s annual impairment test for Goodwill and intangible assets
with indefinite useful lives. The Company\u2019s Goodwill and intangible assets with indefinite useful lives were tested for
impairment on October 1, 2022, which is the new date the Company annually tests goodwill for impairment. In 2021, the
Company performed the test on October 31.
\u2022The estimate of the recoverable amount for purposes of performing the annual impairment test for each of the
operating segments is determined using value-in-use and was based on the following assumptions:
\u25e6The expected future cash flows covering the period from October 1, 2022 through December 31, 2025.
These expected cash flows reflect the current expectations regarding economic conditions and market
trends as well as the Company\u2019s initiatives for the period covered by the projections. These cash flows
relate to the respective CGUs in their current condition when preparing the financial statements and exclude
the estimated cash flows that might arise from restructuring plans or other structural changes. Volumes and
sales mix used for estimating the future cash flow are based on assumptions that are considered reasonable
and sustainable and represent the best estimate of expected conditions regarding market trends and
segment, brand and model share for the respective operating segment over the period considered.
\u25e6The expected future cash flows include a normalized terminal period to estimate the future result beyond
the time period explicitly considered which incorporated a long-term growth rate assumption of 1.4 percent
to 2.5 percent. The growth rate per region is determined by reference to the risk free rate and the rate of
inflation considered in the regional discount rate. The long-term AOI margins are set considering the
Company\u2019s long-term projections for each of the segments.
\u2022The estimated future cash flows are discounted to their present value using a discount rate that reflects current
market assessments of the time value of money and the risks specific to the asset or CGU that are not reflected
in the estimated future cash flows.
\u2022Pre-tax cash flows are discounted using a pre-tax discount rate which reflects the current market assessment of
the time value of money for the period being considered, and the risks specific to those cash flows under
consideration. The pre-tax Weighted Average Cost of Capital (\u201cWACC\u201d) discount rate applied ranged from
14.7 percent to 32.4 percent.
The values estimated as described above are determined to be in excess of the carrying amount for each operating
segment to which Goodwill is allocated. As such, no impairment charges were recognized for Goodwill and Intangible assets
with indefinite useful lives for the year ended December 31, 2022.
No impairment charges were recognized for Goodwill and Intangible assets with indefinite useful lives for the year
ended December 31, 2021.
There were impairment charges resulting from the impairment tests performed for the year ended December 31,
2020, of \u20ac150\u00a0million.
| |
| Goodwill and intangible assets with indefinite useful lives |
Goodwill and intangible assets with indefinite useful lives at December\u00a031, 2022 and 2021 are summarized below:
| | | | | | | | | | | | |
| | | | | | | | |
| | | | Accumulated impairment losses | | | | | | | | Total Goodwill and intangible assets with indefinite useful lives |
| | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
Change in scope of consolidation(1) | | | | | | | | | | | | |
Translation differences and Other | | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
Translation differences and Other | | | | | | | | | | | | |
| | | | | | | | | | | | |
_______________________________________________________________________________________________________________________________________________
(1) Primarily relates to deconsolidation of Faurecia as a discontinued operation as from January 1, 2021
(2) Primarily relates to acquisition of aiMotive and Share Now. Refer to Note 3, Scope of consolidation for additional information
Translation differences in 2022 primarily related to\u00a0foreign currency translation of U.S. Dollar and Pound Sterling to
the Euro.
Brands
Brands, comprised of Jeep, Ram, Dodge, Mopar, Opel/Vauxhall, Fiat, Alfa Romeo and Maserati are allocated to
North America, Enlarged Europe and Maserati segments. These rights are protected legally through registration with
government agencies and through their continuous use in commerce. As these rights have no legal, contractual, competitive
or economic term that limits their useful lives, they were classified as intangible assets with indefinite useful lives and were
therefore not amortized but instead tested annually for impairment.
For the purpose of impairment testing, the carrying value of Brands is tested jointly with the goodwill allocated to
the North America, Enlarged Europe and Maserati segments.
Goodwill
There were nil, nil and \u20ac150\u00a0million impairment charges recognized in respect of Goodwill and intangible assets
with indefinite lives during the years ended December 31, 2022, 2021 and 2020, respectively. Refer to Note 2, Basis of
preparation - Use of estimates for discussion of the assumptions and judgments relating to goodwill impairment testing.
The following table summarizes the allocation of Goodwill and Brands between the Company\u2019s reportable
segments:
| | | | | | | | |
| | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
China and India & Asia Pacific | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
________________________________________________________________________________________________________________________________________________
(1) The increase relates to acquisitions. Refer to Note 3, Scope of Consolidation for additional information
| | | | | | | |
| Capitalized development expenditures | | Patents, concessions, licenses and credits | | | | |
| |
Gross carrying amount at January 1, 2021 | | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
Change in scope of consolidation | | | | | | | |
Translation differences and other changes | | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
Change in scope of consolidation | | | | | | | |
Translation differences and other changes | | | | | | | |
| | | | | | | |
Accumulated amortization and impairment losses at January 1, 2021 | | | | | | | |
| | | | | | | |
Impairment losses and asset write-offs | | | | | | | |
| | | | | | | |
Change in scope of consolidation | | | | | | | |
Translation differences and other changes | | | | | | | |
| | | | | | | |
| | | | | | | |
Impairment losses and asset write-offs(1) | | | | | | | |
| | | | | | | |
Change in scope of consolidation | | | | | | | |
Translation differences and other changes | | | | | | | |
| | | | | | | |
Carrying amount at December 31, 2021 | | | | | | | |
Carrying amount at December 31, 2022 | | | | | | | |
_______________________________________________________________________________________________________________________________________________
(1) Primarily relates to deconsolidation of Faurecia as a discontinued operation as from January 1, 2021
(2) Primarily relates to acquisition of aiMotive and Share Now. Refer to Note 3, Scope of consolidation for additional information
Translation differences in 2022 primarily related to\u00a0foreign currency translation of U.S. Dollar and Pound Sterling to
the Euro.
Brands
Brands, comprised of Jeep, Ram, Dodge, Mopar, Opel/Vauxhall, Fiat, Alfa Romeo and Maserati are allocated to
North America, Enlarged Europe and Maserati segments. These rights are protected legally through registration with
government agencies and through their continuous use in commerce. As these rights have no legal, contractual, competitive
or economic term that limits their useful lives, they were classified as intangible assets with indefinite useful lives and were
therefore not amortized but instead tested annually for impairment.
For the purpose of impairment testing, the carrying value of Brands is tested jointly with the goodwill allocated to
the North America, Enlarged Europe and Maserati segments.
The following table summarizes the allocation of Goodwill and Brands between the Company\u2019s reportable
segments:
| | | | | | | | |
| | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
China and India & Asia Pacific | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
________________________________________________________________________________________________________________________________________________
(1) The increase relates to acquisitions. Refer to Note 3, Scope of Consolidation for additional information
| | | | | | | |
| Capitalized development expenditures | | Patents, concessions, licenses and credits | | | | |
| |
Gross carrying amount at January 1, 2021 | | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
Change in scope of consolidation | | | | | | | |
Translation differences and other changes | | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
Change in scope of consolidation | | | | | | | |
Translation differences and other changes | | | | | | | |
| | | | | | | |
Accumulated amortization and impairment losses at January 1, 2021 | | | | | | | |
| | | | | | | |
Impairment losses and asset write-offs | | | | | | | |
| | | | | | | |
Change in scope of consolidation | | | | | | | |
Translation differences and other changes | | | | | | | |
| | | | | | | |
| | | | | | | |
Impairment losses and asset write-offs(1) | | | | | | | |
| | | | | | | |
Change in scope of consolidation | | | | | | | |
Translation differences and other changes | | | | | | | |
| | | | | | | |
Carrying amount at December 31, 2021 | | | | | | | |
Carrying amount at December 31, 2022 | | | | | | | |
_______________________________________________________________________________________________________________
(1) Other assets includes vehicles sold with a buy-back commitments for which the divestitures are reported on a net basis within the changes of gross carrying amount
Property, plant and equipment of the FCA Group with an acquisition fair value of \u20ac20.7 billion were recognized on
completion of the merger. Refer to Note 3, Scope of consolidation for additional information.
Included within the total of \u20ac36,205 million Property, plant and equipment amounts presented above was owned
property, plant and equipment of \u20ac34,244 million and right-of-use assets of \u20ac1,961 million at December\u00a031, 2022.
Included within the total of \u20ac35,488 million Property, plant and equipment amounts presented above was owned
property, plant and equipment of \u20ac33,162\u00a0million and right-of-use assets of \u20ac2,326\u00a0million at December\u00a031, 2021.
Changes in Right-of-use assets are as follows:
| | | | | | | | | | |
| | | | | | Plant, machinery and equipment | | | | |
| | |
Balance at January 1, 2021 | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
Change in the scope of consolidation | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
Balance at December 31, 2021 | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
Change in the scope of consolidation | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
Balance at December 31, 2022 | | | | | | | | | | |
For the year ended December\u00a031, 2022, the Company recognized a total of \u20ac46 million of impairment losses and
asset write-offs. Refer to Note 2, Basis of preparation - Use of estimates - Recoverability of non-current assets with definite
useful lives, for further information on the impairment losses and asset write-offs recognized.
For the year ended December\u00a031, 2021, the Company recognized a total of \u20ac137 million of impairment losses and
asset write-offs.
These impairment charges were recognized within Cost of revenues in the Consolidated Income Statement for the
years ended December\u00a031, 2022, and 2021.
In 2022, translation differences of \u20ac1,178 million primarily reflected the foreign currency transaction impacts of
U.S. Dollar and Brazilian Real to the Euro. In 2021, translation differences of \u20ac1,265 million primarily reflected the foreign
currency transaction impacts of U.S. Dollar and of Pound Sterling to the Euro.
At December\u00a031, 2022 and 2021, the carrying amounts of Property, plant and equipment of the Company (excluding
the Right-of-Use assets described above) reported as pledged as security for debt and other commitments, was \u20ac1,400 million
and \u20ac1,388 million, respectively.
At December\u00a031, 2022 and 2021, the Company had contractual commitments for the purchase of Property, plant and
equipment amounting to \u20ac1,960 million and \u20ac1,712 million, respectively.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfPropertyPlantAndEquipmentExplanatory",
"language": "en",
"entity": "scheme:549300LKT9PW7ZIBDF31",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjhlODFkMTZmNGE0NDRkZjdhYjBlZjJkODE2MjY0ZGUwL3NlYzo4ZTgxZDE2ZjRhNDQ0ZGY3YWIwZWYyZDgxNjI2NGRlMF80OTAvZnJhZzo2MWU3MDM3NTEyZWY0ZDg5OTlkOWY4OWRhM2M5NGYzZi90ZXh0cmVnaW9uOjYxZTcwMzc1MTJlZjRkODk5OWQ5Zjg5ZGEzYzk0ZjNmXzMwNzg2MzI1NjA5NzQ1_0088f700-6a76-40d9-bdbd-373be823f6e6": {
"value": "Recoverability of non-current assets with definite useful lives
During the year ended December 31, 2020, impairment losses totaling \u20ac202\u00a0million were recognized, mainly related
to \u20ac135\u00a0million impairment of research and development assets in China, India and Asia Pacific, a \u20ac15\u00a0million impairment in
South America CGU and a \u20ac53\u00a0million impairment in Enlarged Europe CGU, in each case due to decreased projections of
volumes and profit, in particular as a result of market disruption caused by the COVID-19 pandemic.
| |
| Research and development costs |
Research and development costs were as follows:
| | | | | |
| |
| | | | | |
| |
Research and development expenditures expensed | | | | | |
Amortization of capitalized development expenditures | | | | | |
Impairment and write-off of capitalized development expenditures | | | | | |
Total Research and development costs | | | | | |
Refer to Note 2,\u00a0Basis of preparation - Use of estimates - Recoverability of non-current assets with definite useful
lives for detail on the impairment and write-off of capitalized development expenditures during the years ended December 31,
2022, 2021 and 2020.
Refer to Note 10, Other intangible assets, for information on capitalized development expenditures.
Capitalized development expenditures included both internal and external costs that were directly attributable to the
internal product development process, primarily consisting of material costs and personnel related expenses relating to
engineering, design and development focused on content enhancement of existing vehicles, new models and propulsion
system programs.
Amortization of capitalized development expenditures was recognized within Research and development costs
within the Consolidated Income Statement, as described in Note 5, Research and development costs. Amortization of patents,
concessions, licenses and other intangibles are recognized within Cost of revenues and Selling, general and other costs.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfResearchAndDevelopmentExpenseExplanatory",
"language": "en",
"entity": "scheme:549300LKT9PW7ZIBDF31",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjhlODFkMTZmNGE0NDRkZjdhYjBlZjJkODE2MjY0ZGUwL3NlYzo4ZTgxZDE2ZjRhNDQ0ZGY3YWIwZWYyZDgxNjI2NGRlMF80OTAvZnJhZzo2MWU3MDM3NTEyZWY0ZDg5OTlkOWY4OWRhM2M5NGYzZi90ZXh0cmVnaW9uOjYxZTcwMzc1MTJlZjRkODk5OWQ5Zjg5ZGEzYzk0ZjNmXzMwNzg2MzI1NjA5NzQ1_6ac58713-d03b-47c4-b8dc-bcf97fd26cab": {
"value": "Recoverability of non-current assets with definite useful lives
During the year ended December 31, 2022, impairment losses of \u20ac237\u00a0million were recognized, mainly related to
Enlarged Europe, primarily in Russia with \u20ac43\u00a0million related to inventories, \u20ac47\u00a0million related to tax assets and \u20ac47\u00a0million
related to other assets.
During the year ended December 31, 2021, impairment losses of \u20ac309\u00a0million were recognized, primarily in relation
to the impairment of certain vehicle platforms in the Enlarged Europe segment. These vehicle platforms were legacy
platforms on which there are a limited number of models. The impairments are generated mainly as a result of the projections
reflected in the MTP used to perform the impairment testing, in which these platforms had reduced volumes and profitability.
The impairment loss of \u20ac309\u00a0million mainly relate to Property, plant and equipment of \u20ac137\u00a0million and \u20ac151\u00a0million of
capitalized development expenditures.
During the year ended December 31, 2020, impairment losses totaling \u20ac202\u00a0million were recognized, mainly related
to \u20ac135\u00a0million impairment of research and development assets in China, India and Asia Pacific, a \u20ac15\u00a0million impairment in
South America CGU and a \u20ac53\u00a0million impairment in Enlarged Europe CGU, in each case due to decreased projections of
volumes and profit, in particular as a result of market disruption caused by the COVID-19 pandemic.
| |
| Research and development costs |
Research and development costs were as follows:
| | | | | |
| |
| | | | | |
| |
Research and development expenditures expensed | | | | | |
Amortization of capitalized development expenditures | | | | | |
Impairment and write-off of capitalized development expenditures | | | | | |
Total Research and development costs | | | | | |
Refer to Note 2,\u00a0Basis of preparation - Use of estimates - Recoverability of non-current assets with definite useful
lives for detail on the impairment and write-off of capitalized development expenditures during the years ended December 31,
2022, 2021 and 2020.
Refer to Note 10, Other intangible assets, for information on capitalized development expenditures.
| |
| Other information by nature |
Amounts relating to IFRS 16 recognized in Profit before taxes
Amounts recognized within Profit before taxes were as follows:
| | | | | | |
| | |
| | | | | | |
| | |
Depreciation of right-of-use assets | | | | | | |
Interest expense on lease liabilities | | | | | | |
Variable lease payments not included in the measurement of lease liabilities | | | | | | |
Income from sub-leasing right-of-use assets | | | | | | |
Expenses relating to short-term leases and to leases of low-value assets | | | | | | |
Gains arising from sale and leaseback transactions | | | | | | |
Total expense recognized in Net profit from continuing operations | | | | | | |
Capitalized development expenditures included both internal and external costs that were directly attributable to the
internal product development process, primarily consisting of material costs and personnel related expenses relating to
engineering, design and development focused on content enhancement of existing vehicles, new models and propulsion
system programs.
In 2022, \u20ac73\u00a0million of impairment losses and asset write-offs were recognized, refer to Note 2, Basis of preparation
- Use of estimates - Recoverability of non-current assets with definite useful lives for further information on the impairment
losses and asset write-offs recognized.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfExpensesExplanatory",
"language": "en",
"entity": "scheme:549300LKT9PW7ZIBDF31",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjhlODFkMTZmNGE0NDRkZjdhYjBlZjJkODE2MjY0ZGUwL3NlYzo4ZTgxZDE2ZjRhNDQ0ZGY3YWIwZWYyZDgxNjI2NGRlMF80OTAvZnJhZzo2MWU3MDM3NTEyZWY0ZDg5OTlkOWY4OWRhM2M5NGYzZi90ZXh0cmVnaW9uOjYxZTcwMzc1MTJlZjRkODk5OWQ5Zjg5ZGEzYzk0ZjNmXzMwNzg2MzI1NjA5NzUy_f42c36dc-9125-4918-b0d9-791c2827f9b1": {
"value": "
Recoverability of Goodwill and Intangible assets with indefinite useful lives
In accordance with IAS 36 - Impairment of Assets, Goodwill and intangible assets with indefinite useful lives are not
amortized and are tested for impairment annually or more frequently if facts or circumstances indicate that the asset may be
impaired.
Goodwill and intangible assets with indefinite useful lives are allocated to operating segments or to CGUs within the
operating segments. The impairment test is performed by comparing the carrying amount (which mainly comprises property,
plant and equipment, goodwill, brands, capitalized development expenditures, working capital and reserves) and the
recoverable amount of each CGU or group of CGUs to which Goodwill has been allocated. The recoverable amount of a
CGU is the higher of its fair value less costs of disposal and its value-in-use. The balance of Goodwill and intangible assets
with indefinite useful lives recognized by the Company primarily relate to the merger with FCA. Goodwill from the merger
with FCA is allocated to the North America, South America, Maserati, India and Asia Pacific and Enlarged Europe operating
segments. All other Goodwill balances relate primarily to Enlarged Europe, Other activities and to a lesser extent China.
The MTP is used as a basis to perform the Company\u2019s annual impairment test for Goodwill and intangible assets
with indefinite useful lives. The Company\u2019s Goodwill and intangible assets with indefinite useful lives were tested for
impairment on October 1, 2022, which is the new date the Company annually tests goodwill for impairment. In 2021, the
Company performed the test on October 31.
\u2022The estimate of the recoverable amount for purposes of performing the annual impairment test for each of the
operating segments is determined using value-in-use and was based on the following assumptions:
\u25e6The expected future cash flows covering the period from October 1, 2022 through December 31, 2025.
These expected cash flows reflect the current expectations regarding economic conditions and market
trends as well as the Company\u2019s initiatives for the period covered by the projections. These cash flows
relate to the respective CGUs in their current condition when preparing the financial statements and exclude
the estimated cash flows that might arise from restructuring plans or other structural changes. Volumes and
sales mix used for estimating the future cash flow are based on assumptions that are considered reasonable
and sustainable and represent the best estimate of expected conditions regarding market trends and
segment, brand and model share for the respective operating segment over the period considered.
\u25e6The expected future cash flows include a normalized terminal period to estimate the future result beyond
the time period explicitly considered which incorporated a long-term growth rate assumption of 1.4 percent
to 2.5 percent. The growth rate per region is determined by reference to the risk free rate and the rate of
inflation considered in the regional discount rate. The long-term AOI margins are set considering the
Company\u2019s long-term projections for each of the segments.
\u2022The estimated future cash flows are discounted to their present value using a discount rate that reflects current
market assessments of the time value of money and the risks specific to the asset or CGU that are not reflected
in the estimated future cash flows.
\u2022Pre-tax cash flows are discounted using a pre-tax discount rate which reflects the current market assessment of
the time value of money for the period being considered, and the risks specific to those cash flows under
consideration. The pre-tax Weighted Average Cost of Capital (\u201cWACC\u201d) discount rate applied ranged from
14.7 percent to 32.4 percent.
The values estimated as described above are determined to be in excess of the carrying amount for each operating
segment to which Goodwill is allocated. As such, no impairment charges were recognized for Goodwill and Intangible assets
with indefinite useful lives for the year ended December 31, 2022.
No impairment charges were recognized for Goodwill and Intangible assets with indefinite useful lives for the year
ended December 31, 2021.
There were impairment charges resulting from the impairment tests performed for the year ended December 31,
2020, of \u20ac150\u00a0million.
| |
| Goodwill and intangible assets with indefinite useful lives |
Goodwill and intangible assets with indefinite useful lives at December\u00a031, 2022 and 2021 are summarized below:
| | | | | | | | | | | | |
| | | | | | | | |
| | | | Accumulated impairment losses | | | | | | | | Total Goodwill and intangible assets with indefinite useful lives |
| | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
Change in scope of consolidation(1) | | | | | | | | | | | | |
Translation differences and Other | | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
Translation differences and Other | | | | | | | | | | | | |
| | | | | | | | | | | | |
_______________________________________________________________________________________________________________________________________________
(1) Primarily relates to deconsolidation of Faurecia as a discontinued operation as from January 1, 2021
(2) Primarily relates to acquisition of aiMotive and Share Now. Refer to Note 3, Scope of consolidation for additional information
Translation differences in 2022 primarily related to\u00a0foreign currency translation of U.S. Dollar and Pound Sterling to
the Euro.
Goodwill
There were nil, nil and \u20ac150\u00a0million impairment charges recognized in respect of Goodwill and intangible assets
with indefinite lives during the years ended December 31, 2022, 2021 and 2020, respectively. Refer to Note 2, Basis of
preparation - Use of estimates for discussion of the assumptions and judgments relating to goodwill impairment testing.
The following table summarizes the allocation of Goodwill and Brands between the Company\u2019s reportable
segments:
| | | | | | | | |
| | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
China and India & Asia Pacific | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
________________________________________________________________________________________________________________________________________________
(1) The increase relates to acquisitions. Refer to Note 3, Scope of Consolidation for additional information
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfGoodwillExplanatory",
"language": "en",
"entity": "scheme:549300LKT9PW7ZIBDF31",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjhlODFkMTZmNGE0NDRkZjdhYjBlZjJkODE2MjY0ZGUwL3NlYzo4ZTgxZDE2ZjRhNDQ0ZGY3YWIwZWYyZDgxNjI2NGRlMF80OTAvZnJhZzo2MWU3MDM3NTEyZWY0ZDg5OTlkOWY4OWRhM2M5NGYzZi90ZXh0cmVnaW9uOjYxZTcwMzc1MTJlZjRkODk5OWQ5Zjg5ZGEzYzk0ZjNmXzMwNzg2MzI1NjA5Njcx_cb177ade-292b-47dc-9d66-bad1e86b3859": {
"value": "
Recoverability of deferred tax assets Deferred tax assets are recognized to the extent that it is probable that sufficient taxable profit will be available to
allow the benefit of part or all of the deferred tax assets to be utilized. The recoverability of deferred tax assets is dependent
on the Company\u2019s ability to generate sufficient future taxable income in the period in which it is assumed that the deductible
temporary differences reverse and tax losses carried forward can be utilized. In making this assessment, the Company
considers future taxable income arising based on the most recent business plan. Moreover, the Company estimates the impact
of the reversal of taxable temporary differences on earnings and it also considers the period over which these deferred tax
assets could be recovered. The estimates and assumptions used in the assessment are subject to uncertainty especially related
to the Company\u2019s future performance as compared to the business plan. Therefore, changes in current estimates due to
unanticipated events could have a significant impact on the Consolidated Financial Statements. Refer to Note 7, Tax expense/
(benefit) for additional detail.
The following table summarizes Tax expense:
| | | | | |
| |
| | | | | |
| |
| | | | | |
Deferred tax (benefit)/expense | | | | | |
Tax (benefit)/expense relating to prior periods(1) | | | | | |
Total Tax expense/(benefit) | | | | | |
____________________________________________________________________________________________________
(1) Tax expense/(benefit) relating to prior periods includes \u20ac161\u00a0million deferred tax expense and \u20ac297\u00a0million deferred tax benefit for 2022 and 2021, respectively, related to U.S.
provision to return adjustments for prior years' tax positions
Effective tax rate reconciliation
The applicable tax rate used to determine theoretical income taxes is the statutory rate of the jurisdiction in which
the Company is tax resident during each reported period. From 2021, as a result of the merger, Stellantis N.V. is tax resident
in the Netherlands. For 2020, prior year comparative information represents the financial information of PSA, which was tax
resident in France. The reconciliation between the theoretical income tax and actual tax is calculated on the basis of the
Netherlands corporate income tax rate of 25.8 percent and 25.0 percent in 2022 and 2021, respectively, and the France
corporate income tax rate of 32.0 percent in 2020, as follows:
| | | | | |
| |
| | | | | |
| |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
Differences between foreign tax rates and the theoretical applicable tax rate and tax holidays | | | | | |
Recognition and utilization of previously unrecognized deferred tax assets | | | | | |
Deferred tax assets not recognized and write-downs | | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
The increase in the effective tax rate to 14.2 percent in 2022 from 13.3 percent in 2021 is primarily related to a lower
tax benefit for net recognition of Deferred tax assets, primarily in Enlarged Europe.
Net deferred tax position
The Company recognizes the net amount as either Deferred tax assets or Deferred tax liabilities, to the extent
deferred taxes may be offset. Amounts recognized were as follows:
| | | |
| |
| | | |
| |
| | | |
Deferred tax liabilities(1) | | | |
Total Net deferred tax (liabilities)/assets | | | |
________________________________________________________________________________________________________________________________________________
(1) Deferred tax assets and Deferred tax liabilities include the impacts of (i) Unrecognized deferred tax assets on temporary differences; (ii) Deferred tax assets arising from tax
loss carry-forwards; and (iii) Unrecognized deferred tax assets on tax loss carry-forwards, which are reflected separately below in the Changes in deferred tax position by nature
summary
The change in Net deferred tax liabilities was mainly due to an increase in deferred tax assets in Enlarged Europe,
partially offset by an increase in deferred tax liabilities in North America. See Note 2, Basis of preparation - Use of estimates
- Recoverability of deferred tax assets for additional detail.
Changes in deferred tax position by nature
The significant components of Deferred tax assets and liabilities and their changes during the years ended
December\u00a031, 2022 and 2021 were as follows:
| | | | | | | | | | | |
| | | Recognized in Consolidated Income Statement | | | | Transferred to Assets/ (Liabilities) Held for Sale | | Translation differences and Other | | |
| |
Deferred tax liabilities arising on: | | | | | | | | | | | |
| | | | | | | | | | | |
Capitalized development assets | | | | | | | | | | | |
Other Intangible assets and Intangible assets with indefinite useful lives | | | | | | | | | | | |
| | | | | | | | | | | |
Provision for employee benefits | | | | | | | | | | | |
| | | | | | | | | | | |
Total deferred tax liabilities | | | | | | | | | | | |
Deferred tax assets arising on: | | | | | | | | | | | |
| | | | | | | | | | | |
Provision for employee benefits | | | | | | | | | | | |
| | | | | | | | | | | |
Impairment of tangible and intangible assets | | | | | | | | | | | |
| | | | | | | | | | | |
Allowances for doubtful accounts | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Total deferred tax assets | | | | | | | | | | | |
Unrecognized deferred tax assets on temporary differences | | | | | | | | | | | |
Deferred tax assets arising on tax loss carry-forwards | | | | | | | | | | | |
Unrecognized deferred tax assets on tax loss carry-forwards | | | | | | | | | | | |
Total Net deferred tax assets/ (liabilities) | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | Recognized in Consolidated Income Statement | | | | Transferred to Assets/ (Liabilities) Held for Sale | | Translation differences and Other(1) | | |
| |
Deferred tax liabilities arising on: | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Capitalized development assets | | | | | | | | | | | | | |
Other Intangible assets and Intangible assets with indefinite useful lives | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Provision for employee benefits | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Total deferred tax liabilities | | | | | | | | | | | | | |
Deferred tax assets arising on: | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Provision for employee benefits | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Impairment of tangible and intangible assets | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Allowances for doubtful accounts | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Total deferred tax assets | | | | | | | | | | | | | |
Unrecognized deferred tax assets on temporary differences | | | | | | | | | | | | | |
Deferred tax assets arising on tax loss carry- forwards | | | | | | | | | | | | | |
Unrecognized deferred tax assets on tax loss carry-forwards | | | | | | | | | | | | | |
Total Net deferred tax assets /(liabilities) | | | | | | | | | | | | | |
| | | | | | |
| | Tax loss carry-forward (after application of the current tax rate) | | Recognized deferred tax assets on tax loss carry- forward | | Unrecognized deferred tax assets on tax loss carry- forwards (after application of the current tax rate) |
| | |
| | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
At the end of December 2022 and December 2021, the Company had total tax-effected tax loss carry-forwards of
\u20ac9.5\u00a0billion and \u20ac8.8\u00a0billion, respectively, of which \u20ac6.5\u00a0billion and \u20ac6.7\u00a0billion were not recognized, respectively. Tax loss
carry-forwards in France, Germany, Italy, Spain, and Brazil do not expire. Tax loss carry-forwards relating to the French,
German, Spanish and Italian tax groups are available within each tax group for offsetting against net deferred tax liabilities
(subject to limitations provided under local tax law) and are recognized in the Consolidated Statement of Financial Position.
In February 2022, the French tax authorities preliminarily agreed that upon merger, the French permanent establishment of
Stellantis N.V., along with the companies within the former French consolidated tax group, succeeded to approximately
\u20ac9.0\u00a0billion of French tax loss carry-forwards existing as of December 31, 2020.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfDeferredTaxesExplanatory",
"language": "en",
"entity": "scheme:549300LKT9PW7ZIBDF31",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjhlODFkMTZmNGE0NDRkZjdhYjBlZjJkODE2MjY0ZGUwL3NlYzo4ZTgxZDE2ZjRhNDQ0ZGY3YWIwZWYyZDgxNjI2NGRlMF80OTAvZnJhZzo2MWU3MDM3NTEyZWY0ZDg5OTlkOWY4OWRhM2M5NGYzZi90ZXh0cmVnaW9uOjYxZTcwMzc1MTJlZjRkODk5OWQ5Zjg5ZGEzYzk0ZjNmXzMwNzg2MzI1NjA5Njcx_d17d6ef9-080d-45fc-8a6e-927cbf4026f7": {
"value": "
Recoverability of deferred tax assets Deferred tax assets are recognized to the extent that it is probable that sufficient taxable profit will be available to
allow the benefit of part or all of the deferred tax assets to be utilized. The recoverability of deferred tax assets is dependent
on the Company\u2019s ability to generate sufficient future taxable income in the period in which it is assumed that the deductible
temporary differences reverse and tax losses carried forward can be utilized. In making this assessment, the Company
considers future taxable income arising based on the most recent business plan. Moreover, the Company estimates the impact
of the reversal of taxable temporary differences on earnings and it also considers the period over which these deferred tax
assets could be recovered. The estimates and assumptions used in the assessment are subject to uncertainty especially related
to the Company\u2019s future performance as compared to the business plan. Therefore, changes in current estimates due to
unanticipated events could have a significant impact on the Consolidated Financial Statements. Refer to Note 7, Tax expense/
(benefit) for additional detail.
The following table summarizes Tax expense:
| | | | | |
| |
| | | | | |
| |
| | | | | |
Deferred tax (benefit)/expense | | | | | |
Tax (benefit)/expense relating to prior periods(1) | | | | | |
Total Tax expense/(benefit) | | | | | |
____________________________________________________________________________________________________
(1) Tax expense/(benefit) relating to prior periods includes \u20ac161\u00a0million deferred tax expense and \u20ac297\u00a0million deferred tax benefit for 2022 and 2021, respectively, related to U.S.
provision to return adjustments for prior years' tax positions
Effective tax rate reconciliation
The applicable tax rate used to determine theoretical income taxes is the statutory rate of the jurisdiction in which
the Company is tax resident during each reported period. From 2021, as a result of the merger, Stellantis N.V. is tax resident
in the Netherlands. For 2020, prior year comparative information represents the financial information of PSA, which was tax
resident in France. The reconciliation between the theoretical income tax and actual tax is calculated on the basis of the
Netherlands corporate income tax rate of 25.8 percent and 25.0 percent in 2022 and 2021, respectively, and the France
corporate income tax rate of 32.0 percent in 2020, as follows:
| | | | | |
| |
| | | | | |
| |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
Differences between foreign tax rates and the theoretical applicable tax rate and tax holidays | | | | | |
Recognition and utilization of previously unrecognized deferred tax assets | | | | | |
Deferred tax assets not recognized and write-downs | | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
The increase in the effective tax rate to 14.2 percent in 2022 from 13.3 percent in 2021 is primarily related to a lower
tax benefit for net recognition of Deferred tax assets, primarily in Enlarged Europe.
Net deferred tax position
The Company recognizes the net amount as either Deferred tax assets or Deferred tax liabilities, to the extent
deferred taxes may be offset. Amounts recognized were as follows:
| | | |
| |
| | | |
| |
| | | |
Deferred tax liabilities(1) | | | |
Total Net deferred tax (liabilities)/assets | | | |
________________________________________________________________________________________________________________________________________________
(1) Deferred tax assets and Deferred tax liabilities include the impacts of (i) Unrecognized deferred tax assets on temporary differences; (ii) Deferred tax assets arising from tax
loss carry-forwards; and (iii) Unrecognized deferred tax assets on tax loss carry-forwards, which are reflected separately below in the Changes in deferred tax position by nature
summary
The change in Net deferred tax liabilities was mainly due to an increase in deferred tax assets in Enlarged Europe,
partially offset by an increase in deferred tax liabilities in North America. See Note 2, Basis of preparation - Use of estimates
- Recoverability of deferred tax assets for additional detail.
Changes in deferred tax position by nature
The significant components of Deferred tax assets and liabilities and their changes during the years ended
December\u00a031, 2022 and 2021 were as follows:
| | | | | | | | | | | |
| | | Recognized in Consolidated Income Statement | | | | Transferred to Assets/ (Liabilities) Held for Sale | | Translation differences and Other | | |
| |
Deferred tax liabilities arising on: | | | | | | | | | | | |
| | | | | | | | | | | |
Capitalized development assets | | | | | | | | | | | |
Other Intangible assets and Intangible assets with indefinite useful lives | | | | | | | | | | | |
| | | | | | | | | | | |
Provision for employee benefits | | | | | | | | | | | |
| | | | | | | | | | | |
Total deferred tax liabilities | | | | | | | | | | | |
Deferred tax assets arising on: | | | | | | | | | | | |
| | | | | | | | | | | |
Provision for employee benefits | | | | | | | | | | | |
| | | | | | | | | | | |
Impairment of tangible and intangible assets | | | | | | | | | | | |
| | | | | | | | | | | |
Allowances for doubtful accounts | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Total deferred tax assets | | | | | | | | | | | |
Unrecognized deferred tax assets on temporary differences | | | | | | | | | | | |
Deferred tax assets arising on tax loss carry-forwards | | | | | | | | | | | |
Unrecognized deferred tax assets on tax loss carry-forwards | | | | | | | | | | | |
Total Net deferred tax assets/ (liabilities) | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | Recognized in Consolidated Income Statement | | | | Transferred to Assets/ (Liabilities) Held for Sale | | Translation differences and Other(1) | | |
| |
Deferred tax liabilities arising on: | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Capitalized development assets | | | | | | | | | | | | | |
Other Intangible assets and Intangible assets with indefinite useful lives | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Provision for employee benefits | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Total deferred tax liabilities | | | | | | | | | | | | | |
Deferred tax assets arising on: | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Provision for employee benefits | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Impairment of tangible and intangible assets | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Allowances for doubtful accounts | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Total deferred tax assets | | | | | | | | | | | | | |
Unrecognized deferred tax assets on temporary differences | | | | | | | | | | | | | |
Deferred tax assets arising on tax loss carry- forwards | | | | | | | | | | | | | |
Unrecognized deferred tax assets on tax loss carry-forwards | | | | | | | | | | | | | |
Total Net deferred tax assets /(liabilities) | | | | | | | | | | | | | |
| | | | | | |
| | Tax loss carry-forward (after application of the current tax rate) | | Recognized deferred tax assets on tax loss carry- forward | | Unrecognized deferred tax assets on tax loss carry- forwards (after application of the current tax rate) |
| | |
| | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
At the end of December 2022 and December 2021, the Company had total tax-effected tax loss carry-forwards of
\u20ac9.5\u00a0billion and \u20ac8.8\u00a0billion, respectively, of which \u20ac6.5\u00a0billion and \u20ac6.7\u00a0billion were not recognized, respectively. Tax loss
carry-forwards in France, Germany, Italy, Spain, and Brazil do not expire. Tax loss carry-forwards relating to the French,
German, Spanish and Italian tax groups are available within each tax group for offsetting against net deferred tax liabilities
(subject to limitations provided under local tax law) and are recognized in the Consolidated Statement of Financial Position.
In February 2022, the French tax authorities preliminarily agreed that upon merger, the French permanent establishment of
Stellantis N.V., along with the companies within the former French consolidated tax group, succeeded to approximately
\u20ac9.0\u00a0billion of French tax loss carry-forwards existing as of December 31, 2020.
",
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"concept": "ifrs-full:DisclosureOfIncomeTaxExplanatory",
"language": "en",
"entity": "scheme:549300LKT9PW7ZIBDF31",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
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"value": "
Sales incentives
The Company records the estimated cost of sales incentive programs offered to dealers and consumers as a reduction
to revenue at the time of sale to the dealer. This estimated cost represents the incentive programs offered to dealers and
consumers, as well as the expected modifications to these programs in order to facilitate sales of the dealer inventory.
Subsequent adjustments to sales incentive programs related to vehicles previously sold to dealers are recognized as an
adjustment to Net revenues in the period the adjustment is determinable.
The Company uses price discounts to adjust vehicle pricing in response to a number of market and product factors,
including pricing actions and incentives offered by competitors, economic conditions, the amount of excess industry
production capacity, the intensity of market competition, consumer demand for the product and the desire to support
promotional campaigns. The Company may offer a variety of sales incentive programs at any given point in time, including
cash offers to dealers and consumers and subvention programs offered to customers, or lease subsidies, which reduce the
retail customer\u2019s monthly lease payment or cash due at the inception of the financing arrangement, or both. Sales incentive
programs are generally brand, model and region specific for a defined period of time.
Multiple factors are used in estimating the future incentive expense by vehicle line, including the current incentive
programs in the market, planned promotional programs and the normal incentive escalation incurred as the model year ages.
The estimated incentive rates are reviewed monthly and changes to planned rates are adjusted accordingly, thereby impacting
revenues. As there are a multitude of inputs affecting the calculation of the estimate for sales incentives, an increase or
decrease of any of these variables could have a significant effect on Net revenues.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForDiscountsAndRebatesExplanatory",
"language": "en",
"entity": "scheme:549300LKT9PW7ZIBDF31",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjhlODFkMTZmNGE0NDRkZjdhYjBlZjJkODE2MjY0ZGUwL3NlYzo4ZTgxZDE2ZjRhNDQ0ZGY3YWIwZWYyZDgxNjI2NGRlMF80OTAvZnJhZzo2MWU3MDM3NTEyZWY0ZDg5OTlkOWY4OWRhM2M5NGYzZi90ZXh0cmVnaW9uOjYxZTcwMzc1MTJlZjRkODk5OWQ5Zjg5ZGEzYzk0ZjNmXzMwNzg2MzI1NjA2NDcz_e187a9b3-a886-4707-ba00-5fbd00f46136": {
"value": "
Product warranties, recall campaigns and product liabilities
The Company establishes reserves for product warranties at the time the related sale is recognized. The Company
issues various types of product warranties under which the performance of products delivered is generally guaranteed for a
certain period or term. The accrual for product warranties includes the expected costs of warranty obligations imposed by law
or contract, as well as the expected costs for policy coverage, recall actions and buyback commitments. The estimated future
costs of these actions are principally based on assumptions regarding the lifetime warranty costs of each vehicle line and each
model year of that vehicle line, as well as historical claims experience for the Company\u2019s vehicles. In addition, the number
and magnitude of additional service actions expected to be approved and policies related to additional service actions are
taken into consideration. Due to the uncertainty and potential volatility of these estimated factors, changes in the assumptions
used could materially affect the results of operations.
The Company periodically initiates voluntary service and recall actions to address various customer satisfaction as
well as safety and emissions issues related to vehicles sold. Included in the reserve is the estimated cost of these service and
recall actions. The Company accrues estimated costs for recalls when they are probable of occurring and a reliable estimate of
the costs can be made.
Estimates of the future costs of these actions are subject to numerous uncertainties, including the enactment of new
laws and regulations, the number of vehicles affected by a service or recall action and the nature of the corrective action. It is
reasonably possible that the ultimate cost of these service and recall actions may require the Company to make expenditures
in excess of (or less than) established reserves over an extended period of time and in a range of amounts that cannot be
reasonably estimated. The estimate of warranty and additional service and recall action obligations is periodically reviewed
during the year. Experience has shown that initial data for any given model year can be volatile; therefore, the Company\u2019s
process relies upon long-term historical averages until sufficient data is available. As actual experience becomes available, it
is used to modify the historical averages to ensure that the forecast is within the range of likely outcomes. Resulting accruals
are then compared with current spending rates to ensure that the balances are adequate to meet expected future obligations.
In addition, the Company makes provisions for estimated product liability costs arising from property damage and
personal injuries including wrongful death, and potential exemplary or punitive damages alleged to be the result of product
defects. By nature, these costs can be infrequent, difficult to predict and have the potential to vary significantly in amount.
The valuation of the reserve is actuarially determined on an annual basis based on, among other factors, the number of
vehicles sold and product liability claims incurred. Costs associated with these provisions are recorded in the Consolidated
Income Statement and any subsequent adjustments are recorded in the period in which the adjustment is determined.
Litigation
Various legal proceedings, claims and governmental investigations are pending against the Company on a wide
range of topics, including vehicle safety, emissions and fuel economy, competition, tax and securities matters, alleged
violations of law, labor, dealer, supplier and other contractual relationships, intellectual property rights, product warranties
and environmental matters. Some of these proceedings allege defects in specific component parts or systems (including
airbags, seats, seat belts, brakes, ball joints, transmissions, engines and fuel systems), in various vehicle models or allege
general design defects relating to vehicle handling and stability, sudden unintended movement or crashworthiness. These
proceedings seek recovery for damage to property, personal injuries or wrongful death and in some cases include a claim for
exemplary or punitive damages. Adverse decisions in one or more of these proceedings could require the Company to pay
substantial damages, or undertake service actions, recall campaigns or other costly actions.
Litigation is subject to many uncertainties, and the outcome of individual matters is not predictable with assurance.
Moreover, the cases and claims against the Company are often derived from complex legal issues that are subject to differing
degrees of uncertainty, including the facts and circumstances of each particular case, the manner in which the applicable law
is likely to be interpreted and applied and the jurisdiction and the different laws involved. A provision is established in
connection with pending or threatened litigation if it is probable there would be an outflow of funds and when the amount can
be reasonably estimated. If an outflow of funds becomes probable, but the amount cannot be estimated, the matter is
disclosed in the notes to the Consolidated Financial Statements. Since these provisions represent estimates, the resolution of
some of these matters could require the Company to make payments in excess of the amounts accrued or may require the
Company to make payments in an amount or range of amounts that could not be reasonably estimated.
The Company monitors the status of pending legal proceedings and consults with experts on legal and tax matters on
a regular basis. As such, the provisions for the Company\u2019s legal proceedings and litigation may vary as a result of future
developments in pending matters.
Provisions consisted of the following:
| | | | | | | | | | | | |
| | |
| | | | |
| | | | | | | | | | | | |
| | |
Product warranty and recall campaigns | | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
Legal proceedings and disputes | | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
Changes in Provisions were as follows:
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | Transfer to Liabilities held for sale | | | | | | |
| | |
Product warranty and recall campaigns | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Legal proceedings and disputes | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Product warranty and recall campaigns
During the year ended December 31, 2022, a total provision of \u20ac951\u00a0million was recognized in Product warranty and
recall campaigns which related to an extension of a recall of Takata airbags in Enlarged Europe, North America, Middle East
& Africa and South America. The estimated future costs of actions are principally based on assumptions regarding the
lifetime warranty costs of each vehicle line and each model year of that vehicle line, as well as historical claims experience
for the vehicles. In addition, the number and magnitude of additional service actions expected to be approved and policies
related to additional service actions are taken into consideration.
The cash outflow for the non-current portion of the Product warranty and recall campaigns provision is primarily
expected within a period through 2026.
Prior to 2021, certain warranty costs that were incurred beyond the contractual warranty period (\u201cgoodwill
warranty\u201d) were expensed as incurred due to the inability to reliably estimate the amount and frequency. As a result of
converged process and methodology of legacy PSA and FCA entities, the Company was able to reliably estimate the cost of
the goodwill warranty as of December 31, 2021. For the six months ended December 31, 2021, the change in estimate was
recognized as an increase to the warranty provision of \u20ac732 million for vehicles sold in prior periods.
During 2022, further refinements to the model implemented during 2021 were made to consider new information
related to expected future spending for individually significant actions. For the year ended December 31, 2022, the change in
estimate was recognized as an increase to the warranty provision of \u20ac314\u00a0million. Refer to Note 29, Segment reporting for
additional detail.
Sales incentives
As described within Note 2, Basis of preparation - Use of estimates, the Company recorded the estimated cost of
sales incentive programs offered to dealers and consumers as a reduction to revenue at the time of sale of the vehicle to the
dealer. At December\u00a031, 2022, the Sales incentive provision increased primarily due to higher provisions for sales incentives
in connection with increased dealer stock and higher per unit accruals.
Legal proceedings and disputes
As described within Note 2, Basis of preparation - Use of estimates, a provision for legal proceedings was
recognized when it was deemed probable that the proceedings would result in an outflow of resources and when the amount
could be reasonably estimated. As the ultimate outcome of pending litigation was uncertain, the timing of cash outflows for
the Legal proceedings and disputes provision was also uncertain.
Commercial risks
Commercial risks arose in connection with the sale of products and services, such as onerous maintenance contracts,
and as a result of certain regulatory emission requirements. For items such as onerous maintenance contracts, a provision was
recognized when the expected costs to complete the services under these contracts exceeded the revenues expected to be
realized. A provision for costs related to regulatory emission requirements was recognized at the time vehicles were sold
based on the estimated cost to settle the obligation, measured as the sum of the cost of regulatory credits previously
purchased plus the amount, if any, of the fine expected to be paid in cash. The cash outflow for the non-current portion of the
Commercial risks provision was primarily expected within a period through 2025.
Corporate Average Fuel Economy (\u201cCAFE\u201d) standards
The increase in the Commercial risks as at December\u00a031, 2022, is primarily related to the incremental provision of
\u20ac660\u00a0million as a result of the issuance of the final rule by the National Highway Traffic Safety Administration (\u201cNHTSA\u201d)
in March 2022. Refer to Note 26, Guarantees granted, commitments and contingent liabilities for additional information.
Restructuring costs
During the year ended December\u00a031, 2022, a total provision for \u20ac1,167\u00a0million was recognized primarily related to
workforce reduction mainly in Enlarged Europe, North America and South America (refer to Note 29, Segment reporting).
During the year ended December 31, 2021, a total provision for \u20ac678\u00a0million was recognized mainly in Enlarged
Europe as part of the integration and optimization of the operations (refer to Note 29, Segment reporting).
Other risks
Other risks included, among other items: provisions for disputes with suppliers related to supply contracts or other
matters that were not subject to legal proceedings, provisions for product liabilities arising from personal injuries including
wrongful death and potential exemplary or punitive damages alleged to be the result of product defects, disputes with other
parties relating to contracts or other matters not subject to legal proceedings and management's best estimate of the
Company\u2019s probable environmental obligations, which also included costs related to claims on environmental matters. The
cash outflow for the non-current portion of the Other risks provision was primarily expected within a period through 2025.
Corporate Average Fuel Economy (\u201cCAFE\u201d) standards
On August 31, 2020, the U.S. Court of Appeals for the Second Circuit vacated a final rule published by NHTSA in
July 2019 that had reversed NHTSA\u2019s 2016 increase to the base rate of the CAFE penalty from $5.50 to $14.00. The base
rate applies to each tenth of a mile per gallon that a manufacturer\u2019s fleet-wide average fuel efficiency is below the CAFE
standard, and is multiplied by the number of vehicles in the manufacturer\u2019s fleet to arrive at an aggregate penalty. On January
14, 2021, NHTSA published an interim final rule with immediate effect, the result of which was to apply the increased fine
rate that resulted from the Second Circuit\u2019s ruling to future model years. In particular, NHTSA\u2019s interim rule imposed a
CAFE penalty base rate of $5.50 through 2021 Model Year and increased the CAFE penalty base rate to $14.00 prospectively
from the 2022 Model Year. FCA accrued estimated amounts for any probable CAFE penalty based on the $5.50 rate for
Model Years 2021 and earlier. In addition, as a result of the acquisition, and in accordance with IFRS 3, we recognized an
incremental contingent liability of \u20ac163\u00a0million for the potentially higher fine rate on vehicle shipments prior to the merger
date.
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | China and India & Asia Pacific | | | | | | Unallocated items & eliminations | | |
| | |
Net revenues from external customers | | | | | | | | | | | | | | | | | | |
Net revenues from transactions with other segments | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Net profit/(loss) from continuing operations | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Share of the profit of equity method investees | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Restructuring costs and other costs, net of reversals(1) | | | | | | | | | | | | | | | | | | |
Takata recall campaign(2) | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Change in estimate of non- contractual warranties(4) | | | | | | | | | | | | | | | | | | |
Impairment expense and supplier obligations(5) | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Total adjustments Jan 1 - Dec 31, 2022 | | | | | | | | | | | | | | | | | | |
Adjusted Operating income | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Share of profit of equity method investees | | | | | | | | | | | | | | | | | | |
| | Fiat India Automobiles Private Limited | | | | |
| | | | |
| | | | |
Maserati (China) Cars Trading Co., Ltd. | | | | |
Maserati North America Inc. | | | | |
| | | | |
| | | | |
FCA Automotive Finance Co. Ltd. | | | | |
Stellantis Financial Services US Corp. | | | | |
| | | | |
| | | | |
Holdings & Other Companies | | | | |
accounted for under