| | | | | | |
| | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Other receivables from financing activities | | | | | | |
Total Receivables from financing activities | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Payables represented by securities | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
N.V. controlled or had a significant influence over, including Iveco Group N.V. post-Demerger, Stellantis N.V. (formerly
Fiat Chrysler Automobiles N.V. which, effective January 16, 2021, merged with Peugeot S.A. by means of a cross-
border legal merger) and its subsidiaries and affiliates (\"Stellantis\") and Iveco Group N.V. which effective January 1,
2022 separated from CNH Industrial N.V. by way of a demerger under Dutch law and became a public listed company
independent from CNH Industrial\u2019s unconsolidated subsidiaries, associates or joint ventures. In addition, the members
of the Board of Directors and managers of CNH Industrial with strategic responsibility and members of their families
were also considered related parties.
As of December 31, 2022, based on public information available and in reference to the Company's files, EXOR N.V.
held 42.8% of CNH Industrial\u2019s voting power and had the ability to significantly influence the decisions submitted to a
vote of CNH Industrial\u2019s shareholders, including approval of annual dividends, the election and removal of directors,
mergers or other business combinations, the acquisition or disposition of assets, and issuances of equity and the
incurrence of indebtedness. The percentage above has been calculated as the ratio of (i) the aggregate number of
common shares and special voting shares owned by EXOR N.V. to (ii) the aggregate number of outstanding common
shares and special voting shares of CNH Industrial as of December 31, 2022.
In addition, CNH Industrial engages in transactions with its unconsolidated subsidiaries, joint ventures, associates and
other related parties on commercial terms that are normal in the respective markets, considering the characteristics of
the goods or services involved.
The Company\u2019s Audit Committee reviews and evaluates all significant related party transactions.
Transactions with EXOR N.V. and its subsidiaries and affiliates
EXOR N.V. is an investment holding company in Europe. As of December 31, 2022 and December 31, 2021, among
other things, EXOR N.V. managed a portfolio that includes investments in Stellantis, Iveco Group and Ferrari. CNH
Industrial did not enter into any significant transactions with EXOR\u00a0N.V. during the years ended December 31, 2022 and
2021.
In connection with the establishment of Fiat Industrial (now CNH Industrial) through the demerger from\u00a0Fiat (which was
subsequently merged into Fiat Chrysler Automobiles N.V. which is now Stellantis), the two companies entered into a
Master Services Agreement (\u201cStellantis MSA\u201d) which sets forth the primary terms and conditions pursuant to which the
service provider subsidiaries of CNH Industrial and Stellantis provide services to the service receiving subsidiaries. As
structured, the applicable service provider and service receiver subsidiaries become parties to the Stellantis MSA
through the execution of an Opt-in letter that may contain additional terms and conditions. Pursuant to the Stellantis
MSA, service receivers are required to pay to service providers the actual cost of the services plus a negotiated margin.
During 2022 and 2021, Stellantis subsidiaries provided CNH Industrial with administrative services such as accounting,
cash management, maintenance of plant and equipment, security, information systems and training under the terms
and conditions of the Stellantis MSA and the applicable Opt-in letters.
Furthermore, CNH Industrial and Stellantis engage in other minor transactions in the ordinary course of business.
These transactions with Stellantis are reflected in the Consolidated Financial Statements as follows:
| | |
| | |
| | |
| | |
Selling, general and administrative costs | | |
Transactions with Iveco Group post-Demerger
CNH Industrial and Iveco Group post-Demerger entered into transactions consisting of the sale of engines from Iveco
Group to CNH Industrial. Additionally, concurrent with the Demerger, the Companies entered into services contracts in
relation to general administrative and specific technical matters, provided by either CNH Industrial to Iveco Group and
vice versa as follows:
Master Service Agreements: CNH Industrial and Iveco Group entered into a two-year Master Services Agreement
(\u201cMSA\u201d) whereby each Party (and its subsidiaries) may provide services to the other (and its subsidiaries). Services
provided under the MSA relate mainly to lease of premises and depots and IT services.
Engine Supply Agreement: in relation to the design and supply of off-road engines from Iveco Group to CNH Industrial
post-Demerger, Iveco Group and CNH Industrial entered into a ten-year Engine Supply Agreement (\u201cESA\u201d) whereby
Iveco Group will sell to CNH Industrial post-Demerger diesel, CNG and LNG engines and provide post-sale services.
Financial Service Agreement: in relation to certain financial services activities carried out by either CNH Industrial to
Iveco Group post-Demerger or vice versa, in connection with the execution of the Demerger Deed, CNH Industrial and
Iveco Group entered into a three-year Master Services Agreement (\u201cFS MSA\u201d), whereby each Party (and its
subsidiaries) may provide services and/or financial services activities to the other (and its subsidiaries). Services
provided under the FS MSA relate mainly to wholesale and retail financing activities to suppliers, distribution network
and customers.
The transactions with Iveco Group post-Demerger are reflected in the Consolidated Financial Statements as follows:
| | |
| | |
Trade and other receivables | | |
| | |
| | |
| | |
Transactions with joint ventures
CNH Industrial sells agricultural and construction equipment, and provides technical services to joint ventures such as
CNH de Mexico SA de CV, T\u00fcrkTrakt\u00f6r ve Ziraat Makineleri A.S. and New Holland HFT Japan Inc.. CNH Industrial also
purchases equipment from joint ventures, such as T\u00fcrkTrakt\u00f6r ve Ziraat Makineleri A.S. These transactions are
reflected in the Consolidated Financial Statements at December 31, 2022 as follows:
Transactions with associates
At December 31, 2022 and 2021, there were no material transactions with associates. At December\u00a031, 2022, CNH
Industrial had provided guarantees on commitments of its associates for an amount of $20 million related to CNH
Industrial Capital Europe S.a.S. ($15 million at December 31, 2021).
Transactions with unconsolidated subsidiaries
In the years ended December 31, 2022 and 2021, there were no material transactions with unconsolidated subsidiaries.
Compensation to Directors and Key Management
The fees of the Directors of CNH Industrial N.V. for carrying out their respective functions, including those in other
consolidated legal entities, and the notional compensation cost arising from stock grants awarded to certain Executive
Directors and Officers, amounted to an expense of approximately $40 million in 2022 ($34 million in 2021).
The aggregate expense incurred in 2022 and in 2021 for the compensation of Executives with strategic responsibilities
of the Group amounted to approximately $47 million and $42 million, respectively. These amounts included the notional
compensation cost for share-based payments.
33. Explanatory notes to the statement of cash flows
The statement of cash flows sets out changes in cash and cash equivalents during the year. As required by IAS 7 -
Cash Flow Statements, cash flows are separated into operating, investing and financing activities. The effects of
changes in exchange rates on cash and cash equivalents are shown separately under the line item Translation
exchange differences.
The Group presents supplemental discussion and disclosure regarding the statement of cash flows for the purpose of
additional analysis. Certain items discussed below, are reflected within the consolidated statement of cash flows either
on an aggregate or net basis, and accordingly have been discussed further as set forth below.
Cash flows for income tax payments net of refunds in 2022 amount to $711 million ($348 million in 2021).
Total interest of $718 million was paid and interest of $446 million was received in 2022 (interest of $539 million was
paid in 2021, and interest of $350 million was received in 2021). In 2021, the amount included a charge of $8\u00a0million in
connection with CNH Industrial's accelerated debt redemption strategy.
Operating activities
Cash flows from/(used in) operating activities derive mainly from the Group\u2019s main revenue producing activities.
Cash generated from the sale of assets under operating leases, net of amounts included in Profit/(loss) for the period, is
recognized under operating activities in a single line item, which includes changes in working capital, capital
expenditure, depreciation and impairment losses.
Cash from operating lease is recognized under operating activities in a single line item, which includes capital
expenditure, depreciation, write-downs and changes in inventory.
The adjustment to exclude Other non-cash items of $89 million in 2022 ($19 million in 2021) includes an amount of
$2\u00a0million ($-60 million in 2021) related to result from investments net of impairment losses on assets recognized during
the year.
Changes in working capital for 2022 and 2021 are summarized as follows:
| | |
| | |
Change in trade receivables | | |
| | |
| | |
Change in other receivables/payables | | |
Change in working capital | | |
Investing activities
Cash flows from/(used in) investing activities represent the extent to which expenditures have been made for resources
intended to generate future income and cash flows. Only expenditures resulting in an asset recognized in the balance
sheet are classified as investing activities in the statement of cash flows. In particular, Cash flows from/(used in)
investing activities include net change in receivables from financing activities that may be analyzed as follows:
| | |
| | |
Change in dealer financing | | |
Change in retail financing | | |
| | |
Change in other receivables from financing activities | | |
Net change in receivables from financing activities | | |
Liquidity absorbed by the increase in receivables from financing activities in 2022 was primarily a result of increased
financing activities.
For consideration for the acquisition and disposal of subsidiaries and of other investments, refer to section \"Business
Combinations\" above and to Note 14 \"Investments and other non-current financial assets\".
Financing activities
The net change in other financial payables and derivative assets/liabilities mainly reflects changes in borrowings from
banks and in asset-backed financing, together with changes in derivative assets and liabilities (consisting of derivative
financial instruments measured at fair value at the balance sheet date, as discussed in Note 18 \"Derivative assets and
Derivative liabilities\" above).
Changes in 2022 and 2021 are summarized as follows:
| | |
| | |
Change in asset-backed financing | | |
Change in borrowings from banks and other financial payables | | |
Net change in other financial payables | | |
Net change in derivative assets and derivative liabilities | | |
Net change in other financial payables and derivative assets/liabilities | | |
Reconciliation of changes in liabilities arising from financing activities may be analyzed as follows:
| | |
| | |
Total Debt at beginning of year | | |
Derivative (assets)/liabilities at beginning of year | | |
Total liabilities from financing activities at beginning of year | | |
| | |
| | |
| | |
| | |
Transfer to Liabilities held for distribution (*) | | |
Net payment to Iveco Group N.V. | | |
Total liabilities from financing activities at end of year | | |
| | |
Total Debt at end of year | | |
Derivative (assets)/liabilities at end of year | | |
34. EU-IFRS to U.S. GAAP reconciliation
These Consolidated Financial Statements have been prepared in accordance with the EU-IFRS (see section
\u201cSignificant accounting policies\u201d, paragraph \u201cBasis of preparation\u201d, for additional information).
CNH Industrial reports quarterly and annual consolidated financial results in accordance with EU-IFRS for European
listing purposes and for Dutch law requirements and in accordance with U.S. GAAP for SEC reporting purposes.
EU-IFRS differ in certain significant requirements from U.S. GAAP. In order to help readers to understand the difference
between the two sets of financial statements of the Group, CNH Industrial has provided, on a voluntary basis, a
reconciliation from EU-IFRS to U.S. GAAP as follows:
Reconciliation of Profit
| | | |
| | | |
Profit/(loss) in accordance with EU-IFRS | | | |
Adjustments to conform to U.S. GAAP: | | | |
| | | |
| | | |
Tax impact on adjustments and other income tax differences | | | |
| | | |
Net income (loss) in accordance with U.S. GAAP | | | |
(1)This item also includes the different accounting impact from the modification of a healthcare plan in the U.S..
Reconciliation of Total Equity
| | | |
| | | |
Total Equity in accordance with EU-IFRS | | | |
Adjustments to conform to U.S. GAAP: | | | |
| | | |
| | | |
Tax impact on adjustments and other income tax differences | | | |
| | | |
Total Equity in accordance with U.S. GAAP | | | |
Description of reconciling items
Reconciling items presented in the tables above are described as follows:
(a)Development costs
Under EU-IFRS, costs relating to development projects are recognized as intangible assets when costs can be
measured reliably and the technical feasibility of the product, volumes and pricing support the view that the
development expenditure will generate future economic benefits. Under U.S. GAAP, development costs are
expensed as incurred. As a result, costs incurred related to development projects that have been capitalized under
EU-IFRS are expensed as incurred under U.S. GAAP. Amortization expenses, net of result on disposal and
impairment charges of previously capitalized development costs recorded under EU-IFRS, have been reversed
under U.S. GAAP.
(b)Other adjustments
It mainly includes the following items:
\u2022Goodwill and other intangible assets: goodwill is not amortized but rather tested for impairment at least
annually under both EU-IFRS and U.S. GAAP. The difference in goodwill and other intangible assets between
the Group\u2019s two sets of financial statements is primarily due to the different times when EU-IFRS and ASC 350
- Intangibles \u2013 Goodwill and Other, were adopted. CNH Industrial transitioned to EU-IFRS on January 1, 2004.
Prior to the adoption of EU-IFRS, goodwill was recorded as an intangible asset and amortized to income on a
straight-line basis over its estimated period of recoverability, not exceeding 20 years. CNH Industrial adopted
ASC 350 on January 1, 2002. Under U.S. GAAP through December 31, 2001, goodwill was recorded as an
intangible asset and amortized to income on a straight-line basis over a period not exceeding 40 years.
\u2022Defined benefit plans: the differences related to defined benefit plans are mainly due to the different
accounting for actuarial gains and losses and the net interest component of the defined benefit cost between
EU-IFRS and U.S. GAAP. Under EU-IFRS, actuarial gains and losses are recognized immediately in other
comprehensive income without reclassification to profit or loss in subsequent years; net interest expense or
income is recognized by applying the discount rate to the net defined benefit liability or asset (the defined
benefit obligation less the fair value of plan assets, allowing for any assets ceiling restriction). Under U.S.
GAAP, actuarial gains and losses are deferred through the use of the corridor method; interest cost applicable
to the liability is recognized using the discount rate, while an expected return on assets is recognized reflecting
management\u2019s expectations on long-term average rates of return on funds invested to provide for benefits
included in the projected benefit obligations.
\u2022Restructuring provisions: the main difference between EU-IFRS and U.S. GAAP with respect to accruing for
restructuring costs is that EU-IFRS places emphasis on the recognition of the costs of the exit plan as a whole,
whereas U.S. GAAP requires that each type of cost is examined individually to determine when it may be
accrued. Under IAS 37 \u2013 Provisions, Contingent Liabilities and Contingent Assets, a provision for restructuring
costs is recognized when the Group has a constructive obligation to restructure. Under U.S. GAAP, termination
benefits are recognized in the period in which a liability is incurred. The application of U.S. GAAP often results
in different timing recognition for the Group\u2019s restructuring activities.
(c)Tax impact on adjustments and other income tax differences
This item includes the tax effects of adjustments included in (a) and (b), primarily related to development costs,
as well as other differences arising in the accounting for deferred tax assets and liabilities. The Group\u2019s policy
for accounting for deferred income taxes under EU-IFRS is described in section \u201cSignificant accounting
policies\u201d. This policy is similar to U.S. GAAP, which states that a deferred tax asset or liability is recognized for
the estimated future tax effects attributable to temporary differences and tax loss carry forwards. Valuation
allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not
be realized based on available evidence. The most significant accounting difference between EU-IFRS and
U.S. GAAP relates to development costs, which also has a significant impact on accumulated deferred tax
assets or liabilities and on U.S. GAAP pre-tax book income or loss in certain jurisdictions. As a result, the
assessment of tax contingencies and recoverability of deferred tax assets in each jurisdiction can vary
significantly between EU-IFRS and U.S. GAAP for financial reporting purposes. This adjustment relates
primarily to jurisdictions with U.S. GAAP pre-tax book losses higher than those recorded for EU-IFRS purposes.
35. Subsequent events
CNH Industrial has evaluated subsequent events through February 28, 2023, which is the date the financial statements
were authorized for issuance, and determined that there were no such events requiring recognition or disclosure in the
financial statements.
February 28, 2023
The Board of Directors
Suzanne Heywood
Scott W. Wine
L\u00e9o W. Houle
Catia Bastioli
Howard W. Buffett
Karen Linehan
Alessandro Nasi
Vagn S\u00f8rensen
\u00c5sa Tamsons",
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PRINCIPAL ACTIVITIES
CNH Industrial N.V. (or the \u201cCompany\u201d) is incorporated in, and under the laws of, the Netherlands. CNH Industrial N.V.
has its corporate seat in Amsterdam, the Netherlands, and its principal office in London, England, United Kingdom. The
Company was formed on September 29, 2013, as a result of the business combination transaction between Fiat
Industrial S.p.A. (\u201cFiat Industrial\u201d) and its majority owned subsidiary CNH Global N.V. (\u201cCNH Global\u201d). Unless otherwise
indicated or the context otherwise requires, the terms \"CNH Industrial\" and the \"Group\" refer to CNH Industrial and its
subsidiaries.
CNH Industrial is a leading company in the capital goods sector that, through its various businesses, designs,
produces, and sells agricultural and construction equipment (see Note 28 \u201cSegment reporting\u201d). In addition, CNH
Industrial\u2019s Financial Services segment offers an array of financial products and services, including retail financing for
the purchase or lease of new and used CNH Industrial and other manufacturers\u2019 products and other retail financing
programs and wholesale financing to dealers.
These Consolidated Financial Statements together with the notes thereto of CNH Industrial at December 31, 2022 were
authorized for issuance by the Board of Directors on February 28, 2023 and have been prepared in accordance with the
International Financial Reporting Standards (\u201cIFRS\u201d) as adopted by the European Union (\u201cEU-IFRS\u201d) and with Part 9 of
Book 2 of the Dutch Civil Code. The designation \u201cIFRS\u201d also includes International Accounting Standards (\u201cIAS\u201d), as
well as all interpretations of the IFRS Interpretations Committee (\u201cIFRIC\u201d).
These Consolidated Financial Statements are prepared using the U.S. dollar as the presentation currency. The
functional currency of the parent company (CNH Industrial N.V.) is the euro. The U.S. dollar presentation currency was
elected to be used in order to improve comparability with main competitors, mainly in the agriculture and construction
businesses, and to provide more meaningful information to U.S. investors.
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"value": "SIGNIFICANT ACCOUNTING POLICIES
Basis of preparation
These Consolidated Financial Statements together with the notes thereto of CNH Industrial at December 31, 2022 were
authorized for issuance by the Board of Directors on February 28, 2023 and have been prepared in accordance with the
International Financial Reporting Standards (\u201cIFRS\u201d) as adopted by the European Union (\u201cEU-IFRS\u201d) and with Part 9 of
Book 2 of the Dutch Civil Code. The designation \u201cIFRS\u201d also includes International Accounting Standards (\u201cIAS\u201d), as
well as all interpretations of the IFRS Interpretations Committee (\u201cIFRIC\u201d).
The financial statements are prepared under the historical cost convention, modified as required for the measurement
of certain financial instruments, as well as on a going concern basis. Despite operating in a continuously difficult
economic and financial environment, including rising inflation, geopolitical instability and the war in the Ukraine, the
Group\u2019s assessment is that no material uncertainties (as defined in paragraph 25 of IAS 1) exist about its ability to
continue as a going concern, in view also of the measures already undertaken by the Group to preserve cash and
contain costs, and to preserve its industrial and financial flexibility, and its strong liquidity position.
These Consolidated Financial Statements are prepared using the U.S. dollar as the presentation currency. The
functional currency of the parent company (CNH Industrial N.V.) is the euro. The U.S. dollar presentation currency was
elected to be used in order to improve comparability with main competitors, mainly in the agriculture and construction
businesses, and to provide more meaningful information to U.S. investors.
Until December 31, 2021, CNH Industrial N.V. owned and controlled the Commercial and Specialty Vehicles business,
the Powertrain business, and the related Financial Services business (together the \u201cIveco Group Business\u201d or the \u201cOn-
Highway Business\u201d), which are classified as Discontinued operations, as well as the Agriculture business, the
Construction business, and the related Financial Services business (collectively, the \u201cOff-Highway Business\u201d). Effective
January 1, 2022, the Iveco Group Business was separated from CNH Industrial N.V. by way of a Demerger under Dutch
law (the \"Demerger\") to Iveco Group N.V. (the \"Iveco Group\"), and the Iveco Group became a public listed company
independent from CNH Industrial. Pursuant to the terms of the deeds of demerger entered into between CNH Industrial
N.V. and Iveco Group N.V. on January 1, 2022, assets related to the On-Highway Business were transferred to, and
liabilities related to, the On-Highway Business were retained or assumed by Iveco Group N.V.
Iveco Group Business Spin-off and Discontinued Operations
During 2021, CNH Industrial completed a strategic project to separate the Commercial and Specialty Vehicles business,
the Powertrain business, and the related Financial Services business (together the \u201cIveco Group Business\u201d) from the
Agriculture business, the Construction business, and the related Financial Services business.
The Iveco Group Business was separated from CNH Industrial N.V. in accordance with Section 2:334a (3) of the Dutch
Civil Code (Burgerlijk Wetboek) by way of a legal statutory demerger (jurisdiche afsplitsing) to Iveco Group N.V. (the
\"Demerger\"), effective January 1, 2022.
The principal phases leading up to completion of the Demerger were as follows:
\u25aaOn September 3, 2019, CNH Industrial announced at its Capital Markets Day event the intended Demerger.
\u25aaOn December 23, 2021, an Extraordinary General Meeting of CNH Industrial shareholders was held to approve the
Demerger of Iveco Group Business.
\u25aaOn December 27, 2021, Borsa Italiana has admitted Iveco Group N.V. common shares to listing on Euronext Milan.
\u25aaFollowing receipt of the above authorizations, the deed of Demerger was executed on December 31, 2021, with
effectiveness of the Demerger on January 1, 2022.
\u25aaOn January 3, 2022 (the \u201cFirst Trading Date\u201d) Iveco Group common shares began trading on the regulated market
Euronext Milan, under the ticker symbol \u2018IVG\u2019. As a result of the Demerger, each holder of CNH Industrial common
shares (and special voting shares as the case may be) received one Iveco Group share for every five CNH Industrial
common shares (or special voting share as the case may be) held at close of business on the record date for
allocation (January 4, 2022). Since January 3, 2022, CNH Industrial N.V. and Iveco Group N.V. have been quoted
separately on the regulated markets and operate as independent listed companies, each with its own management
and Board of Directors.
As the transaction took effect on January 1, 2022, the Consolidated Financial Statements for the year ended December
31, 2022 relate to the remaining CNH Industrial business. Moreover, in accordance with IFRS 5 \u2013 Non-current Assets
Held for Sale and Discontinued Operations, for the corresponding information of earlier periods, the Iveco Group
business is classified and presented as Discontinued Operations in these Consolidated Financial Statements.
For additional detail of items presented under Discontinued Operations in the Consolidated Statements of Income,
Financial Position and Cash Flows, refer to the section \"Scope of Consolidation - Discontinued Operations - Iveco
Group Business\".
Additionally, as the Demerger is a \u201cbusiness combination involving entities or businesses under common control\u201d, it is
outside the scope of application of IFRS 3 \u2013 Business Combinations and IFRIC 17- Distributions of Non-cash Assets to
Owners. Accordingly, in the 2022 Consolidated Financial Statements for CNH Industrial Post-Demerger the opening
position for items in the statement of financial position will be equivalent to the carrying amounts reported in the
Consolidated Financial Statements of CNH Industrial Pre-Demerger.
Climate related matters
CNH Industrial has an established risk management process that includes the assessment and monitoring of climate-
related risk. These assessments are used by CNH Industrial to identify not only risk exposure, but also opportunities, on
which the Group\u2019s climate change strategy is based. The identification of these climate-related risks and opportunities,
along with the analysis of sustainability macrotrends, led to the definition of a decarbonization strategy, which in turn
has been incorporated within, and regularly influences, the Group\u2019s Strategic Business Plan. To further address the
potential impacts of climate change, CNH Industrial has implemented relevant projects and a number of other specific
climate-related topics and has defined long-term strategic targets.
There has been increasing interest in how climate change will impact the Group\u2019s business. With reference to the
climate related matters, a critical review was undertaken, and a focused analysis performed to identify, and
consequently manage, the principal risks and uncertainties to which the Group is exposed. The most significant area of
effort will be the management of water scarcity and waste and the reducing energy and GHG emissions in the supply
chain area. CNH Industrial recognizes the importance of climate change risk and promotes a responsible use of
resources and a reduction of the environmental impact of production to mitigate climate change. In this context, CNH
Industrial Group has adopted an environmental policy that applies to all company locations and divisions and has set up
a structure dedicated to control environmental pollution, waste, and water disposal as well as emission reduction.
In particular, considering the financial statements information are presented through historical values which, by their
nature, do not fully capture future events, all significant assumptions and estimates underlying the preparation of the
following items were subject to an analysis in order to identify and address the new uncertainties related to climate
changes which could affect the business: going concern, inventory management, property, plant and equipment,
goodwill, brands, intangible assets with a finite life, tax reliefs, revenue recognition, provisions and onerous contracts.
The analysis conducted were based on the Group strategy outlined in the context of the global supply chain
environmental targets and did not highlight any critical situations that cannot be attributable to and addressed in the
ordinary course of the business.
Global Business Conditions
Significant uncertainties, including rising inflation, geopolitical instability, and the war in Ukraine, continue to create
volatility in the global economy. These factors lead to inefficiencies in our manufacturing operations and impact costs.
We continue to work to mitigate the impact of these issues in order to meet end-market demand. We will continue to
monitor the situation as conditions remain fluid and evolve.
During the first quarter of 2022, CNH Industrial announced it was suspending non-domestic operations in Russia. CNH
Industrial is supporting its businesses in this market through the continuation of employee salaries and payment of
other administrative expenses. As a result of the suspension, we evaluated the carrying value of assets held within
CNH Industrial's Russia operations. Upon completion of the evaluation, during the quarter ended March 31, 2022, we
recorded charges of $72 million related to asset write downs, financial receivable allowances and a valuation allowance
against deferred tax assets. A prolonged war in Ukraine could have further adverse effects on us and our operations in
Russia. The Russia-Ukraine conflict and the ensuing sanctions to Russia and Belarus and Russian counter-sanctions
have created additional tensions in the commodity markets. CNH Industrial has no critical supplier in the affected
countries, but prices for certain commodities, including natural gas, might create further volatility.
Format of the financial statements
CNH Industrial presents an income statement using a classification based on the function of expenses (otherwise
known as the \u201ccost of sales\u201d method), rather than one based on their nature, as this is believed to provide information
that is more relevant.
For the statement of financial position, a mixed format has been selected to present current and non-current assets and
liabilities, as permitted by IAS 1 \u2013 Presentation of Financial Statements. Legal entities carrying out industrial activities
and those carrying out financial services are both consolidated in the Group\u2019s financial statements. The investment
portfolios of Financial Services are included in current assets, as the investments will be realized in their normal
operating cycle. Financial Services, though, obtains funds only partially from the market: the remainder is obtained from
CNH Industrial N.V. through its treasury legal entities (included in Industrial Activities), which lend funds both to
Industrial Activities and to Financial Services legal entities as the need arises. This Financial Services structure within
the Group means that any attempt to separate current and non-current liabilities in the consolidated statement of
financial position is not meaningful. Disclosure of the due dates of liabilities is however provided in the notes.
The statement of cash flows is presented using the indirect method.
Basis of consolidation
Subsidiaries
Subsidiaries are entities over which the Group has control. Control is achieved when the Group is exposed, or has
rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its
power over the investee.
When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant
facts and circumstances in assessing whether it has power over an investee, including:
\u25aathe contractual arrangement with the other vote holders of the investee;
\u25aarights arising from other contractual arrangements;
\u25aathe Group\u2019s voting rights and potential voting rights.
The Group re-assesses 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. The financial statements of subsidiaries are included in the
Consolidated Financial Statements from the date that control commences until the date that control ceases. Non-
controlling interests in the net assets of consolidated subsidiaries and non-controlling interests in the profit or loss of
consolidated subsidiaries are presented separately from the interests of the owners of the parent in the consolidated
statement of financial position and income statement respectively. Losses applicable to non-controlling interests which
exceed the non-controlling interests in the subsidiary\u2019s equity are debited to non-controlling interests.
Changes in the Group's ownership interests in subsidiaries that do not result in the loss of control are accounted for as
equity transactions. The carrying amounts of the equity attributable to owners of the parent and non-controlling interests
are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the book value
of the non-controlling interests and the fair value of the relevant consideration is recognized directly in the equity
attributable to the owners of the parent.
If the Group loses control of a subsidiary, a gain or loss is recognized in profit or loss and is calculated as the difference
between (i) the aggregate of the fair value of the relevant consideration and the fair value of any retained interest and
(ii) the carrying amount of the assets (including goodwill) and liabilities of the subsidiary and any non-controlling
interests. Any profits or losses recognized in other comprehensive income in respect of the subsidiary are accounted for
as if the subsidiary had been sold (i.e., are reclassified to profit or loss or transferred directly to retained earnings
depending on the applicable IFRS).
Subsidiaries that are either dormant or generate a negligible volume of business, are not consolidated. Their impact on
the Group\u2019s assets, liabilities, financial position and profit/(loss) attributable to the owners of the parent is immaterial.
Joint ventures
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
exists only when decisions about the relevant activities require unanimous consent of the parties sharing control.
Investments in joint ventures are accounted for using the equity method from the date that joint control commences until
the date that joint control ceases.
Associates
Associates are enterprises over which the Group has significant influence. As defined in IAS 28 \u2013 Investments in
Associates and Joint Ventures, significant influence is the power to participate in the financial and operating policy
decisions of the investee but is not control or joint control of those policies. Investments in associates are accounted for
using the equity method from the date that significant influence commences until the date that significant influence
ceases. When the Group\u2019s share of losses of an associate, if any, exceeds the carrying amount of the associate in the
Group\u2019s statement of financial position, the carrying amount is reduced to nil and recognition of further losses is
discontinued except to the extent that the Group has incurred obligations in respect of the associate.
Investments in other companies
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 are measured at
cost as an estimate of fair value, as permitted by IFRS 9. The Group may irrevocably elect to present subsequent
changes in the investment\u2019s fair value in other comprehensive income upon the initial recognition of an equity
investment that is not held to sell. This election is made on an investment-by-investment basis. Dividends received from
these investments are included in Other income/(expenses) from investments.
Transactions eliminated on consolidation
All significant intragroup balances and transactions and any unrealized gains and losses arising from intragroup
transactions are eliminated in preparing the Consolidated Financial Statements. Unrealized gains and losses arising
from transactions with associates and joint ventures are eliminated to the extent of the Group\u2019s interest in those entities.
Foreign currency transactions
Transactions in foreign currencies are recorded at the foreign exchange rate prevailing at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the
exchange rate prevailing at that date. Exchange differences arising on the settlement of monetary items or on reporting
monetary items at rates different from those at which they were initially recorded during the period or in previous
financial statements, are recognized in profit or loss.
Consolidation of foreign entities
All assets and liabilities of subsidiaries with a functional currency other than the U.S. dollar are translated using the
exchange rates in effect at the balance sheet date. Income and expenses are translated at the average exchange rate
for the period. Translation differences resulting from the application of this method are classified as equity until the
disposal of the investment. Average rates of exchange are used to translate the cash flows of foreign subsidiaries in
preparing the consolidated statement of cash flows.
The goodwill, assets acquired and liabilities assumed arising from the acquisition of entities with a functional currency
other than the U.S. dollar are recognized in the functional currency and translated at the exchange rate at the
acquisition date. These balances are subsequently retranslated at the exchange rate at the balance sheet date.
The Group applies IAS 29 - Financial reporting in hyperinflationary economies for its subsidiaries that prepare their
financial statements in a functional currency of a hyperinflationary economy. According to this standard, non-monetary
assets and liabilities not yet translated into U.S. dollar at the reporting date are redetermined using a general price
index. The financial statements of these subsidiaries are then translated at the closing spot rate.
The principal exchange rates used to translate into U.S. dollars the financial statements prepared in currencies other
than the U.S. dollar were as follows:
(1)From July 1, 2018, Argentina\u2019s economy was considered to be hyperinflationary. After the same date, transactions for entities with the Argentine peso as the functional currency were translated using the closing spot rate.From
January 1st, 2023 on, the functional currency of the industrial legal entity changed to USD, only the financial services legal entity remains with the Argentinean Pesos as functional currency.
(2)Starting from 2022, Turkey\u2019s economy was considered to be hyperinflationary. After the same date, transactions for entities with the Turkish lira as the functional currency were translated using the closing spot rate.
Business combinations
Business combinations are accounted for by applying the acquisition method. Under this method:
\u25aathe consideration transferred in a business combination is measured at fair value, which is calculated as the sum of
the acquisition-date fair values of the assets transferred and liabilities assumed by the Group and the equity interests
issued in exchange for control of the acquiree. Acquisition-related costs are generally recognized in profit or loss as
incurred;
\u25aaat the acquisition date, the identifiable assets acquired and the liabilities assumed are recognized at their fair value at
that date, except for deferred tax assets and liabilities, assets and liabilities relating to employee benefit
arrangements, liabilities or equity instruments relating to share-based payment arrangements of the acquiree or
share-based payment arrangements of the Group entered into to replace share-based payment arrangements of the
acquire, assets (or disposal groups) that are classified as held for sale, which are measured in accordance with the
relevant standard;
\u25aagoodwill is measured as the excess of the aggregate of the consideration transferred in the business combination,
the amount of any non-controlling interest in the acquiree and the fair value of the acquirer's previously held equity
interest in the acquiree (if any) over the net of the acquisition-date amounts of the identifiable assets acquired and the
liabilities assumed. If the net of the acquisition-date amounts of the identifiable assets acquired and liabilities
assumed exceeds the aggregate of the consideration transferred, the amount of any non-controlling interest in the
acquiree and the fair value of the acquirer's previously held interest in the acquiree (if any), the excess is recognized
immediately in profit or loss as a gain from a bargain purchase;
\u25aanon-controlling interest is initially measured either at fair value or at the non-controlling interest\u2019s proportionate share
of the acquiree's identifiable net assets. The selection of the measurement method is made on a transaction-by-
transaction basis;
\u25aaany contingent consideration arrangement in the business combination is measured at its acquisition-date fair value
and included as part of the consideration transferred in the business combination in order to determine goodwill.
Changes in the fair value of the contingent consideration that qualify as measurement period adjustments are
recognized retrospectively, with corresponding adjustments to goodwill. Measurement period adjustments are
adjustments that arise from additional information obtained during the \u2018measurement period\u2019 (which may not exceed
one year from the acquisition date) about facts and circumstances that existed as of the acquisition date. Any
changes in fair value after the measurement period are recognized in profit or loss.
When a business combination is achieved in stages, the Group's previously held equity interest in the acquiree is
remeasured at its acquisition-date fair value and the resulting gain or loss, if any, is recognized in profit or loss.
Changes in the equity interest in the acquiree that have been recognized in Other comprehensive income in prior
reporting periods are reclassified to profit or loss as if the interest had been disposed of.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the
combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete in the
Consolidated Financial Statements. Those provisional amounts are adjusted during the above-mentioned measurement
period to reflect new information obtained about facts and circumstances that existed at the acquisition date which, if
known, would have affected the amounts recognized at that date.
Business combinations that took place prior to January 1, 2010 were accounted for in accordance with the version of
IFRS\u00a03 effective before the 2008 amendments, as permitted by the revised standard.
Fair value measurement
Some of the Group\u2019s assets and liabilities are measured at fair value at the balance sheet date. Fair value is the price
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.
In estimating the fair value of an asset or a liability, the Group uses valuation techniques that are appropriate in the
circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant
observable inputs and minimizing the use of unobservable inputs. Additional information about fair value, fair value
hierarchy, valuation techniques and inputs used in determining the fair value of assets and liabilities is provided in Note
18 \"Derivative assets and Derivative liabilities\", Note 31 \"Fair value measurement\" and, where required, in the individual
notes relating to the assets and liabilities whose fair value were determined.
In addition, fair value measurements are categorized within the fair value hierarchy, described as follows, based on the
degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair
value measurement in its entirety:
\u25aaLevel 1 \u2014 quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at
the measurement date;
\u25aaLevel 2 \u2014 inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly (as prices) or indirectly (derived from prices) on the market;
\u25aaLevel 3 \u2014 inputs that are not based on observable market data.
Intangible assets
Goodwill
Goodwill is not amortized, but is tested for impairment annually or more frequently if events or changes in
circumstances indicate that it might be impaired. After initial recognition, goodwill is measured at cost less any
accumulated impairment losses.
Development costs
Development costs for agricultural and construction equipment project are recognized as an asset if and only if both of
the following conditions are met: a) development costs can be measured reliably, and b) the technical feasibility of the
product, volumes and pricing support the view that the development expenditure will generate future economic benefits.
Capitalized development costs include all direct and indirect costs that may be directly attributed to the development
process.
Capitalized development costs for agricultural and construction equipment are amortized on a systematic basis over a
period of 5 years.
All other development costs are expensed as incurred.
Intangible assets with indefinite useful lives
Intangible assets with indefinite useful lives principally consist of acquired trademarks which have no legal, regulatory,
contractual, competitive, economic, or other factor that limits their useful life.\u00a0Intangible assets with an indefinite useful
life are not amortized, but are tested for impairment annually or more frequently whenever there is an indication that the
asset may be impaired.
Other intangible assets
Other purchased and internally-generated intangible assets are recognized as assets in accordance with IAS\u00a038\u00a0\u2013
\u00a0Intangible Assets, where it is probable that the use of the asset will generate future economic benefits and where the
costs of the asset can be determined reliably.
Such assets are measured at purchase or manufacturing cost and amortized on a straight-line basis over their
estimated useful lives, if these assets have finite useful lives.
Other intangible assets acquired as part of the acquisition of a business are capitalized separately from goodwill if their
fair value can be measured reliably.
Property, plant and equipment
Cost
Property, plant and equipment are stated at cost, less accumulated depreciation and accumulated impairment.
Subsequent expenditures and the cost of replacing parts of an asset are capitalized only if they increase 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 recognized in profit or loss.
Depreciation
Depreciation is recorded on a straight-line basis over the estimated useful lives of the respective assets as follows:
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Plant, machinery and equipment | | | |
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Land is not depreciated.
Lease accounting policy
Lessee accounting
A lease is a contract that conveys the right to control the use of an identified asset (the leased asset) for a period of
time in exchange for consideration. The lease term determined by the Group comprises the non-cancellable period of
lease contract together with both periods covered by an option to extend the lease if the lessee is reasonably certain to
exercise that option; and periods covered by an option to terminate the lease if the lessee is reasonably certain not to
exercise that option. For real estate leases, this assessment is based on an analysis by management of all relevant
facts and circumstances including the leased asset\u2019s purpose, the economic and practical potential for replacing and
any plans that the Group has in place for the future use of the asset. The Group combines lease and non-lease
components.
For leases with terms not exceeding twelve months (short-term leases) and for leases of low-value assets, CNH
Industrial recognizes the lease payments associated with those leases on a straight-line basis over the lease term as
operating expense in the income statement.
For all other leases, at the commencement date (i.e., the date the underlying asset is available for use), CNH Industrial
recognizes a right-of-use asset, classified within Property, plant and equipment, and a lease liability, classified within
Other Debt.
At the commencement date, the right-of-use asset includes the amount of lease liability recognized, initial direct costs
incurred, and lease payments made at or before the commencement date less any lease incentives received. At the
same date, the lease liability is measured at the present value of lease payments to be made over the lease term,
discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group's
incremental borrowing rate. The incremental borrowing rate is determined considering macro-economic factors such as
the specific interest rate curve based on the relevant currency and term, as well as specific factors contributing to CNH
Industrial\u2019s credit spread. The Group primarily uses the incremental borrowing rate as the discount rate for its lease
liabilities.
After the commencement date, the right-of-use asset is measured at cost less any accumulated depreciation and any
accumulated impairment losses, and adjusted for any remeasurement of the lease liability. The right-of-use asset is
depreciated on a straight-line basis. If the lease transfers ownership of the underlying asset to the Group by the end of
the lease term or if the cost of the right-of-use asset reflects that the Group will exercise a purchase option, CNH
Industrial depreciates the right-of-use asset from the commencement date to the end of the useful life of the underlying
asset. Otherwise, the Group depreciates the right-of-use asset 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. After the commencement date, the lease liability is
increased to reflect the accretion of interest, recognized within Financial income/(expenses) in the income statement,
reduced for the lease payments made, and remeasured to reflect any reassessment or lease modifications.
Before the adoption of IFRS 16, where CNH Industrial entered as lessee in a lease contract classified as finance,
assuming substantially all the risks and rewards of ownership, assets held under finance lease were recognized as
assets of the Group at the lower of fair value or present value of the minimum lease payments and depreciated. The
corresponding liability to the lessor was included in the financial statement as a debt. Where CNH Industrial entered as
lessee in a lease contract classified as operating, the lessor retained substantially all the risks and rewards of
ownership of the asset. Operating lease expenditures were expensed on a straight-line basis over the lease terms.
Lessor accounting
Lease contracts where CNH Industrial acts as a lessor, can be classified as either an operating lease or finance lease.
Leases where a significant portion of the risks and rewards are retained by the lessor are classified as operating leases.
Leases that transfer substantially all the risks and rewards incidental to ownership of an underlying asset to the lessee
are classified as a finance leases.
Where CNH Industrial is the lessor in a finance lease, the future minimum lease payments from lessees are classified
as Receivables from financing activities. Lease payments are recognized as repayment of the principal, and financial
income remunerating the initial investment and the services provided.
Where CNH Industrial is the lessor in an operating lease, income from operating leases is recognized over the term of
the lease on a straight-line basis. Leased assets include equipment leased to retail customers by the Group's leasing
companies. They are stated at cost and depreciated at annual rates of between 20% and 33%.
CNH Industrial evaluates the carrying amount of equipment on operating leases for potential impairment when it
determines a triggering event has occurred. When a triggering event occurs, a test for recoverability is performed
comparing projected undiscounted future cash flows to the carrying amount of the asset. If the test for recoverability
identifies a possible impairment, the asset\u2019s fair value is measured in accordance with the fair value measurement
framework. An impairment charge would be recognized for the amount by which the carrying amount of the asset
exceeds its estimated fair value.
When leased assets are no longer leased and become held for sale, the Group reclassifies their carrying amount to
Inventories.\u00a0
Borrowing costs
Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets (as
defined under IAS 23 \u2013 Borrowing Costs), which are assets that necessarily take a substantial period of time to get
ready for their intended use or sale, are capitalized and amortized over the useful life of the class of assets to which
they refer.
All other borrowing costs are expensed when incurred.
Impairment of assets
The Group reviews, at least annually, the recoverability of the carrying amount of intangible assets (including capitalized
development costs) and property, plant and equipment, in order to determine whether there is any indication that those
assets have suffered an impairment loss. Goodwill and Intangible assets with indefinite useful lives are tested for
impairment annually or more frequently, if there is an indication that an asset may be impaired.
If indicators of impairment are present, the carrying amount of the assets is reduced to its recoverable amount that is
the higher of its fair value less disposal costs and its value in use. Where it is not possible to estimate the recoverable
amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the
asset belongs. In assessing its value in use, the pre-tax estimated future cash flows are discounted to their present
value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks
specific to the asset. An impairment loss is recognized when the recoverable amount is lower than the carrying amount.
Where a previous impairment loss for assets other than goodwill no longer exists or has decreased, the carrying
amount of the asset or cash-generating unit is increased up 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. A reversal of
an impairment loss is recognized in profit or loss immediately.
Financial instruments
Presentation
Financial instruments held by the Group are presented and measured in the financial statements as described in the
following paragraphs.
Investments and other non-current financial assets comprise investments in unconsolidated companies and other non-
current financial assets (securities, and other non-current financial receivables).
Current financial assets include trade receivables, receivables from financing activities (retail financing, dealer
financing, lease financing and other current loans to third parties), current securities and other current financial assets
(which include derivative financial instruments stated at fair value as assets), as well as cash and cash equivalents.
Current securities include short-term or marketable securities which represent temporary investments of available funds
and do not satisfy the requirements for being classified as cash equivalents.
Financial liabilities refer to debt, which includes asset-backed financing (\u201cABS\u201d), and derivative liabilities (which include
derivative financial instruments stated at fair value as liabilities), trade payables and other liabilities.
Measurement
Investments in unconsolidated companies classified as non-current financial assets are accounted for as described in
the paragraph \u201cBasis of consolidation\u201d.
In accordance with IFRS 9 - Financial Instruments, financial assets are classified as measured at either amortized cost
(\"AC\"), fair value through other comprehensive income (\"FVTOCI\") or fair value through profit or loss (\"FVTPL\"),
depending on the business model for managing such financial assets and the asset\u2019s contractual cash flow
characteristics. Financial liabilities are classified as measured at amortized cost using the effective interest method.
Financial assets and current securities acquired through a regular way purchase are recognized on the basis of the
settlement date and, on initial recognition, are measured at fair value, including transaction costs. Subsequent
measurement depends on the business model for managing the asset and the cash flow characteristics of the asset.
Assets that are held for collection of contractual cash flows, where those cash flows represent solely payments of
principal and interest, are measured at amortized cost using the effective interest method. Receivables with maturities
of over one year which bear no interest or an interest rate significantly lower than market rates are discounted using
market rates.
Assets that are held for collection of contractual cash flows and for selling the financial assets, where the asset\u2019s cash
flows represents solely payments of principal and interests, are measured at fair value through other comprehensive
income. Gains and losses on assets measured at fair value through other comprehensive income are recognized
directly in other comprehensive income until the financial asset is disposed of or is determined to be impaired; when the
asset is disposed of, the cumulative gains or losses, including those previously recognized in other comprehensive
income, are reclassified to profit or loss; when the asset is impaired, impairment losses are recognized to profit or loss.
Interest income from these financial assets is included in financial income.
As a result of the Group's business model, trade receivables and receivables from financing activities are subsequently
measured at amortized cost.
Assessments are made regularly as to whether there is any objective evidence that a financial asset or group of assets
may be impaired. If any such evidence exists, an impairment loss is included in profit or loss for the period. The
recognition of an impairment is based on expected credit losses.
Cash and cash equivalents include cash at banks, units in liquidity funds, other money market securities and other cash
equivalents. Cash and cash equivalents are subject to an insignificant risk of changes in value. Money market securities
consist of investments in high quality, short-term, diversified financial instruments that can generally be liquidated on
demand and are measured at FVTPL. Cash at banks and Other cash equivalents are measured at amortized cost.
Derivatives financial assets and liabilities are measured either at fair value through other comprehensive income (when
in an hedging relationship) or at fair value through profit or loss.
Financial assets and liabilities hedged by derivative instruments are measured in accordance with hedge accounting
principles applicable to fair value hedges: gains and losses arising from remeasurement at fair value, due to changes in
the respective hedged risk, are recognized in profit or loss and are offset by the effective portion of the loss or gain
arising from remeasurement at fair value of the hedging instrument.
Derivative financial instruments
Derivative financial instruments are used for hedging purposes, in order to reduce currency, interest rate and market
price risks. In accordance with IFRS 9, derivative financial instruments qualify for hedge accounting only when, at the
inception of the hedge, there is formal designation and documentation of the hedging relationship and the entity\u2019s risk
management objective and strategy for undertaking the hedge, there is an economic relationship between the hedging
instrument and the hedged item, credit risk does not dominate the value changes that result from the economic
relationship, and the hedging ratio in the hedging relationship reflects the actual quantity of the hedging instruments and
the hedged item. Further details on qualifying criteria are included in Note 18 \u201cDerivative assets and Derivative
liabilities\u201d and Note 30 \u201cInformation on financial risks\u201d.
When derivative financial instruments qualify for hedge accounting, the following accounting treatment applies:
\u25aaFair value hedges \u2013 where a derivative financial instrument is designated as a hedge of the exposure to changes in
fair value of a recognized asset or liability that is attributable to a particular risk and could affect profit or loss, the gain
or loss from remeasuring the hedging instrument at fair value is recognized in profit or loss. 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 profit
or loss.
\u25aaCash flow hedges \u2013 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 profit or
loss, the effective portion of any gain or loss on the derivative financial instrument is recognized directly in other
comprehensive income in the cash flow hedge reserve. The cumulative gain or loss is removed from other
comprehensive income and recognized in profit or loss at the same time as the economic effect arising from the
hedged item affects income. The gain or loss associated with a hedge or part of a hedge that has become ineffective
is recognized in profit or loss 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
in other comprehensive income and is recognized in profit or loss at the same time as the underlying transaction
occurs. If the hedged transaction is no longer probable, the cumulative unrealized gain or loss held in other
comprehensive income is recognized in profit or loss immediately.
If hedge accounting cannot be applied, the gains or losses from the fair value measurement of derivative financial
instruments are recognized immediately in profit or loss.
Transfers of financial assets
The Group derecognizes financial assets when the contractual rights to the cash flows arising from the assets are no
longer held or if it transfers the financial activities, as follows:
\u25aaif the Group transfers substantially all the risks and rewards of ownership of the financial asset, it derecognizes the
financial asset and recognizes separately as assets or liabilities any possible rights and obligations created or
retained in the transfer;
\u25aaif the Group retains substantially all the risks and rewards of ownership of the financial asset, it continues to
recognize the financial asset;
\u25aaif the Group neither transfers nor retains substantially all the risks and rewards of ownership of the financial asset, it
determines whether it has retained control of the financial asset. In this case:
\u25aaif the Group has not maintained control, it derecognizes the financial asset and recognizes separately as assets
and liabilities any possible rights and obligations created or retained in the transfer;
\u25aaif the Group has retained control, it continues to recognize the financial asset to the extent of its continuing
involvement in the financial asset.
On derecognition of a financial asset, the difference between the carrying amount of the asset and the consideration
received or receivable for the transfer of the asset is recognized in profit or loss.
Inventories
Inventories of raw materials, semi-finished products and finished goods (including assets leased out under operating
lease) are stated at the lower of cost or market. Cost is determined by the first-in-first-out (FIFO) method. Cost includes
the direct costs of materials, labor and indirect costs (variable and fixed). 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.
Assets and liabilities held for sale
Non-current assets are classified as held for sale if their carrying amounts will be principally recovered through a sale
transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable,
with the sale expected to be completed within one year from the date of classification, and the non-current asset (or the
disposal group) is available for immediate sale in its present condition subject only to terms that are usual and
customary for sales of such asset (or disposal group). When the Group is committed to a sale plan involving loss of
control of a subsidiary, all of the assets and liabilities of that subsidiary are classified as held for sale when the criteria
described above are met, regardless of whether the Group will retain a non-controlling interest in its former subsidiary
after the sale.
Non-current assets and disposal groups classified as held for sale are measured at the lower of their carrying amounts
and fair value less costs to sell.
Employee benefits
Pension plans
The present value of a defined benefit obligation and the related current service cost (and past service cost, where
applicable) for defined benefit pension plans are determined on an actuarial basis using the projected unit credit
method.
The net defined benefit liability that the Group recognizes in the statement of financial position represents the present
value of the defined benefit obligation reduced by the fair value of any plan assets (deficit). In case of a surplus, a net
defined benefit asset is recognized at the lower of the surplus and the asset ceiling.
Remeasurements of the net defined benefit liability/asset (that comprise: a) actuarial gains and losses, b) return on plan
assets, excluding amounts included in net interest on the net defined benefit liability/asset, and c) any change in the
effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability/asset) are
recognized directly in other comprehensive income without reclassification to profit or loss in subsequent years.
Past service cost resulting from a plan amendment (the introduction or withdrawal of, or changes to, a defined benefit
plan) or a curtailment (a significant reduction in the number of employees covered by a plan) and gain or loss on
settlements (a transaction that eliminates all further legal or constructive obligations for part or all of the benefits) are
recognized in profit or loss in the period in which they occur (or, in case of past service costs, when the entity
recognizes related restructuring costs or termination benefits, if earlier).
Net interest is calculated by applying the discount rate to the net defined benefit liability or asset and is recognized as
Financial income/(expenses) in profit or loss. Current service cost and all other costs and income arising from the
measurement of pension plan provisions are allocated to costs by function in profit or loss.
Post-employment plans other than pensions
The Group provides certain post-employment defined benefits, mainly healthcare plans. The method of accounting and
the frequency of valuations are similar to those used for defined benefit pension plans.
Defined contribution plans
Costs arising from defined contribution plans are recognized as an expense in profit or loss as incurred.
Share-based compensation plans
The Group provides additional benefits to certain members of senior management and employees through equity
compensation plans (stock option plans and stock grants). In accordance with IFRS 2 \u2013 Share-based Payment, these
plans represent a component of recipient remuneration. The compensation expense, corresponding to the fair value of
the instruments at the grant date, is recognized in profit or loss on a straight-line basis over the requisite service period
for each separately vesting portion of an award, with the offsetting credit recognized directly in equity. Any subsequent
changes to fair value do not have any effect on the initial measurement.
Provisions
The Group records provisions when it has an obligation, legal or constructive, to a third party, as a result from a past
event, when it is probable that an outflow of Group resources will be required to satisfy the obligation and when a
reliable estimate of the amount can be made.
Changes in estimates are reflected in profit or loss in the period in which the change occurs.
Treasury shares
Treasury shares are presented as a deduction from equity. The original cost of treasury shares and the proceeds of any
subsequent sale are presented as movements in equity.
Revenue recognition
Revenue is recognized when control of the equipment, services or parts has been transferred and the Group\u2019s
performance obligations to the customers have been satisfied. Revenue is measured as the amount of consideration
the Group expects to receive in exchange for transferring goods or providing services.
The timing of when the Group transfers the goods or services to the customer may differ from the timing of the
customer\u2019s payment.
Revenues are stated net of discounts, allowances, settlement discounts and rebates, as well as costs for sales
incentive programs, which are determined on the basis of historical costs, country by country, and charged against
profit for the period in which the corresponding sales are recognized.
The Group also enters into contracts with multiple performance obligations. For these contracts, the Group 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 the Group sells the goods or services separately in the same market, the standalone selling
price is the observable price at which the Group sells the goods or services separately. For all other goods or services,
the Group estimates the standalone selling price considering all information, reasonably available (including market
conditions, entity-specific factors and information about the customer or class of customer).
Sales of goods
The Group has determined that the customers from the sale of equipment and parts are generally dealers, distributors
and retail customers.
CNH Industrial recognizes revenue at a point in time when control has transferred to the customer at a sales price that
CNH Industrial expects to receive. Transfer of control occurs when title and risk of ownership have transferred to the
customer, which occurs based upon the terms specified in the contract. In most of the jurisdictions where CNH
Industrial operates, and subject to specific exceptions, transfer of control occurs upon shipment.
For all sales, no significant uncertainty exists surrounding the purchaser\u2019s obligation to pay for equipment and parts.
The Group records appropriate allowance for credit losses and anticipated returns as required. Fixed payment
schedules exist for all sales, but payment terms vary by geographic market and product line.
The cost of incentives, if any, are estimated at the inception of a contract at the amount that is expected to be paid and
is recognized as a reduction to revenue at the time of the sale. If an equipment contract transaction has multiple
performance obligations, the cost of incentives is allocated entirely to the equipment as the intent of the incentives is to
encourage sales of equipment. 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. CNH Industrial grants certain sales
incentives to support sales of its products to retail customers. At the later of the time of sale or the time an incentive is
announced to dealers, CNH Industrial records the estimated impact of sales allowances in the form of dealer and
customer incentives as a reduction of revenue. Subsequent adjustments to sales incentive programs related to
products previously sold are recognized as an adjustment to revenues in the period the adjustment is determinable.
The determination of sales allowances requires management to make estimates based upon historical data, estimated
future market demand for products, field inventory levels, announced incentive programs, competitive pricing and
interest rates, among other things.
With reference to the sales to dealers accompanied by \u201cfloor plan\u201d agreements under which the Group offers wholesale
financing including \u201cinterest-free\u201d financing for a specified period of time (which also vary by geographic market and
product line), two separate performance obligations exist. The first performance obligation consists of the sale of the
equipment from Industrial Activities to the dealer. Concurrent with the sale of the equipment, Industrial Activities offers
to the dealer wholesale financing through loans extended by Financial Services. Industrial Activities compensates
Financial Services for the cost of the interest-free period. This cost has been determined to represent a cash sale
incentive on the initial sale of the good, and therefore it should be recognized upfront as a reduction of net sales of
Industrial Activities. The second performance obligation consists of a credit facility extended by Financial Services to
the dealer. The remuneration for this performance obligation is represented by the compensation received from
Industrial Activities for the period of the interest-free financing and by the interest charged to dealer for the remaining
period. This remuneration is recognized by Financial Services over the period of the outstanding exposure.
For parts sales, when the Group provides its customers with a right to return a transferred product, revenue and
corresponding cost of sales are recognized for parts that are not expected to be returned. The expected returns are
estimated based on an analysis of historical experience. The portion of revenue (and corresponding cost of sales)
related to the parts that are expected to be returned is recognized at the end of the return period. The amount received
or receivable that is expected to be returned is recognized as a refund liability, representing the obligation to return the
customer\u2019s consideration.
Furthermore, at the time of the initial sale, CNH Industrial recognizes a return asset for the right to recover the goods
returned by the customer. This asset is initially measured at the former carrying amount of the inventory. At each
reporting date, both the refund liability and the return asset are remeasured to record for any revisions to the expected
level of returns, as well as any decreases in the value of the returned products.
Rendering of services
Revenues from services provided are primarily comprised of extended warranties and maintenance and repair services
and are recognized over the contract period when the costs are incurred, that is when the claims are charged by the
dealer. Amounts invoiced to customers for which CNH Industrial receives consideration before the performance is
satisfied are recognized as contract liability. These services are either separately-priced or included in the selling price
of the equipment. In the second case, revenue for the services is allocated based on the estimated stand-alone selling
price. In the event that the costs expected to be incurred to satisfy the remaining performance obligations exceed the
transaction price, an estimated contract loss is recognized.
Shipping and other transportation activities performed as an agent are recognized on a net basis, which is netting the
related freight cost against the freight revenue.
Finance and interest income
Finance and interest income on retail and other notes receivables and finance leases is recorded using the effective
yield method. Deferred costs on the origination of financing receivables are recognized as a reduction in finance
revenue over the expected lives of the receivables using the effective yield method. When a financial asset becomes
credit-impaired and is, therefore, regarded as \u201cStage 3\u201d, CNH Industrial calculates interest income by applying the
effective interest rate to the net amortized cost of the financial asset. If the financial asset cures and is no longer credit-
impaired, CNH Industrial reverts to calculating interest income on a gross basis. Receivables are considered past due if
the required principal and interest payments have not been received as of the date such payments were due.
Delinquency is reported on receivables greater than 30 days past due. Charge-offs of principal amounts of receivables
outstanding are deducted from the allowance at the point when it is determined to be probable that all amounts due will
not be collected.
Rents and other income on operating leases
Income from operating leases is recognized over the term of the lease on a straight-line basis.
Cost of sales
Cost of sales comprises the cost of manufacturing products and the acquisition cost of purchased merchandise which
has been sold. It includes all directly attributable material and production costs and all production overheads. These
include the depreciation of property, plant and equipment and the amortization of intangible assets relating to
production and write-downs of inventories. Cost of sales also includes freight and insurance costs relating to deliveries
to dealers and agency fees in the case of direct sales.
Cost of sales also includes provisions made to cover the estimated cost of product warranties at the time of sale to
dealer networks or to the end customer.
Expenses which are directly attributable to the Financial Services business, including the interest expense related to the
financing of Financial Services business as a whole and charges for risk provisions and write-downs, are reported in
cost of sales.
Research and development costs
This item includes research costs, development costs not eligible for capitalization and the amortization of development
costs recognized as assets in accordance with IAS\u00a038.
Government grants
Government grants are recognized in the financial statements when there is reasonable assurance that the company
concerned will comply with the conditions for receiving such grants and that the grants themselves will be received.
Government grants are recognized as income over the periods necessary to match them with the related costs which
they are intended to offset.
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 is accounted for in accordance with the policies already used for
the recognition of government grants.
Income taxes
Income taxes include all taxes based upon the taxable profits of the Group. Taxes on income are recognized in profit or
loss except to the extent they relate to items recognized directly in equity or in other comprehensive income, in which
case the related tax effects are recognized directly in equity or in other comprehensive income. Provisions for income
taxes arising on the distribution of a subsidiary\u2019s undistributed profits are only made where there is a current intention to
distribute such profits. Deferred taxes are provided using the full liability method. They are calculated on all temporary
differences between the tax base of an asset or liability and the carrying amounts in the Consolidated Financial
Statements, except for those arising from non-tax-deductible goodwill and for those related to investments in
subsidiaries where it is possible to control the reversal of the differences and reversal will not take place in the
foreseeable future. Deferred tax assets relating to the carry-forward of unused tax losses and tax credits, as well as
those arising from temporary differences, are recognized to the extent it is probable future profits will be available
against which they can be utilized. Current and deferred income tax assets and liabilities are offset when the income
taxes are levied by the same taxation authority and where there is a legally enforceable right of offset. Deferred tax
assets and liabilities are measured at the enacted or substantively enacted tax rates of the relevant tax jurisdictions that
are expected to apply to taxable income during the period or periods in which the temporary differences reverse. The
Group recognizes tax liabilities for uncertain tax treatments when tax risks arising from positions taken by the Group are
considered probable, assuming the tax authorities have full knowledge of all relevant information when making their
examination. In doing so, the Group evaluates whether to consider each uncertain tax treatment separately or jointly
consider multiple uncertain tax treatments, using the approach that better predicts the resolution of the uncertainty. The
liabilities recognized correspond to the amounts expected to be paid. Other taxes not based on taxable profits, such as
property taxes and taxes on capital, are included in operating expenses.
Dividends
Dividends payable by the Group are reported as a change in equity in the period in which they are approved by the
Company\u2019s shareholders at the Annual General Meeting of Shareholders (\u201cAGM\u201d).
Earnings per share
Basic earnings per share are calculated by dividing the Profit/(loss) attributable to owners of the parent by the weighted
average number of common shares outstanding during the year. Special voting shares are not included in the earnings
per share calculation as they are not eligible for dividends and have only limited economic rights. For diluted earnings
per share, the weighted average number of common shares outstanding is adjusted assuming conversion of dilutive
potential common shares.
Use of estimates
These Consolidated Financial Statements have been prepared in accordance with EU-IFRS which requires CNH
Industrial to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities,
disclosure of contingent assets and liabilities, and reported amounts of income and expenses. The estimates and
related assumptions are based on available information at the date of preparation of the financial statements, historical
experience and other relevant factors. Actual results may differ from the estimates.
Particularly in light of the current economic uncertainty, developments may occur which may differ from CNH Industrial's
estimates and assumptions, and therefore might require significant adjustments to the carrying amounts of certain
items, which as of the date of these Consolidated Financial Statements cannot be accurately estimated or predicted.
The principal items affected by estimates are the allowances for doubtful accounts receivable and inventories, non-
current assets (tangible and intangible assets), the residual values of assets leased out under operating lease
arrangements, sales allowances, product warranties, pension and other post-employment benefits, deferred tax assets
and contingent liabilities.
Estimates and assumptions are reviewed periodically and the effects of any changes are recognized in the period in
which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods if
the revision affects both current and future periods.
The following are the critical judgments and the key assumptions concerning the future that CNH Industrial has made in
the process of applying its accounting policies and that may have the most significant effect on the amounts recognized
in its Consolidated Financial Statements or that represent a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next financial year.
Allowance for doubtful accounts
The allowance for doubtful accounts for trade receivables and contract assets reflects CNH Industrial\u2019s estimate of
expected lifetime credit losses, and it is measured at an amount equal to the present value of the cash shortfalls over
the expected life of the financial asset.
The allowance for doubtful accounts for receivables from financing activities reflects management\u2019s estimate of forward
looking expected credit losses (\u201cECL\u201d) in the retail and wholesale portfolios. This requires considerable judgement
about how changes in economic factors affect ECLs, which is determined on a probability-weighted basis. The ECL
model applies to financial assets accounted for at amortized cost and at fair value through other comprehensive
income, lease receivables, and certain loan commitments and financial guarantee contracts. The loss allowances will
be measured on either of the following bases:
\u25aa12 month ECLs: these are ECLs that result from possible default events within the 12 months after the reporting date;
and
\u25aalifetime ECLs: these are ECLs that result from all possible default events over the expected life of a financial
instrument.
Refer to Note 17 \u201cCurrent receivables and Other current financial assets\u201d for additional details on the calculation of
allowance for credit losses.
Allowance for obsolete and slow-moving inventory
The allowance for obsolete and slow-moving inventory reflects management\u2019s estimate of the expected loss in value,
and has been determined on the basis of past experience and historical and expected future trends in the used vehicle
market. A worsening of the economic and financial situation could cause a further deterioration in conditions in the used
vehicle market compared to that taken into consideration in calculating the allowances recognized in the financial
statements.
Recoverability of non-current assets (including goodwill)
Non-current assets include property, plant and equipment, intangible assets (including goodwill), investments and other
non-current financial assets. The Group reviews the carrying value of non-current assets held and used and that of
assets to be disposed of when events and circumstances warrant such a review. For goodwill and intangible assets with
indefinite useful lives such analysis is carried out at least annually.
The analysis of the recoverable amount of non-current assets other than goodwill is usually performed using estimates
of future expected cash flows from the use or disposal of the asset and an appropriate discount rate in order to
calculate present value. If the carrying amount is deemed to be impaired, the Group recognizes an impairment loss for
the amount by which the carrying amount of the asset exceeds its estimated recoverable amount from use or disposal
determined by reference to the cash flows included in its most recent business forecasts.
Goodwill impairment test is performed at the cash generating unit level, the segment level. The recoverable amount of
the cash generating units is determined using multiple valuation methodologies, relying largely on an income approach
(based on the present value of estimated future cash flows) but also incorporating value indicators from a market
approach. The carrying amount of a cash generating unit is then compared to the recoverable amount to determine if
there is an impairment loss. Further details on the goodwill impairment test are included in Note 12 \"Intangible assets\".
In view of the present economic and financial situation, the Group made the following considerations in respect of its
future prospects:
\u25aawhen carrying out impairment testing of tangible and intangible assets, the Group took into account its expected
performance in the upcoming years. CNH Industrial extended such projections for subsequent years to appropriately
cover the period of analysis;
\u25aashould the assumptions underlying the forecast deteriorate further, the following is noted: the Group\u2019s tangible and
intangible assets with a finite useful life (mostly development costs) relate to models or products with high
technological content in line with the latest environmental laws and regulations, which consequently makes them
competitive in the current economic environment, especially in the more mature economies in which particular
attention is placed on the eco-sustainability of those types of products. Consequently, despite the fact that the capital
goods sector is one of the markets which could be most affected by a potential crisis in the immediate term,
management considers that is highly probable that the life cycle of these products can be lengthened to extend over
the period of time involved in a slower economic recovery, allowing the Group to achieve sufficient cash flows to
cover the investments, although over a longer period of time.
Residual values of assets leased out under operating lease arrangements
CNH Industrial records assets rented to customers or leased to them under operating lease as tangible assets. Income
from such operating lease is recognized on a straight-line basis over the term of the lease. Depreciation expense for
assets subject to operating lease is recognized on a straight-line basis over the lease term in amounts necessary to
reduce the cost of an asset to its estimated residual value at the end of the lease term. The estimated residual value of
leased assets is calculated at the lease commencement date on the basis of published industry information and
historical experience and are reviewed quarterly.
Realization of the residual values is dependent on CNH Industrial\u2019s future ability to market the assets under the then-
prevailing market conditions. The Group continually evaluates whether events and circumstances have occurred which
impact the estimated residual values of the assets on operating lease. The used equipment market was carefully
monitored throughout 2022 to ensure that write-downs if any, were properly determined. However, additional write-
downs may be required if market conditions should deteriorate further.
Sales allowances
CNH Industrial provides sales incentives and discounts to dealers. At the time a sale to a dealer is recognized, CNH
Industrial records an estimate of future sales incentive costs and discounts as a reduction of revenue. These incentives
may be based on a dealer's purchase volume, or on retail sales incentive programs and financing programs that will be
due when the dealer sells the equipment to a retail customer. The estimated cost of the these programs is based on
historical data, announced and expected incentive programs, field inventory levels. The final cost of these programs is
determined at the end of the measurement period for volume-based incentives or when the dealer sells the equipment
to the retail customer. Changes in the mix and types of programs affect these estimates, which are reviewed quarterly.
Actual cost differences from the original cost estimate are recognized in \"Net revenues\".
Product warranties
For most equipment and service parts sales, CNH Industrial provides a standard warranty to provide assurance that the
equipment will function as intended for a specified period of time. At the time a sale is recognized, CNH Industrial
records the estimated future warranty costs. CNH Industrial determines its total warranty liability by applying historical
claims rate experience to the estimated amount of equipment that has been sold to end-users and is still under
warranty based on dealer inventories and retail sales. Variances in claims experience and the type of warranty
programs affect these estimates, which are reviewed quarterly. Estimates used to determine the product warranty
accruals are based on historical claims rate leveraging the last rolling 12 months and consideration of current quality
developments.
Pension and other post-employment benefits
Group companies sponsor pension and other post-employment benefits in various countries, mainly in the United
States, the United Kingdom and Germany.
Employee benefit liabilities, related assets, costs and net interest connected with them are measured on an actuarial
basis which requires the use of estimates and assumptions to determine the net defined benefit liability/asset for the
Group. The actuarial method takes into consideration parameters of a financial nature such as the discount rate, the
rate for expected return on plan assets, the rate of salary increases and the healthcare costs trend rate and takes into
consideration the likelihood of potential future events by using certain demographic parameters such as mortality rates
and dismissal or retirement rates. The discount rates selected are based on yields or yield curves of high quality
corporate bonds in the relevant market. Trends in healthcare costs are developed on the basis of historical experience,
the near-term outlook for costs and likely long-term trends. Rates of salary increases reflect the Group\u2019s long-term
actual expectations in the reference market and inflation trends. Changes in any of these assumptions may have an
effect on future contributions to the plans.
The effects resulting from revising the estimates for the above parameters (\u201cre-measurements\u201d) are recognized directly
in other comprehensive income without reclassification to profit or loss in subsequent years: refer to \u201cEmployee
benefits\u201d section above for further details.
Significant future changes in the yields of corporate bonds, other actuarial assumptions referred to above and returns
on plan assets may significantly impact the net liability/asset.
Recognition of deferred tax assets
At December 31, 2022, CNH Industrial had net deferred tax assets, including tax loss carry forwards, of $534 million, of
which $346 million are not recognized in the financial statements. The corresponding totals at December 31, 2021 were
$538 million and $383 million.
Management has recognized deferred tax assets it believes are probable to be realized. In determining the amount of
deferred tax assets probable to be realized management has considered figures from budgets and plans consistent
with those used for other purposes within CNH Industrial, for example impairment testing, as discussed in the
paragraph \u201cRecoverability of non-current assets (including goodwill)\u201d above. CNH\u00a0Industrial believes the amount of
recognized deferred tax assets is appropriate, despite the risk of actual future results potentially being less than results
included in these forecasts, considering many of the recognized net deferred tax assets relate to temporary differences
and tax losses which, to a significant extent, may be recovered over an extended time period, but do not expire based
on currently enacted tax law. As in all financial reporting periods, CNH Industrial assessed the realizability of its various
deferred tax assets, which related to multiple tax jurisdictions in all regions of the world. It is reasonably possible the
Company's recognition of deferred tax assets could change during 2023. Such changes could materially impact the
Company's financial results.
During the fourth quarter of 2022, we recognized substantially all the deferred tax assets related to our agricultural and
construction equipment operations in Italy, resulting in a $5 million non-cash tax benefit, as those operations had
consistently returned to pre-tax profitability, with that trend anticipated to continue for the foreseeable future.
During 2021, CNH Industrial recognized substantially all the deferred tax assets related to the agricultural and
construction equipment operations in Brazil, resulting in a $142 million non-cash tax benefit, as those operations had
consistently returned to sustained profitability in recent years, with that trend anticipated to continue for the foreseeable
future.
Contingent liabilities
CNH Industrial is the subject of legal and indirect tax proceedings covering a range of matters, which are pending in
various jurisdictions. Due to the uncertainty inherent in such matters, it is difficult to predict the final outcome of such
matters. The cases and claims against CNH Industrial often raise difficult and complex factual and legal issues, which
are subject to many uncertainties, including but not limited to the facts and circumstances of each particular case and
claim, the jurisdiction and the differences in applicable law. In the normal course of business management consults with
legal counsel and certain other experts on matters related to litigation, taxes and other similar contingent liabilities. The
Group accrues a liability when it is determined that an adverse outcome is probable and the amount of the loss can be
reasonably estimated. In the event an adverse outcome is possible or an estimate is not determinable, the matter is
disclosed.
New standards and amendments effective from January 1, 2022
\u25aaOn May 14, 2020, the IASB issued Property, Plant and Equipment\u2014Proceeds before Intended Use (Amendments to
IAS 16) to prohibit deducting from the cost of an item of property, plant and equipment any proceeds from selling
items produced before that asset is available for use and clarifying the meaning of \"testing whether an asset is
functioning properly\". These amendments are effective retrospectively from January 1, 2022. These amendments had
no impact on these Consolidated Financial Statements.
\u25aaOn May 14, 2020, the IASB issued Onerous Contracts\u2014Cost of Fulfilling a Contract (Amendments to IAS 37)
specifying that the cost of fulfilling a contract comprises the costs that relate directly to the contract, including both the
incremental costs of fulfilling that contract and an allocation of other costs that relate directly to fulfilling contracts.
These amendments are effective retrospectively from January 1, 2022. These amendments had no impact on these
Consolidated Financial Statements.
\u25aaOn May 14, 2020, the IASB issued the Annual Improvements to IFRS 2018-2020 Cycle. The most important topics
addressed in these amendments are: (i) on IFRS 9 - Financial Instruments clarifying which fees an entity includes
when it applies the \"10 per cent\" test in assessing whether to derecognize a financial liability; and (ii) on IFRS 16 -
Leases removing the illustration of the reimbursement of leasehold improvements. These improvements are effective
from January 1, 2022. These amendments had no impact on these Consolidated Financial Statements.
Accounting standards, amendments and interpretations not yet applicable and not early adopted by the Group
The main accounting standards, amendments and interpretations not yet applicable and not early adopted by the Group
are the following:
\u25aaOn February 12, 2021, the IASB issued the Amendments to IAS 1 - Presentation of Financial Statements and IFRS
Practice Statement 2: Disclosure of Accounting policies, requiring companies to disclose the material accounting
policy information rather than the significant accounting policies. Furthermore, the amendments to IFRS Practice
Statement 2 provide guidance on how to apply the concept of materiality to accounting policy disclosures. This
amendment is effective from January 1, 2023.
\u25aaOn February 12, 2021, the IASB issued the Amendments to IAS 8 - Accounting policies, Changes in Accounting
Estimates and Errors: Definition of Accounting Estimates. The amendments clarify how to distinguish changes in
accounting policies (generally also applied retrospectively to past transactions and other past events) from changes
in accounting estimates (applied prospectively only to future transactions and other future events). This amendment
is effective from January 1, 2023.
\u25aaOn May 7, 2021, the IASB issued Deferred Tax related to Assets and Liabilities arising from a Single Transaction
(Amendments to IAS 12), which specifies how companies should account for deferred tax on transactions such as
leases and decommissioning obligations. The amendments clarify that no exemption applies on such transactions
and that companies are required to recognize deferred tax when they recognize the related assets or liabilities for the
first time. The amendments are effective for annual reporting periods beginning on or after January 1, 2023, with
early application permitted.
Furthermore, at the date of these Consolidated Financial Statements, the European Union has not yet completed its
endorsement process for the amendments and improvements reported below.
The Group is currently evaluating the impact of the adoption of the following amendment on its Consolidated Financial
Statements or disclosures:
\u25aaOn October 31, 2022, the IASB has published \"Non-current Liabilities with Covenants\" Amendments to IAS 1 -
Presentation of Financial Statements, to clarify how conditions with which an entity must comply within twelve months
after the reporting periods affect the classification of a liability. The amendments are effective for reporting periods
beginning on or after January 1, 2024.
\u25aaIn January 2020, the IASB issued amendments to IAS 1 - Presentation of Financial Statements, to clarify its
requirements for classifying a liability as non-current in the statement of financial position. The amendments are
effective from annual reporting periods beginning on or after 1 January 2024.
\u25aaOn September 22, 2022, the IASB issued Lease Liability in a Sale and Leaseback (Amendments to IFRS 16) with
amendments that clarify how a seller-lessee subsequently measures sale and leaseback transactions that satisfy the
requirements in IFRS 15 to be accounted for as a sale. The amendments are effective for annual periods beginning
on or after 1 January 2024.
SCOPE OF CONSOLIDATION
The Consolidated Financial Statements of the Group as of December 31, 2022 include CNH Industrial N.V. and 102
consolidated subsidiaries over which CNH Industrial N.V., directly or indirectly, has control. A total of 111 subsidiaries
were consolidated at December 31, 2021.
Excluded from consolidation are 9 subsidiaries that are either dormant or generate a negligible volume of business:
their proportion of the Group\u2019s assets, liabilities, financial position and earnings is immaterial. In particular, 9 of such
subsidiaries are accounted for using the cost method, and represent in aggregate less than 0.01 percent of Group
revenues, equity and total assets.
Discontinued Operations - Iveco Group Business
This section provides details of the contents of the items relating to Discontinued Operations as reported in the
Consolidated Income Statement, Consolidated Statement of Financial Position and Consolidated Statement of Cash
Flows.
From a methodological standpoint, it should be noted that with reference to the presentation required by IFRS 5 - Non
current Assets Held for Sale and Discontinued Operations, Discontinued Operations are included in the scope of
consolidation of CNH Industrial Group at December 31, 2021 and accordingly the total balances relating to the whole
Group have been determined by making the appropriate eliminations of transactions and balances between Continuing
Operations and Discontinued Operations.
More specifically, the approach was as follows:
\u25aain order to present the financial effects of a Discontinued Operation, revenues and expenses arising from
intercompany transactions were eliminated except for those revenues and expenses that are considered to continue
after the demerger. Eliminations from transactions between Continuing and Discontinued Operations are allocated in
full to Discontinued Operations. However, no profit or loss is recognized for intercompany transactions within the
Consolidated Income Statements. The amounts of income statement items included in Discontinued Operations is
detailed in the following paragraph.
\u25aaintercompany transactions between Continuing and Discontinued Operations have been eliminated in the
consolidated statement of financial position. The net balance between Assets held for distribution and Liabilities held
for distribution represents the net equity of the Discontinued Operations. This amount corresponds to the reduction in
the total equity of CNH Industrial due to the Demerger that occurred on January 1, 2022.
\u25aaall cash flows from Discontinued Operations are reported in the appropriate items for operating activities, investing
activities and financing activities in the Statement of Cash Flows. The cash flows represent those arising from
transactions with third parties.
Assets and Liabilities held for distribution
Assets and Liabilities classified as Discontinued Operations at December 31, 2021 may be analyzed as follows:
| | | |
| |
ASSETS HELD FOR DISTRIBUTION | | | |
| | | |
Property, plant and equipment | | | |
Investments and other non-current financial assets | | | |
| | | |
Defined benefit plan assets | | | |
| | | |
| | | |
| | | |
Receivables from financing activities | | | |
Other receivables and assets | | | |
Cash and cash equivalents | | | |
| | | |
TOTAL ASSETS HELD FOR DISTRIBUTION | | | |
| | | |
LIABILITIES HELD FOR DISTRIBUTION | | | |
| | | |
| | | |
| | | |
| | | |
Other payables and liabilities | | | |
TOTAL LIABILITIES HELD FOR DISTRIBUTION | | | |
The statement of cash flows sets out changes in cash and cash equivalents during the year. As required by IAS 7 -
Cash Flow Statements, cash flows are separated into operating, investing and financing activities. The effects of
changes in exchange rates on cash and cash equivalents are shown separately under the line item Translation
exchange differences.
The Group presents supplemental discussion and disclosure regarding the statement of cash flows for the purpose of
additional analysis. Certain items discussed below, are reflected within the consolidated statement of cash flows either
on an aggregate or net basis, and accordingly have been discussed further as set forth below.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV8zMTkvZnJhZzowYTlmODA0ZDJiZTU0ZmFjYmE4YThmN2MwNjdmODcyYS90ZXh0cmVnaW9uOjBhOWY4MDRkMmJlNTRmYWNiYThhOGY3YzA2N2Y4NzJhXzY1OTcwNjk3NzE1Njc_0ef830a4-930d-4d91-a46a-c4c0ffefe397": {
"value": "
Basis of preparation
These Consolidated Financial Statements together with the notes thereto of CNH Industrial at December 31, 2022 were
authorized for issuance by the Board of Directors on February 28, 2023 and have been prepared in accordance with the
International Financial Reporting Standards (\u201cIFRS\u201d) as adopted by the European Union (\u201cEU-IFRS\u201d) and with Part 9 of
Book 2 of the Dutch Civil Code. The designation \u201cIFRS\u201d also includes International Accounting Standards (\u201cIAS\u201d), as
well as all interpretations of the IFRS Interpretations Committee (\u201cIFRIC\u201d).
The financial statements are prepared under the historical cost convention, modified as required for the measurement
of certain financial instruments, as well as on a going concern basis. Despite operating in a continuously difficult
economic and financial environment, including rising inflation, geopolitical instability and the war in the Ukraine, the
Group\u2019s assessment is that no material uncertainties (as defined in paragraph 25 of IAS 1) exist about its ability to
continue as a going concern, in view also of the measures already undertaken by the Group to preserve cash and
contain costs, and to preserve its industrial and financial flexibility, and its strong liquidity position.
These Consolidated Financial Statements are prepared using the U.S. dollar as the presentation currency. The
functional currency of the parent company (CNH Industrial N.V.) is the euro. The U.S. dollar presentation currency was
elected to be used in order to improve comparability with main competitors, mainly in the agriculture and construction
businesses, and to provide more meaningful information to U.S. investors.
Until December 31, 2021, CNH Industrial N.V. owned and controlled the Commercial and Specialty Vehicles business,
the Powertrain business, and the related Financial Services business (together the \u201cIveco Group Business\u201d or the \u201cOn-
Highway Business\u201d), which are classified as Discontinued operations, as well as the Agriculture business, the
Construction business, and the related Financial Services business (collectively, the \u201cOff-Highway Business\u201d). Effective
January 1, 2022, the Iveco Group Business was separated from CNH Industrial N.V. by way of a Demerger under Dutch
law (the \"Demerger\") to Iveco Group N.V. (the \"Iveco Group\"), and the Iveco Group became a public listed company
independent from CNH Industrial. Pursuant to the terms of the deeds of demerger entered into between CNH Industrial
N.V. and Iveco Group N.V. on January 1, 2022, assets related to the On-Highway Business were transferred to, and
liabilities related to, the On-Highway Business were retained or assumed by Iveco Group N.V.
",
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"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV8zMTkvZnJhZzowYTlmODA0ZDJiZTU0ZmFjYmE4YThmN2MwNjdmODcyYS90ZXh0cmVnaW9uOjBhOWY4MDRkMmJlNTRmYWNiYThhOGY3YzA2N2Y4NzJhXzMyOTg1MzQ4ODgyNDE_07c14e93-980c-4de7-9b68-e9813bbd9905": {
"value": "
These Consolidated Financial Statements together with the notes thereto of CNH Industrial at December 31, 2022 were
authorized for issuance by the Board of Directors on February 28, 2023 and have been prepared in accordance with the
International Financial Reporting Standards (\u201cIFRS\u201d) as adopted by the European Union (\u201cEU-IFRS\u201d) and with Part 9 of
Book 2 of the Dutch Civil Code. The designation \u201cIFRS\u201d also 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:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV8zMTkvZnJhZzowYTlmODA0ZDJiZTU0ZmFjYmE4YThmN2MwNjdmODcyYS90ZXh0cmVnaW9uOjBhOWY4MDRkMmJlNTRmYWNiYThhOGY3YzA2N2Y4NzJhXzMyOTg1MzQ4ODgyNDE_1371a365-fae0-4c3c-98b1-7d45d3da8767": {
"value": "
These Consolidated Financial Statements together with the notes thereto of CNH Industrial at December 31, 2022 were
authorized for issuance by the Board of Directors on February 28, 2023 and have been prepared in accordance with the
International Financial Reporting Standards (\u201cIFRS\u201d) as adopted by the European Union (\u201cEU-IFRS\u201d) and with Part 9 of
Book 2 of the Dutch Civil Code. The designation \u201cIFRS\u201d also 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:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV8zMTkvZnJhZzowYTlmODA0ZDJiZTU0ZmFjYmE4YThmN2MwNjdmODcyYS90ZXh0cmVnaW9uOjBhOWY4MDRkMmJlNTRmYWNiYThhOGY3YzA2N2Y4NzJhXzMyOTg1MzQ4ODgyNTQ_d166769c-a757-471f-93e7-befb8336704e": {
"value": "
The financial statements are prepared under the historical cost convention, modified as required for the measurement
of certain financial instruments, as well as on a going concern basis. Despite operating in a continuously difficult
economic and financial environment, including rising inflation, geopolitical instability and the war in the Ukraine, the
Group\u2019s assessment is that no material uncertainties (as defined in paragraph 25 of IAS 1) exist about its ability to
continue as a going concern, in view also of the measures already undertaken by the Group to preserve cash and
contain costs, and to preserve its industrial and financial flexibility, and its strong liquidity position.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfGoingConcernExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV8zMTkvZnJhZzowYTlmODA0ZDJiZTU0ZmFjYmE4YThmN2MwNjdmODcyYS90ZXh0cmVnaW9uOjBhOWY4MDRkMmJlNTRmYWNiYThhOGY3YzA2N2Y4NzJhXzMyOTg1MzQ4ODgyNDI_6f553c46-b583-449b-b0dd-8c8a7b41615d": {
"value": "
These Consolidated Financial Statements are prepared using the U.S. dollar as the presentation currency. The
functional currency of the parent company (CNH Industrial N.V.) is the euro. The U.S. dollar presentation currency was
elected to be used in order to improve comparability with main competitors, mainly in the agriculture and construction
businesses, and to provide more meaningful information to U.S. investors.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForFunctionalCurrencyExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV8zMTkvZnJhZzowYTlmODA0ZDJiZTU0ZmFjYmE4YThmN2MwNjdmODcyYS90ZXh0cmVnaW9uOjBhOWY4MDRkMmJlNTRmYWNiYThhOGY3YzA2N2Y4NzJhXzMyOTg1MzQ4ODgzMDM_95bd519c-80c4-435b-839a-d026d6fc1f58": {
"value": "CNH Industrial N.V",
"dimensions": {
"concept": "ifrs-full:NameOfParentEntity",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV8zMjIvZnJhZzowMjk1MWQzYmNjZGE0NzRhYjg4ZDJlZTEwZGM0MDEyYy90ZXh0cmVnaW9uOjAyOTUxZDNiY2NkYTQ3NGFiODhkMmVlMTBkYzQwMTJjXzMyOTg1MzQ4OTE3ODE_cfa3ecda-aae9-4f7c-bb21-e50d40c769d8": {
"value": "
Iveco Group Business Spin-off and Discontinued Operations
During 2021, CNH Industrial completed a strategic project to separate the Commercial and Specialty Vehicles business,
the Powertrain business, and the related Financial Services business (together the \u201cIveco Group Business\u201d) from the
Agriculture business, the Construction business, and the related Financial Services business.
The Iveco Group Business was separated from CNH Industrial N.V. in accordance with Section 2:334a (3) of the Dutch
Civil Code (Burgerlijk Wetboek) by way of a legal statutory demerger (jurisdiche afsplitsing) to Iveco Group N.V. (the
\"Demerger\"), effective January 1, 2022.
The principal phases leading up to completion of the Demerger were as follows:
\u25aaOn September 3, 2019, CNH Industrial announced at its Capital Markets Day event the intended Demerger.
\u25aaOn December 23, 2021, an Extraordinary General Meeting of CNH Industrial shareholders was held to approve the
Demerger of Iveco Group Business.
\u25aaOn December 27, 2021, Borsa Italiana has admitted Iveco Group N.V. common shares to listing on Euronext Milan.
\u25aaFollowing receipt of the above authorizations, the deed of Demerger was executed on December 31, 2021, with
effectiveness of the Demerger on January 1, 2022.
\u25aaOn January 3, 2022 (the \u201cFirst Trading Date\u201d) Iveco Group common shares began trading on the regulated market
Euronext Milan, under the ticker symbol \u2018IVG\u2019. As a result of the Demerger, each holder of CNH Industrial common
shares (and special voting shares as the case may be) received one Iveco Group share for every five CNH Industrial
common shares (or special voting share as the case may be) held at close of business on the record date for
allocation (January 4, 2022). Since January 3, 2022, CNH Industrial N.V. and Iveco Group N.V. have been quoted
separately on the regulated markets and operate as independent listed companies, each with its own management
and Board of Directors.
As the transaction took effect on January 1, 2022, the Consolidated Financial Statements for the year ended December
31, 2022 relate to the remaining CNH Industrial business. Moreover, in accordance with IFRS 5 \u2013 Non-current Assets
Held for Sale and Discontinued Operations, for the corresponding information of earlier periods, the Iveco Group
business is classified and presented as Discontinued Operations in these Consolidated Financial Statements.
For additional detail of items presented under Discontinued Operations in the Consolidated Statements of Income,
Financial Position and Cash Flows, refer to the section \"Scope of Consolidation - Discontinued Operations - Iveco
Group Business\".
Additionally, as the Demerger is a \u201cbusiness combination involving entities or businesses under common control\u201d, it is
outside the scope of application of IFRS 3 \u2013 Business Combinations and IFRIC 17- Distributions of Non-cash Assets to
Owners. Accordingly, in the 2022 Consolidated Financial Statements for CNH Industrial Post-Demerger the opening
position for items in the statement of financial position will be equivalent to the carrying amounts reported in the
Consolidated Financial Statements of CNH Industrial Pre-Demerger.
Discontinued Operations - Iveco Group Business
This section provides details of the contents of the items relating to Discontinued Operations as reported in the
Consolidated Income Statement, Consolidated Statement of Financial Position and Consolidated Statement of Cash
Flows.
From a methodological standpoint, it should be noted that with reference to the presentation required by IFRS 5 - Non
current Assets Held for Sale and Discontinued Operations, Discontinued Operations are included in the scope of
consolidation of CNH Industrial Group at December 31, 2021 and accordingly the total balances relating to the whole
Group have been determined by making the appropriate eliminations of transactions and balances between Continuing
Operations and Discontinued Operations.
More specifically, the approach was as follows:
\u25aain order to present the financial effects of a Discontinued Operation, revenues and expenses arising from
intercompany transactions were eliminated except for those revenues and expenses that are considered to continue
after the demerger. Eliminations from transactions between Continuing and Discontinued Operations are allocated in
full to Discontinued Operations. However, no profit or loss is recognized for intercompany transactions within the
Consolidated Income Statements. The amounts of income statement items included in Discontinued Operations is
detailed in the following paragraph.
\u25aaintercompany transactions between Continuing and Discontinued Operations have been eliminated in the
consolidated statement of financial position. The net balance between Assets held for distribution and Liabilities held
for distribution represents the net equity of the Discontinued Operations. This amount corresponds to the reduction in
the total equity of CNH Industrial due to the Demerger that occurred on January 1, 2022.
\u25aaall cash flows from Discontinued Operations are reported in the appropriate items for operating activities, investing
activities and financing activities in the Statement of Cash Flows. The cash flows represent those arising from
transactions with third parties.
Assets and Liabilities held for distribution
Assets and Liabilities classified as Discontinued Operations at December 31, 2021 may be analyzed as follows:
| | | |
| |
ASSETS HELD FOR DISTRIBUTION | | | |
| | | |
Property, plant and equipment | | | |
Investments and other non-current financial assets | | | |
| | | |
Defined benefit plan assets | | | |
| | | |
| | | |
| | | |
Receivables from financing activities | | | |
Other receivables and assets | | | |
Cash and cash equivalents | | | |
| | | |
TOTAL ASSETS HELD FOR DISTRIBUTION | | | |
| | | |
LIABILITIES HELD FOR DISTRIBUTION | | | |
| | | |
| | | |
| | | |
| | | |
Other payables and liabilities | | | |
TOTAL LIABILITIES HELD FOR DISTRIBUTION | | | |
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfDiscontinuedOperationsExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV8zMjIvZnJhZzowMjk1MWQzYmNjZGE0NzRhYjg4ZDJlZTEwZGM0MDEyYy90ZXh0cmVnaW9uOjAyOTUxZDNiY2NkYTQ3NGFiODhkMmVlMTBkYzQwMTJjXzMyOTg1MzQ4OTE3ODE_e868f0c5-30fb-439d-a7de-2bef026512c5": {
"value": "
Iveco Group Business Spin-off and Discontinued Operations
During 2021, CNH Industrial completed a strategic project to separate the Commercial and Specialty Vehicles business,
the Powertrain business, and the related Financial Services business (together the \u201cIveco Group Business\u201d) from the
Agriculture business, the Construction business, and the related Financial Services business.
The Iveco Group Business was separated from CNH Industrial N.V. in accordance with Section 2:334a (3) of the Dutch
Civil Code (Burgerlijk Wetboek) by way of a legal statutory demerger (jurisdiche afsplitsing) to Iveco Group N.V. (the
\"Demerger\"), effective January 1, 2022.
The principal phases leading up to completion of the Demerger were as follows:
\u25aaOn September 3, 2019, CNH Industrial announced at its Capital Markets Day event the intended Demerger.
\u25aaOn December 23, 2021, an Extraordinary General Meeting of CNH Industrial shareholders was held to approve the
Demerger of Iveco Group Business.
\u25aaOn December 27, 2021, Borsa Italiana has admitted Iveco Group N.V. common shares to listing on Euronext Milan.
\u25aaFollowing receipt of the above authorizations, the deed of Demerger was executed on December 31, 2021, with
effectiveness of the Demerger on January 1, 2022.
\u25aaOn January 3, 2022 (the \u201cFirst Trading Date\u201d) Iveco Group common shares began trading on the regulated market
Euronext Milan, under the ticker symbol \u2018IVG\u2019. As a result of the Demerger, each holder of CNH Industrial common
shares (and special voting shares as the case may be) received one Iveco Group share for every five CNH Industrial
common shares (or special voting share as the case may be) held at close of business on the record date for
allocation (January 4, 2022). Since January 3, 2022, CNH Industrial N.V. and Iveco Group N.V. have been quoted
separately on the regulated markets and operate as independent listed companies, each with its own management
and Board of Directors.
As the transaction took effect on January 1, 2022, the Consolidated Financial Statements for the year ended December
31, 2022 relate to the remaining CNH Industrial business. Moreover, in accordance with IFRS 5 \u2013 Non-current Assets
Held for Sale and Discontinued Operations, for the corresponding information of earlier periods, the Iveco Group
business is classified and presented as Discontinued Operations in these Consolidated Financial Statements.
For additional detail of items presented under Discontinued Operations in the Consolidated Statements of Income,
Financial Position and Cash Flows, refer to the section \"Scope of Consolidation - Discontinued Operations - Iveco
Group Business\".
Additionally, as the Demerger is a \u201cbusiness combination involving entities or businesses under common control\u201d, it is
outside the scope of application of IFRS 3 \u2013 Business Combinations and IFRIC 17- Distributions of Non-cash Assets to
Owners. Accordingly, in the 2022 Consolidated Financial Statements for CNH Industrial Post-Demerger the opening
position for items in the statement of financial position will be equivalent to the carrying amounts reported in the
Consolidated Financial Statements of CNH Industrial Pre-Demerger.
Discontinued Operations - Iveco Group Business
This section provides details of the contents of the items relating to Discontinued Operations as reported in the
Consolidated Income Statement, Consolidated Statement of Financial Position and Consolidated Statement of Cash
Flows.
From a methodological standpoint, it should be noted that with reference to the presentation required by IFRS 5 - Non
current Assets Held for Sale and Discontinued Operations, Discontinued Operations are included in the scope of
consolidation of CNH Industrial Group at December 31, 2021 and accordingly the total balances relating to the whole
Group have been determined by making the appropriate eliminations of transactions and balances between Continuing
Operations and Discontinued Operations.
More specifically, the approach was as follows:
\u25aain order to present the financial effects of a Discontinued Operation, revenues and expenses arising from
intercompany transactions were eliminated except for those revenues and expenses that are considered to continue
after the demerger. Eliminations from transactions between Continuing and Discontinued Operations are allocated in
full to Discontinued Operations. However, no profit or loss is recognized for intercompany transactions within the
Consolidated Income Statements. The amounts of income statement items included in Discontinued Operations is
detailed in the following paragraph.
\u25aaintercompany transactions between Continuing and Discontinued Operations have been eliminated in the
consolidated statement of financial position. The net balance between Assets held for distribution and Liabilities held
for distribution represents the net equity of the Discontinued Operations. This amount corresponds to the reduction in
the total equity of CNH Industrial due to the Demerger that occurred on January 1, 2022.
\u25aaall cash flows from Discontinued Operations are reported in the appropriate items for operating activities, investing
activities and financing activities in the Statement of Cash Flows. The cash flows represent those arising from
transactions with third parties.
Assets and Liabilities held for distribution
Assets and Liabilities classified as Discontinued Operations at December 31, 2021 may be analyzed as follows:
| | | |
| |
ASSETS HELD FOR DISTRIBUTION | | | |
| | | |
Property, plant and equipment | | | |
Investments and other non-current financial assets | | | |
| | | |
Defined benefit plan assets | | | |
| | | |
| | | |
| | | |
Receivables from financing activities | | | |
Other receivables and assets | | | |
Cash and cash equivalents | | | |
| | | |
TOTAL ASSETS HELD FOR DISTRIBUTION | | | |
| | | |
LIABILITIES HELD FOR DISTRIBUTION | | | |
| | | |
| | | |
| | | |
| | | |
Other payables and liabilities | | | |
TOTAL LIABILITIES HELD FOR DISTRIBUTION | | | |
20. Assets and Liabilities held for sale
This item may be analyzed as follows at December 31, 2022 and 2021:
| | |
| | |
| | |
| | |
Liabilities held for sale | | |
Assets and Liabilities held for sale decreased of $490 million and $125 million, respectively, compared to December 31,
2021. The decrease was primarily due to the sale of the Engineered Films and Aerostar Divisions, acquired in the
context of Raven acquisition and in a residual way to the sale of a property of CNH Industrial Canada Ltd.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfNoncurrentAssetsHeldForSaleAndDiscontinuedOperationsExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV8zMjIvZnJhZzowMjk1MWQzYmNjZGE0NzRhYjg4ZDJlZTEwZGM0MDEyYy90ZXh0cmVnaW9uOjAyOTUxZDNiY2NkYTQ3NGFiODhkMmVlMTBkYzQwMTJjXzMyOTg1MzQ4OTE3ODQ_2ad15fb6-ceac-4242-b568-837a82495fff": {
"value": "
As the transaction took effect on January 1, 2022, the Consolidated Financial Statements for the year ended December
31, 2022 relate to the remaining CNH Industrial business. Moreover, in accordance with IFRS 5 \u2013 Non-current Assets
Held for Sale and Discontinued Operations, for the corresponding information of earlier periods, the Iveco Group
business is classified and presented as Discontinued Operations in these Consolidated Financial Statements.
For additional detail of items presented under Discontinued Operations in the Consolidated Statements of Income,
Financial Position and Cash Flows, refer to the section \"Scope of Consolidation - Discontinued Operations - Iveco
Group Business\".
Additionally, as the Demerger is a \u201cbusiness combination involving entities or businesses under common control\u201d, it is
outside the scope of application of IFRS 3 \u2013 Business Combinations and IFRIC 17- Distributions of Non-cash Assets to
Owners. Accordingly, in the 2022 Consolidated Financial Statements for CNH Industrial Post-Demerger the opening
position for items in the statement of financial position will be equivalent to the carrying amounts reported in the
Consolidated Financial Statements of CNH Industrial Pre-Demerger.
Discontinued Operations - Iveco Group Business
This section provides details of the contents of the items relating to Discontinued Operations as reported in the
Consolidated Income Statement, Consolidated Statement of Financial Position and Consolidated Statement of Cash
Flows.
From a methodological standpoint, it should be noted that with reference to the presentation required by IFRS 5 - Non
current Assets Held for Sale and Discontinued Operations, Discontinued Operations are included in the scope of
consolidation of CNH Industrial Group at December 31, 2021 and accordingly the total balances relating to the whole
Group have been determined by making the appropriate eliminations of transactions and balances between Continuing
Operations and Discontinued Operations.
More specifically, the approach was as follows:
\u25aain order to present the financial effects of a Discontinued Operation, revenues and expenses arising from
intercompany transactions were eliminated except for those revenues and expenses that are considered to continue
after the demerger. Eliminations from transactions between Continuing and Discontinued Operations are allocated in
full to Discontinued Operations. However, no profit or loss is recognized for intercompany transactions within the
Consolidated Income Statements. The amounts of income statement items included in Discontinued Operations is
detailed in the following paragraph.
\u25aaintercompany transactions between Continuing and Discontinued Operations have been eliminated in the
consolidated statement of financial position. The net balance between Assets held for distribution and Liabilities held
for distribution represents the net equity of the Discontinued Operations. This amount corresponds to the reduction in
the total equity of CNH Industrial due to the Demerger that occurred on January 1, 2022.
\u25aaall cash flows from Discontinued Operations are reported in the appropriate items for operating activities, investing
activities and financing activities in the Statement of Cash Flows. The cash flows represent those arising from
transactions with third parties.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForDiscontinuedOperationsExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV8zMjgvZnJhZzo4OWRlNzliYTM4NDI0YzNhODY5MmU1MTdkZTExZTM4MS90ZXh0cmVnaW9uOjg5ZGU3OWJhMzg0MjRjM2E4NjkyZTUxN2RlMTFlMzgxXzcxNDY4MjU1ODMzMjc_ba54f32f-1d10-4908-ba55-ccb82a202b49": {
"value": "Climate related mattersCNH Industrial has an established risk management process that includes the assessment and monitoring of climate-related risk. These assessments are used by CNH Industrial to identify not only risk exposure, but also opportunities, on which the Group\u2019s climate change strategy is based. The identification of these climate-related risks and opportunities, along with the analysis of sustainability macrotrends, led to the definition of a decarbonization strategy, which in turn has been incorporated within, and regularly influences, the Group\u2019s Strategic Business Plan. To further address the potential impacts of climate change, CNH Industrial has implemented relevant projects and a number of other specific climate-related topics and has defined long-term strategic targets.There has been increasing interest in how climate change will impact the Group\u2019s business. With reference to the climate related matters, a critical review was undertaken, and a focused analysis performed to identify, and consequently manage, the principal risks and uncertainties to which the Group is exposed. The most significant area of effort will be the management of water scarcity and waste and the reducing energy and GHG emissions in the supply chain area. CNH Industrial recognizes the importance of climate change risk and promotes a responsible use of resources and a reduction of the environmental impact of production to mitigate climate change. In this context, CNH Industrial Group has adopted an environmental policy that applies to all company locations and divisions and has set up a structure dedicated to control environmental pollution, waste, and water disposal as well as emission reduction. In particular, considering the financial statements information are presented through historical values which, by their nature, do not fully capture future events, all significant assumptions and estimates underlying the preparation of the following items were subject to an analysis in order to identify and address the new uncertainties related to climate changes which could affect the business: going concern, inventory management, property, plant and equipment, goodwill, brands, intangible assets with a finite life, tax reliefs, revenue recognition, provisions and onerous contracts. The analysis conducted were based on the Group strategy outlined in the context of the global supply chain environmental targets and did not highlight any critical situations that cannot be attributable to and addressed in the ordinary course of the business.Global Business ConditionsSignificant uncertainties, including rising inflation, geopolitical instability, and the war in Ukraine, continue to create volatility in the global economy. These factors lead to inefficiencies in our manufacturing operations and impact costs. We continue to work to mitigate the impact of these issues in order to meet end-market demand. We will continue to monitor the situation as conditions remain fluid and evolve.During the first quarter of 2022, CNH Industrial announced it was suspending non-domestic operations in Russia. CNH Industrial is supporting its businesses in this market through the continuation of employee salaries and payment of other administrative expenses. As a result of the suspension, we evaluated the carrying value of assets held within CNH Industrial's Russia operations. Upon completion of the evaluation, during the quarter ended March 31, 2022, we recorded charges of $72 million related to asset write downs, financial receivable allowances and a valuation allowance against deferred tax assets. A prolonged war in Ukraine could have further adverse effects on us and our operations in Russia. The Russia-Ukraine conflict and the ensuing sanctions to Russia and Belarus and Russian counter-sanctions have created additional tensions in the commodity markets. CNH Industrial has no critical supplier in the affected countries, but prices for certain commodities, including natural gas, might create further volatility.Use of estimatesThese Consolidated Financial Statements have been prepared in accordance with EU-IFRS which requires CNH Industrial to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and reported amounts of income and expenses. The estimates and related assumptions are based on available information at the date of preparation of the financial statements, historical experience and other relevant factors. Actual results may differ from the estimates.Particularly in light of the current economic uncertainty, developments may occur which may differ from CNH Industrial's estimates and assumptions, and therefore might require significant adjustments to the carrying amounts of certain items, which as of the date of these Consolidated Financial Statements cannot be accurately estimated or predicted.The principal items affected by estimates are the allowances for doubtful accounts receivable and inventories, non-current assets (tangible and intangible assets), the residual values of assets leased out under operating lease arrangements, sales allowances, product warranties, pension and other post-employment benefits, deferred tax assets and contingent liabilities.Estimates and assumptions are reviewed periodically and the effects of any changes are recognized in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.The following are the critical judgments and the key assumptions concerning the future that CNH Industrial has made in the process of applying its accounting policies and that may have the most significant effect on the amounts recognized in its Consolidated Financial Statements or that represent a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.Allowance for doubtful accountsThe allowance for doubtful accounts for trade receivables and contract assets reflects CNH Industrial\u2019s estimate of expected lifetime credit losses, and it is measured at an amount equal to the present value of the cash shortfalls over the expected life of the financial asset. The allowance for doubtful accounts for receivables from financing activities reflects management\u2019s estimate of forward looking expected credit losses (\u201cECL\u201d) in the retail and wholesale portfolios. This requires considerable judgement about how changes in economic factors affect ECLs, which is determined on a probability-weighted basis. The ECL model applies to financial assets accounted for at amortized cost and at fair value through other comprehensive income, lease receivables, and certain loan commitments and financial guarantee contracts. The loss allowances will be measured on either of the following bases:\u25aa12 month ECLs: these are ECLs that result from possible default events within the 12 months after the reporting date; and\u25aalifetime ECLs: these are ECLs that result from all possible default events over the expected life of a financial instrument.Refer to Note 17 \u201cCurrent receivables and Other current financial assets\u201d for additional details on the calculation of allowance for credit losses. Allowance for obsolete and slow-moving inventoryThe allowance for obsolete and slow-moving inventory reflects management\u2019s estimate of the expected loss in value, and has been determined on the basis of past experience and historical and expected future trends in the used vehicle market. A worsening of the economic and financial situation could cause a further deterioration in conditions in the used vehicle market compared to that taken into consideration in calculating the allowances recognized in the financial statements.Recoverability of non-current assets (including goodwill)Non-current assets include property, plant and equipment, intangible assets (including goodwill), investments and other non-current financial assets. The Group reviews the carrying value of non-current assets held and used and that of assets to be disposed of when events and circumstances warrant such a review. For goodwill and intangible assets with indefinite useful lives such analysis is carried out at least annually.The analysis of the recoverable amount of non-current assets other than goodwill is usually performed using estimates of future expected cash flows from the use or disposal of the asset and an appropriate discount rate in order to calculate present value. If the carrying amount is deemed to be impaired, the Group recognizes an impairment loss for the amount by which the carrying amount of the asset exceeds its estimated recoverable amount from use or disposal determined by reference to the cash flows included in its most recent business forecasts.Goodwill impairment test is performed at the cash generating unit level, the segment level. The recoverable amount of the cash generating units is determined using multiple valuation methodologies, relying largely on an income approach (based on the present value of estimated future cash flows) but also incorporating value indicators from a market approach. The carrying amount of a cash generating unit is then compared to the recoverable amount to determine if there is an impairment loss. Further details on the goodwill impairment test are included in Note 12 \"Intangible assets\".In view of the present economic and financial situation, the Group made the following considerations in respect of its future prospects:\u25aawhen carrying out impairment testing of tangible and intangible assets, the Group took into account its expected performance in the upcoming years. CNH Industrial extended such projections for subsequent years to appropriately cover the period of analysis;\u25aashould the assumptions underlying the forecast deteriorate further, the following is noted: the Group\u2019s tangible and intangible assets with a finite useful life (mostly development costs) relate to models or products with high technological content in line with the latest environmental laws and regulations, which consequently makes them competitive in the current economic environment, especially in the more mature economies in which particular attention is placed on the eco-sustainability of those types of products. Consequently, despite the fact that the capital goods sector is one of the markets which could be most affected by a potential crisis in the immediate term, management considers that is highly probable that the life cycle of these products can be lengthened to extend over the period of time involved in a slower economic recovery, allowing the Group to achieve sufficient cash flows to cover the investments, although over a longer period of time.Residual values of assets leased out under operating lease arrangementsCNH Industrial records assets rented to customers or leased to them under operating lease as tangible assets. Income from such operating lease is recognized on a straight-line basis over the term of the lease. Depreciation expense for assets subject to operating lease is recognized on a straight-line basis over the lease term in amounts necessary to reduce the cost of an asset to its estimated residual value at the end of the lease term. The estimated residual value of leased assets is calculated at the lease commencement date on the basis of published industry information and historical experience and are reviewed quarterly. Realization of the residual values is dependent on CNH Industrial\u2019s future ability to market the assets under the then-prevailing market conditions. The Group continually evaluates whether events and circumstances have occurred which impact the estimated residual values of the assets on operating lease. The used equipment market was carefully monitored throughout 2022 to ensure that write-downs if any, were properly determined. However, additional write-downs may be required if market conditions should deteriorate further.Sales allowancesCNH Industrial provides sales incentives and discounts to dealers. At the time a sale to a dealer is recognized, CNH Industrial records an estimate of future sales incentive costs and discounts as a reduction of revenue. These incentives may be based on a dealer's purchase volume, or on retail sales incentive programs and financing programs that will be due when the dealer sells the equipment to a retail customer. The estimated cost of the these programs is based on historical data, announced and expected incentive programs, field inventory levels. The final cost of these programs is determined at the end of the measurement period for volume-based incentives or when the dealer sells the equipment to the retail customer. Changes in the mix and types of programs affect these estimates, which are reviewed quarterly. Actual cost differences from the original cost estimate are recognized in \"Net revenues\".Product warrantiesFor most equipment and service parts sales, CNH Industrial provides a standard warranty to provide assurance that the equipment will function as intended for a specified period of time. At the time a sale is recognized, CNH Industrial records the estimated future warranty costs. CNH Industrial determines its total warranty liability by applying historical claims rate experience to the estimated amount of equipment that has been sold to end-users and is still under warranty based on dealer inventories and retail sales. Variances in claims experience and the type of warranty programs affect these estimates, which are reviewed quarterly. Estimates used to determine the product warranty accruals are based on historical claims rate leveraging the last rolling 12 months and consideration of current quality developments.Pension and other post-employment benefitsGroup companies sponsor pension and other post-employment benefits in various countries, mainly in the United States, the United Kingdom and Germany.Employee benefit liabilities, related assets, costs and net interest connected with them are measured on an actuarial basis which requires the use of estimates and assumptions to determine the net defined benefit liability/asset for the Group. The actuarial method takes into consideration parameters of a financial nature such as the discount rate, the rate for expected return on plan assets, the rate of salary increases and the healthcare costs trend rate and takes into consideration the likelihood of potential future events by using certain demographic parameters such as mortality rates and dismissal or retirement rates. The discount rates selected are based on yields or yield curves of high quality corporate bonds in the relevant market. Trends in healthcare costs are developed on the basis of historical experience, the near-term outlook for costs and likely long-term trends. Rates of salary increases reflect the Group\u2019s long-term actual expectations in the reference market and inflation trends. Changes in any of these assumptions may have an effect on future contributions to the plans.The effects resulting from revising the estimates for the above parameters (\u201cre-measurements\u201d) are recognized directly in other comprehensive income without reclassification to profit or loss in subsequent years: refer to \u201cEmployee benefits\u201d section above for further details.Significant future changes in the yields of corporate bonds, other actuarial assumptions referred to above and returns on plan assets may significantly impact the net liability/asset.Recognition of deferred tax assetsAt December 31, 2022, CNH Industrial had net deferred tax assets, including tax loss carry forwards, of $534 million, of which $346 million are not recognized in the financial statements. The corresponding totals at December 31, 2021 were $538 million and $383 million. Management has recognized deferred tax assets it believes are probable to be realized. In determining the amount of deferred tax assets probable to be realized management has considered figures from budgets and plans consistent with those used for other purposes within CNH Industrial, for example impairment testing, as discussed in the paragraph \u201cRecoverability of non-current assets (including goodwill)\u201d above. CNH\u00a0Industrial believes the amount of recognized deferred tax assets is appropriate, despite the risk of actual future results potentially being less than results included in these forecasts, considering many of the recognized net deferred tax assets relate to temporary differences and tax losses which, to a significant extent, may be recovered over an extended time period, but do not expire based on currently enacted tax law. As in all financial reporting periods, CNH Industrial assessed the realizability of its various deferred tax assets, which related to multiple tax jurisdictions in all regions of the world. It is reasonably possible the Company's recognition of deferred tax assets could change during 2023. Such changes could materially impact the Company's financial results. During the fourth quarter of 2022, we recognized substantially all the deferred tax assets related to our agricultural and construction equipment operations in Italy, resulting in a $5 million non-cash tax benefit, as those operations had consistently returned to pre-tax profitability, with that trend anticipated to continue for the foreseeable future. During 2021, CNH Industrial recognized substantially all the deferred tax assets related to the agricultural and construction equipment operations in Brazil, resulting in a $142 million non-cash tax benefit, as those operations had consistently returned to sustained profitability in recent years, with that trend anticipated to continue for the foreseeable future. Contingent liabilitiesCNH Industrial is the subject of legal and indirect tax proceedings covering a range of matters, which are pending in various jurisdictions. Due to the uncertainty inherent in such matters, it is difficult to predict the final outcome of such matters. The cases and claims against CNH Industrial often raise difficult and complex factual and legal issues, which are subject to many uncertainties, including but not limited to the facts and circumstances of each particular case and claim, the jurisdiction and the differences in applicable law. In the normal course of business management consults with legal counsel and certain other experts on matters related to litigation, taxes and other similar contingent liabilities. The Group accrues a liability when it is determined that an adverse outcome is probable and the amount of the loss can be reasonably estimated. In the event an adverse outcome is possible or an estimate is not determinable, the matter is disclosed.",
"dimensions": {
"concept": "ifrs-full:ExplanationOfAssumptionAboutFutureWithSignificantRiskOfResultingInMaterialAdjustments",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV8zMjgvZnJhZzo4OWRlNzliYTM4NDI0YzNhODY5MmU1MTdkZTExZTM4MS90ZXh0cmVnaW9uOjg5ZGU3OWJhMzg0MjRjM2E4NjkyZTUxN2RlMTFlMzgxXzcxNDY4MjU1ODMzMjc_f24603b0-5a49-4103-9e9d-a9975a6a0390": {
"value": "
Climate related matters
CNH Industrial has an established risk management process that includes the assessment and monitoring of climate-
related risk. These assessments are used by CNH Industrial to identify not only risk exposure, but also opportunities, on
which the Group\u2019s climate change strategy is based. The identification of these climate-related risks and opportunities,
along with the analysis of sustainability macrotrends, led to the definition of a decarbonization strategy, which in turn
has been incorporated within, and regularly influences, the Group\u2019s Strategic Business Plan. To further address the
potential impacts of climate change, CNH Industrial has implemented relevant projects and a number of other specific
climate-related topics and has defined long-term strategic targets.
There has been increasing interest in how climate change will impact the Group\u2019s business. With reference to the
climate related matters, a critical review was undertaken, and a focused analysis performed to identify, and
consequently manage, the principal risks and uncertainties to which the Group is exposed. The most significant area of
effort will be the management of water scarcity and waste and the reducing energy and GHG emissions in the supply
chain area. CNH Industrial recognizes the importance of climate change risk and promotes a responsible use of
resources and a reduction of the environmental impact of production to mitigate climate change. In this context, CNH
Industrial Group has adopted an environmental policy that applies to all company locations and divisions and has set up
a structure dedicated to control environmental pollution, waste, and water disposal as well as emission reduction.
In particular, considering the financial statements information are presented through historical values which, by their
nature, do not fully capture future events, all significant assumptions and estimates underlying the preparation of the
following items were subject to an analysis in order to identify and address the new uncertainties related to climate
changes which could affect the business: going concern, inventory management, property, plant and equipment,
goodwill, brands, intangible assets with a finite life, tax reliefs, revenue recognition, provisions and onerous contracts.
The analysis conducted were based on the Group strategy outlined in the context of the global supply chain
environmental targets and did not highlight any critical situations that cannot be attributable to and addressed in the
ordinary course of the business.
Global Business Conditions
Significant uncertainties, including rising inflation, geopolitical instability, and the war in Ukraine, continue to create
volatility in the global economy. These factors lead to inefficiencies in our manufacturing operations and impact costs.
We continue to work to mitigate the impact of these issues in order to meet end-market demand. We will continue to
monitor the situation as conditions remain fluid and evolve.
During the first quarter of 2022, CNH Industrial announced it was suspending non-domestic operations in Russia. CNH
Industrial is supporting its businesses in this market through the continuation of employee salaries and payment of
other administrative expenses. As a result of the suspension, we evaluated the carrying value of assets held within
CNH Industrial's Russia operations. Upon completion of the evaluation, during the quarter ended March 31, 2022, we
recorded charges of $72 million related to asset write downs, financial receivable allowances and a valuation allowance
against deferred tax assets. A prolonged war in Ukraine could have further adverse effects on us and our operations in
Russia. The Russia-Ukraine conflict and the ensuing sanctions to Russia and Belarus and Russian counter-sanctions
have created additional tensions in the commodity markets. CNH Industrial has no critical supplier in the affected
countries, but prices for certain commodities, including natural gas, might create further volatility.
Use of estimates
These Consolidated Financial Statements have been prepared in accordance with EU-IFRS which requires CNH
Industrial to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities,
disclosure of contingent assets and liabilities, and reported amounts of income and expenses. The estimates and
related assumptions are based on available information at the date of preparation of the financial statements, historical
experience and other relevant factors. Actual results may differ from the estimates.
Particularly in light of the current economic uncertainty, developments may occur which may differ from CNH Industrial's
estimates and assumptions, and therefore might require significant adjustments to the carrying amounts of certain
items, which as of the date of these Consolidated Financial Statements cannot be accurately estimated or predicted.
The principal items affected by estimates are the allowances for doubtful accounts receivable and inventories, non-
current assets (tangible and intangible assets), the residual values of assets leased out under operating lease
arrangements, sales allowances, product warranties, pension and other post-employment benefits, deferred tax assets
and contingent liabilities.
Estimates and assumptions are reviewed periodically and the effects of any changes are recognized in the period in
which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods if
the revision affects both current and future periods.
The following are the critical judgments and the key assumptions concerning the future that CNH Industrial has made in
the process of applying its accounting policies and that may have the most significant effect on the amounts recognized
in its Consolidated Financial Statements or that represent a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next financial year.
Allowance for doubtful accounts
The allowance for doubtful accounts for trade receivables and contract assets reflects CNH Industrial\u2019s estimate of
expected lifetime credit losses, and it is measured at an amount equal to the present value of the cash shortfalls over
the expected life of the financial asset.
The allowance for doubtful accounts for receivables from financing activities reflects management\u2019s estimate of forward
looking expected credit losses (\u201cECL\u201d) in the retail and wholesale portfolios. This requires considerable judgement
about how changes in economic factors affect ECLs, which is determined on a probability-weighted basis. The ECL
model applies to financial assets accounted for at amortized cost and at fair value through other comprehensive
income, lease receivables, and certain loan commitments and financial guarantee contracts. The loss allowances will
be measured on either of the following bases:
\u25aa12 month ECLs: these are ECLs that result from possible default events within the 12 months after the reporting date;
and
\u25aalifetime ECLs: these are ECLs that result from all possible default events over the expected life of a financial
instrument.
Refer to Note 17 \u201cCurrent receivables and Other current financial assets\u201d for additional details on the calculation of
allowance for credit losses.
Allowance for obsolete and slow-moving inventory
The allowance for obsolete and slow-moving inventory reflects management\u2019s estimate of the expected loss in value,
and has been determined on the basis of past experience and historical and expected future trends in the used vehicle
market. A worsening of the economic and financial situation could cause a further deterioration in conditions in the used
vehicle market compared to that taken into consideration in calculating the allowances recognized in the financial
statements.
Recoverability of non-current assets (including goodwill)
Non-current assets include property, plant and equipment, intangible assets (including goodwill), investments and other
non-current financial assets. The Group reviews the carrying value of non-current assets held and used and that of
assets to be disposed of when events and circumstances warrant such a review. For goodwill and intangible assets with
indefinite useful lives such analysis is carried out at least annually.
The analysis of the recoverable amount of non-current assets other than goodwill is usually performed using estimates
of future expected cash flows from the use or disposal of the asset and an appropriate discount rate in order to
calculate present value. If the carrying amount is deemed to be impaired, the Group recognizes an impairment loss for
the amount by which the carrying amount of the asset exceeds its estimated recoverable amount from use or disposal
determined by reference to the cash flows included in its most recent business forecasts.
Goodwill impairment test is performed at the cash generating unit level, the segment level. The recoverable amount of
the cash generating units is determined using multiple valuation methodologies, relying largely on an income approach
(based on the present value of estimated future cash flows) but also incorporating value indicators from a market
approach. The carrying amount of a cash generating unit is then compared to the recoverable amount to determine if
there is an impairment loss. Further details on the goodwill impairment test are included in Note 12 \"Intangible assets\".
In view of the present economic and financial situation, the Group made the following considerations in respect of its
future prospects:
\u25aawhen carrying out impairment testing of tangible and intangible assets, the Group took into account its expected
performance in the upcoming years. CNH Industrial extended such projections for subsequent years to appropriately
cover the period of analysis;
\u25aashould the assumptions underlying the forecast deteriorate further, the following is noted: the Group\u2019s tangible and
intangible assets with a finite useful life (mostly development costs) relate to models or products with high
technological content in line with the latest environmental laws and regulations, which consequently makes them
competitive in the current economic environment, especially in the more mature economies in which particular
attention is placed on the eco-sustainability of those types of products. Consequently, despite the fact that the capital
goods sector is one of the markets which could be most affected by a potential crisis in the immediate term,
management considers that is highly probable that the life cycle of these products can be lengthened to extend over
the period of time involved in a slower economic recovery, allowing the Group to achieve sufficient cash flows to
cover the investments, although over a longer period of time.
Residual values of assets leased out under operating lease arrangements
CNH Industrial records assets rented to customers or leased to them under operating lease as tangible assets. Income
from such operating lease is recognized on a straight-line basis over the term of the lease. Depreciation expense for
assets subject to operating lease is recognized on a straight-line basis over the lease term in amounts necessary to
reduce the cost of an asset to its estimated residual value at the end of the lease term. The estimated residual value of
leased assets is calculated at the lease commencement date on the basis of published industry information and
historical experience and are reviewed quarterly.
Realization of the residual values is dependent on CNH Industrial\u2019s future ability to market the assets under the then-
prevailing market conditions. The Group continually evaluates whether events and circumstances have occurred which
impact the estimated residual values of the assets on operating lease. The used equipment market was carefully
monitored throughout 2022 to ensure that write-downs if any, were properly determined. However, additional write-
downs may be required if market conditions should deteriorate further.
Sales allowances
CNH Industrial provides sales incentives and discounts to dealers. At the time a sale to a dealer is recognized, CNH
Industrial records an estimate of future sales incentive costs and discounts as a reduction of revenue. These incentives
may be based on a dealer's purchase volume, or on retail sales incentive programs and financing programs that will be
due when the dealer sells the equipment to a retail customer. The estimated cost of the these programs is based on
historical data, announced and expected incentive programs, field inventory levels. The final cost of these programs is
determined at the end of the measurement period for volume-based incentives or when the dealer sells the equipment
to the retail customer. Changes in the mix and types of programs affect these estimates, which are reviewed quarterly.
Actual cost differences from the original cost estimate are recognized in \"Net revenues\".
Product warranties
For most equipment and service parts sales, CNH Industrial provides a standard warranty to provide assurance that the
equipment will function as intended for a specified period of time. At the time a sale is recognized, CNH Industrial
records the estimated future warranty costs. CNH Industrial determines its total warranty liability by applying historical
claims rate experience to the estimated amount of equipment that has been sold to end-users and is still under
warranty based on dealer inventories and retail sales. Variances in claims experience and the type of warranty
programs affect these estimates, which are reviewed quarterly. Estimates used to determine the product warranty
accruals are based on historical claims rate leveraging the last rolling 12 months and consideration of current quality
developments.
Pension and other post-employment benefits
Group companies sponsor pension and other post-employment benefits in various countries, mainly in the United
States, the United Kingdom and Germany.
Employee benefit liabilities, related assets, costs and net interest connected with them are measured on an actuarial
basis which requires the use of estimates and assumptions to determine the net defined benefit liability/asset for the
Group. The actuarial method takes into consideration parameters of a financial nature such as the discount rate, the
rate for expected return on plan assets, the rate of salary increases and the healthcare costs trend rate and takes into
consideration the likelihood of potential future events by using certain demographic parameters such as mortality rates
and dismissal or retirement rates. The discount rates selected are based on yields or yield curves of high quality
corporate bonds in the relevant market. Trends in healthcare costs are developed on the basis of historical experience,
the near-term outlook for costs and likely long-term trends. Rates of salary increases reflect the Group\u2019s long-term
actual expectations in the reference market and inflation trends. Changes in any of these assumptions may have an
effect on future contributions to the plans.
The effects resulting from revising the estimates for the above parameters (\u201cre-measurements\u201d) are recognized directly
in other comprehensive income without reclassification to profit or loss in subsequent years: refer to \u201cEmployee
benefits\u201d section above for further details.
Significant future changes in the yields of corporate bonds, other actuarial assumptions referred to above and returns
on plan assets may significantly impact the net liability/asset.
Recognition of deferred tax assets
At December 31, 2022, CNH Industrial had net deferred tax assets, including tax loss carry forwards, of $534 million, of
which $346 million are not recognized in the financial statements. The corresponding totals at December 31, 2021 were
$538 million and $383 million.
Management has recognized deferred tax assets it believes are probable to be realized. In determining the amount of
deferred tax assets probable to be realized management has considered figures from budgets and plans consistent
with those used for other purposes within CNH Industrial, for example impairment testing, as discussed in the
paragraph \u201cRecoverability of non-current assets (including goodwill)\u201d above. CNH\u00a0Industrial believes the amount of
recognized deferred tax assets is appropriate, despite the risk of actual future results potentially being less than results
included in these forecasts, considering many of the recognized net deferred tax assets relate to temporary differences
and tax losses which, to a significant extent, may be recovered over an extended time period, but do not expire based
on currently enacted tax law. As in all financial reporting periods, CNH Industrial assessed the realizability of its various
deferred tax assets, which related to multiple tax jurisdictions in all regions of the world. It is reasonably possible the
Company's recognition of deferred tax assets could change during 2023. Such changes could materially impact the
Company's financial results.
During the fourth quarter of 2022, we recognized substantially all the deferred tax assets related to our agricultural and
construction equipment operations in Italy, resulting in a $5 million non-cash tax benefit, as those operations had
consistently returned to pre-tax profitability, with that trend anticipated to continue for the foreseeable future.
During 2021, CNH Industrial recognized substantially all the deferred tax assets related to the agricultural and
construction equipment operations in Brazil, resulting in a $142 million non-cash tax benefit, as those operations had
consistently returned to sustained profitability in recent years, with that trend anticipated to continue for the foreseeable
future.
Contingent liabilities
CNH Industrial is the subject of legal and indirect tax proceedings covering a range of matters, which are pending in
various jurisdictions. Due to the uncertainty inherent in such matters, it is difficult to predict the final outcome of such
matters. The cases and claims against CNH Industrial often raise difficult and complex factual and legal issues, which
are subject to many uncertainties, including but not limited to the facts and circumstances of each particular case and
claim, the jurisdiction and the differences in applicable law. In the normal course of business management consults with
legal counsel and certain other experts on matters related to litigation, taxes and other similar contingent liabilities. The
Group accrues a liability when it is determined that an adverse outcome is probable and the amount of the loss can be
reasonably estimated. In the event an adverse outcome is possible or an estimate is not determinable, the matter is
disclosed.
",
"dimensions": {
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},
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Basis of consolidation
Subsidiaries
Subsidiaries are entities over which the Group has control. Control is achieved when the Group is exposed, or has
rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its
power over the investee.
When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant
facts and circumstances in assessing whether it has power over an investee, including:
\u25aathe contractual arrangement with the other vote holders of the investee;
\u25aarights arising from other contractual arrangements;
\u25aathe Group\u2019s voting rights and potential voting rights.
The Group re-assesses 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. The financial statements of subsidiaries are included in the
Consolidated Financial Statements from the date that control commences until the date that control ceases. Non-
controlling interests in the net assets of consolidated subsidiaries and non-controlling interests in the profit or loss of
consolidated subsidiaries are presented separately from the interests of the owners of the parent in the consolidated
statement of financial position and income statement respectively. Losses applicable to non-controlling interests which
exceed the non-controlling interests in the subsidiary\u2019s equity are debited to non-controlling interests.
Changes in the Group's ownership interests in subsidiaries that do not result in the loss of control are accounted for as
equity transactions. The carrying amounts of the equity attributable to owners of the parent and non-controlling interests
are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the book value
of the non-controlling interests and the fair value of the relevant consideration is recognized directly in the equity
attributable to the owners of the parent.
If the Group loses control of a subsidiary, a gain or loss is recognized in profit or loss and is calculated as the difference
between (i) the aggregate of the fair value of the relevant consideration and the fair value of any retained interest and
(ii) the carrying amount of the assets (including goodwill) and liabilities of the subsidiary and any non-controlling
interests. Any profits or losses recognized in other comprehensive income in respect of the subsidiary are accounted for
as if the subsidiary had been sold (i.e., are reclassified to profit or loss or transferred directly to retained earnings
depending on the applicable IFRS).
Subsidiaries that are either dormant or generate a negligible volume of business, are not consolidated. Their impact on
the Group\u2019s assets, liabilities, financial position and profit/(loss) attributable to the owners of the parent is immaterial.
Joint ventures
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
exists only when decisions about the relevant activities require unanimous consent of the parties sharing control.
Investments in joint ventures are accounted for using the equity method from the date that joint control commences until
the date that joint control ceases.
Associates
Associates are enterprises over which the Group has significant influence. As defined in IAS 28 \u2013 Investments in
Associates and Joint Ventures, significant influence is the power to participate in the financial and operating policy
decisions of the investee but is not control or joint control of those policies. Investments in associates are accounted for
using the equity method from the date that significant influence commences until the date that significant influence
ceases. When the Group\u2019s share of losses of an associate, if any, exceeds the carrying amount of the associate in the
Group\u2019s statement of financial position, the carrying amount is reduced to nil and recognition of further losses is
discontinued except to the extent that the Group has incurred obligations in respect of the associate.
Investments in other companies
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 are measured at
cost as an estimate of fair value, as permitted by IFRS 9. The Group may irrevocably elect to present subsequent
changes in the investment\u2019s fair value in other comprehensive income upon the initial recognition of an equity
investment that is not held to sell. This election is made on an investment-by-investment basis. Dividends received from
these investments are included in Other income/(expenses) from investments.
Transactions eliminated on consolidation
All significant intragroup balances and transactions and any unrealized gains and losses arising from intragroup
transactions are eliminated in preparing the Consolidated Financial Statements. Unrealized gains and losses arising
from transactions with associates and joint ventures are eliminated to the extent of the Group\u2019s interest in those entities.
Foreign currency transactions
Transactions in foreign currencies are recorded at the foreign exchange rate prevailing at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the
exchange rate prevailing at that date. Exchange differences arising on the settlement of monetary items or on reporting
monetary items at rates different from those at which they were initially recorded during the period or in previous
financial statements, are recognized in profit or loss.
Consolidation of foreign entities
All assets and liabilities of subsidiaries with a functional currency other than the U.S. dollar are translated using the
exchange rates in effect at the balance sheet date. Income and expenses are translated at the average exchange rate
for the period. Translation differences resulting from the application of this method are classified as equity until the
disposal of the investment. Average rates of exchange are used to translate the cash flows of foreign subsidiaries in
preparing the consolidated statement of cash flows.
The goodwill, assets acquired and liabilities assumed arising from the acquisition of entities with a functional currency
other than the U.S. dollar are recognized in the functional currency and translated at the exchange rate at the
acquisition date. These balances are subsequently retranslated at the exchange rate at the balance sheet date.
The Group applies IAS 29 - Financial reporting in hyperinflationary economies for its subsidiaries that prepare their
financial statements in a functional currency of a hyperinflationary economy. According to this standard, non-monetary
assets and liabilities not yet translated into U.S. dollar at the reporting date are redetermined using a general price
index. The financial statements of these subsidiaries are then translated at the closing spot rate.
The principal exchange rates used to translate into U.S. dollars the financial statements prepared in currencies other
than the U.S. dollar were as follows:
(1)From July 1, 2018, Argentina\u2019s economy was considered to be hyperinflationary. After the same date, transactions for entities with the Argentine peso as the functional currency were translated using the closing spot rate.From
January 1st, 2023 on, the functional currency of the industrial legal entity changed to USD, only the financial services legal entity remains with the Argentinean Pesos as functional currency.
(2)Starting from 2022, Turkey\u2019s economy was considered to be hyperinflationary. After the same date, transactions for entities with the Turkish lira as the functional currency were translated using the closing spot rate.
SCOPE OF CONSOLIDATION
The Consolidated Financial Statements of the Group as of December 31, 2022 include CNH Industrial N.V. and 102
consolidated subsidiaries over which CNH Industrial N.V., directly or indirectly, has control. A total of 111 subsidiaries
were consolidated at December 31, 2021.
Excluded from consolidation are 9 subsidiaries that are either dormant or generate a negligible volume of business:
their proportion of the Group\u2019s assets, liabilities, financial position and earnings is immaterial. In particular, 9 of such
subsidiaries are accounted for using the cost method, and represent in aggregate less than 0.01 percent of Group
revenues, equity and total assets.
Discontinued Operations - Iveco Group Business
This section provides details of the contents of the items relating to Discontinued Operations as reported in the
Consolidated Income Statement, Consolidated Statement of Financial Position and Consolidated Statement of Cash
Flows.
From a methodological standpoint, it should be noted that with reference to the presentation required by IFRS 5 - Non
current Assets Held for Sale and Discontinued Operations, Discontinued Operations are included in the scope of
consolidation of CNH Industrial Group at December 31, 2021 and accordingly the total balances relating to the whole
Group have been determined by making the appropriate eliminations of transactions and balances between Continuing
Operations and Discontinued Operations.
More specifically, the approach was as follows:
\u25aain order to present the financial effects of a Discontinued Operation, revenues and expenses arising from
intercompany transactions were eliminated except for those revenues and expenses that are considered to continue
after the demerger. Eliminations from transactions between Continuing and Discontinued Operations are allocated in
full to Discontinued Operations. However, no profit or loss is recognized for intercompany transactions within the
Consolidated Income Statements. The amounts of income statement items included in Discontinued Operations is
detailed in the following paragraph.
\u25aaintercompany transactions between Continuing and Discontinued Operations have been eliminated in the
consolidated statement of financial position. The net balance between Assets held for distribution and Liabilities held
for distribution represents the net equity of the Discontinued Operations. This amount corresponds to the reduction in
the total equity of CNH Industrial due to the Demerger that occurred on January 1, 2022.
\u25aaall cash flows from Discontinued Operations are reported in the appropriate items for operating activities, investing
activities and financing activities in the Statement of Cash Flows. The cash flows represent those arising from
transactions with third parties.
Assets and Liabilities held for distribution
Assets and Liabilities classified as Discontinued Operations at December 31, 2021 may be analyzed as follows:
| | | |
| |
ASSETS HELD FOR DISTRIBUTION | | | |
| | | |
Property, plant and equipment | | | |
Investments and other non-current financial assets | | | |
| | | |
Defined benefit plan assets | | | |
| | | |
| | | |
| | | |
Receivables from financing activities | | | |
Other receivables and assets | | | |
Cash and cash equivalents | | | |
| | | |
TOTAL ASSETS HELD FOR DISTRIBUTION | | | |
| | | |
LIABILITIES HELD FOR DISTRIBUTION | | | |
| | | |
| | | |
| | | |
| | | |
Other payables and liabilities | | | |
TOTAL LIABILITIES HELD FOR DISTRIBUTION | | | |
",
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Subsidiaries
Subsidiaries are entities over which the Group has control. Control is achieved when the Group is exposed, or has
rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its
power over the investee.
When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant
facts and circumstances in assessing whether it has power over an investee, including:
\u25aathe contractual arrangement with the other vote holders of the investee;
\u25aarights arising from other contractual arrangements;
\u25aathe Group\u2019s voting rights and potential voting rights.
The Group re-assesses 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. The financial statements of subsidiaries are included in the
Consolidated Financial Statements from the date that control commences until the date that control ceases. Non-
controlling interests in the net assets of consolidated subsidiaries and non-controlling interests in the profit or loss of
consolidated subsidiaries are presented separately from the interests of the owners of the parent in the consolidated
statement of financial position and income statement respectively. Losses applicable to non-controlling interests which
exceed the non-controlling interests in the subsidiary\u2019s equity are debited to non-controlling interests.
Changes in the Group's ownership interests in subsidiaries that do not result in the loss of control are accounted for as
equity transactions. The carrying amounts of the equity attributable to owners of the parent and non-controlling interests
are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the book value
of the non-controlling interests and the fair value of the relevant consideration is recognized directly in the equity
attributable to the owners of the parent.
If the Group loses control of a subsidiary, a gain or loss is recognized in profit or loss and is calculated as the difference
between (i) the aggregate of the fair value of the relevant consideration and the fair value of any retained interest and
(ii) the carrying amount of the assets (including goodwill) and liabilities of the subsidiary and any non-controlling
interests. Any profits or losses recognized in other comprehensive income in respect of the subsidiary are accounted for
as if the subsidiary had been sold (i.e., are reclassified to profit or loss or transferred directly to retained earnings
depending on the applicable IFRS).
Subsidiaries that are either dormant or generate a negligible volume of business, are not consolidated. Their impact on
the Group\u2019s assets, liabilities, financial position and profit/(loss) attributable to the owners of the parent is immaterial.
",
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},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV8zMzcvZnJhZzo2OGZhZmQ2MWIxZDY0M2YwYTIwYTY5ZWEzMTVjNjc1OC90ZXh0cmVnaW9uOjY4ZmFmZDYxYjFkNjQzZjBhMjBhNjllYTMxNWM2NzU4Xzk4OTU2MDQ2NTgxNzE_794ce0f0-0e69-4597-863a-63521f25b7c0": {
"value": "Non-
controlling interests in the net assets of consolidated subsidiaries and non-controlling interests in the profit or loss of
consolidated subsidiaries are presented separately from the interests of the owners of the parent in the consolidated
statement of financial position and income statement respectively. Losses applicable to non-controlling interests which
exceed the non-controlling interests in the subsidiary\u2019s equity are debited to non-controlling interests.
Changes in the Group's ownership interests in subsidiaries that do not result in the loss of control are accounted for as
equity transactions. The carrying amounts of the equity attributable to owners of the parent and non-controlling interests
are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the book value
of the non-controlling interests and the fair value of the relevant consideration is recognized directly in the equity
attributable to the owners of the parent.
If the Group loses control of a subsidiary, a gain or loss is recognized in profit or loss and is calculated as the difference
between (i) the aggregate of the fair value of the relevant consideration and the fair value of any retained interest and
(ii) the carrying amount of the assets (including goodwill) and liabilities of the subsidiary and any non-controlling
interests. Any profits or losses recognized in other comprehensive income in respect of the subsidiary are accounted for
as if the subsidiary had been sold (i.e., are reclassified to profit or loss or transferred directly to retained earnings
depending on the applicable IFRS).
non-controlling interest is initially measured either at fair value or at the non-controlling interest\u2019s proportionate share
of the acquiree's identifiable net assets. The selection of the measurement method is made on a transaction-by-
transaction basis;
",
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},
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"value": "
Joint ventures
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
exists only when decisions about the relevant activities require unanimous consent of the parties sharing control.
Investments in joint ventures are accounted for using the equity method from the date that joint control commences until
the date that joint control ceases.
",
"dimensions": {
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"language": "en",
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}
},
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"value": "
Joint ventures
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
exists only when decisions about the relevant activities require unanimous consent of the parties sharing control.
Investments in joint ventures are accounted for using the equity method from the date that joint control commences until
the date that joint control ceases.
Associates
Associates are enterprises over which the Group has significant influence. As defined in IAS 28 \u2013 Investments in
Associates and Joint Ventures, significant influence is the power to participate in the financial and operating policy
decisions of the investee but is not control or joint control of those policies. Investments in associates are accounted for
using the equity method from the date that significant influence commences until the date that significant influence
ceases. When the Group\u2019s share of losses of an associate, if any, exceeds the carrying amount of the associate in the
Group\u2019s statement of financial position, the carrying amount is reduced to nil and recognition of further losses is
discontinued except to the extent that the Group has incurred obligations in respect of the associate.
",
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}
},
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"value": "
Associates
Associates are enterprises over which the Group has significant influence. As defined in IAS 28 \u2013 Investments in
Associates and Joint Ventures, significant influence is the power to participate in the financial and operating policy
decisions of the investee but is not control or joint control of those policies. Investments in associates are accounted for
using the equity method from the date that significant influence commences until the date that significant influence
ceases. When the Group\u2019s share of losses of an associate, if any, exceeds the carrying amount of the associate in the
Group\u2019s statement of financial position, the carrying amount is reduced to nil and recognition of further losses is
discontinued except to the extent that the Group has incurred obligations in respect of the associate.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentInAssociates",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV8zMzcvZnJhZzo2OGZhZmQ2MWIxZDY0M2YwYTIwYTY5ZWEzMTVjNjc1OC90ZXh0cmVnaW9uOjY4ZmFmZDYxYjFkNjQzZjBhMjBhNjllYTMxNWM2NzU4XzMyOTg1MzQ4OTE1MDM_0d200510-c918-4c11-b386-4e6c48f1cf15": {
"value": "
Investments in other companies
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 are measured at
cost as an estimate of fair value, as permitted by IFRS 9. The Group may irrevocably elect to present subsequent
changes in the investment\u2019s fair value in other comprehensive income upon the initial recognition of an equity
investment that is not held to sell. This election is made on an investment-by-investment basis. Dividends received from
these investments are included in Other income/(expenses) from investments.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentsOtherThanInvestmentsAccountedForUsingEquityMethodExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV8zMzcvZnJhZzo2OGZhZmQ2MWIxZDY0M2YwYTIwYTY5ZWEzMTVjNjc1OC90ZXh0cmVnaW9uOjY4ZmFmZDYxYjFkNjQzZjBhMjBhNjllYTMxNWM2NzU4XzMyOTg1MzQ4OTE0ODk_d0e5e928-d543-41ee-8128-989a9248bfd2": {
"value": "
Foreign currency transactions
Transactions in foreign currencies are recorded at the foreign exchange rate prevailing at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the
exchange rate prevailing at that date. Exchange differences arising on the settlement of monetary items or on reporting
monetary items at rates different from those at which they were initially recorded during the period or in previous
financial statements, are recognized in profit or loss.
Consolidation of foreign entities
All assets and liabilities of subsidiaries with a functional currency other than the U.S. dollar are translated using the
exchange rates in effect at the balance sheet date. Income and expenses are translated at the average exchange rate
for the period. Translation differences resulting from the application of this method are classified as equity until the
disposal of the investment. Average rates of exchange are used to translate the cash flows of foreign subsidiaries in
preparing the consolidated statement of cash flows.
The goodwill, assets acquired and liabilities assumed arising from the acquisition of entities with a functional currency
other than the U.S. dollar are recognized in the functional currency and translated at the exchange rate at the
acquisition date. These balances are subsequently retranslated at the exchange rate at the balance sheet date.
The Group applies IAS 29 - Financial reporting in hyperinflationary economies for its subsidiaries that prepare their
financial statements in a functional currency of a hyperinflationary economy. According to this standard, non-monetary
assets and liabilities not yet translated into U.S. dollar at the reporting date are redetermined using a general price
index. The financial statements of these subsidiaries are then translated at the closing spot rate.
The principal exchange rates used to translate into U.S. dollars the financial statements prepared in currencies other
than the U.S. dollar were as follows:
(1)From July 1, 2018, Argentina\u2019s economy was considered to be hyperinflationary. After the same date, transactions for entities with the Argentine peso as the functional currency were translated using the closing spot rate.From
January 1st, 2023 on, the functional currency of the industrial legal entity changed to USD, only the financial services legal entity remains with the Argentinean Pesos as functional currency.
(2)Starting from 2022, Turkey\u2019s economy was considered to be hyperinflationary. After the same date, transactions for entities with the Turkish lira as the functional currency were translated using the closing spot rate.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForForeignCurrencyTranslationExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV8zNDAvZnJhZzoxYzUxOTVmZGQ1MWI0ODg4OTlkZWYyZDRiMjY2YzgyNy90ZXh0cmVnaW9uOjFjNTE5NWZkZDUxYjQ4ODg5OWRlZjJkNGIyNjZjODI3XzcxNDY4MjU1ODQ2MDE_0d30f7ac-7de9-4cec-9ba0-5c742bb0c7e1": {
"value": "
Business combinations
Business combinations are accounted for by applying the acquisition method. Under this method:
\u25aathe consideration transferred in a business combination is measured at fair value, which is calculated as the sum of
the acquisition-date fair values of the assets transferred and liabilities assumed by the Group and the equity interests
issued in exchange for control of the acquiree. Acquisition-related costs are generally recognized in profit or loss as
incurred;
\u25aaat the acquisition date, the identifiable assets acquired and the liabilities assumed are recognized at their fair value at
that date, except for deferred tax assets and liabilities, assets and liabilities relating to employee benefit
arrangements, liabilities or equity instruments relating to share-based payment arrangements of the acquiree or
share-based payment arrangements of the Group entered into to replace share-based payment arrangements of the
acquire, assets (or disposal groups) that are classified as held for sale, which are measured in accordance with the
relevant standard;
\u25aagoodwill is measured as the excess of the aggregate of the consideration transferred in the business combination,
the amount of any non-controlling interest in the acquiree and the fair value of the acquirer's previously held equity
interest in the acquiree (if any) over the net of the acquisition-date amounts of the identifiable assets acquired and the
liabilities assumed. If the net of the acquisition-date amounts of the identifiable assets acquired and liabilities
assumed exceeds the aggregate of the consideration transferred, the amount of any non-controlling interest in the
acquiree and the fair value of the acquirer's previously held interest in the acquiree (if any), the excess is recognized
immediately in profit or loss as a gain from a bargain purchase;
\u25aanon-controlling interest is initially measured either at fair value or at the non-controlling interest\u2019s proportionate share
of the acquiree's identifiable net assets. The selection of the measurement method is made on a transaction-by-
transaction basis;
\u25aaany contingent consideration arrangement in the business combination is measured at its acquisition-date fair value
and included as part of the consideration transferred in the business combination in order to determine goodwill.
Changes in the fair value of the contingent consideration that qualify as measurement period adjustments are
recognized retrospectively, with corresponding adjustments to goodwill. Measurement period adjustments are
adjustments that arise from additional information obtained during the \u2018measurement period\u2019 (which may not exceed
one year from the acquisition date) about facts and circumstances that existed as of the acquisition date. Any
changes in fair value after the measurement period are recognized in profit or loss.
When a business combination is achieved in stages, the Group's previously held equity interest in the acquiree is
remeasured at its acquisition-date fair value and the resulting gain or loss, if any, is recognized in profit or loss.
Changes in the equity interest in the acquiree that have been recognized in Other comprehensive income in prior
reporting periods are reclassified to profit or loss as if the interest had been disposed of.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the
combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete in the
Consolidated Financial Statements. Those provisional amounts are adjusted during the above-mentioned measurement
period to reflect new information obtained about facts and circumstances that existed at the acquisition date which, if
known, would have affected the amounts recognized at that date.
Business combinations that took place prior to January 1, 2010 were accounted for in accordance with the version of
IFRS\u00a03 effective before the 2008 amendments, as permitted by the revised standard.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV8zNDAvZnJhZzoxYzUxOTVmZGQ1MWI0ODg4OTlkZWYyZDRiMjY2YzgyNy90ZXh0cmVnaW9uOjFjNTE5NWZkZDUxYjQ4ODg5OWRlZjJkNGIyNjZjODI3XzcxNDY4MjU1ODQ2MDE_917cb228-7f0e-4827-8ebd-7ea80996ce50": {
"value": "
Business combinations
Business combinations are accounted for by applying the acquisition method. Under this method:
\u25aathe consideration transferred in a business combination is measured at fair value, which is calculated as the sum of
the acquisition-date fair values of the assets transferred and liabilities assumed by the Group and the equity interests
issued in exchange for control of the acquiree. Acquisition-related costs are generally recognized in profit or loss as
incurred;
\u25aaat the acquisition date, the identifiable assets acquired and the liabilities assumed are recognized at their fair value at
that date, except for deferred tax assets and liabilities, assets and liabilities relating to employee benefit
arrangements, liabilities or equity instruments relating to share-based payment arrangements of the acquiree or
share-based payment arrangements of the Group entered into to replace share-based payment arrangements of the
acquire, assets (or disposal groups) that are classified as held for sale, which are measured in accordance with the
relevant standard;
\u25aagoodwill is measured as the excess of the aggregate of the consideration transferred in the business combination,
the amount of any non-controlling interest in the acquiree and the fair value of the acquirer's previously held equity
interest in the acquiree (if any) over the net of the acquisition-date amounts of the identifiable assets acquired and the
liabilities assumed. If the net of the acquisition-date amounts of the identifiable assets acquired and liabilities
assumed exceeds the aggregate of the consideration transferred, the amount of any non-controlling interest in the
acquiree and the fair value of the acquirer's previously held interest in the acquiree (if any), the excess is recognized
immediately in profit or loss as a gain from a bargain purchase;
\u25aanon-controlling interest is initially measured either at fair value or at the non-controlling interest\u2019s proportionate share
of the acquiree's identifiable net assets. The selection of the measurement method is made on a transaction-by-
transaction basis;
\u25aaany contingent consideration arrangement in the business combination is measured at its acquisition-date fair value
and included as part of the consideration transferred in the business combination in order to determine goodwill.
Changes in the fair value of the contingent consideration that qualify as measurement period adjustments are
recognized retrospectively, with corresponding adjustments to goodwill. Measurement period adjustments are
adjustments that arise from additional information obtained during the \u2018measurement period\u2019 (which may not exceed
one year from the acquisition date) about facts and circumstances that existed as of the acquisition date. Any
changes in fair value after the measurement period are recognized in profit or loss.
When a business combination is achieved in stages, the Group's previously held equity interest in the acquiree is
remeasured at its acquisition-date fair value and the resulting gain or loss, if any, is recognized in profit or loss.
Changes in the equity interest in the acquiree that have been recognized in Other comprehensive income in prior
reporting periods are reclassified to profit or loss as if the interest had been disposed of.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the
combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete in the
Consolidated Financial Statements. Those provisional amounts are adjusted during the above-mentioned measurement
period to reflect new information obtained about facts and circumstances that existed at the acquisition date which, if
known, would have affected the amounts recognized at that date.
Business combinations that took place prior to January 1, 2010 were accounted for in accordance with the version of
IFRS\u00a03 effective before the 2008 amendments, as permitted by the revised standard.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsAndGoodwillExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV8zNDAvZnJhZzoxYzUxOTVmZGQ1MWI0ODg4OTlkZWYyZDRiMjY2YzgyNy90ZXh0cmVnaW9uOjFjNTE5NWZkZDUxYjQ4ODg5OWRlZjJkNGIyNjZjODI3XzMyOTg1MzQ4ODczODY_52dd6dc7-831f-492d-bc9c-4dab678c7b73": {
"value": "goodwill is measured as the excess of the aggregate of the consideration transferred in the business combination,
the amount of any non-controlling interest in the acquiree and the fair value of the acquirer's previously held equity
interest in the acquiree (if any) over the net of the acquisition-date amounts of the identifiable assets acquired and the
liabilities assumed. If the net of the acquisition-date amounts of the identifiable assets acquired and liabilities
assumed exceeds the aggregate of the consideration transferred, the amount of any non-controlling interest in the
acquiree and the fair value of the acquirer's previously held interest in the acquiree (if any), the excess is recognized
immediately in profit or loss as a gain from a bargain purchase;
Goodwill
Goodwill is not amortized, but is tested for impairment annually or more frequently if events or changes in
circumstances indicate that it might be impaired. After initial recognition, goodwill is measured at cost less any
accumulated impairment losses.
Recoverability of non-current assets (including goodwill)
Non-current assets include property, plant and equipment, intangible assets (including goodwill), investments and other
non-current financial assets. The Group reviews the carrying value of non-current assets held and used and that of
assets to be disposed of when events and circumstances warrant such a review. For goodwill and intangible assets with
indefinite useful lives such analysis is carried out at least annually.
The analysis of the recoverable amount of non-current assets other than goodwill is usually performed using estimates
of future expected cash flows from the use or disposal of the asset and an appropriate discount rate in order to
calculate present value. If the carrying amount is deemed to be impaired, the Group recognizes an impairment loss for
the amount by which the carrying amount of the asset exceeds its estimated recoverable amount from use or disposal
determined by reference to the cash flows included in its most recent business forecasts.
Goodwill impairment test is performed at the cash generating unit level, the segment level. The recoverable amount of
the cash generating units is determined using multiple valuation methodologies, relying largely on an income approach
(based on the present value of estimated future cash flows) but also incorporating value indicators from a market
approach. The carrying amount of a cash generating unit is then compared to the recoverable amount to determine if
there is an impairment loss. Further details on the goodwill impairment test are included in Note 12 \"Intangible assets\".
In view of the present economic and financial situation, the Group made the following considerations in respect of its
future prospects:
\u25aawhen carrying out impairment testing of tangible and intangible assets, the Group took into account its expected
performance in the upcoming years. CNH Industrial extended such projections for subsequent years to appropriately
cover the period of analysis;
\u25aashould the assumptions underlying the forecast deteriorate further, the following is noted: the Group\u2019s tangible and
intangible assets with a finite useful life (mostly development costs) relate to models or products with high
technological content in line with the latest environmental laws and regulations, which consequently makes them
competitive in the current economic environment, especially in the more mature economies in which particular
attention is placed on the eco-sustainability of those types of products. Consequently, despite the fact that the capital
goods sector is one of the markets which could be most affected by a potential crisis in the immediate term,
management considers that is highly probable that the life cycle of these products can be lengthened to extend over
the period of time involved in a slower economic recovery, allowing the Group to achieve sufficient cash flows to
cover the investments, although over a longer period of time.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForGoodwillExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV8zNDAvZnJhZzoxYzUxOTVmZGQ1MWI0ODg4OTlkZWYyZDRiMjY2YzgyNy90ZXh0cmVnaW9uOjFjNTE5NWZkZDUxYjQ4ODg5OWRlZjJkNGIyNjZjODI3XzMyOTg1MzQ4ODczODc_7ef70538-8195-43ca-a4c3-690b770d37af": {
"value": "any contingent consideration arrangement in the business combination is measured at its acquisition-date fair value
and included as part of the consideration transferred in the business combination in order to determine goodwill.
Changes in the fair value of the contingent consideration that qualify as measurement period adjustments are
recognized retrospectively, with corresponding adjustments to goodwill. Measurement period adjustments are
adjustments that arise from additional information obtained during the \u2018measurement period\u2019 (which may not exceed
one year from the acquisition date) about facts and circumstances that existed as of the acquisition date. Any
changes in fair value after the measurement period are recognized in profit or loss.
Contingent liabilities
CNH Industrial is the subject of legal and indirect tax proceedings covering a range of matters, which are pending in
various jurisdictions. Due to the uncertainty inherent in such matters, it is difficult to predict the final outcome of such
matters. The cases and claims against CNH Industrial often raise difficult and complex factual and legal issues, which
are subject to many uncertainties, including but not limited to the facts and circumstances of each particular case and
claim, the jurisdiction and the differences in applicable law. In the normal course of business management consults with
legal counsel and certain other experts on matters related to litigation, taxes and other similar contingent liabilities. The
Group accrues a liability when it is determined that an adverse outcome is probable and the amount of the loss can be
reasonably estimated. In the event an adverse outcome is possible or an estimate is not determinable, the matter is
disclosed.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForContingentLiabilitiesAndContingentAssetsExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV8zNDMvZnJhZzoxYTdhMmUyMWQyMDU0ZGY4OGJlNDI1ZDI2OGIxZmY1Ni90ZXh0cmVnaW9uOjFhN2EyZTIxZDIwNTRkZjg4YmU0MjVkMjY4YjFmZjU2XzcxNDY4MjU1ODIxMzE_39809467-07cc-46f3-a4f4-3904678a06e8": {
"value": "
Fair value measurement
Some of the Group\u2019s assets and liabilities are measured at fair value at the balance sheet date. Fair value is the price
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.
In estimating the fair value of an asset or a liability, the Group uses valuation techniques that are appropriate in the
circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant
observable inputs and minimizing the use of unobservable inputs. Additional information about fair value, fair value
hierarchy, valuation techniques and inputs used in determining the fair value of assets and liabilities is provided in Note
18 \"Derivative assets and Derivative liabilities\", Note 31 \"Fair value measurement\" and, where required, in the individual
notes relating to the assets and liabilities whose fair value were determined.
In addition, fair value measurements are categorized within the fair value hierarchy, described as follows, based on the
degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair
value measurement in its entirety:
\u25aaLevel 1 \u2014 quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at
the measurement date;
\u25aaLevel 2 \u2014 inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly (as prices) or indirectly (derived from prices) on the market;
\u25aaLevel 3 \u2014 inputs that are not based on observable market data.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForFairValueMeasurementExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV8zNDYvZnJhZzo2ZGEyZTQwYzVmM2Y0NWYxYTYyYjU3NDcxYWI3NjhlNi90ZXh0cmVnaW9uOjZkYTJlNDBjNWYzZjQ1ZjFhNjJiNTc0NzFhYjc2OGU2Xzg3OTYwOTMwMjQzOTE_e5e56792-9733-4c0f-b588-413668ef8389": {
"value": "
Intangible assets
Goodwill
Goodwill is not amortized, but is tested for impairment annually or more frequently if events or changes in
circumstances indicate that it might be impaired. After initial recognition, goodwill is measured at cost less any
accumulated impairment losses.
Development costs
Development costs for agricultural and construction equipment project are recognized as an asset if and only if both of
the following conditions are met: a) development costs can be measured reliably, and b) the technical feasibility of the
product, volumes and pricing support the view that the development expenditure will generate future economic benefits.
Capitalized development costs include all direct and indirect costs that may be directly attributed to the development
process.
Capitalized development costs for agricultural and construction equipment are amortized on a systematic basis over a
period of 5 years.
All other development costs are expensed as incurred.
Intangible assets with indefinite useful lives
Intangible assets with indefinite useful lives principally consist of acquired trademarks which have no legal, regulatory,
contractual, competitive, economic, or other factor that limits their useful life.\u00a0Intangible assets with an indefinite useful
life are not amortized, but are tested for impairment annually or more frequently whenever there is an indication that the
asset may be impaired.
Other intangible assets
Other purchased and internally-generated intangible assets are recognized as assets in accordance with IAS\u00a038\u00a0\u2013
\u00a0Intangible Assets, where it is probable that the use of the asset will generate future economic benefits and where the
costs of the asset can be determined reliably.
Such assets are measured at purchase or manufacturing cost and amortized on a straight-line basis over their
estimated useful lives, if these assets have finite useful lives.
Other intangible assets acquired as part of the acquisition of a business are capitalized separately from goodwill if their
fair value can be measured reliably.
Recoverability of non-current assets (including goodwill)
Non-current assets include property, plant and equipment, intangible assets (including goodwill), investments and other
non-current financial assets. The Group reviews the carrying value of non-current assets held and used and that of
assets to be disposed of when events and circumstances warrant such a review. For goodwill and intangible assets with
indefinite useful lives such analysis is carried out at least annually.
The analysis of the recoverable amount of non-current assets other than goodwill is usually performed using estimates
of future expected cash flows from the use or disposal of the asset and an appropriate discount rate in order to
calculate present value. If the carrying amount is deemed to be impaired, the Group recognizes an impairment loss for
the amount by which the carrying amount of the asset exceeds its estimated recoverable amount from use or disposal
determined by reference to the cash flows included in its most recent business forecasts.
Goodwill impairment test is performed at the cash generating unit level, the segment level. The recoverable amount of
the cash generating units is determined using multiple valuation methodologies, relying largely on an income approach
(based on the present value of estimated future cash flows) but also incorporating value indicators from a market
approach. The carrying amount of a cash generating unit is then compared to the recoverable amount to determine if
there is an impairment loss. Further details on the goodwill impairment test are included in Note 12 \"Intangible assets\".
In view of the present economic and financial situation, the Group made the following considerations in respect of its
future prospects:
\u25aawhen carrying out impairment testing of tangible and intangible assets, the Group took into account its expected
performance in the upcoming years. CNH Industrial extended such projections for subsequent years to appropriately
cover the period of analysis;
\u25aashould the assumptions underlying the forecast deteriorate further, the following is noted: the Group\u2019s tangible and
intangible assets with a finite useful life (mostly development costs) relate to models or products with high
technological content in line with the latest environmental laws and regulations, which consequently makes them
competitive in the current economic environment, especially in the more mature economies in which particular
attention is placed on the eco-sustainability of those types of products. Consequently, despite the fact that the capital
goods sector is one of the markets which could be most affected by a potential crisis in the immediate term,
management considers that is highly probable that the life cycle of these products can be lengthened to extend over
the period of time involved in a slower economic recovery, allowing the Group to achieve sufficient cash flows to
cover the investments, although over a longer period of time.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsAndGoodwillExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV8zNDYvZnJhZzo2ZGEyZTQwYzVmM2Y0NWYxYTYyYjU3NDcxYWI3NjhlNi90ZXh0cmVnaW9uOjZkYTJlNDBjNWYzZjQ1ZjFhNjJiNTc0NzFhYjc2OGU2XzMyOTg1MzQ4ODU3MTY_08fb79f9-31b3-436b-b1ea-449c08895d67": {
"value": "
Development costs
Development costs for agricultural and construction equipment project are recognized as an asset if and only if both of
the following conditions are met: a) development costs can be measured reliably, and b) the technical feasibility of the
product, volumes and pricing support the view that the development expenditure will generate future economic benefits.
Capitalized development costs include all direct and indirect costs that may be directly attributed to the development
process.
Capitalized development costs for agricultural and construction equipment are amortized on a systematic basis over a
period of 5 years.
All other development costs are expensed as incurred.
Intangible assets with indefinite useful lives
Intangible assets with indefinite useful lives principally consist of acquired trademarks which have no legal, regulatory,
contractual, competitive, economic, or other factor that limits their useful life.\u00a0Intangible assets with an indefinite useful
life are not amortized, but are tested for impairment annually or more frequently whenever there is an indication that the
asset may be impaired.
Other intangible assets
Other purchased and internally-generated intangible assets are recognized as assets in accordance with IAS\u00a038\u00a0\u2013
\u00a0Intangible Assets, where it is probable that the use of the asset will generate future economic benefits and where the
costs of the asset can be determined reliably.
Such assets are measured at purchase or manufacturing cost and amortized on a straight-line basis over their
estimated useful lives, if these assets have finite useful lives.
Other intangible assets acquired as part of the acquisition of a business are capitalized separately from goodwill if their
fair value can be measured reliably.
Recoverability of non-current assets (including goodwill)
Non-current assets include property, plant and equipment, intangible assets (including goodwill), investments and other
non-current financial assets. The Group reviews the carrying value of non-current assets held and used and that of
assets to be disposed of when events and circumstances warrant such a review. For goodwill and intangible assets with
indefinite useful lives such analysis is carried out at least annually.
The analysis of the recoverable amount of non-current assets other than goodwill is usually performed using estimates
of future expected cash flows from the use or disposal of the asset and an appropriate discount rate in order to
calculate present value. If the carrying amount is deemed to be impaired, the Group recognizes an impairment loss for
the amount by which the carrying amount of the asset exceeds its estimated recoverable amount from use or disposal
determined by reference to the cash flows included in its most recent business forecasts.
Goodwill impairment test is performed at the cash generating unit level, the segment level. The recoverable amount of
the cash generating units is determined using multiple valuation methodologies, relying largely on an income approach
(based on the present value of estimated future cash flows) but also incorporating value indicators from a market
approach. The carrying amount of a cash generating unit is then compared to the recoverable amount to determine if
there is an impairment loss. Further details on the goodwill impairment test are included in Note 12 \"Intangible assets\".
In view of the present economic and financial situation, the Group made the following considerations in respect of its
future prospects:
\u25aawhen carrying out impairment testing of tangible and intangible assets, the Group took into account its expected
performance in the upcoming years. CNH Industrial extended such projections for subsequent years to appropriately
cover the period of analysis;
\u25aashould the assumptions underlying the forecast deteriorate further, the following is noted: the Group\u2019s tangible and
intangible assets with a finite useful life (mostly development costs) relate to models or products with high
technological content in line with the latest environmental laws and regulations, which consequently makes them
competitive in the current economic environment, especially in the more mature economies in which particular
attention is placed on the eco-sustainability of those types of products. Consequently, despite the fact that the capital
goods sector is one of the markets which could be most affected by a potential crisis in the immediate term,
management considers that is highly probable that the life cycle of these products can be lengthened to extend over
the period of time involved in a slower economic recovery, allowing the Group to achieve sufficient cash flows to
cover the investments, although over a longer period of time.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsOtherThanGoodwillExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV8zNDYvZnJhZzo2ZGEyZTQwYzVmM2Y0NWYxYTYyYjU3NDcxYWI3NjhlNi90ZXh0cmVnaW9uOjZkYTJlNDBjNWYzZjQ1ZjFhNjJiNTc0NzFhYjc2OGU2XzMyOTg1MzQ4ODU3MTg_1d7f93ff-f46f-4dde-ab05-a73b6eef2a93": {
"value": "
Development costs
Development costs for agricultural and construction equipment project are recognized as an asset if and only if both of
the following conditions are met: a) development costs can be measured reliably, and b) the technical feasibility of the
product, volumes and pricing support the view that the development expenditure will generate future economic benefits.
Capitalized development costs include all direct and indirect costs that may be directly attributed to the development
process.
Capitalized development costs for agricultural and construction equipment are amortized on a systematic basis over a
period of 5 years.
All other development costs are expensed as incurred.
Depreciation
Depreciation is recorded on a straight-line basis over the estimated useful lives of the respective assets as follows:
| | | |
|
| | | |
Plant, machinery and equipment | | | |
| | | |
Land is not depreciated.
After the commencement date, the right-of-use asset is measured at cost less any accumulated depreciation and any
accumulated impairment losses, and adjusted for any remeasurement of the lease liability. The right-of-use asset is
depreciated on a straight-line basis. If the lease transfers ownership of the underlying asset to the Group by the end of
the lease term or if the cost of the right-of-use asset reflects that the Group will exercise a purchase option, CNH
Industrial depreciates the right-of-use asset from the commencement date to the end of the useful life of the underlying
asset. Otherwise, the Group depreciates the right-of-use asset 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. After the commencement date, the lease liability is
increased to reflect the accretion of interest, recognized within Financial income/(expenses) in the income statement,
reduced for the lease payments made, and remeasured to reflect any reassessment or lease modifications.
Cost of sales
Cost of sales comprises the cost of manufacturing products and the acquisition cost of purchased merchandise which
has been sold. It includes all directly attributable material and production costs and all production overheads. These
include the depreciation of property, plant and equipment and the amortization of intangible assets relating to
production and write-downs of inventories. Cost of sales also includes freight and insurance costs relating to deliveries
to dealers and agency fees in the case of direct sales.
Cost of sales also includes provisions made to cover the estimated cost of product warranties at the time of sale to
dealer networks or to the end customer.
Expenses which are directly attributable to the Financial Services business, including the interest expense related to the
financing of Financial Services business as a whole and charges for risk provisions and write-downs, are reported in
cost of sales.
Research and development costs
This item includes research costs, development costs not eligible for capitalization and the amortization of development
costs recognized as assets in accordance with IAS\u00a038.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForExpensesExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV8zNDYvZnJhZzo2ZGEyZTQwYzVmM2Y0NWYxYTYyYjU3NDcxYWI3NjhlNi90ZXh0cmVnaW9uOjZkYTJlNDBjNWYzZjQ1ZjFhNjJiNTc0NzFhYjc2OGU2XzMyOTg1MzQ4ODU3MTg_7a257ea7-b81b-4037-ae65-ba2966ca528c": {
"value": "
Development costs
Development costs for agricultural and construction equipment project are recognized as an asset if and only if both of
the following conditions are met: a) development costs can be measured reliably, and b) the technical feasibility of the
product, volumes and pricing support the view that the development expenditure will generate future economic benefits.
Capitalized development costs include all direct and indirect costs that may be directly attributed to the development
process.
Capitalized development costs for agricultural and construction equipment are amortized on a systematic basis over a
period of 5 years.
All other development costs are expensed as incurred.
Research and development costs
This item includes research costs, development costs not eligible for capitalization and the amortization of development
costs recognized as assets in accordance with IAS\u00a038",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForResearchAndDevelopmentExpenseExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV8zNDkvZnJhZzoyYzUwYTg2MTJjNzU0NDY4YWQ0OGUxOTFlZGFkNjkyYS90ZXh0cmVnaW9uOjJjNTBhODYxMmM3NTQ0NjhhZDQ4ZTE5MWVkYWQ2OTJhXzcxNDY4MjU1ODE0NTA_b4191fa4-9dca-451c-a66a-22fad11f9c27": {
"value": "
Property, plant and equipment
Cost
Property, plant and equipment are stated at cost, less accumulated depreciation and accumulated impairment.
Subsequent expenditures and the cost of replacing parts of an asset are capitalized only if they increase 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 recognized in profit or loss.
Depreciation
Depreciation is recorded on a straight-line basis over the estimated useful lives of the respective assets as follows:
| | | |
|
| | | |
Plant, machinery and equipment | | | |
| | | |
Land is not depreciated.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForPropertyPlantAndEquipmentExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV8zNDkvZnJhZzoyYzUwYTg2MTJjNzU0NDY4YWQ0OGUxOTFlZGFkNjkyYS90ZXh0cmVnaW9uOjJjNTBhODYxMmM3NTQ0NjhhZDQ4ZTE5MWVkYWQ2OTJhXzMyOTg1MzQ4ODQyMzU_3c89e597-29ae-42a4-bf27-dc75781cccf4": {
"value": "
Depreciation
Depreciation is recorded on a straight-line basis over the estimated useful lives of the respective assets as follows:
| | | |
|
| | | |
Plant, machinery and equipment | | | |
| | | |
Land is not depreciated.
After the commencement date, the right-of-use asset is measured at cost less any accumulated depreciation and any
accumulated impairment losses, and adjusted for any remeasurement of the lease liability. The right-of-use asset is
depreciated on a straight-line basis. If the lease transfers ownership of the underlying asset to the Group by the end of
the lease term or if the cost of the right-of-use asset reflects that the Group will exercise a purchase option, CNH
Industrial depreciates the right-of-use asset from the commencement date to the end of the useful life of the underlying
asset. Otherwise, the Group depreciates the right-of-use asset 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. After the commencement date, the lease liability is
increased to reflect the accretion of interest, recognized within Financial income/(expenses) in the income statement,
reduced for the lease payments made, and remeasured to reflect any reassessment or lease modifications.
Where CNH Industrial is the lessor in an operating lease, income from operating leases is recognized over the term of
the lease on a straight-line basis. Leased assets include equipment leased to retail customers by the Group's leasing
companies. They are stated at cost and depreciated at annual rates of between 20% and 33%.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForDepreciationExpenseExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV8zNTIvZnJhZzplNTJhMmJjYTRkYzc0MTI4OWFiNGUwZmE4M2I4NGRjYi90ZXh0cmVnaW9uOmU1MmEyYmNhNGRjNzQxMjg5YWI0ZTBmYTgzYjg0ZGNiXzcxNDY4MjU1ODU3NDA_87bd47a9-ac7d-4bf1-bfb9-168653e0b894": {
"value": "
Lease accounting policy
Lessee accounting
A lease is a contract that conveys the right to control the use of an identified asset (the leased asset) for a period of
time in exchange for consideration. The lease term determined by the Group comprises the non-cancellable period of
lease contract together with both periods covered by an option to extend the lease if the lessee is reasonably certain to
exercise that option; and periods covered by an option to terminate the lease if the lessee is reasonably certain not to
exercise that option. For real estate leases, this assessment is based on an analysis by management of all relevant
facts and circumstances including the leased asset\u2019s purpose, the economic and practical potential for replacing and
any plans that the Group has in place for the future use of the asset. The Group combines lease and non-lease
components.
For leases with terms not exceeding twelve months (short-term leases) and for leases of low-value assets, CNH
Industrial recognizes the lease payments associated with those leases on a straight-line basis over the lease term as
operating expense in the income statement.
For all other leases, at the commencement date (i.e., the date the underlying asset is available for use), CNH Industrial
recognizes a right-of-use asset, classified within Property, plant and equipment, and a lease liability, classified within
Other Debt.
At the commencement date, the right-of-use asset includes the amount of lease liability recognized, initial direct costs
incurred, and lease payments made at or before the commencement date less any lease incentives received. At the
same date, the lease liability is measured at the present value of lease payments to be made over the lease term,
discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group's
incremental borrowing rate. The incremental borrowing rate is determined considering macro-economic factors such as
the specific interest rate curve based on the relevant currency and term, as well as specific factors contributing to CNH
Industrial\u2019s credit spread. The Group primarily uses the incremental borrowing rate as the discount rate for its lease
liabilities.
After the commencement date, the right-of-use asset is measured at cost less any accumulated depreciation and any
accumulated impairment losses, and adjusted for any remeasurement of the lease liability. The right-of-use asset is
depreciated on a straight-line basis. If the lease transfers ownership of the underlying asset to the Group by the end of
the lease term or if the cost of the right-of-use asset reflects that the Group will exercise a purchase option, CNH
Industrial depreciates the right-of-use asset from the commencement date to the end of the useful life of the underlying
asset. Otherwise, the Group depreciates the right-of-use asset 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. After the commencement date, the lease liability is
increased to reflect the accretion of interest, recognized within Financial income/(expenses) in the income statement,
reduced for the lease payments made, and remeasured to reflect any reassessment or lease modifications.
Before the adoption of IFRS 16, where CNH Industrial entered as lessee in a lease contract classified as finance,
assuming substantially all the risks and rewards of ownership, assets held under finance lease were recognized as
assets of the Group at the lower of fair value or present value of the minimum lease payments and depreciated. The
corresponding liability to the lessor was included in the financial statement as a debt. Where CNH Industrial entered as
lessee in a lease contract classified as operating, the lessor retained substantially all the risks and rewards of
ownership of the asset. Operating lease expenditures were expensed on a straight-line basis over the lease terms.
Lessor accounting
Lease contracts where CNH Industrial acts as a lessor, can be classified as either an operating lease or finance lease.
Leases where a significant portion of the risks and rewards are retained by the lessor are classified as operating leases.
Leases that transfer substantially all the risks and rewards incidental to ownership of an underlying asset to the lessee
are classified as a finance leases.
Where CNH Industrial is the lessor in a finance lease, the future minimum lease payments from lessees are classified
as Receivables from financing activities. Lease payments are recognized as repayment of the principal, and financial
income remunerating the initial investment and the services provided.
Where CNH Industrial is the lessor in an operating lease, income from operating leases is recognized over the term of
the lease on a straight-line basis. Leased assets include equipment leased to retail customers by the Group's leasing
companies. They are stated at cost and depreciated at annual rates of between 20% and 33%.
CNH Industrial evaluates the carrying amount of equipment on operating leases for potential impairment when it
determines a triggering event has occurred. When a triggering event occurs, a test for recoverability is performed
comparing projected undiscounted future cash flows to the carrying amount of the asset. If the test for recoverability
identifies a possible impairment, the asset\u2019s fair value is measured in accordance with the fair value measurement
framework. An impairment charge would be recognized for the amount by which the carrying amount of the asset
exceeds its estimated fair value.
When leased assets are no longer leased and become held for sale, the Group reclassifies their carrying amount to
Inventories.\u00a0
Residual values of assets leased out under operating lease arrangements
CNH Industrial records assets rented to customers or leased to them under operating lease as tangible assets. Income
from such operating lease is recognized on a straight-line basis over the term of the lease. Depreciation expense for
assets subject to operating lease is recognized on a straight-line basis over the lease term in amounts necessary to
reduce the cost of an asset to its estimated residual value at the end of the lease term. The estimated residual value of
leased assets is calculated at the lease commencement date on the basis of published industry information and
historical experience and are reviewed quarterly.
Realization of the residual values is dependent on CNH Industrial\u2019s future ability to market the assets under the then-
prevailing market conditions. The Group continually evaluates whether events and circumstances have occurred which
impact the estimated residual values of the assets on operating lease. The used equipment market was carefully
monitored throughout 2022 to ensure that write-downs if any, were properly determined. However, additional write-
downs may be required if market conditions should deteriorate further.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForLeasesExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV8zNTUvZnJhZzo0Mzg1NGU5NjI5ODY0ZTMxOTgwMzhiODI3YzIwNjIxMy90ZXh0cmVnaW9uOjQzODU0ZTk2Mjk4NjRlMzE5ODAzOGI4MjdjMjA2MjEzXzcxNDY4MjU1ODA5OTQ_3a548faf-65b3-4e69-970d-ad63a6814b6c": {
"value": "
Borrowing costs
Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets (as
defined under IAS 23 \u2013 Borrowing Costs), which are assets that necessarily take a substantial period of time to get
ready for their intended use or sale, are capitalized and amortized over the useful life of the class of assets to which
they refer.
All other borrowing costs are expensed when incurred.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForBorrowingCostsExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV8zNTgvZnJhZzo3Zjk2NTUxZWM4Zjg0NWZhYjU0ZjA1ZGNlODM1ODM1MC90ZXh0cmVnaW9uOjdmOTY1NTFlYzhmODQ1ZmFiNTRmMDVkY2U4MzU4MzUwXzcxNDY4MjU1ODIxNTY_0c85ac3d-7a76-40a3-840f-4261769c2e8f": {
"value": "
Impairment of assets
The Group reviews, at least annually, the recoverability of the carrying amount of intangible assets (including capitalized
development costs) and property, plant and equipment, in order to determine whether there is any indication that those
assets have suffered an impairment loss. Goodwill and Intangible assets with indefinite useful lives are tested for
impairment annually or more frequently, if there is an indication that an asset may be impaired.
If indicators of impairment are present, the carrying amount of the assets is reduced to its recoverable amount that is
the higher of its fair value less disposal costs and its value in use. Where it is not possible to estimate the recoverable
amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the
asset belongs. In assessing its value in use, the pre-tax estimated future cash flows are discounted to their present
value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks
specific to the asset. An impairment loss is recognized when the recoverable amount is lower than the carrying amount.
Where a previous impairment loss for assets other than goodwill no longer exists or has decreased, the carrying
amount of the asset or cash-generating unit is increased up 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. A reversal of
an impairment loss is recognized in profit or loss immediately.
Recoverability of non-current assets (including goodwill)
Non-current assets include property, plant and equipment, intangible assets (including goodwill), investments and other
non-current financial assets. The Group reviews the carrying value of non-current assets held and used and that of
assets to be disposed of when events and circumstances warrant such a review. For goodwill and intangible assets with
indefinite useful lives such analysis is carried out at least annually.
The analysis of the recoverable amount of non-current assets other than goodwill is usually performed using estimates
of future expected cash flows from the use or disposal of the asset and an appropriate discount rate in order to
calculate present value. If the carrying amount is deemed to be impaired, the Group recognizes an impairment loss for
the amount by which the carrying amount of the asset exceeds its estimated recoverable amount from use or disposal
determined by reference to the cash flows included in its most recent business forecasts.
Goodwill impairment test is performed at the cash generating unit level, the segment level. The recoverable amount of
the cash generating units is determined using multiple valuation methodologies, relying largely on an income approach
(based on the present value of estimated future cash flows) but also incorporating value indicators from a market
approach. The carrying amount of a cash generating unit is then compared to the recoverable amount to determine if
there is an impairment loss. Further details on the goodwill impairment test are included in Note 12 \"Intangible assets\".
In view of the present economic and financial situation, the Group made the following considerations in respect of its
future prospects:
\u25aawhen carrying out impairment testing of tangible and intangible assets, the Group took into account its expected
performance in the upcoming years. CNH Industrial extended such projections for subsequent years to appropriately
cover the period of analysis;
\u25aashould the assumptions underlying the forecast deteriorate further, the following is noted: the Group\u2019s tangible and
intangible assets with a finite useful life (mostly development costs) relate to models or products with high
technological content in line with the latest environmental laws and regulations, which consequently makes them
competitive in the current economic environment, especially in the more mature economies in which particular
attention is placed on the eco-sustainability of those types of products. Consequently, despite the fact that the capital
goods sector is one of the markets which could be most affected by a potential crisis in the immediate term,
management considers that is highly probable that the life cycle of these products can be lengthened to extend over
the period of time involved in a slower economic recovery, allowing the Group to achieve sufficient cash flows to
cover the investments, although over a longer period of time.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfNonfinancialAssetsExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV8zNTgvZnJhZzo3Zjk2NTUxZWM4Zjg0NWZhYjU0ZjA1ZGNlODM1ODM1MC90ZXh0cmVnaW9uOjdmOTY1NTFlYzhmODQ1ZmFiNTRmMDVkY2U4MzU4MzUwXzcxNDY4MjU1ODIxNTY_0c9d2121-8ea9-41cf-a1f0-595c11e745af": {
"value": "
Impairment of assets
The Group reviews, at least annually, the recoverability of the carrying amount of intangible assets (including capitalized
development costs) and property, plant and equipment, in order to determine whether there is any indication that those
assets have suffered an impairment loss. Goodwill and Intangible assets with indefinite useful lives are tested for
impairment annually or more frequently, if there is an indication that an asset may be impaired.
If indicators of impairment are present, the carrying amount of the assets is reduced to its recoverable amount that is
the higher of its fair value less disposal costs and its value in use. Where it is not possible to estimate the recoverable
amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the
asset belongs. In assessing its value in use, the pre-tax estimated future cash flows are discounted to their present
value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks
specific to the asset. An impairment loss is recognized when the recoverable amount is lower than the carrying amount.
Where a previous impairment loss for assets other than goodwill no longer exists or has decreased, the carrying
amount of the asset or cash-generating unit is increased up 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. A reversal of
an impairment loss is recognized in profit or loss immediately.
Recoverability of non-current assets (including goodwill)
Non-current assets include property, plant and equipment, intangible assets (including goodwill), investments and other
non-current financial assets. The Group reviews the carrying value of non-current assets held and used and that of
assets to be disposed of when events and circumstances warrant such a review. For goodwill and intangible assets with
indefinite useful lives such analysis is carried out at least annually.
The analysis of the recoverable amount of non-current assets other than goodwill is usually performed using estimates
of future expected cash flows from the use or disposal of the asset and an appropriate discount rate in order to
calculate present value. If the carrying amount is deemed to be impaired, the Group recognizes an impairment loss for
the amount by which the carrying amount of the asset exceeds its estimated recoverable amount from use or disposal
determined by reference to the cash flows included in its most recent business forecasts.
Goodwill impairment test is performed at the cash generating unit level, the segment level. The recoverable amount of
the cash generating units is determined using multiple valuation methodologies, relying largely on an income approach
(based on the present value of estimated future cash flows) but also incorporating value indicators from a market
approach. The carrying amount of a cash generating unit is then compared to the recoverable amount to determine if
there is an impairment loss. Further details on the goodwill impairment test are included in Note 12 \"Intangible assets\".
In view of the present economic and financial situation, the Group made the following considerations in respect of its
future prospects:
\u25aawhen carrying out impairment testing of tangible and intangible assets, the Group took into account its expected
performance in the upcoming years. CNH Industrial extended such projections for subsequent years to appropriately
cover the period of analysis;
\u25aashould the assumptions underlying the forecast deteriorate further, the following is noted: the Group\u2019s tangible and
intangible assets with a finite useful life (mostly development costs) relate to models or products with high
technological content in line with the latest environmental laws and regulations, which consequently makes them
competitive in the current economic environment, especially in the more mature economies in which particular
attention is placed on the eco-sustainability of those types of products. Consequently, despite the fact that the capital
goods sector is one of the markets which could be most affected by a potential crisis in the immediate term,
management considers that is highly probable that the life cycle of these products can be lengthened to extend over
the period of time involved in a slower economic recovery, allowing the Group to achieve sufficient cash flows to
cover the investments, although over a longer period of time.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfAssetsExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV8zNjEvZnJhZzpmNjk0YjIyNGEwYTg0ODlkODE5ZGQwMDYwYjY2ZTY1Zi90ZXh0cmVnaW9uOmY2OTRiMjI0YTBhODQ4OWQ4MTlkZDAwNjBiNjZlNjVmXzMyOTg1MzQ4OTEwOTI_cf32e644-683e-4901-b707-1763cd825db1": {
"value": "
Financial instruments
Presentation
Financial instruments held by the Group are presented and measured in the financial statements as described in the
following paragraphs.
Investments and other non-current financial assets comprise investments in unconsolidated companies and other non-
current financial assets (securities, and other non-current financial receivables).
Current financial assets include trade receivables, receivables from financing activities (retail financing, dealer
financing, lease financing and other current loans to third parties), current securities and other current financial assets
(which include derivative financial instruments stated at fair value as assets), as well as cash and cash equivalents.
Current securities include short-term or marketable securities which represent temporary investments of available funds
and do not satisfy the requirements for being classified as cash equivalents.
Financial liabilities refer to debt, which includes asset-backed financing (\u201cABS\u201d), and derivative liabilities (which include
derivative financial instruments stated at fair value as liabilities), trade payables and other liabilities.
Measurement
Investments in unconsolidated companies classified as non-current financial assets are accounted for as described in
the paragraph \u201cBasis of consolidation\u201d.
In accordance with IFRS 9 - Financial Instruments, financial assets are classified as measured at either amortized cost
(\"AC\"), fair value through other comprehensive income (\"FVTOCI\") or fair value through profit or loss (\"FVTPL\"),
depending on the business model for managing such financial assets and the asset\u2019s contractual cash flow
characteristics. Financial liabilities are classified as measured at amortized cost using the effective interest method.
Financial assets and current securities acquired through a regular way purchase are recognized on the basis of the
settlement date and, on initial recognition, are measured at fair value, including transaction costs. Subsequent
measurement depends on the business model for managing the asset and the cash flow characteristics of the asset.
Assets that are held for collection of contractual cash flows, where those cash flows represent solely payments of
principal and interest, are measured at amortized cost using the effective interest method. Receivables with maturities
of over one year which bear no interest or an interest rate significantly lower than market rates are discounted using
market rates.
Assets that are held for collection of contractual cash flows and for selling the financial assets, where the asset\u2019s cash
flows represents solely payments of principal and interests, are measured at fair value through other comprehensive
income. Gains and losses on assets measured at fair value through other comprehensive income are recognized
directly in other comprehensive income until the financial asset is disposed of or is determined to be impaired; when the
asset is disposed of, the cumulative gains or losses, including those previously recognized in other comprehensive
income, are reclassified to profit or loss; when the asset is impaired, impairment losses are recognized to profit or loss.
Interest income from these financial assets is included in financial income.
As a result of the Group's business model, trade receivables and receivables from financing activities are subsequently
measured at amortized cost.
Assessments are made regularly as to whether there is any objective evidence that a financial asset or group of assets
may be impaired. If any such evidence exists, an impairment loss is included in profit or loss for the period. The
recognition of an impairment is based on expected credit losses.
Cash and cash equivalents include cash at banks, units in liquidity funds, other money market securities and other cash
equivalents. Cash and cash equivalents are subject to an insignificant risk of changes in value. Money market securities
consist of investments in high quality, short-term, diversified financial instruments that can generally be liquidated on
demand and are measured at FVTPL. Cash at banks and Other cash equivalents are measured at amortized cost.
Derivatives financial assets and liabilities are measured either at fair value through other comprehensive income (when
in an hedging relationship) or at fair value through profit or loss.
Financial assets and liabilities hedged by derivative instruments are measured in accordance with hedge accounting
principles applicable to fair value hedges: gains and losses arising from remeasurement at fair value, due to changes in
the respective hedged risk, are recognized in profit or loss and are offset by the effective portion of the loss or gain
arising from remeasurement at fair value of the hedging instrument.
Transfers of financial assets
The Group derecognizes financial assets when the contractual rights to the cash flows arising from the assets are no
longer held or if it transfers the financial activities, as follows:
\u25aaif the Group transfers substantially all the risks and rewards of ownership of the financial asset, it derecognizes the
financial asset and recognizes separately as assets or liabilities any possible rights and obligations created or
retained in the transfer;
\u25aaif the Group retains substantially all the risks and rewards of ownership of the financial asset, it continues to
recognize the financial asset;
\u25aaif the Group neither transfers nor retains substantially all the risks and rewards of ownership of the financial asset, it
determines whether it has retained control of the financial asset. In this case:
\u25aaif the Group has not maintained control, it derecognizes the financial asset and recognizes separately as assets
and liabilities any possible rights and obligations created or retained in the transfer;
\u25aaif the Group has retained control, it continues to recognize the financial asset to the extent of its continuing
involvement in the financial asset.
On derecognition of a financial asset, the difference between the carrying amount of the asset and the consideration
received or receivable for the transfer of the asset is recognized in profit or loss.
Allowance for doubtful accounts
The allowance for doubtful accounts for trade receivables and contract assets reflects CNH Industrial\u2019s estimate of
expected lifetime credit losses, and it is measured at an amount equal to the present value of the cash shortfalls over
the expected life of the financial asset.
The allowance for doubtful accounts for receivables from financing activities reflects management\u2019s estimate of forward
looking expected credit losses (\u201cECL\u201d) in the retail and wholesale portfolios. This requires considerable judgement
about how changes in economic factors affect ECLs, which is determined on a probability-weighted basis. The ECL
model applies to financial assets accounted for at amortized cost and at fair value through other comprehensive
income, lease receivables, and certain loan commitments and financial guarantee contracts. The loss allowances will
be measured on either of the following bases:
\u25aa12 month ECLs: these are ECLs that result from possible default events within the 12 months after the reporting date;
and
\u25aalifetime ECLs: these are ECLs that result from all possible default events over the expected life of a financial
instrument.
Refer to Note 17 \u201cCurrent receivables and Other current financial assets\u201d for additional details on the calculation of
allowance for credit losses.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialAssetsExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
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"value": "
Financial instruments
Presentation
Financial instruments held by the Group are presented and measured in the financial statements as described in the
following paragraphs.
Investments and other non-current financial assets comprise investments in unconsolidated companies and other non-
current financial assets (securities, and other non-current financial receivables).
Current financial assets include trade receivables, receivables from financing activities (retail financing, dealer
financing, lease financing and other current loans to third parties), current securities and other current financial assets
(which include derivative financial instruments stated at fair value as assets), as well as cash and cash equivalents.
Current securities include short-term or marketable securities which represent temporary investments of available funds
and do not satisfy the requirements for being classified as cash equivalents.
Financial liabilities refer to debt, which includes asset-backed financing (\u201cABS\u201d), and derivative liabilities (which include
derivative financial instruments stated at fair value as liabilities), trade payables and other liabilities.
Measurement
Investments in unconsolidated companies classified as non-current financial assets are accounted for as described in
the paragraph \u201cBasis of consolidation\u201d.
In accordance with IFRS 9 - Financial Instruments, financial assets are classified as measured at either amortized cost
(\"AC\"), fair value through other comprehensive income (\"FVTOCI\") or fair value through profit or loss (\"FVTPL\"),
depending on the business model for managing such financial assets and the asset\u2019s contractual cash flow
characteristics. Financial liabilities are classified as measured at amortized cost using the effective interest method.
Financial assets and current securities acquired through a regular way purchase are recognized on the basis of the
settlement date and, on initial recognition, are measured at fair value, including transaction costs. Subsequent
measurement depends on the business model for managing the asset and the cash flow characteristics of the asset.
Assets that are held for collection of contractual cash flows, where those cash flows represent solely payments of
principal and interest, are measured at amortized cost using the effective interest method. Receivables with maturities
of over one year which bear no interest or an interest rate significantly lower than market rates are discounted using
market rates.
Assets that are held for collection of contractual cash flows and for selling the financial assets, where the asset\u2019s cash
flows represents solely payments of principal and interests, are measured at fair value through other comprehensive
income. Gains and losses on assets measured at fair value through other comprehensive income are recognized
directly in other comprehensive income until the financial asset is disposed of or is determined to be impaired; when the
asset is disposed of, the cumulative gains or losses, including those previously recognized in other comprehensive
income, are reclassified to profit or loss; when the asset is impaired, impairment losses are recognized to profit or loss.
Interest income from these financial assets is included in financial income.
As a result of the Group's business model, trade receivables and receivables from financing activities are subsequently
measured at amortized cost.
Assessments are made regularly as to whether there is any objective evidence that a financial asset or group of assets
may be impaired. If any such evidence exists, an impairment loss is included in profit or loss for the period. The
recognition of an impairment is based on expected credit losses.
Cash and cash equivalents include cash at banks, units in liquidity funds, other money market securities and other cash
equivalents. Cash and cash equivalents are subject to an insignificant risk of changes in value. Money market securities
consist of investments in high quality, short-term, diversified financial instruments that can generally be liquidated on
demand and are measured at FVTPL. Cash at banks and Other cash equivalents are measured at amortized cost.
Derivatives financial assets and liabilities are measured either at fair value through other comprehensive income (when
in an hedging relationship) or at fair value through profit or loss.
Financial assets and liabilities hedged by derivative instruments are measured in accordance with hedge accounting
principles applicable to fair value hedges: gains and losses arising from remeasurement at fair value, due to changes in
the respective hedged risk, are recognized in profit or loss and are offset by the effective portion of the loss or gain
arising from remeasurement at fair value of the hedging instrument.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialLiabilitiesExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV8zNjEvZnJhZzpmNjk0YjIyNGEwYTg0ODlkODE5ZGQwMDYwYjY2ZTY1Zi90ZXh0cmVnaW9uOmY2OTRiMjI0YTBhODQ4OWQ4MTlkZDAwNjBiNjZlNjVmXzcxNDY4MjU1ODgzMDU_18b57c0d-3abc-4056-81e5-52b393128cf8": {
"value": "
Financial instruments
Presentation
Financial instruments held by the Group are presented and measured in the financial statements as described in the
following paragraphs.
Investments and other non-current financial assets comprise investments in unconsolidated companies and other non-
current financial assets (securities, and other non-current financial receivables).
Current financial assets include trade receivables, receivables from financing activities (retail financing, dealer
financing, lease financing and other current loans to third parties), current securities and other current financial assets
(which include derivative financial instruments stated at fair value as assets), as well as cash and cash equivalents.
Current securities include short-term or marketable securities which represent temporary investments of available funds
and do not satisfy the requirements for being classified as cash equivalents.
Financial liabilities refer to debt, which includes asset-backed financing (\u201cABS\u201d), and derivative liabilities (which include
derivative financial instruments stated at fair value as liabilities), trade payables and other liabilities.
Measurement
Investments in unconsolidated companies classified as non-current financial assets are accounted for as described in
the paragraph \u201cBasis of consolidation\u201d.
In accordance with IFRS 9 - Financial Instruments, financial assets are classified as measured at either amortized cost
(\"AC\"), fair value through other comprehensive income (\"FVTOCI\") or fair value through profit or loss (\"FVTPL\"),
depending on the business model for managing such financial assets and the asset\u2019s contractual cash flow
characteristics. Financial liabilities are classified as measured at amortized cost using the effective interest method.
Financial assets and current securities acquired through a regular way purchase are recognized on the basis of the
settlement date and, on initial recognition, are measured at fair value, including transaction costs. Subsequent
measurement depends on the business model for managing the asset and the cash flow characteristics of the asset.
Assets that are held for collection of contractual cash flows, where those cash flows represent solely payments of
principal and interest, are measured at amortized cost using the effective interest method. Receivables with maturities
of over one year which bear no interest or an interest rate significantly lower than market rates are discounted using
market rates.
Assets that are held for collection of contractual cash flows and for selling the financial assets, where the asset\u2019s cash
flows represents solely payments of principal and interests, are measured at fair value through other comprehensive
income. Gains and losses on assets measured at fair value through other comprehensive income are recognized
directly in other comprehensive income until the financial asset is disposed of or is determined to be impaired; when the
asset is disposed of, the cumulative gains or losses, including those previously recognized in other comprehensive
income, are reclassified to profit or loss; when the asset is impaired, impairment losses are recognized to profit or loss.
Interest income from these financial assets is included in financial income.
As a result of the Group's business model, trade receivables and receivables from financing activities are subsequently
measured at amortized cost.
Assessments are made regularly as to whether there is any objective evidence that a financial asset or group of assets
may be impaired. If any such evidence exists, an impairment loss is included in profit or loss for the period. The
recognition of an impairment is based on expected credit losses.
Cash and cash equivalents include cash at banks, units in liquidity funds, other money market securities and other cash
equivalents. Cash and cash equivalents are subject to an insignificant risk of changes in value. Money market securities
consist of investments in high quality, short-term, diversified financial instruments that can generally be liquidated on
demand and are measured at FVTPL. Cash at banks and Other cash equivalents are measured at amortized cost.
Derivatives financial assets and liabilities are measured either at fair value through other comprehensive income (when
in an hedging relationship) or at fair value through profit or loss.
Financial assets and liabilities hedged by derivative instruments are measured in accordance with hedge accounting
principles applicable to fair value hedges: gains and losses arising from remeasurement at fair value, due to changes in
the respective hedged risk, are recognized in profit or loss and are offset by the effective portion of the loss or gain
arising from remeasurement at fair value of the hedging instrument.
Derivative financial instruments
Derivative financial instruments are used for hedging purposes, in order to reduce currency, interest rate and market
price risks. In accordance with IFRS 9, derivative financial instruments qualify for hedge accounting only when, at the
inception of the hedge, there is formal designation and documentation of the hedging relationship and the entity\u2019s risk
management objective and strategy for undertaking the hedge, there is an economic relationship between the hedging
instrument and the hedged item, credit risk does not dominate the value changes that result from the economic
relationship, and the hedging ratio in the hedging relationship reflects the actual quantity of the hedging instruments and
the hedged item. Further details on qualifying criteria are included in Note 18 \u201cDerivative assets and Derivative
liabilities\u201d and Note 30 \u201cInformation on financial risks\u201d.
When derivative financial instruments qualify for hedge accounting, the following accounting treatment applies:
\u25aaFair value hedges \u2013 where a derivative financial instrument is designated as a hedge of the exposure to changes in
fair value of a recognized asset or liability that is attributable to a particular risk and could affect profit or loss, the gain
or loss from remeasuring the hedging instrument at fair value is recognized in profit or loss. 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 profit
or loss.
\u25aaCash flow hedges \u2013 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 profit or
loss, the effective portion of any gain or loss on the derivative financial instrument is recognized directly in other
comprehensive income in the cash flow hedge reserve. The cumulative gain or loss is removed from other
comprehensive income and recognized in profit or loss at the same time as the economic effect arising from the
hedged item affects income. The gain or loss associated with a hedge or part of a hedge that has become ineffective
is recognized in profit or loss 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
in other comprehensive income and is recognized in profit or loss at the same time as the underlying transaction
occurs. If the hedged transaction is no longer probable, the cumulative unrealized gain or loss held in other
comprehensive income is recognized in profit or loss immediately.
If hedge accounting cannot be applied, the gains or losses from the fair value measurement of derivative financial
instruments are recognized immediately in profit or loss.
Transfers of financial assets
The Group derecognizes financial assets when the contractual rights to the cash flows arising from the assets are no
longer held or if it transfers the financial activities, as follows:
\u25aaif the Group transfers substantially all the risks and rewards of ownership of the financial asset, it derecognizes the
financial asset and recognizes separately as assets or liabilities any possible rights and obligations created or
retained in the transfer;
\u25aaif the Group retains substantially all the risks and rewards of ownership of the financial asset, it continues to
recognize the financial asset;
\u25aaif the Group neither transfers nor retains substantially all the risks and rewards of ownership of the financial asset, it
determines whether it has retained control of the financial asset. In this case:
\u25aaif the Group has not maintained control, it derecognizes the financial asset and recognizes separately as assets
and liabilities any possible rights and obligations created or retained in the transfer;
\u25aaif the Group has retained control, it continues to recognize the financial asset to the extent of its continuing
involvement in the financial asset.
On derecognition of a financial asset, the difference between the carrying amount of the asset and the consideration
received or receivable for the transfer of the asset is recognized in profit or loss.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
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"value": "
Financial instruments
Presentation
Financial instruments held by the Group are presented and measured in the financial statements as described in the
following paragraphs.
Investments and other non-current financial assets comprise investments in unconsolidated companies and other non-
current financial assets (securities, and other non-current financial receivables).
Current financial assets include trade receivables, receivables from financing activities (retail financing, dealer
financing, lease financing and other current loans to third parties), current securities and other current financial assets
(which include derivative financial instruments stated at fair value as assets), as well as cash and cash equivalents.
Current securities include short-term or marketable securities which represent temporary investments of available funds
and do not satisfy the requirements for being classified as cash equivalents.
Financial liabilities refer to debt, which includes asset-backed financing (\u201cABS\u201d), and derivative liabilities (which include
derivative financial instruments stated at fair value as liabilities), trade payables and other liabilities.
Derivatives financial assets and liabilities are measured either at fair value through other comprehensive income (when
in an hedging relationship) or at fair value through profit or loss.
Financial assets and liabilities hedged by derivative instruments are measured in accordance with hedge accounting
principles applicable to fair value hedges: gains and losses arising from remeasurement at fair value, due to changes in
the respective hedged risk, are recognized in profit or loss and are offset by the effective portion of the loss or gain
arising from remeasurement at fair value of the hedging instrument.
Derivative financial instruments
Derivative financial instruments are used for hedging purposes, in order to reduce currency, interest rate and market
price risks. In accordance with IFRS 9, derivative financial instruments qualify for hedge accounting only when, at the
inception of the hedge, there is formal designation and documentation of the hedging relationship and the entity\u2019s risk
management objective and strategy for undertaking the hedge, there is an economic relationship between the hedging
instrument and the hedged item, credit risk does not dominate the value changes that result from the economic
relationship, and the hedging ratio in the hedging relationship reflects the actual quantity of the hedging instruments and
the hedged item. Further details on qualifying criteria are included in Note 18 \u201cDerivative assets and Derivative
liabilities\u201d and Note 30 \u201cInformation on financial risks\u201d.
When derivative financial instruments qualify for hedge accounting, the following accounting treatment applies:
\u25aaFair value hedges \u2013 where a derivative financial instrument is designated as a hedge of the exposure to changes in
fair value of a recognized asset or liability that is attributable to a particular risk and could affect profit or loss, the gain
or loss from remeasuring the hedging instrument at fair value is recognized in profit or loss. 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 profit
or loss.
\u25aaCash flow hedges \u2013 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 profit or
loss, the effective portion of any gain or loss on the derivative financial instrument is recognized directly in other
comprehensive income in the cash flow hedge reserve. The cumulative gain or loss is removed from other
comprehensive income and recognized in profit or loss at the same time as the economic effect arising from the
hedged item affects income. The gain or loss associated with a hedge or part of a hedge that has become ineffective
is recognized in profit or loss 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
in other comprehensive income and is recognized in profit or loss at the same time as the underlying transaction
occurs. If the hedged transaction is no longer probable, the cumulative unrealized gain or loss held in other
comprehensive income is recognized in profit or loss immediately.
If hedge accounting cannot be applied, the gains or losses from the fair value measurement of derivative financial
instruments are recognized immediately in profit or loss.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForDerivativeFinancialInstrumentsExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
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"value": "
Cash and cash equivalents include cash at banks, units in liquidity funds, other money market securities and other cash
equivalents. Cash and cash equivalents are subject to an insignificant risk of changes in value. Money market securities
consist of investments in high quality, short-term, diversified financial instruments that can generally be liquidated on
demand and are measured at FVTPL. Cash at banks and Other cash equivalents are measured at amortized cost.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyToDetermineComponentsOfCashAndCashEquivalents",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV8zNjEvZnJhZzpmNjk0YjIyNGEwYTg0ODlkODE5ZGQwMDYwYjY2ZTY1Zi90ZXh0cmVnaW9uOmY2OTRiMjI0YTBhODQ4OWQ4MTlkZDAwNjBiNjZlNjVmXzMyOTg1MzQ4OTEwOTA_78f15f82-7bdf-4a01-9f07-ea088fc9ef88": {
"value": "
Derivatives financial assets and liabilities are measured either at fair value through other comprehensive income (when
in an hedging relationship) or at fair value through profit or loss.
Financial assets and liabilities hedged by derivative instruments are measured in accordance with hedge accounting
principles applicable to fair value hedges: gains and losses arising from remeasurement at fair value, due to changes in
the respective hedged risk, are recognized in profit or loss and are offset by the effective portion of the loss or gain
arising from remeasurement at fair value of the hedging instrument.
Derivative financial instruments
Derivative financial instruments are used for hedging purposes, in order to reduce currency, interest rate and market
price risks. In accordance with IFRS 9, derivative financial instruments qualify for hedge accounting only when, at the
inception of the hedge, there is formal designation and documentation of the hedging relationship and the entity\u2019s risk
management objective and strategy for undertaking the hedge, there is an economic relationship between the hedging
instrument and the hedged item, credit risk does not dominate the value changes that result from the economic
relationship, and the hedging ratio in the hedging relationship reflects the actual quantity of the hedging instruments and
the hedged item. Further details on qualifying criteria are included in Note 18 \u201cDerivative assets and Derivative
liabilities\u201d and Note 30 \u201cInformation on financial risks\u201d.
When derivative financial instruments qualify for hedge accounting, the following accounting treatment applies:
\u25aaFair value hedges \u2013 where a derivative financial instrument is designated as a hedge of the exposure to changes in
fair value of a recognized asset or liability that is attributable to a particular risk and could affect profit or loss, the gain
or loss from remeasuring the hedging instrument at fair value is recognized in profit or loss. 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 profit
or loss.
\u25aaCash flow hedges \u2013 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 profit or
loss, the effective portion of any gain or loss on the derivative financial instrument is recognized directly in other
comprehensive income in the cash flow hedge reserve. The cumulative gain or loss is removed from other
comprehensive income and recognized in profit or loss at the same time as the economic effect arising from the
hedged item affects income. The gain or loss associated with a hedge or part of a hedge that has become ineffective
is recognized in profit or loss 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
in other comprehensive income and is recognized in profit or loss at the same time as the underlying transaction
occurs. If the hedged transaction is no longer probable, the cumulative unrealized gain or loss held in other
comprehensive income is recognized in profit or loss immediately.
If hedge accounting cannot be applied, the gains or losses from the fair value measurement of derivative financial
instruments are recognized immediately in profit or loss.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForHedgingExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV8zNjEvZnJhZzpmNjk0YjIyNGEwYTg0ODlkODE5ZGQwMDYwYjY2ZTY1Zi90ZXh0cmVnaW9uOmY2OTRiMjI0YTBhODQ4OWQ4MTlkZDAwNjBiNjZlNjVmXzMyOTg1MzQ4OTEwOTA_c2a08b98-b8cf-4428-9f2e-e2416a5d4454": {
"value": "
Derivatives financial assets and liabilities are measured either at fair value through other comprehensive income (when
in an hedging relationship) or at fair value through profit or loss.
Financial assets and liabilities hedged by derivative instruments are measured in accordance with hedge accounting
principles applicable to fair value hedges: gains and losses arising from remeasurement at fair value, due to changes in
the respective hedged risk, are recognized in profit or loss and are offset by the effective portion of the loss or gain
arising from remeasurement at fair value of the hedging instrument.
Derivative financial instruments
Derivative financial instruments are used for hedging purposes, in order to reduce currency, interest rate and market
price risks. In accordance with IFRS 9, derivative financial instruments qualify for hedge accounting only when, at the
inception of the hedge, there is formal designation and documentation of the hedging relationship and the entity\u2019s risk
management objective and strategy for undertaking the hedge, there is an economic relationship between the hedging
instrument and the hedged item, credit risk does not dominate the value changes that result from the economic
relationship, and the hedging ratio in the hedging relationship reflects the actual quantity of the hedging instruments and
the hedged item. Further details on qualifying criteria are included in Note 18 \u201cDerivative assets and Derivative
liabilities\u201d and Note 30 \u201cInformation on financial risks\u201d.
When derivative financial instruments qualify for hedge accounting, the following accounting treatment applies:
\u25aaFair value hedges \u2013 where a derivative financial instrument is designated as a hedge of the exposure to changes in
fair value of a recognized asset or liability that is attributable to a particular risk and could affect profit or loss, the gain
or loss from remeasuring the hedging instrument at fair value is recognized in profit or loss. 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 profit
or loss.
\u25aaCash flow hedges \u2013 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 profit or
loss, the effective portion of any gain or loss on the derivative financial instrument is recognized directly in other
comprehensive income in the cash flow hedge reserve. The cumulative gain or loss is removed from other
comprehensive income and recognized in profit or loss at the same time as the economic effect arising from the
hedged item affects income. The gain or loss associated with a hedge or part of a hedge that has become ineffective
is recognized in profit or loss 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
in other comprehensive income and is recognized in profit or loss at the same time as the underlying transaction
occurs. If the hedged transaction is no longer probable, the cumulative unrealized gain or loss held in other
comprehensive income is recognized in profit or loss immediately.
If hedge accounting cannot be applied, the gains or losses from the fair value measurement of derivative financial
instruments are recognized immediately in profit or loss.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForDerivativeFinancialInstrumentsAndHedgingExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV8zNjQvZnJhZzozYWZlYzFjOTgxNzI0ZmZhOWI3YTc4YzlmNDk2ZjQ2ZS90ZXh0cmVnaW9uOjNhZmVjMWM5ODE3MjRmZmE5YjdhNzhjOWY0OTZmNDZlXzcxNDY4MjU1ODE5NDI_55f25f64-6b0b-4a05-8ed0-a8379f0f97be": {
"value": "
Transfers of financial assets
The Group derecognizes financial assets when the contractual rights to the cash flows arising from the assets are no
longer held or if it transfers the financial activities, as follows:
\u25aaif the Group transfers substantially all the risks and rewards of ownership of the financial asset, it derecognizes the
financial asset and recognizes separately as assets or liabilities any possible rights and obligations created or
retained in the transfer;
\u25aaif the Group retains substantially all the risks and rewards of ownership of the financial asset, it continues to
recognize the financial asset;
\u25aaif the Group neither transfers nor retains substantially all the risks and rewards of ownership of the financial asset, it
determines whether it has retained control of the financial asset. In this case:
\u25aaif the Group has not maintained control, it derecognizes the financial asset and recognizes separately as assets
and liabilities any possible rights and obligations created or retained in the transfer;
\u25aaif the Group has retained control, it continues to recognize the financial asset to the extent of its continuing
involvement in the financial asset.
On derecognition of a financial asset, the difference between the carrying amount of the asset and the consideration
received or receivable for the transfer of the asset is recognized in profit or loss.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForDerecognitionOfFinancialInstrumentsExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV8zNjcvZnJhZzozMzVmMzcyYzc1MmU0ZTQzOTZlMjI3ZjZhMTAyYjQxNi90ZXh0cmVnaW9uOjMzNWYzNzJjNzUyZTRlNDM5NmUyMjdmNmExMDJiNDE2Xzg3OTYwOTMwMjI4OTA_1f114fa4-8e48-4beb-b3cc-19286054e3d6": {
"value": "
Inventories
Inventories of raw materials, semi-finished products and finished goods (including assets leased out under operating
lease) are stated at the lower of cost or market. Cost is determined by the first-in-first-out (FIFO) method. Cost includes
the direct costs of materials, labor and indirect costs (variable and fixed). 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.
Allowance for obsolete and slow-moving inventory
The allowance for obsolete and slow-moving inventory reflects management\u2019s estimate of the expected loss in value,
and has been determined on the basis of past experience and historical and expected future trends in the used vehicle
market. A worsening of the economic and financial situation could cause a further deterioration in conditions in the used
vehicle market compared to that taken into consideration in calculating the allowances recognized in the financial
statements.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForMeasuringInventories",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV8zNzAvZnJhZzo4MjA0NjQxZTVhMTQ0ZjJkYTc3Zjg5ZjAzOTBhZTA0Mi90ZXh0cmVnaW9uOjgyMDQ2NDFlNWExNDRmMmRhNzdmODlmMDM5MGFlMDQyXzcxNDY4MjU1ODE2MDQ_f3ac9406-d2d1-4661-b599-f01e04e0038e": {
"value": "
Assets and liabilities held for sale
Non-current assets are classified as held for sale if their carrying amounts will be principally recovered through a sale
transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable,
with the sale expected to be completed within one year from the date of classification, and the non-current asset (or the
disposal group) is available for immediate sale in its present condition subject only to terms that are usual and
customary for sales of such asset (or disposal group). When the Group is committed to a sale plan involving loss of
control of a subsidiary, all of the assets and liabilities of that subsidiary are classified as held for sale when the criteria
described above are met, regardless of whether the Group will retain a non-controlling interest in its former subsidiary
after the sale.
Non-current assets and disposal groups classified as held for sale are measured at the lower of their carrying amounts
and fair value less costs to sell.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForNoncurrentAssetsOrDisposalGroupsClassifiedAsHeldForSaleExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV8zNzAvZnJhZzo4MjA0NjQxZTVhMTQ0ZjJkYTc3Zjg5ZjAzOTBhZTA0Mi90ZXh0cmVnaW9uOjgyMDQ2NDFlNWExNDRmMmRhNzdmODlmMDM5MGFlMDQyXzcxNDY4MjU1ODE2MDQ_f7705881-2faa-4734-9438-0697464dd565": {
"value": "
Assets and liabilities held for sale
Non-current assets are classified as held for sale if their carrying amounts will be principally recovered through a sale
transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable,
with the sale expected to be completed within one year from the date of classification, and the non-current asset (or the
disposal group) is available for immediate sale in its present condition subject only to terms that are usual and
customary for sales of such asset (or disposal group). When the Group is committed to a sale plan involving loss of
control of a subsidiary, all of the assets and liabilities of that subsidiary are classified as held for sale when the criteria
described above are met, regardless of whether the Group will retain a non-controlling interest in its former subsidiary
after the sale.
Non-current assets and disposal groups classified as held for sale are measured at the lower of their carrying amounts
and fair value less costs to sell.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForNoncurrentAssetsOrDisposalGroupsClassifiedAsHeldForSaleAndDiscontinuedOperationsExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV8zNzMvZnJhZzpiNzdhNTFlYzI2YjY0N2VlOTIwNDcwMjI5NTliNTZmYy90ZXh0cmVnaW9uOmI3N2E1MWVjMjZiNjQ3ZWU5MjA0NzAyMjk1OWI1NmZjXzcxNDY4MjU1ODM2MTE_c14b329e-ee6f-4f0d-a06d-b4e3bbfac666": {
"value": "
Employee benefits
Pension plans
The present value of a defined benefit obligation and the related current service cost (and past service cost, where
applicable) for defined benefit pension plans are determined on an actuarial basis using the projected unit credit
method.
The net defined benefit liability that the Group recognizes in the statement of financial position represents the present
value of the defined benefit obligation reduced by the fair value of any plan assets (deficit). In case of a surplus, a net
defined benefit asset is recognized at the lower of the surplus and the asset ceiling.
Remeasurements of the net defined benefit liability/asset (that comprise: a) actuarial gains and losses, b) return on plan
assets, excluding amounts included in net interest on the net defined benefit liability/asset, and c) any change in the
effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability/asset) are
recognized directly in other comprehensive income without reclassification to profit or loss in subsequent years.
Past service cost resulting from a plan amendment (the introduction or withdrawal of, or changes to, a defined benefit
plan) or a curtailment (a significant reduction in the number of employees covered by a plan) and gain or loss on
settlements (a transaction that eliminates all further legal or constructive obligations for part or all of the benefits) are
recognized in profit or loss in the period in which they occur (or, in case of past service costs, when the entity
recognizes related restructuring costs or termination benefits, if earlier).
Net interest is calculated by applying the discount rate to the net defined benefit liability or asset and is recognized as
Financial income/(expenses) in profit or loss. Current service cost and all other costs and income arising from the
measurement of pension plan provisions are allocated to costs by function in profit or loss.
Post-employment plans other than pensions
The Group provides certain post-employment defined benefits, mainly healthcare plans. The method of accounting and
the frequency of valuations are similar to those used for defined benefit pension plans.
Defined contribution plans
Costs arising from defined contribution plans are recognized as an expense in profit or loss as incurred.
Share-based compensation plans
The Group provides additional benefits to certain members of senior management and employees through equity
compensation plans (stock option plans and stock grants). In accordance with IFRS 2 \u2013 Share-based Payment, these
plans represent a component of recipient remuneration. The compensation expense, corresponding to the fair value of
the instruments at the grant date, is recognized in profit or loss on a straight-line basis over the requisite service period
for each separately vesting portion of an award, with the offsetting credit recognized directly in equity. Any subsequent
changes to fair value do not have any effect on the initial measurement.
Pension and other post-employment benefits
Group companies sponsor pension and other post-employment benefits in various countries, mainly in the United
States, the United Kingdom and Germany.
Employee benefit liabilities, related assets, costs and net interest connected with them are measured on an actuarial
basis which requires the use of estimates and assumptions to determine the net defined benefit liability/asset for the
Group. The actuarial method takes into consideration parameters of a financial nature such as the discount rate, the
rate for expected return on plan assets, the rate of salary increases and the healthcare costs trend rate and takes into
consideration the likelihood of potential future events by using certain demographic parameters such as mortality rates
and dismissal or retirement rates. The discount rates selected are based on yields or yield curves of high quality
corporate bonds in the relevant market. Trends in healthcare costs are developed on the basis of historical experience,
the near-term outlook for costs and likely long-term trends. Rates of salary increases reflect the Group\u2019s long-term
actual expectations in the reference market and inflation trends. Changes in any of these assumptions may have an
effect on future contributions to the plans.
The effects resulting from revising the estimates for the above parameters (\u201cre-measurements\u201d) are recognized directly
in other comprehensive income without reclassification to profit or loss in subsequent years: refer to \u201cEmployee
benefits\u201d section above for further details.
Significant future changes in the yields of corporate bonds, other actuarial assumptions referred to above and returns
on plan assets may significantly impact the net liability/asset.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForEmployeeBenefitsExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV8zNzMvZnJhZzpiNzdhNTFlYzI2YjY0N2VlOTIwNDcwMjI5NTliNTZmYy90ZXh0cmVnaW9uOmI3N2E1MWVjMjZiNjQ3ZWU5MjA0NzAyMjk1OWI1NmZjXzMyOTg1MzQ4ODYzOTY_45c396aa-6d54-4b81-88e9-97a1189e80bd": {
"value": "
Share-based compensation plans
The Group provides additional benefits to certain members of senior management and employees through equity
compensation plans (stock option plans and stock grants). In accordance with IFRS 2 \u2013 Share-based Payment, these
plans represent a component of recipient remuneration. The compensation expense, corresponding to the fair value of
the instruments at the grant date, is recognized in profit or loss on a straight-line basis over the requisite service period
for each separately vesting portion of an award, with the offsetting credit recognized directly in equity. Any subsequent
changes to fair value do not have any effect on the initial measurement.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForSharebasedPaymentTransactionsExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV8zNzYvZnJhZzphYmFkNTMyMzdjYTI0NDhhODg1OTYwZjBkNjIxYWM5ZC90ZXh0cmVnaW9uOmFiYWQ1MzIzN2NhMjQ0OGE4ODU5NjBmMGQ2MjFhYzlkXzcxNDY4MjU1ODA5NDA_d74527f5-2c30-40b0-a8ab-c615f941fa4d": {
"value": "
Provisions
The Group records provisions when it has an obligation, legal or constructive, to a third party, as a result from a past
event, when it is probable that an outflow of Group resources will be required to satisfy the obligation and when a
reliable estimate of the amount can be made.
Changes in estimates are reflected in profit or loss in the period in which the change occurs.
Product warranties
For most equipment and service parts sales, CNH Industrial provides a standard warranty to provide assurance that the
equipment will function as intended for a specified period of time. At the time a sale is recognized, CNH Industrial
records the estimated future warranty costs. CNH Industrial determines its total warranty liability by applying historical
claims rate experience to the estimated amount of equipment that has been sold to end-users and is still under
warranty based on dealer inventories and retail sales. Variances in claims experience and the type of warranty
programs affect these estimates, which are reviewed quarterly. Estimates used to determine the product warranty
accruals are based on historical claims rate leveraging the last rolling 12 months and consideration of current quality
developments.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForProvisionsExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV8zNzkvZnJhZzpmNmY3YjllMGU5MmQ0Mjg3OTNhYzIwZGQ4NzVjZDlmYi90ZXh0cmVnaW9uOmY2ZjdiOWUwZTkyZDQyODc5M2FjMjBkZDg3NWNkOWZiXzcxNDY4MjU1ODA3NDA_f47b34d0-bde6-4caa-96dc-9386d0fb3bda": {
"value": "
Treasury shares
Treasury shares are presented as a deduction from equity. The original cost of treasury shares and the proceeds of any
subsequent sale are presented as movements in equity.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForTreasurySharesExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV8zODIvZnJhZzo1YTFiOGNmYzM5YmU0MzhiYTA5NzZhOTQxNmFhZDFlYy90ZXh0cmVnaW9uOjVhMWI4Y2ZjMzliZTQzOGJhMDk3NmE5NDE2YWFkMWVjXzg3OTYwOTMwMzI4NzY_501e0458-9080-49b6-9694-1fb2ccc11275": {
"value": "
Revenue recognition
Revenue is recognized when control of the equipment, services or parts has been transferred and the Group\u2019s
performance obligations to the customers have been satisfied. Revenue is measured as the amount of consideration
the Group expects to receive in exchange for transferring goods or providing services.
The timing of when the Group transfers the goods or services to the customer may differ from the timing of the
customer\u2019s payment.
Revenues are stated net of discounts, allowances, settlement discounts and rebates, as well as costs for sales
incentive programs, which are determined on the basis of historical costs, country by country, and charged against
profit for the period in which the corresponding sales are recognized.
The Group also enters into contracts with multiple performance obligations. For these contracts, the Group 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 the Group sells the goods or services separately in the same market, the standalone selling
price is the observable price at which the Group sells the goods or services separately. For all other goods or services,
the Group estimates the standalone selling price considering all information, reasonably available (including market
conditions, entity-specific factors and information about the customer or class of customer).
Sales of goods
The Group has determined that the customers from the sale of equipment and parts are generally dealers, distributors
and retail customers.
CNH Industrial recognizes revenue at a point in time when control has transferred to the customer at a sales price that
CNH Industrial expects to receive. Transfer of control occurs when title and risk of ownership have transferred to the
customer, which occurs based upon the terms specified in the contract. In most of the jurisdictions where CNH
Industrial operates, and subject to specific exceptions, transfer of control occurs upon shipment.
For all sales, no significant uncertainty exists surrounding the purchaser\u2019s obligation to pay for equipment and parts.
The Group records appropriate allowance for credit losses and anticipated returns as required. Fixed payment
schedules exist for all sales, but payment terms vary by geographic market and product line.
The cost of incentives, if any, are estimated at the inception of a contract at the amount that is expected to be paid and
is recognized as a reduction to revenue at the time of the sale. If an equipment contract transaction has multiple
performance obligations, the cost of incentives is allocated entirely to the equipment as the intent of the incentives is to
encourage sales of equipment. 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. CNH Industrial grants certain sales
incentives to support sales of its products to retail customers. At the later of the time of sale or the time an incentive is
announced to dealers, CNH Industrial records the estimated impact of sales allowances in the form of dealer and
customer incentives as a reduction of revenue. Subsequent adjustments to sales incentive programs related to
products previously sold are recognized as an adjustment to revenues in the period the adjustment is determinable.
The determination of sales allowances requires management to make estimates based upon historical data, estimated
future market demand for products, field inventory levels, announced incentive programs, competitive pricing and
interest rates, among other things.
With reference to the sales to dealers accompanied by \u201cfloor plan\u201d agreements under which the Group offers wholesale
financing including \u201cinterest-free\u201d financing for a specified period of time (which also vary by geographic market and
product line), two separate performance obligations exist. The first performance obligation consists of the sale of the
equipment from Industrial Activities to the dealer. Concurrent with the sale of the equipment, Industrial Activities offers
to the dealer wholesale financing through loans extended by Financial Services. Industrial Activities compensates
Financial Services for the cost of the interest-free period. This cost has been determined to represent a cash sale
incentive on the initial sale of the good, and therefore it should be recognized upfront as a reduction of net sales of
Industrial Activities. The second performance obligation consists of a credit facility extended by Financial Services to
the dealer. The remuneration for this performance obligation is represented by the compensation received from
Industrial Activities for the period of the interest-free financing and by the interest charged to dealer for the remaining
period. This remuneration is recognized by Financial Services over the period of the outstanding exposure.
For parts sales, when the Group provides its customers with a right to return a transferred product, revenue and
corresponding cost of sales are recognized for parts that are not expected to be returned. The expected returns are
estimated based on an analysis of historical experience. The portion of revenue (and corresponding cost of sales)
related to the parts that are expected to be returned is recognized at the end of the return period. The amount received
or receivable that is expected to be returned is recognized as a refund liability, representing the obligation to return the
customer\u2019s consideration.
Furthermore, at the time of the initial sale, CNH Industrial recognizes a return asset for the right to recover the goods
returned by the customer. This asset is initially measured at the former carrying amount of the inventory. At each
reporting date, both the refund liability and the return asset are remeasured to record for any revisions to the expected
level of returns, as well as any decreases in the value of the returned products.
Rendering of services
Revenues from services provided are primarily comprised of extended warranties and maintenance and repair services
and are recognized over the contract period when the costs are incurred, that is when the claims are charged by the
dealer. Amounts invoiced to customers for which CNH Industrial receives consideration before the performance is
satisfied are recognized as contract liability. These services are either separately-priced or included in the selling price
of the equipment. In the second case, revenue for the services is allocated based on the estimated stand-alone selling
price. In the event that the costs expected to be incurred to satisfy the remaining performance obligations exceed the
transaction price, an estimated contract loss is recognized.
Shipping and other transportation activities performed as an agent are recognized on a net basis, which is netting the
related freight cost against the freight revenue.
Finance and interest income
Finance and interest income on retail and other notes receivables and finance leases is recorded using the effective
yield method. Deferred costs on the origination of financing receivables are recognized as a reduction in finance
revenue over the expected lives of the receivables using the effective yield method. When a financial asset becomes
credit-impaired and is, therefore, regarded as \u201cStage 3\u201d, CNH Industrial calculates interest income by applying the
effective interest rate to the net amortized cost of the financial asset. If the financial asset cures and is no longer credit-
impaired, CNH Industrial reverts to calculating interest income on a gross basis. Receivables are considered past due if
the required principal and interest payments have not been received as of the date such payments were due.
Delinquency is reported on receivables greater than 30 days past due. Charge-offs of principal amounts of receivables
outstanding are deducted from the allowance at the point when it is determined to be probable that all amounts due will
not be collected.
Rents and other income on operating leases
Income from operating leases is recognized over the term of the lease on a straight-line basis.
Sales allowances
CNH Industrial provides sales incentives and discounts to dealers. At the time a sale to a dealer is recognized, CNH
Industrial records an estimate of future sales incentive costs and discounts as a reduction of revenue. These incentives
may be based on a dealer's purchase volume, or on retail sales incentive programs and financing programs that will be
due when the dealer sells the equipment to a retail customer. The estimated cost of the these programs is based on
historical data, announced and expected incentive programs, field inventory levels. The final cost of these programs is
determined at the end of the measurement period for volume-based incentives or when the dealer sells the equipment
to the retail customer. Changes in the mix and types of programs affect these estimates, which are reviewed quarterly.
Actual cost differences from the original cost estimate are recognized in \"Net revenues\".
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForRecognitionOfRevenue",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV8zODIvZnJhZzo1YTFiOGNmYzM5YmU0MzhiYTA5NzZhOTQxNmFhZDFlYy90ZXh0cmVnaW9uOjVhMWI4Y2ZjMzliZTQzOGJhMDk3NmE5NDE2YWFkMWVjXzMyOTg1MzQ4OTQwMDU_8997f70d-d3e8-4b44-85bc-d8f84b2c38ae": {
"value": "
Finance and interest income
Finance and interest income on retail and other notes receivables and finance leases is recorded using the effective
yield method. Deferred costs on the origination of financing receivables are recognized as a reduction in finance
revenue over the expected lives of the receivables using the effective yield method. When a financial asset becomes
credit-impaired and is, therefore, regarded as \u201cStage 3\u201d, CNH Industrial calculates interest income by applying the
effective interest rate to the net amortized cost of the financial asset. If the financial asset cures and is no longer credit-
impaired, CNH Industrial reverts to calculating interest income on a gross basis. Receivables are considered past due if
the required principal and interest payments have not been received as of the date such payments were due.
Delinquency is reported on receivables greater than 30 days past due. Charge-offs of principal amounts of receivables
outstanding are deducted from the allowance at the point when it is determined to be probable that all amounts due will
not be collected.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForFinanceIncomeAndCostsExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV8zODIvZnJhZzo1YTFiOGNmYzM5YmU0MzhiYTA5NzZhOTQxNmFhZDFlYy90ZXh0cmVnaW9uOjVhMWI4Y2ZjMzliZTQzOGJhMDk3NmE5NDE2YWFkMWVjXzMyOTg1MzQ4OTQwMDU_ac4eb840-01df-426c-83cc-ec626f83a978": {
"value": "
Finance and interest income
Finance and interest income on retail and other notes receivables and finance leases is recorded using the effective
yield method. Deferred costs on the origination of financing receivables are recognized as a reduction in finance
revenue over the expected lives of the receivables using the effective yield method. When a financial asset becomes
credit-impaired and is, therefore, regarded as \u201cStage 3\u201d, CNH Industrial calculates interest income by applying the
effective interest rate to the net amortized cost of the financial asset. If the financial asset cures and is no longer credit-
impaired, CNH Industrial reverts to calculating interest income on a gross basis. Receivables are considered past due if
the required principal and interest payments have not been received as of the date such payments were due.
Delinquency is reported on receivables greater than 30 days past due. Charge-offs of principal amounts of receivables
outstanding are deducted from the allowance at the point when it is determined to be probable that all amounts due will
not be collected.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForInterestIncomeAndExpenseExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV8zOTEvZnJhZzo1MTcxYjRkNGVhMmI0MGEwODM4ODNmNDg1N2YwYWVlNy90ZXh0cmVnaW9uOjUxNzFiNGQ0ZWEyYjQwYTA4Mzg4M2Y0ODU3ZjBhZWU3XzgyNDYzMzcyMDkxMTg_f43d7cb4-25eb-4a4f-922e-1e53b25cb1e6": {
"value": "
Government grants
Government grants are recognized in the financial statements when there is reasonable assurance that the company
concerned will comply with the conditions for receiving such grants and that the grants themselves will be received.
Government grants are recognized as income over the periods necessary to match them with the related costs which
they are intended to offset.
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 is accounted for in accordance with the policies already used for
the recognition of government grants.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForGovernmentGrants",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV8zOTQvZnJhZzoyMWY5ZTZmMGIyYTM0NDM4OWJiNjJhNzM2ZWIyMjljZS90ZXh0cmVnaW9uOjIxZjllNmYwYjJhMzQ0Mzg5YmI2MmE3MzZlYjIyOWNlXzgyNDYzMzcyMTA2Nzk_767a6ddc-3b7f-491e-b273-090121eb60cf": {
"value": "
Income taxes
Income taxes include all taxes based upon the taxable profits of the Group. Taxes on income are recognized in profit or
loss except to the extent they relate to items recognized directly in equity or in other comprehensive income, in which
case the related tax effects are recognized directly in equity or in other comprehensive income. Provisions for income
taxes arising on the distribution of a subsidiary\u2019s undistributed profits are only made where there is a current intention to
distribute such profits. Deferred taxes are provided using the full liability method. They are calculated on all temporary
differences between the tax base of an asset or liability and the carrying amounts in the Consolidated Financial
Statements, except for those arising from non-tax-deductible goodwill and for those related to investments in
subsidiaries where it is possible to control the reversal of the differences and reversal will not take place in the
foreseeable future. Deferred tax assets relating to the carry-forward of unused tax losses and tax credits, as well as
those arising from temporary differences, are recognized to the extent it is probable future profits will be available
against which they can be utilized. Current and deferred income tax assets and liabilities are offset when the income
taxes are levied by the same taxation authority and where there is a legally enforceable right of offset. Deferred tax
assets and liabilities are measured at the enacted or substantively enacted tax rates of the relevant tax jurisdictions that
are expected to apply to taxable income during the period or periods in which the temporary differences reverse. The
Group recognizes tax liabilities for uncertain tax treatments when tax risks arising from positions taken by the Group are
considered probable, assuming the tax authorities have full knowledge of all relevant information when making their
examination. In doing so, the Group evaluates whether to consider each uncertain tax treatment separately or jointly
consider multiple uncertain tax treatments, using the approach that better predicts the resolution of the uncertainty. The
liabilities recognized correspond to the amounts expected to be paid. Other taxes not based on taxable profits, such as
property taxes and taxes on capital, are included in operating expenses.
Recognition of deferred tax assets
At December 31, 2022, CNH Industrial had net deferred tax assets, including tax loss carry forwards, of $534 million, of
which $346 million are not recognized in the financial statements. The corresponding totals at December 31, 2021 were
$538 million and $383 million.
Management has recognized deferred tax assets it believes are probable to be realized. In determining the amount of
deferred tax assets probable to be realized management has considered figures from budgets and plans consistent
with those used for other purposes within CNH Industrial, for example impairment testing, as discussed in the
paragraph \u201cRecoverability of non-current assets (including goodwill)\u201d above. CNH\u00a0Industrial believes the amount of
recognized deferred tax assets is appropriate, despite the risk of actual future results potentially being less than results
included in these forecasts, considering many of the recognized net deferred tax assets relate to temporary differences
and tax losses which, to a significant extent, may be recovered over an extended time period, but do not expire based
on currently enacted tax law. As in all financial reporting periods, CNH Industrial assessed the realizability of its various
deferred tax assets, which related to multiple tax jurisdictions in all regions of the world. It is reasonably possible the
Company's recognition of deferred tax assets could change during 2023. Such changes could materially impact the
Company's financial results.
During the fourth quarter of 2022, we recognized substantially all the deferred tax assets related to our agricultural and
construction equipment operations in Italy, resulting in a $5 million non-cash tax benefit, as those operations had
consistently returned to pre-tax profitability, with that trend anticipated to continue for the foreseeable future.
During 2021, CNH Industrial recognized substantially all the deferred tax assets related to the agricultural and
construction equipment operations in Brazil, resulting in a $142 million non-cash tax benefit, as those operations had
consistently returned to sustained profitability in recent years, with that trend anticipated to continue for the foreseeable
future.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForDeferredIncomeTaxExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV8zOTQvZnJhZzoyMWY5ZTZmMGIyYTM0NDM4OWJiNjJhNzM2ZWIyMjljZS90ZXh0cmVnaW9uOjIxZjllNmYwYjJhMzQ0Mzg5YmI2MmE3MzZlYjIyOWNlXzgyNDYzMzcyMTA2Nzk_7da97218-5f9b-4a46-b568-7f2c2a24b602": {
"value": "
Income taxes
Income taxes include all taxes based upon the taxable profits of the Group. Taxes on income are recognized in profit or
loss except to the extent they relate to items recognized directly in equity or in other comprehensive income, in which
case the related tax effects are recognized directly in equity or in other comprehensive income. Provisions for income
taxes arising on the distribution of a subsidiary\u2019s undistributed profits are only made where there is a current intention to
distribute such profits. Deferred taxes are provided using the full liability method. They are calculated on all temporary
differences between the tax base of an asset or liability and the carrying amounts in the Consolidated Financial
Statements, except for those arising from non-tax-deductible goodwill and for those related to investments in
subsidiaries where it is possible to control the reversal of the differences and reversal will not take place in the
foreseeable future. Deferred tax assets relating to the carry-forward of unused tax losses and tax credits, as well as
those arising from temporary differences, are recognized to the extent it is probable future profits will be available
against which they can be utilized. Current and deferred income tax assets and liabilities are offset when the income
taxes are levied by the same taxation authority and where there is a legally enforceable right of offset. Deferred tax
assets and liabilities are measured at the enacted or substantively enacted tax rates of the relevant tax jurisdictions that
are expected to apply to taxable income during the period or periods in which the temporary differences reverse. The
Group recognizes tax liabilities for uncertain tax treatments when tax risks arising from positions taken by the Group are
considered probable, assuming the tax authorities have full knowledge of all relevant information when making their
examination. In doing so, the Group evaluates whether to consider each uncertain tax treatment separately or jointly
consider multiple uncertain tax treatments, using the approach that better predicts the resolution of the uncertainty. The
liabilities recognized correspond to the amounts expected to be paid. Other taxes not based on taxable profits, such as
property taxes and taxes on capital, are included in operating expenses.
Recognition of deferred tax assets
At December 31, 2022, CNH Industrial had net deferred tax assets, including tax loss carry forwards, of $534 million, of
which $346 million are not recognized in the financial statements. The corresponding totals at December 31, 2021 were
$538 million and $383 million.
Management has recognized deferred tax assets it believes are probable to be realized. In determining the amount of
deferred tax assets probable to be realized management has considered figures from budgets and plans consistent
with those used for other purposes within CNH Industrial, for example impairment testing, as discussed in the
paragraph \u201cRecoverability of non-current assets (including goodwill)\u201d above. CNH\u00a0Industrial believes the amount of
recognized deferred tax assets is appropriate, despite the risk of actual future results potentially being less than results
included in these forecasts, considering many of the recognized net deferred tax assets relate to temporary differences
and tax losses which, to a significant extent, may be recovered over an extended time period, but do not expire based
on currently enacted tax law. As in all financial reporting periods, CNH Industrial assessed the realizability of its various
deferred tax assets, which related to multiple tax jurisdictions in all regions of the world. It is reasonably possible the
Company's recognition of deferred tax assets could change during 2023. Such changes could materially impact the
Company's financial results.
During the fourth quarter of 2022, we recognized substantially all the deferred tax assets related to our agricultural and
construction equipment operations in Italy, resulting in a $5 million non-cash tax benefit, as those operations had
consistently returned to pre-tax profitability, with that trend anticipated to continue for the foreseeable future.
During 2021, CNH Industrial recognized substantially all the deferred tax assets related to the agricultural and
construction equipment operations in Brazil, resulting in a $142 million non-cash tax benefit, as those operations had
consistently returned to sustained profitability in recent years, with that trend anticipated to continue for the foreseeable
future.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForIncomeTaxExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV8zOTcvZnJhZzo1MjE1ZTIwN2NkZmE0N2RhOGE0NmFkYzhiNTQwNjYwMS90ZXh0cmVnaW9uOjUyMTVlMjA3Y2RmYTQ3ZGE4YTQ2YWRjOGI1NDA2NjAxXzgyNDYzMzcyMDg1Mjg_9705d2c0-2025-4efe-90be-1284f429bcf6": {
"value": "
Dividends
Dividends payable by the Group are reported as a change in equity in the period in which they are approved by the
Company\u2019s shareholders at the Annual General Meeting of Shareholders (\u201cAGM\u201d).
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForDividendsExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV80MDAvZnJhZzoyOGEzNGI4YjYyMGI0Y2Q2OWJlZGM2ZmU0NDg5ZTNjYy90ZXh0cmVnaW9uOjI4YTM0YjhiNjIwYjRjZDY5YmVkYzZmZTQ0ODllM2NjXzgyNDYzMzcyMDg4NDM_0ce4ccd4-6e6b-4b32-8b4e-fe0757667b46": {
"value": "
Earnings per share
Basic earnings per share are calculated by dividing the Profit/(loss) attributable to owners of the parent by the weighted
average number of common shares outstanding during the year. Special voting shares are not included in the earnings
per share calculation as they are not eligible for dividends and have only limited economic rights. For diluted earnings
per share, the weighted average number of common shares outstanding is adjusted assuming conversion of dilutive
potential common shares.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForEarningsPerShareExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV80MDMvZnJhZzozNWI5MTI1ODI1Mjc0OTQ2OTdiNGU0MTc2Y2ZmOGQwYi90ZXh0cmVnaW9uOjM1YjkxMjU4MjUyNzQ5NDY5N2I0ZTQxNzZjZmY4ZDBiXzMyOTg1MzQ4OTgwMzA_3ec53b0c-a05d-499c-bb5f-2a316041c444": {
"value": "
Allowance for doubtful accounts
The allowance for doubtful accounts for trade receivables and contract assets reflects CNH Industrial\u2019s estimate of
expected lifetime credit losses, and it is measured at an amount equal to the present value of the cash shortfalls over
the expected life of the financial asset.
The allowance for doubtful accounts for receivables from financing activities reflects management\u2019s estimate of forward
looking expected credit losses (\u201cECL\u201d) in the retail and wholesale portfolios. This requires considerable judgement
about how changes in economic factors affect ECLs, which is determined on a probability-weighted basis. The ECL
model applies to financial assets accounted for at amortized cost and at fair value through other comprehensive
income, lease receivables, and certain loan commitments and financial guarantee contracts. The loss allowances will
be measured on either of the following bases:
\u25aa12 month ECLs: these are ECLs that result from possible default events within the 12 months after the reporting date;
and
\u25aalifetime ECLs: these are ECLs that result from all possible default events over the expected life of a financial
instrument.
Refer to Note 17 \u201cCurrent receivables and Other current financial assets\u201d for additional details on the calculation of
allowance for credit losses.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForTradeAndOtherReceivablesExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV80MDMvZnJhZzozNWI5MTI1ODI1Mjc0OTQ2OTdiNGU0MTc2Y2ZmOGQwYi90ZXh0cmVnaW9uOjM1YjkxMjU4MjUyNzQ5NDY5N2I0ZTQxNzZjZmY4ZDBiXzMyOTg1MzQ4OTgwMzA_903fac8e-eb6f-45dc-9251-7d1ef64de9be": {
"value": "
Allowance for doubtful accounts
The allowance for doubtful accounts for trade receivables and contract assets reflects CNH Industrial\u2019s estimate of
expected lifetime credit losses, and it is measured at an amount equal to the present value of the cash shortfalls over
the expected life of the financial asset.
The allowance for doubtful accounts for receivables from financing activities reflects management\u2019s estimate of forward
looking expected credit losses (\u201cECL\u201d) in the retail and wholesale portfolios. This requires considerable judgement
about how changes in economic factors affect ECLs, which is determined on a probability-weighted basis. The ECL
model applies to financial assets accounted for at amortized cost and at fair value through other comprehensive
income, lease receivables, and certain loan commitments and financial guarantee contracts. The loss allowances will
be measured on either of the following bases:
\u25aa12 month ECLs: these are ECLs that result from possible default events within the 12 months after the reporting date;
and
\u25aalifetime ECLs: these are ECLs that result from all possible default events over the expected life of a financial
instrument.
Refer to Note 17 \u201cCurrent receivables and Other current financial assets\u201d for additional details on the calculation of
allowance for credit losses.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfFinancialAssetsExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV80MDkvZnJhZzo5NTFhODhjYTQ0MDA0MTY0YTI4MWE2MGM2NDQ1ZTQzMi90ZXh0cmVnaW9uOjk1MWE4OGNhNDQwMDQxNjRhMjgxYTYwYzY0NDVlNDMyXzgyNDYzMzcyMTUwNDg_c9d3fba5-a9a2-495e-bbc3-d111afada455": {
"value": "
New standards and amendments effective from January 1, 2022
\u25aaOn May 14, 2020, the IASB issued Property, Plant and Equipment\u2014Proceeds before Intended Use (Amendments to
IAS 16) to prohibit deducting from the cost of an item of property, plant and equipment any proceeds from selling
items produced before that asset is available for use and clarifying the meaning of \"testing whether an asset is
functioning properly\". These amendments are effective retrospectively from January 1, 2022. These amendments had
no impact on these Consolidated Financial Statements.
\u25aaOn May 14, 2020, the IASB issued Onerous Contracts\u2014Cost of Fulfilling a Contract (Amendments to IAS 37)
specifying that the cost of fulfilling a contract comprises the costs that relate directly to the contract, including both the
incremental costs of fulfilling that contract and an allocation of other costs that relate directly to fulfilling contracts.
These amendments are effective retrospectively from January 1, 2022. These amendments had no impact on these
Consolidated Financial Statements.
\u25aaOn May 14, 2020, the IASB issued the Annual Improvements to IFRS 2018-2020 Cycle. The most important topics
addressed in these amendments are: (i) on IFRS 9 - Financial Instruments clarifying which fees an entity includes
when it applies the \"10 per cent\" test in assessing whether to derecognize a financial liability; and (ii) on IFRS 16 -
Leases removing the illustration of the reimbursement of leasehold improvements. These improvements are effective
from January 1, 2022. These amendments had no impact on these Consolidated Financial Statements.
Accounting standards, amendments and interpretations not yet applicable and not early adopted by the Group
The main accounting standards, amendments and interpretations not yet applicable and not early adopted by the Group
are the following:
\u25aaOn February 12, 2021, the IASB issued the Amendments to IAS 1 - Presentation of Financial Statements and IFRS
Practice Statement 2: Disclosure of Accounting policies, requiring companies to disclose the material accounting
policy information rather than the significant accounting policies. Furthermore, the amendments to IFRS Practice
Statement 2 provide guidance on how to apply the concept of materiality to accounting policy disclosures. This
amendment is effective from January 1, 2023.
\u25aaOn February 12, 2021, the IASB issued the Amendments to IAS 8 - Accounting policies, Changes in Accounting
Estimates and Errors: Definition of Accounting Estimates. The amendments clarify how to distinguish changes in
accounting policies (generally also applied retrospectively to past transactions and other past events) from changes
in accounting estimates (applied prospectively only to future transactions and other future events). This amendment
is effective from January 1, 2023.
\u25aaOn May 7, 2021, the IASB issued Deferred Tax related to Assets and Liabilities arising from a Single Transaction
(Amendments to IAS 12), which specifies how companies should account for deferred tax on transactions such as
leases and decommissioning obligations. The amendments clarify that no exemption applies on such transactions
and that companies are required to recognize deferred tax when they recognize the related assets or liabilities for the
first time. The amendments are effective for annual reporting periods beginning on or after January 1, 2023, with
early application permitted.
Furthermore, at the date of these Consolidated Financial Statements, the European Union has not yet completed its
endorsement process for the amendments and improvements reported below.
The Group is currently evaluating the impact of the adoption of the following amendment on its Consolidated Financial
Statements or disclosures:
\u25aaOn October 31, 2022, the IASB has published \"Non-current Liabilities with Covenants\" Amendments to IAS 1 -
Presentation of Financial Statements, to clarify how conditions with which an entity must comply within twelve months
after the reporting periods affect the classification of a liability. The amendments are effective for reporting periods
beginning on or after January 1, 2024.
\u25aaIn January 2020, the IASB issued amendments to IAS 1 - Presentation of Financial Statements, to clarify its
requirements for classifying a liability as non-current in the statement of financial position. The amendments are
effective from annual reporting periods beginning on or after 1 January 2024.
\u25aaOn September 22, 2022, the IASB issued Lease Liability in a Sale and Leaseback (Amendments to IFRS 16) with
amendments that clarify how a seller-lessee subsequently measures sale and leaseback transactions that satisfy the
requirements in IFRS 15 to be accounted for as a sale. The amendments are effective for annual periods beginning
on or after 1 January 2024.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfChangesInAccountingPoliciesExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV80MDkvZnJhZzo5NTFhODhjYTQ0MDA0MTY0YTI4MWE2MGM2NDQ1ZTQzMi90ZXh0cmVnaW9uOjk1MWE4OGNhNDQwMDQxNjRhMjgxYTYwYzY0NDVlNDMyXzgyNDYzMzcyMTUwNDg_cfcfb799-e33f-41b0-862c-e4c59e6bc23c": {
"value": "
New standards and amendments effective from January 1, 2022
\u25aaOn May 14, 2020, the IASB issued Property, Plant and Equipment\u2014Proceeds before Intended Use (Amendments to
IAS 16) to prohibit deducting from the cost of an item of property, plant and equipment any proceeds from selling
items produced before that asset is available for use and clarifying the meaning of \"testing whether an asset is
functioning properly\". These amendments are effective retrospectively from January 1, 2022. These amendments had
no impact on these Consolidated Financial Statements.
\u25aaOn May 14, 2020, the IASB issued Onerous Contracts\u2014Cost of Fulfilling a Contract (Amendments to IAS 37)
specifying that the cost of fulfilling a contract comprises the costs that relate directly to the contract, including both the
incremental costs of fulfilling that contract and an allocation of other costs that relate directly to fulfilling contracts.
These amendments are effective retrospectively from January 1, 2022. These amendments had no impact on these
Consolidated Financial Statements.
\u25aaOn May 14, 2020, the IASB issued the Annual Improvements to IFRS 2018-2020 Cycle. The most important topics
addressed in these amendments are: (i) on IFRS 9 - Financial Instruments clarifying which fees an entity includes
when it applies the \"10 per cent\" test in assessing whether to derecognize a financial liability; and (ii) on IFRS 16 -
Leases removing the illustration of the reimbursement of leasehold improvements. These improvements are effective
from January 1, 2022. These amendments had no impact on these Consolidated Financial Statements.
Accounting standards, amendments and interpretations not yet applicable and not early adopted by the Group
The main accounting standards, amendments and interpretations not yet applicable and not early adopted by the Group
are the following:
\u25aaOn February 12, 2021, the IASB issued the Amendments to IAS 1 - Presentation of Financial Statements and IFRS
Practice Statement 2: Disclosure of Accounting policies, requiring companies to disclose the material accounting
policy information rather than the significant accounting policies. Furthermore, the amendments to IFRS Practice
Statement 2 provide guidance on how to apply the concept of materiality to accounting policy disclosures. This
amendment is effective from January 1, 2023.
\u25aaOn February 12, 2021, the IASB issued the Amendments to IAS 8 - Accounting policies, Changes in Accounting
Estimates and Errors: Definition of Accounting Estimates. The amendments clarify how to distinguish changes in
accounting policies (generally also applied retrospectively to past transactions and other past events) from changes
in accounting estimates (applied prospectively only to future transactions and other future events). This amendment
is effective from January 1, 2023.
\u25aaOn May 7, 2021, the IASB issued Deferred Tax related to Assets and Liabilities arising from a Single Transaction
(Amendments to IAS 12), which specifies how companies should account for deferred tax on transactions such as
leases and decommissioning obligations. The amendments clarify that no exemption applies on such transactions
and that companies are required to recognize deferred tax when they recognize the related assets or liabilities for the
first time. The amendments are effective for annual reporting periods beginning on or after January 1, 2023, with
early application permitted.
Furthermore, at the date of these Consolidated Financial Statements, the European Union has not yet completed its
endorsement process for the amendments and improvements reported below.
The Group is currently evaluating the impact of the adoption of the following amendment on its Consolidated Financial
Statements or disclosures:
\u25aaOn October 31, 2022, the IASB has published \"Non-current Liabilities with Covenants\" Amendments to IAS 1 -
Presentation of Financial Statements, to clarify how conditions with which an entity must comply within twelve months
after the reporting periods affect the classification of a liability. The amendments are effective for reporting periods
beginning on or after January 1, 2024.
\u25aaIn January 2020, the IASB issued amendments to IAS 1 - Presentation of Financial Statements, to clarify its
requirements for classifying a liability as non-current in the statement of financial position. The amendments are
effective from annual reporting periods beginning on or after 1 January 2024.
\u25aaOn September 22, 2022, the IASB issued Lease Liability in a Sale and Leaseback (Amendments to IFRS 16) with
amendments that clarify how a seller-lessee subsequently measures sale and leaseback transactions that satisfy the
requirements in IFRS 15 to be accounted for as a sale. The amendments are effective for annual periods beginning
on or after 1 January 2024.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfChangesInAccountingPoliciesAccountingEstimatesAndErrorsExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV80MTUvZnJhZzo3M2JjMzVjZTgwOWU0ZmEwYjQ3OTE2ODllMTBlNDZhNi90ZXh0cmVnaW9uOjczYmMzNWNlODA5ZTRmYTBiNDc5MTY4OWUxMGU0NmE2XzMyOTg1MzQ4ODQzMzk_5a8bc6ac-7f36-4fc1-bb2b-e36ae9561c79": {
"value": "
SCOPE OF CONSOLIDATION
The Consolidated Financial Statements of the Group as of December 31, 2022 include CNH Industrial N.V. and 102
consolidated subsidiaries over which CNH Industrial N.V., directly or indirectly, has control. A total of 111 subsidiaries
were consolidated at December 31, 2021.
Excluded from consolidation are 9 subsidiaries that are either dormant or generate a negligible volume of business:
their proportion of the Group\u2019s assets, liabilities, financial position and earnings is immaterial. In particular, 9 of such
subsidiaries are accounted for using the cost method, and represent in aggregate less than 0.01 percent of Group
revenues, equity and total assets.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfSignificantInvestmentsInSubsidiariesExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV80MTUvZnJhZzo3M2JjMzVjZTgwOWU0ZmEwYjQ3OTE2ODllMTBlNDZhNi90ZXh0cmVnaW9uOjczYmMzNWNlODA5ZTRmYTBiNDc5MTY4OWUxMGU0NmE2XzgyNDYzMzcyMDkxNTk_17f72f27-45c9-4b0b-8533-420d0cf9e4de": {
"value": "
SCOPE OF CONSOLIDATION
The Consolidated Financial Statements of the Group as of December 31, 2022 include CNH Industrial N.V. and 102
consolidated subsidiaries over which CNH Industrial N.V., directly or indirectly, has control. A total of 111 subsidiaries
were consolidated at December 31, 2021.
Excluded from consolidation are 9 subsidiaries that are either dormant or generate a negligible volume of business:
their proportion of the Group\u2019s assets, liabilities, financial position and earnings is immaterial. In particular, 9 of such
subsidiaries are accounted for using the cost method, and represent in aggregate less than 0.01 percent of Group
revenues, equity and total assets.
5.Result from investments
This item mainly includes CNH Industrial\u2019s share in the net profit or loss of the investees accounted for using the equity
method, as well as any impairment losses, reversal of impairment losses, accruals to the investment provision, and
dividend income. In 2022 and 2021, CNH Industrial\u2019s share in the net profit or loss of the investees accounted for using
the equity method was a gain of $108 million and $92 million, respectively.
14.Investments and other non-current financial assets
| | |
| | |
Investments accounted for using the equity method | | |
| | |
| | |
Non-current financial receivables and other non-current securities | | |
Total Investments and other non-current financial assets | | |
At December 31, 2022 and 2021, no Non-current financial receivables had been pledged as security.
Investments
Changes in Investments in 2022 and 2021 are set out below:
| | | | | | | |
| | Revaluations/ (Write-downs) | Acquisitions and capitalizations | Fair value remeasurements | | Disposals and other changes | |
| | | | | | | |
Unconsolidated subsidiaries and other | | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | | |
| | Revaluations/ (Write-downs) | Acquisitions and capitalizations | Fair value remeasu- rements | | Disposals and other changes | Transfer to Assets held for distribution | |
| | | | | | | | |
Unconsolidated subsidiaries and other | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Equity investments measured at fair value through other comprehensive income | | | | | | | | |
| | | | | | | | |
| | |
| | |
| T\u00fcrkTrakt\u00f6r Ve Ziraat Makineleri A.S. | T\u00fcrkTrakt\u00f6r Ve Ziraat Makineleri A.S. |
| | |
Depreciation and amortization | | |
Net Financial income/(expenses) | | |
Profit/(loss) before taxes | | |
| | |
Profit/(loss) from Continuing Operations | | |
Profit/(loss) from Discontinued Operations | | |
| | |
| | |
Total Other comprehensive income, net of tax | | |
Total Comprehensive income | | |
| | |
| | |
| | |
Profit/(loss) before taxes | | |
Profit/(loss) from Continuing Operations | | |
Profit/(loss) from Discontinued Operations | | |
| | |
| | |
Total Other comprehensive income, net of tax | | |
Total Comprehensive income | | |
(1) The 24.95% investment in CNH Capital Europe S.A. held by CNH Industrial N.V. through CIFINS S.p.A. at December 31, 2022 was included in the combined financial statements at December 31, 2021 as
investments in associates.
Summarized financial information relating to the Group\u2019s pro-rata interest in associates that are not individually material,
accounted for using the equity method, is as follows:
| | |
| | |
Profit/(loss) from Continuing Operations | | |
Profit/(loss) from Discontinued Operations | | |
| | |
| | |
Total Other comprehensive income, net of tax | | |
Total Comprehensive income | | |
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfBusinessCombinationsExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV80MzYvZnJhZzowNzE0MWQxOWY4YmU0Y2I2YWQ1NzI3NzUzYWFiNjAyMy90ZXh0cmVnaW9uOjA3MTQxZDE5ZjhiZTRjYjZhZDU3Mjc3NTNhYWI2MDIzXzgyNDYzMzcyMDk0MzU_5e1ca6d8-fc66-41b6-b412-94ceace3bde9": {
"value": "
1.Net revenues
The following table summarizes Net revenues for the years ended December 31, 2022 and 2021:
| | |
| | |
| | |
| | |
| | |
Total Industrial Activities | | |
| | |
| | |
| | |
The following table disaggregates Net revenues by major source for the years ended December 31, 2022 and 2021:
| | |
| | |
| | |
| | |
| | |
Revenues from sales of goods and services | | |
Finance and interest income | | |
Rents and other income on operating lease | | |
| | |
During the years ended December 31, 2022 and 2021, revenues included $6 million and $1 million, respectively,
relating to the reversal of contract liabilities outstanding at the beginning of each period. Refer to Note 26 \"Other current
liabilities\" for additional details on contract liabilities.
As of December 31, 2022, the aggregate amount of the transaction price allocated to remaining performance
obligations related to extended warranties/maintenance and repair contracts was approximately $33 million ($15 million
as of December 31, 2021). As of December 31, 2022, CNH Industrial expects to recognize revenue on approximately
30% and 91% of the remaining performance obligations over the next 12 and 36 months, respectively (approximately
30% and 89%, respectively, as of December 31, 2021), with the remaining recognized thereafter.
Changes in Contract liabilities for the year ended December 31, 2022, are as follows:
| | | | | |
| | Additional amounts arising during the period | Amounts recognized within revenue | Translation differences and other changes | |
| | | | | |
At December 31, 2022, and 2021, Contract liabilities primarily relate to extended warranties/maintenance and repair
contracts.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfRevenueFromContractsWithCustomersExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV80MzYvZnJhZzowNzE0MWQxOWY4YmU0Y2I2YWQ1NzI3NzUzYWFiNjAyMy90ZXh0cmVnaW9uOjA3MTQxZDE5ZjhiZTRjYjZhZDU3Mjc3NTNhYWI2MDIzXzgyNDYzMzcyMDk0MzU_e0d4f666-9d63-41b6-9285-5ac2e40ba287": {
"value": "
1.Net revenues
The following table summarizes Net revenues for the years ended December 31, 2022 and 2021:
| | |
| | |
| | |
| | |
| | |
Total Industrial Activities | | |
| | |
| | |
| | |
The following table disaggregates Net revenues by major source for the years ended December 31, 2022 and 2021:
| | |
| | |
| | |
| | |
| | |
Revenues from sales of goods and services | | |
Finance and interest income | | |
Rents and other income on operating lease | | |
| | |
During the years ended December 31, 2022 and 2021, revenues included $6 million and $1 million, respectively,
relating to the reversal of contract liabilities outstanding at the beginning of each period. Refer to Note 26 \"Other current
liabilities\" for additional details on contract liabilities.
As of December 31, 2022, the aggregate amount of the transaction price allocated to remaining performance
obligations related to extended warranties/maintenance and repair contracts was approximately $33 million ($15 million
as of December 31, 2021). As of December 31, 2022, CNH Industrial expects to recognize revenue on approximately
30% and 91% of the remaining performance obligations over the next 12 and 36 months, respectively (approximately
30% and 89%, respectively, as of December 31, 2021), with the remaining recognized thereafter.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfRevenueExplanatory",
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}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV80MzkvZnJhZzpmNDBhZjVjYTc3YzY0ODAzYmFiZjFjMDlmMjVmODg0MC90ZXh0cmVnaW9uOmY0MGFmNWNhNzdjNjQ4MDNiYWJmMWMwOWYyNWY4ODQwXzgyNDYzMzcyMDg0MzE_4923da4a-954f-45bb-91db-79b61671f309": {
"value": "
2.Cost of sales
Cost of sales amounted to $18,167 million in 2022 and to $15,231 million in 2021.
",
"dimensions": {
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"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
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}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV80MzkvZnJhZzpmNDBhZjVjYTc3YzY0ODAzYmFiZjFjMDlmMjVmODg0MC90ZXh0cmVnaW9uOmY0MGFmNWNhNzdjNjQ4MDNiYWJmMWMwOWYyNWY4ODQwXzgyNDYzMzcyMDg0MzE_617167c3-4eab-4c73-938d-c33df34493ac": {
"value": "
2.Cost of sales
Cost of sales amounted to $18,167 million in 2022 and to $15,231 million in 2021.
3.Selling, general and administrative costs
Selling, general and administrative costs amounted to $1,678 million in 2022, compared to $1,425 million recorded in
2021, as costs returned to more normal levels from the pandemic-affected low levels experienced last year.
4.Research and development costs
In 2022, Research and development costs of $881 million ($677 million in 2021) comprise all the research and
development costs not recognized as assets in the year, amounting to $698 million ($492 million in 2021) and the
amortization of capitalized development costs of $183 million ($185 million in 2021). During 2022, the Group capitalized
new development costs of $175 million ($154 million in 2021).
6.Restructuring costs
CNH Industrial incurred restructuring costs of $34 million and $36 million in 2022 and 2021, respectively.
7.Other income/(expenses)
This item consists of miscellaneous costs which cannot be allocated to specific functional areas, such as accruals for
various provisions not attributable to other items of Cost of sales or Selling, general and administrative costs, net of
income arising from operations which is not attributable to the sale of goods and services. Other expenses were $9
million in 2022 and $124 million in 2021. In 2022, this item also includes $22 million ($54 million after-tax) of loss on the
sale of the Raven Engineered Films and Aerostar divisions, net of income from the Raven businesses held for sale
during the period, separation costs in connection with the spin-off of the On-Highway business of $25 million, and a $65
million gain from the sale of our Canada parts depot. In 2021, this item also included a pre-tax gain of $95 million
related to a healthcare plan amendment in the U.S., $133 million separation costs in connection with the spin-off of the
On-Highway business, $57 million for the transaction costs related to the acquisition of Raven Industries, Inc. and a
gain of $12 million ($9 million after-tax) for a fair value adjustment of Monarch Tractor investment.
Development costs and other intangible assets with finite useful lives
The amortization of development costs and impairment losses are reported in the income statement as Research and
development costs.
Development costs are tested for impairment at the cash-generating unit level.
Intangible assets with finite useful lives are amortized over their estimated useful lives and tested for impairment if
events or changes in circumstances indicate that the asset may be impaired.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfExpensesExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV80MzkvZnJhZzpmNDBhZjVjYTc3YzY0ODAzYmFiZjFjMDlmMjVmODg0MC90ZXh0cmVnaW9uOmY0MGFmNWNhNzdjNjQ4MDNiYWJmMWMwOWYyNWY4ODQwXzQ5_884b03cb-b533-4b74-b3b4-0d12c69569ff": {
"value": "18167000000",
"decimals": -6,
"dimensions": {
"concept": "ifrs-full:CostOfSales",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00",
"unit": "iso4217:USD"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV80MzkvZnJhZzpmNDBhZjVjYTc3YzY0ODAzYmFiZjFjMDlmMjVmODg0MC90ZXh0cmVnaW9uOmY0MGFmNWNhNzdjNjQ4MDNiYWJmMWMwOWYyNWY4ODQwXzc2_d8b3c4a8-56de-4c55-af54-bd6ba919bc2d": {
"value": "15231000000",
"decimals": -6,
"dimensions": {
"concept": "ifrs-full:CostOfSales",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2021-01-01T00:00:00/2022-01-01T00:00:00",
"unit": "iso4217:USD"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV80NDIvZnJhZzplNzA3Y2E1ZjZmMGU0OGZhYWM4MjJiMDA3OWQzYzJkZC90ZXh0cmVnaW9uOmU3MDdjYTVmNmYwZTQ4ZmFhYzgyMmIwMDc5ZDNjMmRkXzgyNDYzMzcyMDg2ODQ_3c4167c8-c178-4d91-9f54-091f4520d966": {
"value": "
3.Selling, general and administrative costs
Selling, general and administrative costs amounted to $1,678 million in 2022, compared to $1,425 million recorded in
2021, as costs returned to more normal levels from the pandemic-affected low levels experienced last year.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfGeneralAndAdministrativeExpenseExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV80NDIvZnJhZzplNzA3Y2E1ZjZmMGU0OGZhYWM4MjJiMDA3OWQzYzJkZC90ZXh0cmVnaW9uOmU3MDdjYTVmNmYwZTQ4ZmFhYzgyMmIwMDc5ZDNjMmRkXzEwNQ_817eaea6-b172-446d-9009-070b99652b00": {
"value": "1678000000",
"decimals": -6,
"dimensions": {
"concept": "ifrs-full:SellingGeneralAndAdministrativeExpense",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00",
"unit": "iso4217:USD"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV80NDIvZnJhZzplNzA3Y2E1ZjZmMGU0OGZhYWM4MjJiMDA3OWQzYzJkZC90ZXh0cmVnaW9uOmU3MDdjYTVmNmYwZTQ4ZmFhYzgyMmIwMDc5ZDNjMmRkXzEzNg_2e3f6dd9-6719-4869-b49b-a7251745bd35": {
"value": "1425000000",
"decimals": -6,
"dimensions": {
"concept": "ifrs-full:SellingGeneralAndAdministrativeExpense",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2021-01-01T00:00:00/2022-01-01T00:00:00",
"unit": "iso4217:USD"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV80NDUvZnJhZzo4NGEyNGI4YzNlZjM0ZTAwOTNmNjAxODkxYzY3M2Y1Ny90ZXh0cmVnaW9uOjg0YTI0YjhjM2VmMzRlMDA5M2Y2MDE4OTFjNjczZjU3XzgyNDYzMzcyMDkwMjc_7a240893-13e4-4771-a41e-4071f1c15e4f": {
"value": "
4.Research and development costs
In 2022, Research and development costs of $881 million ($677 million in 2021) comprise all the research and
development costs not recognized as assets in the year, amounting to $698 million ($492 million in 2021) and the
amortization of capitalized development costs of $183 million ($185 million in 2021). During 2022, the Group capitalized
new development costs of $175 million ($154 million in 2021).
Development costs and other intangible assets with finite useful lives
The amortization of development costs and impairment losses are reported in the income statement as Research and
development costs.
Development costs are tested for impairment at the cash-generating unit level.
Intangible assets with finite useful lives are amortized over their estimated useful lives and tested for impairment if
events or changes in circumstances indicate that the asset may be impaired.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfResearchAndDevelopmentExpenseExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV80NDgvZnJhZzo2ZTg1ODZkNmFhMmY0NzdhOTVjMzFjMWZlNjI3OWU5NS90ZXh0cmVnaW9uOjZlODU4NmQ2YWEyZjQ3N2E5NWMzMWMxZmU2Mjc5ZTk1XzgyNDYzMzcyMDkwODY_3ad45f00-a348-4e67-9191-be11bce8f548": {
"value": "
5.Result from investments
This item mainly includes CNH Industrial\u2019s share in the net profit or loss of the investees accounted for using the equity
method, as well as any impairment losses, reversal of impairment losses, accruals to the investment provision, and
dividend income. In 2022 and 2021, CNH Industrial\u2019s share in the net profit or loss of the investees accounted for using
the equity method was a gain of $108 million and $92 million, respectively.
14.Investments and other non-current financial assets
| | |
| | |
Investments accounted for using the equity method | | |
| | |
| | |
Non-current financial receivables and other non-current securities | | |
Total Investments and other non-current financial assets | | |
At December 31, 2022 and 2021, no Non-current financial receivables had been pledged as security.
Investments
Changes in Investments in 2022 and 2021 are set out below:
| | | | | | | |
| | Revaluations/ (Write-downs) | Acquisitions and capitalizations | Fair value remeasurements | | Disposals and other changes | |
| | | | | | | |
Unconsolidated subsidiaries and other | | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | | |
| | Revaluations/ (Write-downs) | Acquisitions and capitalizations | Fair value remeasu- rements | | Disposals and other changes | Transfer to Assets held for distribution | |
| | | | | | | | |
Unconsolidated subsidiaries and other | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Equity investments measured at fair value through other comprehensive income | | | | | | | | |
| | | | | | | | |
| | |
| | |
| T\u00fcrkTrakt\u00f6r Ve Ziraat Makineleri A.S. | T\u00fcrkTrakt\u00f6r Ve Ziraat Makineleri A.S. |
| | |
Depreciation and amortization | | |
Net Financial income/(expenses) | | |
Profit/(loss) before taxes | | |
| | |
Profit/(loss) from Continuing Operations | | |
Profit/(loss) from Discontinued Operations | | |
| | |
| | |
Total Other comprehensive income, net of tax | | |
Total Comprehensive income | | |
| | |
| | |
| | |
Profit/(loss) before taxes | | |
Profit/(loss) from Continuing Operations | | |
Profit/(loss) from Discontinued Operations | | |
| | |
| | |
Total Other comprehensive income, net of tax | | |
Total Comprehensive income | | |
(1) The 24.95% investment in CNH Capital Europe S.A. held by CNH Industrial N.V. through CIFINS S.p.A. at December 31, 2022 was included in the combined financial statements at December 31, 2021 as
investments in associates.
Summarized financial information relating to the Group\u2019s pro-rata interest in associates that are not individually material,
accounted for using the equity method, is as follows:
| | |
| | |
Profit/(loss) from Continuing Operations | | |
Profit/(loss) from Discontinued Operations | | |
| | |
| | |
Total Other comprehensive income, net of tax | | |
Total Comprehensive income | | |
Financial income may be analyzed as follows:
| | |
| | |
Interest income from banks | | |
Interest and financial income from financial assets at amortized cost | | |
Other interest income and financial income | | |
| | |
Interest and other financial expenses may be analyzed as follows:
| | |
| | |
Interest expenses on bonds | | |
| | |
Interest expenses related to lease liabilities | | |
| | |
Other interest cost and other financial expenses | | |
Total Interest and other financial expenses | | |
Financial income may be analyzed as follows:
| | |
| | |
Interest income from banks | | |
Interest and financial income from financial assets at amortized cost | | |
Other interest income and financial income | | |
| | |
Interest and other financial expenses may be analyzed as follows:
| | |
| | |
Interest expenses on bonds | | |
| | |
Interest expenses related to lease liabilities | | |
| | |
Other interest cost and other financial expenses | | |
Total Interest and other financial expenses | | |
Financial income may be analyzed as follows:
| | |
| | |
Interest income from banks | | |
Interest and financial income from financial assets at amortized cost | | |
Other interest income and financial income | | |
| | |
Interest and other financial expenses may be analyzed as follows:
| | |
| | |
Interest expenses on bonds | | |
| | |
Interest expenses related to lease liabilities | | |
| | |
Other interest cost and other financial expenses | | |
Total Interest and other financial expenses | | |
An analysis of Current receivables by due date is as follows:
| | | | | | | | |
| | |
| | due between one and five years | | | | due between one and five years | | |
| | | | | | | | |
Receivables from financing activities | | | | | | | | |
| | | | | | | | |
Other current receivables | | | | | | | | |
Total Current receivables | | | | | | | | |
Trade receivables
As of December 31, 2022 and 2021, CNH Industrial had trade receivables of $168 million and $192 million,
respectively. Trade receivables are shown net of allowances for doubtful accounts of $23 million for both year ended
December 31, 2022 and 2021. The allowances are determined using the simplified approach, as permitted by IFRS 9
for trade receivables, consisting in the use of lifetime expected loss.
Changes in the allowances for doubtful accounts during 2022, and 2021 were as follows:
| | |
| |
| | |
| | |
| | |
| | |
Transfer to liabilities held for distribution | | |
| | |
sale and Discontinued Operations. Iveco Group's results are presented as a single line item within the Consolidated Statement of Comprehensive Income for the year ended December 31, 2021. The spin-off
of Iveco Group took effect on January 1, 2022 (refer to the Section - \"Scope of Consolidation - Discontinued Operations - Iveco Group Business\").
The allowances at December 31, 2022 and 2021, have been determined using the following expected loss rates:
| | | | | | |
| | |
| | | | | Greater than 90 days past due | |
| | | | | | |
| | | | | | |
Allowances for doubtful accounts | | | | | | |
| | | | | | |
| | |
| | | | | Greater than 90 days past due | |
| | | | | | |
| | | | | | |
Allowances for doubtful accounts | | | | | | |
Trade accounts have significant concentrations of credit risk in the Agriculture and Construction segments. There is not
a disproportionate concentration of credit risk in any geographic region.
The Industrial Activities businesses sell a significant portion of their trade receivables to Financial Services and provide
compensation to Financial Services at approximate market interest rates.
As of December 31, 2022 and 2021, write offs for trade receivables were immaterial.
Charge\u2011offs of principal amounts of trade receivables outstanding are deducted from the allowance at the point when it
is estimated that amounts due are deemed uncollectible. CNH Industrial continues to engage in collection efforts to
attempt to recover the receivables. When recoveries are collected, these are recognized as income.
Receivables from financing activities
A summary of Receivables from financing activities as of December 31, 2022 and 2021 is as follows:
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Total Receivables from financing activities | | |
CNH Industrial provides and administers retail note and lease financing to end use customers for the purchase of new
and used equipment sold through its dealer network, as well as revolving charge account financing. The terms of retail
notes and finance leases generally range from two to six years, and interest rates vary depending on prevailing market
interest rates and certain incentive programs offered on behalf of and sustained by Industrial Activities. Revolving
charge accounts are generally accompanied by higher interest rates than CNH Industrial's other retail financing
products, require minimum monthly payments, and do not have pre-determined maturity dates.
Wholesale receivables arise primarily from dealer floorplan financing, and to a lesser extent, the financing of dealer
operations. Under the standard terms of the wholesale receivable agreements, these receivables typically have
\u201cinterest-free\u201d periods of up to twelve months and stated original maturities of up to twenty-four months, with repayment
accelerated upon the sale of the underlying equipment by the dealer. During the \u201cinterest-free\u201d period, Financial
Services is compensated by Industrial Activities based on market interest rates. After the expiration of any \u201cinterest-free\u201d
period, interest is charged to dealers on outstanding balances until CNH Industrial receives payment in full. The
\u201cinterest-free\u201d periods are determined based on the type of equipment sold and the time of year of the sale. CNH
Industrial evaluates and assesses dealers on an ongoing basis as to their credit worthiness. CNH Industrial may be
obligated to repurchase the dealer\u2019s equipment upon cancellation or termination of the dealer\u2019s contract for such
causes as change in ownership, closeout of the business, or default. There were no significant losses in 2022 and 2021
relating to the termination of dealer contracts.
Finance lease receivables mainly relate to equipment leased out under finance lease arrangements. The interest rate
implicit in the lease is determined at the commencement of the lease for the whole lease term. The average interest
rate implicit in total finance lease receivables varies depending on prevailing market interest rates.
The item may be analyzed as follows stated gross of an allowance of $34 million at December 31, 2022 ($6 million at
December 31, 2021):
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Total Undiscounted receivables for future minimum lease payments | | |
| | |
Present value of future minimum lease payments | | |
Financing receivables have significant concentrations of credit risk in the agriculture and construction business sectors.
On a geographic basis, there is not a disproportionate concentration of credit risk in any area. CNH Industrial typically
retains, as collateral, a security interest in the equipment associated with retail and wholesale receivables, while
revolving charge accounts are generally unsecured.
Transfers of financial receivables
As part of its overall funding strategy, the Group periodically transfers certain receivables into special purpose entities
(\"SPEs\") as part of its asset backed securitization (\"ABS\") programs or into factoring transactions.
The SPEs finance the purchase of receivables by issuing asset-backed securities (i.e., securities whose repayment and
interest flow depend upon the cash flow generated by the portfolio). Asset-backed securities are divided into classes
according to their degree of seniority and rating: the most senior classes are placed with investors on the market; the
junior class, whose repayment is subordinated to the senior classes, is normally subscribed for by the seller. The
residual interest in the receivables retained by the seller is therefore limited to the junior securities it has subscribed for.
In accordance with IFRS 10 \u2013 Consolidated Financial Statements, all securitization vehicles are included in the scope of
consolidation because the subscription of the junior asset-backed securities by the seller implies its control in substance
over the structured entity.
Factoring transactions may be either with recourse or without recourse; certain without recourse transfers include
deferred payment clauses (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), requiring first loss cover, meaning that the transferor
takes priority participation in the losses, or requires a significant exposure to the cash flows arising from the transferred
receivables to be retained. These types of transactions do not comply with the requirements of IFRS 9 \u2013 Financial
Instruments for the derecognition of the assets, since the risks and rewards connected with collection are not
substantially transferred and, accordingly, the Group continues to recognize the receivables transferred by this means
in its consolidated statement of financial position and recognizes a financial liability of the same amount under asset-
backed financing (see Note 24 \u201cDebt\u201d).
At December\u00a031,\u00a02022 and 2021, the carrying amount of such transferred financial assets not derecognized and the
related liability and the respective fair values were as follows:
| | | | | | |
| | |
| Receivables from financing activities transferred | Other financial assets transferred | | Receivables from financing activities transferred | Other financial assets transferred | |
Carrying amount of assets | | | | | | |
Carrying amount of the related liabilities | | | | | | |
| | | | | | |
Liabilities for which the counterparty has the right to obtain relief on the transferred assets: | | | | | | |
| | | | | | |
Fair value of the liabilities | | | | | | |
| | | | | | |
Other financial assets transferred also include the cash with a pre-determined use restricted to the repayment of the
securitization debt.
CNH Industrial has discounted receivables and bills without recourse having due dates beyond December 31, 2022
amounting to $17 million which refer to trade receivables and other receivables. At December 31, 2021, the amount of
discounted receivables and bills without recourse with due dates beyond that date, was $192 million, of which, $178
million referred to trade receivables and other receivables and $14 million referred to receivables from financing
activities.
Allowance for Credit Losses
CNH Industrial's allowance for credit losses is segregated into two portfolio segments: retail and wholesale. A portfolio
segment is the level at which CNH Industrial develops a systematic methodology for determining its allowance for credit
losses. Further, the class of receivables by which CNH Industrial evaluates its portfolio segments is by geographic
region. Typically, CNH Industrial's receivables within a geographic region have similar risk profiles and methods for
assessing and monitoring risk. These classes align with management reporting.
CNH Industrial utilizes three categories for receivables from financing activities that reflect their credit risk and how the
loss provision is determined.
| | | |
| | | Basis for recognition of expected credit loss provision |
| | Low risk of default; payments are generally less than 30 days past due | 12 month expected credit losses |
| | Significant increase in credit risk; payments generally between 31 and 90 days past due | Lifetime expected credit losses |
| | Accounts are credit impaired and/or a legal action has been initiated; payments generally greater than 90 days past due | Lifetime expected credit losses |
At December 31, 2022, the allowance for credit losses included an increase in reserves due to growth in the retail
portfolio and additionally included $15 million for domestic Russian receivables, $9 million for the addition of revolving
charge accounts in North America and $7 million in China related to Construction customers. CNH Industrial will update
the macroeconomic factors and qualitative factors in future periods, as warranted.
Allowance for credit losses activity for the year ended December 31, 2021 is as follows:
| | | | | | | | |
| Year ended December 31, 2021 |
| | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Charge-offs, net of recoveries | | | | | | | | |
| | | | | | | | |
Foreign currency translation and other | | | | | | | | |
Transfer to assets held for distribution | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
At December 31, 2021, the allowance for credit losses included a reduction in retail reserves primarily due to the
improved outlook for the agricultural industry and a reduced expected impact on credit conditions from the COVID-19
pandemic.
CNH Industrial assesses and monitors the credit quality of its financing receivables based on whether a receivable is
classified as Performing or Non-Performing. Receivables are considered past due if the required principal and interest
payments have not yet been received as of the date such payments were due. Delinquency is reported on financing
receivables greater than 30 days past due. Non-performing financing receivables represent loans for which CNH
Industrial has ceased accruing finance income. These receivables are generally 90 days past due. Finance income for
non-performing receivables is recognized on a cash basis. Accrued interest is charged-off to interest income. Interest
income charged-off was not material for the year ended December 31, 2022. Interest accrual is resumed if the
receivable becomes contractually current and collection becomes probable. Previously suspended income is
recognized at that time.
The aging of Receivables from financing activities as of December 31, 2022 and 2021 is as follows:
| | | | | | |
| |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Europe, Middle East, Africa | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Europe, Middle East, Africa | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Europe, Middle East, Africa | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Europe, Middle East, Africa | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Troubled Debt Restructurings
A restructuring of a receivable constitutes a troubled debt restructuring (\u201cTDR\u201d) when the lender grants a concession it
would not otherwise consider to a borrower that is experiencing financial difficulties. As a collateral-based lender, CNH
Industrial typically will repossess collateral in lieu of restructuring receivables. As such, for retail receivables,
concessions are typically provided based on bankruptcy court proceedings. For wholesale receivables, concessions
granted may include extended contract maturities, inclusion of interest-only periods, modification of a contractual
interest rate to a below market interest rate and waiving of interest and principal.
TDRs are reviewed along with other receivables as part of management\u2019s ongoing evaluation of the adequacy of the
allowance for credit losses. The allowance for credit losses attributable to TDRs is based on the most probable source
of repayment, which is normally the liquidation of the collateral. In determining collateral value, CNH Industrial
estimates the current fair market value of the equipment collateral and considers credit enhancements such as
additional collateral and third-party guarantees.
Before removing a receivable from TDR classification, a review of the borrower is conducted. If concerns exist about the
future ability of the borrower to meet its obligations based on a credit review, the TDR classification is not removed from
the receivable.
As of December\u00a031, 2022, and 2021, CNH Industrial\u2019s TDRs for retail and wholesale receivables were immaterial.
Other current receivables
At December 31, 2022, Other current receivables mainly consisted of other tax receivables for VAT and other indirect
taxes of $308\u00a0million ($638 million at December 31, 2021), and receivables from employees of $15 million ($11 million
at December\u00a031,\u00a02021).
Other current financial assets
At December 31, 2022, and 2021, Other current financial assets primarily consist of current securities and short-term
deposits and investments.
Refer to Note 30 \u201cInformation on financial risks\u201d for additional information on the credit risk to which CNH Industrial is
exposed and the way it is managed by the Group.
18. Derivative assets and Derivative liabilities
These items consist of derivative financial instruments measured at fair value at the balance sheet date.
CNH Industrial utilizes derivative instruments to mitigate its exposure to interest rate and foreign currency exposures.
Derivatives used as hedges are effective at reducing the risk associated with the exposure being hedged and are
designated as a hedge at the inception of the derivative contract. CNH Industrial does not hold or enter into derivative
or other financial instruments for speculative purposes. The credit and market risk related to derivatives is reduced
through diversification among various counterparties, utilizing mandatory termination clauses and/or collateral support
agreements. Derivative instruments are generally classified as Level 2 in the fair value hierarchy.
In accordance with IFRS 9, derivative financial instruments qualify for hedge accounting only when, at the inception of
the hedge, there is formal designation and documentation of the hedging relationship, there is an economic relationship
between the hedging instrument and the hedged item, credit risk does not dominate the value changes that result from
the economic relationship, and the hedging relationship\u2019s hedging ratio reflects the actual quantity of the hedging
instrument and the hedged item. Hedge effectiveness is determined at the inception of the hedge relationship and
through periodic prospective effectiveness assessments to ensure that an economic relationship exists between the
hedged item and hedging instrument.
Further description of the risk management exposures and strategies for interest rate and currency risk is presented in
Note\u00a030 \u201cInformation on financial risks\u201d, paragraph \u201cMarket risk\u201d together with sensitivity analysis assessing the
potential impact of changes in interest rates and foreign currencies.
Foreign Exchange Derivatives
CNH Industrial has entered into foreign exchange forward contracts and swaps in order to manage and preserve the
economic value of cash flows in a currency different from the functional currency of the relevant legal entity. CNH
Industrial conducts its business on a global basis in a wide variety of foreign currencies and hedges foreign currency
exposures arising from various receivables, liabilities, and expected inventory purchases and sales. Derivative
instruments utilized to hedge the foreign currency risk associated with anticipated inventory purchases and sales in
foreign currencies are designated as cash flow hedges. Gains and losses on these instruments are deferred in
accumulated other comprehensive income/(loss) and recognized in earnings when the related transaction occurs.
For hedging cash flows in a currency different from the functional currency, the hedge relationship reflects the hedge
ratio of 1:1, which means that relationship is characterized by the value of the hedging instrument and the value of the
hedged item moving in the opposite direction as a result of the common underlying of hedged risk.
The main sources of hedge ineffectiveness are:
\u25aathe effect of the counterparty and the Group\u2019s own credit risk on the fair value of the foreign exchange derivatives,
which is not reflected in the change in the fair value of the hedged cash flow attributable to the change in the
exchange rates, and
\u25aachanges in timing of the hedged transaction.
Ineffectiveness related to these hedge relationships is recognized in the consolidated income statement in the line
\u201cFinancial income/(expenses)\u201d and was not significant for all periods presented. The maturity of these instruments does
not exceed 24 months and the after-tax gains/(losses) deferred in accumulated other comprehensive income/(loss) that
will be recognized in net revenues and cost of sales over the next twelve months, assuming foreign exchange rates
remain unchanged, is approximately $-17 million. If a derivative instrument is terminated because the hedge
relationship is no longer effective or because the hedged item is a forecasted transaction that is no longer determined
to be probable, the cumulative amount recorded in accumulated other comprehensive income/(loss) is recognized
immediately in earnings. Such amounts were insignificant in all periods presented.
CNH Industrial also uses forwards and swaps to hedge certain assets and liabilities denominated in foreign currencies.
Such derivatives are considered economic hedges and not designated as hedging instruments. The changes in the fair
values of these instruments are recognized directly in income in \u201cFinancial income/(expenses)\u201d and are expected to
offset the foreign exchange gains or losses on the exposures being managed.
All of CNH Industrial\u2019s foreign exchange derivatives are considered Level 2 as the fair value is calculated using market
data input and can be compared to actively traded derivatives.
Interest Rate Derivatives
CNH Industrial has entered into interest rate derivatives (swaps and caps) in order to manage interest rate exposures
arising in the normal course of business. Interest rate derivatives that have been designated as cash flow hedges are
being used by CNH Industrial to mitigate the risk of rising interest rates related to existing debt and anticipated issuance
of fixed-rate debt in future periods. Gains and losses on these instruments, to the extent that the hedge relationship has
been effective, are deferred in other comprehensive income/(loss) and recognized in \u201cFinancial income/(expenses)\u201d
over the period in which CNH Industrial recognizes interest expense on the related debt. The after-tax gains (losses)
deferred in other comprehensive income/(loss) that will be recognized in interest expense over the next twelve months
are insignificant.
Interest rate derivatives that have been designated as fair value hedge relationships have been used by CNH Industrial
to mitigate the volatility in the fair value of existing fixed rate bonds and medium-term notes due to changes in floating
interest rate benchmarks. Gains and losses on these instruments are recorded in \u201cFinancial income/(expenses)\u201d in the
period in which they occur and an offsetting gain or loss is also reflected in \u201cFinancial income/(expenses)\u201d based on
changes in the fair value of the debt instrument being hedged due to changes in floating interest rate benchmarks.
For hedging interest rate exposures, the hedge relationship reflects the hedge ratio 1:1, which means that relationship
is characterized by the value of the hedging instrument and the value of the hedged item that move in the opposite
direction as a result of the common underlying of hedged risk.
The main sources of hedge ineffectiveness are:
\u25aathe effect of the counterparty and the Group\u2019s own credit risk on the fair value of the swaps, which is not reflected in
the change in the fair value of the hedged cash flow attributable to the change in the interest rates, and
\u25aadifferences in repricing dates between the swaps and the borrowings.
Any ineffectiveness is recorded in \u201cFinancial income/(expenses)\u201d in the consolidated income statement and its amount
was insignificant for all periods presented.
CNH Industrial also enters into offsetting interest rate derivatives with substantially similar terms that are not designated
as hedging instruments, to mitigate interest rate risk related to CNH Industrial\u2019s committed asset-backed facilities.
Unrealized and realized gains and losses resulting from fair value changes in these instruments are recognized directly
in income. Net gains and losses on these instruments were insignificant for the years ending December 31, 2022 and
2021. All of CNH Industrial\u2019s interest rate derivatives outstanding as of December 31, 2022 and 2021 are considered
Level 2. The fair market value of these derivatives is calculated using market data input and can be compared to
actively traded derivatives.
Financial statement impact of CNH Industrial derivatives
The following table summarizes the gross impact of changes in the fair value of derivatives had on other
comprehensive income and profit or loss during the years ended December 31, 2022 and 2021:
| | |
| | |
| | |
Interest rate derivatives \u2013 Financial income/(expenses) | | |
Gains/(losses) on hedged items \u2013 Financial income/(expenses) | | |
| | |
| | |
Recognized in Other comprehensive income (effective portion): | | |
Foreign exchange derivatives | | |
Interest rate derivatives | | |
| | |
Reclassified from other comprehensive income (effective portion): | | |
Foreign exchange derivatives \u2013 Net revenues | | |
Foreign exchange derivatives \u2013 Cost of sales | | |
Foreign exchange derivatives \u2013 Financial income/(expenses) | | |
Interest rate derivatives \u2013 Cost of sales | | |
| | |
| | |
Foreign exchange derivatives \u2013 Financial income/(expenses) | | |
(*) The 2021 data have been restated to exclude Iveco Group Business, consistent with Iveco Group's classification as a Discontinued Operations as requested by the IFRS 5 - Non-current Assets held for
sale and Discontinued Operations. Iveco Group's results are presented as a single line item within the Consolidated Statement of Comprehensive Income for the year ended December 31, 2021. The spin-off
of Iveco Group took effect on January 1, 2022 (refer to the Section - \"Scope of Consolidation - Discontinued Operations - Iveco Group Business\").
The fair values of CNH Industrial\u2019s derivatives as of December\u00a031, 2022 and 2021 in the consolidated statement of
financial position are recorded as follows:
| | | | |
| | |
| | | | |
Derivatives designated as hedging instruments | | | | |
| | | | |
Interest rate derivatives | | | | |
| | | | |
| | | | |
| | | | |
Foreign exchange derivatives | | | | |
Interest rate derivatives | | | | |
| | | | |
Total Derivatives designated as hedging instruments | | | | |
| | | | |
Derivatives not designated as hedging instruments | | | | |
Foreign exchange derivatives | | | | |
Interest rate derivatives | | | | |
Total Derivatives not designated as hedging instruments | | | | |
Elimination of net Continuing Operations balances towards Discontinued Operations | | | | |
Derivative assets/(liabilities) | | | | |
The following table provides the effect of hedged items designated in fair value hedging relationships:
| | | | | |
| | | | | |
| Carrying amount of the hedged item | Accumulated amount of fair value hedge adjustments included in the carrying amounts | Fair value changes used as a basis to calculate hedge ineffectiveness |
| | | | | |
| | | | | |
| | | | | |
sale and Discontinued Operations. Iveco Group's results are presented as a single line item within the Consolidated Statement of Comprehensive Income for the year ended December 31, 2021. The spin-off
of Iveco Group took effect on January 1, 2022 (refer to the Section - \"Scope of Consolidation - Discontinued Operations - Iveco Group Business\").
The following table provides further information about the effect of cash flow hedges on the consolidated equity of CNH
Industrial:
| | | |
| | | Total cash flow hedge reserve |
| | | |
Gains/(losses) recognized in Other comprehensive income | | | |
Gains/(losses) reclassified from Other comprehensive income in Profit or loss | | | |
| | | |
| | | |
| | | |
Gains/(losses) recognized in Other comprehensive income | | | |
Gains/(losses) reclassified from Other comprehensive income in Profit or loss | | | |
| | | |
| | | |
The following table provides an analysis by due date of the notional amount of outstanding derivative financial
instruments at December 31, 2022 and 2021:
| | | | | | | | |
| | |
| | due between one and five years | | | | due between one and five years | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
19. Cash and cash equivalents
Cash and cash equivalents consist of:
| | |
| | |
| | |
| | |
Money market securities and other cash equivalents | | |
Total Cash and cash equivalents | | |
Amounts shown are readily convertible into cash and are subject to an insignificant risk of changes in value. Restricted
cash mainly includes bank deposits that may be used exclusively for the repayment of the debt relating to
securitizations classified as Asset-backed financing.
The credit risk associated with Cash and cash equivalents is considered not significant, because it mainly relates to
deposits spread across primary national and international financial institutions.
24. Debt
Credit Facilities
Lenders of committed credit facilities have the obligation to make advances up to the facility amount. Lenders of
uncommitted facilities have the right to terminate the agreement with prior notice to CNH Industrial. At December 31,
2022, CNH Industrial had available committed unsecured facilities expiring after twelve months amounting to $5.1
billion ($5.2 billion at December\u00a031, 2021).
In March 2019, CNH Industrial signed a five-year committed revolving credit facility for \u20ac4 billion ($4.5 billion at March
31, 2019 exchange rate) due to mature in 2024 with two extension options of 1-year each, exercisable on the first and
second anniversary of the signing date. CNH Industrial exercised the first of the two extension options as of February
28, 2020 and the second extension option as of February 26, 2021. The facility is now due to mature in March 2026 for
\u20ac3,950.5 million; \u20ac49.5 million within the facility will mature in March 2025. The credit facility replaced the existing five-
year \u20ac1.75 billion credit facility due to mature in 2021. The \u20ac4 billion facility is guaranteed by the parent company with
cross-guarantees from each of the borrowers (i.e., CNH Industrial Finance S.p.A., CNH Industrial Finance Europe S.A.
and CNH Industrial Finance North America Inc.), and includes typical provisions for contracts of this type and size, such
as: customary covenants mainly relating to Industrial Activities including negative pledge, a status (or pari passu)
covenant, restrictions on the incurrence of indebtedness by certain subsidiaries, customary events of default (some of
which are subject to minimum thresholds and customary mitigants) including cross-default, failure to pay amounts due
or to comply with certain provisions under the loan agreement, the occurrence of certain bankruptcy-related events and
mandatory obligations upon a change in control of CNH Industrial or the borrower and a financial covenant (Net Debt/
EBITDA ration relating to Industrial Activities) that is not applicable with the current ratings levels. The failure to comply
with these provisions, in certain cases if not suitably remedied, can lead to the requirement to make early repayment of
the outstanding advances. At December 31, 2022, CNH Industrial was in compliance with all covenants in the revolving
credit facility.
Total committed secured facilities expiring after twelve months amounted to approximately $2.9 billion at December 31,
2022 ($3.9 billion at December 31, 2021, $3.0 billion excluding Iveco Group), of which $0.8 billion was available at
December 31, 2022 ($1.1 billion at December 31, 2021, $1.0 billion excluding Iveco Group).
With the strong liquidity position at the end of December 2022 and the demonstrated access to the financial markets,
CNH Industrial believes that its cash and cash equivalents, access to credit facilities and cash flows from future
operations will be adequate to fund its known cash needs.
At December 31, 2022, Financial Services\u2019 committed asset-backed facilities expiring after twelve months amounted to
$2.9 billion ($3.0\u00a0billion at December 31, 2021), of which $2.1 billion at December 31, 2022 ($2.0\u00a0billion at December
31, 2021) were utilized.
Debt
An analysis of debt by nature and due date is as follows:
| | | | | | | | |
| | |
| | Due between one and five years | | | | Due between one and five years | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Payables represented by securities | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
(1)Bond listed on the Irish Stock Exchange.
(2)Bond listed on the New York Stock Exchange.
The bonds issued by the Group may contain commitments of the issuer, and in certain cases commitments of CNH
Industrial N.V. in its capacity as guarantor, which are typical of international practice for bond issues of this type such
as, in particular, negative pledge (in relation to quoted indebtedness), a status (or pari passu) covenant and cross
default clauses. A breach of these commitments can lead to the early repayment of the applicable notes. The bonds
guaranteed by CNH Industrial N.V. under the Euro Medium Term Note Programme (and its predecessor the Global
Medium Term Note Programme), as well as the notes issued by CNH Industrial N.V., contain clauses which could lead
to early repayment if there is a change of control of CNH Industrial N.V. leading to a rating downgrading of CNH
Industrial N.V.
On January 4, 2022 Fitch Ratings raised its Long-Term Issuer Default Rating (\"IDR\") on CNH Industrial N.V. to \u2018BBB+\u2019
from \u2018BBB-\u2019. Fitch also upgraded CNH Industrial Finance Europe S.A.\u2019s senior unsecured rating to \u2018BBB+\u2019 from \u2018BBB-\u2019.
The Outlook is stable. On January 7, 2022, Fitch upgraded the Long-Term IDR and senior long-term debt ratings of
CNH Industrial Capital LLC and CNH Industrial Capital Canada Ltd. to 'BBB+' from 'BBB-'. The outlook is stable. Fitch
has also upgraded CNH Industrial Capital LLC's short-term IDR and commercial paper ratings to 'F2' from 'F3'.
On February 25, 2022, Moody's upgraded the senior unsecured ratings of CNH Industrial N.V. and its supported
subsidiaries including CNH Industrial Capital LLC, CNH Industrial Finance Europe S.A., CNH Industrial Capital Australia
Pty. Ltd. and CNH Industrial Capital Canada Ltd. to Baa2 from Baa3. At the same time, Moody's withdrew CNH
Industrial Finance Europe S.A. short term rating of (P)P-3. The rating outlook is stable. Our long-term credit ratings
remained unchanged at \"BBB\" from Standard & Poor's Global Ratings with stable outlook.
For further information on the management of interest rate and currency risk reference should be made to Note 30
\"Information on financial risks\".
At December 31, 2022 and 2021, there was no debt secured with mortgages and other liens on assets of the Group,
and the total carrying amount of assets acting as security for loans was not significant at December\u00a031, 2022 and 2021.
In addition, the Group\u2019s assets include current receivables and cash with a pre-determined use to settle asset-backed
financing of $9,753 million at December 31, 2022 ($8,875\u00a0million at December 31, 2021).
25. Trade payables
An analysis by due date of trade payables is as follows:
| | | | | | | | |
| | |
| | Due between one and five years | | | | Due between one and five years | | |
|
| | | | | | | | |
At December 31, 2022, Trade payables were $3,690 and increased by $3,364 million compared to December 31, 2021.
30. Information on financial risks
We are exposed to the following financial risks connected with our operations:
\u25aacredit risk related to our financing activities;
\u25aamarket risk (primarily exchange rates and interest rates).
We attempt to actively manage these risks.
The quantitative data reported in the following paragraphs does not have any predictive value. In particular, the
sensitivity analysis on market risks does not reflect the complexity of the market or the reaction, which may result from
any changes that are assumed to take place.
Credit risk
Our credit concentration risk differs in relation to the activities carried out by the segments and end markets in which we
operate; in all cases, the risk is mitigated by the large number of counterparties and customers. Considered from a
global point of view, however, there is a concentration of credit risk in trade receivables and receivables from financing
activities, in particular dealer financing in the European Union market and in North America, as well as in South America
for Agriculture and Construction.
CNH Industrial measures the loss allowance for its trade receivables and contract assets at an amount equal to the
lifetime expected credit losses, which are the present value of the cash shortfalls over the expected life of the financial
asset.
Financial assets are recognized in the statement of financial position net of write-downs for the risk that counterparties
may be unable to fulfill their contractual obligations, determined on the basis of the available information as to the
creditworthiness of the customer and historical data.
The maximum credit risk to which we were theoretically exposed at December 31, 2022 is represented by the carrying
amounts stated for financial assets in the statement of financial position and the nominal value of the guarantees
provided on debt or commitments of third parties as discussed in Note 27 \"Commitments and contingencies\".
Dealers and final customers are generally subject to specific assessments of their creditworthiness under a detailed
scoring system. In addition to carrying out this evaluation process, we may also obtain financial and non-financial
guarantees for risks arising from credit granted for the sale of agricultural equipment, construction equipment and
related parts. These guarantees are further secured, where possible, by retention of title clauses or specific guarantees
on financed equipment sales to the distribution network and on equipment under finance or leasing agreements.
A financial asset has experienced a significant increase in credit risk when the customer shows signs of operational or
financial weakness including past dues, which requires significant collection effort and monitoring and generally occurs
when the customer becomes past due greater than 30 days. The assessment considers available information regarding
the financial stability of the customer and other market/industry data. An account is typically considered in default when
they are 90 days past due.
CNH Industrial utilizes three categories for receivables from financing activities that reflect their credit risk and the loan
provision is determined.
| | | |
| | | Basis for recognition of expected credit loss provision |
| | Low risk of default; payments are generally less than 30 days past due | 12 month expected credit losses |
| | Significant increase in credit risk; payments generally between 31 and 90 days past due | Lifetime expected credit losses |
| | Accounts are credit impaired and/or a legal action has been initiated; payments generally greater than 90 days past due | Lifetime expected credit losses |
2021). The principal exchange rates to which we are exposed are the following:
\u25aaEUR/USD, in relation to the production/purchases of Agriculture and Construction in the euro area;
\u25aaUSD/BRL and EUR/BRL, in relation to production in Brazil and the respective import/export flows;
\u25aaAUD/USD, mainly in relation to sales made by Agriculture and Construction in Australia;
\u25aaEUR/GBP, predominately in relation to sales on the U.K. market.
Trade flows exposed to changes in these exchange rates in 2022 made up approximately 73% of the exposure to
currency risk from trade transactions.
It is our policy to use derivative financial instruments to hedge a certain percentage, on average between 55% and
85%, of the forecasted trading transaction exchange risk exposure for the coming 12 months with additional flexibility to
reach 0% or 100% (including forecasted risk exposure beyond that timeframe where it is believed to be appropriate)
and to hedge completely the exposure resulting from firm commitments.
Certain subsidiaries may hold trade receivables or payables denominated in a currency different from the subsidiary\u2019s
functional currency. In addition, in a limited number of cases, subsidiaries may obtain financing or use funds in a
currency different from their functional currency. Changes in exchange rates may result in exchange gains or losses
arising from these situations. It is our policy to hedge fully, whenever possible, the exposure resulting from receivables,
payables, and securities denominated in currencies different from the subsidiary\u2019s functional currency.
Certain of our subsidiaries\u2019 functional currency is different than the U.S. dollar, which is the Group presentation
currency. The income statements of those subsidiaries are converted into U.S. dollars using the average exchange rate
for the period, and while revenues and margins are unchanged in local currency, changes in exchange rates may lead
to effects on the converted balances of revenues, costs and the results reported in U.S. dollars.
The assets and liabilities of consolidated companies whose functional currency is different from the U.S. dollar may
acquire converted values in U.S. dollars which differ as a function of the fluctuation in exchange rates. The effects of
these changes are recognized directly in the Cumulative Translation Adjustments reserve, included in Other
comprehensive income (see Note 21 \"Equity\").
We monitor our principal exposure to translation exchange risk, although there was no specific hedging in place at
December\u00a031, 2022.
There were no substantial changes in 2022 in the nature or structure of exposure to currency risk or in our hedging
policies.
Sensitivity analysis
The potential loss in fair value of derivative financial instruments held for currency risk management (currency swaps/
forwards, currency options, interest rate and currency swaps) at December 31, 2022 resulting from a hypothetical
change of 10% in the exchange rates amounted to approximately $276 million ($344 million at December 31,\u00a02021).
The valuation model for currency options assumes that market volatility at year-end remains unchanged.
Receivables, payables, and future trade flows whose hedging transactions have been analyzed were not considered in
this analysis. It is reasonable to assume that changes in exchange rates will produce the opposite effect, of an equal or
greater amount, on the underlying transactions that have been hedged.
Interest rate risk
Our Industrial Activities make use of external funds obtained in the form of financing and invest in monetary and
financial market instruments. In addition, we sell receivables. Changes in market interest rates can affect the cost of
financing, including the sale of receivables, or the return on investments of funds, causing an impact on the level of net
financial expenses incurred by us.
In addition, Financial Services provides loans (mainly to customers and dealers), financed primarily using various forms
of external borrowings or asset-backed financing (e.g., securitization of receivables). 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/
funding obtained, changes in the current level of interest rates can affect our profit/(loss).
In order to mitigate these risks, we use interest rate derivative financial instruments, mainly interest rate swaps and
forward rate agreements.
Interest rate benchmark reform
Certain existing benchmark InterBank Offered Rates (IBORs) such as USD LIBOR will be reformed by the authority and
gradually replaced with alternative benchmark rates. Despite the uncertainty around the timing and precise nature of
these changes, the existing benchmark interest rates are still applied as reference rates.
To transition existing contracts and agreements that reference USD LIBOR to an alternative benchmark rate (SOFR),
adjustments for term differences and credit differences might need to be applied to the alternative benchmark rate, to
enable the two benchmark rates to be economically equivalent on transition.
The Group has issued US dollar\u2011denominated fixed rate debt which it fair value hedges using sterling fixed to US dollar
fixed to USD LIBOR interest rate swaps. At December 31, 2022, the notional amount of hedging instruments directly
affected by the reform of benchmark interest rates is $1,220 million.
Group Treasury is managing the Group\u2019s USD LIBOR transition plan. The greatest change will be amendments to the
contractual terms of the USD LIBOR-referenced fixed-rate debt and the corresponding update of the hedge
designation.
In calculating the change in fair value attributable to the hedged risk of fixed-rate debt, the Group has made the
following assumptions that reflect its current expectations:
\u25aathe fixed-rate debt will move to SOFR at the beginning of 2022 (or at July 2023 if the new consultations were
confirmed) and the spread will be similar to the spread included in the interest rate swap used as the hedging
instrument;
\u25aano other changes to the terms of the fixed-rate debt are anticipated; and
\u25aathe Group does not expect any material impact deriving from the replacement of benchmark interest rate.
Sensitivity analysis
In assessing the potential impact of changes in interest rates, we separate fixed rate financial instruments (for which the
impact is assessed in terms of fair value) from floating rate financial instruments (for which the impact is assessed in
terms of cash flows).
The fixed rate financial instruments used by us consist of retail receivables, debt, ABS securities, and other instruments.
The potential loss in fair value of fixed rate financial instruments (including the effect of interest rate derivative financial
instruments) held at December 31, 2022, resulting from a hypothetical, unfavorable and instantaneous change of
10%\u00a0in market interest rates, would have been approximately $29 million ($20 million at December 31,\u00a02021).
Floating rate financial instruments consist principally of cash and cash equivalents, wholesale receivables, debt, and
ABS securities. The effect of the sale of receivables is also considered in the sensitivity analysis as well as the effect of
hedging derivative instruments.
A hypothetical change of 10% 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 have caused increased
net expenses before taxes, on an annual basis, of approximately $15 million ($3 million at December 31,\u00a02021).
This analysis is based on the assumption that there is a hypothetical change of 10% in interest rates across
homogeneous categories. A homogeneous category is defined on the basis of the currency in which the financial assets
and liabilities are denominated.
Other risks on derivative financial instruments
We have entered derivative contracts linked to commodity prices to hedge specific exposures on supply contracts.
Sensitivity analysis
In the event of a hypothetical change of 10% in the underlying raw materials prices, the potential loss in fair value of
outstanding derivative financial instruments at December 31, 2022 linked to commodity prices would not have been
significant (not significant at December 31, 2021).
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8.Financial income/(expenses)
The item \u201cFinancial income/(expenses)\u201d is detailed as follows:
| | |
| | |
| | |
Interest and other financial expenses (b) | | |
Net (income)/expenses from derivative financial instruments at fair value through profit or loss | | |
Exchange rate differences from derivative financial instruments | | |
Total interest and other financial expenses, net (income)/expenses from derivative financial instruments and exchange differences (c) | | |
| | |
Net financial income/(expenses) excluding Financial Services (a) - (b) + (c) | | |
Financial income may be analyzed as follows:
| | |
| | |
Interest income from banks | | |
Interest and financial income from financial assets at amortized cost | | |
Other interest income and financial income | | |
| | |
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9.Income tax (expense) benefit
CNH Industrial N.V. and its subsidiaries have substantial worldwide operations and incur tax obligations in the
jurisdictions in which they operate. CNH Industrial\u2019s provision (benefit) for income taxes as reported in its consolidated
statements of operations for the year ended December\u00a031, 2022 of $758 million consists almost entirely of income
taxes related to subsidiaries of CNH Industrial N.V..
Income taxes for the years ended December 31, 2022 and 2021 consisted of the following:
| | |
| | |
| | |
| | |
Taxes relating to prior periods | | |
Total Income tax (expense) benefit | | |
The increase of $33 million in net deferred tax assets is mainly due to the net increase recognized in the income
statement of $80 million, largely driven by the disposition of Raven\u2019s Engineered Films Division and Raven\u2019s Aerostar
Division.
The decision to recognize deferred tax assets is made for each legal entity in the Group by critically assessing whether
the conditions exist for the future realization of such assets on the basis of actual results, as well as updated strategic
plans and accompanying tax plans. For this reason, the total theoretical future tax benefits arising from deductible
temporary differences of $1,269 million at December 31, 2022 and of $1,163 million at December 31, 2021, and tax
loss carryforwards and tax credits of $266 million at December 31, 2022 and of $382 million at December 31, 2021,
were reduced by $346 million at December\u00a031, 2022 and by $383 million at December 31, 2021.
Net deferred tax assets include $74 million at December 31, 2022 ($149 million at December 31, 2021) of tax benefits
arising from tax loss carryforwards and tax credits. At December 31, 2022, a further tax benefit of $203 million ($233
million at December\u00a031, 2021) arising from tax loss carryforwards and tax credits has not been recognized.
Tax liabilities primarily include uncertain income tax amounts of $173 million and other tax payables.
CNH Industrial has gross tax loss carry forwards in several tax jurisdictions. These tax losses expire as follows: $40
million in 2023; $33 million in 2024; $23 million in 2025; $17 million in 2026; $296 million in 2027 and beyond. CNH
Industrial also had tax loss carry forwards of approximately $628 million with indefinite lives. CNH Industrial has tax
credit carry forwards of $48 million which expire in 2026 and beyond.
CNH Industrial files income tax returns in multiple jurisdictions and is subject to examination by taxing authorities
throughout the world. CNH Industrial has open tax years from 2009 through 2022. Due to the global nature of CNH
Industrial business, transfer pricing disputes may arise and CNH Industrial may seek correlative relief through
competent authority processes. CNH Industrial has considered the possibility of correlative relief when booking
contingencies related to transfer pricing.
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}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV80NjMvZnJhZzowYjZkY2FjODhkNTY0MjgzYWUyYWMzOTZkZDg0ZjhmNy90ZXh0cmVnaW9uOjBiNmRjYWM4OGQ1NjQyODNhZTJhYzM5NmRkODRmOGY3XzgyNDYzMzcyMTYwOTc_c5e73c27-ec96-4ae3-ad88-f9681d2efd8a": {
"value": "
9.Income tax (expense) benefit
CNH Industrial N.V. and its subsidiaries have substantial worldwide operations and incur tax obligations in the
jurisdictions in which they operate. CNH Industrial\u2019s provision (benefit) for income taxes as reported in its consolidated
statements of operations for the year ended December\u00a031, 2022 of $758 million consists almost entirely of income
taxes related to subsidiaries of CNH Industrial N.V..
Income taxes for the years ended December 31, 2022 and 2021 consisted of the following:
| | |
| | |
| | |
| | |
Taxes relating to prior periods | | |
Total Income tax (expense) benefit | | |
The increase of $33 million in net deferred tax assets is mainly due to the net increase recognized in the income
statement of $80 million, largely driven by the disposition of Raven\u2019s Engineered Films Division and Raven\u2019s Aerostar
Division.
The decision to recognize deferred tax assets is made for each legal entity in the Group by critically assessing whether
the conditions exist for the future realization of such assets on the basis of actual results, as well as updated strategic
plans and accompanying tax plans. For this reason, the total theoretical future tax benefits arising from deductible
temporary differences of $1,269 million at December 31, 2022 and of $1,163 million at December 31, 2021, and tax
loss carryforwards and tax credits of $266 million at December 31, 2022 and of $382 million at December 31, 2021,
were reduced by $346 million at December\u00a031, 2022 and by $383 million at December 31, 2021.
Net deferred tax assets include $74 million at December 31, 2022 ($149 million at December 31, 2021) of tax benefits
arising from tax loss carryforwards and tax credits. At December 31, 2022, a further tax benefit of $203 million ($233
million at December\u00a031, 2021) arising from tax loss carryforwards and tax credits has not been recognized.
Tax liabilities primarily include uncertain income tax amounts of $173 million and other tax payables.
CNH Industrial has gross tax loss carry forwards in several tax jurisdictions. These tax losses expire as follows: $40
million in 2023; $33 million in 2024; $23 million in 2025; $17 million in 2026; $296 million in 2027 and beyond. CNH
Industrial also had tax loss carry forwards of approximately $628 million with indefinite lives. CNH Industrial has tax
credit carry forwards of $48 million which expire in 2026 and beyond.
CNH Industrial files income tax returns in multiple jurisdictions and is subject to examination by taxing authorities
throughout the world. CNH Industrial has open tax years from 2009 through 2022. Due to the global nature of CNH
Industrial business, transfer pricing disputes may arise and CNH Industrial may seek correlative relief through
competent authority processes. CNH Industrial has considered the possibility of correlative relief when booking
contingencies related to transfer pricing.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfIncomeTaxExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV80NjYvZnJhZzo4YTMwM2M5OTJkMjc0YTFmYjRjZDZkZWM0NDY1NzI0ZS90ZXh0cmVnaW9uOjhhMzAzYzk5MmQyNzRhMWZiNGNkNmRlYzQ0NjU3MjRlXzg3OTYwOTMwMjI1ODg_1780507a-1d4a-4678-9ebb-e3d3913e7c8c": {
"value": "
10.Other information by nature of expense
The income statement includes personnel costs for $2,976 million in 2022 ($2,583 million in 2021).
An analysis of the average number of employees by category is as follows:
| | |
| | |
| | |
| | |
| | |
Average number of employees | | |
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfInformationAboutEmployeesExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV80NjYvZnJhZzo4YTMwM2M5OTJkMjc0YTFmYjRjZDZkZWM0NDY1NzI0ZS90ZXh0cmVnaW9uOjhhMzAzYzk5MmQyNzRhMWZiNGNkNmRlYzQ0NjU3MjRlXzg3OTYwOTMwMjI1ODg_437fa2c4-813e-403c-bdc9-791011e556ef": {
"value": "
10.Other information by nature of expense
The income statement includes personnel costs for $2,976 million in 2022 ($2,583 million in 2021).
An analysis of the average number of employees by category is as follows:
| | |
| | |
| | |
| | |
| | |
Average number of employees | | |
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfExpensesByNatureExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV80NjkvZnJhZzozMDUyM2FhODFjZDg0MmFlODI3ODBlNTk4ZGYwMGFlYy90ZXh0cmVnaW9uOjMwNTIzYWE4MWNkODQyYWU4Mjc4MGU1OThkZjAwYWVjXzgyNDYzMzcyMDk3MzQ_c230f7cb-e83e-4111-8885-579225a535a5": {
"value": "
11.Earnings per share
A reconciliation of basic and diluted earnings/(loss) per share is as follows:
| | | |
| | | |
Net profit/(loss) attributable to CNH Industrial | | | |
Net profit/(loss) attributable to CNH Industrial from Continuing Operations | | | |
Net profit/(loss) attributable to CNH Industrial from Discontinued Operations | | | |
| | | |
Basic earnings/(loss) per share attributable to common shareholders: | | | |
Weighted average common shares outstanding \u2013 basic | | | |
| | | |
| | | |
Basic earnings/(loss) per share attributable to CNH Industrial N.V. | | | |
| | | |
Diluted earnings/(loss) per share attributable to common shareholders: | | | |
Weighted average common shares outstanding \u2013 basic | | | |
Effect of dilutive potential shares (when dilutive): | | | |
| | | |
Weighted average common shares outstanding \u2013 diluted | | | |
| | | |
| | | |
Diluted earnings/(loss) per share attributable to CNH Industrial N.V. | | | |
(*) Increases in Goodwill refer to acquisitions discussed in section \"Business combinations\" above.
Foreign exchange losses were $44 million in 2022 (gains of $170 million in 2021).
Goodwill, trademarks and intangible assets with indefinite useful lives
Goodwill is allocated to the Group\u2019s cash-generating units identified as the Group\u2019s operating segments. The following
table presents the allocation of goodwill across the segments:
| | |
| | |
| | |
| | |
| | |
Goodwill net carrying amount | | |
The acquisition of Specialty Enterprises LLC (Specialty) during the second quarter of 2022 led to the increase in
Goodwill for Agriculture of $43 million. Goodwill related to the acquisitions was calculated as the excess of the
consideration transferred over the net assets recognized and represents the future economic benefits arising from the
other assets acquired that could not be individually identified and separately recognized.
The valuation of assets acquired and liabilities assumed has not yet been finalized as of December 31, 2022. Thus,
goodwill associated with the acquisitions is subject to adjustment during the measurement period.
As of December 31, 2021, the acquisitions of Raven and Sampierana during the fourth quarter of 2021 led to an
increase in Goodwill for Agriculture and Construction of $1.3 billion and $51 million, respectively. Goodwill related to the
acquisitions was calculated as the excess of the consideration transferred over the net assets recognized and
represents the future economic benefits arising from the other assets acquired that could not be individually identified
and separately recognized. The valuation of assets acquired and liabilities assumed was finalized during the fourth
quarter of 2022. Measurement period adjustments were recorded in the current year that increased Goodwill by $77
million for Agriculture, primarily related to updates of certain of the valuations.
During the fourth quarter of 2021, CNH Industrial recorded $0.5 billion in intangible assets based on the preliminary
valuation for the Raven Industries, Inc. and Sampierana S.p.A. acquisitions. Measurement period adjustments were
recorded in 2022 and decreased the net amount of intangible assets by $72.
Goodwill and Intangible assets with indefinite useful lives are tested for impairment annually or more frequently if a
triggering event occurs. At December 31, 2022 and 2021, CNH Industrial completed its annual impairment assessment
and concluded there were no impairments to goodwill for any of the reporting units.
CNH Industrial determines the recoverable amount of these cash-generating units using multiple valuation
methodologies, relying largely on an income approach but also incorporating value indicators from a market approach,
with reference to the cash-generating units with the most significant allocated goodwill.
Under the income approach, CNH Industrial calculates the recoverable amount of a cash-generating unit based on the
present value of estimated future cash flows. The income approach is dependent on several critical management
assumptions, including estimates of future sales in the discrete future period, the weighted average cost of capital
(discount rate) and terminal value growth rates, and also less significant assumptions such as gross margins, operating
costs, income tax rates, capital expenditures and changes in working capital requirements. Discount rate assumptions
include an assessment of the risk inherent in the future cash flows of the respective cash-generating units.
The following discount rates before taxes were selected:
Expected cash flows used under the income approach are developed in conjunction with CNH Industrial budgeting and
forecasting processes. CNH Industrial used nine years of expected cash flows for Agriculture, and five years of
expected cash flows for Financial Services, as management believes that these periods generally reflect the underlying
market cycles for its businesses. Under the market approach, CNH Industrial estimates the recoverable amount of the
Agriculture cash-generating unit, using earnings before interest, tax, depreciation and amortization multiples, and
estimates the recoverable amount of the Financial Services cash-generating unit using book value multiples. The
multiples are derived from comparable publicly-traded companies with similar operating and investment characteristics
as the respective cash-generating units. The guideline company method makes use of market price data of
corporations whose stock is actively traded in a public, free and open market, either on an exchange or over-the-
counter basis. Although it is clear no two companies are entirely alike, the corporations selected as guideline
companies must be engaged in the same, or a similar, line of business or be subject to similar financial and business
risks, including the opportunity for growth.
A terminal value is included at the end of the projection period used in the discounted cash flow analysis in order to
reflect the remaining value that each cash-generating unit is expected to generate. The terminal value represents the
present value in the last year of the projection period of all subsequent cash flows into perpetuity. The terminal value
growth rate is a key assumption used in determining the terminal value as it represents the annual growth of all
subsequent cash flows into perpetuity. The terminal value growth rate was 1.0% in 2022 and 2021 for the Agriculture
cash-generating unit, and 1.5% in 2022 and 2021 for Financial Services.
As of December 31, 2022, the estimated recoverable amounts, (excluding the balance of the 2021 acquisitions)
calculated using the above method, of the Agriculture and Financial Services cash-generating units exceeded the
carrying values by approximately 294% and 75%, respectively. Thus, CNH Industrial did not recognize an impairment
for these cash-generating units.
The results obtained for Commercial and Specialty Vehicles confirmed the absence of an impairment loss with
reference to the goodwill amount included in the Discontinued Operations.
The sum of the recoverable amounts of CNH Industrial\u2019s cash generating units was in excess of CNH Industrial\u2019s
market capitalization at December 31, 2022. CNH Industrial believes that the difference between the recoverable
amount and market capitalization is reasonable (in the context of assessing whether any asset impairment exists) when
market-based control premiums are taken into consideration.
Trademarks and Other intangible assets with indefinite useful lives are mainly attributable to Agriculture and
Construction and consist of acquired trademarks and similar rights which have no legal, contractual, competitive or
economic factors that limit their useful lives. For the purposes of impairment testing, these assets were attributed to the
respective cash-generating units. No impairment loss was recognized.
Finally, the estimates and budget data to which the above-mentioned parameters have been applied are those
determined by management based on past performance and expectations of developments in the markets in which
CNH Industrial operates. Impairment assessments inherently involve management judgments regarding a number of
assumptions such as those described above. Due to the many variables inherent in the estimation of a cash generating
unit\u2019s recoverable amount, differences in assumptions could have a material effect on the estimated recoverable
amount and could result in a goodwill impairment loss in a future period. Circumstances and events, which could
potentially cause further impairment losses, are constantly monitored by CNH Industrial.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfGoodwillExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV80NzUvZnJhZzo1MWEzNmNhN2VmYzM0YzliYTVmYjlmMTEwYWQ5NjE3My90ZXh0cmVnaW9uOjUxYTM2Y2E3ZWZjMzRjOWJhNWZiOWYxMTBhZDk2MTczXzMyOTg1MzQ5MTA4MzI_1ff47c72-b6fa-45e2-9934-63e5e39f51bc": {
"value": "
12.Intangible assets
In 2022 and 2021, changes in the carrying amount of Intangible assets were as follows:
| | | | | | | | |
| | Trademarks and other intangible assets with indefinite useful lives | Development costs externally acquired | Development costs internally generated | Patents, concessions and licenses | Other intangible assets externally acquired | Advances and intangible assets in progress externally acquired | |
Gross carrying amount Balance at\u00a0 December 31, 2020 | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Translation differences and other changes | | | | | | | | |
Transfer to Assets held for distribution | | | | | | | | |
Balance at December 31, 2021 | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Translation differences and other changes | | | | | | | | |
Balance at December 31, 2022 | | | | | | | | |
Accumulated amortization and impairment losses Balance at\u00a0 December 31, 2020 | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Translation differences and other changes | | | | | | | | |
Transfer to Assets held for distribution | | | | | | | | |
Balance at December 31, 2021 | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Translation differences and other changes | | | | | | | | |
Balance at December 31, 2022 | | | | | | | | |
Carrying amount at December 31, 2021 | | | | | | | | |
Carrying amount at December 31, 2022 | | | | | | | | |
(*) Increases in Goodwill refer to acquisitions discussed in section \"Business combinations\" above.
Foreign exchange losses were $44 million in 2022 (gains of $170 million in 2021).
Goodwill, trademarks and intangible assets with indefinite useful lives
Goodwill is allocated to the Group\u2019s cash-generating units identified as the Group\u2019s operating segments. The following
table presents the allocation of goodwill across the segments:
| | |
| | |
| | |
| | |
| | |
Goodwill net carrying amount | | |
The acquisition of Specialty Enterprises LLC (Specialty) during the second quarter of 2022 led to the increase in
Goodwill for Agriculture of $43 million. Goodwill related to the acquisitions was calculated as the excess of the
consideration transferred over the net assets recognized and represents the future economic benefits arising from the
other assets acquired that could not be individually identified and separately recognized.
The valuation of assets acquired and liabilities assumed has not yet been finalized as of December 31, 2022. Thus,
goodwill associated with the acquisitions is subject to adjustment during the measurement period.
As of December 31, 2021, the acquisitions of Raven and Sampierana during the fourth quarter of 2021 led to an
increase in Goodwill for Agriculture and Construction of $1.3 billion and $51 million, respectively. Goodwill related to the
acquisitions was calculated as the excess of the consideration transferred over the net assets recognized and
represents the future economic benefits arising from the other assets acquired that could not be individually identified
and separately recognized. The valuation of assets acquired and liabilities assumed was finalized during the fourth
quarter of 2022. Measurement period adjustments were recorded in the current year that increased Goodwill by $77
million for Agriculture, primarily related to updates of certain of the valuations.
During the fourth quarter of 2021, CNH Industrial recorded $0.5 billion in intangible assets based on the preliminary
valuation for the Raven Industries, Inc. and Sampierana S.p.A. acquisitions. Measurement period adjustments were
recorded in 2022 and decreased the net amount of intangible assets by $72.
Goodwill and Intangible assets with indefinite useful lives are tested for impairment annually or more frequently if a
triggering event occurs. At December 31, 2022 and 2021, CNH Industrial completed its annual impairment assessment
and concluded there were no impairments to goodwill for any of the reporting units.
CNH Industrial determines the recoverable amount of these cash-generating units using multiple valuation
methodologies, relying largely on an income approach but also incorporating value indicators from a market approach,
with reference to the cash-generating units with the most significant allocated goodwill.
Under the income approach, CNH Industrial calculates the recoverable amount of a cash-generating unit based on the
present value of estimated future cash flows. The income approach is dependent on several critical management
assumptions, including estimates of future sales in the discrete future period, the weighted average cost of capital
(discount rate) and terminal value growth rates, and also less significant assumptions such as gross margins, operating
costs, income tax rates, capital expenditures and changes in working capital requirements. Discount rate assumptions
include an assessment of the risk inherent in the future cash flows of the respective cash-generating units.
The following discount rates before taxes were selected:
Expected cash flows used under the income approach are developed in conjunction with CNH Industrial budgeting and
forecasting processes. CNH Industrial used nine years of expected cash flows for Agriculture, and five years of
expected cash flows for Financial Services, as management believes that these periods generally reflect the underlying
market cycles for its businesses. Under the market approach, CNH Industrial estimates the recoverable amount of the
Agriculture cash-generating unit, using earnings before interest, tax, depreciation and amortization multiples, and
estimates the recoverable amount of the Financial Services cash-generating unit using book value multiples. The
multiples are derived from comparable publicly-traded companies with similar operating and investment characteristics
as the respective cash-generating units. The guideline company method makes use of market price data of
corporations whose stock is actively traded in a public, free and open market, either on an exchange or over-the-
counter basis. Although it is clear no two companies are entirely alike, the corporations selected as guideline
companies must be engaged in the same, or a similar, line of business or be subject to similar financial and business
risks, including the opportunity for growth.
A terminal value is included at the end of the projection period used in the discounted cash flow analysis in order to
reflect the remaining value that each cash-generating unit is expected to generate. The terminal value represents the
present value in the last year of the projection period of all subsequent cash flows into perpetuity. The terminal value
growth rate is a key assumption used in determining the terminal value as it represents the annual growth of all
subsequent cash flows into perpetuity. The terminal value growth rate was 1.0% in 2022 and 2021 for the Agriculture
cash-generating unit, and 1.5% in 2022 and 2021 for Financial Services.
As of December 31, 2022, the estimated recoverable amounts, (excluding the balance of the 2021 acquisitions)
calculated using the above method, of the Agriculture and Financial Services cash-generating units exceeded the
carrying values by approximately 294% and 75%, respectively. Thus, CNH Industrial did not recognize an impairment
for these cash-generating units.
The results obtained for Commercial and Specialty Vehicles confirmed the absence of an impairment loss with
reference to the goodwill amount included in the Discontinued Operations.
The sum of the recoverable amounts of CNH Industrial\u2019s cash generating units was in excess of CNH Industrial\u2019s
market capitalization at December 31, 2022. CNH Industrial believes that the difference between the recoverable
amount and market capitalization is reasonable (in the context of assessing whether any asset impairment exists) when
market-based control premiums are taken into consideration.
Trademarks and Other intangible assets with indefinite useful lives are mainly attributable to Agriculture and
Construction and consist of acquired trademarks and similar rights which have no legal, contractual, competitive or
economic factors that limit their useful lives. For the purposes of impairment testing, these assets were attributed to the
respective cash-generating units. No impairment loss was recognized.
Finally, the estimates and budget data to which the above-mentioned parameters have been applied are those
determined by management based on past performance and expectations of developments in the markets in which
CNH Industrial operates. Impairment assessments inherently involve management judgments regarding a number of
assumptions such as those described above. Due to the many variables inherent in the estimation of a cash generating
unit\u2019s recoverable amount, differences in assumptions could have a material effect on the estimated recoverable
amount and could result in a goodwill impairment loss in a future period. Circumstances and events, which could
potentially cause further impairment losses, are constantly monitored by CNH Industrial.
Development costs and other intangible assets with finite useful lives
The amortization of development costs and impairment losses are reported in the income statement as Research and
development costs.
Development costs are tested for impairment at the cash-generating unit level.
Intangible assets with finite useful lives are amortized over their estimated useful lives and tested for impairment if
events or changes in circumstances indicate that the asset may be impaired.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfIntangibleAssetsExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV80NzUvZnJhZzo1MWEzNmNhN2VmYzM0YzliYTVmYjlmMTEwYWQ5NjE3My90ZXh0cmVnaW9uOjUxYTM2Y2E3ZWZjMzRjOWJhNWZiOWYxMTBhZDk2MTczXzgyNDYzMzcyMTkxMDE_d081035b-d7a0-4366-898b-a875090a3e64": {
"value": "
12.Intangible assets
In 2022 and 2021, changes in the carrying amount of Intangible assets were as follows:
| | | | | | | | |
| | Trademarks and other intangible assets with indefinite useful lives | Development costs externally acquired | Development costs internally generated | Patents, concessions and licenses | Other intangible assets externally acquired | Advances and intangible assets in progress externally acquired | |
Gross carrying amount Balance at\u00a0 December 31, 2020 | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Translation differences and other changes | | | | | | | | |
Transfer to Assets held for distribution | | | | | | | | |
Balance at December 31, 2021 | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Translation differences and other changes | | | | | | | | |
Balance at December 31, 2022 | | | | | | | | |
Accumulated amortization and impairment losses Balance at\u00a0 December 31, 2020 | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Translation differences and other changes | | | | | | | | |
Transfer to Assets held for distribution | | | | | | | | |
Balance at December 31, 2021 | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Translation differences and other changes | | | | | | | | |
Balance at December 31, 2022 | | | | | | | | |
Carrying amount at December 31, 2021 | | | | | | | | |
Carrying amount at December 31, 2022 | | | | | | | | |
(*) Increases in Goodwill refer to acquisitions discussed in section \"Business combinations\" above.
Foreign exchange losses were $44 million in 2022 (gains of $170 million in 2021).
Goodwill, trademarks and intangible assets with indefinite useful lives
Goodwill is allocated to the Group\u2019s cash-generating units identified as the Group\u2019s operating segments. The following
table presents the allocation of goodwill across the segments:
| | |
| | |
| | |
| | |
| | |
Goodwill net carrying amount | | |
The acquisition of Specialty Enterprises LLC (Specialty) during the second quarter of 2022 led to the increase in
Goodwill for Agriculture of $43 million. Goodwill related to the acquisitions was calculated as the excess of the
consideration transferred over the net assets recognized and represents the future economic benefits arising from the
other assets acquired that could not be individually identified and separately recognized.
The valuation of assets acquired and liabilities assumed has not yet been finalized as of December 31, 2022. Thus,
goodwill associated with the acquisitions is subject to adjustment during the measurement period.
As of December 31, 2021, the acquisitions of Raven and Sampierana during the fourth quarter of 2021 led to an
increase in Goodwill for Agriculture and Construction of $1.3 billion and $51 million, respectively. Goodwill related to the
acquisitions was calculated as the excess of the consideration transferred over the net assets recognized and
represents the future economic benefits arising from the other assets acquired that could not be individually identified
and separately recognized. The valuation of assets acquired and liabilities assumed was finalized during the fourth
quarter of 2022. Measurement period adjustments were recorded in the current year that increased Goodwill by $77
million for Agriculture, primarily related to updates of certain of the valuations.
During the fourth quarter of 2021, CNH Industrial recorded $0.5 billion in intangible assets based on the preliminary
valuation for the Raven Industries, Inc. and Sampierana S.p.A. acquisitions. Measurement period adjustments were
recorded in 2022 and decreased the net amount of intangible assets by $72.
Goodwill and Intangible assets with indefinite useful lives are tested for impairment annually or more frequently if a
triggering event occurs. At December 31, 2022 and 2021, CNH Industrial completed its annual impairment assessment
and concluded there were no impairments to goodwill for any of the reporting units.
CNH Industrial determines the recoverable amount of these cash-generating units using multiple valuation
methodologies, relying largely on an income approach but also incorporating value indicators from a market approach,
with reference to the cash-generating units with the most significant allocated goodwill.
Under the income approach, CNH Industrial calculates the recoverable amount of a cash-generating unit based on the
present value of estimated future cash flows. The income approach is dependent on several critical management
assumptions, including estimates of future sales in the discrete future period, the weighted average cost of capital
(discount rate) and terminal value growth rates, and also less significant assumptions such as gross margins, operating
costs, income tax rates, capital expenditures and changes in working capital requirements. Discount rate assumptions
include an assessment of the risk inherent in the future cash flows of the respective cash-generating units.
The following discount rates before taxes were selected:
Expected cash flows used under the income approach are developed in conjunction with CNH Industrial budgeting and
forecasting processes. CNH Industrial used nine years of expected cash flows for Agriculture, and five years of
expected cash flows for Financial Services, as management believes that these periods generally reflect the underlying
market cycles for its businesses. Under the market approach, CNH Industrial estimates the recoverable amount of the
Agriculture cash-generating unit, using earnings before interest, tax, depreciation and amortization multiples, and
estimates the recoverable amount of the Financial Services cash-generating unit using book value multiples. The
multiples are derived from comparable publicly-traded companies with similar operating and investment characteristics
as the respective cash-generating units. The guideline company method makes use of market price data of
corporations whose stock is actively traded in a public, free and open market, either on an exchange or over-the-
counter basis. Although it is clear no two companies are entirely alike, the corporations selected as guideline
companies must be engaged in the same, or a similar, line of business or be subject to similar financial and business
risks, including the opportunity for growth.
A terminal value is included at the end of the projection period used in the discounted cash flow analysis in order to
reflect the remaining value that each cash-generating unit is expected to generate. The terminal value represents the
present value in the last year of the projection period of all subsequent cash flows into perpetuity. The terminal value
growth rate is a key assumption used in determining the terminal value as it represents the annual growth of all
subsequent cash flows into perpetuity. The terminal value growth rate was 1.0% in 2022 and 2021 for the Agriculture
cash-generating unit, and 1.5% in 2022 and 2021 for Financial Services.
As of December 31, 2022, the estimated recoverable amounts, (excluding the balance of the 2021 acquisitions)
calculated using the above method, of the Agriculture and Financial Services cash-generating units exceeded the
carrying values by approximately 294% and 75%, respectively. Thus, CNH Industrial did not recognize an impairment
for these cash-generating units.
The results obtained for Commercial and Specialty Vehicles confirmed the absence of an impairment loss with
reference to the goodwill amount included in the Discontinued Operations.
The sum of the recoverable amounts of CNH Industrial\u2019s cash generating units was in excess of CNH Industrial\u2019s
market capitalization at December 31, 2022. CNH Industrial believes that the difference between the recoverable
amount and market capitalization is reasonable (in the context of assessing whether any asset impairment exists) when
market-based control premiums are taken into consideration.
Trademarks and Other intangible assets with indefinite useful lives are mainly attributable to Agriculture and
Construction and consist of acquired trademarks and similar rights which have no legal, contractual, competitive or
economic factors that limit their useful lives. For the purposes of impairment testing, these assets were attributed to the
respective cash-generating units. No impairment loss was recognized.
Finally, the estimates and budget data to which the above-mentioned parameters have been applied are those
determined by management based on past performance and expectations of developments in the markets in which
CNH Industrial operates. Impairment assessments inherently involve management judgments regarding a number of
assumptions such as those described above. Due to the many variables inherent in the estimation of a cash generating
unit\u2019s recoverable amount, differences in assumptions could have a material effect on the estimated recoverable
amount and could result in a goodwill impairment loss in a future period. Circumstances and events, which could
potentially cause further impairment losses, are constantly monitored by CNH Industrial.
Development costs and other intangible assets with finite useful lives
The amortization of development costs and impairment losses are reported in the income statement as Research and
development costs.
Development costs are tested for impairment at the cash-generating unit level.
Intangible assets with finite useful lives are amortized over their estimated useful lives and tested for impairment if
events or changes in circumstances indicate that the asset may be impaired.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfIntangibleAssetsAndGoodwillExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV80NzUvZnJhZzo1MWEzNmNhN2VmYzM0YzliYTVmYjlmMTEwYWQ5NjE3My90ZXh0cmVnaW9uOjUxYTM2Y2E3ZWZjMzRjOWJhNWZiOWYxMTBhZDk2MTczXzMyOTg1MzQ5MTA4Mjc_ba33251f-ec5f-4ada-99ed-dee6b1383928": {
"value": "
Goodwill and Intangible assets with indefinite useful lives are tested for impairment annually or more frequently if a
triggering event occurs. At December 31, 2022 and 2021, CNH Industrial completed its annual impairment assessment
and concluded there were no impairments to goodwill for any of the reporting units.
CNH Industrial determines the recoverable amount of these cash-generating units using multiple valuation
methodologies, relying largely on an income approach but also incorporating value indicators from a market approach,
with reference to the cash-generating units with the most significant allocated goodwill.
Under the income approach, CNH Industrial calculates the recoverable amount of a cash-generating unit based on the
present value of estimated future cash flows. The income approach is dependent on several critical management
assumptions, including estimates of future sales in the discrete future period, the weighted average cost of capital
(discount rate) and terminal value growth rates, and also less significant assumptions such as gross margins, operating
costs, income tax rates, capital expenditures and changes in working capital requirements. Discount rate assumptions
include an assessment of the risk inherent in the future cash flows of the respective cash-generating units.
The following discount rates before taxes were selected:
Expected cash flows used under the income approach are developed in conjunction with CNH Industrial budgeting and
forecasting processes. CNH Industrial used nine years of expected cash flows for Agriculture, and five years of
expected cash flows for Financial Services, as management believes that these periods generally reflect the underlying
market cycles for its businesses. Under the market approach, CNH Industrial estimates the recoverable amount of the
Agriculture cash-generating unit, using earnings before interest, tax, depreciation and amortization multiples, and
estimates the recoverable amount of the Financial Services cash-generating unit using book value multiples. The
multiples are derived from comparable publicly-traded companies with similar operating and investment characteristics
as the respective cash-generating units. The guideline company method makes use of market price data of
corporations whose stock is actively traded in a public, free and open market, either on an exchange or over-the-
counter basis. Although it is clear no two companies are entirely alike, the corporations selected as guideline
companies must be engaged in the same, or a similar, line of business or be subject to similar financial and business
risks, including the opportunity for growth.
A terminal value is included at the end of the projection period used in the discounted cash flow analysis in order to
reflect the remaining value that each cash-generating unit is expected to generate. The terminal value represents the
present value in the last year of the projection period of all subsequent cash flows into perpetuity. The terminal value
growth rate is a key assumption used in determining the terminal value as it represents the annual growth of all
subsequent cash flows into perpetuity. The terminal value growth rate was 1.0% in 2022 and 2021 for the Agriculture
cash-generating unit, and 1.5% in 2022 and 2021 for Financial Services.
As of December 31, 2022, the estimated recoverable amounts, (excluding the balance of the 2021 acquisitions)
calculated using the above method, of the Agriculture and Financial Services cash-generating units exceeded the
carrying values by approximately 294% and 75%, respectively. Thus, CNH Industrial did not recognize an impairment
for these cash-generating units.
The results obtained for Commercial and Specialty Vehicles confirmed the absence of an impairment loss with
reference to the goodwill amount included in the Discontinued Operations.
The sum of the recoverable amounts of CNH Industrial\u2019s cash generating units was in excess of CNH Industrial\u2019s
market capitalization at December 31, 2022. CNH Industrial believes that the difference between the recoverable
amount and market capitalization is reasonable (in the context of assessing whether any asset impairment exists) when
market-based control premiums are taken into consideration.
Trademarks and Other intangible assets with indefinite useful lives are mainly attributable to Agriculture and
Construction and consist of acquired trademarks and similar rights which have no legal, contractual, competitive or
economic factors that limit their useful lives. For the purposes of impairment testing, these assets were attributed to the
respective cash-generating units. No impairment loss was recognized.
Finally, the estimates and budget data to which the above-mentioned parameters have been applied are those
determined by management based on past performance and expectations of developments in the markets in which
CNH Industrial operates. Impairment assessments inherently involve management judgments regarding a number of
assumptions such as those described above. Due to the many variables inherent in the estimation of a cash generating
unit\u2019s recoverable amount, differences in assumptions could have a material effect on the estimated recoverable
amount and could result in a goodwill impairment loss in a future period. Circumstances and events, which could
potentially cause further impairment losses, are constantly monitored by CNH Industrial.
13.Property, plant and equipment
In 2022 and 2021, changes in the carrying amount of Property, plant and equipment were as follows:
| | | | | | | | |
| | | Plant, machinery and equipment | | Assets sold with a buy-back commitment | | Advances and tangible assets in progress | |
Gross carrying amount Balance at December 31, 2020 | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Transfer to Assets held for distribution | | | | | | | | |
Balance at December 31, 2021 | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Balance at December 31, 2022 | | | | | | | | |
Accumulated depreciation and impairment losses balance at\u00a0 December 31, 2020 | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Transfer to Assets held for distribution | | | | | | | | |
Balance at December 31, 2021 | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Balance at December 31, 2022 | | | | | | | | |
Carrying amount at December 31, 2021 | | | | | | | | |
Carrying amount at December 31, 2022 | | | | | | | | |
CNH Industrial recognized an impairment loss of commitments of $17 million. The impairment losses were recognized
in Cost of sales.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfImpairmentOfAssetsExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV80NzgvZnJhZzozNzA3NDZhMzk4ZmU0YjMwYTEwMTZiN2JiY2UzZWEwNC90ZXh0cmVnaW9uOjM3MDc0NmEzOThmZTRiMzBhMTAxNmI3YmJjZTNlYTA0XzcxNDY4MjU1ODUwODY_1c2c6393-b603-4214-8497-95be58210314": {
"value": "
13.Property, plant and equipment
In 2022 and 2021, changes in the carrying amount of Property, plant and equipment were as follows:
| | | | | | | | |
| | | Plant, machinery and equipment | | Assets sold with a buy-back commitment | | Advances and tangible assets in progress | |
Gross carrying amount Balance at December 31, 2020 | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Transfer to Assets held for distribution | | | | | | | | |
Balance at December 31, 2021 | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Balance at December 31, 2022 | | | | | | | | |
Accumulated depreciation and impairment losses balance at\u00a0 December 31, 2020 | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Transfer to Assets held for distribution | | | | | | | | |
Balance at December 31, 2021 | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Balance at December 31, 2022 | | | | | | | | |
Carrying amount at December 31, 2021 | | | | | | | | |
Carrying amount at December 31, 2022 | | | | | | | | |
CNH Industrial recognized an impairment loss of commitments of $17 million. The impairment losses were recognized
in Cost of sales.
At December 31, 2022, right-of-use assets refer primarily to the following lease contracts: industrial buildings for $162
million ($139 million at December 31, 2021), plant, machinery and equipment for $12 million ($13 million at December
31, 2021), and other assets for $45 million ($39 million at December 31, 2021). For a description of the related lease
liabilities, refer to Note 24 \"Debt\".
Short-term and low-value leases are not recorded in the statement of financial position; CNH Industrial recognizes
lease expense ($10 million for both 2022 and 2021) in the income statement for these leases on a straight-line basis
over the lease term.
Land and industrial buildings and plant, machinery and equipment pledged as security for debt and other commitments
were immaterial at December 31, 2022 and 2021.
CNH Industrial had contractual commitments of $77 million and $95 million for the acquisition of property, plant and
equipment at December 31, 2022 and 2021, respectively.
15.Leased assets
This item changed as follows in 2022 and 2021:
| | | | | | |
| | | | | Disposals and other changes | |
| | | | | | |
Less: Depreciation and impairment | | | | | | |
Net carrying amount of Leased assets | | | | | | |
| | | | | | | |
| | | | | Disposals and other changes | Transfer to Assets held for distribution | |
| | | | | | | |
Less: Depreciation and impairment | | | | | | | |
Net carrying amount of Leased assets | | | | | | | |
Leased assets include equipment leased to retail customers by the Group's leasing companies.
At December 31, 2022, minimum lease payments receivable for assets under non-cancelable operating leases amount
to $438 million ($450 million\u00a0at December 31, 2021) and fall due as follows:
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Total Undiscounted lease payments | | |
No leased assets have been pledged as security at December 31, 2022 and 2021.
Debt
An analysis of debt by nature and due date is as follows:
| | | | | | | | |
| | |
| | Due between one and five years | | | | Due between one and five years | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Payables represented by securities | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
CNH Industrial recognized an impairment loss of commitments of $17 million. The impairment losses were recognized
in Cost of sales.
At December 31, 2022, right-of-use assets refer primarily to the following lease contracts: industrial buildings for $162
million ($139 million at December 31, 2021), plant, machinery and equipment for $12 million ($13 million at December
31, 2021), and other assets for $45 million ($39 million at December 31, 2021). For a description of the related lease
liabilities, refer to Note 24 \"Debt\".
Short-term and low-value leases are not recorded in the statement of financial position; CNH Industrial recognizes
lease expense ($10 million for both 2022 and 2021) in the income statement for these leases on a straight-line basis
over the lease term.
Land and industrial buildings and plant, machinery and equipment pledged as security for debt and other commitments
were immaterial at December 31, 2022 and 2021.
CNH Industrial had contractual commitments of $77 million and $95 million for the acquisition of property, plant and
equipment at December 31, 2022 and 2021, respectively.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfPropertyPlantAndEquipmentExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV80ODEvZnJhZzpmNTgxNzkyMDQ4YTY0ODJkYjk0NDgxNjhiOWZhNWNhMi90ZXh0cmVnaW9uOmY1ODE3OTIwNDhhNjQ4MmRiOTQ0ODE2OGI5ZmE1Y2EyXzMyOTg1MzQ4OTI2ODE_530596f4-b483-4eb2-93ad-8451cfc5c974": {
"value": "
14.Investments and other non-current financial assets
| | |
| | |
Investments accounted for using the equity method | | |
| | |
| | |
Non-current financial receivables and other non-current securities | | |
Total Investments and other non-current financial assets | | |
At December 31, 2022 and 2021, no Non-current financial receivables had been pledged as security.
Investments
Changes in Investments in 2022 and 2021 are set out below:
| | | | | | | |
| | Revaluations/ (Write-downs) | Acquisitions and capitalizations | Fair value remeasurements | | Disposals and other changes | |
| | | | | | | |
Unconsolidated subsidiaries and other | | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | | |
| | Revaluations/ (Write-downs) | Acquisitions and capitalizations | Fair value remeasu- rements | | Disposals and other changes | Transfer to Assets held for distribution | |
| | | | | | | | |
Unconsolidated subsidiaries and other | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Equity investments measured at fair value through other comprehensive income | | | | | | | | |
| | | | | | | | |
| | |
| | |
| T\u00fcrkTrakt\u00f6r Ve Ziraat Makineleri A.S. | T\u00fcrkTrakt\u00f6r Ve Ziraat Makineleri A.S. |
| | |
Depreciation and amortization | | |
Net Financial income/(expenses) | | |
Profit/(loss) before taxes | | |
| | |
Profit/(loss) from Continuing Operations | | |
Profit/(loss) from Discontinued Operations | | |
| | |
| | |
Total Other comprehensive income, net of tax | | |
Total Comprehensive income | | |
| | |
| | |
| | |
Profit/(loss) before taxes | | |
Profit/(loss) from Continuing Operations | | |
Profit/(loss) from Discontinued Operations | | |
| | |
| | |
Total Other comprehensive income, net of tax | | |
Total Comprehensive income | | |
(1) The 24.95% investment in CNH Capital Europe S.A. held by CNH Industrial N.V. through CIFINS S.p.A. at December 31, 2022 was included in the combined financial statements at December 31, 2021 as
investments in associates.
Summarized financial information relating to the Group\u2019s pro-rata interest in associates that are not individually material,
accounted for using the equity method, is as follows:
| | |
| | |
Profit/(loss) from Continuing Operations | | |
Profit/(loss) from Discontinued Operations | | |
| | |
| | |
Total Other comprehensive income, net of tax | | |
Total Comprehensive income | | |
At December 31, 2022, the amount of Inventories measured at net realizable value (estimated selling price less the
estimated costs of completion and the estimated costs necessary to make the sale) is $574 million ($478\u00a0million at
December 31, 2021).
At December 31, 2022, Inventories included assets which are no longer subject to operating lease arrangements and
were held for sale for a total amount of $13 million ($29 million at December 31, 2021).
There were no inventories pledged as security at December 31, 2022 and 2021.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfInventoriesExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
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"value": "
17.Current receivables and Other current financial assets
A summary of Current receivables and Other current financial assets as of December 31, 2022 and 2021 is as follows:
| | |
| | |
| | |
Receivables from financing activities | | |
| | |
Other current receivables and financial assets: | | |
Other current receivables | | |
Other current financial assets | | |
Total Other current receivables and financial assets | | |
Total Current receivables and Other current financial assets | | |
An analysis of Current receivables by due date is as follows:
| | | | | | | | |
| | |
| | due between one and five years | | | | due between one and five years | | |
| | | | | | | | |
Receivables from financing activities | | | | | | | | |
| | | | | | | | |
Other current receivables | | | | | | | | |
Total Current receivables | | | | | | | | |
Trade receivables
As of December 31, 2022 and 2021, CNH Industrial had trade receivables of $168 million and $192 million,
respectively. Trade receivables are shown net of allowances for doubtful accounts of $23 million for both year ended
December 31, 2022 and 2021. The allowances are determined using the simplified approach, as permitted by IFRS 9
for trade receivables, consisting in the use of lifetime expected loss.
Changes in the allowances for doubtful accounts during 2022, and 2021 were as follows:
| | |
| |
| | |
| | |
| | |
| | |
Transfer to liabilities held for distribution | | |
| | |
sale and Discontinued Operations. Iveco Group's results are presented as a single line item within the Consolidated Statement of Comprehensive Income for the year ended December 31, 2021. The spin-off
of Iveco Group took effect on January 1, 2022 (refer to the Section - \"Scope of Consolidation - Discontinued Operations - Iveco Group Business\").
The allowances at December 31, 2022 and 2021, have been determined using the following expected loss rates:
| | | | | | |
| | |
| | | | | Greater than 90 days past due | |
| | | | | | |
| | | | | | |
Allowances for doubtful accounts | | | | | | |
| | | | | | |
| | |
| | | | | Greater than 90 days past due | |
| | | | | | |
| | | | | | |
Allowances for doubtful accounts | | | | | | |
Trade accounts have significant concentrations of credit risk in the Agriculture and Construction segments. There is not
a disproportionate concentration of credit risk in any geographic region.
The Industrial Activities businesses sell a significant portion of their trade receivables to Financial Services and provide
compensation to Financial Services at approximate market interest rates.
As of December 31, 2022 and 2021, write offs for trade receivables were immaterial.
Charge\u2011offs of principal amounts of trade receivables outstanding are deducted from the allowance at the point when it
is estimated that amounts due are deemed uncollectible. CNH Industrial continues to engage in collection efforts to
attempt to recover the receivables. When recoveries are collected, these are recognized as income.
Receivables from financing activities
A summary of Receivables from financing activities as of December 31, 2022 and 2021 is as follows:
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Total Receivables from financing activities | | |
CNH Industrial provides and administers retail note and lease financing to end use customers for the purchase of new
and used equipment sold through its dealer network, as well as revolving charge account financing. The terms of retail
notes and finance leases generally range from two to six years, and interest rates vary depending on prevailing market
interest rates and certain incentive programs offered on behalf of and sustained by Industrial Activities. Revolving
charge accounts are generally accompanied by higher interest rates than CNH Industrial's other retail financing
products, require minimum monthly payments, and do not have pre-determined maturity dates.
Wholesale receivables arise primarily from dealer floorplan financing, and to a lesser extent, the financing of dealer
operations. Under the standard terms of the wholesale receivable agreements, these receivables typically have
\u201cinterest-free\u201d periods of up to twelve months and stated original maturities of up to twenty-four months, with repayment
accelerated upon the sale of the underlying equipment by the dealer. During the \u201cinterest-free\u201d period, Financial
Services is compensated by Industrial Activities based on market interest rates. After the expiration of any \u201cinterest-free\u201d
period, interest is charged to dealers on outstanding balances until CNH Industrial receives payment in full. The
\u201cinterest-free\u201d periods are determined based on the type of equipment sold and the time of year of the sale. CNH
Industrial evaluates and assesses dealers on an ongoing basis as to their credit worthiness. CNH Industrial may be
obligated to repurchase the dealer\u2019s equipment upon cancellation or termination of the dealer\u2019s contract for such
causes as change in ownership, closeout of the business, or default. There were no significant losses in 2022 and 2021
relating to the termination of dealer contracts.
Finance lease receivables mainly relate to equipment leased out under finance lease arrangements. The interest rate
implicit in the lease is determined at the commencement of the lease for the whole lease term. The average interest
rate implicit in total finance lease receivables varies depending on prevailing market interest rates.
The item may be analyzed as follows stated gross of an allowance of $34 million at December 31, 2022 ($6 million at
December 31, 2021):
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Total Undiscounted receivables for future minimum lease payments | | |
| | |
Present value of future minimum lease payments | | |
Financing receivables have significant concentrations of credit risk in the agriculture and construction business sectors.
On a geographic basis, there is not a disproportionate concentration of credit risk in any area. CNH Industrial typically
retains, as collateral, a security interest in the equipment associated with retail and wholesale receivables, while
revolving charge accounts are generally unsecured.
Transfers of financial receivables
As part of its overall funding strategy, the Group periodically transfers certain receivables into special purpose entities
(\"SPEs\") as part of its asset backed securitization (\"ABS\") programs or into factoring transactions.
The SPEs finance the purchase of receivables by issuing asset-backed securities (i.e., securities whose repayment and
interest flow depend upon the cash flow generated by the portfolio). Asset-backed securities are divided into classes
according to their degree of seniority and rating: the most senior classes are placed with investors on the market; the
junior class, whose repayment is subordinated to the senior classes, is normally subscribed for by the seller. The
residual interest in the receivables retained by the seller is therefore limited to the junior securities it has subscribed for.
In accordance with IFRS 10 \u2013 Consolidated Financial Statements, all securitization vehicles are included in the scope of
consolidation because the subscription of the junior asset-backed securities by the seller implies its control in substance
over the structured entity.
Factoring transactions may be either with recourse or without recourse; certain without recourse transfers include
deferred payment clauses (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), requiring first loss cover, meaning that the transferor
takes priority participation in the losses, or requires a significant exposure to the cash flows arising from the transferred
receivables to be retained. These types of transactions do not comply with the requirements of IFRS 9 \u2013 Financial
Instruments for the derecognition of the assets, since the risks and rewards connected with collection are not
substantially transferred and, accordingly, the Group continues to recognize the receivables transferred by this means
in its consolidated statement of financial position and recognizes a financial liability of the same amount under asset-
backed financing (see Note 24 \u201cDebt\u201d).
At December\u00a031,\u00a02022 and 2021, the carrying amount of such transferred financial assets not derecognized and the
related liability and the respective fair values were as follows:
| | | | | | |
| | |
| Receivables from financing activities transferred | Other financial assets transferred | | Receivables from financing activities transferred | Other financial assets transferred | |
Carrying amount of assets | | | | | | |
Carrying amount of the related liabilities | | | | | | |
| | | | | | |
Liabilities for which the counterparty has the right to obtain relief on the transferred assets: | | | | | | |
| | | | | | |
Fair value of the liabilities | | | | | | |
| | | | | | |
Other financial assets transferred also include the cash with a pre-determined use restricted to the repayment of the
securitization debt.
CNH Industrial has discounted receivables and bills without recourse having due dates beyond December 31, 2022
amounting to $17 million which refer to trade receivables and other receivables. At December 31, 2021, the amount of
discounted receivables and bills without recourse with due dates beyond that date, was $192 million, of which, $178
million referred to trade receivables and other receivables and $14 million referred to receivables from financing
activities.
Allowance for Credit Losses
CNH Industrial's allowance for credit losses is segregated into two portfolio segments: retail and wholesale. A portfolio
segment is the level at which CNH Industrial develops a systematic methodology for determining its allowance for credit
losses. Further, the class of receivables by which CNH Industrial evaluates its portfolio segments is by geographic
region. Typically, CNH Industrial's receivables within a geographic region have similar risk profiles and methods for
assessing and monitoring risk. These classes align with management reporting.
CNH Industrial utilizes three categories for receivables from financing activities that reflect their credit risk and how the
loss provision is determined.
| | | |
| | | Basis for recognition of expected credit loss provision |
| | Low risk of default; payments are generally less than 30 days past due | 12 month expected credit losses |
| | Significant increase in credit risk; payments generally between 31 and 90 days past due | Lifetime expected credit losses |
| | Accounts are credit impaired and/or a legal action has been initiated; payments generally greater than 90 days past due | Lifetime expected credit losses |
At December 31, 2022, the allowance for credit losses included an increase in reserves due to growth in the retail
portfolio and additionally included $15 million for domestic Russian receivables, $9 million for the addition of revolving
charge accounts in North America and $7 million in China related to Construction customers. CNH Industrial will update
the macroeconomic factors and qualitative factors in future periods, as warranted.
Allowance for credit losses activity for the year ended December 31, 2021 is as follows:
| | | | | | | | |
| Year ended December 31, 2021 |
| | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Charge-offs, net of recoveries | | | | | | | | |
| | | | | | | | |
Foreign currency translation and other | | | | | | | | |
Transfer to assets held for distribution | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
At December 31, 2021, the allowance for credit losses included a reduction in retail reserves primarily due to the
improved outlook for the agricultural industry and a reduced expected impact on credit conditions from the COVID-19
pandemic.
CNH Industrial assesses and monitors the credit quality of its financing receivables based on whether a receivable is
classified as Performing or Non-Performing. Receivables are considered past due if the required principal and interest
payments have not yet been received as of the date such payments were due. Delinquency is reported on financing
receivables greater than 30 days past due. Non-performing financing receivables represent loans for which CNH
Industrial has ceased accruing finance income. These receivables are generally 90 days past due. Finance income for
non-performing receivables is recognized on a cash basis. Accrued interest is charged-off to interest income. Interest
income charged-off was not material for the year ended December 31, 2022. Interest accrual is resumed if the
receivable becomes contractually current and collection becomes probable. Previously suspended income is
recognized at that time.
The aging of Receivables from financing activities as of December 31, 2022 and 2021 is as follows:
| | | | | | |
| |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Europe, Middle East, Africa | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Europe, Middle East, Africa | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Europe, Middle East, Africa | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Europe, Middle East, Africa | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Troubled Debt Restructurings
A restructuring of a receivable constitutes a troubled debt restructuring (\u201cTDR\u201d) when the lender grants a concession it
would not otherwise consider to a borrower that is experiencing financial difficulties. As a collateral-based lender, CNH
Industrial typically will repossess collateral in lieu of restructuring receivables. As such, for retail receivables,
concessions are typically provided based on bankruptcy court proceedings. For wholesale receivables, concessions
granted may include extended contract maturities, inclusion of interest-only periods, modification of a contractual
interest rate to a below market interest rate and waiving of interest and principal.
TDRs are reviewed along with other receivables as part of management\u2019s ongoing evaluation of the adequacy of the
allowance for credit losses. The allowance for credit losses attributable to TDRs is based on the most probable source
of repayment, which is normally the liquidation of the collateral. In determining collateral value, CNH Industrial
estimates the current fair market value of the equipment collateral and considers credit enhancements such as
additional collateral and third-party guarantees.
Before removing a receivable from TDR classification, a review of the borrower is conducted. If concerns exist about the
future ability of the borrower to meet its obligations based on a credit review, the TDR classification is not removed from
the receivable.
As of December\u00a031, 2022, and 2021, CNH Industrial\u2019s TDRs for retail and wholesale receivables were immaterial.
Other current receivables
At December 31, 2022, Other current receivables mainly consisted of other tax receivables for VAT and other indirect
taxes of $308\u00a0million ($638 million at December 31, 2021), and receivables from employees of $15 million ($11 million
at December\u00a031,\u00a02021).
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfTradeAndOtherReceivablesExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV81NTE2L2ZyYWc6MWRiMWM0MThhMGE2NDhiNDg0OWM1ODFlNmZjNGEyNzgvdGV4dHJlZ2lvbjoxZGIxYzQxOGEwYTY0OGI0ODQ5YzU4MWU2ZmM0YTI3OF8yNzQ4Nzc5MDc0NDA1_65fd7c95-2a91-4bf8-a545-edaf4367d404": {
"value": "
Allowance for Credit Losses
CNH Industrial's allowance for credit losses is segregated into two portfolio segments: retail and wholesale. A portfolio
segment is the level at which CNH Industrial develops a systematic methodology for determining its allowance for credit
losses. Further, the class of receivables by which CNH Industrial evaluates its portfolio segments is by geographic
region. Typically, CNH Industrial's receivables within a geographic region have similar risk profiles and methods for
assessing and monitoring risk. These classes align with management reporting.
CNH Industrial utilizes three categories for receivables from financing activities that reflect their credit risk and how the
loss provision is determined.
| | | |
| | | Basis for recognition of expected credit loss provision |
| | Low risk of default; payments are generally less than 30 days past due | 12 month expected credit losses |
| | Significant increase in credit risk; payments generally between 31 and 90 days past due | Lifetime expected credit losses |
| | Accounts are credit impaired and/or a legal action has been initiated; payments generally greater than 90 days past due | Lifetime expected credit losses |
At December 31, 2022, the allowance for credit losses included an increase in reserves due to growth in the retail
portfolio and additionally included $15 million for domestic Russian receivables, $9 million for the addition of revolving
charge accounts in North America and $7 million in China related to Construction customers. CNH Industrial will update
the macroeconomic factors and qualitative factors in future periods, as warranted.
Allowance for credit losses activity for the year ended December 31, 2021 is as follows:
| | | | | | | | |
| Year ended December 31, 2021 |
| | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Charge-offs, net of recoveries | | | | | | | | |
| | | | | | | | |
Foreign currency translation and other | | | | | | | | |
Transfer to assets held for distribution | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
At December 31, 2021, the allowance for credit losses included a reduction in retail reserves primarily due to the
improved outlook for the agricultural industry and a reduced expected impact on credit conditions from the COVID-19
pandemic.
CNH Industrial assesses and monitors the credit quality of its financing receivables based on whether a receivable is
classified as Performing or Non-Performing. Receivables are considered past due if the required principal and interest
payments have not yet been received as of the date such payments were due. Delinquency is reported on financing
receivables greater than 30 days past due. Non-performing financing receivables represent loans for which CNH
Industrial has ceased accruing finance income. These receivables are generally 90 days past due. Finance income for
non-performing receivables is recognized on a cash basis. Accrued interest is charged-off to interest income. Interest
income charged-off was not material for the year ended December 31, 2022. Interest accrual is resumed if the
receivable becomes contractually current and collection becomes probable. Previously suspended income is
recognized at that time.
The aging of Receivables from financing activities as of December 31, 2022 and 2021 is as follows:
| | | | | | |
| |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Europe, Middle East, Africa | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Europe, Middle East, Africa | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Europe, Middle East, Africa | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Europe, Middle East, Africa | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Troubled Debt Restructurings
A restructuring of a receivable constitutes a troubled debt restructuring (\u201cTDR\u201d) when the lender grants a concession it
would not otherwise consider to a borrower that is experiencing financial difficulties. As a collateral-based lender, CNH
Industrial typically will repossess collateral in lieu of restructuring receivables. As such, for retail receivables,
concessions are typically provided based on bankruptcy court proceedings. For wholesale receivables, concessions
granted may include extended contract maturities, inclusion of interest-only periods, modification of a contractual
interest rate to a below market interest rate and waiving of interest and principal.
TDRs are reviewed along with other receivables as part of management\u2019s ongoing evaluation of the adequacy of the
allowance for credit losses. The allowance for credit losses attributable to TDRs is based on the most probable source
of repayment, which is normally the liquidation of the collateral. In determining collateral value, CNH Industrial
estimates the current fair market value of the equipment collateral and considers credit enhancements such as
additional collateral and third-party guarantees.
Before removing a receivable from TDR classification, a review of the borrower is conducted. If concerns exist about the
future ability of the borrower to meet its obligations based on a credit review, the TDR classification is not removed from
the receivable.
As of December\u00a031, 2022, and 2021, CNH Industrial\u2019s TDRs for retail and wholesale receivables were immaterial.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfAllowanceForCreditLossesExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV81NTE2L2ZyYWc6MWRiMWM0MThhMGE2NDhiNDg0OWM1ODFlNmZjNGEyNzgvdGV4dHJlZ2lvbjoxZGIxYzQxOGEwYTY0OGI0ODQ5YzU4MWU2ZmM0YTI3OF8yNzQ4Nzc5MDc0NDA1_dae83daf-6f5a-45a2-b1b7-e0b5f5a62ddc": {
"value": "
Allowance for Credit Losses
CNH Industrial's allowance for credit losses is segregated into two portfolio segments: retail and wholesale. A portfolio
segment is the level at which CNH Industrial develops a systematic methodology for determining its allowance for credit
losses. Further, the class of receivables by which CNH Industrial evaluates its portfolio segments is by geographic
region. Typically, CNH Industrial's receivables within a geographic region have similar risk profiles and methods for
assessing and monitoring risk. These classes align with management reporting.
CNH Industrial utilizes three categories for receivables from financing activities that reflect their credit risk and how the
loss provision is determined.
| | | |
| | | Basis for recognition of expected credit loss provision |
| | Low risk of default; payments are generally less than 30 days past due | 12 month expected credit losses |
| | Significant increase in credit risk; payments generally between 31 and 90 days past due | Lifetime expected credit losses |
| | Accounts are credit impaired and/or a legal action has been initiated; payments generally greater than 90 days past due | Lifetime expected credit losses |
At December 31, 2022, the allowance for credit losses included an increase in reserves due to growth in the retail
portfolio and additionally included $15 million for domestic Russian receivables, $9 million for the addition of revolving
charge accounts in North America and $7 million in China related to Construction customers. CNH Industrial will update
the macroeconomic factors and qualitative factors in future periods, as warranted.
Allowance for credit losses activity for the year ended December 31, 2021 is as follows:
| | | | | | | | |
| Year ended December 31, 2021 |
| | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Charge-offs, net of recoveries | | | | | | | | |
| | | | | | | | |
Foreign currency translation and other | | | | | | | | |
Transfer to assets held for distribution | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
At December 31, 2021, the allowance for credit losses included a reduction in retail reserves primarily due to the
improved outlook for the agricultural industry and a reduced expected impact on credit conditions from the COVID-19
pandemic.
CNH Industrial assesses and monitors the credit quality of its financing receivables based on whether a receivable is
classified as Performing or Non-Performing. Receivables are considered past due if the required principal and interest
payments have not yet been received as of the date such payments were due. Delinquency is reported on financing
receivables greater than 30 days past due. Non-performing financing receivables represent loans for which CNH
Industrial has ceased accruing finance income. These receivables are generally 90 days past due. Finance income for
non-performing receivables is recognized on a cash basis. Accrued interest is charged-off to interest income. Interest
income charged-off was not material for the year ended December 31, 2022. Interest accrual is resumed if the
receivable becomes contractually current and collection becomes probable. Previously suspended income is
recognized at that time.
The aging of Receivables from financing activities as of December 31, 2022 and 2021 is as follows:
| | | | | | |
| |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Europe, Middle East, Africa | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Europe, Middle East, Africa | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Europe, Middle East, Africa | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Europe, Middle East, Africa | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Troubled Debt Restructurings
A restructuring of a receivable constitutes a troubled debt restructuring (\u201cTDR\u201d) when the lender grants a concession it
would not otherwise consider to a borrower that is experiencing financial difficulties. As a collateral-based lender, CNH
Industrial typically will repossess collateral in lieu of restructuring receivables. As such, for retail receivables,
concessions are typically provided based on bankruptcy court proceedings. For wholesale receivables, concessions
granted may include extended contract maturities, inclusion of interest-only periods, modification of a contractual
interest rate to a below market interest rate and waiving of interest and principal.
TDRs are reviewed along with other receivables as part of management\u2019s ongoing evaluation of the adequacy of the
allowance for credit losses. The allowance for credit losses attributable to TDRs is based on the most probable source
of repayment, which is normally the liquidation of the collateral. In determining collateral value, CNH Industrial
estimates the current fair market value of the equipment collateral and considers credit enhancements such as
additional collateral and third-party guarantees.
Before removing a receivable from TDR classification, a review of the borrower is conducted. If concerns exist about the
future ability of the borrower to meet its obligations based on a credit review, the TDR classification is not removed from
the receivable.
As of December\u00a031, 2022, and 2021, CNH Industrial\u2019s TDRs for retail and wholesale receivables were immaterial.
Commitments
At December 31, 2022, Financial Services has various agreements to extend credit for the following financing
arrangements:
| | | |
| |
| | | |
| | | |
Wholesale and dealer financing | | | |
Revolving charge accounts | | | |
. A portfolio segment is the level at which CNH Industrial develops a systematic methodology for determining its allowance for credit
losses. Further, the class of receivables by which CNH Industrial evaluates its portfolio segments is by geographic
region. Typically, CNH Industrial's receivables within a geographic region have similar risk profiles and methods for
assessing and monitoring risk. These classes align with management reporting.
CNH Industrial utilizes three categories for receivables from financing activities that reflect their credit risk and how the
loss provision is determined.
| | | |
| | | Basis for recognition of expected credit loss provision |
| | Low risk of default; payments are generally less than 30 days past due | 12 month expected credit losses |
| | Significant increase in credit risk; payments generally between 31 and 90 days past due | Lifetime expected credit losses |
| | Accounts are credit impaired and/or a legal action has been initiated; payments generally greater than 90 days past due | Lifetime expected credit losses |
At December 31, 2022, the allowance for credit losses included an increase in reserves due to growth in the retail
portfolio and additionally included $15 million for domestic Russian receivables, $9 million for the addition of revolving
charge accounts in North America and $7 million in China related to Construction customers. CNH Industrial will update
the macroeconomic factors and qualitative factors in future periods, as warranted.
Allowance for credit losses activity for the year ended December 31, 2021 is as follows:
| | | | | | | | |
| Year ended December 31, 2021 |
| | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Charge-offs, net of recoveries | | | | | | | | |
| | | | | | | | |
Foreign currency translation and other | | | | | | | | |
Transfer to assets held for distribution | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
At December 31, 2021, the allowance for credit losses included a reduction in retail reserves primarily due to the
improved outlook for the agricultural industry and a reduced expected impact on credit conditions from the COVID-19
pandemic.
CNH Industrial assesses and monitors the credit quality of its financing receivables based on whether a receivable is
classified as Performing or Non-Performing. Receivables are considered past due if the required principal and interest
payments have not yet been received as of the date such payments were due. Delinquency is reported on financing
receivables greater than 30 days past due. Non-performing financing receivables represent loans for which CNH
Industrial has ceased accruing finance income. These receivables are generally 90 days past due. Finance income for
non-performing receivables is recognized on a cash basis. Accrued interest is charged-off to interest income. Interest
income charged-off was not material for the year ended December 31, 2022. Interest accrual is resumed if the
receivable becomes contractually current and collection becomes probable. Previously suspended income is
recognized at that time.
The aging of Receivables from financing activities as of December 31, 2022 and 2021 is as follows:
| | | | | | |
| |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Europe, Middle East, Africa | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Europe, Middle East, Africa | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Europe, Middle East, Africa | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Europe, Middle East, Africa | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Troubled Debt Restructurings
A restructuring of a receivable constitutes a troubled debt restructuring (\u201cTDR\u201d) when the lender grants a concession it
would not otherwise consider to a borrower that is experiencing financial difficulties. As a collateral-based lender, CNH
Industrial typically will repossess collateral in lieu of restructuring receivables. As such, for retail receivables,
concessions are typically provided based on bankruptcy court proceedings. For wholesale receivables, concessions
granted may include extended contract maturities, inclusion of interest-only periods, modification of a contractual
interest rate to a below market interest rate and waiving of interest and principal.
TDRs are reviewed along with other receivables as part of management\u2019s ongoing evaluation of the adequacy of the
allowance for credit losses. The allowance for credit losses attributable to TDRs is based on the most probable source
of repayment, which is normally the liquidation of the collateral. In determining collateral value, CNH Industrial
estimates the current fair market value of the equipment collateral and considers credit enhancements such as
additional collateral and third-party guarantees.
Before removing a receivable from TDR classification, a review of the borrower is conducted. If concerns exist about the
future ability of the borrower to meet its obligations based on a credit review, the TDR classification is not removed from
the receivable.
As of December\u00a031, 2022, and 2021, CNH Industrial\u2019s TDRs for retail and wholesale receivables were immaterial.
The following table provides an analysis by due date of the notional amount of outstanding derivative financial
instruments at December 31, 2022 and 2021:
| | | | | | | | |
| | |
| | due between one and five years | | | | due between one and five years | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Debt
An analysis of debt by nature and due date is as follows:
| | | | | | | | |
| | |
| | Due between one and five years | | | | Due between one and five years | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Payables represented by securities | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
2021). The principal exchange rates to which we are exposed are the following:
\u25aaEUR/USD, in relation to the production/purchases of Agriculture and Construction in the euro area;
\u25aaUSD/BRL and EUR/BRL, in relation to production in Brazil and the respective import/export flows;
\u25aaAUD/USD, mainly in relation to sales made by Agriculture and Construction in Australia;
\u25aaEUR/GBP, predominately in relation to sales on the U.K. market.
Trade flows exposed to changes in these exchange rates in 2022 made up approximately 73% of the exposure to
currency risk from trade transactions.
It is our policy to use derivative financial instruments to hedge a certain percentage, on average between 55% and
85%, of the forecasted trading transaction exchange risk exposure for the coming 12 months with additional flexibility to
reach 0% or 100% (including forecasted risk exposure beyond that timeframe where it is believed to be appropriate)
and to hedge completely the exposure resulting from firm commitments.
Certain subsidiaries may hold trade receivables or payables denominated in a currency different from the subsidiary\u2019s
functional currency. In addition, in a limited number of cases, subsidiaries may obtain financing or use funds in a
currency different from their functional currency. Changes in exchange rates may result in exchange gains or losses
arising from these situations. It is our policy to hedge fully, whenever possible, the exposure resulting from receivables,
payables, and securities denominated in currencies different from the subsidiary\u2019s functional currency.
Certain of our subsidiaries\u2019 functional currency is different than the U.S. dollar, which is the Group presentation
currency. The income statements of those subsidiaries are converted into U.S. dollars using the average exchange rate
for the period, and while revenues and margins are unchanged in local currency, changes in exchange rates may lead
to effects on the converted balances of revenues, costs and the results reported in U.S. dollars.
The assets and liabilities of consolidated companies whose functional currency is different from the U.S. dollar may
acquire converted values in U.S. dollars which differ as a function of the fluctuation in exchange rates. The effects of
these changes are recognized directly in the Cumulative Translation Adjustments reserve, included in Other
comprehensive income (see Note 21 \"Equity\").
We monitor our principal exposure to translation exchange risk, although there was no specific hedging in place at
December\u00a031, 2022.
There were no substantial changes in 2022 in the nature or structure of exposure to currency risk or in our hedging
policies.
Sensitivity analysis
The potential loss in fair value of derivative financial instruments held for currency risk management (currency swaps/
forwards, currency options, interest rate and currency swaps) at December 31, 2022 resulting from a hypothetical
change of 10% in the exchange rates amounted to approximately $276 million ($344 million at December 31,\u00a02021).
The valuation model for currency options assumes that market volatility at year-end remains unchanged.
Receivables, payables, and future trade flows whose hedging transactions have been analyzed were not considered in
this analysis. It is reasonable to assume that changes in exchange rates will produce the opposite effect, of an equal or
greater amount, on the underlying transactions that have been hedged.
Interest rate risk
Our Industrial Activities make use of external funds obtained in the form of financing and invest in monetary and
financial market instruments. In addition, we sell receivables. Changes in market interest rates can affect the cost of
financing, including the sale of receivables, or the return on investments of funds, causing an impact on the level of net
financial expenses incurred by us.
In addition, Financial Services provides loans (mainly to customers and dealers), financed primarily using various forms
of external borrowings or asset-backed financing (e.g., securitization of receivables). 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/
funding obtained, changes in the current level of interest rates can affect our profit/(loss).
In order to mitigate these risks, we use interest rate derivative financial instruments, mainly interest rate swaps and
forward rate agreements.
Interest rate benchmark reform
Certain existing benchmark InterBank Offered Rates (IBORs) such as USD LIBOR will be reformed by the authority and
gradually replaced with alternative benchmark rates. Despite the uncertainty around the timing and precise nature of
these changes, the existing benchmark interest rates are still applied as reference rates.
To transition existing contracts and agreements that reference USD LIBOR to an alternative benchmark rate (SOFR),
adjustments for term differences and credit differences might need to be applied to the alternative benchmark rate, to
enable the two benchmark rates to be economically equivalent on transition.
The Group has issued US dollar\u2011denominated fixed rate debt which it fair value hedges using sterling fixed to US dollar
fixed to USD LIBOR interest rate swaps. At December 31, 2022, the notional amount of hedging instruments directly
affected by the reform of benchmark interest rates is $1,220 million.
Group Treasury is managing the Group\u2019s USD LIBOR transition plan. The greatest change will be amendments to the
contractual terms of the USD LIBOR-referenced fixed-rate debt and the corresponding update of the hedge
designation.
In calculating the change in fair value attributable to the hedged risk of fixed-rate debt, the Group has made the
following assumptions that reflect its current expectations:
\u25aathe fixed-rate debt will move to SOFR at the beginning of 2022 (or at July 2023 if the new consultations were
confirmed) and the spread will be similar to the spread included in the interest rate swap used as the hedging
instrument;
\u25aano other changes to the terms of the fixed-rate debt are anticipated; and
\u25aathe Group does not expect any material impact deriving from the replacement of benchmark interest rate.
Sensitivity analysis
In assessing the potential impact of changes in interest rates, we separate fixed rate financial instruments (for which the
impact is assessed in terms of fair value) from floating rate financial instruments (for which the impact is assessed in
terms of cash flows).
The fixed rate financial instruments used by us consist of retail receivables, debt, ABS securities, and other instruments.
The potential loss in fair value of fixed rate financial instruments (including the effect of interest rate derivative financial
instruments) held at December 31, 2022, resulting from a hypothetical, unfavorable and instantaneous change of
10%\u00a0in market interest rates, would have been approximately $29 million ($20 million at December 31,\u00a02021).
Floating rate financial instruments consist principally of cash and cash equivalents, wholesale receivables, debt, and
ABS securities. The effect of the sale of receivables is also considered in the sensitivity analysis as well as the effect of
hedging derivative instruments.
A hypothetical change of 10% 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 have caused increased
net expenses before taxes, on an annual basis, of approximately $15 million ($3 million at December 31,\u00a02021).
This analysis is based on the assumption that there is a hypothetical change of 10% in interest rates across
homogeneous categories. A homogeneous category is defined on the basis of the currency in which the financial assets
and liabilities are denominated.
Other risks on derivative financial instruments
We have entered derivative contracts linked to commodity prices to hedge specific exposures on supply contracts.
Sensitivity analysis
In the event of a hypothetical change of 10% in the underlying raw materials prices, the potential loss in fair value of
outstanding derivative financial instruments at December 31, 2022 linked to commodity prices would not have been
significant (not significant at December 31, 2021).
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"value": "
Other current receivables
At December 31, 2022, Other current receivables mainly consisted of other tax receivables for VAT and other indirect
taxes of $308\u00a0million ($638 million at December 31, 2021), and receivables from employees of $15 million ($11 million
at December\u00a031,\u00a02021).
Other current financial assets
At December 31, 2022, and 2021, Other current financial assets primarily consist of current securities and short-term
deposits and investments.
Refer to Note 30 \u201cInformation on financial risks\u201d for additional information on the credit risk to which CNH Industrial is
exposed and the way it is managed by the Group.
",
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"value": "
Other current receivables
At December 31, 2022, Other current receivables mainly consisted of other tax receivables for VAT and other indirect
taxes of $308\u00a0million ($638 million at December 31, 2021), and receivables from employees of $15 million ($11 million
at December\u00a031,\u00a02021).
Other current financial assets
At December 31, 2022, and 2021, Other current financial assets primarily consist of current securities and short-term
deposits and investments.
Refer to Note 30 \u201cInformation on financial risks\u201d for additional information on the credit risk to which CNH Industrial is
exposed and the way it is managed by the Group.
",
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"value": "
18. Derivative assets and Derivative liabilities
These items consist of derivative financial instruments measured at fair value at the balance sheet date.
CNH Industrial utilizes derivative instruments to mitigate its exposure to interest rate and foreign currency exposures.
Derivatives used as hedges are effective at reducing the risk associated with the exposure being hedged and are
designated as a hedge at the inception of the derivative contract. CNH Industrial does not hold or enter into derivative
or other financial instruments for speculative purposes. The credit and market risk related to derivatives is reduced
through diversification among various counterparties, utilizing mandatory termination clauses and/or collateral support
agreements. Derivative instruments are generally classified as Level 2 in the fair value hierarchy.
In accordance with IFRS 9, derivative financial instruments qualify for hedge accounting only when, at the inception of
the hedge, there is formal designation and documentation of the hedging relationship, there is an economic relationship
between the hedging instrument and the hedged item, credit risk does not dominate the value changes that result from
the economic relationship, and the hedging relationship\u2019s hedging ratio reflects the actual quantity of the hedging
instrument and the hedged item. Hedge effectiveness is determined at the inception of the hedge relationship and
through periodic prospective effectiveness assessments to ensure that an economic relationship exists between the
hedged item and hedging instrument.
Further description of the risk management exposures and strategies for interest rate and currency risk is presented in
Note\u00a030 \u201cInformation on financial risks\u201d, paragraph \u201cMarket risk\u201d together with sensitivity analysis assessing the
potential impact of changes in interest rates and foreign currencies.
Foreign Exchange Derivatives
CNH Industrial has entered into foreign exchange forward contracts and swaps in order to manage and preserve the
economic value of cash flows in a currency different from the functional currency of the relevant legal entity. CNH
Industrial conducts its business on a global basis in a wide variety of foreign currencies and hedges foreign currency
exposures arising from various receivables, liabilities, and expected inventory purchases and sales. Derivative
instruments utilized to hedge the foreign currency risk associated with anticipated inventory purchases and sales in
foreign currencies are designated as cash flow hedges. Gains and losses on these instruments are deferred in
accumulated other comprehensive income/(loss) and recognized in earnings when the related transaction occurs.
For hedging cash flows in a currency different from the functional currency, the hedge relationship reflects the hedge
ratio of 1:1, which means that relationship is characterized by the value of the hedging instrument and the value of the
hedged item moving in the opposite direction as a result of the common underlying of hedged risk.
The main sources of hedge ineffectiveness are:
\u25aathe effect of the counterparty and the Group\u2019s own credit risk on the fair value of the foreign exchange derivatives,
which is not reflected in the change in the fair value of the hedged cash flow attributable to the change in the
exchange rates, and
\u25aachanges in timing of the hedged transaction.
Ineffectiveness related to these hedge relationships is recognized in the consolidated income statement in the line
\u201cFinancial income/(expenses)\u201d and was not significant for all periods presented. The maturity of these instruments does
not exceed 24 months and the after-tax gains/(losses) deferred in accumulated other comprehensive income/(loss) that
will be recognized in net revenues and cost of sales over the next twelve months, assuming foreign exchange rates
remain unchanged, is approximately $-17 million. If a derivative instrument is terminated because the hedge
relationship is no longer effective or because the hedged item is a forecasted transaction that is no longer determined
to be probable, the cumulative amount recorded in accumulated other comprehensive income/(loss) is recognized
immediately in earnings. Such amounts were insignificant in all periods presented.
CNH Industrial also uses forwards and swaps to hedge certain assets and liabilities denominated in foreign currencies.
Such derivatives are considered economic hedges and not designated as hedging instruments. The changes in the fair
values of these instruments are recognized directly in income in \u201cFinancial income/(expenses)\u201d and are expected to
offset the foreign exchange gains or losses on the exposures being managed.
All of CNH Industrial\u2019s foreign exchange derivatives are considered Level 2 as the fair value is calculated using market
data input and can be compared to actively traded derivatives.
Interest Rate Derivatives
CNH Industrial has entered into interest rate derivatives (swaps and caps) in order to manage interest rate exposures
arising in the normal course of business. Interest rate derivatives that have been designated as cash flow hedges are
being used by CNH Industrial to mitigate the risk of rising interest rates related to existing debt and anticipated issuance
of fixed-rate debt in future periods. Gains and losses on these instruments, to the extent that the hedge relationship has
been effective, are deferred in other comprehensive income/(loss) and recognized in \u201cFinancial income/(expenses)\u201d
over the period in which CNH Industrial recognizes interest expense on the related debt. The after-tax gains (losses)
deferred in other comprehensive income/(loss) that will be recognized in interest expense over the next twelve months
are insignificant.
Interest rate derivatives that have been designated as fair value hedge relationships have been used by CNH Industrial
to mitigate the volatility in the fair value of existing fixed rate bonds and medium-term notes due to changes in floating
interest rate benchmarks. Gains and losses on these instruments are recorded in \u201cFinancial income/(expenses)\u201d in the
period in which they occur and an offsetting gain or loss is also reflected in \u201cFinancial income/(expenses)\u201d based on
changes in the fair value of the debt instrument being hedged due to changes in floating interest rate benchmarks.
For hedging interest rate exposures, the hedge relationship reflects the hedge ratio 1:1, which means that relationship
is characterized by the value of the hedging instrument and the value of the hedged item that move in the opposite
direction as a result of the common underlying of hedged risk.
The main sources of hedge ineffectiveness are:
\u25aathe effect of the counterparty and the Group\u2019s own credit risk on the fair value of the swaps, which is not reflected in
the change in the fair value of the hedged cash flow attributable to the change in the interest rates, and
\u25aadifferences in repricing dates between the swaps and the borrowings.
Any ineffectiveness is recorded in \u201cFinancial income/(expenses)\u201d in the consolidated income statement and its amount
was insignificant for all periods presented.
CNH Industrial also enters into offsetting interest rate derivatives with substantially similar terms that are not designated
as hedging instruments, to mitigate interest rate risk related to CNH Industrial\u2019s committed asset-backed facilities.
Unrealized and realized gains and losses resulting from fair value changes in these instruments are recognized directly
in income. Net gains and losses on these instruments were insignificant for the years ending December 31, 2022 and
2021. All of CNH Industrial\u2019s interest rate derivatives outstanding as of December 31, 2022 and 2021 are considered
Level 2. The fair market value of these derivatives is calculated using market data input and can be compared to
actively traded derivatives.
31. Fair value measurement
Fair value levels presented below are described in the \u201cSignificant accounting policies \u2013 Fair value measurement\u201d
section of these Notes.
Assets and liabilities measured at fair value on a recurring basis
The following table presents, for each of the fair value hierarchy levels, the assets and liabilities that are measured at
fair value on a recurring basis at December 31, 2022 and 2021:
Description of the valuation techniques used to determine the fair value of derivative financial instruments is included in
Note 18 \u201cDerivative assets and Derivative liabilities\u201d.
Assets and liabilities not measured at fair value
The estimated fair values for financial assets and liabilities that are not measured at fair value in the statement of
financial position at December 31, 2022 and 2021 are as follows:
| | | | | | |
| | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Other receivables from financing activities | | | | | | |
Total Receivables from financing activities | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Payables represented by securities | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
(*) The 2021 data have been restated to exclude Iveco Group Business, consistent with Iveco Group's classification as a Discontinued Operations as requested by the IFRS 5 - Non-current Assets held for
sale and Discontinued Operations. Iveco Group's results are presented as a single line item within the Consolidated Statement of Comprehensive Income for the year ended December 31, 2021. The spin-off
of Iveco Group took effect on January 1, 2022 (refer to the Section - \"Scope of Consolidation - Discontinued Operations - Iveco Group Business\").
The fair values of CNH Industrial\u2019s derivatives as of December\u00a031, 2022 and 2021 in the consolidated statement of
financial position are recorded as follows:
| | | | |
| | |
| | | | |
Derivatives designated as hedging instruments | | | | |
| | | | |
Interest rate derivatives | | | | |
| | | | |
| | | | |
| | | | |
Foreign exchange derivatives | | | | |
Interest rate derivatives | | | | |
| | | | |
Total Derivatives designated as hedging instruments | | | | |
| | | | |
Derivatives not designated as hedging instruments | | | | |
Foreign exchange derivatives | | | | |
Interest rate derivatives | | | | |
Total Derivatives not designated as hedging instruments | | | | |
Elimination of net Continuing Operations balances towards Discontinued Operations | | | | |
Derivative assets/(liabilities) | | | | |
The following table provides the effect of hedged items designated in fair value hedging relationships:
| | | | | |
| | | | | |
| Carrying amount of the hedged item | Accumulated amount of fair value hedge adjustments included in the carrying amounts | Fair value changes used as a basis to calculate hedge ineffectiveness |
| | | | | |
| | | | | |
| | | | | |
sale and Discontinued Operations. Iveco Group's results are presented as a single line item within the Consolidated Statement of Comprehensive Income for the year ended December 31, 2021. The spin-off
of Iveco Group took effect on January 1, 2022 (refer to the Section - \"Scope of Consolidation - Discontinued Operations - Iveco Group Business\").
The following table provides further information about the effect of cash flow hedges on the consolidated equity of CNH
Industrial:
| | | |
| | | Total cash flow hedge reserve |
| | | |
Gains/(losses) recognized in Other comprehensive income | | | |
Gains/(losses) reclassified from Other comprehensive income in Profit or loss | | | |
| | | |
| | | |
| | | |
Gains/(losses) recognized in Other comprehensive income | | | |
Gains/(losses) reclassified from Other comprehensive income in Profit or loss | | | |
| | | |
| | | |
The following table provides an analysis by due date of the notional amount of outstanding derivative financial
instruments at December 31, 2022 and 2021:
| | | | | | | | |
| | |
| | due between one and five years | | | | due between one and five years | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
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The following table provides an analysis by due date of the notional amount of outstanding derivative financial
instruments at December 31, 2022 and 2021:
| | | | | | | | |
| | |
| | due between one and five years | | | | due between one and five years | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Debt
An analysis of debt by nature and due date is as follows:
| | | | | | | | |
| | |
| | Due between one and five years | | | | Due between one and five years | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Payables represented by securities | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Amounts shown are readily convertible into cash and are subject to an insignificant risk of changes in value. Restricted
cash mainly includes bank deposits that may be used exclusively for the repayment of the debt relating to
securitizations classified as Asset-backed financing.
The credit risk associated with Cash and cash equivalents is considered not significant, because it mainly relates to
deposits spread across primary national and international financial institutions.
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"value": "
20. Assets and Liabilities held for sale
This item may be analyzed as follows at December 31, 2022 and 2021:
| | |
| | |
| | |
| | |
Liabilities held for sale | | |
Assets and Liabilities held for sale decreased of $490 million and $125 million, respectively, compared to December 31,
2021. The decrease was primarily due to the sale of the Engineered Films and Aerostar Divisions, acquired in the
context of Raven acquisition and in a residual way to the sale of a property of CNH Industrial Canada Ltd.",
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21. EquityShare capital
The Articles of Association of CNH Industrial N.V. provide for authorized share capital of \u20ac40 million, divided into 2
billion common shares and 2 billion special voting shares to be held with associated common shares, each with a per
share par value of \u20ac0.01. As of December 31, 2022, the Company\u2019s share capital was \u20ac18 million (equivalent to $25
million), fully paid-in, and consisted of 1,364,400,196 common shares (1,344,240,971 common shares outstanding and
20,159,225 common shares held in treasury by the Company as described in the following section) and 396,474,276
special voting shares (371,072,953 special voting shares outstanding, net of 25,401,323 special voting shares held in
treasury by the Company as described in the section below).
Changes in the composition of the share capital of CNH Industrial during 2022 and 2021 are as follows:
| | | | | | | | | |
| CNH Industrial N.V. common shares issued | | CNH Industrial N.V. common shares outstanding | CNH Industrial N.V. loyalty program special voting shares issued | | CNH Industrial N.V. loyalty program special voting shares outstanding | Total Shares issued by CNH Industrial N.V. | | Total CNH Industrial N.V. outstanding shares |
Total CNH Industrial N.V. shares at\u00a0 December 31, 2020 | | | | | | | | | |
| | | | | | | | | |
(Purchases)/Sales of treasury shares | | | | | | | | | |
Total CNH Industrial N.V. shares at December 31, 2021 | | | | | | | | | |
| | | | | | | | | |
(Purchases)/Sales of treasury shares | | | | | | | | | |
Total CNH Industrial N.V. shares at December 31, 2022 | | | | | | | | | |
During the year ended December 31, 2022 and 2021, 145,297 and 109,904 special voting shares, respectively, were
acquired for no consideration by the Company following the de-registration of the corresponding number of qualifying
common shares from the Loyalty Register, net of transfer and allocation of special voting shares in accordance with the
Special Voting Shares - Terms and Conditions.
Furthermore, during the years ended December 31, 2022 and 2021, the Company delivered 0.6 million and 2.2 million
common shares, respectively, under the Company\u2019s stock compensation plan, primarily due to the vesting or exercise
of share-based awards. See paragraph below \u201cShare-based compensation\u201d for further discussion.
The Company is required to maintain a special capital reserve to be credited against the share premium exclusively for
the purpose of facilitating any issuance or cancellation of special voting shares. The special voting shares do not carry
any entitlement to the balance of the special capital reserve. The Board of Directors is authorized to resolve upon (i)
any distribution out of the special capital reserve to pay up special voting shares or (ii) re-allocation of amounts to credit
or debit the special capital reserve against or in favor of the share premium reserve.
The Company is required to maintain a separate dividend reserve for the special voting shares. The special voting
shares shall not carry any entitlement to any other reserve of the Company. Any distribution out of the special voting
shares dividend reserve or the partial or full release of such reserve will require a prior proposal from the Board of
Directors and a subsequent resolution of the general meeting of holders of special voting shares.
From the profits, shown in the annual accounts, as adopted, such amounts shall be reserved as the Board of Directors
may determine.
The profits remaining thereafter shall first be applied to allocate and add to the special voting shares dividend reserve
an amount equal to one percent (1%) of the aggregate nominal amount of all outstanding special voting shares. The
calculation of the amount to be allocated and added to the special voting shares dividend reserve shall occur on a time-
proportionate basis. If special voting shares are issued during the financial year to which the allocation and addition
pertains, then the amount to be allocated and added to the special voting shares dividend reserve in respect of these
newly issued special voting shares shall be calculated as from the date on which such special voting shares were
issued until the last day of the financial year concerned. The special voting shares shall not carry any other entitlement
to the profits.
Any profits remaining thereafter shall be at the disposal of the general meeting of shareholders for distribution of
dividend on the common shares only subject to the provision that the distribution of profits shall be made after the
adoption of the annual accounts, from which it appears that the same is permitted.
Subject to a prior proposal of the Board of Directors, the general meeting of shareholders may declare and pay
dividends in U.S. dollars. Furthermore, subject to the approval of the general meeting of shareholders and the Board of
Directors having been designated as the body competent to pass a resolution for the issuance of shares in accordance
with Article\u00a05 of the Articles of Association, the Board of Directors may decide that a distribution shall be made in the
form of shares or that shareholders shall be given the option to receive a distribution either in cash or in the form of
shares.
On February 2, 2023, the Company announced that its Board of Directors intends to recommend and propose dividend
of \u20ac0.36 per common share, totaling approximately \u20ac483\u00a0million (equivalent to approximately $511 million, translated at
the exchange rate reported by the European Central Bank on February 25, 2022), subject to shareholder approval.
On March 3, 2022, the Board of Directors of CNH Industrial N.V. recommended and proposed to the Company\u2019s
shareholders that the Company declare a dividend of \u20ac0.28 per common share, totaling approximately \u20ac380 million
(equivalent to approximately $412 million, translated at the exchange rate reported by the European Central Bank on
April 20, 2022). The proposal was approved by the Company\u2019s shareholders at the AGM that was held on April 13,
2022.
The Company shall only have power to make distributions to shareholders and other persons entitled to distributable
profits to the extent the Company's equity exceeds the sum of the paid-up portion of the share capital and the reserves
that must be maintained in accordance with provision of law. No distribution of profits may be made to the Company
itself for shares that the Company holds in its own share capital.
The Board of Directors has the power to declare one or more interim dividends, provided that the requirements of the
Article 22 paragraph 5 of the Articles of Association are duly observed as evidenced by an interim statement of assets
and liabilities as referred to in Article 2:105 paragraph 4 of the Dutch Civil Code and provided further that the policy of
the Company on additions to reserves and dividends is duly observed. The provisions of the Article 22 paragraphs 2
and 3 of the Articles of Association shall apply mutatis mutandis.
The Board of Directors may determine that dividends or interim dividends, as the case may be, shall be paid, in whole
or in part, from the Company's share premium reserve or from any other reserve, provided that payments from reserves
may only be made to the shareholders that are entitled to the relevant reserve upon the dissolution of the Company.
Dividends and other distributions of profit shall be made payable in the manner and at such date(s) - within four weeks
after declaration thereof - and notice thereof shall be given, as the general meeting of shareholders, or in the case of
interim dividends, the Board of Directors shall determine, provided, however, that the Board of Directors shall have the
right to determine that each payment of annual dividends in respect of shares be deferred for a period not exceeding
five consecutive annual periods. Dividends and other distributions of profit, which have not been collected within five
years and one day after the same have become payable, shall become the property of the Company.
In the event of a winding-up, a resolution to dissolve the Company can only be passed by a general meeting of
shareholders pursuant to a prior proposal of the Board of Directors. In the event a resolution is passed to dissolve the
Company, the Company shall be wound-up by the Board of Directors, unless the general meeting of shareholders
would resolve otherwise.
The general meeting of shareholders shall appoint and decide on the remuneration of the liquidators.
Until the winding-up of the Company has been completed, the Articles of Association of the Company shall to the extent
possible, remain in full force and effect.
Effects of the Demerger on the share capital of CNH Industrial N.V.
On January 1, 2022, the share capital of CNH Industrial N.V. did not change as result of the Demerger. CNH Industrial
N.V. also did not receive any shares in Iveco Group N.V. as a part of the Demerger, as the portion of the shares held in
treasury buy CNH Industrial N.V. was not eligible to be part of the Demerger and consequent allotment of Iveco Group
N.V. shares.
Loyalty voting program
In order to reward long-term ownership of the Company\u2019s common shares and promote stability of its shareholder base,
the Articles of Association of CNH Industrial N.V. provide for a loyalty-voting program that grants eligible long-term
shareholders the equivalent of two votes for each CNH Industrial N.V. common share that they hold. This has been
accomplished through the issuance of special voting shares.
A shareholder may at any time elect to participate in the loyalty voting program by requesting the registration of all or
some of the common shares held by such shareholder in a separate register (the \u201cLoyalty Register\u201d) of the Company. If
such common shares have been registered in the Loyalty Register for an uninterrupted period of three years in the
name of the same shareholder, such shares will become \u201cQualifying Common Shares\u201d and the relevant shareholder will
be entitled to receive one special voting share for each such Qualifying Common Share which can be retained only for
so long as the shareholder retains the associated common share and registers it in the Loyalty Register.
Shareholders are not required to pay any amount to the Company in connection with the allocation of the special voting
shares.
The common shares are freely transferable, while, special voting shares are transferable exclusively in limited
circumstances and they are not listed on the NYSE or the Euronext Milan. In particular, at any time, a holder of common
shares that are Qualifying Common Shares who wants to transfer such common shares other than in limited specified
circumstances (e.g., transfers to affiliates or relatives through succession, donation or other transfers) must request a
de-registration of such Qualifying Common Shares from the Loyalty Register. After de-registration from the Loyalty
Register, such common shares no longer qualify as Qualifying Common Shares and, as a result, the holder of such
common shares is required to transfer the special voting shares associated with the transferred common shares to the
Company for no consideration.
The special voting shares have minimal economic entitlements as the purpose of the special voting shares is to grant
long-term shareholders with an extra voting right by means of granting an additional special voting share, without
granting such shareholders with any additional economic rights. However, as a matter of Dutch law, such special voting
shares cannot be fully excluded from economic entitlements. Therefore, the Articles of Association provide that only a
minimal dividend accrues to the special voting shares, which is not distributed, but allocated to a separate special
dividend reserve. The impact of this special dividend reserve on the earnings per share of the common shares is not
material.
Treasury shares
In order to maintain the necessary operating flexibility over an adequate time period, including the implementation of the
program in place, on April 13, 2022, the Annual General Meeting (\u201cAGM\u201d) granted to the Board of Directors the authority
to acquire common shares in the capital of the Company through stock exchange trading on the Euronext Milan and the
NYSE or otherwise for a period of 18 months (i.e., up to and including October 12, 2023). Under such authorization the
Board\u2019s authority is limited to a maximum of up to 10% of the issued common shares as of the date of the AGM and, in
compliance with applicable rules and regulations, subject to a maximum price per common share equal to the average
of the highest price on each of the five trading days prior to the date of acquisition, as shown in the Official Price List of
the Euronext Milan or NYSE (as the case may be) plus 10% (maximum price) and to a minimum price per common
share equal to the average of the lowest price on each of the five trading days prior to the date of acquisition, as shown
in the Official Price List of the Euronext Milan or NYSE (as the case may be) minus 10% (minimum price).
Neither the renewal of the authorization, nor the launch of any program obliges the Company to buy-back any common
shares. The launch of any new program will be subject to a further resolution of the Board of Director. In any event,
such programs may be suspended, discontinued or modified at any time for any reason and without previous notice, in
accordance with applicable laws and regulations.
During the year ended December 31, 2022, the Company repurchased 12,390,052 shares of its common stock on the
Euronext Milan and on multilateral trading facilities (\"MTFs\") under the buy-back program. As of December 31, 2022,
the Company held 20.2 million common shares in treasury, net of transfers of common shares to fulfill its obligations
under its stock compensation plans, at an aggregate cost of $227 million. Depending on market and business
conditions and other factors, the Company may continue or suspend purchasing its common stock at any time without
notice.
At the 2023 Annual General Meeting of Shareholders, the Board of Directors intends to recommend to the Company\u2019s
shareholders the renewal of the authorization to repurchase up to a maximum of 10% of the Company\u2019s issued
common shares for further 18 months.
During the year ended December 31, 2022, the Company acquired, for no consideration, 145,297 special voting shares
following the de-registration of qualifying common shares from the Loyalty Register, net of the transfer and allocation of
special voting shares to those shareholders whose qualifying common shares became eligible to receive special voting
shares after the uninterrupted three-year registration period in the Loyalty Register. As of December 31, 2022, the
Company held 25.4 million special voting shares in treasury.
Effects of the Demerger on the treasury shares held CNH Industrial N.V.
On January 1, 2022, CNH Industrial N.V. did not receive any shares in Iveco Group N.V. as a part of the Demerger as
the portion of the shares held in treasury by CNH Industrial N.V. was not eligible to be part of the Demerger and
consequent allotment of Iveco Group N.V. shares.
Capital reserves
At December 31, 2022 capital reserves, amounting to $332 million ($3,294 million at December 31, 2021), mainly
consisted of the share premium deriving from the merger occurred in 2013 between Fiat Industrial and its majority
owned subsidiary CNH Global.
Effects of the Demerger on the capital reserves of CNH Industrial N.V.
As a consequence of the Demerger, on January 1, 2022, capital reserves of CNH Industrial N.V. decreased by $2,593
million (\u20ac2,289 million).
Earnings reserves
Earnings reserves, amounting to $9,534 million at December 31, 2022 ($7,795 million at December 31, 2021), mainly
consist of retained earnings and profits attributable to the owners of the parent.
Effects of the Demerger on the earnings reserves of CNH Industrial N.V.
On January 1, 2022, there were no impacts on earnings reserves as a results of the Demerger.
Other comprehensive income/(loss)
Other comprehensive income/(loss) consisted of the following:
| | |
| | |
Other comprehensive income/(loss) that will not be reclassified subsequently to profit or loss: | | |
\u00a0 Gains/(losses) on the remeasurement of defined benefit plans | | |
\u00a0 Items related to Discontinued Operations | | |
Total Other comprehensive income/(loss) that will not be reclassified subsequently to profit or loss (A) | | |
| | |
Other comprehensive income/(loss) that may be reclassified subsequently to profit or loss: | | |
\u00a0 Gains/(losses) on cash flow hedging instruments arising during the period | | |
\u00a0 (Gains)/losses on cash flow hedging instruments reclassified to profit or loss | | |
Gains/(losses) on cash flow hedging instruments | | |
| | |
\u00a0 Exchange gains/(losses) on translating foreign operations arising during the period | | |
\u00a0 Exchange (gains)/losses on translating foreign operations reclassified to profit or loss | | |
Exchange gains/(losses) on translating foreign operations | | |
| | |
\u00a0 Share of Other comprehensive income/(loss) of entities accounted for using the equity method \u00a0 arising during the period | | |
\u00a0 Reclassification adjustment for the share of Other comprehensive income/(loss) of entities \u00a0 accounted for using the equity method | | |
Share of Other comprehensive income/(loss) of entities accounted for using the equity method | | |
\u00a0 Items related to Discontinued Operations | | |
Total Other comprehensive income/(loss) that may be reclassified subsequently to profit or loss (B) | | |
| | |
Tax effect - Discontinued Operations (D) | | |
Total Other comprehensive income/(loss), net of tax (A) + (B) + (C) + (D) | | |
The income tax effect for each component of Other comprehensive income/(loss) consisted of the following:
| | | | | | |
| | | | | | |
| | | | | | |
Other comprehensive income/(loss) that will not be reclassified subsequently to profit or loss: | | | | | | |
Gains/(losses) on the remeasurement of defined benefit plans | | | | | | |
Items related to Discontinued Operations | | | | | | |
Total Other comprehensive income/(loss) that will not be reclassified subsequently to profit or loss | | | | | | |
| | | | | | |
Other comprehensive income/(loss) that may be reclassified subsequently to profit or loss: | | | | | | |
Gains/(losses) on cash flow hedging instruments | | | | | | |
Exchange gains/(losses) on translating foreign operations | | | | | | |
Share of Other comprehensive income/(loss) of entities accounted for using the equity method | | | | | | |
Items related to Discontinued Operations | | | | | | |
Total Other comprehensive income/(loss) that may be reclassified subsequently to profit or loss | | | | | | |
Total Other comprehensive income/(loss) | | | | | | |
that must be maintained in accordance with provision of law. No distribution of profits may be made to the Company
itself for shares that the Company holds in its own share capital.
The Board of Directors has the power to declare one or more interim dividends, provided that the requirements of the
Article 22 paragraph 5 of the Articles of Association are duly observed as evidenced by an interim statement of assets
and liabilities as referred to in Article 2:105 paragraph 4 of the Dutch Civil Code and provided further that the policy of
the Company on additions to reserves and dividends is duly observed. The provisions of the Article 22 paragraphs 2
and 3 of the Articles of Association shall apply mutatis mutandis.
The Board of Directors may determine that dividends or interim dividends, as the case may be, shall be paid, in whole
or in part, from the Company's share premium reserve or from any other reserve, provided that payments from reserves
may only be made to the shareholders that are entitled to the relevant reserve upon the dissolution of the Company.
Dividends and other distributions of profit shall be made payable in the manner and at such date(s) - within four weeks
after declaration thereof - and notice thereof shall be given, as the general meeting of shareholders, or in the case of
interim dividends, the Board of Directors shall determine, provided, however, that the Board of Directors shall have the
right to determine that each payment of annual dividends in respect of shares be deferred for a period not exceeding
five consecutive annual periods. Dividends and other distributions of profit, which have not been collected within five
years and one day after the same have become payable, shall become the property of the Company.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfDividendsExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV81MjYvZnJhZzo0MTdmN2UyYWNlZjA0ZDc0YjM3OGVkOTI3YzRjZDE5Zi90ZXh0cmVnaW9uOjQxN2Y3ZTJhY2VmMDRkNzRiMzc4ZWQ5MjdjNGNkMTlmXzMyOTg1MzQ4OTg0Nzk_f6328cd2-c2a7-44c6-befe-5da9433b3960": {
"value": "0.36",
"decimals": 2,
"dimensions": {
"concept": "ifrs-full:DividendsProposedOrDeclaredBeforeFinancialStatementsAuthorisedForIssueButNotRecognisedAsDistributionToOwnersPerShare",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00",
"unit": "iso4217:USD/xbrli:shares"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV81MjYvZnJhZzo0MTdmN2UyYWNlZjA0ZDc0YjM3OGVkOTI3YzRjZDE5Zi90ZXh0cmVnaW9uOjQxN2Y3ZTJhY2VmMDRkNzRiMzc4ZWQ5MjdjNGNkMTlmXzMyOTg1MzQ4OTg0NjU_adcc9659-7661-47d2-9f05-00f9ce2e6e28": {
"value": "483000000",
"decimals": -6,
"dimensions": {
"concept": "ifrs-full:DividendsProposedOrDeclaredBeforeFinancialStatementsAuthorisedForIssueButNotRecognisedAsDistributionToOwners",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00",
"unit": "iso4217:USD"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV81MjYvZnJhZzo0MTdmN2UyYWNlZjA0ZDc0YjM3OGVkOTI3YzRjZDE5Zi90ZXh0cmVnaW9uOjQxN2Y3ZTJhY2VmMDRkNzRiMzc4ZWQ5MjdjNGNkMTlmXzMyOTg1MzQ4OTg0OTA_326a4502-7728-49c4-bfd5-67c716144257": {
"value": "0.28",
"decimals": 2,
"dimensions": {
"concept": "ifrs-full:DividendsRecognisedAsDistributionsToOwnersPerShare",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00",
"unit": "iso4217:USD/xbrli:shares"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV81MjYvZnJhZzo0MTdmN2UyYWNlZjA0ZDc0YjM3OGVkOTI3YzRjZDE5Zi90ZXh0cmVnaW9uOjQxN2Y3ZTJhY2VmMDRkNzRiMzc4ZWQ5MjdjNGNkMTlmXzMyOTg1MzQ4OTg0NTU_62cf1392-259b-49b8-bb50-dc4e3e9ae445": {
"value": "
Policies and processes for managing capital
The objectives identified by the Group for managing capital are to create value for shareholders as a whole, safeguard
business continuity and support the growth of the Group. As a result, the Group endeavors to maintain an adequate
level of capital that at the same time enables it to obtain a satisfactory economic return for its shareholders and
maintain access to external sources of funds, including by means of achieving an adequate rating.
The Group regularly monitors its debt/equity ratio and in particular the level of net debt and the generation of cash from
Industrial Activities.
To reach these objectives the Group aims at a continuous improvement in the profitability of the business in which it
operates. Further, in general, the Group may sell part of its assets to reduce the level of its debt, while the Board of
Directors may make proposals to shareholders in general meeting to reduce or increase share capital or, where
permitted by law, to distribute reserves.
The Company shall at all times have the authority to acquire fully paid-up shares in its own share capital, provided that
such acquisition is made for no consideration (om niet).
The Company shall also have authority to acquire fully paid-up shares in its own share capital for consideration, if:
\u25aathe general meeting of shareholders has authorized the Board of Directors to make such acquisition \u2013 which
authorization shall be valid for no more than eighteen months \u2013 and has specified the number of shares which may
be acquired, the manner in which they may be acquired and the limits within which the price must be set;
\u25aathe Company's equity, after deduction of the acquisition price of the relevant shares, is not less than the sum of the
paid-up portion of the share capital and the reserves that have to be maintained by provision of law; and
\u25aathe aggregate par value of the shares to be acquired and the shares in its share capital the Company already holds,
holds as pledgee or are held by a subsidiary, does not amount to more than one half of the aggregate par value of
the issued share capital.
If no annual accounts have been confirmed and adopted when more than six months have expired after the end of any
financial year, then the Group is not allowed any acquisition under Dutch law.
No authorization shall be required, if the Company acquires its own shares for the purpose of transferring the same to
directors or employees of the Company or a Group company as defined in Article 2:24b of the Dutch Civil Code, under
a scheme applicable to such employees. Such own shares must be officially listed on a price list of an exchange.
The preceding provisions shall not apply to shares which the Company acquires under universal title of succession
(algemene titel).
No voting rights may be exercised in the general meeting of shareholders for any share held by the Company or any of
its subsidiaries. Beneficiaries of a life interest on shares that are held by the Company and its subsidiaries are not
excluded from exercising the voting rights provided that the life interest was created before the shares were held by the
Company or any of its subsidiaries. The Company or any of its subsidiaries may not exercise voting rights for shares in
respect of which it holds a usufruct.
Any acquisition by the Company of shares that have not been fully paid up shall be void.
Any disposal of shares held by the Company requires approval of the Board of Directors. Such approval shall also
stipulate the conditions of the disposal.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfObjectivesPoliciesAndProcessesForManagingCapitalExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV81MzIvZnJhZzoyNmI1MTBiYmVlZDA0OTY5YWQzMmNiN2NkNzkxMmU2ZS90ZXh0cmVnaW9uOjI2YjUxMGJiZWVkMDQ5NjlhZDMyY2I3Y2Q3OTEyZTZlXzcxNDY4MjU1ODM4NzU_25bc16a3-811e-4a13-9ed7-330a0d3a4e8a": {
"value": "
Treasury shares
In order to maintain the necessary operating flexibility over an adequate time period, including the implementation of the
program in place, on April 13, 2022, the Annual General Meeting (\u201cAGM\u201d) granted to the Board of Directors the authority
to acquire common shares in the capital of the Company through stock exchange trading on the Euronext Milan and the
NYSE or otherwise for a period of 18 months (i.e., up to and including October 12, 2023). Under such authorization the
Board\u2019s authority is limited to a maximum of up to 10% of the issued common shares as of the date of the AGM and, in
compliance with applicable rules and regulations, subject to a maximum price per common share equal to the average
of the highest price on each of the five trading days prior to the date of acquisition, as shown in the Official Price List of
the Euronext Milan or NYSE (as the case may be) plus 10% (maximum price) and to a minimum price per common
share equal to the average of the lowest price on each of the five trading days prior to the date of acquisition, as shown
in the Official Price List of the Euronext Milan or NYSE (as the case may be) minus 10% (minimum price).
Neither the renewal of the authorization, nor the launch of any program obliges the Company to buy-back any common
shares. The launch of any new program will be subject to a further resolution of the Board of Director. In any event,
such programs may be suspended, discontinued or modified at any time for any reason and without previous notice, in
accordance with applicable laws and regulations.
During the year ended December 31, 2022, the Company repurchased 12,390,052 shares of its common stock on the
Euronext Milan and on multilateral trading facilities (\"MTFs\") under the buy-back program. As of December 31, 2022,
the Company held 20.2 million common shares in treasury, net of transfers of common shares to fulfill its obligations
under its stock compensation plans, at an aggregate cost of $227 million. Depending on market and business
conditions and other factors, the Company may continue or suspend purchasing its common stock at any time without
notice.
At the 2023 Annual General Meeting of Shareholders, the Board of Directors intends to recommend to the Company\u2019s
shareholders the renewal of the authorization to repurchase up to a maximum of 10% of the Company\u2019s issued
common shares for further 18 months.
During the year ended December 31, 2022, the Company acquired, for no consideration, 145,297 special voting shares
following the de-registration of qualifying common shares from the Loyalty Register, net of the transfer and allocation of
special voting shares to those shareholders whose qualifying common shares became eligible to receive special voting
shares after the uninterrupted three-year registration period in the Loyalty Register. As of December 31, 2022, the
Company held 25.4 million special voting shares in treasury.
Effects of the Demerger on the treasury shares held CNH Industrial N.V.
On January 1, 2022, CNH Industrial N.V. did not receive any shares in Iveco Group N.V. as a part of the Demerger as
the portion of the shares held in treasury by CNH Industrial N.V. was not eligible to be part of the Demerger and
consequent allotment of Iveco Group N.V. shares.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfTreasurySharesExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
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"value": "332000000",
"decimals": -6,
"dimensions": {
"concept": "ifrs-full:Equity",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2023-01-01T00:00:00",
"ifrs-full:ComponentsOfEquityAxis": "ifrs-full:CapitalReserveMember",
"unit": "iso4217:USD"
}
},
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"value": "3294000000",
"decimals": -6,
"dimensions": {
"concept": "ifrs-full:Equity",
"entity": "scheme:549300WGC2HZ5J67V817",
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Share-based compensation
For the years ended December 31, 2022 and 2021, CNH Industrial recognized total share-based compensation
expense of $87\u00a0million and $78 million, respectively. For the years ended December 31, 2022 and 2021, CNH Industrial
recognized a total tax benefit relating to share-based compensation expense of $11 million and $6 million, respectively.
As of December\u00a031, 2022, CNH Industrial had unrecognized share-based compensation expense related to non-vested
awards of approximately $142 million based on current assumptions related to achievement of specified performance
objectives, when applicable. Unrecognized share-based compensation costs will be recognized over a weighted-
average period of 1.6 years.
CNH Industrial\u2019s equity awards are governed by the CNH Industrial N.V. Equity Incentive Plan (\u201cCNH Industrial EIP\u201d)
and CNH Industrial N.V. Directors\u2019 Compensation Plan (\u201cCNH Industrial DCP\u201d).
At the AGM held on April 16, 2014, the Company\u2019s shareholders approved the adoption of the CNH Industrial EIP, an
umbrella program defining the terms and conditions for any subsequent long-term incentive program. The EIP allows
grants of the following specific types of equity awards to any current or prospective executive director, officer, employee
of, or service provider to, CNH Industrial: stock options, stock appreciation rights, restricted share units, restricted stock,
performance shares or performance share units and other stock-based awards that are payable in cash, common
shares or any combination thereof subject to the terms and conditions established by the Compensation Committee.
In February 2020, the Board of Directors approved the issuance of up to 50 million common shares under the EIP. At
the AGM on April 16, 2020, the Company's shareholders approved the issuance of up to 7 million common shares to
executive directors under the 2021-2023 Long-Term Incentive Plan (described below) in accordance with and under the
EIP.
As part of the Demerger, any awards outstanding under the CNH Industrial EIP, and held by directors, officers and other
employees vesting in 2022 were accelerated in December 2021 and the related equity incentives were issued by CNH
Industrial in CNH Industrial stock. As a result of the Demerger, remaining outstanding awards vesting in 2023 and 2024
were converted to the entity the participant is employed with post Demerger. As such, for Iveco Group employees, the
underlying stock awards under the CNH Industrial EIP vesting in 2023 and 2024 were converted at the effective date of
the Demerger, subject to its terms, to Common Shares of Iveco Group N.V.. The conversion of the CNH Industrial EIP
includes appropriate adjustment mechanisms to ensure that the value of the unvested awards granted to all the
beneficiaries under such plan remain unchanged pre and post demerger for employees in both the Iveco Group N.V.
and CNH Industrial N.V..
Performance Share Units
2021-2023 Long-Term Incentive Plan
In February 2020, the Board of Directors approved the 2021-2023 Long-Term Incentive Plan under the EIP. In
December 2020, CNH Industrial issued a new grant of PSUs to its key executive officers and select employees with the
financial performance goals covering a three-year period culminating with a cliff vest date of February 28, 2024. Two
internal financial metrics, Industrial ROIC (the ratio of Industrial Activities Adjusted EBIT (after-tax) over Average
Industrial Invested Capital) and Adjusted EPS (the net profit (loss) excluding any nonrecurring items (after-tax), divided
by the weighted average outstanding number of common shares on a fully diluted basis), weighted 50% each, and a
multiplier-based on CNH Industrial\u2019s percentile ranking of Total Shareholder Return among a comparator group, will
determine the total PSUs earned. The internal financial metrics have a payout factor of up to 200% and the market
based TSR determinant has a payout factor of 125%. These metrics are considered performance vesting conditions. As
such, compensation cost will be accrued based on whether it is considered probable that the performance conditions
will be satisfied. The fair value of the PSU awards issued under this plan will be calculated by using the CNH Industrial
N.V. stock price on the grant date adjusted for the present value of future dividends that would not be received during
the vesting period.
As of December 31, 2020 CNH Industrial issued 5 million PSUs. The total number of shares that will eventually be
issued may vary from the original estimate due to forfeiture or the level of achievement of the performance goals. The
weighted average fair value of the awards that were issued in 2020 was $10.83 per share. The 2020 PSU awards
distributed under this plan were issued on December 4, 2020 to key executive officers and select employees and on
December 14, 2020 to the Chair of CNH Industrial. During 2021, CNH Industrial issued an additional 3 million PSUs to
key executive officers and select employees. The weighted average fair value of the awards that were issued in 2021
was $13.13 per share.
Effective January 1, 2022, the Iveco Group Business was separated from CNH Industrial N.V. by way of a legal
statutory demerger to Iveco Group N.V. (the Demerger) and Iveco Group became a public listed company independent
from CNH Industrial. As part of the Demerger, any awards outstanding under the CNH Industrial Equity Incentive Plan
(or \u201cCNH Industrial EIP\u201d), and held by directors, officers and other employees vesting in April 2022 were accelerated in
December 2021 and the related equity incentives were issued by CNH Industrial in CNH Industrial stock. Further, as a
result of the Demerger, remaining outstanding awards vesting in 2023 and 2024 were converted to the entity the
participant is employed with post Demerger. The conversion of the CNH Industrial EIP includes appropriate adjustment
mechanisms to ensure that the value of the unvested awards granted to all the beneficiaries under such plan remain
unchanged pre and post demerger for employees in both the Iveco Group N.V. and CNH Industrial N.V.
2022-2024 Long-Term Incentive Plan
In 2022, the Board of Directors approved the 2022-2024 Long-Term Incentive Plan under the EIP. Just as the previous
2021-2023 EIP, the 2022-2024 EIP features financial performance goals covering a three-year vesting period. Similar to
the 2021-2023 EIP, two internal financial metrics, Industrial ROIC (the ratio of Adjusted EBIT (after-tax) over Average
Industrial Invested Capital) and Adjusted EPS (the net profit/(loss) excluding any nonrecurring items (after-tax), divided
by the weighted average outstanding number of common shares on a fully diluted basis), weighted 50% each, and a
multiplier-based on CNH Industrial\u2019s percentile ranking of Total Shareholder Return among a comparator group, will
determine the total PSUs earned. However the difference between the two EIPs is that the 2022-2024 EIP has a higher
performance achievement threshold for both ROIC and EPS but a smaller list of comparator group for its TSR
percentile ranking.
In 2022 CNH Industrial issued 2.5 million PSUs. The total number of shares that will eventually be issued may vary from
the original estimate due to forfeiture or the level of achievement of the performance goals. The weighted average fair
value of the awards that were issued in 2022 was $14.04 per share.
The following table reflects the activity of PSUs under the 2021-2023 Long-Term Incentive Plan for the years ended
December 31, 2022 and 2021:
| | | | |
| | | | |
| | Weighted average grant date fair value (in $) | | Weighted average grant date fair value (in $) |
Nonvested at beginning of year | | | | |
Less: Awards transferred to Iveco Group | | | | |
Plus: Adjustments to awards for continuing employees | | | | |
Nonvested as of January 5, 2022 | | | | |
| | | | |
| | | | |
| | | | |
| | | | |
(*) The 2021 data are presented considering Continuing and Discontinued Operations
Restricted Share Units
In 2020, 2021 and 2022 CNH Industrial issued approximately 5 million, 1 million, and 2 million Restricted Share Units
(\u201cRSUs\u201d) to key executive officers and select employees with a weighted average fair value of $10.87, $14.39 and
$13.90 per share, respectively. The fair value of the award is measured using the CNH Industrial N.V. stock price on the
grant date adjusted for the present value of future dividends that employees will not receive during the vesting period.
The RSUs vest upon a time-based service requirement.
2021-2023 Long-Term Incentive Plan
On December 4, 2020, CNH Industrial issued two separate RSU grants to key executive officers and select employees.
Under the first RSU grant, 1.1 million RSUs were awarded to select employees with a weighted average fair value of
$11.43. These awards vested on December 31, 2020. Under the second RSU grant, 3.3 million RSUs were awarded to
select employees and are set to vest in three equal installments over a three-year period. The first tranche which
consisted of 1.1 million RSUs was set to vest on April 30, 2022. The second and third tranches are set to vest on April
30, 2023 and April 30, 2024, respectively. The weighted average fair value for the December 2020 three tranche award
group are $11.23, $11.02, and $10.82, respectively.
On December 14, 2020, CNH Industrial issued 120 thousand RSUs to the Chair of CNH Industrial, of which 17
thousand vested on December 31, 2020. The weighted average fair value for these awards is $10.96. The remaining
103 thousand RSUs vest in three equal installments on April 30, 2022, 2023, and 2024, respectively. The fair value for
these awards are $10.76, $10.55 and $10.35, respectively.
During 2021, CNH Industrial issued an additional 1.5 million RSUs to select employees and key executive officers. Of
the awards that were issued, 1.2 million are set to vest in three equal installments over a three year period. The first
tranche, which consists of 0.4 million RSUs, was set to vest on April 30, 2022. The second and third tranches are set to
vest on April 30, 2023 and April 30, 2024, respectively. The weighted average fair value of these awards are $14.04 per
share for the first tranche, $13.84 per share for the second tranche, and $13.66 per share for the third tranche. The
remaining awards issued in 2021 had a cumulative weighted average fair value of $16.73. In 2021, CNH Industrial, in
anticipation of the Demerger, accelerated the vesting of awards with a vest date of April 31, 2022, to December 1, 2021,
excluding shares awarded to the CEO and Chairperson. As a result, CNH Industrial recorded $5 million of expense due
to the acceleration of these awards. The weighted average fair value of the shares vested during 2021 was $11.75 per
share.
2022-2024 Long-Term Incentive Plan
In 2022 CNH Industrial issued 2.3 million PSUs. The total number of shares that will eventually be issued may vary from
the original estimate due to forfeiture or the level of achievement of the performance goals. The weighted average fair
value of the awards that were issued in 2022 was $13.90 per share.
The following table reflects the activity of RSUs under the 2017-2019 Long-Term Incentive Plan and 2021-2023 Long-
Term Incentive Plan for the years ended December\u00a031, 2022 and 2021:
| | | | |
| | | | |
| | Weighted average grant date fair value (in $) | | Weighted average grant date fair value (in $) |
Nonvested at beginning of year | | | | |
Less: Awards transferred to Iveco Group | | | | |
Plus: Adjustments to awards for continuing employees | | | | |
Nonvested as of January 5, 2022 | | | | |
| | | | |
| | | | |
| | | | |
| | | | |
(*) The 2021 data are presented considering Continuing and Discontinued Operations
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22. Provisions for employee benefits
CNH Industrial provides pension, healthcare and insurance plans and other post-employment benefits to their
employees and retirees, either directly or by contributing to independently administered funds. The way these benefits
are provided varies according to the legal, fiscal and economic conditions of each country in which the Group operates,
the benefits generally being based on the employees\u2019 remuneration and years of service. CNH Industrial provides post-
employment benefits under defined contribution and defined benefit plans.
In the case of defined contribution plans, CNH Industrial makes contributions to publicly or privately administered
pension insurance plans on a mandatory, contractual or voluntary basis. Once the contributions have been made, CNH
Industrial has no further payment obligations. CNH Industrial recognizes the contribution cost when the employees
have rendered their service and includes this cost by function in Cost of sales, Selling, general and administrative costs
and Research and development costs. During the years ended December 31, 2022 and 2021, CNH Industrial recorded
expenses of $351 million and $315 million, respectively, for its defined contribution plans, inclusive of social security
contributions.
Defined benefit plans may be unfunded, or they may be wholly or partly funded by contributions made by an entity, and
sometimes by its employees, into an entity, or fund, that is legally separate from the employer from which the employee
benefits are paid. Benefits are generally payable under these plans after the completion of employment. Defined benefit
plans are classified by CNH Industrial on the basis of the type of benefit provided as follows: Pension plans, Healthcare
plans, and Other post-employment benefits.
Pension plans
Pension obligations primarily comprise the obligations of CNH Industrial\u2019s pension plans in the U.S., the U.K., and
Germany.
Under these plans, contributions are made to a separate fund (trust) that independently administers the plan assets.
CNH Industrial\u2019s funding policy is to contribute amounts to the plan equal to the amounts required to meet the minimum
funding requirements pursuant to the laws of the applicable jurisdictions. The significant pension plans that we are
required to fund are in the United States and the U.K.. CNH Industrial may also choose to make discretionary
contributions in addition to the funding requirements. To the extent that a fund is overfunded, the Group is not required
to make further contribution to the plan in respect of minimum performance requirements so long as the fund is in
surplus.
In 2020, CNH Industrial signed group annuity contracts to transfer the outstanding pension benefit obligations related to
certain retirees and beneficiaries within the U.S. plans. In connection with these transactions, $551 million of plan
obligations were transferred along with $550 million of plan assets; the related non-cash settlement impact recognized
in the income statement in the fourth quarter of 2020 was immaterial.
Healthcare plans
Healthcare plan obligations comprise obligations for healthcare and insurance plans granted to CNH Industrial
employees working in the U.S. and Canada. These plans generally cover employees retiring on or after reaching the
age of 55 who have completed at least 10 years of employment. CNH Industrial U.S. salaried and non-represented
hourly employees and Canadian employees hired after January 1, 2001 and January 1, 2002, respectively, are not
eligible for postretirement healthcare and life insurance benefits under the CNH Industrial plans. These benefits may be
subject to deductibles, co-payment provisions and other limitations, and CNH Industrial has reserved the right to
change or terminate these benefits, subject to the provisions of any collective bargaining agreement. These plans are
not required to be funded. However, beginning in 2007, CNH Industrial began making contributions on a voluntary basis
to a separate and independently managed fund established to finance the North American healthcare plans.
In 2021, CNH Industrial communicated plan changes for the U.S. retiree medical plan. The plan changes resulted in a
reduction of the plan liability by $100 million, recognized immediately in profit or loss as a pre-tax plan amendment gain
of the same amount.
Effective January 1, 2022, post-retirement medical coverage for certain U.S. employees who retired prior to December
2004 was transitioned to an individual marketplace. In August 2022, CNH Industrial settled the benefits obligation
related to RHRA benefits for this group. In connection with this transaction, $27 million of plan obligations and plan
assets were transferred.
Other post-employment benefits
Other post-employment benefits consist of obligations for Italian Employee Leaving Entitlements up to December 31,
2006, loyalty bonus in Italy and various other similar plans in France, Germany and Belgium. Until December 31, 2006,
Italian companies with more than 50 employees were required to accrue for benefits paid to employees upon them
leaving Italian legal entities. The scheme has since changed to a defined contribution plan. The obligation on our
consolidated balance sheet represents the residual reserve for years until December 31, 2006. Loyalty bonus is
accrued for employees who have reached certain service seniority and are generally settled when employees leave the
company. These plans are not required to be funded and, therefore, have no plan assets.
Provisions for employee benefits at December 31, 2022 and 2021 are as follows:
| | |
| | |
Post-employment benefits: | | |
| | |
| | |
| | |
Total Post-employment benefits | | |
| | |
Other provisions for employees | | |
Other long-term employee benefits | | |
Total Provision for employee benefits | | |
| | |
Defined benefit plan assets | | |
Total Defined benefit plan assets | | |
| | | | | | |
| | | | Change in the scope of consolidation and other changes | Transfer to Liabilities held for distribution | |
Other provisions for employees | | | | | | |
Other long-term employee benefits | | | | | | |
| | | | | | |
Post-employment benefits
The amounts recognized in the statement of financial position for post-employment benefits at December 31, 2022 and
2021 are as follows:
| | | | | | |
| | | |
| | | |
| | | | | | |
Present value of obligations | | | | | | |
Less: Fair value of plan assets | | | | | | |
| | | | | | |
Effect of the asset ceiling | | | | | | |
Net liability/(Net asset) | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
(1) The healthcare and other post-employment plans are not required to be prefunded.
Changes in the present value of post-employment obligations in 2022 and 2021 are as follows:
| | | | | | |
| | | |
| | | | | | |
Present value of obligation at the beginning of the year | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Contribution by plan participants | | | | | | |
| | | | | | |
| | | | | | |
Actuarial losses/(gains) from changes in demographic assumptions | | | | | | |
Actuarial losses/(gains) from changes in financial assumptions | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Exchange rate differences | | | | | | |
| | | | | | |
| | | | | | |
Change in scope of consolidation | | | | | | |
| | | | | | |
Transfers between subsidiaries | | | | | | |
Transfer to Liabilities held for distribution | | | | | | |
Present value of obligation at the end of the year | | | | | | |
(1)The healthcare and other post-employment plans are not required to be prefunded.
(2)Settlements include in 2022 the impact of the transfer of the outstanding pension benefit obligations related to certain retirees and beneficiaries within the U.S. plans through group annuity contracts
purchases in the fourth quarter of 2022.
Other remeasurements mainly include in 2022 and 2021 the amount of experience adjustments.
Changes in the fair value of plan assets for post-employment benefits in 2022 and 2021 are as follows:
| | | | | | | | |
| | | | | | |
| | | | | | | | |
Fair value of plan assets at the beginning of the year | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Exchange rate differences | | | | | | | | |
| | | | | | | | |
Contribution by plan participants | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Transfers between subsidiaries | | | | | | | | |
Transfer to Liabilities held for distribution | | | | | | | | |
Fair value of plan assets at the end of the year | | | | | | | | |
(1)In 2022, Past service cost and (gains)/losses from curtailments and settlements included th3e pre-tax gain of $30 million related to a healthcare plan amendment in the U.S..
The following summarizes data from CNH Industrial\u2019s defined benefit pension plans by significant geographical area for
the years ended December 31, 2022 and 2021:
| | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | | |
Change in benefit obligations: | | | | | | | | | | | |
Present value of obligation at the beginning of the year | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Contribution by plan participants | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Exchange rate differences and other | | | | | | | | | | | |
Transfer to Liabilities held for distribution | | | | | | | | | | | |
Present value of obligation at the end of the year | | | | | | | | | | | |
Change in the fair value of plans assets: | | | | | | | | | | | |
Fair value of plan assets at the beginning of the year | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Contribution by plan participants | | | | | | | | | | | |
| | | | | | | | | | | |
Exchange rate differences and other(2) | | | | | | | | | | | |
Transfer to Liabilities held for distribution | | | | | | | | | | | |
Fair value of plan assets at the end of the year | | | | | | | | | | | |
| | | | | | | | | | | |
The weighted average durations of post-employment benefits obligations are as follows:
Assumptions
The following assumptions were utilized in determining the funded status at December 31, 2022 and 2021, and the
expense of CNH Industrial\u2019s defined benefit plans for the years ended December 31, 2022 and 2021:
| | | | | | |
| Assumptions used to determine funded status at year-end |
| | |
| | | | | | |
Weighted-average discount rates | | | | | | |
Weighted-average rate of compensation increase | | | | | | |
Weighted-average, initial healthcare cost trend rate | | | | | | |
Weighted-average, ultimate healthcare cost trend rate(*) | | | | | | |
| | | | | | |
| Assumptions used to determine expense at year-end |
| | |
| | | | | | |
Weighted-average discount rates \u2013 current service cost | | | | | | |
Weighted-average discount rates \u2013 interest cost | | | | | | |
Weighted-average rate of compensation increase | | | | | | |
Weighted-average, initial healthcare cost trend rate | | | | | | |
Weighted-average, ultimate healthcare cost trend rate(*) | | | | | | |
(*) CNH Industrial expects to achieve the ultimate healthcare cost trend rate in 2028 for U.S. plans. A flat trend rate assumption is utilized for the Canada plans.
Assumed discount rates are used in measurements of pension, healthcare and other post-employment benefit
obligations and net interest on the net defined benefit liability/asset. CNH Industrial selects its assumed discount rates
based on the consideration of equivalent yields on high-quality fixed income investments at the measurement date. The
assumed discount rate is used to discount future benefit obligations back to today\u2019s dollars. The discount rates for the
U.S., European, U.K. and Canadian obligations are based on a benefit cash flow-matching approach and represent the
rates at which the benefit obligations could effectively be settled as of the measurement date, December 31. The
benefit cash flow-matching approach involves analyzing CNH Industrial\u2019s projected cash flows against a high-quality
bond yield curve, mainly calculated using a wide population of AA-grade corporate bonds subject to minimum amounts
outstanding and meeting other defined selection criteria. The discount rates for the CNH Industrial\u2019s remaining
obligations are based on benchmark yield data of high-quality fixed income investments for which the timing and
amounts of payments approximate the timing and amounts of projected benefit payments.
The assumed healthcare trend rate represents the rate at which healthcare costs are assumed to increase. Rates are
determined based on CNH Industrial\u2019s specific experience, consultation with actuaries and outside consultants, and
various trend factors including general and healthcare sector-specific inflation projections from the United States
Department of Health and Human Services Healthcare Financing Administration. The initial trend is a short-term
assumption based on recent experience and prevailing market conditions. The ultimate trend is a long-term assumption
of healthcare cost inflation based on general inflation, incremental medical inflation, technology, new medicine,
government cost-shifting, utilization changes, an aging population, and a changing mix of medical services.
CNH Industrial annually reviews the mortality assumptions and demographic characteristics of its U.S. pension plan
and healthcare plan participants.
In 2020, CNH Industrial adopted the no-collar variant of the Pri-2012 base table for the US pension plans subsequent to
the settlement of a portion of the outstanding pension obligation through purchase of annuity contracts. Additionally,
CNH Industrial adopted the updated mortality improvement scale issued by the SOA (\"MP-2020\"). The adoption of the
new mortality assumptions resulted in a total increase of $7.8 million to CNH Industrial\u2019s benefit obligations at
December 31, 2020, of which an increase of $8.6 million, and a decrease of $0.8 million were related to pension plans
and healthcare plans, respectively.
In 2021, the Company adopted the updated mortality improvement scale issued by the SOA (\"MP-2021\"). The adoption
of the new mortality assumptions resulted in a total increase of $1.3 million to the Company\u2019s benefit obligations at
December 31, 2021, of which $0.5 million and $0.8 million were related to pension plans and healthcare plans,
respectively.
CNH Industrial did not change its mortality assumptions in 2022 because the MP-2021 mortality improvement scale
continues to be the most current.
CNH Industrial uses the spot yield curve approach to estimate the service cost and net interest components by applying
the specific spot rates along the yield curve used to determine the benefit obligations to relevant projected cash
outflows.
Assumed discount rates and healthcare cost trend rates have a significant effect on the amount recognized in the 2022
financial statements. A one percentage point change in the assumed discount rates would have the following effects:
| | |
| One percentage point increase | One percentage point decrease |
Effect on pension plans defined benefit obligation at December 31, 2022 | | |
Effect on healthcare defined benefit obligation at December 31, 2022 | | |
A one percentage point change in the assumed healthcare cost trend rates would have the following effect:
| | |
| One percentage point increase | One percentage point decrease |
Effect on healthcare defined benefit obligation at December 31, 2022 | | |
(1) This category includes mutual funds, which primarily invest in non-U.S. equities and non-U.S. corporate bonds.
The fair value of the plan assets at December 31, 2021 may be disaggregated by asset class and level as follows. Fair
value levels presented below are described in the \u201cSignificant accounting policies \u2013 Fair value measurement\u201d section of
these Notes.
| | | | |
| Fair value of plan assets at December 31, 2021 |
| | | | |
| | | | |
| | | | |
| | | | |
Non-U.S. government bonds | | | | |
| | | | |
Total Fixed income securities | | | | |
| | | | |
Other types of investments: | | | | |
| | | | |
| | | | |
Total Other types of investments | | | | |
| | | | |
| | | | |
Potential outflows in the years after 2023 are subject to a number of uncertainties, including future asset performance
and changes in assumptions.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfEmployeeBenefitsExplanatory",
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"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV81NDEvZnJhZzo4Mjg3MjdhM2NjZjQ0Y2MxOGNlYjI0MGZmOWZlOTE2My90ZXh0cmVnaW9uOjgyODcyN2EzY2NmNDRjYzE4Y2ViMjQwZmY5ZmU5MTYzXzcxNDY4MjU2MDIzOTY_8443bd76-241c-49dc-8505-289bf5ef0548": {
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22. Provisions for employee benefits
CNH Industrial provides pension, healthcare and insurance plans and other post-employment benefits to their
employees and retirees, either directly or by contributing to independently administered funds. The way these benefits
are provided varies according to the legal, fiscal and economic conditions of each country in which the Group operates,
the benefits generally being based on the employees\u2019 remuneration and years of service. CNH Industrial provides post-
employment benefits under defined contribution and defined benefit plans.
In the case of defined contribution plans, CNH Industrial makes contributions to publicly or privately administered
pension insurance plans on a mandatory, contractual or voluntary basis. Once the contributions have been made, CNH
Industrial has no further payment obligations. CNH Industrial recognizes the contribution cost when the employees
have rendered their service and includes this cost by function in Cost of sales, Selling, general and administrative costs
and Research and development costs. During the years ended December 31, 2022 and 2021, CNH Industrial recorded
expenses of $351 million and $315 million, respectively, for its defined contribution plans, inclusive of social security
contributions.
Defined benefit plans may be unfunded, or they may be wholly or partly funded by contributions made by an entity, and
sometimes by its employees, into an entity, or fund, that is legally separate from the employer from which the employee
benefits are paid. Benefits are generally payable under these plans after the completion of employment. Defined benefit
plans are classified by CNH Industrial on the basis of the type of benefit provided as follows: Pension plans, Healthcare
plans, and Other post-employment benefits.
Pension plans
Pension obligations primarily comprise the obligations of CNH Industrial\u2019s pension plans in the U.S., the U.K., and
Germany.
Under these plans, contributions are made to a separate fund (trust) that independently administers the plan assets.
CNH Industrial\u2019s funding policy is to contribute amounts to the plan equal to the amounts required to meet the minimum
funding requirements pursuant to the laws of the applicable jurisdictions. The significant pension plans that we are
required to fund are in the United States and the U.K.. CNH Industrial may also choose to make discretionary
contributions in addition to the funding requirements. To the extent that a fund is overfunded, the Group is not required
to make further contribution to the plan in respect of minimum performance requirements so long as the fund is in
surplus.
In 2020, CNH Industrial signed group annuity contracts to transfer the outstanding pension benefit obligations related to
certain retirees and beneficiaries within the U.S. plans. In connection with these transactions, $551 million of plan
obligations were transferred along with $550 million of plan assets; the related non-cash settlement impact recognized
in the income statement in the fourth quarter of 2020 was immaterial.
Healthcare plans
Healthcare plan obligations comprise obligations for healthcare and insurance plans granted to CNH Industrial
employees working in the U.S. and Canada. These plans generally cover employees retiring on or after reaching the
age of 55 who have completed at least 10 years of employment. CNH Industrial U.S. salaried and non-represented
hourly employees and Canadian employees hired after January 1, 2001 and January 1, 2002, respectively, are not
eligible for postretirement healthcare and life insurance benefits under the CNH Industrial plans. These benefits may be
subject to deductibles, co-payment provisions and other limitations, and CNH Industrial has reserved the right to
change or terminate these benefits, subject to the provisions of any collective bargaining agreement. These plans are
not required to be funded. However, beginning in 2007, CNH Industrial began making contributions on a voluntary basis
to a separate and independently managed fund established to finance the North American healthcare plans.
In 2021, CNH Industrial communicated plan changes for the U.S. retiree medical plan. The plan changes resulted in a
reduction of the plan liability by $100 million, recognized immediately in profit or loss as a pre-tax plan amendment gain
of the same amount.
Effective January 1, 2022, post-retirement medical coverage for certain U.S. employees who retired prior to December
2004 was transitioned to an individual marketplace. In August 2022, CNH Industrial settled the benefits obligation
related to RHRA benefits for this group. In connection with this transaction, $27 million of plan obligations and plan
assets were transferred.
Other post-employment benefits
Other post-employment benefits consist of obligations for Italian Employee Leaving Entitlements up to December 31,
2006, loyalty bonus in Italy and various other similar plans in France, Germany and Belgium. Until December 31, 2006,
Italian companies with more than 50 employees were required to accrue for benefits paid to employees upon them
leaving Italian legal entities. The scheme has since changed to a defined contribution plan. The obligation on our
consolidated balance sheet represents the residual reserve for years until December 31, 2006. Loyalty bonus is
accrued for employees who have reached certain service seniority and are generally settled when employees leave the
company. These plans are not required to be funded and, therefore, have no plan assets.
Provisions for employee benefits at December 31, 2022 and 2021 are as follows:
| | |
| | |
Post-employment benefits: | | |
| | |
| | |
| | |
Total Post-employment benefits | | |
| | |
Other provisions for employees | | |
Other long-term employee benefits | | |
Total Provision for employee benefits | | |
| | |
Defined benefit plan assets | | |
Total Defined benefit plan assets | | |
| | | | | | |
| | | | Change in the scope of consolidation and other changes | Transfer to Liabilities held for distribution | |
Other provisions for employees | | | | | | |
Other long-term employee benefits | | | | | | |
| | | | | | |
Post-employment benefits
The amounts recognized in the statement of financial position for post-employment benefits at December 31, 2022 and
2021 are as follows:
| | | | | | |
| | | |
| | | |
| | | | | | |
Present value of obligations | | | | | | |
Less: Fair value of plan assets | | | | | | |
| | | | | | |
Effect of the asset ceiling | | | | | | |
Net liability/(Net asset) | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
(1) The healthcare and other post-employment plans are not required to be prefunded.
Changes in the present value of post-employment obligations in 2022 and 2021 are as follows:
| | | | | | |
| | | |
| | | | | | |
Present value of obligation at the beginning of the year | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Contribution by plan participants | | | | | | |
| | | | | | |
| | | | | | |
Actuarial losses/(gains) from changes in demographic assumptions | | | | | | |
Actuarial losses/(gains) from changes in financial assumptions | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Exchange rate differences | | | | | | |
| | | | | | |
| | | | | | |
Change in scope of consolidation | | | | | | |
| | | | | | |
Transfers between subsidiaries | | | | | | |
Transfer to Liabilities held for distribution | | | | | | |
Present value of obligation at the end of the year | | | | | | |
(1)The healthcare and other post-employment plans are not required to be prefunded.
(2)Settlements include in 2022 the impact of the transfer of the outstanding pension benefit obligations related to certain retirees and beneficiaries within the U.S. plans through group annuity contracts
purchases in the fourth quarter of 2022.
Other remeasurements mainly include in 2022 and 2021 the amount of experience adjustments.
Changes in the fair value of plan assets for post-employment benefits in 2022 and 2021 are as follows:
| | | | | | | | |
| | | | | | |
| | | | | | | | |
Fair value of plan assets at the beginning of the year | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Exchange rate differences | | | | | | | | |
| | | | | | | | |
Contribution by plan participants | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Transfers between subsidiaries | | | | | | | | |
Transfer to Liabilities held for distribution | | | | | | | | |
Fair value of plan assets at the end of the year | | | | | | | | |
(1)In 2022, Past service cost and (gains)/losses from curtailments and settlements included th3e pre-tax gain of $30 million related to a healthcare plan amendment in the U.S..
The following summarizes data from CNH Industrial\u2019s defined benefit pension plans by significant geographical area for
the years ended December 31, 2022 and 2021:
| | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | | |
Change in benefit obligations: | | | | | | | | | | | |
Present value of obligation at the beginning of the year | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Contribution by plan participants | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Exchange rate differences and other | | | | | | | | | | | |
Transfer to Liabilities held for distribution | | | | | | | | | | | |
Present value of obligation at the end of the year | | | | | | | | | | | |
Change in the fair value of plans assets: | | | | | | | | | | | |
Fair value of plan assets at the beginning of the year | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Contribution by plan participants | | | | | | | | | | | |
| | | | | | | | | | | |
Exchange rate differences and other(2) | | | | | | | | | | | |
Transfer to Liabilities held for distribution | | | | | | | | | | | |
Fair value of plan assets at the end of the year | | | | | | | | | | | |
| | | | | | | | | | | |
The weighted average durations of post-employment benefits obligations are as follows:
Assumptions
The following assumptions were utilized in determining the funded status at December 31, 2022 and 2021, and the
expense of CNH Industrial\u2019s defined benefit plans for the years ended December 31, 2022 and 2021:
| | | | | | |
| Assumptions used to determine funded status at year-end |
| | |
| | | | | | |
Weighted-average discount rates | | | | | | |
Weighted-average rate of compensation increase | | | | | | |
Weighted-average, initial healthcare cost trend rate | | | | | | |
Weighted-average, ultimate healthcare cost trend rate(*) | | | | | | |
| | | | | | |
| Assumptions used to determine expense at year-end |
| | |
| | | | | | |
Weighted-average discount rates \u2013 current service cost | | | | | | |
Weighted-average discount rates \u2013 interest cost | | | | | | |
Weighted-average rate of compensation increase | | | | | | |
Weighted-average, initial healthcare cost trend rate | | | | | | |
Weighted-average, ultimate healthcare cost trend rate(*) | | | | | | |
(*) CNH Industrial expects to achieve the ultimate healthcare cost trend rate in 2028 for U.S. plans. A flat trend rate assumption is utilized for the Canada plans.
Assumed discount rates are used in measurements of pension, healthcare and other post-employment benefit
obligations and net interest on the net defined benefit liability/asset. CNH Industrial selects its assumed discount rates
based on the consideration of equivalent yields on high-quality fixed income investments at the measurement date. The
assumed discount rate is used to discount future benefit obligations back to today\u2019s dollars. The discount rates for the
U.S., European, U.K. and Canadian obligations are based on a benefit cash flow-matching approach and represent the
rates at which the benefit obligations could effectively be settled as of the measurement date, December 31. The
benefit cash flow-matching approach involves analyzing CNH Industrial\u2019s projected cash flows against a high-quality
bond yield curve, mainly calculated using a wide population of AA-grade corporate bonds subject to minimum amounts
outstanding and meeting other defined selection criteria. The discount rates for the CNH Industrial\u2019s remaining
obligations are based on benchmark yield data of high-quality fixed income investments for which the timing and
amounts of payments approximate the timing and amounts of projected benefit payments.
The assumed healthcare trend rate represents the rate at which healthcare costs are assumed to increase. Rates are
determined based on CNH Industrial\u2019s specific experience, consultation with actuaries and outside consultants, and
various trend factors including general and healthcare sector-specific inflation projections from the United States
Department of Health and Human Services Healthcare Financing Administration. The initial trend is a short-term
assumption based on recent experience and prevailing market conditions. The ultimate trend is a long-term assumption
of healthcare cost inflation based on general inflation, incremental medical inflation, technology, new medicine,
government cost-shifting, utilization changes, an aging population, and a changing mix of medical services.
CNH Industrial annually reviews the mortality assumptions and demographic characteristics of its U.S. pension plan
and healthcare plan participants.
In 2020, CNH Industrial adopted the no-collar variant of the Pri-2012 base table for the US pension plans subsequent to
the settlement of a portion of the outstanding pension obligation through purchase of annuity contracts. Additionally,
CNH Industrial adopted the updated mortality improvement scale issued by the SOA (\"MP-2020\"). The adoption of the
new mortality assumptions resulted in a total increase of $7.8 million to CNH Industrial\u2019s benefit obligations at
December 31, 2020, of which an increase of $8.6 million, and a decrease of $0.8 million were related to pension plans
and healthcare plans, respectively.
In 2021, the Company adopted the updated mortality improvement scale issued by the SOA (\"MP-2021\"). The adoption
of the new mortality assumptions resulted in a total increase of $1.3 million to the Company\u2019s benefit obligations at
December 31, 2021, of which $0.5 million and $0.8 million were related to pension plans and healthcare plans,
respectively.
CNH Industrial did not change its mortality assumptions in 2022 because the MP-2021 mortality improvement scale
continues to be the most current.
CNH Industrial uses the spot yield curve approach to estimate the service cost and net interest components by applying
the specific spot rates along the yield curve used to determine the benefit obligations to relevant projected cash
outflows.
Assumed discount rates and healthcare cost trend rates have a significant effect on the amount recognized in the 2022
financial statements. A one percentage point change in the assumed discount rates would have the following effects:
| | |
| One percentage point increase | One percentage point decrease |
Effect on pension plans defined benefit obligation at December 31, 2022 | | |
Effect on healthcare defined benefit obligation at December 31, 2022 | | |
A one percentage point change in the assumed healthcare cost trend rates would have the following effect:
| | |
| One percentage point increase | One percentage point decrease |
Effect on healthcare defined benefit obligation at December 31, 2022 | | |
(1) This category includes mutual funds, which primarily invest in non-U.S. equities and non-U.S. corporate bonds.
The fair value of the plan assets at December 31, 2021 may be disaggregated by asset class and level as follows. Fair
value levels presented below are described in the \u201cSignificant accounting policies \u2013 Fair value measurement\u201d section of
these Notes.
| | | | |
| Fair value of plan assets at December 31, 2021 |
| | | | |
| | | | |
| | | | |
| | | | |
Non-U.S. government bonds | | | | |
| | | | |
Total Fixed income securities | | | | |
| | | | |
Other types of investments: | | | | |
| | | | |
| | | | |
Total Other types of investments | | | | |
| | | | |
| | | | |
Potential outflows in the years after 2023 are subject to a number of uncertainties, including future asset performance
and changes in assumptions.
23. Other provisions
Changes in Other provisions are as follows:
| | | | | |
| | | | Release to income and other changes | |
Warranty and technical assistance provision | | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
investigators in the context of a request for assistance by the public prosecutors of Frankfurt am Main, Germany and
Turin, Italy in relation to alleged noncompliance of two engine models produced by FPT Industrial S.p.A., which is a
wholly-controlled subsidiary Iveco Group N.V., installed in certain Ducato (a vehicle distributed by Stellantis N.V.) and
Iveco Daily vehicles. In certain instances CNH Industrial and other third parties have also received various requests for
compensation by German and Austrian customers on various contractual and tort grounds, including requests for
damages resulting from the termination of the purchase contracts, or in the form of requests for an alleged lower
residual value of their vehicles as a consequence of the alleged non-compliance with other approval regulations
regarding emissions. In certain instances, other customers have brought judicial claims on the same legal and factual
bases. While the Company had no role in the design and sale of such engine models and vehicles, the Company
cannot predict at this time the extent and outcome of these requests and directly or indirectly related legal proceedings,
including customer claims or potential class actions alleging emissions non-compliance. The Company believes that the
risk of either FPT Industrial or Iveco Group N.V. defaulting on potential payment obligations arising from such
proceedings is remote.
Commitments
At December 31, 2022, Financial Services has various agreements to extend credit for the following financing
arrangements:
| | | |
| |
| | | |
| | | |
Wholesale and dealer financing | | | |
Revolving charge accounts | | | |
(1)Bond listed on the Irish Stock Exchange.
(2)Bond listed on the New York Stock Exchange.
The bonds issued by the Group may contain commitments of the issuer, and in certain cases commitments of CNH
Industrial N.V. in its capacity as guarantor, which are typical of international practice for bond issues of this type such
as, in particular, negative pledge (in relation to quoted indebtedness), a status (or pari passu) covenant and cross
default clauses. A breach of these commitments can lead to the early repayment of the applicable notes. The bonds
guaranteed by CNH Industrial N.V. under the Euro Medium Term Note Programme (and its predecessor the Global
Medium Term Note Programme), as well as the notes issued by CNH Industrial N.V., contain clauses which could lead
to early repayment if there is a change of control of CNH Industrial N.V. leading to a rating downgrading of CNH
Industrial N.V.
On January 4, 2022 Fitch Ratings raised its Long-Term Issuer Default Rating (\"IDR\") on CNH Industrial N.V. to \u2018BBB+\u2019
from \u2018BBB-\u2019. Fitch also upgraded CNH Industrial Finance Europe S.A.\u2019s senior unsecured rating to \u2018BBB+\u2019 from \u2018BBB-\u2019.
The Outlook is stable. On January 7, 2022, Fitch upgraded the Long-Term IDR and senior long-term debt ratings of
CNH Industrial Capital LLC and CNH Industrial Capital Canada Ltd. to 'BBB+' from 'BBB-'. The outlook is stable. Fitch
has also upgraded CNH Industrial Capital LLC's short-term IDR and commercial paper ratings to 'F2' from 'F3'.
On February 25, 2022, Moody's upgraded the senior unsecured ratings of CNH Industrial N.V. and its supported
subsidiaries including CNH Industrial Capital LLC, CNH Industrial Finance Europe S.A., CNH Industrial Capital Australia
Pty. Ltd. and CNH Industrial Capital Canada Ltd. to Baa2 from Baa3. At the same time, Moody's withdrew CNH
Industrial Finance Europe S.A. short term rating of (P)P-3. The rating outlook is stable. Our long-term credit ratings
remained unchanged at \"BBB\" from Standard & Poor's Global Ratings with stable outlook.
For further information on the management of interest rate and currency risk reference should be made to Note 30
\"Information on financial risks\".
At December 31, 2022 and 2021, there was no debt secured with mortgages and other liens on assets of the Group,
and the total carrying amount of assets acting as security for loans was not significant at December\u00a031, 2022 and 2021.
In addition, the Group\u2019s assets include current receivables and cash with a pre-determined use to settle asset-backed
financing of $9,753 million at December 31, 2022 ($8,875\u00a0million at December 31, 2021).
",
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Debt
An analysis of debt by nature and due date is as follows:
| | | | | | | | |
| | |
| | Due between one and five years | | | | Due between one and five years | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Payables represented by securities | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
(1)Bond listed on the Irish Stock Exchange.
(2)Bond listed on the New York Stock Exchange.
The bonds issued by the Group may contain commitments of the issuer, and in certain cases commitments of CNH
Industrial N.V. in its capacity as guarantor, which are typical of international practice for bond issues of this type such
as, in particular, negative pledge (in relation to quoted indebtedness), a status (or pari passu) covenant and cross
default clauses. A breach of these commitments can lead to the early repayment of the applicable notes. The bonds
guaranteed by CNH Industrial N.V. under the Euro Medium Term Note Programme (and its predecessor the Global
Medium Term Note Programme), as well as the notes issued by CNH Industrial N.V., contain clauses which could lead
to early repayment if there is a change of control of CNH Industrial N.V. leading to a rating downgrading of CNH
Industrial N.V.
On January 4, 2022 Fitch Ratings raised its Long-Term Issuer Default Rating (\"IDR\") on CNH Industrial N.V. to \u2018BBB+\u2019
from \u2018BBB-\u2019. Fitch also upgraded CNH Industrial Finance Europe S.A.\u2019s senior unsecured rating to \u2018BBB+\u2019 from \u2018BBB-\u2019.
The Outlook is stable. On January 7, 2022, Fitch upgraded the Long-Term IDR and senior long-term debt ratings of
CNH Industrial Capital LLC and CNH Industrial Capital Canada Ltd. to 'BBB+' from 'BBB-'. The outlook is stable. Fitch
has also upgraded CNH Industrial Capital LLC's short-term IDR and commercial paper ratings to 'F2' from 'F3'.
On February 25, 2022, Moody's upgraded the senior unsecured ratings of CNH Industrial N.V. and its supported
subsidiaries including CNH Industrial Capital LLC, CNH Industrial Finance Europe S.A., CNH Industrial Capital Australia
Pty. Ltd. and CNH Industrial Capital Canada Ltd. to Baa2 from Baa3. At the same time, Moody's withdrew CNH
Industrial Finance Europe S.A. short term rating of (P)P-3. The rating outlook is stable. Our long-term credit ratings
remained unchanged at \"BBB\" from Standard & Poor's Global Ratings with stable outlook.
For further information on the management of interest rate and currency risk reference should be made to Note 30
\"Information on financial risks\".
At December 31, 2022 and 2021, there was no debt secured with mortgages and other liens on assets of the Group,
and the total carrying amount of assets acting as security for loans was not significant at December\u00a031, 2022 and 2021.
In addition, the Group\u2019s assets include current receivables and cash with a pre-determined use to settle asset-backed
financing of $9,753 million at December 31, 2022 ($8,875\u00a0million at December 31, 2021).
",
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"value": "
25. Trade payables
An analysis by due date of trade payables is as follows:
| | | | | | | | |
| | |
| | Due between one and five years | | | | Due between one and five years | | |
|
| | | | | | | | |
At December 31, 2022, Trade payables were $3,690 and increased by $3,364 million compared to December 31, 2021.
",
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}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV81NTMvZnJhZzoyNzc1MWUwYzkzZTA0MGY3OGM3M2Q3M2RhODE5ZWUzMi90ZXh0cmVnaW9uOjI3NzUxZTBjOTNlMDQwZjc4YzczZDczZGE4MTllZTMyXzcxNDY4MjU1ODIxNzE_042250de-66bb-4152-ae96-7d723ceac282": {
"value": "
26. Other current liabilities
An analysis of Other current liabilities is as follows:
| | |
| | |
| | |
| | |
Accrued expenses and deferred income | | |
| | |
| | |
| | |
Total Other current liabilities | | |
An analysis of Other current liabilities (excluding Accrued expenses and deferred income) by due date is as follows:
| | | | | | | | |
| | |
| | Due between one and five years | | | | Due between one and five years | | |
|
Other current liabilities (excluding Accrued expenses and deferred income) | | | | | | | | |
Changes in Contract liabilities for the year ended December 31, 2022, are as follows:
| | | | | |
| | Additional amounts arising during the period | Amounts recognized within revenue | Translation differences and other changes | |
| | | | | |
At December 31, 2022, and 2021, Contract liabilities primarily relate to extended warranties/maintenance and repair
contracts.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfOtherCurrentLiabilitiesExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV81NTMvZnJhZzoyNzc1MWUwYzkzZTA0MGY3OGM3M2Q3M2RhODE5ZWUzMi90ZXh0cmVnaW9uOjI3NzUxZTBjOTNlMDQwZjc4YzczZDczZGE4MTllZTMyXzcxNDY4MjU1ODIxNzE_0aa71770-d30c-4c39-b819-1b129660b9aa": {
"value": "
26. Other current liabilities
An analysis of Other current liabilities is as follows:
| | |
| | |
| | |
| | |
Accrued expenses and deferred income | | |
| | |
| | |
| | |
Total Other current liabilities | | |
An analysis of Other current liabilities (excluding Accrued expenses and deferred income) by due date is as follows:
| | | | | | | | |
| | |
| | Due between one and five years | | | | Due between one and five years | | |
|
Other current liabilities (excluding Accrued expenses and deferred income) | | | | | | | | |
Changes in Contract liabilities for the year ended December 31, 2022, are as follows:
| | | | | |
| | Additional amounts arising during the period | Amounts recognized within revenue | Translation differences and other changes | |
| | | | | |
At December 31, 2022, and 2021, Contract liabilities primarily relate to extended warranties/maintenance and repair
contracts.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfOtherLiabilitiesExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV81NTMvZnJhZzoyNzc1MWUwYzkzZTA0MGY3OGM3M2Q3M2RhODE5ZWUzMi90ZXh0cmVnaW9uOjI3NzUxZTBjOTNlMDQwZjc4YzczZDczZGE4MTllZTMyXzcxNDY4MjU1ODIxNzE_0fb4773d-2f10-4935-bb3d-71b71a86e2ef": {
"value": "
26. Other current liabilities
An analysis of Other current liabilities is as follows:
| | |
| | |
| | |
| | |
Accrued expenses and deferred income | | |
| | |
| | |
| | |
Total Other current liabilities | | |
An analysis of Other current liabilities (excluding Accrued expenses and deferred income) by due date is as follows:
| | | | | | | | |
| | |
| | Due between one and five years | | | | Due between one and five years | | |
|
Other current liabilities (excluding Accrued expenses and deferred income) | | | | | | | | |
Changes in Contract liabilities for the year ended December 31, 2022, are as follows:
| | | | | |
| | Additional amounts arising during the period | Amounts recognized within revenue | Translation differences and other changes | |
| | | | | |
At December 31, 2022, and 2021, Contract liabilities primarily relate to extended warranties/maintenance and repair
contracts.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfAccruedExpensesAndOtherLiabilitiesExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV81NTYvZnJhZzpjZjVlOGI0M2ZiZDA0ODkxODQ0ZjVmNTlhZGVlNjY1Yi90ZXh0cmVnaW9uOmNmNWU4YjQzZmJkMDQ4OTE4NDRmNWY1OWFkZWU2NjViXzcxNDY4MjU1ODI3Njk_7c15f961-34d0-4af0-8efb-95853f8044e5": {
"value": "
27. Commitments and contingencies
As a global company with a diverse business portfolio, CNH Industrial in the ordinary course of business is exposed to
numerous legal risks, including, without limitation, dealer and supplier litigation, intellectual property right disputes,
product warranty and defective product claims, product performance, asbestos, personal injury, emissions and/or fuel
economy regulatory and contractual issues, competition law and other investigations and environmental claims. The
most significant of these matters are described below.
The outcome of any current or future proceedings, claims, or investigations cannot be predicted with certainty. Adverse
decisions in one or more of these proceedings, claims or investigations could require CNH Industrial to pay substantial
damages or fines or undertake service actions, recall campaigns or other costly actions. It is therefore possible that
legal judgments could give rise to expenses that are not covered, or not fully covered, by insurers\u2019 compensation
payments and could affect CNH Industrial\u2019s financial position and results.
When it is probable that an outflow of resources embodying economic benefits will be required to settle obligations and
this amount can be reliably estimated, CNH Industrial recognizes specific provisions for this purpose. At December 31,
2022, contingent liabilities estimated by the Group amount to approximately $43 million (approximately $47 million at
December 31, 2021), for which no provisions have been recognized since an outflow of resources is not considered
probable at the present time.
Although the ultimate outcome of legal matters pending against CNH Industrial and its subsidiaries cannot be predicted,
CNH Industrial believes the reasonable possible range of losses for these unresolved legal matters in addition to the
amounts accrued would not have a material effect on its Consolidated Financial Statements.
Other litigation and investigation
Follow-up on Damages Claims: in 2011 Iveco S.p.A. (\"Iveco\"), which, following the Demerger, is now part of Iveco
Group N.V., and its competitors in the European Union were subject to an investigation\u00a0by the European Commission
(the \u201cCommission\u201d) into certain business practices\u00a0in the European Union (in the period 1997-2011) in relation to
Medium & Heavy trucks.\u00a0On July 19, 2016, the Commission announced a settlement with Iveco (\"the Decision\").
Following the Decision, the Company, Iveco and Iveco Magirus AG (\"IMAG\") have been named as defendants in
proceedings across Europe. The consummation of the Demerger will not allow CNH Industrial to be excluded from
current and future follow on proceedings originating from the Decision because under EU competition law a company
cannot use corporate reorganizations to avoid liability for private damage claims. In the event one or more of these
judicial proceedings would result in a decision against CNH Industrial ordering it to compensate such claimants as a
result of the conduct that was the subject matter of the Decision, and Iveco and IMAG do not comply with such
decisions, as a result of various intercompany arrangements, then CNH Industrial will ultimately have recourse against
Iveco and IMAG for the reimbursement of the damages effectively paid to such claimants. The extent and outcome of
these claims cannot be predicted at this time. The Company believes that the risk of either Iveco or IMAG or Iveco
Group defaulting on potential payment obligations arising from such follow-up on damage claims is remote.
FPT Emissions Investigation: on July 22, 2020, a number of FPT Industrial S.p.A.'s offices in Europe were visited by
investigators in the context of a request for assistance by the public prosecutors of Frankfurt am Main, Germany and
Turin, Italy in relation to alleged noncompliance of two engine models produced by FPT Industrial S.p.A., which is a
wholly-controlled subsidiary Iveco Group N.V., installed in certain Ducato (a vehicle distributed by Stellantis N.V.) and
Iveco Daily vehicles. In certain instances CNH Industrial and other third parties have also received various requests for
compensation by German and Austrian customers on various contractual and tort grounds, including requests for
damages resulting from the termination of the purchase contracts, or in the form of requests for an alleged lower
residual value of their vehicles as a consequence of the alleged non-compliance with other approval regulations
regarding emissions. In certain instances, other customers have brought judicial claims on the same legal and factual
bases. While the Company had no role in the design and sale of such engine models and vehicles, the Company
cannot predict at this time the extent and outcome of these requests and directly or indirectly related legal proceedings,
including customer claims or potential class actions alleging emissions non-compliance. The Company believes that the
risk of either FPT Industrial or Iveco Group N.V. defaulting on potential payment obligations arising from such
proceedings is remote.
Commitments
At December 31, 2022, Financial Services has various agreements to extend credit for the following financing
arrangements:
| | | |
| |
| | | |
| | | |
Wholesale and dealer financing | | | |
Revolving charge accounts | | | |
investigators in the context of a request for assistance by the public prosecutors of Frankfurt am Main, Germany and
Turin, Italy in relation to alleged noncompliance of two engine models produced by FPT Industrial S.p.A., which is a
wholly-controlled subsidiary Iveco Group N.V., installed in certain Ducato (a vehicle distributed by Stellantis N.V.) and
Iveco Daily vehicles. In certain instances CNH Industrial and other third parties have also received various requests for
compensation by German and Austrian customers on various contractual and tort grounds, including requests for
damages resulting from the termination of the purchase contracts, or in the form of requests for an alleged lower
residual value of their vehicles as a consequence of the alleged non-compliance with other approval regulations
regarding emissions. In certain instances, other customers have brought judicial claims on the same legal and factual
bases. While the Company had no role in the design and sale of such engine models and vehicles, the Company
cannot predict at this time the extent and outcome of these requests and directly or indirectly related legal proceedings,
including customer claims or potential class actions alleging emissions non-compliance. The Company believes that the
risk of either FPT Industrial or Iveco Group N.V. defaulting on potential payment obligations arising from such
proceedings is remote.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfContingentLiabilitiesExplanatory",
"language": "en",
"entity": "scheme:549300WGC2HZ5J67V817",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjAzYmJjNmJiMjM4YTRhZmU4MmU5MjFjZDNkZjJmNmM5L3NlYzowM2JiYzZiYjIzOGE0YWZlODJlOTIxY2QzZGYyZjZjOV81NTYvZnJhZzpjZjVlOGI0M2ZiZDA0ODkxODQ0ZjVmNTlhZGVlNjY1Yi90ZXh0cmVnaW9uOmNmNWU4YjQzZmJkMDQ4OTE4NDRmNWY1OWFkZWU2NjViXzMyOTg1MzQ4ODU1NTQ_45f204e0-9d6f-420c-88d3-f9cab150f23c": {
"value": "
Commitments
At December 31, 2022, Financial Services has various agreements to extend credit for the following financing
arrangements:
| | | |
| |
| | | |
| | | |
Wholesale and dealer financing | | | |
Revolving charge accounts | | | |
well as revolving charge account financing and other financial services. Financial Services also provides wholesale
financing to CNH Industrial brand dealers and distributors. Further, Financial Services provides trade receivables
factoring to CNH Industrial companies. The European operations of CNH Industrial Financial Services are
supported by the Iveco Group's Financial Services segment. CNH Industrial Financial Services provides financial
services to Iveco Group companies in the North America, South America and Asia Pacific regions.
The activities carried out by the two industrial segments Agriculture and Construction, as well as corporate functions,
are collectively referred to as \u201cIndustrial Activities\u201d.
Revenues for each reported segment are those directly generated by or attributable to the segment as a result of its
business activities and include revenues from transactions with third parties as well as those deriving from transactions
with other segments, recognized at normal market prices. Segment expenses represent expenses deriving from each
segment's business activities both with third parties and other operating segments or which may otherwise be directly
attributable to it. Expenses deriving from business activities with other segments are recognized at normal market
prices.
With reference to Industrial Activities' segments, the CODM assesses segment performance and makes decisions
about resource allocation based upon Adjusted EBIT calculated using U.S. GAAP. CNH Industrial believes Adjusted
EBIT more fully reflects Industrial Activities segments' inherent profitability. Adjusted EBIT of Industrial Activities under
U.S. GAAP is defined as net income/(loss) before: Income taxes, Financial Services' results, Industrial Activities'
interest expenses/(net), foreign exchange gains/losses, finance and non-service component of pension and other post-
employment benefit costs, restructuring expenses, and certain non-recurring items. In particular, non-recurring items
are specifically disclosed items that management considers to be rare or discrete events that are infrequent in nature
and not reflective of on-going operational activities.
With reference to Financial Services, the CODM assesses the performance of the segment and makes decisions about
resource allocation on the basis of net income prepared in accordance with U.S. GAAP.
The following table summarizes Adjusted EBIT of Industrial Activities under U.S. GAAP by reportable segment:
| | |
| | |
| | |
| | |
Unallocated items, eliminations and other | | |
Adjusted EBIT of Industrial Activities under U.S. GAAP | | |
(*) The 2021 data have been restated to exclude Iveco Group Business, consistent with Iveco Group's classification as a Discontinued Operation, as requested by the IFRS 5 - Non-current assets held for
sale and Discontinued Operations. Iveco Group's results are presented as a single line item within the Consolidated Income Statements for the year ended December 31, 2021. The spin-off of Iveco Group
took effect on January 1, 2022 (refer to the Section - \"Scope of Consolidation - Discontinued Operations - Iveco Group Business\").
A reconciliation from Adjusted EBIT of Industrial Activities under U.S. GAAP to CNH Industrial's consolidated Profit(loss)
before taxes under EU-IFRS for the years ended December 31, 2022 and 2021 is provided below:
| | |
| | |
Adjusted EBIT of Industrial Activities under U.S. GAAP | | |
Adjustments/reclassifications to convert from Adjusted EBIT of Industrial Activities under U.S. GAAP to Profit/(loss) before taxes under EU-IFRS: | | |
Financial income/(expenses) under EU-IFRS | | |
| | |
| | |
Total adjustments/reclassifications | | |
Profit/(loss) from Continuing Operations before taxes under EU-IFRS | | |
(1) This item also includes the different accounting impact from the modification of a healthcare plan in the U.S..
Net income of Financial Services prepared under U.S. GAAP for years ended December 31, 2022 and 2021 is
summarized as follows, together with a reconciliation to CNH Industrial\u2019s consolidated Profit/(loss) before taxes under
EU-IFRS for the same periods:
| | |
| | |
Net income of Financial Services under U.S. GAAP (A) | | |
Eliminations and other (B)(*) | | |
CNH Industrial\u2019s consolidated Net income (loss) under U.S. GAAP (C) = (A) + (B) | | |
Adjustments to conform to EU-IFRS (D)(**) | | |
Income tax (expense) benefit under EU-IFRS (E) | | |
Profit/(loss) from Continuing Operations before taxes under EU-IFRS (F) = (C) + (D) - (E) | | |
(*)Includes Net income of Industrial Activities under U.S. GAAP.
(**) Details about this item are provided in Note 34 \u201cEU-IFRS to U.S. GAAP reconciliation\u201d.
There are no segment assets reported to the CODM for assessing performance and allocating resources. Additional
reportable segment information under U.S. GAAP is provided as follows.
Additional reportable segment information under U.S. GAAP
Revenues under U.S. GAAP, together with a reconciliation to the corresponding EU-IFRS consolidated item for the
years ended December 31, 2022 and 2021, are provided below:
| | |
| | |
| | |
| | |
| | |
Net sales of Industrial Activities | | |
| | |
| | |
Total Revenues under U.S. GAAP | | |
| | |
Total Net Revenues under EU-IFRS | | |
(*)\u00a0 Excluding depreciation of assets on operating lease.
(**) Primarily amortization of development costs capitalized under EU-IFRS and depreciation of right-of-use assets under EU-IFRS.
Expenditures for long-lived assets under U.S. GAAP by operating segment together with a reconciliation to the
corresponding EU-IFRS consolidated item for the years ended December 31, 2022 and 2021 are provided below:
| | |
| | |
| | |
| | |
Total Industrial Activities | | |
| | |
Total Expenditures for long-lived assets(*) under U.S. GAAP | | |
Difference, principally expenditure for development costs capitalized under EU-IFRS | | |
Total Expenditures for long-lived assets(*) under EU-IFRS | | |
(*) Excluding equipment on operating lease.
29. Information by geographical area
CNH Industrial N.V. has its principal office in London, England, United Kingdom. Revenues earned in the U.K. from
external customers were $557 million and $548 million in 2022 and 2021, respectively. Revenues earned in the rest of
the world from external customers were $22,916 million and $18,926 million in 2022 and 2021, respectively. The
following highlights revenues earned from external customers in the rest of the world by destination:
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Total revenues from external customers in the rest of the world | | |
2021). The principal exchange rates to which we are exposed are the following:
\u25aaEUR/USD, in relation to the production/purchases of Agriculture and Construction in the euro area;
\u25aaUSD/BRL and EUR/BRL, in relation to production in Brazil and the respective import/export flows;
\u25aaAUD/USD, mainly in relation to sales made by Agriculture and Construction in Australia;
\u25aaEUR/GBP, predominately in relation to sales on the U.K. market.
Trade flows exposed to changes in these exchange rates in 2022 made up approximately 73% of the exposure to
currency risk from trade transactions.
It is our policy to use derivative financial instruments to hedge a certain percentage, on average between 55% and
85%, of the forecasted trading transaction exchange risk exposure for the coming 12 months with additional flexibility to
reach 0% or 100% (including forecasted risk exposure beyond that timeframe where it is believed to be appropriate)
and to hedge completely the exposure resulting from firm commitments.
Certain subsidiaries may hold trade receivables or payables denominated in a currency different from the subsidiary\u2019s
functional currency. In addition, in a limited number of cases, subsidiaries may obtain financing or use funds in a
currency different from their functional currency. Changes in exchange rates may result in exchange gains or losses
arising from these situations. It is our policy to hedge fully, whenever possible, the exposure resulting from receivables,
payables, and securities denominated in currencies different from the subsidiary\u2019s functional currency.
Certain of our subsidiaries\u2019 functional currency is different than the U.S. dollar, which is the Group presentation
currency. The income statements of those subsidiaries are converted into U.S. dollars using the average exchange rate
for the period, and while revenues and margins are unchanged in local currency, changes in exchange rates may lead
to effects on the converted balances of revenues, costs and the results reported in U.S. dollars.
The assets and liabilities of consolidated companies whose functional currency is different from the U.S. dollar may
acquire converted values in U.S. dollars which differ as a function of the fluctuation in exchange rates. The effects of
these changes are recognized directly in the Cumulative Translation Adjustments reserve, included in Other
comprehensive income (see Note 21 \"Equity\").
We monitor our principal exposure to translation exchange risk, although there was no specific hedging in place at
December\u00a031, 2022.
There were no substantial changes in 2022 in the nature or structure of exposure to currency risk or in our hedging
policies.
Sensitivity analysis
The potential loss in fair value of derivative financial instruments held for currency risk management (currency swaps/
forwards, currency options, interest rate and currency swaps) at December 31, 2022 resulting from a hypothetical
change of 10% in the exchange rates amounted to approximately $276 million ($344 million at December 31,\u00a02021).
The valuation model for currency options assumes that market volatility at year-end remains unchanged.
Receivables, payables, and future trade flows whose hedging transactions have been analyzed were not considered in
this analysis. It is reasonable to assume that changes in exchange rates will produce the opposite effect, of an equal or
greater amount, on the underlying transactions that have been hedged.
Interest rate risk
Our Industrial Activities make use of external funds obtained in the form of financing and invest in monetary and
financial market instruments. In addition, we sell receivables. Changes in market interest rates can affect the cost of
financing, including the sale of receivables, or the return on investments of funds, causing an impact on the level of net
financial expenses incurred by us.
In addition, Financial Services provides loans (mainly to customers and dealers), financed primarily using various forms
of external borrowings or asset-backed financing (e.g., securitization of receivables). 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/
funding obtained, changes in the current level of interest rates can affect our profit/(loss).
In order to mitigate these risks, we use interest rate derivative financial instruments, mainly interest rate swaps and
forward rate agreements.
Interest rate benchmark reform
Certain existing benchmark InterBank Offered Rates (IBORs) such as USD LIBOR will be reformed by the authority and
gradually replaced with alternative benchmark rates. Despite the uncertainty around the timing and precise nature of
these changes, the existing benchmark interest rates are still applied as reference rates.
To transition existing contracts and agreements that reference USD LIBOR to an alternative benchmark rate (SOFR),
adjustments for term differences and credit differences might need to be applied to the alternative benchmark rate, to
enable the two benchmark rates to be economically equivalent on transition.
The Group has issued US dollar\u2011denominated fixed rate debt which it fair value hedges using sterling fixed to US dollar
fixed to USD LIBOR interest rate swaps. At December 31, 2022, the notional amount of hedging instruments directly
affected by the reform of benchmark interest rates is $1,220 million.
Group Treasury is managing the Group\u2019s USD LIBOR transition plan. The greatest change will be amendments to the
contractual terms of the USD LIBOR-referenced fixed-rate debt and the corresponding update of the hedge
designation.
In calculating the change in fair value attributable to the hedged risk of fixed-rate debt, the Group has made the
following assumptions that reflect its current expectations:
\u25aathe fixed-rate debt will move to SOFR at the beginning of 2022 (or at July 2023 if the new consultations were
confirmed) and the spread will be similar to the spread included in the interest rate swap used as the hedging
instrument;
\u25aano other changes to the terms of the fixed-rate debt are anticipated; and
\u25aathe Group does not expect any material impact deriving from the replacement of benchmark interest rate.
Sensitivity analysis
In assessing the potential impact of changes in interest rates, we separate fixed rate financial instruments (for which the
impact is assessed in terms of fair value) from floating rate financial instruments (for which the impact is assessed in
terms of cash flows).
The fixed rate financial instruments used by us consist of retail receivables, debt, ABS securities, and other instruments.
The potential loss in fair value of fixed rate financial instruments (including the effect of interest rate derivative financial
instruments) held at December 31, 2022, resulting from a hypothetical, unfavorable and instantaneous change of
10%\u00a0in market interest rates, would have been approximately $29 million ($20 million at December 31,\u00a02021).
Floating rate financial instruments consist principally of cash and cash equivalents, wholesale receivables, debt, and
ABS securities. The effect of the sale of receivables is also considered in the sensitivity analysis as well as the effect of
hedging derivative instruments.
A hypothetical change of 10% 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 have caused increased
net expenses before taxes, on an annual basis, of approximately $15 million ($3 million at December 31,\u00a02021).
This analysis is based on the assumption that there is a hypothetical change of 10% in interest rates across
homogeneous categories. A homogeneous category is defined on the basis of the currency in which the financial assets
and liabilities are denominated.
Other risks on derivative financial instruments
We have entered derivative contracts linked to commodity prices to hedge specific exposures on supply contracts.
Sensitivity analysis
In the event of a hypothetical change of 10% in the underlying raw materials prices, the potential loss in fair value of
outstanding derivative financial instruments at December 31, 2022 linked to commodity prices would not have been
significant (not significant at December 31, 2021).
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfMarketRiskExplanatory",
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"value": "
Assets and liabilities measured at fair value on a recurring basis
The following table presents, for each of the fair value hierarchy levels, the assets and liabilities that are measured at
fair value on a recurring basis at December 31, 2022 and 2021:
Description of the valuation techniques used to determine the fair value of derivative financial instruments is included in
Note 18 \u201cDerivative assets and Derivative liabilities\u201d.
",
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}
},
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Assets and liabilities measured at fair value on a recurring basis
The following table presents, for each of the fair value hierarchy levels, the assets and liabilities that are measured at
fair value on a recurring basis at December 31, 2022 and 2021:
Description of the valuation techniques used to determine the fair value of derivative financial instruments is included in
Note 18 \u201cDerivative assets and Derivative liabilities\u201d.
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32. Related party transactions
In accordance with IAS 24 \u2013 Related Party Disclosures, CNH Industrial\u2019s related parties are companies and persons
capable of exercising control, joint control or significant influence over the Group.
As of December 31, 2022, CNH Industrial's related parties were primarily EXOR N.V. and the companies that EXOR
N.V. controlled or had a significant influence over, including Iveco Group N.V. post-Demerger, Stellantis N.V. (formerly
Fiat Chrysler Automobiles N.V. which, effective January 16, 2021, merged with Peugeot S.A. by means of a cross-
border legal merger) and its subsidiaries and affiliates (\"Stellantis\") and Iveco Group N.V. which effective January 1,
2022 separated from CNH Industrial N.V. by way of a demerger under Dutch law and became a public listed company
independent from CNH Industrial\u2019s unconsolidated subsidiaries, associates or joint ventures. In addition, the members
of the Board of Directors and managers of CNH Industrial with strategic responsibility and members of their families
were also considered related parties.
As of December 31, 2022, based on public information available and in reference to the Company's files, EXOR N.V.
held 42.8% of CNH Industrial\u2019s voting power and had the ability to significantly influence the decisions submitted to a
vote of CNH Industrial\u2019s shareholders, including approval of annual dividends, the election and removal of directors,
mergers or other business combinations, the acquisition or disposition of assets, and issuances of equity and the
incurrence of indebtedness. The percentage above has been calculated as the ratio of (i) the aggregate number of
common shares and special voting shares owned by EXOR N.V. to (ii) the aggregate number of outstanding common
shares and special voting shares of CNH Industrial as of December 31, 2022.
In addition, CNH Industrial engages in transactions with its unconsolidated subsidiaries, joint ventures, associates and
other related parties on commercial terms that are normal in the respective markets, considering the characteristics of
the goods or services involved.
The Company\u2019s Audit Committee reviews and evaluates all significant related party transactions.
Transactions with EXOR N.V. and its subsidiaries and affiliates
EXOR N.V. is an investment holding company in Europe. As of December 31, 2022 and December 31, 2021, among
other things, EXOR N.V. managed a portfolio that includes investments in Stellantis, Iveco Group and Ferrari. CNH
Industrial did not enter into any significant transactions with EXOR\u00a0N.V. during the years ended December 31, 2022 and
2021.
In connection with the establishment of Fiat Industrial (now CNH Industrial) through the demerger from\u00a0Fiat (which was
subsequently merged into Fiat Chrysler Automobiles N.V. which is now Stellantis), the two companies entered into a
Master Services Agreement (\u201cStellantis MSA\u201d) which sets forth the primary terms and conditions pursuant to which the
service provider subsidiaries of CNH Industrial and Stellantis provide services to the service receiving subsidiaries. As
structured, the applicable service provider and service receiver subsidiaries become parties to the Stellantis MSA
through the execution of an Opt-in letter that may contain additional terms and conditions. Pursuant to the Stellantis
MSA, service receivers are required to pay to service providers the actual cost of the services plus a negotiated margin.
During 2022 and 2021, Stellantis subsidiaries provided CNH Industrial with administrative services such as accounting,
cash management, maintenance of plant and equipment, security, information systems and training under the terms
and conditions of the Stellantis MSA and the applicable Opt-in letters.
Furthermore, CNH Industrial and Stellantis engage in other minor transactions in the ordinary course of business.
These transactions with Stellantis are reflected in the Consolidated Financial Statements as follows:
| | |
| | |
| | |
| | |
Selling, general and administrative costs | | |
Transactions with Iveco Group post-Demerger
CNH Industrial and Iveco Group post-Demerger entered into transactions consisting of the sale of engines from Iveco
Group to CNH Industrial. Additionally, concurrent with the Demerger, the Companies entered into services contracts in
relation to general administrative and specific technical matters, provided by either CNH Industrial to Iveco Group and
vice versa as follows:
Master Service Agreements: CNH Industrial and Iveco Group entered into a two-year Master Services Agreement
(\u201cMSA\u201d) whereby each Party (and its subsidiaries) may provide services to the other (and its subsidiaries). Services
provided under the MSA relate mainly to lease of premises and depots and IT services.
Engine Supply Agreement: in relation to the design and supply of off-road engines from Iveco Group to CNH Industrial
post-Demerger, Iveco Group and CNH Industrial entered into a ten-year Engine Supply Agreement (\u201cESA\u201d) whereby
Iveco Group will sell to CNH Industrial post-Demerger diesel, CNG and LNG engines and provide post-sale services.
Financial Service Agreement: in relation to certain financial services activities carried out by either CNH Industrial to
Iveco Group post-Demerger or vice versa, in connection with the execution of the Demerger Deed, CNH Industrial and
Iveco Group entered into a three-year Master Services Agreement (\u201cFS MSA\u201d), whereby each Party (and its
subsidiaries) may provide services and/or financial services activities to the other (and its subsidiaries). Services
provided under the FS MSA relate mainly to wholesale and retail financing activities to suppliers, distribution network
and customers.
The transactions with Iveco Group post-Demerger are reflected in the Consolidated Financial Statements as follows:
| | |
| | |
Trade and other receivables | | |
| | |
| | |
| | |
Transactions with joint ventures
CNH Industrial sells agricultural and construction equipment, and provides technical services to joint ventures such as
CNH de Mexico SA de CV, T\u00fcrkTrakt\u00f6r ve Ziraat Makineleri A.S. and New Holland HFT Japan Inc.. CNH Industrial also
purchases equipment from joint ventures, such as T\u00fcrkTrakt\u00f6r ve Ziraat Makineleri A.S. These transactions are
reflected in the Consolidated Financial Statements at December 31, 2022 as follows:
Transactions with associates
At December 31, 2022 and 2021, there were no material transactions with associates. At December\u00a031, 2022, CNH
Industrial had provided guarantees on commitments of its associates for an amount of $20 million related to CNH
Industrial Capital Europe S.a.S. ($15 million at December 31, 2021).
Transactions with unconsolidated subsidiaries
In the years ended December 31, 2022 and 2021, there were no material transactions with unconsolidated subsidiaries.
Compensation to Directors and Key Management
The fees of the Directors of CNH Industrial N.V. for carrying out their respective functions, including those in other
consolidated legal entities, and the notional compensation cost arising from stock grants awarded to certain Executive
Directors and Officers, amounted to an expense of approximately $40 million in 2022 ($34 million in 2021).
The aggregate expense incurred in 2022 and in 2021 for the compensation of Executives with strategic responsibilities
of the Group amounted to approximately $47 million and $42 million, respectively. These amounts included the notional
compensation cost for share-based payments.
",
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Compensation to Directors and Key Management
The fees of the Directors of CNH Industrial N.V. for carrying out their respective functions, including those in other
consolidated legal entities, and the notional compensation cost arising from stock grants awarded to certain Executive
Directors and Officers, amounted to an expense of approximately $40 million in 2022 ($34 million in 2021).
The aggregate expense incurred in 2022 and in 2021 for the compensation of Executives with strategic responsibilities
of the Group amounted to approximately $47 million and $42 million, respectively. These amounts included the notional
compensation cost for share-based payments.
",
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33. Explanatory notes to the statement of cash flows
The statement of cash flows sets out changes in cash and cash equivalents during the year. As required by IAS 7 -
Cash Flow Statements, cash flows are separated into operating, investing and financing activities. The effects of
changes in exchange rates on cash and cash equivalents are shown separately under the line item Translation
exchange differences.
The Group presents supplemental discussion and disclosure regarding the statement of cash flows for the purpose of
additional analysis. Certain items discussed below, are reflected within the consolidated statement of cash flows either
on an aggregate or net basis, and accordingly have been discussed further as set forth below.
Cash flows for income tax payments net of refunds in 2022 amount to $711 million ($348 million in 2021).
Total interest of $718 million was paid and interest of $446 million was received in 2022 (interest of $539 million was
paid in 2021, and interest of $350 million was received in 2021). In 2021, the amount included a charge of $8\u00a0million in
connection with CNH Industrial's accelerated debt redemption strategy.
Operating activities
Cash flows from/(used in) operating activities derive mainly from the Group\u2019s main revenue producing activities.
Cash generated from the sale of assets under operating leases, net of amounts included in Profit/(loss) for the period, is
recognized under operating activities in a single line item, which includes changes in working capital, capital
expenditure, depreciation and impairment losses.
Cash from operating lease is recognized under operating activities in a single line item, which includes capital
expenditure, depreciation, write-downs and changes in inventory.
The adjustment to exclude Other non-cash items of $89 million in 2022 ($19 million in 2021) includes an amount of
$2\u00a0million ($-60 million in 2021) related to result from investments net of impairment losses on assets recognized during
the year.
Changes in working capital for 2022 and 2021 are summarized as follows:
| | |
| | |
Change in trade receivables | | |
| | |
| | |
Change in other receivables/payables | | |
Change in working capital | | |
Investing activities
Cash flows from/(used in) investing activities represent the extent to which expenditures have been made for resources
intended to generate future income and cash flows. Only expenditures resulting in an asset recognized in the balance
sheet are classified as investing activities in the statement of cash flows. In particular, Cash flows from/(used in)
investing activities include net change in receivables from financing activities that may be analyzed as follows:
| | |
| | |
Change in dealer financing | | |
Change in retail financing | | |
| | |
Change in other receivables from financing activities | | |
Net change in receivables from financing activities | | |
Liquidity absorbed by the increase in receivables from financing activities in 2022 was primarily a result of increased
financing activities.
For consideration for the acquisition and disposal of subsidiaries and of other investments, refer to section \"Business
Combinations\" above and to Note 14 \"Investments and other non-current financial assets\".
Financing activities
The net change in other financial payables and derivative assets/liabilities mainly reflects changes in borrowings from
banks and in asset-backed financing, together with changes in derivative assets and liabilities (consisting of derivative
financial instruments measured at fair value at the balance sheet date, as discussed in Note 18 \"Derivative assets and
Derivative liabilities\" above).
Changes in 2022 and 2021 are summarized as follows:
| | |
| | |
Change in asset-backed financing | | |
Change in borrowings from banks and other financial payables | | |
Net change in other financial payables | | |
Net change in derivative assets and derivative liabilities | | |
Net change in other financial payables and derivative assets/liabilities | | |
Reconciliation of changes in liabilities arising from financing activities may be analyzed as follows:
| | |
| | |
Total Debt at beginning of year | | |
Derivative (assets)/liabilities at beginning of year | | |
Total liabilities from financing activities at beginning of year | | |
| | |
| | |
| | |
| | |
Transfer to Liabilities held for distribution (*) | | |
Net payment to Iveco Group N.V. | | |
Total liabilities from financing activities at end of year | | |
| | |
Total Debt at end of year | | |
Derivative (assets)/liabilities at end of year | | |
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"decimals": -6,
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"value": "19000000",
"decimals": -6,
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35. Subsequent events
CNH Industrial has evaluated subsequent events through February 28, 2023, which is the date the financial statements
were authorized for issuance, and determined that there were no such events requiring recognition or disclosure in the
financial statements.
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}
}