| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
Total undiscounted lease payments | | | |
| | | |
| | | |
31 December 2022 (\u20ac73\u00a0million outstanding at 31 December 2021).
As of 31 December 2022, the credit rating assigned by Fitch Ratings to Iveco Group N.V. is a Long-Term Issuer Default Rating (IDR) of \u2018BBB-\u2019.
The outlook is stable.
For further information on the management of interest rate and currency risk reference should be made to Note 30.
At 31 December 2022 and 2021, there was no significant debt secured with mortgages and other liens on assets of the Group, and the total
carrying amount of assets acting as security was not significant at 31 December 2022 and 2021. In addition, the Group\u2019s assets include current
receivables and cash with a pre-determined use reserved primarily to settle asset-backed financing of \u20ac3,149 million at 31 December 2022
(\u20ac1,926 million at 31 December 2021)
\u00a0
25. Trade payables
An analysis by due date of Trade payables is as follows:
| | | | | | | |
| |
| | | Due between one and five years | | | | |
| | | | | | | |
Contract liabilities primarily relate to extended warranties/maintenance and repair contracts, and transactions for the sale of vehicles with a buy-
back commitment. Contract liabilities include \u20ac619 million at 31 December 2022 (\u20ac658 million at 31 December 2021) for future rents related to
buy-back agreements. Changes in Contract liabilities for the years ended 31 December 2022 and 2021 are as follows:
| | | | | | | | | |
| | | Additional amounts arising during the period | | Amounts recognized within revenue | | Translation differences and other changes | | |
| | | | | | | | | |
| | | | | | | | | |
| | | Additional amounts arising during the period | | Amounts recognized within revenue | | Translation differences and other changes | | |
| | | | | | | | | |
Advances on buy-back agreements includes the repurchase value of the vehicle relating to new vehicles sold with the buy-back commitment from
Commercial and Specialty Vehicles included in Property, plant and equipment, as described in section \u201cSignificant accounting policies\u201d.
27. Commitments and contingencies
As a global company with a diverse business portfolio, the Iveco Group, 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. All significant matters are described below.
The outcome of any current or future proceedings, claims, or investigations cannot be predicted with certainty. Adverse decisions in some of
these proceedings, claims, or investigations could require the Iveco Group 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 the Iveco Group\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, Iveco Group recognizes specific provisions for this purpose. Contingent liabilities estimated by the Group, for which no
provisions have been recognized since an outflow of resources is not considered probable at the present time, were not material at 31 December
2022 and 2021.
Although the ultimate outcome of legal matters pending against the Iveco Group and its subsidiaries cannot be predicted, the Iveco Group
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, except for the following cases.
Other litigation and investigation
Follow on Damages Claims: in 2011 Iveco S.p.A. and Iveco Magirus AG (together \"Iveco\"), which, following the Demerger, are now part of Iveco
Group N.V., and its competitors in the European Union were subject to an investigation by the European Commission (the \u201cCommission\u201d) into
certain business practices in the European Union (in the period 1997-2011) in relation to Medium & Heavy trucks. On 19 July 2016, the
Commission announced a settlement with CNH Industrial (\"the Decision\") including a settlement with Iveco. In particular, Iveco received a
reduction in its fine for cooperating with the European Commission throughout the investigation, and received a fine of \u20ac494.6 million. Similar
decisions were taken, by the Commission, with reference to the other competitors. Following the Decision, Iveco S.p.A. and Iveco Magirus AG
(\"IMAG\") have been named as defendants in many proceedings across Europe and Israel. These damage claims could result in substantial
liabilities for the Group as well as incurring in significant defense costs, which may have a material adverse effect on its operations and financial
condition. The extent and outcome of these claims, in the absence of any final judgement, cannot be reliably predicted at this time and, therefore,
the Group did not recognize any specific provision for these claims. This current position will be reassessed from time to time and updated as
necessary. In accordance with IAS 37 \u2013 Provisions, Contingent Liabilities and Contingent Assets (paragraph 92), no further information is
disclosed so as not to prejudice the Group\u2019s position
FPT Emissions Investigation: on 22 July 2020, a number of CNH Industrial'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. (\"FPT\"), which is now part of the Iveco Group N.V., installed in certain Ducato (a vehicle
manufactured and distributed by Stellantis) and Iveco Daily vehicles. FPT is providing its full cooperation to properly address the requests
received. FPT, other companies of Iveco Group, and in certain instances CNH Industrial and other third parties have received various requests for
compensation by German and Austrian customers on various contractual and tort grounds, including requests for damages resulting out of 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 type approval regulations regarding emissions. In certain instances, other customers have brought judicial claims on
the same legal and factual bases. Although, at the date hereof, Iveco Group has no evidence of any wrongdoing, it 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. Therefore, Iveco Group did not recognize any specific provision in relation to this investigation.
Commitments and guarantees
Iveco Group provided guarantees on the debt or commitments of third parties and performance guarantees mainly in the interest of an associate
providing financing solutions to customers and a joint venture related to commercial commitments of defense vehicles, totaling \u20ac409 million and
\u20ac452 million as of 31 December 2022 and 2021, respectively.
28. Segment reporting
The segment information disclosed in these Consolidated Financial Statements reflects the identifiable reporting segments of the Company and
the financial information that the Chief Operating Decision Maker (\u201cCODM\u201d) reviewed to assess performance and make decisions about resource
allocation. The segments are organized based on products and services provided by Iveco Group.
Iveco Group has three operating segments:
\u25aaCommercial and Specialty Vehicles designs, manufactures and distributes a full range of light, medium, and heavy vehicles for the
transportation and distribution of goods under the IVECO brand, city-buses, commuter buses under the IVECO BUS (previously Iveco Irisbus)
and HEULIEZ BUS brands, quarry and mining equipment under the IVECO ASTRA brand, firefighting vehicles under the MAGIRUS brand, and
vehicles for civil defense and peace-keeping missions under the IDV brand.
\u25aaPowertrain designs, manufactures and distributes, under the FPT Industrial brand, a range of combustion engines, alternative propulsion
systems, transmission systems and axles for on- and off-road applications, as well as for marine and power generation.
\u25aaFinancial Services offers a range of financial products and services to dealers and customers. Financial Services provides and administers
retail financing to customers for the purchase or lease of new and used vehicles sold by brand dealers and distributors of the Group or directly
by subsidiaries of the Group. In addition, Financial Services provides wholesale financing to brand dealers and distributors of the Group.
Wholesale financing consists primarily of floor plan financing and allows the dealers to purchase and maintain a representative inventory of
products. Financial Services also provides trade receivables factoring services to Iveco Group Industrial Activities legal entities. Additionally,
Financial Services grants support to CNH Industrial, by providing financial services for their European brands, dealers and customers under a
vendor and service agreement, receiving a fee for the services rendered.
The activities carried out by the two industrial segments Commercial and Specialty Vehicles and Powertrain, and as well as by the holding
company Iveco Group N.V., 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 the segment performance and make decisions about resource allocation
based upon Adjusted EBIT, which is deemed to more fully reflect Industrial Activities segments' profitability. With reference to Financial Services,
historically and through 2021, the CODM assessed the performance of the segment and made decisions about resource allocation on the basis of
net income. Effective 1 January 2022, the CODM began to assess Financial Services segment performance and make decisions about resource
allocation on the basis of Adjusted EBIT, which now Iveco Group believes more fully reflect segment profitability. Adjusted EBIT is defined as
EBIT before restructuring costs and non-recurring items. In particular, non-recurring items are specifically disclosed items that management
considers rare or discrete events that are infrequent in nature and not reflective of on-going operational activities.
The following table summarizes Adjusted EBIT by reportable segment:
| | | |
| | | |
Commercial and Specialty Vehicles | | | |
| | | |
Unallocated items, eliminations and other | | | |
Adjusted EBIT of Industrial Activities | | | |
| | | |
| | | |
| | | |
A reconciliation from Adjusted EBIT to Iveco Group's consolidated Profit/(loss) before taxes for the years ended 31 December 2022 and 2021 is
provided below:
| | | |
| | | |
Adjusted EBIT of Industrial Activities | | | |
Adjusted EBIT of Financial Services | | | |
| | | |
| | | |
| | | |
Financial income/(expenses) | | | |
Profit/(loss) before taxes | | | |
(1) In the year ended 31 December 2022, this item primarily includes \u20ac44 million charge in connection with our Russian and Ukrainian operations, due to the impairment of certain assets,
\u20ac14 million related to the first time adoption of hyperinflationary accounting in T\u00fcrkiye, \u20ac30 million spin-off costs, \u20ac40 million loss for the impairment of certain development costs and
other assets, primarily related to the bus business, as a consequence of the acceleration in emission-related technological transition, \u20ac4 million related to the impairment of certain
assets held for sale, \u20ac36 million gain on the final step of Chinese joint ventures\u2019 restructuring, and \u20ac52 million gain from the disposal of certain fixed assets in Australia. In the year
ended 31 December 2021, this item primarily included the pre- and after-tax gain of \u20ac8 million from the sale of a 30.1% interest in Naveco, as well as the positive impact of \u20ac11 million
from the sale of investments by a joint venture accounted for under the equity method, \u20ac46 million spin-off costs, and a loss of \u20ac21 million due to the impairment of certain assets held
for sale.
No segment asset is expected to be reported to the CODM for assessing performance and allocating resources. Additional reportable segment
information is provided as follows.
Additional reportable segment information
Net Revenues by reportable segment for the years ended 31 December 2022 and 2021 are provided in Note 1.
Depreciation and amortization by reportable segment for the years ended 31 December 2022 and 2021 are provided below:
| | | |
| | | |
Commercial and Specialty Vehicles | | | |
| | | |
Unallocated items, eliminations and other | | | |
Total Industrial Activities | | | |
| | | |
Total Depreciation and Amortization(*) | | | |
(*)\u00a0 Excluding depreciation of assets on operating lease and assets sold with buy-back commitment.
Expenditures for long-lived assets by operating segments for the years ended 31 December 2022 and 2021 are provided below:
| | | |
| | | |
Commercial and Specialty Vehicles | | | |
| | | |
Unallocated items, eliminations and other | | | |
Total Industrial Activities | | | |
| | | |
Total Expenditures for long-lived assets(*) | | | |
(*) Excluding vehicles sold under buy-back commitments and operating leases.
29. Information by geographical area
The Company has its principal office in Turin, Italy. Revenues earned in Italy from external customers were \u20ac2,777 million and \u20ac2,582 million in
2022 and 2021, respectively. Revenues earned in the rest of the world from external customers were \u20ac11,580 million and \u20ac10,069 million in 2022
and 2021, respectively. The following table highlights revenues earned from external customers in the rest of the world by destination:
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
South East and Japan Sub-region, excluding Pakistan | | | |
| | | |
T\u00fcrkiye, Caucasus and South Central Asia Sub-region | | | |
| | | |
| | | |
| | | |
| | | |
| | | |
Australia and New Zealand | | | |
| | | |
| | | |
| | | |
| | | |
| | | |
Total revenues from external customers in the rest of the world | | | |
Total non-current assets located in Italy, excluding financial assets, deferred tax assets, defined benefit assets and rights arising under insurance
contracts, were \u20ac2,088 million and \u20ac1,859 million at 31 December 2022 and 2021, respectively, and the total of such assets located in the rest of
the world totaled \u20ac2,813 million and \u20ac3,115 million at 31 December 2022 and 2021, respectively. The following highlights non-current assets by
geographical area in the rest of the world:
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
Total non-current assets in the rest of the world | | | |
In 2022 and 2021, no single external customer of Iveco Group accounted for 10 per cent or more of consolidated revenues.
30. Information on financial risks
We are exposed to the following financial risks connected with our operations:
\u25aacredit risk related to our financing activities;
\u25aaliquidity risk, with particular reference to the availability of funds and access to the credit market and to financial instruments in general;
\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
The Group\u2019s credit risk differs in relation to the activities carried out by the segments and sales markets in which we operate; in all cases,
however, the risk is mitigated by the large number of counterparties and customers.
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 the reporting date 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.
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
commercial vehicles. These guarantees are further secured, where possible, by retention of title clauses or specific guarantees on financed
vehicle sales to the distribution network and on vehicles under finance 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.
Iveco Group utilizes three categories for receivables from financing activities that reflect their credit risk and how 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 |
Charge-offs of principal amounts of receivables outstanding are deducted from the allowance at the point when it is estimated that amounts due
are deemed uncollectible. Iveco Group continues to engage in collection efforts to attempt to recover the receivables. When recoveries are
collected, these are recognized as income.
Iveco Group\u2019s allowance for credit losses is segregated into two portfolio segments: retail and wholesale. A portfolio segment is the level at which
Iveco Group develops a systematic methodology for determining its allowance for credit losses. Typically, Iveco Group\u2019s receivables within a
portfolio segment have similar risk profiles and methods for assessing and monitoring risk. These classes align with management reporting.
The Group accounts for its credit risk by appropriately providing for expected credit losses on a timely basis. In calculating the expected credit
loss rates, Iveco Group considers historical loss rates for each category of customer and adjusts for forward-looking macroeconomic data.
In calculating the expected credit losses, Iveco Group\u2019s calculations depend on whether the receivable has been individually identified as being
impaired. The first component of the allowance for credit losses covers the receivables specifically reviewed by management for which Iveco
Group has determined it is probable that it will not collect all of the contractual principal and interest. Receivables are individually reviewed for
impairment based on, among other items, amounts outstanding, days past due and prior collection history. Expected credit losses are measured
by considering: the unbiased and probability-weighted amount; the time value of money; and reasonable and supportable information (available
without undue costs or effort) at the reporting date about past events, current conditions and forecasts of future economic conditions. Expected
credit losses are measured as the probability-weighted present value of all cash shortfalls over the expected life of each financial asset.
The second component of the allowance for credit losses covers all receivables that have not been individually reviewed for impairment. The
allowance for these receivables is based on aggregated portfolio evaluations, generally by financial product. The allowance for wholesale and
retail credit losses is based on loss forecast models that consider a variety of factors that include, but are not limited to, historical loss experience,
collateral value, portfolio balance and delinquency. The loss forecast models are updated on a quarterly basis. The calculation is adjusted for
forward-looking macroeconomic factors. In addition, qualitative factors that are not fully captured in the loss forecast models are considered in the
evaluation of the adequacy of the allowance for credit losses. These qualitative factors are subjective and require a degree of management
judgment.
Liquidity risk
We are exposed to funding risk if there is difficulty in obtaining finance for operations at any given point in time.
The cash flows, funding requirements and liquidity of our subsidiaries are monitored on a centralized basis. The aim of this centralized system is
to optimize the efficiency and effectiveness of the management of our capital resources.
Additionally, as part of our activities, we regularly carry out funding operations on the various financial markets which may take on different
technical forms and which are aimed at ensuring that it has an adequate level of current and future liquidity.
Measures taken to generate financial resources through operations and to maintain an adequate level of available liquidity are an important factor
in ensuring normal operating conditions and addressing strategic challenges. We therefore plan to meet our requirements to settle liabilities as
they fall due and to cover expected capital expenditures by using cash flows from operations and available liquidity, renewing or refinancing bank
loans and making recourse to the bond market and other forms of funding.
The main factors that determine our liquidity situation are the funds generated by or used in operating and investing activities and the debt lending
period and its renewal features or the liquidity of the funds employed and market terms and conditions.
Iveco Group has adopted a series of policies and procedures whose purpose is to optimize the management of funds and to reduce the liquidity
risk, as follows:
\u25aacentralizing the management of receipts and payments, where it may be economical in the context of the local statutory, currency and fiscal
regulations of the countries in which we are present;
\u25aamaintaining an adequate level of available liquidity;
\u25aadiversifying the means by which funds are obtained and maintaining a continuous and active presence on the capital markets;
\u25aaobtaining adequate credit lines; and
\u25aamonitoring future liquidity on the basis of business planning.
Details as to the repayment structure of the Iveco Group\u2019s financial assets and liabilities are provided in Note 17 \u201cCurrent Receivables and Other
current financial assets\u201d and in Note 24 \u201cDebt\u201d. Details of the repayment structure of derivative financial instruments are provided in Note 18
\u201cDerivative assets and Derivative liabilities\u201d.
Management believes that the funds currently available, together with the funds that will be generated from operating and financing activities, will
enable Iveco Group to satisfy its requirements resulting from its investing activities and working capital needs and to fulfill its obligations to repay
its debts at their natural due date.
Market risk
We operate in numerous markets worldwide and are exposed to market risks stemming from fluctuations in currency and interest rates.
The exposure to foreign currency risk arises both in connection with the geographical distribution of our industrial activities compared to the
markets in which we sell our products, and in relation to the use of external borrowing denominated in foreign currencies.
The exposure to interest rate risk arises from the need to fund industrial and financial operating activities and the necessity to deploy surplus
funds. Changes in market interest rates may have the effect of either increasing or decreasing our profit/(loss), thereby indirectly affecting the
costs and returns of financing and investing transactions.
We regularly assess our exposure to foreign currency and interest rate risk and manage those risks through the use of derivative financial
instruments in accordance with our established risk management policies.
Our policy permits derivatives to be used only for managing the exposure to fluctuations in exchange and interest rates connected with future
cash flows and assets and liabilities, and not for speculative purposes.
We utilize derivative financial instruments designated as fair value hedges, mainly to hedge:
\u25aathe currency risk on financial instruments denominated in foreign currency;
\u25aathe interest rate risk on fixed rate loans and borrowings.
The instruments used for these hedges are mainly currency swaps, forward contracts, interest rate swaps and combined interest rate and
currency financial instruments.
We use derivative financial instruments as cash flow hedges for the purpose of pre-determining:
\u25aathe exchange rate at which forecasted transactions denominated in foreign currencies will be accounted for;
\u25aathe interest paid on borrowings, both to match the fixed interest received on loans (customer financing activity), and to achieve a pre-defined
mix of floating versus fixed rate funding structured loans.
The exchange rate exposure on forecasted commercial flows is hedged by currency swaps, forward contracts and currency options. Interest rate
exposures are usually hedged by interest rate swaps and, in limited cases, by forward rate agreements.
Counterparties to these agreements are major and diverse financial institutions.
Information on the fair value of derivative financial instruments held at the balance sheet date is provided in Note 18 \u201cDerivative assets and
Derivative liabilities\u201d.
Currency risk
We are exposed to risk resulting from changes in exchange rates, which can affect our earnings and invested equity.
Where one of our subsidiaries incurs costs in a currency different from that of its revenues, any change in exchange rates can affect the profit/
(loss) of that company. In 2022 the total net trade flows exposed to currency risk amounted to the equivalent of 13% of our revenue (9% in 2021).
The principal exchange rates to which we are exposed are the following:
\u25aaEUR/GBP, predominately in relation to sales on the U.K. market;
\u25aaEUR/BRL, predominately in relation to import on the Brazilian market;
\u25aaEUR/TRY, predominately in relation to sales on the T\u00fcrkiye market;
\u25aaEUR/PLN, predominately in relation to sales on the Polish market;
\u25aaEUR/CZK, predominately in relation to the production of Commercial and Specialty Vehicles (Bus) in Czech Republic.
Trade flows exposed to changes in these exchange rates in 2022 made up approximately 67% of the exposure to currency risk from trade
transactions.
It is the Group\u2019s policy to use derivative financial instruments to hedge a pre-determined 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 risk
beyond that date where it is believed to be appropriate) and to hedge completely the exposure resulting from firm commitments.
Group\u2019s 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 foreign currencies different from the subsidiary\u2019s functional
currency.
Group\u2019s subsidiaries may have functional currency different from the euro, which is the Group presentation currency. The income statements of
those subsidiaries are converted into euros 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 euros.
The assets and liabilities of consolidated companies whose functional currency is different from the euro may acquire converted values in euros
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).
We monitor our principal exposure to translation exchange risk, although there was no specific hedging in place at 31 December 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 31 December 2022 resulting from a hypothetical change of 10% in the exchange rates amounts to
approximately \u20ac291 million (\u20ac187 million at 31 December 2021). The valuation model for currency options assumes that market volatility at year-
end remains unchanged.
The underlying transactions (consisting of receivables, payables, and future trade flows) for which we put in place, as hedging transactions, the
derivative financial instruments analyzed in the above mentioned sensitivity analysis, were not considered. 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), financing themselves 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) will be reformed by the authority and gradually replaced with alternative benchmark
rates (SOFR). Despite the uncertainty around the timing and precise nature of these changes, the existing benchmark interest rates are still
applied as reference rates.
Group Treasury is managing the Group\u2019s IBOR transition plan. The greatest change will be amendments to the contractual terms of the IBOR-
referenced floating-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 floating-rate debt will move to SOFR at the beginning of July 2025 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 floating-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, ABCP, 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 31
December 2022, resulting from a hypothetical, unfavorable and instantaneous change of 10%\u00a0in market interest rates, would have been
approximately \u20ac1 million (\u20ac1 million at 31 December 2021).
Floating rate financial instruments consist principally of cash and cash equivalents, wholesale receivables, debt, and ABCPs. The effect of the
sale of receivables is also considered in the sensitivity analysis as well as the effect of hedging derivative instruments. This analysis doesn\u2019t
include cash and cash equivalent from hyperinflationary countries which could have distorting effects on the results of the analysis and the
change in fair value of foreign exchange rate derivatives instruments.
A hypothetical change of 10% in short-term interest rates at 31 December 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 \u20ac8 million (\u20ac5 million at 31 December 2021).
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 limited 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 31 December 2022 linked to commodity prices would not have been significant (not significant at 31 December 2021).
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 31 December 2022 and 2021:
| | | | | | | | |
| | |
| | | | | | | | |
Equity investments measured at fair value through other comprehensive income | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | |
| | | | | | | | |
Equity investments measured at fair value through other comprehensive income | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
The following table provides a reconciliation from the opening balance to the closing balance for fair value measurements categorized in Level 3
in 2022 and 2021:
| | | |
| | | |
| | | |
| | | |
Gains/(Losses) recognized in Other comprehensive income/(loss) | | | |
Transfer from Level 3 to Level 1 | | | |
| | | |
| | | |
(1) At 31 December 2022 Other debt includes \u20ac277 million of financial payables to CNH Industrial classified as Level 3.
| | | | | | | | | | |
| | |
| | | | | | | | | | |
Total Financial receivables from CNH Industrial | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
Other receivables from financing activities | | | | | | | | | | |
Total Receivables from financing activities | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
Payables represented by securities | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
(1) At 31 December 2021 Other debt included \u20ac3,076 million of financial payables to CNH Industrial classified as Level 3.
Receivables from financing activities
The fair value of Receivables from financing activities is based on the discounted values of their related cash flows at market discount rates that
reflect conditions applied in various reference markets on receivables with similar characteristic, adjusted to take into account the credit risk of the
counterparties.
Debt
The fair value of Asset-backed financing, Borrowings from banks, Payable represented by securities and Other debt are included in the Level 2
and has been estimated based on discounted cash flows analysis using the current market interest rates at year-end adjusted for the Group non-
performance risk over the remaining term of the financial liability.
The fair value of Lease liabilities classified within Level 3 of the fair value hierarchy has been estimated using discounted cash flow models that
require significant adjustments using unobservable inputs.
Other financial assets and liabilities
The carrying amount of Cash at banks, Restricted cash, Other cash equivalents, Trade receivables, Other current receivables and financial
assets, Trade payables and Other current liabilities included in the statement of financial position approximates their fair value, due to the short
maturity of these items.
32. Related party transactions
In accordance with IAS 24 \u2013 Related Party Disclosures, Iveco Group\u2019s related parties are companies and persons capable of exercising control,
joint control or significant influence over the Group. As of 31 December 2022 and 2021, related parties included Iveco Group\u2019s parent company
Exor N.V. and its subsidiaries and affiliates, including CNH Industrial post-Demerger, Stellantis N.V. (formerly Fiat Chrysler Automobiles N.V.
which, effective 16 January 2021, merged with Peugeot S.A. by means of a cross-border legal merger) and its subsidiaries and affiliates
(\"Stellantis\"), and Iveco Group's unconsolidated subsidiaries, associates or joint ventures. In addition, the members of the Board of Directors and
managers of Iveco Group with strategic responsibility and members of their families were also considered related parties.
As of 31 December 2022, based on public information available and in reference to Company's files, Exor N.V. held 42.5% of Iveco Group\u2019s
voting power and had the ability to significantly influence the decisions submitted to a vote of Iveco Group\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 Iveco Group N.V. as of 31 December 2022.
In addition, Iveco Group 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
Iveco Group did not enter into any significant transactions with Exor\u00a0N.V. during the years ended 31 December 2022 and 2021.
In connection with the establishment of Fiat Industrial (now CNH Industrial) through the demerger from Fiat (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 Iveco Group with administrative services such as accounting, 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. After the Demerger, the Stellantis MSA has been
duplicated at the same terms and conditions between Iveco Group and Stellantis.
Furthermore, Iveco Group and Stellantis might 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 | | | |
Iveco Group and CNH Industrial entered into agreements, primarily of commercial nature, but also covering general administrative and specific
technical matters as well as services provided by CNH Industrial N.V., as follows:
Master Service Agreements: in relation to certain services provided by either Iveco Group to CNH Industrial and vice versa, in connection with the
execution of the Demerger Deed, Iveco Group and CNH Industrial 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, in connection with the
execution of the Demerger Deed, Iveco Group and CNH Industrial entered into a ten-year Engine Supply Agreement (\u201cESA\u201d) whereby Iveco
Group will sell to CNH Industrial diesel, CNG and LNG engines and provide post-sale services.
Financial Service Agreement: in relation to certain financial services activities carried out by either Iveco Group to CNH Industrial or vice versa, in
connection with the execution of the Demerger Deed, Iveco Group and CNH Industrial 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.
Transactions with joint ventures
Iveco Group sells commercial vehicles and provides technical services to joint ventures such as IVECO - OTO MELARA Societ\u00e0 Consortile a
responsabilit\u00e0 limitata.
Net revenues from joint ventures totaled \u20ac260 million in 2022 (\u20ac398 million in 2021) and trade receivables from joint ventures totaled \u20ac14 million at
31 December 2022 (\u20ac3 million at 31 December 2021).
At 31 December 2022 and 2021, Iveco Group had provided guarantees on commitments of its joint ventures for an amount of \u20ac161 million and
\u20ac186 million, respectively, mainly related to IVECO - OTO MELARA Societ\u00e0 Consortile a responsabilit\u00e0 limitata.
Transactions with associates
Iveco Group sells trucks and commercial vehicles and provides services to associates. In 2022, revenues from associates totaled \u20ac89 million
(\u20ac190 million in 2021). In 2022, cost of sales from associates totaled \u20ac13 million (\u20ac15 million in 2021). At 31 December 2022 receivables from
associates amounted to \u20ac12 million (\u20ac11 million at 31 December 2021). Trade payables to associates amounted to \u20ac13 million at 31 December
2022 (\u20ac18\u00a0million at 31 December 2021). At 31 December 2022 and 2021, Iveco Group had provided guarantees on commitments of its
associates for an amount of \u20ac244 million and \u20ac256 million related to CNH Industrial Capital Europe S.a.S.
Transactions with unconsolidated subsidiaries
In the years ended 31 December 2022 and 2021, there were no material transactions with unconsolidated subsidiaries.
Compensation to Directors and Key Management
The fees of the Directors of Iveco Group 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 \u20ac7 million in 2022 (no compensation in 2021 as Iveco Group had not its separate Board of Directors during that year).
The aggregate expense incurred for the compensation of Executives with strategic responsibilities of the Group amounted to approximately
\u20ac15\u00a0million and \u20ac16 million in 2022, and 2021 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. 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.
The Cash flows for income tax payments net of refunds in 2022 amount to \u20ac99 million (\u20ac92 million in 2021).
Total interest of \u20ac119 million was paid and interest of \u20ac170 million was received in 2022 (interest of \u20ac36 million was paid and interest of \u20ac24 million
was received in 2021, respectively).
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 vehicles under buy-back commitments, 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.
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 | | | |
Liquidity absorbed by the increase in receivables from financing activities in 2022 was primarily a result of increased financing activities.
Cash generated by \u201cOther changes\u201d of \u20ac683 million in 2022 (\u20ac581 million in 2021) primarily derived from the change in receivables from and
payables to CNH Industrial.
For consideration for the acquisition and disposal of subsidiaries and of other investments, refer to section \"Business Combinations\" above and to
Note 14.
Financing activities
The net change in debt 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 above).
Changes in 2022 and 2021 are summarized as follows:
| | | |
| | | |
Change in asset-backed financing | | | |
Change in borrowings from banks and other debt | | | |
| | | |
| | | |
Net change in derivative assets and derivatives liabilities | | | |
Net change in debt and derivative assets/liabilities | | | |
Reconciliation of changes in liabilities arising from financing activities may be analyzed as follows:
| | | |
| | | |
Total Debt at beginning of year (1) | | | |
Derivative (assets)/liabilities at beginning of year | | | |
Total liabilities from financing activities at beginning of year | | | |
| | | |
| | | |
Total liabilities from financing activities at end of year | | | |
| | | |
Total Debt at end of year (1) | | | |
Derivative (assets)/liabilities at end of year | | | |
(1) Excluding Debt payable to CNH Industrial.
34. Subsequent events
Iveco Group has evaluated subsequent events through 2 March 2023, which is the date the financial statements were authorized for issuance,
and identified the following:
\u25aaOn 24 January 2023, IDV, the brand of Iveco Group specialised in defence and civil protection equipment, announced it entered into an
agreement to acquire a controlling stake in MIRA UGV, the Uncrewed Ground Vehicle division of HORIBA MIRA, a global provider of
automotive engineering, research and test services, headquartered in the U.K.\u00a0 \u00a0
35. Companies included in the scope of the Consolidated Financial Statements
The main legal entities comprising the Iveco Group at 31 December 2022, including major subsidiaries, joint ventures and associates, are
provided below:
| | |
| | |
SUBSIDIARIES CONSOLIDATED LINE-BY-LINE | | |
Amce-Automotive Manufacturing Co.Ethiopia | | |
Astra Veicoli Industriali S.p.A. | | |
| | |
CNH Industrial Argentina S.A. | | |
CNH Industrial Finance France S.A. | | |
| | |
Fiat Powertrain Technologies (Chongqing) Co., Ltd. | | |
Fiat Powertrain Technologies Management (Shanghai) Co. Ltd. | | |
Fiat Powertrain Technologies of North America, Inc. | | |
FPT - Powertrain Technologies France SAS | | |
FPT INDUSTRIAL BRASIL LTDA. | | |
| | |
| | |
Green & Advanced Transport Ecosystem S.p.A. | | |
| | |
IAV-Industrie-Anlagen-Verpachtung GmbH | | |
IC Financial Services S.A. | | |
IC Financial Services UK Limited | | |
| | |
| | |
| | |
Iveco (China) Commercial Vehicle Sales Co. Ltd | | |
| | |
| | |
| | |
Iveco Arac Sanayi VE Ticaret A.S. | | |
| | |
| | |
| | |
| | |
IVECO CAPITAL BULGARIA EAD | | |
Iveco Capital Services S.R.L. | | |
Iveco Capital Slovakia s.r.o. | | |
Iveco Capital Solutions S.p.A. | | |
Iveco Czech Republic A.S. | | |
| | |
IVECO DEFENCE VEHICLES ROMANIA S.R.L. | | |
Iveco Defence Vehicles S.p.A. | | |
| | |
| | |
| | |
| | |
| | |
Iveco Group Switzerland SA | | |
| | |
| | |
| | |
| | |
| | |
Iveco Magirus Fire Fighting GmbH | | |
| | |
Iveco Nord Nutzfahrzeuge GmbH | | |
| | |
Iveco Nord-Ost Nutzfahrzeuge GmbH | | |
| | |
Iveco Otomotiv Ticaret A.S. | | |
Iveco Participations s.a.s. | | |
Iveco Pension Trustee Ltd | | |
| | |
Iveco Portugal-Comercio de Veiculos Industriais S.A. | | |
| | |
| | |
| | |
| | |
| | |
| | |
Iveco South Africa Works (Pty) Ltd | | |
Iveco Sud-West Nutzfahrzeuge GmbH | | |
| | |
| | |
| | |
Iveco Truck Centrum s.r.o. | | |
Iveco Truck Services S.R.L. | | |
Iveco Trucks Australia Limited | | |
| | |
Iveco West Nutzfahrzeuge GmbH | | |
MAGIRUS CAMIVA S.a.s. (societ\u00e8 par actions simplifi\u00e8e) | | |
| | |
| | |
| | |
Mediterranea de Camiones S.L. | | |
| | |
| | |
| | |
Potenza Technology Holdings Limited | | |
Potenza Technology Limited | | |
SAIC Fiat Powertrain Hongyan Co. Ltd. | | |
Seddon Atkinson Vehicles Ltd | | |
Soci\u00e9t\u00e9 Charolaise de Participations SAS | | |
Soci\u00e9t\u00e9 de Diffusion de Vehicules Industriels-SDVI S.A.S. | | |
| | |
Transolver Services S.A.S. | | |
UAB \"IVECO CAPITAL BALTIC\" (In liquidation) | | |
Zona Franca Alari Sepauto S.A. | | |
| | |
JOINTLY-CONTROLLED ENTITIES ACCOUNTED FOR USING THE EQUITY METHOD | | |
| | |
IVECO - OTO MELARA Societ\u00e0 Consortile a responsabilit\u00e0 limitata | | |
| | |
| | |
| | |
SUBSIDIARIES VALUED AT COST | | |
| | |
FPT INDUSTRIAL INDIA PRIVATE LIMITED | | |
| | |
| | |
ASSOCIATED COMPANIES ACCOUNTED FOR USING THE EQUITY METHOD | | |
CNH Industrial Capital Europe S.a.S.(2) | | |
Transolver Finance Establecimiento Financiero de Credito S.A. | | |
| | |
ASSOCIATED COMPANIES VALUED AT COST | | |
| | |
| | |
| | |
| | |
| | |
OTHER COMPANIES VALUED AT FVTPL | | |
Naveco (Nanjing IVECO Motor Co.) Ltd. | | |
(1) After the Demerger CIFINS S.p.A. is owned 50.00% by Iveco Group and 50.00% by CNH Industrial.
(2) This percentage represents the interest held by Iveco Group through its 50% interest in CIFINS S.p.A.
2 March 2023
The Board of Directors
Suzanne Heywood
Gerrit Andreas Marx
Tufan Erginbilgic
Essimari Kairisto
Linda Knoll
Alessandro Nasi
Olof Persson
Beno\u00eet Ribadeau-Dumas
Lorenzo Simonelli
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BASIS OF PREPARATION
These consolidated financial statements together with the notes thereto of Iveco Group at 31 December 2022 (the \u201cConsolidated Financial
Statements\u201d) were authorized for issuance by the Board of Directors of Iveco Group N.V. on 2 March 2023 and have been prepared in
accordance with the International Financial Reporting Standards (\u201cIFRS\u201d) as adopted by the European Union (\u201cEU-IFRS 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 negatively
impacted by the effects of the Russia-Ukraine conflict, the supply chain issues, energy and inflation costs, and the COVID-19 pandemic, 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 euro as the presentation currency.
Method of preparation of comparative data for 2021
Comparative data for the year ended 2021 and at 31 December 2021 (in the following the \u201cCombined Financial Statements\u201d) have been prepared
in connection with the Demerger and have been derived from the Consolidated Financial Statements and accounting records of CNH Industrial.
The Combined Financial Statements have been prepared to represent the combined historical results of operations, financial position and cash
flows of the Iveco Group business structure that is controlled by the Company following the Demerger. The Combined Financial Statements are
presented as if the entities controlled directly or indirectly by CNH Industrial until the Demerger and that are controlled by the Company
afterwards, together with other assets and liabilities, had been combined for all periods presented.
As the Demerger was considered a \u201cbusiness combination involving entities or businesses under common control\u201d, it was outside the scope of
application of IFRS 3 \u2013 Business Combinations and IFRIC 17 \u2013 Distributions of Non-cash Assets to Owners. Accordingly, assets and liabilities
were accounted for at the carrying value in the accounting records of the transferring entity (i.e. CNH Industrial). The Combined Financial
Statements were therefore prepared under the historical cost convention, modified as required for the measurement of financial instruments, as
well as on a going concern basis.
EU-IFRS do not provide principles for the preparation of combined and/or carved-out financial statements, accordingly, in preparing the combined
financial statements, accounting and allocation conventions commonly used in practice for the preparation of combined and/or carved-out
financial statements were applied.
The following paragraphs describe the significant estimates and assumptions applied by management in the preparation of these Combined
Financial Statements:
\u25aaWhere they did not correspond to a separate legal entity, assets and liabilities attributable to the Group\u2019s operations were identified and
recognized in the Combined Financial Statements by adjusting equity.
\u25aaIncome and expenses attributable to operations were allocated on a basis consistent with the allocation of the assets and liabilities that
generated them or the legal entities to which they relate. In particular, corporate general and administrative functions costs in the areas of
corporate governance, including senior management, corporate responsibility and other corporate functions, such as tax, legal, investor
relations, treasury, communication functions, were not charged or allocated to the Iveco Group business in the past. The Combined Financial
Statements included a reasonable allocation of these corporate general and administrative functions costs, primarily based on headcount.
\u25aaAll the items resulting from transactions between entities remaining in the CNH Industrial Group and entities being transferred to Iveco Group
were included in those Combined Financial Statements as items relating to third parties.
\u25aaIncome tax expense or benefit, deferred income tax assets and liabilities and income tax receivables and liabilities attributable to Iveco Group
were determined based on actual taxation. In certain cases, entities being transferred to the Iveco Group business have historically been
included in consolidated tax filing groups with other entities that were not transferred to the Iveco Group business. In these instances, the
current and deferred taxes presented in the Combined Financial Statements have generally been calculated considering the effects resulting
from these entities participating in their respective group tax filings.
\u25aaDividends and other equity transactions between Iveco Group and CNH Industrial Group were recognized directly in the Invested capital and
retained earnings attributable to owners of Iveco Group.
The Company believes that the assumptions above described underlying the Combined Financial Statements, including recharges of expenses
from CNH Industrial Group, are reasonable. Nevertheless, the Combined Financial Statements may not include all of the actual expenses that
would have been incurred by Iveco Group and may not reflect the combined results of operations, financial position and cash flows had Iveco
Group been a stand-alone group during the periods presented. Actual costs that would have been incurred if Iveco Group had been a stand-alone
group would depend on multiple factors, including organizational structure and strategic decisions made in various areas.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfBasisOfPreparationOfFinancialStatementsExplanatory",
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"value": "
These consolidated financial statements together with the notes thereto of Iveco Group at 31 December 2022 (the \u201cConsolidated Financial
Statements\u201d) were authorized for issuance by the Board of Directors of Iveco Group N.V. on 2 March 2023 and have been prepared in
accordance with the International Financial Reporting Standards (\u201cIFRS\u201d) as adopted by the European Union (\u201cEU-IFRS 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).
",
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"value": "
These consolidated financial statements together with the notes thereto of Iveco Group at 31 December 2022 (the \u201cConsolidated Financial
Statements\u201d) were authorized for issuance by the Board of Directors of Iveco Group N.V. on 2 March 2023 and have been prepared in
accordance with the International Financial Reporting Standards (\u201cIFRS\u201d) as adopted by the European Union (\u201cEU-IFRS 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).
",
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"language": "en",
"entity": "scheme:549300ZWF2ZJDD9EOR96",
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},
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"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 negatively
impacted by the effects of the Russia-Ukraine conflict, the supply chain issues, energy and inflation costs, and the COVID-19 pandemic, 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:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl8zMzQvZnJhZzoxZmFjZDNhY2U4ZDY0ZGFlYmMzNWJhY2EwOWE5MTc2Ny90ZXh0cmVnaW9uOjFmYWNkM2FjZThkNjRkYWViYzM1YmFjYTA5YTkxNzY3XzMyOTg1MzQ4ODMzNjQ_eea7c22f-c611-44cb-93c4-54cfc3c34a98": {
"value": "SIGNIFICANT ACCOUNTING POLICIES
Format of the financial statements
Iveco Group 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. The Consolidated Financial Statements include both industrial activities companies and financial
services companies. The investment portfolios of the financial services companies are included in current assets, as the investments will be
realized in their normal operating cycle. However, financial services companies obtain only a portion of their funding from the market; the
remainder is obtained from the parent company (included in the Industrial Activities) through its treasury activity, which lends funds both to
industrial activities companies and to financial services companies as the need arises. This financial services structure within the Iveco Group
does not allow the separation of financial liabilities funding the financial services operations (whose assets are reported within current assets) and
those funding the industrial activities operations. Presentation of financial liabilities as current or non-current based on their date of maturity would
not facilitate a meaningful comparison with financial assets, which are categorized on the basis of their normal operating cycle. Disclosure of the
due dates of financial 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. With reference to 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, cost is used as an estimate of fair value, as permitted
by IFRS 9 - Financial Instruments. 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 unless they are basically
a repayment of the initial investment (in case of investments measured at fair value through other comprehensive income).
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 euro 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 euro 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, at the reporting date, the amount of non-monetary assets and
liabilities is redetermined using a general price index before being translated into euro. The financial statements of these subsidiaries are then
translated at the closing spot rate.
The principal exchange rates used to translate into euros the financial statements prepared in currencies other than the euro 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.
(2) As of 30 June 2022, the Company applied the hyperinflationary accounting in T\u00fcrkiye, with effect from 1 January 2022. After 1 January 2022, 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.
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, Note 31 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 vehicle production project (trucks, buses, and engines) are recognized as an asset if and only if both of the following
conditions are met: a) development costs can be measured reliably, b) the technical feasibility of the product, volumes and pricing support the
view that the development expenditure will generate future economic benefits, and c) the intention to complete the intangible asset, as well as d)
the availability of adequate technical, financial and other resources for this purpose. Capitalized development costs include all direct and indirect
costs that may be directly attributed to the development process. Capitalized development costs are amortized on a systematic basis from the
start of production of the related product over the product\u2019s estimated average life, as follows:
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.
Property, plant and equipment also include vehicles sold with a buy-back commitment, which are recognized under the method described in the
paragraph \u201cRevenue recognition\u201d.
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, Iveco Group 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), Iveco Group 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 Iveco Group\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, Iveco Group 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.
Lessor accounting
Lease contracts where Iveco Group 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 Iveco Group 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 Iveco Group 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 vehicles 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%.
When leased assets are no longer leased and become held for sale, the Group reclassifies their carrying amount to Inventories.
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, 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 (\u201cAC\u201d), fair value through
other comprehensive income (\u201cFVTOCI\u201d) or fair value through profit or loss (\u201cFVTPL\u201d), 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 where applicable. 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 represent 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 a hedging relationship)
or at fair value through profit or loss (refer to \"Derivative financial instruments\" below).
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 - Financial Instruments, 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:
\u25e6if 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;
\u25e6if 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 net realizable value. 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 other post-employment defined benefits. 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 the key executive officers and select employees through equity compensation plans (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.
Revenue recognition
Revenue is recognized when control of the vehicles, 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 vehicles and parts are generally dealers, distributors and retail customers.
Transfer of control, and thus related revenue recognition, generally corresponds to when the vehicles and parts are made available to the
customer. Therefore, the Group recognizes revenue at a point in time, when control is transferred to the customer at a sale price that the Group
expects to receive.
For all sales, no significant uncertainty exists surrounding the purchaser\u2019s obligation to pay for vehicles 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 a vehicle contract transaction has multiple performance obligations, the cost of incentives is
allocated entirely to vehicle as the intent of the incentives is to encourage sales of vehicles. If the estimate of the incentive changes following the
sale to the customer, the change in estimate is recognized as an adjustment to revenue in the period of the change. Iveco Group grants 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,
Iveco Group 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/vehicles 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 vehicle from Industrial Activities to the dealer. Concurrent with the
sale of the vehicle, 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, Iveco Group 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
Iveco Group 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 vehicle. 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.
Rents and other income on assets sold with a buy-back commitment
Commercial and Specialty Vehicles enters into transactions for the sale of vehicles to some customers with an obligation to repurchase (\u201cbuy-
back commitment\u201d) the vehicles at the end of a period (\u201cbuy-back period\u201d) at the customer\u2019s request. For these types of arrangements, at
inception, Iveco Group assesses whether a significant economic incentive exists for the customer to exercise the option.
If Iveco Group determines that a significant economic incentive exists for the customer to exercise the buy-back option, the transaction is
accounted for as an operating lease. In such case, vehicles are accounted for as Property, plant and equipment because the agreements typically
have a long-term buy-back period. The difference between the carrying value (corresponding to the manufacturing cost) and the estimated resale
value (net of refurbishing costs) at the end of the buy-back period is depreciated on a straight-line basis over the same period. The initial sale
price received is recognized in \u201cOther current liabilities\u201d and is comprised of the repurchase value of the vehicle, and the rents to be recognized in
the future recorded as contract liability. These rents are determined at the inception of the contract as the difference between the initial sale price
and the repurchase price and are recognized as revenue on a straight-line basis over the term of the agreement. At the end of the agreement
term, upon exercise of the option, the used vehicles are reclassified from Property, plant and equipment to Inventories. The proceeds from the
sale of such vehicles are recognized as Revenues.
If Iveco Group determines that a significant economic incentive does not exist for the customer to exercise the buy-back option, the transaction is
treated as a sale with a variable consideration whose variable component is the buy-back provision accrual. The buy-back provision accrual is the
difference between the repurchase price and the estimated market value of the used vehicle at the end of the buy-back period and is recorded
only when the repurchase price is greater than the estimated market value of the used vehicle. The buy-back provision accrual is estimated and
recognized as a reduction of revenues at the time of the sale. Any subsequent change following such periodic reassessment is recognized as a
reduction of revenues at that time.
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, Iveco Group 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, Iveco Group 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 future distribution of a subsidiary\u2019s undistributed profits are only made when 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 bases of assets or
liabilities and the corresponding carrying amounts in the Consolidated Financial Statements, except for those arising from non-tax-deductible
goodwill and investments in subsidiaries where it is possible to control the reversal of the basis 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 examinations. 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 Iveco Group to make judgments,
estimates and assumptions affecting 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, on 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 Iveco Group'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 vehicles leased out under operating lease arrangements or sold with buy-back commitments, sales
allowances, product warranties, pension and other post-employment benefits, deferred tax assets and liabilities 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 Iveco Group 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 Iveco Group\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 wholesale and retail credit portfolio. 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 months 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
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.
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. Iveco Group 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 or sold with a buy-back commitment
Iveco Group records assets rented to customers or leased to them under operating lease as tangible assets. Furthermore, new vehicle sales with
a buy-back commitment are not recognized as sales at the time of delivery but are accounted for as operating lease if it is probable that the
vehicle will be bought back. 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 Iveco Group\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 vehicle market was carefully monitored to ensure that write-downs were properly determined. However, it cannot be excluded
that additional write-downs may be required if market conditions should deteriorate further.
Sales allowances
Iveco Group grants 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, Iveco Group records the estimated impact of sales allowances in the form of dealer and customer incentives as a reduction
of revenue. The expense for new programs is accrued at the inception of the program. The amounts of incentives to be paid are estimated. 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.
Product warranties
Iveco Group makes provisions for estimated expenses related to product warranties at the time products are sold. Management establishes these
estimates based on historical information on the nature, frequency and average cost of warranty claims. The Group seeks to improve vehicle
quality and minimize warranty expenses arising from claims. Warranty costs may differ from those estimated if actual claim rates are higher or
lower than historical rates.
Pension and other post-employment benefits
Group companies sponsor pension and other post-employment benefits in various countries, mainly in the United Kingdom, Germany, Italy, and
Switzerland.
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 of salary increases and the healthcare costs trend rate and takes into
consideration the likelihood of potential future events by using 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 31 December 2022, Iveco Group had net deferred tax assets, including tax loss carry forwards, of \u20ac927 million, of which \u20ac252 million are not
recognized in the financial statements. The corresponding totals at 31 December 2021 were \u20ac864 million and \u20ac229 million. Management has
recognized deferred tax assets it believes are probable to be recovered considering amounts from budgets and plans consistent with those used
for other purposes within Iveco Group, for example impairment testing, as discussed in the paragraph \u201cRecoverability of non-current assets\u201d
above. Iveco Group 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, Iveco Group assessed the realizability of its various deferred tax assets, which related to multiple tax
jurisdictions in all regions of the world. In substantially all the jurisdictions in which Iveco Group operates, no changes in assessment occurred with
respect to the recognition of deferred tax assets. This is primarily attributable to the fact accumulated losses were largely driven by non-recurring
events (the COVID-19 pandemic and asset impairments) that impacted taxable income in the near-term, while substantially all of Iveco Group\u2019s
deferred tax assets have no expiry date. Further, Iveco Group has a history of producing pre-tax losses in the bottom-end of economic cycles
followed by generating pre-tax profits during ensuing periods of economic expansion such that there is little history of its tax attributes expiring
unutilized. Given the uncertainty on evolution of certain macro-economic dynamics (i.e.: Russia-Ukraine war, supply chain issues, energy price
and supply), however, it is possible assessment changes could occur within the next twelve months, with those changes potentially having a
material impact on Iveco Group\u2019s results of operations.
Contingent liabilities
Iveco Group is the subject of legal proceedings and tax issues 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 Iveco Group 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 other experts on matters related to litigation and taxes. 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.
Global Supply Chain, energy costs, and COVID-19 pandemic
Global supply chain remains challenging, as well as increased energy costs and inflation, representing the main challenge for the Group
operations. Furthermore, the Group remains cautious about future impacts on its end-markets and business operations of restrictions on social
interactions and business operations to limit the resurgence of the COVID-19 pandemic.
Climate related matters
The Company has established specific functions and structures within its respective business units to monitor the relevant emerging policies and
regulatory developments at local and global level (especially in Europe, where regulatory pressure is greater). The resulting analyses are
incorporated into the Company\u2019s strategy to ensure full compliance with applicable laws. The shifts in consumer preferences and demand towards
sustainable transport solutions, driven by both an increase in climate-related awareness and more stringent regulations, may result in potential
risks for manufacturers that must adapt to the evolving market. To counter this, Iveco Group applies these shifts to the development of its product
portfolio to steer R&D focus towards sustainable technologies (e.g., biofuels, electric and hydrogen propulsion technologies) and ensure the
resilience of its business model. To ensure the timely delivery of its strategy, the Company has established specific targets linked to the
environmental performance of its manufacturing processes, logistics, and product portfolio. Iveco Group developed a scenario analysis which led
to the identification of the Internal Price of Carbon (IPoC), an indicator that enables management to prioritise energy-saving projects based on the
Group\u2019s ability to generate the greatest reduction in CO2 emissions. The IPoC is used as a decision making tool whenever an initiative is
presented to the Company\u2019s Investment Committee.
Based on the analysis of climate-related risks and opportunities, Iveco Group defined 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,
Iveco Group has implemented relevant projects and a number of other specific climate-related topics and has defined long-term strategic targets
that aim to reduce the CO2 emissions along the entire value chain (e.g.,in manufacturing plants, in logistics processes, during the use of sold
products).
There has been increasing interest in how climate change will impact the Group\u2019s business. Iveco Group 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, Iveco Group has adopted an environmental policy that applies to all Group 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.
In particular, one of the performance metrics foreseen in the equity incentive plan (2022-2024 LTIP Awards) in which employees and executive
directors participate is the CO2 emissions reduction. This could impact the future amount of the recognition of share-based payment expense in
the income statement.
Russia-Ukraine conflict
The geopolitical situation and the Russia-Ukraine conflict escalated since the end of February 2022. Iveco Group has operations in both Russia
and Ukraine, which have been suspended during the first quarter of 2022. During the first quarter, Iveco Group recorded a negative after-tax
impact of \u20ac51 million in connection with our operations in Russia and Ukraine, primarily due to the impairment of certain assets and EU sanctions
preventing further commercial activities with Russian legal entities and individuals. On 20 July 2022, the Company executed a dissolution
agreement with the Russian JV, IVECO AMT, also formally presenting its withdrawal from the legal entity. Accordingly, the Iveco Group stake
(33.3%) was returned to IVECO AMT. While Russia and Ukraine do not constitute a material portion of the Group business, a significant
escalation or expansion of economic disruption could have a material adverse effect on Iveco Group results of operations. The Group is closely
monitoring the impact of the Russia-Ukraine conflict on its employees and all aspects of its business, the Group\u2019s results of operations, financial
condition and cash flows.
The increased risk resulting from the Russia-Ukraine conflict is described in section \u201cRisk Factors - Political or Financial instability in countries
where the Group operates\u201d of this Annual Report.
New standards and amendments effective from 1 January 2022
\u25aaOn 14 May 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 1
January 2022. These amendments had no impact on these Consolidated Financial Statements.
\u25aaOn 14 May 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 1 January 2022. These
amendments had no impact on these Consolidated Financial Statements.
\u25aaOn 14 May 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 an illustrative example of reimbursement for
leasehold improvements. These amendments are effective from 1 January 2022. These improvements 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 12 February 2021 the IASB issued the Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2:
Disclosure of Accounting policies, requiring 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 1 January 2023. The Group does not expect any material impact from the adoption of these
amendments.
\u25aaOn 12 February 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 1 January 2023. The Group does not expect any material impact from the adoption of these
amendments.
\u25aaOn 7 May 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 1
January 2023, with early application permitted. The Group does not expect any material impact from the adoption of these amendments.
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 these amendments and improvements on its Consolidated Financial Statements or
disclosures:
\u25aaOn 22 September 2022, the IASB issued Lease liability in a Sale and Leaseback (Amendments to IFRS 16) specifying the requirements that,
after the commencement date, a seller-lessee uses in measuring the lease liability arising in a sale and leaseback transaction, to ensure the
seller-lessee does not recognise any amount of the gain or loss that relates to the right of use it retains. The amendment applies retrospectively
to annual reporting periods beginning on or after 1 January 2024, with early application permitted. At the date of these Consolidated Financial
Statements, the European Union has not yet completed its endorsement process for this amendment.
28. Segment reporting
The segment information disclosed in these Consolidated Financial Statements reflects the identifiable reporting segments of the Company and
the financial information that the Chief Operating Decision Maker (\u201cCODM\u201d) reviewed to assess performance and make decisions about resource
allocation. The segments are organized based on products and services provided by Iveco Group.
32. Related party transactions
In accordance with IAS 24 \u2013 Related Party Disclosures, Iveco Group\u2019s related parties are companies and persons capable of exercising control,
joint control or significant influence over the Group. As of 31 December 2022 and 2021, related parties included Iveco Group\u2019s parent company
Exor N.V. and its subsidiaries and affiliates, including CNH Industrial post-Demerger, Stellantis N.V. (formerly Fiat Chrysler Automobiles N.V.
which, effective 16 January 2021, merged with Peugeot S.A. by means of a cross-border legal merger) and its subsidiaries and affiliates
(\"Stellantis\"), and Iveco Group's unconsolidated subsidiaries, associates or joint ventures. In addition, the members of the Board of Directors and
managers of Iveco Group with strategic responsibility and members of their families were also considered related parties.
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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. With reference to 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, cost is used as an estimate of fair value, as permitted
by IFRS 9 - Financial Instruments. 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 unless they are basically
a repayment of the initial investment (in case of investments measured at fair value through other comprehensive income).
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 euro 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 euro 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, at the reporting date, the amount of non-monetary assets and
liabilities is redetermined using a general price index before being translated into euro. The financial statements of these subsidiaries are then
translated at the closing spot rate.
The principal exchange rates used to translate into euros the financial statements prepared in currencies other than the euro 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.
(2) As of 30 June 2022, the Company applied the hyperinflationary accounting in T\u00fcrkiye, with effect from 1 January 2022. After 1 January 2022, 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 31 December 2022 include the Company and 91\u00a0consolidated subsidiaries.
At 31 December 2022, excluded from consolidation are 3 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. All 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.
A list of the companies included in the scope of the Consolidated Financial Statements is included in Note 35.
35. Companies included in the scope of the Consolidated Financial Statements
The main legal entities comprising the Iveco Group at 31 December 2022, including major subsidiaries, joint ventures and associates, are
provided below:
| | |
| | |
SUBSIDIARIES CONSOLIDATED LINE-BY-LINE | | |
Amce-Automotive Manufacturing Co.Ethiopia | | |
Astra Veicoli Industriali S.p.A. | | |
| | |
CNH Industrial Argentina S.A. | | |
CNH Industrial Finance France S.A. | | |
| | |
Fiat Powertrain Technologies (Chongqing) Co., Ltd. | | |
Fiat Powertrain Technologies Management (Shanghai) Co. Ltd. | | |
Fiat Powertrain Technologies of North America, Inc. | | |
FPT - Powertrain Technologies France SAS | | |
FPT INDUSTRIAL BRASIL LTDA. | | |
| | |
| | |
Green & Advanced Transport Ecosystem S.p.A. | | |
| | |
IAV-Industrie-Anlagen-Verpachtung GmbH | | |
IC Financial Services S.A. | | |
IC Financial Services UK Limited | | |
| | |
| | |
| | |
Iveco (China) Commercial Vehicle Sales Co. Ltd | | |
| | |
| | |
| | |
Iveco Arac Sanayi VE Ticaret A.S. | | |
| | |
| | |
| | |
| | |
IVECO CAPITAL BULGARIA EAD | | |
Iveco Capital Services S.R.L. | | |
Iveco Capital Slovakia s.r.o. | | |
Iveco Capital Solutions S.p.A. | | |
Iveco Czech Republic A.S. | | |
| | |
IVECO DEFENCE VEHICLES ROMANIA S.R.L. | | |
Iveco Defence Vehicles S.p.A. | | |
| | |
| | |
| | |
| | |
| | |
Iveco Group Switzerland SA | | |
| | |
| | |
| | |
| | |
| | |
Iveco Magirus Fire Fighting GmbH | | |
| | |
Iveco Nord Nutzfahrzeuge GmbH | | |
| | |
Iveco Nord-Ost Nutzfahrzeuge GmbH | | |
| | |
Iveco Otomotiv Ticaret A.S. | | |
Iveco Participations s.a.s. | | |
Iveco Pension Trustee Ltd | | |
| | |
Iveco Portugal-Comercio de Veiculos Industriais S.A. | | |
| | |
| | |
| | |
| | |
| | |
| | |
Iveco South Africa Works (Pty) Ltd | | |
Iveco Sud-West Nutzfahrzeuge GmbH | | |
| | |
| | |
| | |
Iveco Truck Centrum s.r.o. | | |
Iveco Truck Services S.R.L. | | |
Iveco Trucks Australia Limited | | |
| | |
Iveco West Nutzfahrzeuge GmbH | | |
MAGIRUS CAMIVA S.a.s. (societ\u00e8 par actions simplifi\u00e8e) | | |
| | |
| | |
| | |
Mediterranea de Camiones S.L. | | |
| | |
| | |
| | |
Potenza Technology Holdings Limited | | |
Potenza Technology Limited | | |
SAIC Fiat Powertrain Hongyan Co. Ltd. | | |
Seddon Atkinson Vehicles Ltd | | |
Soci\u00e9t\u00e9 Charolaise de Participations SAS | | |
Soci\u00e9t\u00e9 de Diffusion de Vehicules Industriels-SDVI S.A.S. | | |
| | |
Transolver Services S.A.S. | | |
UAB \"IVECO CAPITAL BALTIC\" (In liquidation) | | |
Zona Franca Alari Sepauto S.A. | | |
| | |
JOINTLY-CONTROLLED ENTITIES ACCOUNTED FOR USING THE EQUITY METHOD | | |
| | |
IVECO - OTO MELARA Societ\u00e0 Consortile a responsabilit\u00e0 limitata | | |
| | |
| | |
| | |
SUBSIDIARIES VALUED AT COST | | |
| | |
FPT INDUSTRIAL INDIA PRIVATE LIMITED | | |
| | |
| | |
ASSOCIATED COMPANIES ACCOUNTED FOR USING THE EQUITY METHOD | | |
CNH Industrial Capital Europe S.a.S.(2) | | |
Transolver Finance Establecimiento Financiero de Credito S.A. | | |
| | |
ASSOCIATED COMPANIES VALUED AT COST | | |
| | |
| | |
| | |
| | |
| | |
OTHER COMPANIES VALUED AT FVTPL | | |
Naveco (Nanjing IVECO Motor Co.) Ltd. | | |
(1) After the Demerger CIFINS S.p.A. is owned 50.00% by Iveco Group and 50.00% by CNH Industrial.
(2) This percentage represents the interest held by Iveco Group through its 50% interest in CIFINS S.p.A.
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"value": "
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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"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl8zNDkvZnJhZzoyZWFkMTZkZmJkN2E0MDRjYjlhNzVmOTAxMGI2YmU1ZC90ZXh0cmVnaW9uOjJlYWQxNmRmYmQ3YTQwNGNiOWE3NWY5MDEwYjZiZTVkXzMyOTg1MzQ4OTE2ODc_eb9b30de-40dc-4cf7-a6b0-2233c1506c2a": {
"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.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentInAssociatesAndJointVenturesExplanatory",
"language": "en",
"entity": "scheme:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
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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": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentsInJointVentures",
"language": "en",
"entity": "scheme:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl8zNDkvZnJhZzoyZWFkMTZkZmJkN2E0MDRjYjlhNzVmOTAxMGI2YmU1ZC90ZXh0cmVnaW9uOjJlYWQxNmRmYmQ3YTQwNGNiOWE3NWY5MDEwYjZiZTVkXzMyOTg1MzQ4OTA4ODQ_bf16852b-b94f-45cb-8d13-e894438d5402": {
"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:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl8zNDkvZnJhZzoyZWFkMTZkZmJkN2E0MDRjYjlhNzVmOTAxMGI2YmU1ZC90ZXh0cmVnaW9uOjJlYWQxNmRmYmQ3YTQwNGNiOWE3NWY5MDEwYjZiZTVkXzMyOTg1MzQ4OTA4ODE_4784f4f6-5c72-4d7a-8346-213e768ef9f5": {
"value": "
Investments in other companies
Investments in other companies are measured at fair value. With reference to 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, cost is used as an estimate of fair value, as permitted
by IFRS 9 - Financial Instruments. 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 unless they are basically
a repayment of the initial investment (in case of investments measured at fair value through other comprehensive income).
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.
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 (\u201cAC\u201d), fair value through
other comprehensive income (\u201cFVTOCI\u201d) or fair value through profit or loss (\u201cFVTPL\u201d), 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 where applicable. 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 represent 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.
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:
\u25e6if 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;
\u25e6if 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 Iveco Group\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 wholesale and retail credit portfolio. 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 months 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:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl8zNDkvZnJhZzoyZWFkMTZkZmJkN2E0MDRjYjlhNzVmOTAxMGI2YmU1ZC90ZXh0cmVnaW9uOjJlYWQxNmRmYmQ3YTQwNGNiOWE3NWY5MDEwYjZiZTVkXzMyOTg1MzQ4OTA4ODE_64d25a63-9a49-45ef-963e-1bb469520a20": {
"value": "
Investments in other companies
Investments in other companies are measured at fair value. With reference to 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, cost is used as an estimate of fair value, as permitted
by IFRS 9 - Financial Instruments. 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 unless they are basically
a repayment of the initial investment (in case of investments measured at fair value through other comprehensive income).
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, 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 (\u201cAC\u201d), fair value through
other comprehensive income (\u201cFVTOCI\u201d) or fair value through profit or loss (\u201cFVTPL\u201d), 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 where applicable. 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 represent 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 a hedging relationship)
or at fair value through profit or loss (refer to \"Derivative financial instruments\" below).
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 - Financial Instruments, 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:
\u25e6if 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;
\u25e6if 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 Iveco Group\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 wholesale and retail credit portfolio. 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 months 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:DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory",
"language": "en",
"entity": "scheme:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl8zNDkvZnJhZzoyZWFkMTZkZmJkN2E0MDRjYjlhNzVmOTAxMGI2YmU1ZC90ZXh0cmVnaW9uOjJlYWQxNmRmYmQ3YTQwNGNiOWE3NWY5MDEwYjZiZTVkXzMyOTg1MzQ4OTA4ODE_e2220398-f0d3-4f0b-a880-820e40019e9a": {
"value": "
Investments in other companies
Investments in other companies are measured at fair value. With reference to 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, cost is used as an estimate of fair value, as permitted
by IFRS 9 - Financial Instruments. 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 unless they are basically
a repayment of the initial investment (in case of investments measured at fair value through other comprehensive income).
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentsOtherThanInvestmentsAccountedForUsingEquityMethodExplanatory",
"language": "en",
"entity": "scheme:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl8zNDkvZnJhZzoyZWFkMTZkZmJkN2E0MDRjYjlhNzVmOTAxMGI2YmU1ZC90ZXh0cmVnaW9uOjJlYWQxNmRmYmQ3YTQwNGNiOWE3NWY5MDEwYjZiZTVkXzMyOTg1MzQ4OTA4ODA_b8038527-34e4-4b49-bbe3-6454ca14b247": {
"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 euro 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 euro 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, at the reporting date, the amount of non-monetary assets and
liabilities is redetermined using a general price index before being translated into euro. The financial statements of these subsidiaries are then
translated at the closing spot rate.
The principal exchange rates used to translate into euros the financial statements prepared in currencies other than the euro 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.
(2) As of 30 June 2022, the Company applied the hyperinflationary accounting in T\u00fcrkiye, with effect from 1 January 2022. After 1 January 2022, 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:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl8zNDkvZnJhZzoyZWFkMTZkZmJkN2E0MDRjYjlhNzVmOTAxMGI2YmU1ZC90ZXh0cmVnaW9uOjJlYWQxNmRmYmQ3YTQwNGNiOWE3NWY5MDEwYjZiZTVkXzMyOTg1MzQ4OTA4ODk_364939ff-d475-4398-b74d-8cd80302c3cc": {
"value": "
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, at the reporting date, the amount of non-monetary assets and
liabilities is redetermined using a general price index before being translated into euro. The financial statements of these subsidiaries are then
translated at the closing spot rate.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfHyperinflationaryReportingExplanatory",
"language": "en",
"entity": "scheme:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl8zNTIvZnJhZzphNzc2MmZjYmNmOWY0ZDNjOGVkNGE4MTQyZTlhZTBmYy90ZXh0cmVnaW9uOmE3NzYyZmNiY2Y5ZjRkM2M4ZWQ0YTgxNDJlOWFlMGZjXzMyOTg1MzQ4ODcxNTg_1ccb961b-e15a-47b5-8461-9271cf0924bd": {
"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.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsAndGoodwillExplanatory",
"language": "en",
"entity": "scheme:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl8zNTIvZnJhZzphNzc2MmZjYmNmOWY0ZDNjOGVkNGE4MTQyZTlhZTBmYy90ZXh0cmVnaW9uOmE3NzYyZmNiY2Y5ZjRkM2M4ZWQ0YTgxNDJlOWFlMGZjXzMyOTg1MzQ4ODcxNTg_b1e15f0f-a59f-46b4-8b95-ef0eecd545c4": {
"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.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsExplanatory",
"language": "en",
"entity": "scheme:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl8zNTIvZnJhZzphNzc2MmZjYmNmOWY0ZDNjOGVkNGE4MTQyZTlhZTBmYy90ZXh0cmVnaW9uOmE3NzYyZmNiY2Y5ZjRkM2M4ZWQ0YTgxNDJlOWFlMGZjXzMyOTg1MzQ4ODcxNjM_57d55b0d-5ad8-4371-8db8-7adc04468fff": {
"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.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForGoodwillExplanatory",
"language": "en",
"entity": "scheme:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl8zNTIvZnJhZzphNzc2MmZjYmNmOWY0ZDNjOGVkNGE4MTQyZTlhZTBmYy90ZXh0cmVnaW9uOmE3NzYyZmNiY2Y5ZjRkM2M4ZWQ0YTgxNDJlOWFlMGZjXzMyOTg1MzQ4ODcxNjI_b4e339bc-e0f9-4b84-93a5-0be3672656b9": {
"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
Iveco Group is the subject of legal proceedings and tax issues 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 Iveco Group 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 other experts on matters related to litigation and taxes. 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:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl8zNTUvZnJhZzozYzRkZTA1MWI0ZjU0NTA0YTE2MDA0MmFlNjBlNWE5My90ZXh0cmVnaW9uOjNjNGRlMDUxYjRmNTQ1MDRhMTYwMDQyYWU2MGU1YTkzXzMyOTg1MzQ4ODQ5MDU_46d072f6-1e9d-4435-ba10-8fce22339458": {
"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, Note 31 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:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl8zNTgvZnJhZzpkMTgxZjkyZDBmYmQ0ZjI2YWM5NGE1ZTY5ODk4MDlkMi90ZXh0cmVnaW9uOmQxODFmOTJkMGZiZDRmMjZhYzk0YTVlNjk4OTgwOWQyXzMyOTg1MzQ4ODU1ODc_0a5c8ae2-3811-4faa-9b7e-a4811cd775f3": {
"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 vehicle production project (trucks, buses, and engines) are recognized as an asset if and only if both of the following
conditions are met: a) development costs can be measured reliably, b) the technical feasibility of the product, volumes and pricing support the
view that the development expenditure will generate future economic benefits, and c) the intention to complete the intangible asset, as well as d)
the availability of adequate technical, financial and other resources for this purpose. Capitalized development costs include all direct and indirect
costs that may be directly attributed to the development process. Capitalized development costs are amortized on a systematic basis from the
start of production of the related product over the product\u2019s estimated average life, as follows:
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.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsAndGoodwillExplanatory",
"language": "en",
"entity": "scheme:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl8zNTgvZnJhZzpkMTgxZjkyZDBmYmQ0ZjI2YWM5NGE1ZTY5ODk4MDlkMi90ZXh0cmVnaW9uOmQxODFmOTJkMGZiZDRmMjZhYzk0YTVlNjk4OTgwOWQyXzMyOTg1MzQ4ODU1ODg_2460063b-f197-4ab4-aec8-11d61c500fba": {
"value": "
Development costs
Development costs for vehicle production project (trucks, buses, and engines) are recognized as an asset if and only if both of the following
conditions are met: a) development costs can be measured reliably, b) the technical feasibility of the product, volumes and pricing support the
view that the development expenditure will generate future economic benefits, and c) the intention to complete the intangible asset, as well as d)
the availability of adequate technical, financial and other resources for this purpose. Capitalized development costs include all direct and indirect
costs that may be directly attributed to the development process. Capitalized development costs are amortized on a systematic basis from the
start of production of the related product over the product\u2019s estimated average life, as follows:
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.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsOtherThanGoodwillExplanatory",
"language": "en",
"entity": "scheme:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl8zNTgvZnJhZzpkMTgxZjkyZDBmYmQ0ZjI2YWM5NGE1ZTY5ODk4MDlkMi90ZXh0cmVnaW9uOmQxODFmOTJkMGZiZDRmMjZhYzk0YTVlNjk4OTgwOWQyXzMyOTg1MzQ4ODU1OTA_d02ddff6-a4ad-4333-a95f-4ae6e92ba232": {
"value": "
Development costs
Development costs for vehicle production project (trucks, buses, and engines) are recognized as an asset if and only if both of the following
conditions are met: a) development costs can be measured reliably, b) the technical feasibility of the product, volumes and pricing support the
view that the development expenditure will generate future economic benefits, and c) the intention to complete the intangible asset, as well as d)
the availability of adequate technical, financial and other resources for this purpose. Capitalized development costs include all direct and indirect
costs that may be directly attributed to the development process. Capitalized development costs are amortized on a systematic basis from the
start of production of the related product over the product\u2019s estimated average life, as follows:
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:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl8zNjEvZnJhZzo3ZjQ5OGU3OWNlOWQ0MWM2YTVkMjhkNWMwMWQxYzQxMi90ZXh0cmVnaW9uOjdmNDk4ZTc5Y2U5ZDQxYzZhNWQyOGQ1YzAxZDFjNDEyXzMyOTg1MzQ4ODQxNDM_2e54c33a-a56d-429a-8360-194887bfa72f": {
"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.
Property, plant and equipment also include vehicles sold with a buy-back commitment, which are recognized under the method described in the
paragraph \u201cRevenue recognition\u201d.
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:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl8zNjEvZnJhZzo3ZjQ5OGU3OWNlOWQ0MWM2YTVkMjhkNWMwMWQxYzQxMi90ZXh0cmVnaW9uOjdmNDk4ZTc5Y2U5ZDQxYzZhNWQyOGQ1YzAxZDFjNDEyXzMyOTg1MzQ4ODQxNDU_d2f9147c-a7ed-40f3-a08e-531152d27dcd": {
"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, Iveco Group 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.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForDepreciationExpenseExplanatory",
"language": "en",
"entity": "scheme:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl8zNjQvZnJhZzo4YmMzYjJkYzA0NTg0MTBhYTI1Y2RlZTYxZWE3YzY5YS90ZXh0cmVnaW9uOjhiYzNiMmRjMDQ1ODQxMGFhMjVjZGVlNjFlYTdjNjlhXzMyOTg1MzQ4ODc3ODE_086a2335-9f09-4aa8-9997-e6bbfce7a7ef": {
"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, Iveco Group 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), Iveco Group 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 Iveco Group\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, Iveco Group 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.
Lessor accounting
Lease contracts where Iveco Group 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 Iveco Group 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 Iveco Group 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 vehicles 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%.
When leased assets are no longer leased and become held for sale, the Group reclassifies their carrying amount to Inventories.
Residual values of assets leased out under operating lease arrangements or sold with a buy-back commitment
Iveco Group records assets rented to customers or leased to them under operating lease as tangible assets. Furthermore, new vehicle sales with
a buy-back commitment are not recognized as sales at the time of delivery but are accounted for as operating lease if it is probable that the
vehicle will be bought back. 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 Iveco Group\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 vehicle market was carefully monitored to ensure that write-downs were properly determined. However, it cannot be excluded
that additional write-downs may be required if market conditions should deteriorate further.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForLeasesExplanatory",
"language": "en",
"entity": "scheme:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl8zNjcvZnJhZzoxYTdhNTEyYjUwNjA0MjU0YTA4MjJmMjlhMmQ1ODQ4Mi90ZXh0cmVnaW9uOjFhN2E1MTJiNTA2MDQyNTRhMDgyMmYyOWEyZDU4NDgyXzMyOTg1MzQ4ODM3NzA_1cdee591-264a-4757-a16e-2628a2e445f0": {
"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:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl8zNzAvZnJhZzplOTUzNmJmNWUyMmQ0OGRlODg1Yzk0ZDQ5ZGY5Y2I2MS90ZXh0cmVnaW9uOmU5NTM2YmY1ZTIyZDQ4ZGU4ODVjOTRkNDlkZjljYjYxXzMyOTg1MzQ4ODQ5MzM_2f6ed456-2150-4705-ab45-4cd2c92fccd8": {
"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
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.
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. Iveco Group 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:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl8zNzAvZnJhZzplOTUzNmJmNWUyMmQ0OGRlODg1Yzk0ZDQ5ZGY5Y2I2MS90ZXh0cmVnaW9uOmU5NTM2YmY1ZTIyZDQ4ZGU4ODVjOTRkNDlkZjljYjYxXzMyOTg1MzQ4ODQ5MzM_dc4c35e4-3c6d-4b20-ac30-def50ca93244": {
"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
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.
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. Iveco Group 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:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl8zNzMvZnJhZzo5ODYzMGM5ZDM1NmE0YjkwOWVjZWFhOTJiN2M5ZmY1NS90ZXh0cmVnaW9uOjk4NjMwYzlkMzU2YTRiOTA5ZWNlYWE5MmI3YzlmZjU1XzMyOTg1MzQ5MDQ5OTI_e093050f-3fed-4179-b8c3-67b96a96af79": {
"value": "
Financial liabilities refer to debt, which includes asset-backed financing, and derivative liabilities (which include derivative financial instruments
stated at fair value as liabilities), trade payables and other liabilities.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialLiabilitiesExplanatory",
"language": "en",
"entity": "scheme:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl8zNzMvZnJhZzo5ODYzMGM5ZDM1NmE0YjkwOWVjZWFhOTJiN2M5ZmY1NS90ZXh0cmVnaW9uOjk4NjMwYzlkMzU2YTRiOTA5ZWNlYWE5MmI3YzlmZjU1XzMyOTg1MzQ5MDQ5OTU_ec823b08-93a8-4b91-847b-3b2f442d481c": {
"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:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl8zNzMvZnJhZzo5ODYzMGM5ZDM1NmE0YjkwOWVjZWFhOTJiN2M5ZmY1NS90ZXh0cmVnaW9uOjk4NjMwYzlkMzU2YTRiOTA5ZWNlYWE5MmI3YzlmZjU1XzMyOTg1MzQ4OTEwODQ_323699e8-8348-48c3-b6e4-99a52af3d9c4": {
"value": "
Derivatives financial assets and liabilities are measured either at fair value through other comprehensive income (when in a hedging relationship)
or at fair value through profit or loss (refer to \"Derivative financial instruments\" below).
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 - Financial Instruments, 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:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl8zNzMvZnJhZzo5ODYzMGM5ZDM1NmE0YjkwOWVjZWFhOTJiN2M5ZmY1NS90ZXh0cmVnaW9uOjk4NjMwYzlkMzU2YTRiOTA5ZWNlYWE5MmI3YzlmZjU1XzMyOTg1MzQ4OTEwODQ_a8eedc42-5d2a-445c-8c17-dfb9192dbdd4": {
"value": "
Derivatives financial assets and liabilities are measured either at fair value through other comprehensive income (when in a hedging relationship)
or at fair value through profit or loss (refer to \"Derivative financial instruments\" below).
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 - Financial Instruments, 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:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl8zNzMvZnJhZzo5ODYzMGM5ZDM1NmE0YjkwOWVjZWFhOTJiN2M5ZmY1NS90ZXh0cmVnaW9uOjk4NjMwYzlkMzU2YTRiOTA5ZWNlYWE5MmI3YzlmZjU1XzMyOTg1MzQ4OTEwODQ_c0a6090d-c235-4032-9d8a-c9f3b5efef45": {
"value": "
Derivatives financial assets and liabilities are measured either at fair value through other comprehensive income (when in a hedging relationship)
or at fair value through profit or loss (refer to \"Derivative financial instruments\" below).
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 - Financial Instruments, 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:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl8zNzYvZnJhZzpmMTQ2YjY4OWNjY2U0ZjNiYWM0ZTRjZTgyYmQ4MTlhOS90ZXh0cmVnaW9uOmYxNDZiNjg5Y2NjZTRmM2JhYzRlNGNlODJiZDgxOWE5XzMyOTg1MzQ4ODQ3MTA_93ea7469-d178-4dba-a566-ed05f60987e2": {
"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:
\u25e6if 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;
\u25e6if 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:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
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"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 net realizable value. 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:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl8zODIvZnJhZzo3YzZmODJlY2U5NzI0YTE5YTVlODNiNjI0YmU3ZDUyYi90ZXh0cmVnaW9uOjdjNmY4MmVjZTk3MjRhMTlhNWU4M2I2MjRiZTdkNTJiXzMyOTg1MzQ4ODQzODI_579aa7d3-9101-4609-8fe7-13f8d2617e88": {
"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:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl8zODIvZnJhZzo3YzZmODJlY2U5NzI0YTE5YTVlODNiNjI0YmU3ZDUyYi90ZXh0cmVnaW9uOjdjNmY4MmVjZTk3MjRhMTlhNWU4M2I2MjRiZTdkNTJiXzMyOTg1MzQ4ODQzODI_c697b2f1-0bfb-4fd7-9c3a-a28b1fa8e7dd": {
"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:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl8zODUvZnJhZzo1ODhiYmU0ZDc2ODk0OWEwYTJjNjgyZTM3ZGI4M2Q3Yi90ZXh0cmVnaW9uOjU4OGJiZTRkNzY4OTQ5YTBhMmM2ODJlMzdkYjgzZDdiXzMyOTg1MzQ4ODY4ODA_a428ade8-264f-4067-8fe2-4c93ea43ca3d": {
"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 other post-employment defined benefits. 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 the key executive officers and select employees through equity compensation plans (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 Kingdom, Germany, Italy, and
Switzerland.
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 of salary increases and the healthcare costs trend rate and takes into
consideration the likelihood of potential future events by using 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:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl8zODUvZnJhZzo1ODhiYmU0ZDc2ODk0OWEwYTJjNjgyZTM3ZGI4M2Q3Yi90ZXh0cmVnaW9uOjU4OGJiZTRkNzY4OTQ5YTBhMmM2ODJlMzdkYjgzZDdiXzMyOTg1MzQ4ODY4ODE_7bf73ecf-c492-48fd-a1dd-c3526721a4bc": {
"value": "
Share-based compensation plans
The Group provides additional benefits to the key executive officers and select employees through equity compensation plans (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:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl8zODgvZnJhZzo3ZTRiMzUyNTgzMzI0ZDUyYjBkZTgwOGQwYTk5OTA2YS90ZXh0cmVnaW9uOjdlNGIzNTI1ODMzMjRkNTJiMGRlODA4ZDBhOTk5MDZhXzMyOTg1MzQ4ODM3MTk_dab5b8df-364c-408b-a59f-a5e714059ae1": {
"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
Iveco Group makes provisions for estimated expenses related to product warranties at the time products are sold. Management establishes these
estimates based on historical information on the nature, frequency and average cost of warranty claims. The Group seeks to improve vehicle
quality and minimize warranty expenses arising from claims. Warranty costs may differ from those estimated if actual claim rates are higher or
lower than historical rates.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForProvisionsExplanatory",
"language": "en",
"entity": "scheme:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl8zOTEvZnJhZzowMzIyMTZhNWU1NWQ0YWZjOWJkYzc3Y2U1NDc2YWNmMS90ZXh0cmVnaW9uOjAzMjIxNmE1ZTU1ZDRhZmM5YmRjNzdjZTU0NzZhY2YxXzMyOTg1MzQ4OTM4MTk_49ea0f30-4ef0-40da-9cdc-30a62031834a": {
"value": "
Revenue recognition
Revenue is recognized when control of the vehicles, 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 vehicles and parts are generally dealers, distributors and retail customers.
Transfer of control, and thus related revenue recognition, generally corresponds to when the vehicles and parts are made available to the
customer. Therefore, the Group recognizes revenue at a point in time, when control is transferred to the customer at a sale price that the Group
expects to receive.
For all sales, no significant uncertainty exists surrounding the purchaser\u2019s obligation to pay for vehicles 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 a vehicle contract transaction has multiple performance obligations, the cost of incentives is
allocated entirely to vehicle as the intent of the incentives is to encourage sales of vehicles. If the estimate of the incentive changes following the
sale to the customer, the change in estimate is recognized as an adjustment to revenue in the period of the change. Iveco Group grants 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,
Iveco Group 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/vehicles 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 vehicle from Industrial Activities to the dealer. Concurrent with the
sale of the vehicle, 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, Iveco Group 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
Iveco Group 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 vehicle. 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.
Rents and other income on assets sold with a buy-back commitment
Commercial and Specialty Vehicles enters into transactions for the sale of vehicles to some customers with an obligation to repurchase (\u201cbuy-
back commitment\u201d) the vehicles at the end of a period (\u201cbuy-back period\u201d) at the customer\u2019s request. For these types of arrangements, at
inception, Iveco Group assesses whether a significant economic incentive exists for the customer to exercise the option.
If Iveco Group determines that a significant economic incentive exists for the customer to exercise the buy-back option, the transaction is
accounted for as an operating lease. In such case, vehicles are accounted for as Property, plant and equipment because the agreements typically
have a long-term buy-back period. The difference between the carrying value (corresponding to the manufacturing cost) and the estimated resale
value (net of refurbishing costs) at the end of the buy-back period is depreciated on a straight-line basis over the same period. The initial sale
price received is recognized in \u201cOther current liabilities\u201d and is comprised of the repurchase value of the vehicle, and the rents to be recognized in
the future recorded as contract liability. These rents are determined at the inception of the contract as the difference between the initial sale price
and the repurchase price and are recognized as revenue on a straight-line basis over the term of the agreement. At the end of the agreement
term, upon exercise of the option, the used vehicles are reclassified from Property, plant and equipment to Inventories. The proceeds from the
sale of such vehicles are recognized as Revenues.
If Iveco Group determines that a significant economic incentive does not exist for the customer to exercise the buy-back option, the transaction is
treated as a sale with a variable consideration whose variable component is the buy-back provision accrual. The buy-back provision accrual is the
difference between the repurchase price and the estimated market value of the used vehicle at the end of the buy-back period and is recorded
only when the repurchase price is greater than the estimated market value of the used vehicle. The buy-back provision accrual is estimated and
recognized as a reduction of revenues at the time of the sale. Any subsequent change following such periodic reassessment is recognized as a
reduction of revenues at that time.
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, Iveco Group 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, Iveco Group 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
Iveco Group grants 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, Iveco Group records the estimated impact of sales allowances in the form of dealer and customer incentives as a reduction
of revenue. The expense for new programs is accrued at the inception of the program. The amounts of incentives to be paid are estimated. 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.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForRecognitionOfRevenue",
"language": "en",
"entity": "scheme:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl8zOTEvZnJhZzowMzIyMTZhNWU1NWQ0YWZjOWJkYzc3Y2U1NDc2YWNmMS90ZXh0cmVnaW9uOjAzMjIxNmE1ZTU1ZDRhZmM5YmRjNzdjZTU0NzZhY2YxXzMyOTg1MzQ4OTQxODA_e01e8f9d-c663-439b-87e1-3c425fc844b2": {
"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, Iveco Group 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, Iveco Group 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:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
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"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:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl80MDMvZnJhZzo2ZmYxMWRhZDc5M2E0YTM2OTQwNmE3MjQzOGZiNmU0NS90ZXh0cmVnaW9uOjZmZjExZGFkNzkzYTRhMzY5NDA2YTcyNDM4ZmI2ZTQ1XzMyOTg1MzQ4ODU2ODQ_1f6603b3-33bc-411e-9919-d1dcc5ac2c45": {
"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 future distribution of a subsidiary\u2019s undistributed profits are only made when 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 bases of assets or
liabilities and the corresponding carrying amounts in the Consolidated Financial Statements, except for those arising from non-tax-deductible
goodwill and investments in subsidiaries where it is possible to control the reversal of the basis 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 examinations. 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 31 December 2022, Iveco Group had net deferred tax assets, including tax loss carry forwards, of \u20ac927 million, of which \u20ac252 million are not
recognized in the financial statements. The corresponding totals at 31 December 2021 were \u20ac864 million and \u20ac229 million. Management has
recognized deferred tax assets it believes are probable to be recovered considering amounts from budgets and plans consistent with those used
for other purposes within Iveco Group, for example impairment testing, as discussed in the paragraph \u201cRecoverability of non-current assets\u201d
above. Iveco Group 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, Iveco Group assessed the realizability of its various deferred tax assets, which related to multiple tax
jurisdictions in all regions of the world. In substantially all the jurisdictions in which Iveco Group operates, no changes in assessment occurred with
respect to the recognition of deferred tax assets. This is primarily attributable to the fact accumulated losses were largely driven by non-recurring
events (the COVID-19 pandemic and asset impairments) that impacted taxable income in the near-term, while substantially all of Iveco Group\u2019s
deferred tax assets have no expiry date. Further, Iveco Group has a history of producing pre-tax losses in the bottom-end of economic cycles
followed by generating pre-tax profits during ensuing periods of economic expansion such that there is little history of its tax attributes expiring
unutilized. Given the uncertainty on evolution of certain macro-economic dynamics (i.e.: Russia-Ukraine war, supply chain issues, energy price
and supply), however, it is possible assessment changes could occur within the next twelve months, with those changes potentially having a
material impact on Iveco Group\u2019s results of operations.
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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 future distribution of a subsidiary\u2019s undistributed profits are only made when 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 bases of assets or
liabilities and the corresponding carrying amounts in the Consolidated Financial Statements, except for those arising from non-tax-deductible
goodwill and investments in subsidiaries where it is possible to control the reversal of the basis 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 examinations. 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 31 December 2022, Iveco Group had net deferred tax assets, including tax loss carry forwards, of \u20ac927 million, of which \u20ac252 million are not
recognized in the financial statements. The corresponding totals at 31 December 2021 were \u20ac864 million and \u20ac229 million. Management has
recognized deferred tax assets it believes are probable to be recovered considering amounts from budgets and plans consistent with those used
for other purposes within Iveco Group, for example impairment testing, as discussed in the paragraph \u201cRecoverability of non-current assets\u201d
above. Iveco Group 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, Iveco Group assessed the realizability of its various deferred tax assets, which related to multiple tax
jurisdictions in all regions of the world. In substantially all the jurisdictions in which Iveco Group operates, no changes in assessment occurred with
respect to the recognition of deferred tax assets. This is primarily attributable to the fact accumulated losses were largely driven by non-recurring
events (the COVID-19 pandemic and asset impairments) that impacted taxable income in the near-term, while substantially all of Iveco Group\u2019s
deferred tax assets have no expiry date. Further, Iveco Group has a history of producing pre-tax losses in the bottom-end of economic cycles
followed by generating pre-tax profits during ensuing periods of economic expansion such that there is little history of its tax attributes expiring
unutilized. Given the uncertainty on evolution of certain macro-economic dynamics (i.e.: Russia-Ukraine war, supply chain issues, energy price
and supply), however, it is possible assessment changes could occur within the next twelve months, with those changes potentially having a
material impact on Iveco Group\u2019s results of operations.
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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).
",
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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.",
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"value": "
Use of estimates
These Consolidated Financial Statements have been prepared in accordance with EU-IFRS which requires Iveco Group to make judgments,
estimates and assumptions affecting 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, on 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 Iveco Group'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 vehicles leased out under operating lease arrangements or sold with buy-back commitments, sales
allowances, product warranties, pension and other post-employment benefits, deferred tax assets and liabilities 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 Iveco Group 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 Iveco Group\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 wholesale and retail credit portfolio. 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 months 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
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.
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. Iveco Group 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 or sold with a buy-back commitment
Iveco Group records assets rented to customers or leased to them under operating lease as tangible assets. Furthermore, new vehicle sales with
a buy-back commitment are not recognized as sales at the time of delivery but are accounted for as operating lease if it is probable that the
vehicle will be bought back. 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 Iveco Group\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 vehicle market was carefully monitored to ensure that write-downs were properly determined. However, it cannot be excluded
that additional write-downs may be required if market conditions should deteriorate further.
Sales allowances
Iveco Group grants 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, Iveco Group records the estimated impact of sales allowances in the form of dealer and customer incentives as a reduction
of revenue. The expense for new programs is accrued at the inception of the program. The amounts of incentives to be paid are estimated. 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.
Product warranties
Iveco Group makes provisions for estimated expenses related to product warranties at the time products are sold. Management establishes these
estimates based on historical information on the nature, frequency and average cost of warranty claims. The Group seeks to improve vehicle
quality and minimize warranty expenses arising from claims. Warranty costs may differ from those estimated if actual claim rates are higher or
lower than historical rates.
Pension and other post-employment benefits
Group companies sponsor pension and other post-employment benefits in various countries, mainly in the United Kingdom, Germany, Italy, and
Switzerland.
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 of salary increases and the healthcare costs trend rate and takes into
consideration the likelihood of potential future events by using 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 31 December 2022, Iveco Group had net deferred tax assets, including tax loss carry forwards, of \u20ac927 million, of which \u20ac252 million are not
recognized in the financial statements. The corresponding totals at 31 December 2021 were \u20ac864 million and \u20ac229 million. Management has
recognized deferred tax assets it believes are probable to be recovered considering amounts from budgets and plans consistent with those used
for other purposes within Iveco Group, for example impairment testing, as discussed in the paragraph \u201cRecoverability of non-current assets\u201d
above. Iveco Group 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, Iveco Group assessed the realizability of its various deferred tax assets, which related to multiple tax
jurisdictions in all regions of the world. In substantially all the jurisdictions in which Iveco Group operates, no changes in assessment occurred with
respect to the recognition of deferred tax assets. This is primarily attributable to the fact accumulated losses were largely driven by non-recurring
events (the COVID-19 pandemic and asset impairments) that impacted taxable income in the near-term, while substantially all of Iveco Group\u2019s
deferred tax assets have no expiry date. Further, Iveco Group has a history of producing pre-tax losses in the bottom-end of economic cycles
followed by generating pre-tax profits during ensuing periods of economic expansion such that there is little history of its tax attributes expiring
unutilized. Given the uncertainty on evolution of certain macro-economic dynamics (i.e.: Russia-Ukraine war, supply chain issues, energy price
and supply), however, it is possible assessment changes could occur within the next twelve months, with those changes potentially having a
material impact on Iveco Group\u2019s results of operations.
Contingent liabilities
Iveco Group is the subject of legal proceedings and tax issues 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 Iveco Group 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 other experts on matters related to litigation and taxes. 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.
Global Supply Chain, energy costs, and COVID-19 pandemic
Global supply chain remains challenging, as well as increased energy costs and inflation, representing the main challenge for the Group
operations. Furthermore, the Group remains cautious about future impacts on its end-markets and business operations of restrictions on social
interactions and business operations to limit the resurgence of the COVID-19 pandemic.
Climate related matters
The Company has established specific functions and structures within its respective business units to monitor the relevant emerging policies and
regulatory developments at local and global level (especially in Europe, where regulatory pressure is greater). The resulting analyses are
incorporated into the Company\u2019s strategy to ensure full compliance with applicable laws. The shifts in consumer preferences and demand towards
sustainable transport solutions, driven by both an increase in climate-related awareness and more stringent regulations, may result in potential
risks for manufacturers that must adapt to the evolving market. To counter this, Iveco Group applies these shifts to the development of its product
portfolio to steer R&D focus towards sustainable technologies (e.g., biofuels, electric and hydrogen propulsion technologies) and ensure the
resilience of its business model. To ensure the timely delivery of its strategy, the Company has established specific targets linked to the
environmental performance of its manufacturing processes, logistics, and product portfolio. Iveco Group developed a scenario analysis which led
to the identification of the Internal Price of Carbon (IPoC), an indicator that enables management to prioritise energy-saving projects based on the
Group\u2019s ability to generate the greatest reduction in CO2 emissions. The IPoC is used as a decision making tool whenever an initiative is
presented to the Company\u2019s Investment Committee.
Based on the analysis of climate-related risks and opportunities, Iveco Group defined 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,
Iveco Group has implemented relevant projects and a number of other specific climate-related topics and has defined long-term strategic targets
that aim to reduce the CO2 emissions along the entire value chain (e.g.,in manufacturing plants, in logistics processes, during the use of sold
products).
There has been increasing interest in how climate change will impact the Group\u2019s business. Iveco Group 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, Iveco Group has adopted an environmental policy that applies to all Group 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.
In particular, one of the performance metrics foreseen in the equity incentive plan (2022-2024 LTIP Awards) in which employees and executive
directors participate is the CO2 emissions reduction. This could impact the future amount of the recognition of share-based payment expense in
the income statement.
Russia-Ukraine conflict
The geopolitical situation and the Russia-Ukraine conflict escalated since the end of February 2022. Iveco Group has operations in both Russia
and Ukraine, which have been suspended during the first quarter of 2022. During the first quarter, Iveco Group recorded a negative after-tax
impact of \u20ac51 million in connection with our operations in Russia and Ukraine, primarily due to the impairment of certain assets and EU sanctions
preventing further commercial activities with Russian legal entities and individuals. On 20 July 2022, the Company executed a dissolution
agreement with the Russian JV, IVECO AMT, also formally presenting its withdrawal from the legal entity. Accordingly, the Iveco Group stake
(33.3%) was returned to IVECO AMT. While Russia and Ukraine do not constitute a material portion of the Group business, a significant
escalation or expansion of economic disruption could have a material adverse effect on Iveco Group results of operations. The Group is closely
monitoring the impact of the Russia-Ukraine conflict on its employees and all aspects of its business, the Group\u2019s results of operations, financial
condition and cash flows.
The increased risk resulting from the Russia-Ukraine conflict is described in section \u201cRisk Factors - Political or Financial instability in countries where the Group operates\u201d of this Annual Report.",
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"value": "Use of estimatesThese Consolidated Financial Statements have been prepared in accordance with EU-IFRS which requires Iveco Group to make judgments, estimates and assumptions affecting 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, on 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 Iveco Group'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 vehicles leased out under operating lease arrangements or sold with buy-back commitments, sales allowances, product warranties, pension and other post-employment benefits, deferred tax assets and liabilities 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 Iveco Group 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 Iveco Group\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 wholesale and retail credit portfolio. 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 months 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 assetsNon-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.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. Iveco Group 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 or sold with a buy-back commitmentIveco Group records assets rented to customers or leased to them under operating lease as tangible assets. Furthermore, new vehicle sales with a buy-back commitment are not recognized as sales at the time of delivery but are accounted for as operating lease if it is probable that the vehicle will be bought back. 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 Iveco Group\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 vehicle market was carefully monitored to ensure that write-downs were properly determined. However, it cannot be excluded that additional write-downs may be required if market conditions should deteriorate further.Sales allowancesIveco Group grants 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, Iveco Group records the estimated impact of sales allowances in the form of dealer and customer incentives as a reduction of revenue. The expense for new programs is accrued at the inception of the program. The amounts of incentives to be paid are estimated. 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.Product warrantiesIveco Group makes provisions for estimated expenses related to product warranties at the time products are sold. Management establishes these estimates based on historical information on the nature, frequency and average cost of warranty claims. The Group seeks to improve vehicle quality and minimize warranty expenses arising from claims. Warranty costs may differ from those estimated if actual claim rates are higher or lower than historical rates.Pension and other post-employment benefitsGroup companies sponsor pension and other post-employment benefits in various countries, mainly in the United Kingdom, Germany, Italy, and Switzerland.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 of salary increases and the healthcare costs trend rate and takes into consideration the likelihood of potential future events by using 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 31 December 2022, Iveco Group had net deferred tax assets, including tax loss carry forwards, of \u20ac927 million, of which \u20ac252 million are not recognized in the financial statements. The corresponding totals at 31 December 2021 were \u20ac864 million and \u20ac229 million. Management has recognized deferred tax assets it believes are probable to be recovered considering amounts from budgets and plans consistent with those used for other purposes within Iveco Group, for example impairment testing, as discussed in the paragraph \u201cRecoverability of non-current assets\u201d above. Iveco Group 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, Iveco Group assessed the realizability of its various deferred tax assets, which related to multiple tax jurisdictions in all regions of the world. In substantially all the jurisdictions in which Iveco Group operates, no changes in assessment occurred with respect to the recognition of deferred tax assets. This is primarily attributable to the fact accumulated losses were largely driven by non-recurring events (the COVID-19 pandemic and asset impairments) that impacted taxable income in the near-term, while substantially all of Iveco Group\u2019s deferred tax assets have no expiry date. Further, Iveco Group has a history of producing pre-tax losses in the bottom-end of economic cycles followed by generating pre-tax profits during ensuing periods of economic expansion such that there is little history of its tax attributes expiring unutilized. Given the uncertainty on evolution of certain macro-economic dynamics (i.e.: Russia-Ukraine war, supply chain issues, energy price and supply), however, it is possible assessment changes could occur within the next twelve months, with those changes potentially having a material impact on Iveco Group\u2019s results of operations.Contingent liabilitiesIveco Group is the subject of legal proceedings and tax issues 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 Iveco Group 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 other experts on matters related to litigation and taxes. 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.Global Supply Chain, energy costs, and COVID-19 pandemic Global supply chain remains challenging, as well as increased energy costs and inflation, representing the main challenge for the Group operations. Furthermore, the Group remains cautious about future impacts on its end-markets and business operations of restrictions on social interactions and business operations to limit the resurgence of the COVID-19 pandemic. Climate related matters The Company has established specific functions and structures within its respective business units to monitor the relevant emerging policies and regulatory developments at local and global level (especially in Europe, where regulatory pressure is greater). The resulting analyses are incorporated into the Company\u2019s strategy to ensure full compliance with applicable laws. The shifts in consumer preferences and demand towards sustainable transport solutions, driven by both an increase in climate-related awareness and more stringent regulations, may result in potential risks for manufacturers that must adapt to the evolving market. To counter this, Iveco Group applies these shifts to the development of its product portfolio to steer R&D focus towards sustainable technologies (e.g., biofuels, electric and hydrogen propulsion technologies) and ensure the resilience of its business model. To ensure the timely delivery of its strategy, the Company has established specific targets linked to the environmental performance of its manufacturing processes, logistics, and product portfolio. Iveco Group developed a scenario analysis which led to the identification of the Internal Price of Carbon (IPoC), an indicator that enables management to prioritise energy-saving projects based on the Group\u2019s ability to generate the greatest reduction in CO2 emissions. The IPoC is used as a decision making tool whenever an initiative is presented to the Company\u2019s Investment Committee.Based on the analysis of climate-related risks and opportunities, Iveco Group defined 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, Iveco Group has implemented relevant projects and a number of other specific climate-related topics and has defined long-term strategic targets that aim to reduce the CO2 emissions along the entire value chain (e.g.,in manufacturing plants, in logistics processes, during the use of sold products).There has been increasing interest in how climate change will impact the Group\u2019s business. Iveco Group 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, Iveco Group has adopted an environmental policy that applies to all Group 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.In particular, one of the performance metrics foreseen in the equity incentive plan (2022-2024 LTIP Awards) in which employees and executive directors participate is the CO2 emissions reduction. This could impact the future amount of the recognition of share-based payment expense in the income statement.Russia-Ukraine conflictThe geopolitical situation and the Russia-Ukraine conflict escalated since the end of February 2022. Iveco Group has operations in both Russia and Ukraine, which have been suspended during the first quarter of 2022. During the first quarter, Iveco Group recorded a negative after-tax impact of \u20ac51 million in connection with our operations in Russia and Ukraine, primarily due to the impairment of certain assets and EU sanctions preventing further commercial activities with Russian legal entities and individuals. On 20 July 2022, the Company executed a dissolution agreement with the Russian JV, IVECO AMT, also formally presenting its withdrawal from the legal entity. Accordingly, the Iveco Group stake (33.3%) was returned to IVECO AMT. While Russia and Ukraine do not constitute a material portion of the Group business, a significant escalation or expansion of economic disruption could have a material adverse effect on Iveco Group results of operations. The Group is closely monitoring the impact of the Russia-Ukraine conflict on its employees and all aspects of its business, the Group\u2019s results of operations, financial condition and cash flows. The increased risk resulting from the Russia-Ukraine conflict is described in section \u201cRisk Factors - Political or Financial instability in countries where the Group operates\u201d of this Annual Report.",
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"value": "
Allowance for doubtful accounts
The allowance for doubtful accounts for trade receivables and contract assets reflects Iveco Group\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 wholesale and retail credit portfolio. 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 months 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.
Recoverability of non-current assets
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.
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. Iveco Group 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.
",
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"language": "en",
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},
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"value": "
Allowance for doubtful accounts
The allowance for doubtful accounts for trade receivables and contract assets reflects Iveco Group\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 wholesale and retail credit portfolio. 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 months 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.
",
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"entity": "scheme:549300ZWF2ZJDD9EOR96",
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},
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Contingent liabilities
Iveco Group is the subject of legal proceedings and tax issues 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 Iveco Group 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 other experts on matters related to litigation and taxes. 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.
27. Commitments and contingencies
As a global company with a diverse business portfolio, the Iveco Group, 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. All significant matters are described below.
The outcome of any current or future proceedings, claims, or investigations cannot be predicted with certainty. Adverse decisions in some of
these proceedings, claims, or investigations could require the Iveco Group 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 the Iveco Group\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, Iveco Group recognizes specific provisions for this purpose. Contingent liabilities estimated by the Group, for which no
provisions have been recognized since an outflow of resources is not considered probable at the present time, were not material at 31 December
2022 and 2021.
Although the ultimate outcome of legal matters pending against the Iveco Group and its subsidiaries cannot be predicted, the Iveco Group
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, except for the following cases.
",
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"value": "
New standards and amendments effective from 1 January 2022
\u25aaOn 14 May 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 1
January 2022. These amendments had no impact on these Consolidated Financial Statements.
\u25aaOn 14 May 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 1 January 2022. These
amendments had no impact on these Consolidated Financial Statements.
\u25aaOn 14 May 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 an illustrative example of reimbursement for
leasehold improvements. These amendments are effective from 1 January 2022. These improvements 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 12 February 2021 the IASB issued the Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2:
Disclosure of Accounting policies, requiring 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 1 January 2023. The Group does not expect any material impact from the adoption of these
amendments.
\u25aaOn 12 February 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 1 January 2023. The Group does not expect any material impact from the adoption of these
amendments.
\u25aaOn 7 May 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 1
January 2023, with early application permitted. The Group does not expect any material impact from the adoption of these amendments.
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 these amendments and improvements on its Consolidated Financial Statements or
disclosures:
\u25aaOn 22 September 2022, the IASB issued Lease liability in a Sale and Leaseback (Amendments to IFRS 16) specifying the requirements that,
after the commencement date, a seller-lessee uses in measuring the lease liability arising in a sale and leaseback transaction, to ensure the
seller-lessee does not recognise any amount of the gain or loss that relates to the right of use it retains. The amendment applies retrospectively
to annual reporting periods beginning on or after 1 January 2024, with early application permitted. At the date of these Consolidated Financial
Statements, the European Union has not yet completed its endorsement process for this amendment.",
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},
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New standards and amendments effective from 1 January 2022
\u25aaOn 14 May 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 1
January 2022. These amendments had no impact on these Consolidated Financial Statements.
\u25aaOn 14 May 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 1 January 2022. These
amendments had no impact on these Consolidated Financial Statements.
\u25aaOn 14 May 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 an illustrative example of reimbursement for
leasehold improvements. These amendments are effective from 1 January 2022. These improvements had no impact on these Consolidated
Financial Statements.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfChangesInAccountingPoliciesExplanatory",
"language": "en",
"entity": "scheme:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl80MjcvZnJhZzoxMDkyYWYwNDE1OTk0MjJiODVjNGIwZjJlM2IyMzhlNi90ZXh0cmVnaW9uOjEwOTJhZjA0MTU5OTQyMmI4NWM0YjBmMmUzYjIzOGU2XzMyOTg1MzQ4ODM0MTU_eba673cb-0da7-48a5-9458-affbcf61dba6": {
"value": "
BUSINESS COMBINATIONS
There were no significant business combinations in 2022 or 2021.
For completeness, in 2022 Iveco Group transferred to a third party the entire share capital in its French subsidiary 2H Energy, active in the
production of generating sets and turnkey solutions.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfBusinessCombinationsExplanatory",
"language": "en",
"entity": "scheme:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl80MzMvZnJhZzo0N2UxNTVhMDhmNmM0MDM4YTBmZDRmN2VkNTZlMGRlZS90ZXh0cmVnaW9uOjQ3ZTE1NWEwOGY2YzQwMzhhMGZkNGY3ZWQ1NmUwZGVlXzMyOTg1MzQ4ODQ0Mjc_f36adee5-613d-4337-a925-9eb3f26a0d25": {
"value": "
1. Net revenues
The following table summarizes Net revenues for the years ended 31 December 2022 and 2021:
| | | |
| | | |
Commercial and Specialty Vehicles | | | |
| | | |
| | | |
Total Industrial Activities | | | |
| | | |
| | | |
| | | |
The following table disaggregates Net revenues by major source for the years ended 31 December 2022 and 2021:
| | | |
| | | |
| | | |
| | | |
Rendering of services and other revenues | | | |
Rents and other income on assets sold with a buy-back commitment | | | |
Revenues from sales of goods and services | | | |
Finance and interest income | | | |
Rents and other income on operating lease | | | |
| | | |
The following table disaggregates Net revenues by major source for the years ended 31 December 2022 and 2021:
| | | |
| | | |
| | | |
| | | |
Rendering of services and other revenues | | | |
Rents and other income on assets sold with a buy-back commitment | | | |
Revenues from sales of goods and services | | | |
Finance and interest income | | | |
Rents and other income on operating lease | | | |
| | | |
| | | | | | | | | |
| | | Additional amounts arising during the period | | Amounts recognized within revenue | | Translation differences and other changes | | |
| | | | | | | | | |
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfRevenueFromContractsWithCustomersExplanatory",
"language": "en",
"entity": "scheme:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl80MzYvZnJhZzoyMDIwNWI3NTQzYmM0YzFiYjUxODdjZWEwZGQwODIzZi90ZXh0cmVnaW9uOjIwMjA1Yjc1NDNiYzRjMWJiNTE4N2NlYTBkZDA4MjNmXzMyOTg1MzQ4ODM1NDM_0cc22f78-0e7c-46fa-87ce-5dede1379d9b": {
"value": "
2. Cost of sales
Cost of sales amounted to \u20ac12,389 million in 2022 and \u20ac10,881 million in 2021. In 2022, cost of sales includes \u20ac31 million related to the
impairment of certain assets in connection with operations in Russia and Ukraine.
",
"dimensions": {
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"language": "en",
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}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl80MzYvZnJhZzoyMDIwNWI3NTQzYmM0YzFiYjUxODdjZWEwZGQwODIzZi90ZXh0cmVnaW9uOjIwMjA1Yjc1NDNiYzRjMWJiNTE4N2NlYTBkZDA4MjNmXzMyOTg1MzQ4ODM1NDQ_44b062b0-c44f-4a86-a001-c781d7a79b82": {
"value": "
2. Cost of sales
Cost of sales amounted to \u20ac12,389 million in 2022 and \u20ac10,881 million in 2021. In 2022, cost of sales includes \u20ac31 million related to the
impairment of certain assets in connection with operations in Russia and Ukraine.
3. Selling, general and administrative costs
Selling, general and administrative costs amounted to \u20ac936 million in 2022, up \u20ac111 million compared to 2021, primarily due to emerging
corporate costs.
4. Research and development costs
In 2022, Research and development costs of \u20ac473 million (\u20ac481 million in 2021) comprise all the research and development costs not recognized
as assets in the year, amounting to \u20ac244 million (\u20ac238 million in 2021), the amortization of capitalized development costs of \u20ac214 million
(\u20ac227\u00a0million in 2021) and the impairment of capitalized development costs of \u20ac15 million (\u20ac16 million in 2021). During 2022, the Group capitalized
new development costs of \u20ac390 million (\u20ac271 million in 2021). The costs in both periods were primarily attributable to spending on engine
development activities associated with emission requirements and continued investment in new products.
5. Result from investments
In 2022 and 2021 Iveco Group\u2019s share in the net profit or loss of the investees accounted for using the equity method amounted to a loss of
\u20ac5\u00a0million and a gain of \u20ac27 million, respectively.
6. Restructuring costs
Iveco Group incurred restructuring costs of \u20ac15 million and \u20ac36 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 \u20ac106 million and \u20ac168 million in 2022 and 2021, respectively. In both periods,
this item primarily included legal costs, indirect taxes, and the separation costs related to the spin-off of the Iveco Group business. In 2022, this
item also included the negative impact of \u20ac14\u00a0million deriving from the first-time adoption of hyperinflation accounting in T\u00fcrkiye, in accordance
with IAS 29 - Financial reporting in Hyperinflationary Economies, effective from 1 January 2022, and the \u20ac52 million gain from the disposal of
certain fixed assets in Australia. In 2021, this item also included a pre- and after-tax-loss of \u20ac21 million from the valuation at their recoverable
amount of certain assets classified as held for sale.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfExpensesExplanatory",
"language": "en",
"entity": "scheme:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl80MzYvZnJhZzoyMDIwNWI3NTQzYmM0YzFiYjUxODdjZWEwZGQwODIzZi90ZXh0cmVnaW9uOjIwMjA1Yjc1NDNiYzRjMWJiNTE4N2NlYTBkZDA4MjNmXzQ5_d7b2901a-e9ba-4db2-8bda-a38ad462f4f4": {
"value": "12389000000",
"decimals": -6,
"dimensions": {
"concept": "ifrs-full:CostOfSales",
"entity": "scheme:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00",
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}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl80MzYvZnJhZzoyMDIwNWI3NTQzYmM0YzFiYjUxODdjZWEwZGQwODIzZi90ZXh0cmVnaW9uOjIwMjA1Yjc1NDNiYzRjMWJiNTE4N2NlYTBkZDA4MjNmXzcx_8ac101f8-87ec-4c1e-9866-961a8d3b4d4e": {
"value": "10881000000",
"decimals": -6,
"dimensions": {
"concept": "ifrs-full:CostOfSales",
"entity": "scheme:549300ZWF2ZJDD9EOR96",
"period": "2021-01-01T00:00:00/2022-01-01T00:00:00",
"unit": "iso4217:EUR"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl80MzkvZnJhZzpjZjU5Mzk1N2EwNTk0ZWIwYjgzODI5YzllNGU2MmM1Yy90ZXh0cmVnaW9uOmNmNTkzOTU3YTA1OTRlYjBiODM4MjljOWU0ZTYyYzVjXzMyOTg1MzQ4ODM1ODU_f1439f7d-5e33-4ded-8c80-7ba3793ef946": {
"value": "
3. Selling, general and administrative costs
Selling, general and administrative costs amounted to \u20ac936 million in 2022, up \u20ac111 million compared to 2021, primarily due to emerging
corporate costs.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfGeneralAndAdministrativeExpenseExplanatory",
"language": "en",
"entity": "scheme:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl80MzkvZnJhZzpjZjU5Mzk1N2EwNTk0ZWIwYjgzODI5YzllNGU2MmM1Yy90ZXh0cmVnaW9uOmNmNTkzOTU3YTA1OTRlYjBiODM4MjljOWU0ZTYyYzVjXzEwNQ_34e6a78f-78f1-4e10-8812-7cba1ddc608b": {
"value": "936000000",
"decimals": -6,
"dimensions": {
"concept": "ifrs-full:SellingGeneralAndAdministrativeExpense",
"entity": "scheme:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00",
"unit": "iso4217:EUR"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl80NDIvZnJhZzo0ZWViM2IwNmVkZTY0MzhhYmFkOTg5ZDg0ZTI4MjM3NC90ZXh0cmVnaW9uOjRlZWIzYjA2ZWRlNjQzOGFiYWQ5ODlkODRlMjgyMzc0XzMyOTg1MzQ4ODM4NDU_2eb5cf65-eb6e-4dc7-869a-0023da117c7a": {
"value": "
4. Research and development costs
In 2022, Research and development costs of \u20ac473 million (\u20ac481 million in 2021) comprise all the research and development costs not recognized
as assets in the year, amounting to \u20ac244 million (\u20ac238 million in 2021), the amortization of capitalized development costs of \u20ac214 million
(\u20ac227\u00a0million in 2021) and the impairment of capitalized development costs of \u20ac15 million (\u20ac16 million in 2021). During 2022, the Group capitalized
new development costs of \u20ac390 million (\u20ac271 million in 2021). The costs in both periods were primarily attributable to spending on engine
development activities associated with emission requirements and continued investment in new products.
Development costs
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. Impairment of development costs in 2022 primarily refers to the
bus business, as a consequence of the acceleration in emission-related technological transition.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfResearchAndDevelopmentExpenseExplanatory",
"language": "en",
"entity": "scheme:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl80NDIvZnJhZzo0ZWViM2IwNmVkZTY0MzhhYmFkOTg5ZDg0ZTI4MjM3NC90ZXh0cmVnaW9uOjRlZWIzYjA2ZWRlNjQzOGFiYWQ5ODlkODRlMjgyMzc0Xzgx_80f0c659-cc3c-42f1-9ec2-961e5b224835": {
"value": "473000000",
"decimals": -6,
"dimensions": {
"concept": "ifrs-full:ResearchAndDevelopmentExpense",
"entity": "scheme:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00",
"unit": "iso4217:EUR"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl80NDIvZnJhZzo0ZWViM2IwNmVkZTY0MzhhYmFkOTg5ZDg0ZTI4MjM3NC90ZXh0cmVnaW9uOjRlZWIzYjA2ZWRlNjQzOGFiYWQ5ODlkODRlMjgyMzc0Xzk0_749a0454-773a-49ff-abe0-8f079054bc8e": {
"value": "481000000",
"decimals": -6,
"dimensions": {
"concept": "ifrs-full:ResearchAndDevelopmentExpense",
"entity": "scheme:549300ZWF2ZJDD9EOR96",
"period": "2021-01-01T00:00:00/2022-01-01T00:00:00",
"unit": "iso4217:EUR"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl80NDUvZnJhZzoyNWE2ZDY0OWE5MTU0ZTc4YjNiNGFjZDczZTYyZTY4Mi90ZXh0cmVnaW9uOjI1YTZkNjQ5YTkxNTRlNzhiM2I0YWNkNzNlNjJlNjgyXzMyOTg1MzQ4ODM3ODc_97503270-c96a-4df7-95df-3593b9bb22fc": {
"value": "
5. Result from investments
In 2022 and 2021 Iveco Group\u2019s share in the net profit or loss of the investees accounted for using the equity method amounted to a loss of
\u20ac5\u00a0million and a gain of \u20ac27 million, respectively.
14. Investments and other non-current financial assets
| | | |
| | | |
Investments accounted for using the equity method | | | |
Equity investments measured at fair value through other comprehensive income | | | |
| | | |
| | | |
Non-current financial receivables and other non-current securities | | | |
Total Investments and other financial assets | | | |
At 31 December 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 | | Translation differences, disposals and other changes | | |
| |
| | | | | | | | | | | |
| | | | | | | | | | | |
Equity investments measured at fair value through other comprehensive income | | | | | | | | | | | |
Unconsolidated subsidiaries and other | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | Revaluations/ (Write-downs) | | Acquisitions and capitalizations | | Fair value remeasurements | | Translation differences, disposals and other changes | | |
| |
| | | | | | | | | | | |
| | | | | | | | | | | |
Equity investments measured at fair value through other comprehensive income | | | | | | | | | | | |
Unconsolidated subsidiaries and other | | | | | | | | | | | |
| | | | | | | | | | | |
Revaluations and Write-downs include the Group\u2019s share of the profit or loss for the year of investments accounted for using the equity method for
a loss of \u20ac5 million in 2022 (a gain of \u20ac27 million in 2021).
Translation differences, disposals and other changes also included dividends by companies accounted for using the equity method.
In 2022, Other changes primarily reflects the liquidation of the investment in the joint venture SAIC IVECO Commercial Vehicle Investment
Company Limited (amounting to \u20ac166 million at 31 December 2021) following the final step of Chinese joint ventures' restructuring. This final step
resulted in a gain of \u20ac36 million in the income statement in item Gains/(losses) on disposal of investments.
Investments in joint ventures
Interests in joint ventures are accounted for using the equity method. A summary of investments in joint ventures at 31 December 2022 and 2021
is as follows:
| | | | | | | |
| | | |
| | | | | | | |
| | | | | | | |
SAIC IVECO Commercial Vehicle Investment Company Limited | | | | | | | |
| | | | | | | |
Total Investments in joint ventures | | | | | | | |
Interests in joint ventures consist of 4 companies at 31 December 2022 (4 companies at 31 December 2021) and mainly include CIFINS S.p.A.,
legal entity jointly held by Iveco Group and CNH Industrial, which holds 49.9% of CNH Capital Europe S.a.S., a joint venture with the BNP Paribas
Group providing financing solutions to customers of both Iveco Group and CNH Industrial Group in several European countries. The 24.95%
investment in CNH Capital Europe S.A. indirectly held by Iveco Group through CIFINS S.p.A. at 31 December 2022, was included in the
combined financial statements at 31 December 2021 as investments in associates.
At 31 December 2022 and 2021, summarized financial information relating to the joint ventures of the Group material at these dates, respectively,
prepared in accordance with EU-IFRS, is as follows:
| | | | | |
| | | |
| | | | | |
Cash and cash equivalents | | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | | |
| | | |
| | | | | | |
| | | | | | |
Profit/(loss) before taxes | | | | | | |
| | | | | | |
Profit/(loss) from continuing operations | | | | | | |
Profit/(loss) from discontinued operations | | | | | | |
| | | | | | |
| | | | | | |
Total Other comprehensive income, net of tax | | | | | | |
Total Comprehensive income | | | | | | |
This summarized financial information may be reconciled to the carrying amount of the % interest held in the joint ventures as follows:
| | | | | |
| | |
| | | | | |
| | | | | |
Group\u2019s interest (%) | | | | | |
| | | | | |
Adjustments made by using the equity method | | | | | |
| | | | | |
Summarized financial information relating to CNH Industrial Capital Europe S.a.S., material associate of the Group held by CIFINS S.p.A., is as
follows:
Investments in associates
A summary of investments in associates at 31 December 2022 and 2021 is as follows:
| | | | | | | |
| | | |
| | | | | | | |
Transolver Finance Establecimiento Financiero de Credito S.A. | | | | | | | |
| | | | | | | |
Total Investments in associates | | | | | | | |
(1) The 24.95% investment in CNH Capital Europe S.A. indirectly held by Iveco Group through CIFINS S.p.A. at 31 December 2022, was included in the combined financial statements at
31 December 2021 as investments in associates.
Summarized financial information relating to Transolver Finance Establecimiento Financiero de Credito S.A., material associate of the Group, is
as follows:
This summarized financial information may be reconciled to the carrying amount of the % interest held in the associate as follows:
| | | | | |
| | | |
| | | | | |
Group\u2019s interest (%) | | | | | |
| | | | | |
Adjustments made by using the equity method | | | | | |
| | | | | |
",
"dimensions": {
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}
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"value": "-5000000",
"decimals": -6,
"dimensions": {
"concept": "ivg:ResultsOfInvestments",
"entity": "scheme:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00",
"unit": "iso4217:EUR"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl80NDUvZnJhZzoyNWE2ZDY0OWE5MTU0ZTc4YjNiNGFjZDczZTYyZTY4Mi90ZXh0cmVnaW9uOjI1YTZkNjQ5YTkxNTRlNzhiM2I0YWNkNzNlNjJlNjgyXzE5NQ_cf0cf5b6-9775-4f44-a708-2fd78e69e0a9": {
"value": "27000000",
"decimals": -6,
"dimensions": {
"concept": "ivg:ResultsOfInvestments",
"entity": "scheme:549300ZWF2ZJDD9EOR96",
"period": "2021-01-01T00:00:00/2022-01-01T00:00:00",
"unit": "iso4217:EUR"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl80NTEvZnJhZzphYmMzODI1ZGZiNGM0NjhkYmI1ZTZiNDhjNTlkMjQxMi90ZXh0cmVnaW9uOmFiYzM4MjVkZmI0YzQ2OGRiYjVlNmI0OGM1OWQyNDEyXzcz_e12f3a05-9c75-437c-8c4e-c59a782044ae": {
"value": "15000000",
"decimals": -6,
"dimensions": {
"concept": "ifrs-full:ExpenseOfRestructuringActivities",
"entity": "scheme:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00",
"unit": "iso4217:EUR"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl80NTEvZnJhZzphYmMzODI1ZGZiNGM0NjhkYmI1ZTZiNDhjNTlkMjQxMi90ZXh0cmVnaW9uOmFiYzM4MjVkZmI0YzQ2OGRiYjVlNmI0OGM1OWQyNDEyXzg5_a8b38223-1d84-4bdf-a30d-e19e9e6fe99e": {
"value": "36000000",
"decimals": -6,
"dimensions": {
"concept": "ifrs-full:ExpenseOfRestructuringActivities",
"entity": "scheme:549300ZWF2ZJDD9EOR96",
"period": "2021-01-01T00:00:00/2022-01-01T00:00:00",
"unit": "iso4217:EUR"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl80NTQvZnJhZzpkMzFmMDJmZjI3ZDg0Y2E4YTE2MjczNjllZTk2MTIxYi90ZXh0cmVnaW9uOmQzMWYwMmZmMjdkODRjYThhMTYyNzM2OWVlOTYxMjFiXzMyOTg1MzQ4ODM3NzA_1922b3c2-bf59-46c7-94f4-d0d4204c94d6": {
"value": "
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 \u20ac106 million and \u20ac168 million in 2022 and 2021, respectively. In both periods,
this item primarily included legal costs, indirect taxes, and the separation costs related to the spin-off of the Iveco Group business. In 2022, this
item also included the negative impact of \u20ac14\u00a0million deriving from the first-time adoption of hyperinflation accounting in T\u00fcrkiye, in accordance
with IAS 29 - Financial reporting in Hyperinflationary Economies, effective from 1 January 2022, and the \u20ac52 million gain from the disposal of
certain fixed assets in Australia. In 2021, this item also included a pre- and after-tax-loss of \u20ac21 million from the valuation at their recoverable
amount of certain assets classified as held for sale.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfOtherOperatingIncomeExpenseExplanatory",
"language": "en",
"entity": "scheme:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl80NTQvZnJhZzpkMzFmMDJmZjI3ZDg0Y2E4YTE2MjczNjllZTk2MTIxYi90ZXh0cmVnaW9uOmQzMWYwMmZmMjdkODRjYThhMTYyNzM2OWVlOTYxMjFiXzMyOTg1MzQ4ODM3NzE_491a3a55-1834-4b4e-9ba1-ce402614dc03": {
"value": "
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 \u20ac106 million and \u20ac168 million in 2022 and 2021, respectively. In both periods,
this item primarily included legal costs, indirect taxes, and the separation costs related to the spin-off of the Iveco Group business. In 2022, this
item also included the negative impact of \u20ac14\u00a0million deriving from the first-time adoption of hyperinflation accounting in T\u00fcrkiye, in accordance
with IAS 29 - Financial reporting in Hyperinflationary Economies, effective from 1 January 2022, and the \u20ac52 million gain from the disposal of
certain fixed assets in Australia. In 2021, this item also included a pre- and after-tax-loss of \u20ac21 million from the valuation at their recoverable
amount of certain assets classified as held for sale.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfOtherOperatingIncomeExplanatory",
"language": "en",
"entity": "scheme:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl80NTQvZnJhZzpkMzFmMDJmZjI3ZDg0Y2E4YTE2MjczNjllZTk2MTIxYi90ZXh0cmVnaW9uOmQzMWYwMmZmMjdkODRjYThhMTYyNzM2OWVlOTYxMjFiXzMyOTg1MzQ4ODM3NzE_56eaddda-c25d-4685-b6a8-8bc25f724dfb": {
"value": "
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 \u20ac106 million and \u20ac168 million in 2022 and 2021, respectively. In both periods,
this item primarily included legal costs, indirect taxes, and the separation costs related to the spin-off of the Iveco Group business. In 2022, this
item also included the negative impact of \u20ac14\u00a0million deriving from the first-time adoption of hyperinflation accounting in T\u00fcrkiye, in accordance
with IAS 29 - Financial reporting in Hyperinflationary Economies, effective from 1 January 2022, and the \u20ac52 million gain from the disposal of
certain fixed assets in Australia. In 2021, this item also included a pre- and after-tax-loss of \u20ac21 million from the valuation at their recoverable
amount of certain assets classified as held for sale.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfOtherOperatingExpenseExplanatory",
"language": "en",
"entity": "scheme:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl80NTQvZnJhZzpkMzFmMDJmZjI3ZDg0Y2E4YTE2MjczNjllZTk2MTIxYi90ZXh0cmVnaW9uOmQzMWYwMmZmMjdkODRjYThhMTYyNzM2OWVlOTYxMjFiXzM4NQ_30f23052-f03e-40c8-a151-4b195ea8ee0f": {
"value": "-106000000",
"decimals": -6,
"dimensions": {
"concept": "ifrs-full:OtherOperatingIncomeExpense",
"entity": "scheme:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00",
"unit": "iso4217:EUR"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl80NTQvZnJhZzpkMzFmMDJmZjI3ZDg0Y2E4YTE2MjczNjllZTk2MTIxYi90ZXh0cmVnaW9uOmQzMWYwMmZmMjdkODRjYThhMTYyNzM2OWVlOTYxMjFiXzQwMQ_dcba67fd-4b9c-453a-893f-7119daa169fb": {
"value": "-168000000",
"decimals": -6,
"dimensions": {
"concept": "ifrs-full:OtherOperatingIncomeExpense",
"entity": "scheme:549300ZWF2ZJDD9EOR96",
"period": "2021-01-01T00:00:00/2022-01-01T00:00:00",
"unit": "iso4217:EUR"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl80NTcvZnJhZzo0MTZlYmY3MjYzYjc0NzkzOTViMjRkMjU5YmMwMDAzMS90ZXh0cmVnaW9uOjQxNmViZjcyNjNiNzQ3OTM5NWIyNGQyNTliYzAwMDMxXzMyOTg1MzQ4ODM1MjU_9f99adf1-a4ad-4e35-9c47-b4d819986420": {
"value": "
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 | | | |
Exchange rate differences and other | | | |
Total net income/(expenses) from derivative financial instruments, exchange differences and other (c) | | | |
| | | |
Net financial income/(expenses)\u00a0 (a) - (b) + (c) | | | |
Interest earned and other 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 | | | |
Total Interest earned and other financial income | | | |
Capitalized borrowing costs amounted to \u20ac15 million and \u20ac4 million in 2022 and 2021, respectively.
Other interest cost and other financial expenses include, amongst other things, interest cost on asset-backed financing and factoring cost.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfFinanceIncomeExpenseExplanatory",
"language": "en",
"entity": "scheme:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl80NTcvZnJhZzo0MTZlYmY3MjYzYjc0NzkzOTViMjRkMjU5YmMwMDAzMS90ZXh0cmVnaW9uOjQxNmViZjcyNjNiNzQ3OTM5NWIyNGQyNTliYzAwMDMxXzMyOTg1MzQ4ODM4MzE_bb0f0e13-5daa-4688-b282-f386db77d021": {
"value": "
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 | | | |
Exchange rate differences and other | | | |
Total net income/(expenses) from derivative financial instruments, exchange differences and other (c) | | | |
| | | |
Net financial income/(expenses)\u00a0 (a) - (b) + (c) | | | |
Interest earned and other 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 | | | |
Total Interest earned and other financial income | | | |
Interest cost and other financial expenses may be analyzed as follows:
| | | |
| | | |
| | | |
Interest expenses related to lease liabilities | | | |
| | | |
Other interest cost and other financial expenses | | | |
Total Interest cost and other financial expenses | | | |
Capitalized borrowing costs amounted to \u20ac15 million and \u20ac4 million in 2022 and 2021, respectively.
Other interest cost and other financial expenses include, amongst other things, interest cost on asset-backed financing and factoring cost.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfFinanceCostExplanatory",
"language": "en",
"entity": "scheme:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl80NjAvZnJhZzozYmIwODYxZGIyYzA0OGU5YTczZGE4OWNiNzVlZjRkZi90ZXh0cmVnaW9uOjNiYjA4NjFkYjJjMDQ4ZTlhNzNkYTg5Y2I3NWVmNGRmXzMyOTg1MzQ4ODczNjE_3bf75272-4760-4887-9589-aaa2577ec4d4": {
"value": "
9. Income tax (expense) benefit
The Company and its subsidiaries have substantial worldwide operations. The Company\u2019s subsidiaries incur tax obligations in the jurisdictions in
which they operate. The Group\u2019s income tax expenses or benefits as reported in its consolidated income statement for the years ended 31
December 2022 and 2021 consist primarily of income tax expenses or benefits related to subsidiaries of the Company.
Income tax (expense) benefit for the years ended 31 December 2022 and 2021 consisted of the following:
| | | |
| | | |
| | | |
| | | |
Taxes relating to prior periods | | | |
Total Income tax (expense) benefit | | | |
The Company is incorporated in the Netherlands but is a tax resident of Italy. The reconciliation of the differences between the theoretical income
taxes at the parent statutory rate and the total income taxes is presented based on the Italian national statutory corporation tax rate of 24% in
force during each of Iveco Group\u2019s calendar year reporting periods presented in these Consolidated Financial Statements. A reconciliation of
Iveco Group\u2019s income tax expense for the years ended 31 December 2022 and 2021 is as follows:
| | | |
| | | |
Theoretical Income tax (expense) at the parent statutory rate | | | |
Foreign income taxed at different rates | | | |
Deferred tax assets not recognized and write-down | | | |
| | | |
Taxes relating to prior years | | | |
Use of tax losses for which no deferred tax assets were recognized | | | |
Change in tax rate or law | | | |
| | | |
Total Income tax (expense) benefit | | | |
The increase of \u20ac40 million in net deferred tax assets during 2022 was mainly due to the income tax gain of \u20ac48 million recognized in the income
statement as a result of the reversal of temporary differences, tax losses and taxes related to prior periods.
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 recoverability of such assets on the basis of actual results, as well as updated strategic business plans and accompanying tax plans. For
this reason, the total theoretical future tax benefits arising from deductible temporary differences of \u20ac836 million at 31 December 2022 and
\u20ac811\u00a0million at 31 December 2021, and tax loss and credit carryforwards of \u20ac231 million at 31 December 2022 and \u20ac238 million at 31 December
2021, were reduced by \u20ac252 million at 31 December 2022 and \u20ac229 million at 31 December 2021.
Net recognized deferred tax assets include \u20ac121 million at 31 December 2022 (\u20ac136 million at 31 December 2021) of tax benefits arising from tax
loss carryforwards and tax credits. At 31 December 2022, a further tax benefit of \u20ac110 million (\u20ac102 million at 31 December 2021) arising from tax
loss carryforwards and tax credits has not been recognized.
At 31 December 2022, tax liabilities primarily include uncertain income tax amounts of \u20ac21 million (\u20ac21 million at 31 December 2021) and other
tax payables.
The totals of deductible and taxable temporary differences and accumulated tax losses at 31 December 2022, together with the amounts for
which deferred tax assets have not been recognized, analyzed by estimated year of reversal or expiry, are as follows:
| | | | | | | | | | | | | |
| | | |
| Total at 31 December 2022 | | | | | | | | | | | | Unlimited/ indeterminable |
Temporary differences and tax losses: | | | | | | | | | | | | | |
Deductible temporary differences | | | | | | | | | | | | | |
Taxable temporary differences | | | | | | | | | | | | | |
Tax losses and tax credits | | | | | | | | | | | | | |
Temporary differences and tax losses for which deferred tax assets have not been recognized | | | | | | | | | | | | | |
Temporary differences and tax losses | | | | | | | | | | | | | |
Iveco Group files income tax returns in multiple jurisdictions and is subject to examination by taxing authorities throughout the world. Iveco Group
has open tax years from 2010 through 2021. Due to the global nature of Iveco Group\u2019s business, transfer pricing disputes may arise, and Iveco
Group may seek correlative relief through competent authority processes. Further, as various ongoing audits are concluded, or as the applicable
statutes of limitations expire, it is possible Iveco Group\u2019s amount of unrecognized tax benefits could change during the next twelve months. Iveco
Group does not believe the resolution of any outstanding tax examinations will have a material effect on Iveco Group\u2019s results of operations,
statement of financial position, or cash flows.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfIncomeTaxExplanatory",
"language": "en",
"entity": "scheme:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl80NjAvZnJhZzozYmIwODYxZGIyYzA0OGU5YTczZGE4OWNiNzVlZjRkZi90ZXh0cmVnaW9uOjNiYjA4NjFkYjJjMDQ4ZTlhNzNkYTg5Y2I3NWVmNGRmXzMyOTg1MzQ4ODczNjI_024c5fc6-2020-4d97-9943-8e46b9d99874": {
"value": "
At 31 December 2022, undistributed earnings in certain subsidiaries totaled approximately \u20ac3.7 billion (\u20ac2.6 billion at 31 December 2021) for
which no deferred tax liability has been recorded because the remittance of earnings from certain jurisdictions would incur no tax or such earnings
are indefinitely reinvested. Iveco Group has determined the amount of unrecognized deferred tax liability relating to the \u20ac3.7 billion undistributed
earnings is approximately \u20ac79 million and related to withholding taxes and incremental local country income taxes in certain jurisdictions. Dividend
income in Italy is generally exempt at 95% from income taxes.
The Group recognizes in its consolidated statement of financial position within Deferred tax assets, the amount of deferred tax assets less the
deferred tax liabilities of the individual consolidated legal entities, where these may be offset.
The components of net deferred tax assets at 31 December 2022 and 2021 are as follows:
| | | | | | | | | |
| | | Recognized in income statement | | | | Translation differences and other changes | | |
Deferred tax assets arising from: | |
| | | | | | | | | |
| | | | | | | | | |
Taxed allowances for doubtful accounts | | | | | | | | | |
Provision for employee benefits | | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
Measurement of derivative financial instruments | | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
Deferred tax liabilities arising from: | |
| | | | | | | | | |
| | | | | | | | | |
Provision from employee benefits | | | | | | | | | |
Capitalization of development costs | | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
Theoretical tax benefit arising from tax loss carryforwards and tax credits | | | | | | | | | |
Adjustments for assets whose recoverability is not probable | | | | | | | | | |
Total net deferred tax assets | | | | | | | | | |
The increase of \u20ac40 million in net deferred tax assets during 2022 was mainly due to the income tax gain of \u20ac48 million recognized in the income
statement as a result of the reversal of temporary differences, tax losses and taxes related to prior periods.
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 recoverability of such assets on the basis of actual results, as well as updated strategic business plans and accompanying tax plans. For
this reason, the total theoretical future tax benefits arising from deductible temporary differences of \u20ac836 million at 31 December 2022 and
\u20ac811\u00a0million at 31 December 2021, and tax loss and credit carryforwards of \u20ac231 million at 31 December 2022 and \u20ac238 million at 31 December
2021, were reduced by \u20ac252 million at 31 December 2022 and \u20ac229 million at 31 December 2021.
Net recognized deferred tax assets include \u20ac121 million at 31 December 2022 (\u20ac136 million at 31 December 2021) of tax benefits arising from tax
loss carryforwards and tax credits. At 31 December 2022, a further tax benefit of \u20ac110 million (\u20ac102 million at 31 December 2021) arising from tax
loss carryforwards and tax credits has not been recognized.
At 31 December 2022, tax liabilities primarily include uncertain income tax amounts of \u20ac21 million (\u20ac21 million at 31 December 2021) and other
tax payables.
The totals of deductible and taxable temporary differences and accumulated tax losses at 31 December 2022, together with the amounts for
which deferred tax assets have not been recognized, analyzed by estimated year of reversal or expiry, are as follows:
| | | | | | | | | | | | | |
| | | |
| Total at 31 December 2022 | | | | | | | | | | | | Unlimited/ indeterminable |
Temporary differences and tax losses: | | | | | | | | | | | | | |
Deductible temporary differences | | | | | | | | | | | | | |
Taxable temporary differences | | | | | | | | | | | | | |
Tax losses and tax credits | | | | | | | | | | | | | |
Temporary differences and tax losses for which deferred tax assets have not been recognized | | | | | | | | | | | | | |
Temporary differences and tax losses | | | | | | | | | | | | | |
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfDeferredTaxesExplanatory",
"language": "en",
"entity": "scheme:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl80NjMvZnJhZzoyOTc0ZmM2MGZhZWY0YTNlOWY2MTQ5ODJlMzdiMTljYi90ZXh0cmVnaW9uOjI5NzRmYzYwZmFlZjRhM2U5ZjYxNDk4MmUzN2IxOWNiXzMyOTg1MzQ4ODM1NDg_1e414305-0df2-477c-9974-a6cc21080b9f": {
"value": "
10. Other information by nature of expense
The income statement includes personnel costs for \u20ac1,943 million in 2022 (\u20ac1,792 million in 2021).
An analysis of the average number of employees by category is as follows:
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
Average number of employees | | | |
Basic earnings/(loss) per common share (\u201cEPS\u201d) is computed by dividing the Profit/(loss) for the period attributable to the owners of the parent by
the weighted average number of common shares outstanding during the period. Diluted EPS reflects the potential dilution that could occur on the
conversion of all dilutive potential common shares into common shares. Restricted share units and performance share units deriving from the
Iveco Group share-based payment awards are considered dilutive potential common shares.
For the year ended 31 December 2022, 2.7 million shares (consisting of share grants) were outstanding but not included in the calculation of
diluted earnings per share as the impact of these shares would have been anti-dilutive.
For 2021, the denominator for basic and diluted earnings (loss) per share is the number of common shares at the Effective date, which is
considered more representative of the expected average number of outstanding common shares after the Demerger.
For additional information on the share-based payment awards, see Note 21 \"Equity\".
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfEarningsPerShareExplanatory",
"language": "en",
"entity": "scheme:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl80NjYvZnJhZzplODgyN2EwOTY3YzM0MTdjODNiYWUwMjI3ZDA3ZjUzMS90YWJsZToyZjc5ZWZlMjllODg0MGE2YTk2NWExNDE1YzI1NjM0OC90YWJsZXJhbmdlOjJmNzllZmUyOWU4ODQwYTZhOTY1YTE0MTVjMjU2MzQ4XzItMi0xLTEtODkyNjY_9607b27d-de3e-4f6e-8e3c-7aae62b05ce3": {
"value": "147000000",
"decimals": -6,
"dimensions": {
"concept": "ifrs-full:ProfitLossAttributableToOwnersOfParent",
"entity": "scheme:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00",
"unit": "iso4217:EUR"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl80NjYvZnJhZzplODgyN2EwOTY3YzM0MTdjODNiYWUwMjI3ZDA3ZjUzMS90YWJsZToyZjc5ZWZlMjllODg0MGE2YTk2NWExNDE1YzI1NjM0OC90YWJsZXJhbmdlOjJmNzllZmUyOWU4ODQwYTZhOTY1YTE0MTVjMjU2MzQ4XzItNC0xLTEtODkyNjY_3b013abe-414e-4111-b0e6-523226e4de72": {
"value": "52000000",
"decimals": -6,
"dimensions": {
"concept": "ifrs-full:ProfitLossAttributableToOwnersOfParent",
"entity": "scheme:549300ZWF2ZJDD9EOR96",
"period": "2021-01-01T00:00:00/2022-01-01T00:00:00",
"unit": "iso4217:EUR"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl80NjYvZnJhZzplODgyN2EwOTY3YzM0MTdjODNiYWUwMjI3ZDA3ZjUzMS90YWJsZToyZjc5ZWZlMjllODg0MGE2YTk2NWExNDE1YzI1NjM0OC90YWJsZXJhbmdlOjJmNzllZmUyOWU4ODQwYTZhOTY1YTE0MTVjMjU2MzQ4XzQtMi0xLTEtODkyNjY_23c9d0a6-0737-41e6-a8c5-be9a49848ea7": {
"value": "0.54",
"decimals": 2,
"dimensions": {
"concept": "ifrs-full:BasicEarningsLossPerShare",
"entity": "scheme:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00",
"unit": "iso4217:EUR/xbrli:shares"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl80NjYvZnJhZzplODgyN2EwOTY3YzM0MTdjODNiYWUwMjI3ZDA3ZjUzMS90YWJsZToyZjc5ZWZlMjllODg0MGE2YTk2NWExNDE1YzI1NjM0OC90YWJsZXJhbmdlOjJmNzllZmUyOWU4ODQwYTZhOTY1YTE0MTVjMjU2MzQ4XzQtNC0xLTEtODkyNjY_a4cd0dae-5639-4f66-85e6-57f88c036aa1": {
"value": "0.19",
"decimals": 2,
"dimensions": {
"concept": "ifrs-full:BasicEarningsLossPerShare",
"entity": "scheme:549300ZWF2ZJDD9EOR96",
"period": "2021-01-01T00:00:00/2022-01-01T00:00:00",
"unit": "iso4217:EUR/xbrli:shares"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl80NjYvZnJhZzplODgyN2EwOTY3YzM0MTdjODNiYWUwMjI3ZDA3ZjUzMS90YWJsZToyZjc5ZWZlMjllODg0MGE2YTk2NWExNDE1YzI1NjM0OC90YWJsZXJhbmdlOjJmNzllZmUyOWU4ODQwYTZhOTY1YTE0MTVjMjU2MzQ4XzctMi0xLTEtODkyNjY_9607b27d-de3e-4f6e-8e3c-7aae62b05ce3": {
"value": "147000000",
"decimals": -6,
"dimensions": {
"concept": "ifrs-full:ProfitLossAttributableToOwnersOfParent",
"entity": "scheme:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00",
"unit": "iso4217:EUR"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl80NjYvZnJhZzplODgyN2EwOTY3YzM0MTdjODNiYWUwMjI3ZDA3ZjUzMS90YWJsZToyZjc5ZWZlMjllODg0MGE2YTk2NWExNDE1YzI1NjM0OC90YWJsZXJhbmdlOjJmNzllZmUyOWU4ODQwYTZhOTY1YTE0MTVjMjU2MzQ4XzctNC0xLTEtODkyNjY_3b013abe-414e-4111-b0e6-523226e4de72": {
"value": "52000000",
"decimals": -6,
"dimensions": {
"concept": "ifrs-full:ProfitLossAttributableToOwnersOfParent",
"entity": "scheme:549300ZWF2ZJDD9EOR96",
"period": "2021-01-01T00:00:00/2022-01-01T00:00:00",
"unit": "iso4217:EUR"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl80NjYvZnJhZzplODgyN2EwOTY3YzM0MTdjODNiYWUwMjI3ZDA3ZjUzMS90YWJsZToyZjc5ZWZlMjllODg0MGE2YTk2NWExNDE1YzI1NjM0OC90YWJsZXJhbmdlOjJmNzllZmUyOWU4ODQwYTZhOTY1YTE0MTVjMjU2MzQ4XzEyLTItMS0xLTg5MjY2_23c9d0a6-0737-41e6-a8c5-be9a49848ea7": {
"value": "0.54",
"decimals": 2,
"dimensions": {
"concept": "ifrs-full:BasicEarningsLossPerShare",
"entity": "scheme:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00",
"unit": "iso4217:EUR/xbrli:shares"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl80NjYvZnJhZzplODgyN2EwOTY3YzM0MTdjODNiYWUwMjI3ZDA3ZjUzMS90YWJsZToyZjc5ZWZlMjllODg0MGE2YTk2NWExNDE1YzI1NjM0OC90YWJsZXJhbmdlOjJmNzllZmUyOWU4ODQwYTZhOTY1YTE0MTVjMjU2MzQ4XzEyLTQtMS0xLTg5MjY2_a4cd0dae-5639-4f66-85e6-57f88c036aa1": {
"value": "0.19",
"decimals": 2,
"dimensions": {
"concept": "ifrs-full:BasicEarningsLossPerShare",
"entity": "scheme:549300ZWF2ZJDD9EOR96",
"period": "2021-01-01T00:00:00/2022-01-01T00:00:00",
"unit": "iso4217:EUR/xbrli:shares"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl80NzIvZnJhZzo5MjE1YjE3NTNhZmY0MGVjYjA2MTJiMDM3N2I1OWY2YS90ZXh0cmVnaW9uOjkyMTViMTc1M2FmZjQwZWNiMDYxMmIwMzc3YjU5ZjZhXzMyOTg1MzQ4ODM0NDE_57626de0-608d-4d5e-bdb6-636056cfd43b": {
"value": "
12. Intangible assets
In 2022 and 2021, changes in the carrying amount of Intangible assets were as follows:
| | | | | | | | | | | | | |
| | | 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 31 December 2020 | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Divestitures, translation differences and other changes | | | | | | | | | | | | | |
Balance at 31 December 2021 | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Divestitures, translation differences and other changes | | | | | | | | | | | | | |
Balance at 31 December 2022 | | | | | | | | | | | | | |
Accumulated amortization and impairment losses Balance at 31 December 2020 | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Divestitures, translation differences and other changes | | | | | | | | | | | | | |
Balance at 31 December 2021 | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Divestitures, translation differences and other changes | | | | | | | | | | | | | |
Balance at 31 December 2022 | | | | | | | | | | | | | |
Carrying amount at 31 December\u00a0 2021 | | | | | | | | | | | | | |
Carrying amount at 31 December 2022 | | | | | | | | | | | | | |
Goodwill and intangible assets with indefinite useful lives are tested for impairment annually or more frequently if a triggering event occurs.
Goodwill impairment test is performed at the cash generating unit level, the segment level, comparing the recoverable amount of the cash
generating unit to the carrying amount to determine if there is an impairment loss. The results of the impairment tests obtained in 2022 and 2021
confirmed the absence of an impairment loss.
The vast majority of goodwill, representing approximately the 77% of the total, related to Commercial and Specialty Vehicles and, as such, the
following discussion relates to the impairment testing performed at year-end for this cash-generating unit.
The recoverable amount of the Commercial and Specialty Vehicles cash-generating unit is determined using an income approach, 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 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 cash-generating unit. The discount rate
before taxes selected was approximately 15.6% at 31 December 2022 and 11.8% at 31 December 2021.
Expected cash flows used under the income approach are developed in conjunction with budgeting and forecasting processes. Iveco Group used
5 years in both 2022 and 2021 of expected cash flows for Commercial and Specialty Vehicles as the Company believes that these periods reflect
the underlying market cycle for its business. Furthermore, instead of including a terminal value, an additional 5-year discounted cash flow has
been included at the end of the projection period in order to conservatively reflect the remaining value that the cash-generating unit is expected to
generate.
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 Iveco Group.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfGoodwillExplanatory",
"language": "en",
"entity": "scheme:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl80NzIvZnJhZzo5MjE1YjE3NTNhZmY0MGVjYjA2MTJiMDM3N2I1OWY2YS90ZXh0cmVnaW9uOjkyMTViMTc1M2FmZjQwZWNiMDYxMmIwMzc3YjU5ZjZhXzMyOTg1MzQ4ODM0NDE_f61f2f30-1b11-40c3-8f2a-603ffc8d503d": {
"value": "
12. Intangible assets
In 2022 and 2021, changes in the carrying amount of Intangible assets were as follows:
| | | | | | | | | | | | | |
| | | 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 31 December 2020 | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Divestitures, translation differences and other changes | | | | | | | | | | | | | |
Balance at 31 December 2021 | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Divestitures, translation differences and other changes | | | | | | | | | | | | | |
Balance at 31 December 2022 | | | | | | | | | | | | | |
Accumulated amortization and impairment losses Balance at 31 December 2020 | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Divestitures, translation differences and other changes | | | | | | | | | | | | | |
Balance at 31 December 2021 | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Divestitures, translation differences and other changes | | | | | | | | | | | | | |
Balance at 31 December 2022 | | | | | | | | | | | | | |
Carrying amount at 31 December\u00a0 2021 | | | | | | | | | | | | | |
Carrying amount at 31 December 2022 | | | | | | | | | | | | | |
Goodwill and intangible assets with indefinite useful lives are tested for impairment annually or more frequently if a triggering event occurs.
Goodwill impairment test is performed at the cash generating unit level, the segment level, comparing the recoverable amount of the cash
generating unit to the carrying amount to determine if there is an impairment loss. The results of the impairment tests obtained in 2022 and 2021
confirmed the absence of an impairment loss.
The vast majority of goodwill, representing approximately the 77% of the total, related to Commercial and Specialty Vehicles and, as such, the
following discussion relates to the impairment testing performed at year-end for this cash-generating unit.
The recoverable amount of the Commercial and Specialty Vehicles cash-generating unit is determined using an income approach, 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 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 cash-generating unit. The discount rate
before taxes selected was approximately 15.6% at 31 December 2022 and 11.8% at 31 December 2021.
Expected cash flows used under the income approach are developed in conjunction with budgeting and forecasting processes. Iveco Group used
5 years in both 2022 and 2021 of expected cash flows for Commercial and Specialty Vehicles as the Company believes that these periods reflect
the underlying market cycle for its business. Furthermore, instead of including a terminal value, an additional 5-year discounted cash flow has
been included at the end of the projection period in order to conservatively reflect the remaining value that the cash-generating unit is expected to
generate.
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 Iveco Group.
Development costs
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. Impairment of development costs in 2022 primarily refers to the
bus business, as a consequence of the acceleration in emission-related technological transition.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfIntangibleAssetsAndGoodwillExplanatory",
"language": "en",
"entity": "scheme:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl80NzIvZnJhZzo5MjE1YjE3NTNhZmY0MGVjYjA2MTJiMDM3N2I1OWY2YS90ZXh0cmVnaW9uOjkyMTViMTc1M2FmZjQwZWNiMDYxMmIwMzc3YjU5ZjZhXzMyOTg1MzQ4ODM0NDU_70bd22fe-0d86-4bb4-afea-bb1d1c24054d": {
"value": "
12. Intangible assets
In 2022 and 2021, changes in the carrying amount of Intangible assets were as follows:
| | | | | | | | | | | | | |
| | | 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 31 December 2020 | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Divestitures, translation differences and other changes | | | | | | | | | | | | | |
Balance at 31 December 2021 | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Divestitures, translation differences and other changes | | | | | | | | | | | | | |
Balance at 31 December 2022 | | | | | | | | | | | | | |
Accumulated amortization and impairment losses Balance at 31 December 2020 | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Divestitures, translation differences and other changes | | | | | | | | | | | | | |
Balance at 31 December 2021 | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Divestitures, translation differences and other changes | | | | | | | | | | | | | |
Balance at 31 December 2022 | | | | | | | | | | | | | |
Carrying amount at 31 December\u00a0 2021 | | | | | | | | | | | | | |
Carrying amount at 31 December 2022 | | | | | | | | | | | | | |
Goodwill and intangible assets with indefinite useful lives are tested for impairment annually or more frequently if a triggering event occurs.
Goodwill impairment test is performed at the cash generating unit level, the segment level, comparing the recoverable amount of the cash
generating unit to the carrying amount to determine if there is an impairment loss. The results of the impairment tests obtained in 2022 and 2021
confirmed the absence of an impairment loss.
The vast majority of goodwill, representing approximately the 77% of the total, related to Commercial and Specialty Vehicles and, as such, the
following discussion relates to the impairment testing performed at year-end for this cash-generating unit.
The recoverable amount of the Commercial and Specialty Vehicles cash-generating unit is determined using an income approach, 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 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 cash-generating unit. The discount rate
before taxes selected was approximately 15.6% at 31 December 2022 and 11.8% at 31 December 2021.
Expected cash flows used under the income approach are developed in conjunction with budgeting and forecasting processes. Iveco Group used
5 years in both 2022 and 2021 of expected cash flows for Commercial and Specialty Vehicles as the Company believes that these periods reflect
the underlying market cycle for its business. Furthermore, instead of including a terminal value, an additional 5-year discounted cash flow has
been included at the end of the projection period in order to conservatively reflect the remaining value that the cash-generating unit is expected to
generate.
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 Iveco Group.
Development costs
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. Impairment of development costs in 2022 primarily refers to the
bus business, as a consequence of the acceleration in emission-related technological transition.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfIntangibleAssetsExplanatory",
"language": "en",
"entity": "scheme:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl80NzUvZnJhZzplNWEzNTJiOTNlYzg0ZWE0YjNmYTUxN2RjN2Y5MDMxYi90ZXh0cmVnaW9uOmU1YTM1MmI5M2VjODRlYTRiM2ZhNTE3ZGM3ZjkwMzFiXzMyOTg1MzQ4OTIwNDc_dfc9ad40-b56c-4fe4-91e6-df238c73d414": {
"value": "Goodwill and intangible assets with indefinite useful lives are tested for impairment annually or more frequently if a triggering event occurs.
Goodwill impairment test is performed at the cash generating unit level, the segment level, comparing the recoverable amount of the cash
generating unit to the carrying amount to determine if there is an impairment loss. The results of the impairment tests obtained in 2022 and 2021
confirmed the absence of an impairment loss.
The vast majority of goodwill, representing approximately the 77% of the total, related to Commercial and Specialty Vehicles and, as such, the
following discussion relates to the impairment testing performed at year-end for this cash-generating unit.
The recoverable amount of the Commercial and Specialty Vehicles cash-generating unit is determined using an income approach, 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 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 cash-generating unit. The discount rate
before taxes selected was approximately 15.6% at 31 December 2022 and 11.8% at 31 December 2021.
Expected cash flows used under the income approach are developed in conjunction with budgeting and forecasting processes. Iveco Group used
5 years in both 2022 and 2021 of expected cash flows for Commercial and Specialty Vehicles as the Company believes that these periods reflect
the underlying market cycle for its business. Furthermore, instead of including a terminal value, an additional 5-year discounted cash flow has
been included at the end of the projection period in order to conservatively reflect the remaining value that the cash-generating unit is expected to
generate.
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 Iveco Group.
Development costs are tested for impairment at the cash-generating unit level. Impairment of development costs in 2022 primarily refers to the
bus business, as a consequence of the acceleration in emission-related technological transition. \u00a0 In 2022, Commercial and Specialty Vehicles recognized an impairment loss of \u20ac2 million on Assets sold with a buy-back commitment (\u20ac2 million
in 2021) and of \u20ac2 million on Plant, machinery and equipment (nil in 2021). The losses were recognized in the Cost of sales.
",
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"entity": "scheme:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
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"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 | | | | |
Gross carrying amount Balance at 31 December 2020 | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Divestitures, translation differences and other changes | | | | | | | | | | | | | |
Balance at 31 December 2021 | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Divestitures, translation differences and other changes | | | | | | | | | | | | | |
Balance at 31 December 2022 | | | | | | | | | | | | | |
Accumulated depreciation and impairment losses Balance at 31 December 2020 | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Divestitures, translation differences and other changes | | | | | | | | | | | | | |
Balance at 31 December 2021 | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Divestitures, translation differences and other changes | | | | | | | | | | | | | |
Balance at 31 December 2022 | | | | | | | | | | | | | |
Carrying amount at 31 December 2021 | | | | | | | | | | | | | |
Carrying amount at 31 December 2022 | | | | | | | | | | | | | |
Other tangible assets also include advances and tangible assets in progress.
In 2022, Commercial and Specialty Vehicles recognized an impairment loss of \u20ac2 million on Assets sold with a buy-back commitment (\u20ac2 million
in 2021) and of \u20ac2 million on Plant, machinery and equipment (nil in 2021). The losses were recognized in the Cost of sales.
Other changes mainly include the reclassification of the prior year balances for Advances and tangible assets in progress to the appropriate
categories when the assets were effectively acquired and put into operation, as well as the reclassification to Inventory of Assets sold with a buy-
back commitment (\u20ac98 million in 2022 and \u20ac183 million in 2021) that are held for sale at the agreement expiry date.
At 31 December 2022, right-of-use assets refer primarily to lease contracts for industrial buildings for \u20ac127 million (\u20ac133 million at 31 December
2021), plant, machinery and equipment for \u20ac16 million (\u20ac16 million at 31 December 2021), and other assets for \u20ac40 million (\u20ac49 million at 31
December 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. Iveco Group recognizes lease expense (\u20ac11 million and
\u20ac9 million in 2022 and 2021, respectively) 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 31
December 2022 and 2021.
Iveco Group had contractual commitments of \u20ac149 million and \u20ac54 million for the acquisition of property, plant and equipment at 31 December
2022 and 2021, respectively.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfPropertyPlantAndEquipmentExplanatory",
"language": "en",
"entity": "scheme:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl80ODEvZnJhZzo5MzlkNGIzMGQyNDA0ZjgxYTQ0OTU1NTI0OTdjZDBmNC90ZXh0cmVnaW9uOjkzOWQ0YjMwZDI0MDRmODFhNDQ5NTU1MjQ5N2NkMGY0XzMyOTg1MzQ4ODgyMzU_ce806ab9-9a81-4b7e-b89d-32492e206052": {
"value": "
At 31 December 2022, right-of-use assets refer primarily to lease contracts for industrial buildings for \u20ac127 million (\u20ac133 million at 31 December
2021), plant, machinery and equipment for \u20ac16 million (\u20ac16 million at 31 December 2021), and other assets for \u20ac40 million (\u20ac49 million at 31
December 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. Iveco Group recognizes lease expense (\u20ac11 million and
\u20ac9 million in 2022 and 2021, respectively) in the income statement for these leases on a straight-line basis over the lease term.
15. Leased assets
This item changed as follows in 2022 and 2021:
| | | | | | | | | |
| | | | | | | Translation differences, disposals and other changes | | |
| | | | | | | | | |
Less: Depreciation and impairment | | | | | | | | | |
Net carrying amount of Leased assets | | | | | | | | | |
| | | | | | | | | |
| | | | | | | Translation differences, disposals and other changes | | |
| | | | | | | | | |
Less: Depreciation and impairment | | | | | | | | | |
Net carrying amount of Leased assets | | | | | | | | | |
Leased assets include vehicles leased to retail customers by the Group's leasing companies.
At 31 December 2022, minimum lease payments receivable for assets under non-cancelable operating leases amount to \u20ac85 million
(\u20ac73\u00a0million\u00a0at 31 December 2021) and fall due as follows:
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
Total Undiscounted lease payments | | | |
No leased assets have been pledged as security at 31 December 2022 and 2021.
In 2022, \u20ac67 million for the principal portion of Lease liabilities and \u20ac5 million for interest expenses related to lease liabilities were paid. In 2021,
\u20ac69 million for the principal portion of Lease liabilities and \u20ac5 million for interest expenses related to lease liabilities were paid.
The following table sets out a maturity analysis of Lease liabilities at 31 December 2022 and 2021:
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
Total undiscounted lease payments | | | |
| | | |
| | | |
31 December 2022 (\u20ac73\u00a0million outstanding at 31 December 2021).
As of 31 December 2022, the credit rating assigned by Fitch Ratings to Iveco Group N.V. is a Long-Term Issuer Default Rating (IDR) of \u2018BBB-\u2019.
The outlook is stable.
For further information on the management of interest rate and currency risk reference should be made to Note 30.
At 31 December 2022 and 2021, there was no significant debt secured with mortgages and other liens on assets of the Group, and the total
carrying amount of assets acting as security was not significant at 31 December 2022 and 2021. In addition, the Group\u2019s assets include current
receivables and cash with a pre-determined use reserved primarily to settle asset-backed financing of \u20ac3,149 million at 31 December 2022
(\u20ac1,926 million at 31 December 2021)
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfLeasesExplanatory",
"language": "en",
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"value": "
14. Investments and other non-current financial assets
| | | |
| | | |
Investments accounted for using the equity method | | | |
Equity investments measured at fair value through other comprehensive income | | | |
| | | |
| | | |
Non-current financial receivables and other non-current securities | | | |
Total Investments and other financial assets | | | |
At 31 December 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 | | Translation differences, disposals and other changes | | |
| |
| | | | | | | | | | | |
| | | | | | | | | | | |
Equity investments measured at fair value through other comprehensive income | | | | | | | | | | | |
Unconsolidated subsidiaries and other | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | Revaluations/ (Write-downs) | | Acquisitions and capitalizations | | Fair value remeasurements | | Translation differences, disposals and other changes | | |
| |
| | | | | | | | | | | |
| | | | | | | | | | | |
Equity investments measured at fair value through other comprehensive income | | | | | | | | | | | |
Unconsolidated subsidiaries and other | | | | | | | | | | | |
| | | | | | | | | | | |
Equity investments measured at fair value through other comprehensive income mainly include the \u20ac52 million fair value of the approximately
5.0% investment held by Iveco Group in Nikola Corporation (\"Nikola\"), made in the context of the strategic partnership with Nikola to industrialize
fuel-cell and battery electric Heavy-Duty trucks. During 2022, Iveco Group recorded in Other comprehensive income a pre- and after-tax loss of
\u20ac172 million (a pre-tax loss of \u20ac95 million and an after-tax loss of \u20ac94 million during 2021) from the remeasurement at fair value of the investment
in Nikola.
Iveco S.p.A. and Nikola Corporation are jointly developing cab over battery-electric vehicle (\u201cBEV\u201d) and hydrogen fuel cell electric vehicle
(\u201cFCEV\u201d) trucks, which will be manufactured in Europe through a legal entity 50/50 owned by Iveco S.p.A. and Nikola Corporation (Nikola Iveco
Europe GmbH), and in the U.S. by Nikola Corporation.
At 31 December 2022, Equity investments measured at fair value through other comprehensive income also included a minor investment in a
non-listed company in India acquired during 2022, considered strategic in nature.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfInvestmentsOtherThanInvestmentsAccountedForUsingEquityMethodExplanatory",
"language": "en",
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"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl80ODQvZnJhZzoxZjgzZTBkNjMzZDM0NjA3YjY0ZWE1M2E3ZDM2MjE4MS90ZXh0cmVnaW9uOjFmODNlMGQ2MzNkMzQ2MDdiNjRlYTUzYTdkMzYyMTgxXzMyOTg1MzQ4ODkzNjA_22a41153-82a2-4aa4-9e35-2ab50102c3d3": {
"value": "
14. Investments and other non-current financial assets
| | | |
| | | |
Investments accounted for using the equity method | | | |
Equity investments measured at fair value through other comprehensive income | | | |
| | | |
| | | |
Non-current financial receivables and other non-current securities | | | |
Total Investments and other financial assets | | | |
At 31 December 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 | | Translation differences, disposals and other changes | | |
| |
| | | | | | | | | | | |
| | | | | | | | | | | |
Equity investments measured at fair value through other comprehensive income | | | | | | | | | | | |
Unconsolidated subsidiaries and other | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | Revaluations/ (Write-downs) | | Acquisitions and capitalizations | | Fair value remeasurements | | Translation differences, disposals and other changes | | |
| |
| | | | | | | | | | | |
| | | | | | | | | | | |
Equity investments measured at fair value through other comprehensive income | | | | | | | | | | | |
Unconsolidated subsidiaries and other | | | | | | | | | | | |
| | | | | | | | | | | |
Revaluations and Write-downs include the Group\u2019s share of the profit or loss for the year of investments accounted for using the equity method for
a loss of \u20ac5 million in 2022 (a gain of \u20ac27 million in 2021).
Translation differences, disposals and other changes also included dividends by companies accounted for using the equity method.
In 2022, Other changes primarily reflects the liquidation of the investment in the joint venture SAIC IVECO Commercial Vehicle Investment
Company Limited (amounting to \u20ac166 million at 31 December 2021) following the final step of Chinese joint ventures' restructuring. This final step
resulted in a gain of \u20ac36 million in the income statement in item Gains/(losses) on disposal of investments.
Equity investments measured at fair value through other comprehensive income mainly include the \u20ac52 million fair value of the approximately
5.0% investment held by Iveco Group in Nikola Corporation (\"Nikola\"), made in the context of the strategic partnership with Nikola to industrialize
fuel-cell and battery electric Heavy-Duty trucks. During 2022, Iveco Group recorded in Other comprehensive income a pre- and after-tax loss of
\u20ac172 million (a pre-tax loss of \u20ac95 million and an after-tax loss of \u20ac94 million during 2021) from the remeasurement at fair value of the investment
in Nikola.
Iveco S.p.A. and Nikola Corporation are jointly developing cab over battery-electric vehicle (\u201cBEV\u201d) and hydrogen fuel cell electric vehicle
(\u201cFCEV\u201d) trucks, which will be manufactured in Europe through a legal entity 50/50 owned by Iveco S.p.A. and Nikola Corporation (Nikola Iveco
Europe GmbH), and in the U.S. by Nikola Corporation.
At 31 December 2022, Equity investments measured at fair value through other comprehensive income also included a minor investment in a
non-listed company in India acquired during 2022, considered strategic in nature.
Investments in joint ventures
Interests in joint ventures are accounted for using the equity method. A summary of investments in joint ventures at 31 December 2022 and 2021
is as follows:
| | | | | | | |
| | | |
| | | | | | | |
| | | | | | | |
SAIC IVECO Commercial Vehicle Investment Company Limited | | | | | | | |
| | | | | | | |
Total Investments in joint ventures | | | | | | | |
Interests in joint ventures consist of 4 companies at 31 December 2022 (4 companies at 31 December 2021) and mainly include CIFINS S.p.A.,
legal entity jointly held by Iveco Group and CNH Industrial, which holds 49.9% of CNH Capital Europe S.a.S., a joint venture with the BNP Paribas
Group providing financing solutions to customers of both Iveco Group and CNH Industrial Group in several European countries. The 24.95%
investment in CNH Capital Europe S.A. indirectly held by Iveco Group through CIFINS S.p.A. at 31 December 2022, was included in the
combined financial statements at 31 December 2021 as investments in associates.
At 31 December 2022 and 2021, summarized financial information relating to the joint ventures of the Group material at these dates, respectively,
prepared in accordance with EU-IFRS, is as follows:
| | | | | |
| | | |
| | | | | |
Cash and cash equivalents | | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | | |
| | | |
| | | | | | |
| | | | | | |
Profit/(loss) before taxes | | | | | | |
| | | | | | |
Profit/(loss) from continuing operations | | | | | | |
Profit/(loss) from discontinued operations | | | | | | |
| | | | | | |
| | | | | | |
Total Other comprehensive income, net of tax | | | | | | |
Total Comprehensive income | | | | | | |
This summarized financial information may be reconciled to the carrying amount of the % interest held in the joint ventures as follows:
| | | | | |
| | |
| | | | | |
| | | | | |
Group\u2019s interest (%) | | | | | |
| | | | | |
Adjustments made by using the equity method | | | | | |
| | | | | |
Summarized financial information relating to CNH Industrial Capital Europe S.a.S., material associate of the Group held by CIFINS S.p.A., is as
follows:
Investments in associates
A summary of investments in associates at 31 December 2022 and 2021 is as follows:
| | | | | | | |
| | | |
| | | | | | | |
Transolver Finance Establecimiento Financiero de Credito S.A. | | | | | | | |
| | | | | | | |
Total Investments in associates | | | | | | | |
(1) The 24.95% investment in CNH Capital Europe S.A. indirectly held by Iveco Group through CIFINS S.p.A. at 31 December 2022, was included in the combined financial statements at
31 December 2021 as investments in associates.
Summarized financial information relating to Transolver Finance Establecimiento Financiero de Credito S.A., material associate of the Group, is
as follows:
This summarized financial information may be reconciled to the carrying amount of the % interest held in the associate as follows:
| | | | | |
| | | |
| | | | | |
Group\u2019s interest (%) | | | | | |
| | | | | |
Adjustments made by using the equity method | | | | | |
| | | | | |
35. Companies included in the scope of the Consolidated Financial Statements
The main legal entities comprising the Iveco Group at 31 December 2022, including major subsidiaries, joint ventures and associates, are
provided below:
| | |
| | |
SUBSIDIARIES CONSOLIDATED LINE-BY-LINE | | |
Amce-Automotive Manufacturing Co.Ethiopia | | |
Astra Veicoli Industriali S.p.A. | | |
| | |
CNH Industrial Argentina S.A. | | |
CNH Industrial Finance France S.A. | | |
| | |
Fiat Powertrain Technologies (Chongqing) Co., Ltd. | | |
Fiat Powertrain Technologies Management (Shanghai) Co. Ltd. | | |
Fiat Powertrain Technologies of North America, Inc. | | |
FPT - Powertrain Technologies France SAS | | |
FPT INDUSTRIAL BRASIL LTDA. | | |
| | |
| | |
Green & Advanced Transport Ecosystem S.p.A. | | |
| | |
IAV-Industrie-Anlagen-Verpachtung GmbH | | |
IC Financial Services S.A. | | |
IC Financial Services UK Limited | | |
| | |
| | |
| | |
Iveco (China) Commercial Vehicle Sales Co. Ltd | | |
| | |
| | |
| | |
Iveco Arac Sanayi VE Ticaret A.S. | | |
| | |
| | |
| | |
| | |
IVECO CAPITAL BULGARIA EAD | | |
Iveco Capital Services S.R.L. | | |
Iveco Capital Slovakia s.r.o. | | |
Iveco Capital Solutions S.p.A. | | |
Iveco Czech Republic A.S. | | |
| | |
IVECO DEFENCE VEHICLES ROMANIA S.R.L. | | |
Iveco Defence Vehicles S.p.A. | | |
| | |
| | |
| | |
| | |
| | |
Iveco Group Switzerland SA | | |
| | |
| | |
| | |
| | |
| | |
Iveco Magirus Fire Fighting GmbH | | |
| | |
Iveco Nord Nutzfahrzeuge GmbH | | |
| | |
Iveco Nord-Ost Nutzfahrzeuge GmbH | | |
| | |
Iveco Otomotiv Ticaret A.S. | | |
Iveco Participations s.a.s. | | |
Iveco Pension Trustee Ltd | | |
| | |
Iveco Portugal-Comercio de Veiculos Industriais S.A. | | |
| | |
| | |
| | |
| | |
| | |
| | |
Iveco South Africa Works (Pty) Ltd | | |
Iveco Sud-West Nutzfahrzeuge GmbH | | |
| | |
| | |
| | |
Iveco Truck Centrum s.r.o. | | |
Iveco Truck Services S.R.L. | | |
Iveco Trucks Australia Limited | | |
| | |
Iveco West Nutzfahrzeuge GmbH | | |
MAGIRUS CAMIVA S.a.s. (societ\u00e8 par actions simplifi\u00e8e) | | |
| | |
| | |
| | |
Mediterranea de Camiones S.L. | | |
| | |
| | |
| | |
Potenza Technology Holdings Limited | | |
Potenza Technology Limited | | |
SAIC Fiat Powertrain Hongyan Co. Ltd. | | |
Seddon Atkinson Vehicles Ltd | | |
Soci\u00e9t\u00e9 Charolaise de Participations SAS | | |
Soci\u00e9t\u00e9 de Diffusion de Vehicules Industriels-SDVI S.A.S. | | |
| | |
Transolver Services S.A.S. | | |
UAB \"IVECO CAPITAL BALTIC\" (In liquidation) | | |
Zona Franca Alari Sepauto S.A. | | |
| | |
JOINTLY-CONTROLLED ENTITIES ACCOUNTED FOR USING THE EQUITY METHOD | | |
| | |
IVECO - OTO MELARA Societ\u00e0 Consortile a responsabilit\u00e0 limitata | | |
| | |
| | |
| | |
SUBSIDIARIES VALUED AT COST | | |
| | |
FPT INDUSTRIAL INDIA PRIVATE LIMITED | | |
| | |
| | |
ASSOCIATED COMPANIES ACCOUNTED FOR USING THE EQUITY METHOD | | |
CNH Industrial Capital Europe S.a.S.(2) | | |
Transolver Finance Establecimiento Financiero de Credito S.A. | | |
| | |
ASSOCIATED COMPANIES VALUED AT COST | | |
| | |
| | |
| | |
| | |
| | |
OTHER COMPANIES VALUED AT FVTPL | | |
Naveco (Nanjing IVECO Motor Co.) Ltd. | | |
(1) After the Demerger CIFINS S.p.A. is owned 50.00% by Iveco Group and 50.00% by CNH Industrial.
(2) This percentage represents the interest held by Iveco Group through its 50% interest in CIFINS S.p.A.
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"decimals": -6,
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}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl80ODQvZnJhZzoxZjgzZTBkNjMzZDM0NjA3YjY0ZWE1M2E3ZDM2MjE4MS90ZXh0cmVnaW9uOjFmODNlMGQ2MzNkMzQ2MDdiNjRlYTUzYTdkMzYyMTgxXzMyOTg1MzQ4ODc1MDE_6de6bc31-fe3c-48fd-80e0-6c56b372495d": {
"value": "
Investments in joint ventures
Interests in joint ventures are accounted for using the equity method. A summary of investments in joint ventures at 31 December 2022 and 2021
is as follows:
| | | | | | | |
| | | |
| | | | | | | |
| | | | | | | |
SAIC IVECO Commercial Vehicle Investment Company Limited | | | | | | | |
| | | | | | | |
Total Investments in joint ventures | | | | | | | |
Interests in joint ventures consist of 4 companies at 31 December 2022 (4 companies at 31 December 2021) and mainly include CIFINS S.p.A.,
legal entity jointly held by Iveco Group and CNH Industrial, which holds 49.9% of CNH Capital Europe S.a.S., a joint venture with the BNP Paribas
Group providing financing solutions to customers of both Iveco Group and CNH Industrial Group in several European countries. The 24.95%
investment in CNH Capital Europe S.A. indirectly held by Iveco Group through CIFINS S.p.A. at 31 December 2022, was included in the
combined financial statements at 31 December 2021 as investments in associates.
At 31 December 2022 and 2021, summarized financial information relating to the joint ventures of the Group material at these dates, respectively,
prepared in accordance with EU-IFRS, is as follows:
| | | | | |
| | | |
| | | | | |
Cash and cash equivalents | | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | | |
| | | |
| | | | | | |
| | | | | | |
Profit/(loss) before taxes | | | | | | |
| | | | | | |
Profit/(loss) from continuing operations | | | | | | |
Profit/(loss) from discontinued operations | | | | | | |
| | | | | | |
| | | | | | |
Total Other comprehensive income, net of tax | | | | | | |
Total Comprehensive income | | | | | | |
This summarized financial information may be reconciled to the carrying amount of the % interest held in the joint ventures as follows:
| | | | | |
| | |
| | | | | |
| | | | | |
Group\u2019s interest (%) | | | | | |
| | | | | |
Adjustments made by using the equity method | | | | | |
| | | | | |
Summarized financial information relating to CNH Industrial Capital Europe S.a.S., material associate of the Group held by CIFINS S.p.A., is as
follows:
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfJointVenturesExplanatory",
"language": "en",
"entity": "scheme:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl80ODQvZnJhZzoxZjgzZTBkNjMzZDM0NjA3YjY0ZWE1M2E3ZDM2MjE4MS90ZXh0cmVnaW9uOjFmODNlMGQ2MzNkMzQ2MDdiNjRlYTUzYTdkMzYyMTgxXzMyOTg1MzQ4ODc1MDI_6ad84d22-8d7b-4292-bfef-f57797f90ee1": {
"value": "
Investments in associates
A summary of investments in associates at 31 December 2022 and 2021 is as follows:
| | | | | | | |
| | | |
| | | | | | | |
Transolver Finance Establecimiento Financiero de Credito S.A. | | | | | | | |
| | | | | | | |
Total Investments in associates | | | | | | | |
(1) The 24.95% investment in CNH Capital Europe S.A. indirectly held by Iveco Group through CIFINS S.p.A. at 31 December 2022, was included in the combined financial statements at
31 December 2021 as investments in associates.
Summarized financial information relating to Transolver Finance Establecimiento Financiero de Credito S.A., material associate of the Group, is
as follows:
This summarized financial information may be reconciled to the carrying amount of the % interest held in the associate as follows:
| | | | | |
| | | |
| | | | | |
Group\u2019s interest (%) | | | | | |
| | | | | |
Adjustments made by using the equity method | | | | | |
| | | | | |
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfSignificantInvestmentsInAssociatesExplanatory",
"language": "en",
"entity": "scheme:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl80OTAvZnJhZzplOGZmN2ZjZDZiMTI0NWY2OGI1MmU1YTRiM2UzZWQ3YS90ZXh0cmVnaW9uOmU4ZmY3ZmNkNmIxMjQ1ZjY4YjUyZTVhNGIzZTNlZDdhXzMyOTg1MzQ4ODQ1NjM_c7042bdb-79c3-4d41-ae49-a6999637a9b9": {
"value": "
16. Inventories
At 31 December 2022 and 2021, Inventories consisted of the following:
At 31 December 2022, Inventories included assets which are no longer subject to operating lease arrangements or buy-back commitments and
were held for sale for a total amount of \u20ac11\u00a0million (\u20ac49 million at 31 December 2021). Total Inventories increased \u20ac187 million compared to 31
December 2021, primarily to serve the solid order backlog and due to increased inflation.
At 31 December 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 \u20ac750 million (\u20ac546 million at 31 December 2021).
During 2021, Commercial and Specialty Vehicles recognized impairment losses of \u20ac24 million in Inventories.
There were no inventories pledged as security at 31 December 2022 and 2021.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfInventoriesExplanatory",
"language": "en",
"entity": "scheme:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl80OTMvZnJhZzo5YjQ2Njg5MTU3YWM0MGM1Yjc1MmRmYzgwN2M4Y2VjNi90ZXh0cmVnaW9uOjliNDY2ODkxNTdhYzQwYzViNzUyZGZjODA3YzhjZWM2XzMyOTg1MzQ4ODM1OTM_701e1124-00f3-42dc-aefd-5849460a5bd9": {
"value": "
17. Current receivables and Other current financial assets
A summary of Current receivables and Other current financial assets as of 31 December 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 | | | |
Trade receivables
As of 31 December 2022 and 2021, Iveco Group had trade receivables of \u20ac341 million and \u20ac318 million, respectively. Trade receivables are
shown net of allowances for doubtful accounts of \u20ac21 million and \u20ac40 million at 31 December 2022 and 2021, respectively. 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:
The allowances at 31 December 2022 and 2021 have been determined using the following expected loss rates:
| | | | | | | | | | | | | | | | | | | | | |
| | | | | |
| | | | | | | | | Greater than 90 days past due | | | | | | | | | | Greater than 90 days past due | | |
Expected loss rate (in %) | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Allowances for doubtful accounts | | | | | | | | | | | | | | | | | | | | | |
Trade receivables have significant concentrations of credit risk in Commercial and Specialty Vehicles segment. 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.
In 2022 and 2021, trade receivables for an amount of \u20ac5 million and \u20ac8 million, respectively, were written off by Iveco Group.
Charge-offs 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. Iveco Group 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 31 December 2022 and 2021 is as follows:
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
Total Receivables from financing activities | | | |
The above aging tables are not necessarily reflective of the potential credit risk in the portfolio due to payment schedule changes granted by Iveco
Group and government stimulus policies benefiting Iveco Group's dealers and end-use customers.
Receivables from financing activities have significant concentrations of credit risk in the Commercial and Specialty Vehicles segment. On a
geographic basis, there is not a disproportionate concentration of credit risk in any area. Iveco Group typically retains as collateral a security
interest in the vehicles associated with retail notes, wholesale notes and finance leases.
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 it is 90 days past due.
Iveco Group utilizes three categories for receivables from financing activities that reflect their credit risk and how 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 |
| | | | | | | | | | | | | | | |
| Year Ended 31 December 2021 |
| | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Charge-offs, net of recoveries | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Foreign currency translation and other | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
At 31 December 2022, the change in allowance for credit losses mainly related to the write-offs registered over the period.
Finance lease receivables mainly relate to vehicles 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 \u20ac59 million at 31 December 2022 (\u20ac73 million at 31 December 2021):
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
Total Undiscounted receivables for future minimum lease payments | | | |
| | | |
Present value of future minimum lease payments | | | |
Other current receivables
At 31 December 2022, Other current receivables mainly consisted of other tax receivables for VAT and other indirect taxes of \u20ac214 million
(\u20ac225\u00a0million at 31 December 2021, and receivables from employees of \u20ac9 million (\u20ac9 million a 31 December 2021). At 31 December 2021, Other
current receivables also included \u20ac3,520 million of financial receivables from CNH Industrial that were almost entirely settled following the
Demerger.
Other current financial assets
At 31 December 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 Iveco Group is exposed and the way it is
managed by the Group.
Transfers of financial receivables
The Group transfers a number of its financial receivables to securitization programs or factoring transactions.
A securitization transaction entails the sale of a portfolio of receivables to a securitization vehicle. This structured entity finances the purchase of
the receivables through asset-backed financing. Asset-backed financing 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 note of the asset-backed commercial paper by the seller implies its control in substance over
the structured entity.
Furthermore, factoring transactions may be either with recourse or without recourse; 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). The gains and losses arising from the
transfer of these assets are only recognized when the assets are derecognized.
At 31 December 2022 and 2021, the carrying amount of such transferred financial assets not derecognized (constituted entirely of Receivables
from financing activities) and the related liability and the respective fair values were as follows:
| | | |
| | | |
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.
Iveco Group has discounted receivables and bills without recourse having due dates beyond 31 December 2022 amounting to \u20ac183 million
(\u20ac141\u00a0million at 31 December 2021, with due dates beyond that date), which refer to trade receivables.
18. Derivative assets and Derivative liabilities
These items consist of derivative financial instruments measured at fair value at the balance sheet date.
Iveco Group 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. Iveco Group 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. Derivative instruments are generally classified as Level 2 in
the fair value hierarchy.
In accordance with IFRS 9 - Financial Instruments, 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.
With regard to hedge accounting, Iveco Group continues to monitor significant developments in order to assess the potential future impacts of the
COVID-19 pandemic, as well as of the ongoing supply chain disruptions, the Russia-Ukraine war, cost and availability of energy, and components
availability on the hedging relationships in place and to update its estimates concerning whether forecasted transactions can still be considered
highly likely to occur
Foreign Exchange Derivatives
Iveco Group 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. Iveco Group 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 \u20ac-14 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.
Iveco Group also uses forwards and swaps to hedge 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 Iveco Group\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
Iveco Group has entered into interest rate derivatives (mainly swaps) 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 Iveco Group 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 Iveco Group 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 Iveco Group to mitigate the volatility in
the fair value of existing financing instruments 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.
All of Iveco Group\u2019s interest rate derivatives outstanding as of 31 December 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 Iveco Group 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 31 December 2022 and 2021:
| | | |
| | | |
| | | |
Recognized in Other comprehensive income (effective portion): | | | |
Foreign exchange derivatives | | | |
Interest rate derivatives | | | |
| | | |
Reclassified from other comprehensive income (effective portion): | | | |
Foreign exchange contracts \u2013 Net revenues | | | |
Foreign exchange contracts \u2013 Cost of sales | | | |
Foreign exchange contracts \u2013 Financial income/(expenses) | | | |
Interest rate derivatives \u2013 Financial income/(expenses) | | | |
| | | |
| | | |
Foreign exchange contracts \u2013 Financial income/(expenses) | | | |
The fair values of Iveco Group\u2019s derivatives as of 31 December 2022 and 2021 in the consolidated statement of financial position are recorded as
follows:
| | | | | | | |
| | |
| | | | | | | |
Derivatives designated as hedging instruments | | | | | | | |
| | | | | | | |
Foreign exchange derivatives | | | | | | | |
| | | | | | | |
Total Derivatives designated as hedging instruments | | | | | | | |
| | | | | | | |
Derivatives not designated as hedging instruments | | | | | | | |
Foreign exchange derivatives | | | | | | | |
Total Derivatives not designated as hedging instruments | | | | | | | |
Derivative assets/(liabilities) | | | | | | | |
Derivatives not designated as hedging instruments consist mainly of derivatives (mostly currency-based derivatives) acquired to hedge
receivables and payables subject to currency risk and/or interest rate risk which are not formally designated as hedges at Group level. The
following table provides, for derivatives designated as hedging instruments, the detail of notional amounts and of the fair vale changes used as a
basis to calculate hedge ineffectiveness, and for derivative not designated as hedging instruments, the detail of notional amounts:
| | | | | | | |
| | |
| | | Fair value changes used as a basis to calculate hedge ineffectiveness | | | | Fair value changes used as a basis to calculate hedge ineffectiveness |
Derivatives designated as hedging instruments | | | | | | | |
| | | | | | | |
Foreign exchange derivatives | | | | | | | |
| | | | | | | |
Total Derivatives designated as hedging instruments | | | | | | | |
Total Derivatives not designated as hedging instruments | | | | | | | |
| | | | | | | |
The following table provides an analysis by due date of the notional amount of outstanding derivative financial instruments at 31 December 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 securitization 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 no acceleration of the advances, with prior notice to Iveco Group. At 31 December 2022, Iveco Group had
available committed unsecured facilities expiring after twelve months amounting to \u20ac2,000 million (\u20ac41 million at 31 December 2021).
On 4 January 2022, Iveco Group signed a \u20ac1.9 billion syndicated facility, which included a \u20ac1.4 billion committed revolving credit facility with a 5-
year tenor with two extension options of 1-year each (subject to the bank\u2019s approval), as well as a \u20ac0.5 billion committed term facility with a 12-
months tenor, extendable for up to an additional 12 months at the Company\u2019s sole option. In October 2022 Iveco Group signed a new \u20ac400\u00a0million
syndicated term facility with a 2-year tenor extendable for up to an additional 12 months at the Company\u2019s sole option. The proceeds have been
used to refinance the existing term facility. The \u20ac1.4 billion revolving credit facility has been extended for one additional year with all lenders, by
exercising the first one-year extension option. The facility is now due to mature in January 2028. The syndicated facilities include 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 prepayment obligations upon a change
in control of Iveco Group or the borrower and a financial covenant (Net debt/EBITDA ratio relating to Industrial Activities) that is not applicable in
case of rating equal or higher than BBB/Baa2. 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 31 December 2022 Iveco Group was in compliance with all covenants
of the Facilities.
At 31 December 2022, Financial Services\u2019 asset-backed facilities amounted to \u20ac839 million (\u20ac751 million at 31 December 2021), of which
\u20ac719\u00a0million committed and expiring after twelve months.
Debt
An analysis of debt by nature and due date is as follows:
| | | | |
| |
| | Due between one and five years | | |
| | | | |
| | | | |
| | | | |
Payables represented by securities | | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| |
| | Due between one and five years | | |
| | | | |
| | | | |
| | | | |
Payables represented by securities | | | | |
| | | | |
| | | | |
| | | | |
| | | | |
Total Debt was \u20ac4,433 million 31 December 2022, a decrease of \u20ac1,352 million compared to 31 December 2021 as a result of the reduction in
financial payables to CNH Industrial (included in the line item \"Other\" for an amount of \u20ac3,076 million at 31 December 2021 and almost entirely
settled following the Demerger), partially offset by the drawing of the \u20ac500 million term loans and by the increase of Asset-backed financing
related to the receivables portfolio.
The item Asset-backed financing represents the financing received through both asset-backed commercial paper (\u201cABCP\u201d) and factoring
transactions which do not meet IFRS 9 derecognition requirements and are recognized as assets in the statement of financial position.
In 2022, \u20ac67 million for the principal portion of Lease liabilities and \u20ac5 million for interest expenses related to lease liabilities were paid. In 2021,
\u20ac69 million for the principal portion of Lease liabilities and \u20ac5 million for interest expenses related to lease liabilities were paid.
The following table sets out a maturity analysis of Lease liabilities at 31 December 2022 and 2021:
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
Total undiscounted lease payments | | | |
| | | |
| | | |
31 December 2022 (\u20ac73\u00a0million outstanding at 31 December 2021).
As of 31 December 2022, the credit rating assigned by Fitch Ratings to Iveco Group N.V. is a Long-Term Issuer Default Rating (IDR) of \u2018BBB-\u2019.
The outlook is stable.
For further information on the management of interest rate and currency risk reference should be made to Note 30.
At 31 December 2022 and 2021, there was no significant debt secured with mortgages and other liens on assets of the Group, and the total
carrying amount of assets acting as security was not significant at 31 December 2022 and 2021. In addition, the Group\u2019s assets include current
receivables and cash with a pre-determined use reserved primarily to settle asset-backed financing of \u20ac3,149 million at 31 December 2022
(\u20ac1,926 million at 31 December 2021)
\u00a0
25. Trade payables
An analysis by due date of Trade payables is as follows:
| | | | | | | |
| |
| | | Due between one and five years | | | | |
| | | | | | | |
Charge-offs of principal amounts of receivables outstanding are deducted from the allowance at the point when it is estimated that amounts due
are deemed uncollectible. Iveco Group continues to engage in collection efforts to attempt to recover the receivables. When recoveries are
collected, these are recognized as income.
Iveco Group\u2019s allowance for credit losses is segregated into two portfolio segments: retail and wholesale. A portfolio segment is the level at which
Iveco Group develops a systematic methodology for determining its allowance for credit losses. Typically, Iveco Group\u2019s receivables within a
portfolio segment have similar risk profiles and methods for assessing and monitoring risk. These classes align with management reporting.
The Group accounts for its credit risk by appropriately providing for expected credit losses on a timely basis. In calculating the expected credit
loss rates, Iveco Group considers historical loss rates for each category of customer and adjusts for forward-looking macroeconomic data.
In calculating the expected credit losses, Iveco Group\u2019s calculations depend on whether the receivable has been individually identified as being
impaired. The first component of the allowance for credit losses covers the receivables specifically reviewed by management for which Iveco
Group has determined it is probable that it will not collect all of the contractual principal and interest. Receivables are individually reviewed for
impairment based on, among other items, amounts outstanding, days past due and prior collection history. Expected credit losses are measured
by considering: the unbiased and probability-weighted amount; the time value of money; and reasonable and supportable information (available
without undue costs or effort) at the reporting date about past events, current conditions and forecasts of future economic conditions. Expected
credit losses are measured as the probability-weighted present value of all cash shortfalls over the expected life of each financial asset.
The second component of the allowance for credit losses covers all receivables that have not been individually reviewed for impairment. The
allowance for these receivables is based on aggregated portfolio evaluations, generally by financial product. The allowance for wholesale and
retail credit losses is based on loss forecast models that consider a variety of factors that include, but are not limited to, historical loss experience,
collateral value, portfolio balance and delinquency. The loss forecast models are updated on a quarterly basis. The calculation is adjusted for
forward-looking macroeconomic factors. In addition, qualitative factors that are not fully captured in the loss forecast models are considered in the
evaluation of the adequacy of the allowance for credit losses. These qualitative factors are subjective and require a degree of management
judgment.
Liquidity risk
We are exposed to funding risk if there is difficulty in obtaining finance for operations at any given point in time.
The cash flows, funding requirements and liquidity of our subsidiaries are monitored on a centralized basis. The aim of this centralized system is
to optimize the efficiency and effectiveness of the management of our capital resources.
Additionally, as part of our activities, we regularly carry out funding operations on the various financial markets which may take on different
technical forms and which are aimed at ensuring that it has an adequate level of current and future liquidity.
Measures taken to generate financial resources through operations and to maintain an adequate level of available liquidity are an important factor
in ensuring normal operating conditions and addressing strategic challenges. We therefore plan to meet our requirements to settle liabilities as
they fall due and to cover expected capital expenditures by using cash flows from operations and available liquidity, renewing or refinancing bank
loans and making recourse to the bond market and other forms of funding.
The main factors that determine our liquidity situation are the funds generated by or used in operating and investing activities and the debt lending
period and its renewal features or the liquidity of the funds employed and market terms and conditions.
Iveco Group has adopted a series of policies and procedures whose purpose is to optimize the management of funds and to reduce the liquidity
risk, as follows:
\u25aacentralizing the management of receipts and payments, where it may be economical in the context of the local statutory, currency and fiscal
regulations of the countries in which we are present;
\u25aamaintaining an adequate level of available liquidity;
\u25aadiversifying the means by which funds are obtained and maintaining a continuous and active presence on the capital markets;
\u25aaobtaining adequate credit lines; and
\u25aamonitoring future liquidity on the basis of business planning.
Details as to the repayment structure of the Iveco Group\u2019s financial assets and liabilities are provided in Note 17 \u201cCurrent Receivables and Other
current financial assets\u201d and in Note 24 \u201cDebt\u201d. Details of the repayment structure of derivative financial instruments are provided in Note 18
\u201cDerivative assets and Derivative liabilities\u201d.
Management believes that the funds currently available, together with the funds that will be generated from operating and financing activities, will
enable Iveco Group to satisfy its requirements resulting from its investing activities and working capital needs and to fulfill its obligations to repay
its debts at their natural due date.
Market risk
We operate in numerous markets worldwide and are exposed to market risks stemming from fluctuations in currency and interest rates.
The exposure to foreign currency risk arises both in connection with the geographical distribution of our industrial activities compared to the
markets in which we sell our products, and in relation to the use of external borrowing denominated in foreign currencies.
The exposure to interest rate risk arises from the need to fund industrial and financial operating activities and the necessity to deploy surplus
funds. Changes in market interest rates may have the effect of either increasing or decreasing our profit/(loss), thereby indirectly affecting the
costs and returns of financing and investing transactions.
We regularly assess our exposure to foreign currency and interest rate risk and manage those risks through the use of derivative financial
instruments in accordance with our established risk management policies.
Our policy permits derivatives to be used only for managing the exposure to fluctuations in exchange and interest rates connected with future
cash flows and assets and liabilities, and not for speculative purposes.
We utilize derivative financial instruments designated as fair value hedges, mainly to hedge:
\u25aathe currency risk on financial instruments denominated in foreign currency;
\u25aathe interest rate risk on fixed rate loans and borrowings.
The instruments used for these hedges are mainly currency swaps, forward contracts, interest rate swaps and combined interest rate and
currency financial instruments.
We use derivative financial instruments as cash flow hedges for the purpose of pre-determining:
\u25aathe exchange rate at which forecasted transactions denominated in foreign currencies will be accounted for;
\u25aathe interest paid on borrowings, both to match the fixed interest received on loans (customer financing activity), and to achieve a pre-defined
mix of floating versus fixed rate funding structured loans.
The exchange rate exposure on forecasted commercial flows is hedged by currency swaps, forward contracts and currency options. Interest rate
exposures are usually hedged by interest rate swaps and, in limited cases, by forward rate agreements.
Counterparties to these agreements are major and diverse financial institutions.
Information on the fair value of derivative financial instruments held at the balance sheet date is provided in Note 18 \u201cDerivative assets and
Derivative liabilities\u201d.
Currency risk
We are exposed to risk resulting from changes in exchange rates, which can affect our earnings and invested equity.
Where one of our subsidiaries incurs costs in a currency different from that of its revenues, any change in exchange rates can affect the profit/
(loss) of that company. In 2022 the total net trade flows exposed to currency risk amounted to the equivalent of 13% of our revenue (9% in 2021).
The principal exchange rates to which we are exposed are the following:
\u25aaEUR/GBP, predominately in relation to sales on the U.K. market;
\u25aaEUR/BRL, predominately in relation to import on the Brazilian market;
\u25aaEUR/TRY, predominately in relation to sales on the T\u00fcrkiye market;
\u25aaEUR/PLN, predominately in relation to sales on the Polish market;
\u25aaEUR/CZK, predominately in relation to the production of Commercial and Specialty Vehicles (Bus) in Czech Republic.
Trade flows exposed to changes in these exchange rates in 2022 made up approximately 67% of the exposure to currency risk from trade
transactions.
It is the Group\u2019s policy to use derivative financial instruments to hedge a pre-determined 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 risk
beyond that date where it is believed to be appropriate) and to hedge completely the exposure resulting from firm commitments.
Group\u2019s 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 foreign currencies different from the subsidiary\u2019s functional
currency.
Group\u2019s subsidiaries may have functional currency different from the euro, which is the Group presentation currency. The income statements of
those subsidiaries are converted into euros 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 euros.
The assets and liabilities of consolidated companies whose functional currency is different from the euro may acquire converted values in euros
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).
We monitor our principal exposure to translation exchange risk, although there was no specific hedging in place at 31 December 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 31 December 2022 resulting from a hypothetical change of 10% in the exchange rates amounts to
approximately \u20ac291 million (\u20ac187 million at 31 December 2021). The valuation model for currency options assumes that market volatility at year-
end remains unchanged.
The underlying transactions (consisting of receivables, payables, and future trade flows) for which we put in place, as hedging transactions, the
derivative financial instruments analyzed in the above mentioned sensitivity analysis, were not considered. 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), financing themselves 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) will be reformed by the authority and gradually replaced with alternative benchmark
rates (SOFR). Despite the uncertainty around the timing and precise nature of these changes, the existing benchmark interest rates are still
applied as reference rates.
Group Treasury is managing the Group\u2019s IBOR transition plan. The greatest change will be amendments to the contractual terms of the IBOR-
referenced floating-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 floating-rate debt will move to SOFR at the beginning of July 2025 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 floating-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, ABCP, 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 31
December 2022, resulting from a hypothetical, unfavorable and instantaneous change of 10%\u00a0in market interest rates, would have been
approximately \u20ac1 million (\u20ac1 million at 31 December 2021).
Floating rate financial instruments consist principally of cash and cash equivalents, wholesale receivables, debt, and ABCPs. The effect of the
sale of receivables is also considered in the sensitivity analysis as well as the effect of hedging derivative instruments. This analysis doesn\u2019t
include cash and cash equivalent from hyperinflationary countries which could have distorting effects on the results of the analysis and the
change in fair value of foreign exchange rate derivatives instruments.
A hypothetical change of 10% in short-term interest rates at 31 December 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 \u20ac8 million (\u20ac5 million at 31 December 2021).
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 limited 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 31 December 2022 linked to commodity prices would not have been significant (not significant at 31 December 2021).
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17. Current receivables and Other current financial assets
A summary of Current receivables and Other current financial assets as of 31 December 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 | | | |
Trade receivables
As of 31 December 2022 and 2021, Iveco Group had trade receivables of \u20ac341 million and \u20ac318 million, respectively. Trade receivables are
shown net of allowances for doubtful accounts of \u20ac21 million and \u20ac40 million at 31 December 2022 and 2021, respectively. 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:
The allowances at 31 December 2022 and 2021 have been determined using the following expected loss rates:
| | | | | | | | | | | | | | | | | | | | | |
| | | | | |
| | | | | | | | | Greater than 90 days past due | | | | | | | | | | Greater than 90 days past due | | |
Expected loss rate (in %) | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Allowances for doubtful accounts | | | | | | | | | | | | | | | | | | | | | |
Trade receivables have significant concentrations of credit risk in Commercial and Specialty Vehicles segment. 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.
In 2022 and 2021, trade receivables for an amount of \u20ac5 million and \u20ac8 million, respectively, were written off by Iveco Group.
Charge-offs 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. Iveco Group 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 31 December 2022 and 2021 is as follows:
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
Total Receivables from financing activities | | | |
The above aging tables are not necessarily reflective of the potential credit risk in the portfolio due to payment schedule changes granted by Iveco
Group and government stimulus policies benefiting Iveco Group's dealers and end-use customers.
Receivables from financing activities have significant concentrations of credit risk in the Commercial and Specialty Vehicles segment. On a
geographic basis, there is not a disproportionate concentration of credit risk in any area. Iveco Group typically retains as collateral a security
interest in the vehicles associated with retail notes, wholesale notes and finance leases.
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 it is 90 days past due.
Iveco Group utilizes three categories for receivables from financing activities that reflect their credit risk and how 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 |
| | | | | | | | | | | | | | | |
| Year Ended 31 December 2021 |
| | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Charge-offs, net of recoveries | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Foreign currency translation and other | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
At 31 December 2022, the change in allowance for credit losses mainly related to the write-offs registered over the period.
Finance lease receivables mainly relate to vehicles 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 \u20ac59 million at 31 December 2022 (\u20ac73 million at 31 December 2021):
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
Total Undiscounted receivables for future minimum lease payments | | | |
| | | |
Present value of future minimum lease payments | | | |
Other current receivables
At 31 December 2022, Other current receivables mainly consisted of other tax receivables for VAT and other indirect taxes of \u20ac214 million
(\u20ac225\u00a0million at 31 December 2021, and receivables from employees of \u20ac9 million (\u20ac9 million a 31 December 2021). At 31 December 2021, Other
current receivables also included \u20ac3,520 million of financial receivables from CNH Industrial that were almost entirely settled following the
Demerger.
Transfers of financial receivables
The Group transfers a number of its financial receivables to securitization programs or factoring transactions.
A securitization transaction entails the sale of a portfolio of receivables to a securitization vehicle. This structured entity finances the purchase of
the receivables through asset-backed financing. Asset-backed financing 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 note of the asset-backed commercial paper by the seller implies its control in substance over
the structured entity.
Furthermore, factoring transactions may be either with recourse or without recourse; 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). The gains and losses arising from the
transfer of these assets are only recognized when the assets are derecognized.
At 31 December 2022 and 2021, the carrying amount of such transferred financial assets not derecognized (constituted entirely of Receivables
from financing activities) and the related liability and the respective fair values were as follows:
| | | |
| | | |
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.
Iveco Group has discounted receivables and bills without recourse having due dates beyond 31 December 2022 amounting to \u20ac183 million
(\u20ac141\u00a0million at 31 December 2021, with due dates beyond that date), which refer to trade receivables.
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Trade receivables
As of 31 December 2022 and 2021, Iveco Group had trade receivables of \u20ac341 million and \u20ac318 million, respectively. Trade receivables are
shown net of allowances for doubtful accounts of \u20ac21 million and \u20ac40 million at 31 December 2022 and 2021, respectively. 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:
The allowances at 31 December 2022 and 2021 have been determined using the following expected loss rates:
| | | | | | | | | | | | | | | | | | | | | |
| | | | | |
| | | | | | | | | Greater than 90 days past due | | | | | | | | | | Greater than 90 days past due | | |
Expected loss rate (in %) | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Allowances for doubtful accounts | | | | | | | | | | | | | | | | | | | | | |
Trade receivables have significant concentrations of credit risk in Commercial and Specialty Vehicles segment. 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.
In 2022 and 2021, trade receivables for an amount of \u20ac5 million and \u20ac8 million, respectively, were written off by Iveco Group.
Charge-offs 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. Iveco Group continues to engage in collection efforts to attempt to recover the receivables. When recoveries are
collected, these are recognized as income.
The aging of Receivables from financing activities as of 31 December 2022 and 2021 is as follows (receivables are primarily related to Europe
region):
The above aging tables are not necessarily reflective of the potential credit risk in the portfolio due to payment schedule changes granted by Iveco
Group and government stimulus policies benefiting Iveco Group's dealers and end-use customers.
Receivables from financing activities have significant concentrations of credit risk in the Commercial and Specialty Vehicles segment. On a
geographic basis, there is not a disproportionate concentration of credit risk in any area. Iveco Group typically retains as collateral a security
interest in the vehicles associated with retail notes, wholesale notes and finance leases.
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 it is 90 days past due.
Iveco Group utilizes three categories for receivables from financing activities that reflect their credit risk and how 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 |
| | | | | | | | | | | | | | | |
| Year Ended 31 December 2021 |
| | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Charge-offs, net of recoveries | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Foreign currency translation and other | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
At 31 December 2022, the change in allowance for credit losses mainly related to the write-offs registered over the period.
Credit risk
The Group\u2019s credit risk differs in relation to the activities carried out by the segments and sales markets in which we operate; in all cases,
however, the risk is mitigated by the large number of counterparties and customers.
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 the reporting date 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.
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
commercial vehicles. These guarantees are further secured, where possible, by retention of title clauses or specific guarantees on financed
vehicle sales to the distribution network and on vehicles under finance 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.
Iveco Group utilizes three categories for receivables from financing activities that reflect their credit risk and how 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 |
Charge-offs of principal amounts of receivables outstanding are deducted from the allowance at the point when it is estimated that amounts due
are deemed uncollectible. Iveco Group continues to engage in collection efforts to attempt to recover the receivables. When recoveries are
collected, these are recognized as income.
Iveco Group\u2019s allowance for credit losses is segregated into two portfolio segments: retail and wholesale. A portfolio segment is the level at which
Iveco Group develops a systematic methodology for determining its allowance for credit losses. Typically, Iveco Group\u2019s receivables within a
portfolio segment have similar risk profiles and methods for assessing and monitoring risk. These classes align with management reporting.
The Group accounts for its credit risk by appropriately providing for expected credit losses on a timely basis. In calculating the expected credit
loss rates, Iveco Group considers historical loss rates for each category of customer and adjusts for forward-looking macroeconomic data.
In calculating the expected credit losses, Iveco Group\u2019s calculations depend on whether the receivable has been individually identified as being
impaired. The first component of the allowance for credit losses covers the receivables specifically reviewed by management for which Iveco
Group has determined it is probable that it will not collect all of the contractual principal and interest. Receivables are individually reviewed for
impairment based on, among other items, amounts outstanding, days past due and prior collection history. Expected credit losses are measured
by considering: the unbiased and probability-weighted amount; the time value of money; and reasonable and supportable information (available
without undue costs or effort) at the reporting date about past events, current conditions and forecasts of future economic conditions. Expected
credit losses are measured as the probability-weighted present value of all cash shortfalls over the expected life of each financial asset.
The second component of the allowance for credit losses covers all receivables that have not been individually reviewed for impairment. The
allowance for these receivables is based on aggregated portfolio evaluations, generally by financial product. The allowance for wholesale and
retail credit losses is based on loss forecast models that consider a variety of factors that include, but are not limited to, historical loss experience,
collateral value, portfolio balance and delinquency. The loss forecast models are updated on a quarterly basis. The calculation is adjusted for
forward-looking macroeconomic factors. In addition, qualitative factors that are not fully captured in the loss forecast models are considered in the
evaluation of the adequacy of the allowance for credit losses. These qualitative factors are subjective and require a degree of management
judgment.
",
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"concept": "ifrs-full:DisclosureOfCreditRiskExplanatory",
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}
},
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"value": "
Trade receivables
As of 31 December 2022 and 2021, Iveco Group had trade receivables of \u20ac341 million and \u20ac318 million, respectively. Trade receivables are
shown net of allowances for doubtful accounts of \u20ac21 million and \u20ac40 million at 31 December 2022 and 2021, respectively. 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:
The allowances at 31 December 2022 and 2021 have been determined using the following expected loss rates:
| | | | | | | | | | | | | | | | | | | | | |
| | | | | |
| | | | | | | | | Greater than 90 days past due | | | | | | | | | | Greater than 90 days past due | | |
Expected loss rate (in %) | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Allowances for doubtful accounts | | | | | | | | | | | | | | | | | | | | | |
Trade receivables have significant concentrations of credit risk in Commercial and Specialty Vehicles segment. 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.
In 2022 and 2021, trade receivables for an amount of \u20ac5 million and \u20ac8 million, respectively, were written off by Iveco Group.
Charge-offs 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. Iveco Group continues to engage in collection efforts to attempt to recover the receivables. When recoveries are
collected, these are recognized as income.
The aging of Receivables from financing activities as of 31 December 2022 and 2021 is as follows (receivables are primarily related to Europe
region):
The above aging tables are not necessarily reflective of the potential credit risk in the portfolio due to payment schedule changes granted by Iveco
Group and government stimulus policies benefiting Iveco Group's dealers and end-use customers.
Receivables from financing activities have significant concentrations of credit risk in the Commercial and Specialty Vehicles segment. On a
geographic basis, there is not a disproportionate concentration of credit risk in any area. Iveco Group typically retains as collateral a security
interest in the vehicles associated with retail notes, wholesale notes and finance leases.
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 it is 90 days past due.
Iveco Group utilizes three categories for receivables from financing activities that reflect their credit risk and how 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 |
| | | | | | | | | | | | | | | |
| Year Ended 31 December 2021 |
| | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Charge-offs, net of recoveries | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Foreign currency translation and other | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
At 31 December 2022, the change in allowance for credit losses mainly related to the write-offs registered over the period.
The following table provides an analysis by due date of the notional amount of outstanding derivative financial instruments at 31 December 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 | | |
| | | | |
| | | | |
| | | | |
Payables represented by securities | | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| |
| | Due between one and five years | | |
| | | | |
| | | | |
| | | | |
Payables represented by securities | | | | |
| | | | |
| | | | |
| | | | |
| | | | |
25. Trade payables
An analysis by due date of Trade payables is as follows:
| | | | | | | |
| |
| | | Due between one and five years | | | | |
| | | | | | | |
Charge-offs of principal amounts of receivables outstanding are deducted from the allowance at the point when it is estimated that amounts due
are deemed uncollectible. Iveco Group continues to engage in collection efforts to attempt to recover the receivables. When recoveries are
collected, these are recognized as income.
Iveco Group\u2019s allowance for credit losses is segregated into two portfolio segments: retail and wholesale. A portfolio segment is the level at which
Iveco Group develops a systematic methodology for determining its allowance for credit losses. Typically, Iveco Group\u2019s receivables within a
portfolio segment have similar risk profiles and methods for assessing and monitoring risk. These classes align with management reporting.
The Group accounts for its credit risk by appropriately providing for expected credit losses on a timely basis. In calculating the expected credit
loss rates, Iveco Group considers historical loss rates for each category of customer and adjusts for forward-looking macroeconomic data.
In calculating the expected credit losses, Iveco Group\u2019s calculations depend on whether the receivable has been individually identified as being
impaired. The first component of the allowance for credit losses covers the receivables specifically reviewed by management for which Iveco
Group has determined it is probable that it will not collect all of the contractual principal and interest. Receivables are individually reviewed for
impairment based on, among other items, amounts outstanding, days past due and prior collection history. Expected credit losses are measured
by considering: the unbiased and probability-weighted amount; the time value of money; and reasonable and supportable information (available
without undue costs or effort) at the reporting date about past events, current conditions and forecasts of future economic conditions. Expected
credit losses are measured as the probability-weighted present value of all cash shortfalls over the expected life of each financial asset.
The second component of the allowance for credit losses covers all receivables that have not been individually reviewed for impairment. The
allowance for these receivables is based on aggregated portfolio evaluations, generally by financial product. The allowance for wholesale and
retail credit losses is based on loss forecast models that consider a variety of factors that include, but are not limited to, historical loss experience,
collateral value, portfolio balance and delinquency. The loss forecast models are updated on a quarterly basis. The calculation is adjusted for
forward-looking macroeconomic factors. In addition, qualitative factors that are not fully captured in the loss forecast models are considered in the
evaluation of the adequacy of the allowance for credit losses. These qualitative factors are subjective and require a degree of management
judgment.
Liquidity risk
We are exposed to funding risk if there is difficulty in obtaining finance for operations at any given point in time.
The cash flows, funding requirements and liquidity of our subsidiaries are monitored on a centralized basis. The aim of this centralized system is
to optimize the efficiency and effectiveness of the management of our capital resources.
Additionally, as part of our activities, we regularly carry out funding operations on the various financial markets which may take on different
technical forms and which are aimed at ensuring that it has an adequate level of current and future liquidity.
Measures taken to generate financial resources through operations and to maintain an adequate level of available liquidity are an important factor
in ensuring normal operating conditions and addressing strategic challenges. We therefore plan to meet our requirements to settle liabilities as
they fall due and to cover expected capital expenditures by using cash flows from operations and available liquidity, renewing or refinancing bank
loans and making recourse to the bond market and other forms of funding.
The main factors that determine our liquidity situation are the funds generated by or used in operating and investing activities and the debt lending
period and its renewal features or the liquidity of the funds employed and market terms and conditions.
Iveco Group has adopted a series of policies and procedures whose purpose is to optimize the management of funds and to reduce the liquidity
risk, as follows:
\u25aacentralizing the management of receipts and payments, where it may be economical in the context of the local statutory, currency and fiscal
regulations of the countries in which we are present;
\u25aamaintaining an adequate level of available liquidity;
\u25aadiversifying the means by which funds are obtained and maintaining a continuous and active presence on the capital markets;
\u25aaobtaining adequate credit lines; and
\u25aamonitoring future liquidity on the basis of business planning.
Details as to the repayment structure of the Iveco Group\u2019s financial assets and liabilities are provided in Note 17 \u201cCurrent Receivables and Other
current financial assets\u201d and in Note 24 \u201cDebt\u201d. Details of the repayment structure of derivative financial instruments are provided in Note 18
\u201cDerivative assets and Derivative liabilities\u201d.
Management believes that the funds currently available, together with the funds that will be generated from operating and financing activities, will
enable Iveco Group to satisfy its requirements resulting from its investing activities and working capital needs and to fulfill its obligations to repay
its debts at their natural due date.
Market risk
We operate in numerous markets worldwide and are exposed to market risks stemming from fluctuations in currency and interest rates.
The exposure to foreign currency risk arises both in connection with the geographical distribution of our industrial activities compared to the
markets in which we sell our products, and in relation to the use of external borrowing denominated in foreign currencies.
The exposure to interest rate risk arises from the need to fund industrial and financial operating activities and the necessity to deploy surplus
funds. Changes in market interest rates may have the effect of either increasing or decreasing our profit/(loss), thereby indirectly affecting the
costs and returns of financing and investing transactions.
We regularly assess our exposure to foreign currency and interest rate risk and manage those risks through the use of derivative financial
instruments in accordance with our established risk management policies.
Our policy permits derivatives to be used only for managing the exposure to fluctuations in exchange and interest rates connected with future
cash flows and assets and liabilities, and not for speculative purposes.
We utilize derivative financial instruments designated as fair value hedges, mainly to hedge:
\u25aathe currency risk on financial instruments denominated in foreign currency;
\u25aathe interest rate risk on fixed rate loans and borrowings.
The instruments used for these hedges are mainly currency swaps, forward contracts, interest rate swaps and combined interest rate and
currency financial instruments.
We use derivative financial instruments as cash flow hedges for the purpose of pre-determining:
\u25aathe exchange rate at which forecasted transactions denominated in foreign currencies will be accounted for;
\u25aathe interest paid on borrowings, both to match the fixed interest received on loans (customer financing activity), and to achieve a pre-defined
mix of floating versus fixed rate funding structured loans.
The exchange rate exposure on forecasted commercial flows is hedged by currency swaps, forward contracts and currency options. Interest rate
exposures are usually hedged by interest rate swaps and, in limited cases, by forward rate agreements.
Counterparties to these agreements are major and diverse financial institutions.
Information on the fair value of derivative financial instruments held at the balance sheet date is provided in Note 18 \u201cDerivative assets and
Derivative liabilities\u201d.
Currency risk
We are exposed to risk resulting from changes in exchange rates, which can affect our earnings and invested equity.
Where one of our subsidiaries incurs costs in a currency different from that of its revenues, any change in exchange rates can affect the profit/
(loss) of that company. In 2022 the total net trade flows exposed to currency risk amounted to the equivalent of 13% of our revenue (9% in 2021).
The principal exchange rates to which we are exposed are the following:
\u25aaEUR/GBP, predominately in relation to sales on the U.K. market;
\u25aaEUR/BRL, predominately in relation to import on the Brazilian market;
\u25aaEUR/TRY, predominately in relation to sales on the T\u00fcrkiye market;
\u25aaEUR/PLN, predominately in relation to sales on the Polish market;
\u25aaEUR/CZK, predominately in relation to the production of Commercial and Specialty Vehicles (Bus) in Czech Republic.
Trade flows exposed to changes in these exchange rates in 2022 made up approximately 67% of the exposure to currency risk from trade
transactions.
It is the Group\u2019s policy to use derivative financial instruments to hedge a pre-determined 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 risk
beyond that date where it is believed to be appropriate) and to hedge completely the exposure resulting from firm commitments.
Group\u2019s 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 foreign currencies different from the subsidiary\u2019s functional
currency.
Group\u2019s subsidiaries may have functional currency different from the euro, which is the Group presentation currency. The income statements of
those subsidiaries are converted into euros 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 euros.
The assets and liabilities of consolidated companies whose functional currency is different from the euro may acquire converted values in euros
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).
We monitor our principal exposure to translation exchange risk, although there was no specific hedging in place at 31 December 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 31 December 2022 resulting from a hypothetical change of 10% in the exchange rates amounts to
approximately \u20ac291 million (\u20ac187 million at 31 December 2021). The valuation model for currency options assumes that market volatility at year-
end remains unchanged.
The underlying transactions (consisting of receivables, payables, and future trade flows) for which we put in place, as hedging transactions, the
derivative financial instruments analyzed in the above mentioned sensitivity analysis, were not considered. 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), financing themselves 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) will be reformed by the authority and gradually replaced with alternative benchmark
rates (SOFR). Despite the uncertainty around the timing and precise nature of these changes, the existing benchmark interest rates are still
applied as reference rates.
Group Treasury is managing the Group\u2019s IBOR transition plan. The greatest change will be amendments to the contractual terms of the IBOR-
referenced floating-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 floating-rate debt will move to SOFR at the beginning of July 2025 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 floating-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, ABCP, 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 31
December 2022, resulting from a hypothetical, unfavorable and instantaneous change of 10%\u00a0in market interest rates, would have been
approximately \u20ac1 million (\u20ac1 million at 31 December 2021).
Floating rate financial instruments consist principally of cash and cash equivalents, wholesale receivables, debt, and ABCPs. The effect of the
sale of receivables is also considered in the sensitivity analysis as well as the effect of hedging derivative instruments. This analysis doesn\u2019t
include cash and cash equivalent from hyperinflationary countries which could have distorting effects on the results of the analysis and the
change in fair value of foreign exchange rate derivatives instruments.
A hypothetical change of 10% in short-term interest rates at 31 December 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 \u20ac8 million (\u20ac5 million at 31 December 2021).
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 limited 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 31 December 2022 linked to commodity prices would not have been significant (not significant at 31 December 2021).
",
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Trade receivables
As of 31 December 2022 and 2021, Iveco Group had trade receivables of \u20ac341 million and \u20ac318 million, respectively. Trade receivables are
shown net of allowances for doubtful accounts of \u20ac21 million and \u20ac40 million at 31 December 2022 and 2021, respectively. 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:
The allowances at 31 December 2022 and 2021 have been determined using the following expected loss rates:
| | | | | | | | | | | | | | | | | | | | | |
| | | | | |
| | | | | | | | | Greater than 90 days past due | | | | | | | | | | Greater than 90 days past due | | |
Expected loss rate (in %) | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Allowances for doubtful accounts | | | | | | | | | | | | | | | | | | | | | |
Trade receivables have significant concentrations of credit risk in Commercial and Specialty Vehicles segment. 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.
In 2022 and 2021, trade receivables for an amount of \u20ac5 million and \u20ac8 million, respectively, were written off by Iveco Group.
Charge-offs 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. Iveco Group continues to engage in collection efforts to attempt to recover the receivables. When recoveries are
collected, these are recognized as income.
The aging of Receivables from financing activities as of 31 December 2022 and 2021 is as follows (receivables are primarily related to Europe
region):
The above aging tables are not necessarily reflective of the potential credit risk in the portfolio due to payment schedule changes granted by Iveco
Group and government stimulus policies benefiting Iveco Group's dealers and end-use customers.
Receivables from financing activities have significant concentrations of credit risk in the Commercial and Specialty Vehicles segment. On a
geographic basis, there is not a disproportionate concentration of credit risk in any area. Iveco Group typically retains as collateral a security
interest in the vehicles associated with retail notes, wholesale notes and finance leases.
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 it is 90 days past due.
Iveco Group utilizes three categories for receivables from financing activities that reflect their credit risk and how 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 |
| | | | | | | | | | | | | | | |
| Year Ended 31 December 2021 |
| | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Charge-offs, net of recoveries | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Foreign currency translation and other | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
At 31 December 2022, the change in allowance for credit losses mainly related to the write-offs registered over the period.
Finance lease receivables mainly relate to vehicles 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 \u20ac59 million at 31 December 2022 (\u20ac73 million at 31 December 2021):
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
Total Undiscounted receivables for future minimum lease payments | | | |
| | | |
Present value of future minimum lease payments | | | |
Credit risk
The Group\u2019s credit risk differs in relation to the activities carried out by the segments and sales markets in which we operate; in all cases,
however, the risk is mitigated by the large number of counterparties and customers.
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 the reporting date 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.
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
commercial vehicles. These guarantees are further secured, where possible, by retention of title clauses or specific guarantees on financed
vehicle sales to the distribution network and on vehicles under finance 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.
Iveco Group utilizes three categories for receivables from financing activities that reflect their credit risk and how 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 |
Charge-offs of principal amounts of receivables outstanding are deducted from the allowance at the point when it is estimated that amounts due
are deemed uncollectible. Iveco Group continues to engage in collection efforts to attempt to recover the receivables. When recoveries are
collected, these are recognized as income.
Iveco Group\u2019s allowance for credit losses is segregated into two portfolio segments: retail and wholesale. A portfolio segment is the level at which
Iveco Group develops a systematic methodology for determining its allowance for credit losses. Typically, Iveco Group\u2019s receivables within a
portfolio segment have similar risk profiles and methods for assessing and monitoring risk. These classes align with management reporting.
The Group accounts for its credit risk by appropriately providing for expected credit losses on a timely basis. In calculating the expected credit
loss rates, Iveco Group considers historical loss rates for each category of customer and adjusts for forward-looking macroeconomic data.
In calculating the expected credit losses, Iveco Group\u2019s calculations depend on whether the receivable has been individually identified as being
impaired. The first component of the allowance for credit losses covers the receivables specifically reviewed by management for which Iveco
Group has determined it is probable that it will not collect all of the contractual principal and interest. Receivables are individually reviewed for
impairment based on, among other items, amounts outstanding, days past due and prior collection history. Expected credit losses are measured
by considering: the unbiased and probability-weighted amount; the time value of money; and reasonable and supportable information (available
without undue costs or effort) at the reporting date about past events, current conditions and forecasts of future economic conditions. Expected
credit losses are measured as the probability-weighted present value of all cash shortfalls over the expected life of each financial asset.
The second component of the allowance for credit losses covers all receivables that have not been individually reviewed for impairment. The
allowance for these receivables is based on aggregated portfolio evaluations, generally by financial product. The allowance for wholesale and
retail credit losses is based on loss forecast models that consider a variety of factors that include, but are not limited to, historical loss experience,
collateral value, portfolio balance and delinquency. The loss forecast models are updated on a quarterly basis. The calculation is adjusted for
forward-looking macroeconomic factors. In addition, qualitative factors that are not fully captured in the loss forecast models are considered in the
evaluation of the adequacy of the allowance for credit losses. These qualitative factors are subjective and require a degree of management
judgment.
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"value": "341000000",
"decimals": -6,
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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.
Iveco Group 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. Iveco Group 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. Derivative instruments are generally classified as Level 2 in
the fair value hierarchy.
In accordance with IFRS 9 - Financial Instruments, 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.
With regard to hedge accounting, Iveco Group continues to monitor significant developments in order to assess the potential future impacts of the
COVID-19 pandemic, as well as of the ongoing supply chain disruptions, the Russia-Ukraine war, cost and availability of energy, and components
availability on the hedging relationships in place and to update its estimates concerning whether forecasted transactions can still be considered
highly likely to occur
Foreign Exchange Derivatives
Iveco Group 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. Iveco Group 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 \u20ac-14 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.
Iveco Group also uses forwards and swaps to hedge 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 Iveco Group\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
Iveco Group has entered into interest rate derivatives (mainly swaps) 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 Iveco Group 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 Iveco Group 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 Iveco Group to mitigate the volatility in
the fair value of existing financing instruments 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.
All of Iveco Group\u2019s interest rate derivatives outstanding as of 31 December 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 Iveco Group 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 31 December 2022 and 2021:
| | | |
| | | |
| | | |
Recognized in Other comprehensive income (effective portion): | | | |
Foreign exchange derivatives | | | |
Interest rate derivatives | | | |
| | | |
Reclassified from other comprehensive income (effective portion): | | | |
Foreign exchange contracts \u2013 Net revenues | | | |
Foreign exchange contracts \u2013 Cost of sales | | | |
Foreign exchange contracts \u2013 Financial income/(expenses) | | | |
Interest rate derivatives \u2013 Financial income/(expenses) | | | |
| | | |
| | | |
Foreign exchange contracts \u2013 Financial income/(expenses) | | | |
The fair values of Iveco Group\u2019s derivatives as of 31 December 2022 and 2021 in the consolidated statement of financial position are recorded as
follows:
| | | | | | | |
| | |
| | | | | | | |
Derivatives designated as hedging instruments | | | | | | | |
| | | | | | | |
Foreign exchange derivatives | | | | | | | |
| | | | | | | |
Total Derivatives designated as hedging instruments | | | | | | | |
| | | | | | | |
Derivatives not designated as hedging instruments | | | | | | | |
Foreign exchange derivatives | | | | | | | |
Total Derivatives not designated as hedging instruments | | | | | | | |
Derivative assets/(liabilities) | | | | | | | |
Derivatives not designated as hedging instruments consist mainly of derivatives (mostly currency-based derivatives) acquired to hedge
receivables and payables subject to currency risk and/or interest rate risk which are not formally designated as hedges at Group level. The
following table provides, for derivatives designated as hedging instruments, the detail of notional amounts and of the fair vale changes used as a
basis to calculate hedge ineffectiveness, and for derivative not designated as hedging instruments, the detail of notional amounts:
| | | | | | | |
| | |
| | | Fair value changes used as a basis to calculate hedge ineffectiveness | | | | Fair value changes used as a basis to calculate hedge ineffectiveness |
Derivatives designated as hedging instruments | | | | | | | |
| | | | | | | |
Foreign exchange derivatives | | | | | | | |
| | | | | | | |
Total Derivatives designated as hedging instruments | | | | | | | |
Total Derivatives not designated as hedging instruments | | | | | | | |
| | | | | | | |
The following table provides an analysis by due date of the notional amount of outstanding derivative financial instruments at 31 December 2022
and 2021:
| | | | | | | |
| |
| | | due between one and five years | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| |
| | | due between one and five years | | | | |
| | | | | | | |
| | | | | | | |
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All of Iveco Group\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.
All of Iveco Group\u2019s interest rate derivatives outstanding as of 31 December 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 31 December 2022 and 2021:
| | | | | | | | |
| | |
| | | | | | | | |
Equity investments measured at fair value through other comprehensive income | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | |
| | | | | | | | |
Equity investments measured at fair value through other comprehensive income | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
The following table provides a reconciliation from the opening balance to the closing balance for fair value measurements categorized in Level 3
in 2022 and 2021:
| | | |
| | | |
| | | |
| | | |
Gains/(Losses) recognized in Other comprehensive income/(loss) | | | |
Transfer from Level 3 to Level 1 | | | |
| | | |
| | | |
(1) At 31 December 2022 Other debt includes \u20ac277 million of financial payables to CNH Industrial classified as Level 3.
| | | | | | | | | | |
| | |
| | | | | | | | | | |
Total Financial receivables from CNH Industrial | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
Other receivables from financing activities | | | | | | | | | | |
Total Receivables from financing activities | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
Payables represented by securities | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
(1) At 31 December 2021 Other debt included \u20ac3,076 million of financial payables to CNH Industrial classified as Level 3.
Receivables from financing activities
The fair value of Receivables from financing activities is based on the discounted values of their related cash flows at market discount rates that
reflect conditions applied in various reference markets on receivables with similar characteristic, adjusted to take into account the credit risk of the
counterparties.
Debt
The fair value of Asset-backed financing, Borrowings from banks, Payable represented by securities and Other debt are included in the Level 2
and has been estimated based on discounted cash flows analysis using the current market interest rates at year-end adjusted for the Group non-
performance risk over the remaining term of the financial liability.
The fair value of Lease liabilities classified within Level 3 of the fair value hierarchy has been estimated using discounted cash flow models that
require significant adjustments using unobservable inputs.
Other financial assets and liabilities
The carrying amount of Cash at banks, Restricted cash, Other cash equivalents, Trade receivables, Other current receivables and financial
assets, Trade payables and Other current liabilities included in the statement of financial position approximates their fair value, due to the short
maturity of these items.
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The following table provides an analysis by due date of the notional amount of outstanding derivative financial instruments at 31 December 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 | | |
| | | | |
| | | | |
| | | | |
Payables represented by securities | | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| |
| | Due between one and five years | | |
| | | | |
| | | | |
| | | | |
Payables represented by securities | | | | |
| | | | |
| | | | |
| | | | |
| | | | |
25. Trade payables
An analysis by due date of Trade payables is as follows:
| | | | | | | |
| |
| | | Due between one and five years | | | | |
| | | | | | | |
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 securitization 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": "
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 securitization 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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20. Assets held for sale
Assets held for sale at 31 December 2022 and 2021 primarily included buildings.
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}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl81MzIvZnJhZzo0MThmYmQ0ZDQ5MzM0YWUxYjQ2M2M3NGY1ZTZjM2ZiYi90ZXh0cmVnaW9uOjQxOGZiZDRkNDkzMzRhZTFiNDYzYzc0ZjVlNmMzZmJiXzMyOTg1MzQ4ODM0MjE_b95bd0be-65a6-461b-a35d-e7ca504d3c54": {
"value": "
20. Assets held for sale
Assets held for sale at 31 December 2022 and 2021 primarily included buildings.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfNoncurrentAssetsHeldForSaleAndDiscontinuedOperationsExplanatory",
"language": "en",
"entity": "scheme:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl81MzUvZnJhZzo2MzkyMGY0MjYwM2M0MWQ5OTU4OTkwYTgxZDY1ZTdiNS90ZXh0cmVnaW9uOjYzOTIwZjQyNjAzYzQxZDk5NTg5OTBhODFkNjVlN2I1XzMyOTg1MzQ5MjcxMzY_aa81b2b1-20cc-433a-bfeb-85da2bcb828f": {
"value": "
21.Equity
Share capital
The Articles of Association of Iveco Group N.V. provide for authorized share capital of \u20ac8 million, divided into 400 million Common Shares and
400\u00a0million Special Voting Shares to be held with associated Common Shares, each having a par value of one euro cent (\u20ac0.01). As of 31
December 2022, the Company\u2019s share capital was \u20ac3,454,589.70, fully paid-in, and consisted of 271,215,400 Common Shares and 74,243,570
Special Voting Shares (74,217,406 Special Voting Shares outstanding, net of 26,164 Special Voting Shares surrendered to the Company
following the de-registration of the corresponding Qualifying Common Shares from the Loyalty Register and which are held as treasury shares by
the Company).
Changes in the composition of the share capital of Iveco Group N.V. during 2022 are as follows:
| | | | | | | | | |
| Iveco Group N.V. Common Shares issued | | Iveco Group N.V. Common Shares outstanding | Iveco Group N.V. loyalty program Special Voting Shares issued | | Iveco Group N.V. loyalty program Special Voting Shares outstanding | Total Shares issued by Iveco Group N.V. | | Total Iveco Group N.V.\u00a0 outstanding shares |
Total Iveco Group N.V. shares at 1 January 2022 | | | | | | | | | |
| | | | | | | | | |
(Purchases)/Sales of treasury shares | | | | | | | | | |
Total Iveco Group N.V. shares at 31 December 2022 | | | | | | | | | |
During the year ended 31 December 2022:
\u25aa26,164 Special Voting Shares were surrendered to the Company following the de-registration of the corresponding Qualifying Common
Shares from the Loyalty Register\u00a0 in accordance with the Special Voting Shares - Terms and Conditions;
\u25aathe Company delivered no Common Shares under the Iveco Group Equity Incentive Plan. See paragraph below \u201cShare-based
compensation\u201d for further discussion.
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 the Company provide for a loyalty voting program. 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 (including Common Shares that have been
allotted upon Demerger and that have been registered in the Loyalty Register in the name of one and the same shareholder or its loyalty
transferees for an uninterrupted period of at least three years, which period is shortened with the period for which the corresponding Common
Shares held in CNH Industrial have been registered in the loyalty register of CNH Industrial N.V. prior to the Demerger, and continue to be so
registered), 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 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 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. For further details, see paragraph \u201cLoyalty voting program\u201d of the Corporate Governance section.
Capital reserves
At 31 December 2022 capital reserves amounted to \u20ac2,311 million.
Earnings reserves
Earnings reserves, amounting to \u20ac566 million at 31 December 2022, mainly consist of retained earnings and profits attributable to the owners of
the parent.
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: | | | |
Gains/(losses) on the remeasurement of defined benefit plans | | | |
Net change in fair value of equity investments at fair value through other comprehensive income(1) | | | |
Total Other comprehensive income/(loss) that will not be reclassified subsequently to profit or loss (A) | | | |
| | | |
Other comprehensive income that may be reclassified subsequently to profit or loss: | | | |
| | | |
Gains/(losses) on cash flow hedging instruments arising during the period | | | |
(Gains)/losses on cash flow hedging instruments reclassified to profit or loss | | | |
Gains/(losses) on cash flow hedging instruments | | | |
| | | |
Exchange gains/(losses) on translating foreign operations arising during the period | | | |
Exchange (gains)/losses on translating foreign operations reclassified to profit or loss | | | |
Exchange gains/(losses) on translating foreign operations | | | |
| | | |
Share of Other comprehensive income/(loss) of entities accounted for using the equity method arising during the period | | | |
Reclassification adjustment for the share of Other comprehensive income/(loss) of entities accounted for using the equity method | | | |
Share of Other comprehensive income/(loss) of entities accounted for using the equity method | | | |
Total Other comprehensive income/(loss) that may be reclassified subsequently to profit or loss (B) | | | |
| | | |
Total Other comprehensive income/(loss), net of tax (A) + (B) + (C) | | | |
(1)\u00a0 In the years ended 31 December 2022 and 2021, Net change in fair value of equity investments at fair value through other comprehensive income includes the remeasurement at fair
value of the investment in Nikola Corporation. Refer to Note 14 for additional information on this investment.
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 | | | | | | | | | | | |
Net change in fair value of equity investments at fair value through other comprehensive income(1) | | | | | | | | | | | |
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 | | | | | | | | | | | |
Total Other comprehensive income/(loss) that may be reclassified subsequently to profit or loss | | | | | | | | | | | |
Total Other comprehensive income/(loss) | | | | | | | | | | | |
(1)\u00a0 In the years ended 31 December 2022 and 2021, Net change in fair value of equity investments at fair value through other comprehensive income includes the remeasurement at fair
value of the investment in Nikola Corporation. Refer to Note 14 for additional information on this investment.
",
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"concept": "ifrs-full:DisclosureOfShareCapitalReservesAndOtherEquityInterestExplanatory",
"language": "en",
"entity": "scheme:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
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"value": "
Share capital
The Articles of Association of Iveco Group N.V. provide for authorized share capital of \u20ac8 million, divided into 400 million Common Shares and
400\u00a0million Special Voting Shares to be held with associated Common Shares, each having a par value of one euro cent (\u20ac0.01). As of 31
December 2022, the Company\u2019s share capital was \u20ac3,454,589.70, fully paid-in, and consisted of 271,215,400 Common Shares and 74,243,570
Special Voting Shares (74,217,406 Special Voting Shares outstanding, net of 26,164 Special Voting Shares surrendered to the Company
following the de-registration of the corresponding Qualifying Common Shares from the Loyalty Register and which are held as treasury shares by
the Company).
Changes in the composition of the share capital of Iveco Group N.V. during 2022 are as follows:
| | | | | | | | | |
| Iveco Group N.V. Common Shares issued | | Iveco Group N.V. Common Shares outstanding | Iveco Group N.V. loyalty program Special Voting Shares issued | | Iveco Group N.V. loyalty program Special Voting Shares outstanding | Total Shares issued by Iveco Group N.V. | | Total Iveco Group N.V.\u00a0 outstanding shares |
Total Iveco Group N.V. shares at 1 January 2022 | | | | | | | | | |
| | | | | | | | | |
(Purchases)/Sales of treasury shares | | | | | | | | | |
Total Iveco Group N.V. shares at 31 December 2022 | | | | | | | | | |
During the year ended 31 December 2022:
\u25aa26,164 Special Voting Shares were surrendered to the Company following the de-registration of the corresponding Qualifying Common
Shares from the Loyalty Register\u00a0 in accordance with the Special Voting Shares - Terms and Conditions;
\u25aathe Company delivered no Common Shares under the Iveco Group Equity Incentive Plan. See paragraph below \u201cShare-based
compensation\u201d for further discussion.
",
"dimensions": {
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"language": "en",
"entity": "scheme:549300ZWF2ZJDD9EOR96",
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"value": "
Share capital
The Articles of Association of Iveco Group N.V. provide for authorized share capital of \u20ac8 million, divided into 400 million Common Shares and
400\u00a0million Special Voting Shares to be held with associated Common Shares, each having a par value of one euro cent (\u20ac0.01). As of 31
December 2022, the Company\u2019s share capital was \u20ac3,454,589.70, fully paid-in, and consisted of 271,215,400 Common Shares and 74,243,570
Special Voting Shares (74,217,406 Special Voting Shares outstanding, net of 26,164 Special Voting Shares surrendered to the Company
following the de-registration of the corresponding Qualifying Common Shares from the Loyalty Register and which are held as treasury shares by
the Company).
Changes in the composition of the share capital of Iveco Group N.V. during 2022 are as follows:
| | | | | | | | | |
| Iveco Group N.V. Common Shares issued | | Iveco Group N.V. Common Shares outstanding | Iveco Group N.V. loyalty program Special Voting Shares issued | | Iveco Group N.V. loyalty program Special Voting Shares outstanding | Total Shares issued by Iveco Group N.V. | | Total Iveco Group N.V.\u00a0 outstanding shares |
Total Iveco Group N.V. shares at 1 January 2022 | | | | | | | | | |
| | | | | | | | | |
(Purchases)/Sales of treasury shares | | | | | | | | | |
Total Iveco Group N.V. shares at 31 December 2022 | | | | | | | | | |
During the year ended 31 December 2022:
\u25aa26,164 Special Voting Shares were surrendered to the Company following the de-registration of the corresponding Qualifying Common
Shares from the Loyalty Register\u00a0 in accordance with the Special Voting Shares - Terms and Conditions;
\u25aathe Company delivered no Common Shares under the Iveco Group Equity Incentive Plan. See paragraph below \u201cShare-based
compensation\u201d for further discussion.
",
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"entity": "scheme:549300ZWF2ZJDD9EOR96",
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},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl81MzUvZnJhZzo2MzkyMGY0MjYwM2M0MWQ5OTU4OTkwYTgxZDY1ZTdiNS90ZXh0cmVnaW9uOjYzOTIwZjQyNjAzYzQxZDk5NTg5OTBhODFkNjVlN2I1XzMyOTg1MzQ4OTQyMzA_edb517a2-660e-4846-9815-b0da4a3bffd2": {
"value": "
Policies and processes for managing capital
Pursuant to the Articles of Association, 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.
On 2 March 2023 the Board of Directors decided to not propose any dividend distribution to the Company\u2019s shareholders
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 5 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.
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 21 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 21 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.
",
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"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
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},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl81MzUvZnJhZzo2MzkyMGY0MjYwM2M0MWQ5OTU4OTkwYTgxZDY1ZTdiNS90ZXh0cmVnaW9uOjYzOTIwZjQyNjAzYzQxZDk5NTg5OTBhODFkNjVlN2I1XzMyOTg1MzQ5MjcxNDA_f89baaac-90fa-4de8-9919-3ffe6a44b5a1": {
"value": "
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.
On 2 March 2023 the Board of Directors decided to not propose any dividend distribution to the Company\u2019s shareholders
",
"dimensions": {
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},
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"value": "
Capital reserves
At 31 December 2022 capital reserves amounted to \u20ac2,311 million.
Earnings reserves
Earnings reserves, amounting to \u20ac566 million at 31 December 2022, mainly consist of retained earnings and profits attributable to the owners of
the parent.
",
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},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl81MzgvZnJhZzo4ODg2MjdhOWIxODY0ZDkyOTEyMjM1YWJkZjcyZTE4My90ZXh0cmVnaW9uOjg4ODYyN2E5YjE4NjRkOTI5MTIyMzVhYmRmNzJlMTgzXzEwOTk1MTE2MjkwMzM_9f5f591f-2ccf-4a76-9695-b1652c7cfe24": {
"value": "2311000000",
"decimals": -6,
"dimensions": {
"concept": "ifrs-full:Equity",
"entity": "scheme:549300ZWF2ZJDD9EOR96",
"period": "2023-01-01T00:00:00",
"ifrs-full:ComponentsOfEquityAxis": "ifrs-full:CapitalReserveMember",
"unit": "iso4217:EUR"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl81MzgvZnJhZzo4ODg2MjdhOWIxODY0ZDkyOTEyMjM1YWJkZjcyZTE4My90ZXh0cmVnaW9uOjg4ODYyN2E5YjE4NjRkOTI5MTIyMzVhYmRmNzJlMTgzXzEwOTk1MTE2MjkxODI_22a6d814-a51b-424b-b962-f4b6141d29d9": {
"value": "566000000",
"decimals": -6,
"dimensions": {
"concept": "ifrs-full:Equity",
"entity": "scheme:549300ZWF2ZJDD9EOR96",
"period": "2023-01-01T00:00:00",
"ifrs-full:ComponentsOfEquityAxis": "ifrs-full:RetainedEarningsMember",
"unit": "iso4217:EUR"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl81NDEvZnJhZzoyZjEzZmJlMDE5Mzg0ZThlYmYyMDE2ZmMwNDI2MGFmMS90ZXh0cmVnaW9uOjJmMTNmYmUwMTkzODRlOGViZjIwMTZmYzA0MjYwYWYxXzMyOTg1MzQ4ODU4Nzk_fefd23cf-79c0-4b47-bdac-fbc90397dfa4": {
"value": "
Share-based compensation
For the year ended 31 December 2022, Iveco Group recognized total share-based compensation expense of \u20ac17 million and total tax benefit
relating to share-based compensation expense of \u20ac4 million. For the year ended 31 December 2021, share-based compensation expense
amounted to \u20ac18 million, and has been allocated to the Iveco Group based on the awards and terms previously granted to Iveco Group's
employees who have historically participated in CNH Industrial\u2019s equity compensation plans.
As of 31 December 2022, Iveco Group had unrecognized share-based compensation expense related to non-vested awards of approximately
\u20ac25\u00a0million based on current assumptions related to the achievement of specified performance objectives, when applicable. Unrecognized share-
based compensation costs will be recognized over a weighted-average period of 1.5 years.
As part of the Demerger, any awards outstanding under the CNH Industrial Equity Incentive Plan (\"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 N.V. 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 spin. 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 included appropriate adjustment mechanisms to ensure that the value of the unvested awards granted
to all the beneficiaries under such plan remained unchanged pre and post Demerger for employees in both Iveco Group and CNH Industrial. No
incremental cost has been recognized as consequence of the conversion.
On 25 February 2022, the Board of Directors adopted the Iveco Group N.V. Equity Incentive Plan (\u201cthe EIP\u201d or \u201cthe Plan\u201d). The EIP relates to the
grant of stock-based awards to eligible top performers and key leaders of the Company and its subsidiaries. The EIP is an umbrella programme
defining the terms and conditions for any subsequent long term incentive programme.
The Board of Directors also approved a new long-term incentive programme (\u201cLTIP\u201d), tied to the Company\u2019s five-year Strategic Business Plan
which spans in total over a five-year performance period, 2022 through 2026. Shareholders at the 13 April 2022 AGM voted in favor to allow up to
a maximum of 16 million common shares which may be issued under the LTIP, of which 4 million (rights to subscribe for) common shares are
reserved for issuance to the Executive Directors.
Under the LTIP, performance share rights (\u201cPSUs\u201d) representing the right to receive one common share in the capital of the Company, will be
awarded to the Chairman and to the Chief Executive Officer. A combination of PSUs and restricted share rights (\u201cRSUs\u201d), each representing the
right to receive one common share in the capital of the Company, will be awarded to members of the Senior Leadership Team (\u201cSLT\u201d) and other
key members of the Group. The PSUs will be subject to the achievement of certain performance targets while the RSUs will be subject only to the
participant\u2019s continuing service as officer, director or employee of the Company; both PSUs and RSUs are also subject to acceptable individual
performance.
Performance Share Units
2021-2023 LTIP Awards from the Demerger
Under the CNH Industrial EIP, 1.9 million of nonvested PSUs on CNH Industrial N.V.'s shares related to Iveco Group key executive officers and
select employees where outstanding at 31 December 2021. As a result of the Demerger, such nonvested outstanding PSUs were converted to
3.0 million awards on Iveco Group N.V.'s shares.
The PSUs will vest on 28 February 2024, based on the achievement of each target of Adjusted diluted EPS and Industrial ROIC (the ratio of
Adjusted EBIT (after-tax) over Average Industrial Invested Capital), weighted 50% each, determined independently, and adjusted according to the
TSR multiplier. The payout of the two independent metrics ranges from 50% at threshold results to a cap of 200% at or above outstanding results.
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.
2022-2024 LTIP Awards
In February 2022, the Board of Directors approved the equity incentive plan in which employees and executive directors may participate. In May
2022, the Company issued approximately 2 million of PSUs to its key executive officers and select employees. The Executive Directors (CEO and
Chairperson) have only been awarded PSUs.
The PSUs will vest on 28 February 2025 after the end of the performance period, based on the achievement of each target determined
independently related to: (i) 3 years average of the Adjusted EBIT Margin %, weighted 40%; (ii) Relative Total Shareholder Return (\u201cRelative TSR\u201d
is the annualised rate of return, reflecting stock price performance, and compared to a pre-selected comparator group), weighted 40% and (iii)
CO2% reduction over the 3 years compared to 2019, weighted 20%. The payout ranges from 50% of target award to a cap of 200% of target
award. The Adjusted EBIT Margin % and CO2 Reduction % metrics payout 50% of target award at threshold, 100% at target achievement and
capped at 200% of target award for outstanding performance. No payout below threshold results. Relative TSR only pays out at or above target
(median ranking) and is also capped at 200% of target award for 1st place ranking among the comparator companies.
The fair values of the awards are calculated using the Monte Carlo Simulation model. As almost all the awards of total awards issued during 2022
were issued on 5 May 2022, the key assumptions utilized to calculate the grant-date fair values for awards issued on this grant date are listed
below:
| |
| Key Assumptions for awards issued on 5 May 2022 |
Grant date stock price (in \u20ac) | |
| |
| |
| |
Restricted Share Units
2021-2023 LTIP Awards from the Demerger
Under the CNH Industrial EIP, 1.0 million of nonvested RSUs on CNH Industrial N.V.'s shares related to Iveco Group key executive officers and
select employees where outstanding at 31 December 2021. As a result of the Demerger, such nonvested RSUs outstanding were converted to
1.6 million awards on Iveco Group N.V.'s shares.
The RSUs will set to vest 50% on 30 April 2023 and 50% on 30 April 2024. The RSUs vest upon a time-based service requirement.
2022-2024 LTIP Awards
In February 2022, the Board of Directors approved the equity incentive plan in which employees and executive directors may participate. In May
2022, the Company issued 1 million of RSUs to its key executive officers and select employees.
The RSUs will vest on 28 February 2025, subject only to the participant\u2019s continuing service as officer, director or employee of the Company. The
fair value of the award is measured using the stock price on the grant date adjusted for the present value of future dividends that employees will
not receive during the vesting period.
In October and November 2022, Iveco Group issued total 80 thousands RSUs to select employees, set to vest on 28 February 2025.
The following table reflects the activity of RSUs under the 2021-2023 LTIP Awards from the Demerger and the 2022-2024 LTIP Awards during the
year ended 31 December 2022:
| | |
| | |
| | Weighted average grant date fair value (in \u20ac) |
Nonvested at beginning of year | | |
| | |
| | |
| | |
| | |
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22. Provisions for employee benefits
Iveco Group 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. Iveco Group provides post-employment benefits under defined contribution and defined benefit plans.
In the case of defined contribution plans, Iveco Group makes contributions to publicly or privately administered pension insurance plans on a
mandatory, contractual, or voluntary basis. Once the contributions have been made, Iveco Group has no further payment obligations. Iveco Group
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 31 December 2022 and 2021, Iveco Group
recorded expenses of approximately \u20ac296 million and \u20ac259 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 Iveco Group on the basis of the type of
benefit provided as Pension plans and Other post-employment benefits.
Pension plans
Pension obligations primarily comprise the obligations of Iveco Group\u2019s pension plans in the U.K., Germany and Switzerland.
Under these plans, contributions are made to a separate fund (trust) that independently administers the plan assets. Iveco Group\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 U.K. Iveco Group 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.
Other post-employment benefits
Other post-employment benefits consist of obligations for Italian Employee Leaving Entitlements up to 31 December 2006, loyalty bonus in Italy
and various other similar plans in France, Germany, and Belgium. Until 31 December 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 31 December 2006. Loyalty bonus is
accrued for employees who have reached pre-defined 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. Other post-employment benefits also include plan obligations for
healthcare and insurance plans granted to Iveco Group employees in France.
Provisions for employee benefits at 31 December 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 | | | |
Assumptions
The following significant assumptions were utilized in determining the funded status at 31 December 2022 and 2021, and the expense of Iveco
Group\u2019s defined benefit plans for the years ended 31 December 2022 and 2021:
| | | |
| | | Assumptions used to determine funded status at year-end |
| | | |
| | | Other post-employment benefits |
Weighted-average discount rates | | | |
Weighted-average rate of compensation increase | | | |
| | | |
| | | Other post-employment benefits |
Weighted-average discount rates | | | |
Weighted-average rate of compensation increase | | | |
| | | |
| | | Assumptions used to determine expense at year-end |
| | | |
| | | Other post-employment benefits |
Weighted-average discount rates \u2013 current service cost | | | |
Weighted-average discount rates \u2013 interest cost | | | |
Weighted-average rate of compensation increase | | | |
| | | |
| | | Other post-employment benefits |
Weighted-average discount rates \u2013 current service cost | | | |
Weighted-average discount rates \u2013 interest cost | | | |
Weighted-average rate of compensation increase | | | |
Assumed discount rates are used in measurements of pension and other post-employment benefit obligations and net interest on the net defined
benefit liability/asset. Iveco Group 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 euros. The
discount rates 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, 31 December. The benefit cash flow-matching approach involves analyzing Iveco Group\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.
Iveco Group reviews annually the mortality assumptions used in measurements of its pension, healthcare and other post-employment benefit
obligations. Consideration is given to the assumptions used in the latest local funding valuations, and the latest tables applicable in each country.
For major plans in France and Germany, Iveco Group 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.
For plans in Italy, discount rate is set locally and interest cost is based on first year rate of the Euro Composite AA curve. For all other plans
service cost and interest cost are calculated based on a single discount rate.
Assumed discount 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 31 December 2022 | | | |
Effect on other post-employment defined benefit obligation at 31 December 2022 | | | |
Plan assets
The investment strategy for the plan assets depends on the features of the plan and on the maturity of the obligations. Typically, less mature plan
benefit obligations are funded by using more equity securities as they are expected to achieve long-term growth exceeding the rate of inflation.
More mature plan benefit obligations are funded using more fixed income securities as they are expected to produce current income with limited
volatility. Risk management practices include the use of multiple asset classes and investment managers within each asset class for
diversification purposes. Specific guidelines for each asset class and investment manager are implemented and monitored. Plan assets do not
include treasury shares of the Company or properties occupied by Group companies.
The fair value of plan assets at 31 December 2022 and 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 31 December 2022 |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
Other types of investments (1) | | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
(1) This category includes primarily commingled funds.
| | | | | | | |
| Fair value of plan assets at 31 December 2021 |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
Other types of investments (1) | | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
(1) This category includes primarily commingled funds.
Contribution
Iveco Group expects to contribute approximately \u20ac8 million to its pension plans in 2023. The benefit expected to be paid from the benefit plans,
which reflect expected future years of service, are as follows:
| | | | | | | | | | | | | |
| Expected benefit payments |
| | | | | | | | | | | | | |
Post-employment benefits: | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Total Post-employment benefits | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Other long-term employee benefits | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | |
| | | | | | | Release to income and other changes | | |
Warranty and technical assistance provision | | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
The warranty and technical assistance provision represents management\u2019s best estimate of commitments given by the Group for contractual,
legal or constructive obligations arising from product warranties given for a specified period of time which begins at the date of delivery to the
customer. This estimate has been calculated considering past experience and specific contractual terms. This provision also includes
management\u2019s best estimate of the costs that are expected to be incurred in connection with product defects that could result in a larger recall of
vehicles. This provision for risks is developed through an assessment of reported damages or returns on a case-by-case basis.
The provision for other risks represents the amounts set aside by the individual companies of the Group principally in connection with contractual
and commercial risks and disputes. The more significant balances of this provision are as follows:
| | | |
| | | |
| | | |
Marketing and sales incentives programs | | | |
Legal proceedings and other disputes | | | |
Other reserves for risks and charges | | | |
| | | |
Assumptions
The following significant assumptions were utilized in determining the funded status at 31 December 2022 and 2021, and the expense of Iveco
Group\u2019s defined benefit plans for the years ended 31 December 2022 and 2021:
| | | |
| | | Assumptions used to determine funded status at year-end |
| | | |
| | | Other post-employment benefits |
Weighted-average discount rates | | | |
Weighted-average rate of compensation increase | | | |
| | | |
| | | Other post-employment benefits |
Weighted-average discount rates | | | |
Weighted-average rate of compensation increase | | | |
| | | |
| | | Assumptions used to determine expense at year-end |
| | | |
| | | Other post-employment benefits |
Weighted-average discount rates \u2013 current service cost | | | |
Weighted-average discount rates \u2013 interest cost | | | |
Weighted-average rate of compensation increase | | | |
| | | |
| | | Other post-employment benefits |
Weighted-average discount rates \u2013 current service cost | | | |
Weighted-average discount rates \u2013 interest cost | | | |
Weighted-average rate of compensation increase | | | |
Assumed discount rates are used in measurements of pension and other post-employment benefit obligations and net interest on the net defined
benefit liability/asset. Iveco Group 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 euros. The
discount rates 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, 31 December. The benefit cash flow-matching approach involves analyzing Iveco Group\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.
Iveco Group reviews annually the mortality assumptions used in measurements of its pension, healthcare and other post-employment benefit
obligations. Consideration is given to the assumptions used in the latest local funding valuations, and the latest tables applicable in each country.
For major plans in France and Germany, Iveco Group 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.
For plans in Italy, discount rate is set locally and interest cost is based on first year rate of the Euro Composite AA curve. For all other plans
service cost and interest cost are calculated based on a single discount rate.
Assumed discount 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 31 December 2022 | | | |
Effect on other post-employment defined benefit obligation at 31 December 2022 | | | |
Plan assets
The investment strategy for the plan assets depends on the features of the plan and on the maturity of the obligations. Typically, less mature plan
benefit obligations are funded by using more equity securities as they are expected to achieve long-term growth exceeding the rate of inflation.
More mature plan benefit obligations are funded using more fixed income securities as they are expected to produce current income with limited
volatility. Risk management practices include the use of multiple asset classes and investment managers within each asset class for
diversification purposes. Specific guidelines for each asset class and investment manager are implemented and monitored. Plan assets do not
include treasury shares of the Company or properties occupied by Group companies.
The fair value of plan assets at 31 December 2022 and 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 31 December 2022 |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
Other types of investments (1) | | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
(1) This category includes primarily commingled funds.
| | | | | | | |
| Fair value of plan assets at 31 December 2021 |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
Other types of investments (1) | | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
(1) This category includes primarily commingled funds.
Contribution
Iveco Group expects to contribute approximately \u20ac8 million to its pension plans in 2023. The benefit expected to be paid from the benefit plans,
which reflect expected future years of service, are as follows:
| | | | | | | | | | | | | |
| Expected benefit payments |
| | | | | | | | | | | | | |
Post-employment benefits: | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Total Post-employment benefits | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Other long-term employee benefits | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | |
| |
| | Due between one and five years | | |
| | | | |
| | | | |
| | | | |
Payables represented by securities | | | | |
| | | | |
| | | | |
| | | | |
| | | | |
Total Debt was \u20ac4,433 million 31 December 2022, a decrease of \u20ac1,352 million compared to 31 December 2021 as a result of the reduction in
financial payables to CNH Industrial (included in the line item \"Other\" for an amount of \u20ac3,076 million at 31 December 2021 and almost entirely
settled following the Demerger), partially offset by the drawing of the \u20ac500 million term loans and by the increase of Asset-backed financing
related to the receivables portfolio.
The item Asset-backed financing represents the financing received through both asset-backed commercial paper (\u201cABCP\u201d) and factoring
transactions which do not meet IFRS 9 derecognition requirements and are recognized as assets in the statement of financial position.
In 2022, \u20ac67 million for the principal portion of Lease liabilities and \u20ac5 million for interest expenses related to lease liabilities were paid. In 2021,
\u20ac69 million for the principal portion of Lease liabilities and \u20ac5 million for interest expenses related to lease liabilities were paid.
The following table sets out a maturity analysis of Lease liabilities at 31 December 2022 and 2021:
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
Total undiscounted lease payments | | | |
| | | |
| | | |
31 December 2022 (\u20ac73\u00a0million outstanding at 31 December 2021).
As of 31 December 2022, the credit rating assigned by Fitch Ratings to Iveco Group N.V. is a Long-Term Issuer Default Rating (IDR) of \u2018BBB-\u2019.
The outlook is stable.
For further information on the management of interest rate and currency risk reference should be made to Note 30.
At 31 December 2022 and 2021, there was no significant debt secured with mortgages and other liens on assets of the Group, and the total
carrying amount of assets acting as security was not significant at 31 December 2022 and 2021. In addition, the Group\u2019s assets include current
receivables and cash with a pre-determined use reserved primarily to settle asset-backed financing of \u20ac3,149 million at 31 December 2022
(\u20ac1,926 million at 31 December 2021)
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25. Trade payables
An analysis by due date of Trade payables is as follows:
| | | | | | | |
| |
| | | Due between one and five years | | | | |
| | | | | | | |
Contract liabilities primarily relate to extended warranties/maintenance and repair contracts, and transactions for the sale of vehicles with a buy-
back commitment. Contract liabilities include \u20ac619 million at 31 December 2022 (\u20ac658 million at 31 December 2021) for future rents related to
buy-back agreements. Changes in Contract liabilities for the years ended 31 December 2022 and 2021 are as follows:
| | | | | | | | | |
| | | Additional amounts arising during the period | | Amounts recognized within revenue | | Translation differences and other changes | | |
| | | | | | | | | |
| | | | | | | | | |
| | | Additional amounts arising during the period | | Amounts recognized within revenue | | Translation differences and other changes | | |
| | | | | | | | | |
Advances on buy-back agreements includes the repurchase value of the vehicle relating to new vehicles sold with the buy-back commitment from
Commercial and Specialty Vehicles included in Property, plant and equipment, as described in section \u201cSignificant accounting policies\u201d.
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26. Other current liabilities
An analysis of Other current liabilities is as follows:
| | | |
| | | |
Advances on buy-back agreements | | | |
| | | |
| | | |
Accrued expenses and deferred income | | | |
| | | |
| | | |
| | | |
Total Other current liabilities | | | |
Contract liabilities primarily relate to extended warranties/maintenance and repair contracts, and transactions for the sale of vehicles with a buy-
back commitment. Contract liabilities include \u20ac619 million at 31 December 2022 (\u20ac658 million at 31 December 2021) for future rents related to
buy-back agreements. Changes in Contract liabilities for the years ended 31 December 2022 and 2021 are as follows:
| | | | | | | | | |
| | | Additional amounts arising during the period | | Amounts recognized within revenue | | Translation differences and other changes | | |
| | | | | | | | | |
| | | | | | | | | |
| | | Additional amounts arising during the period | | Amounts recognized within revenue | | Translation differences and other changes | | |
| | | | | | | | | |
Advances on buy-back agreements includes the repurchase value of the vehicle relating to new vehicles sold with the buy-back commitment from
Commercial and Specialty Vehicles included in Property, plant and equipment, as described in section \u201cSignificant accounting policies\u201d.
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27. Commitments and contingencies
As a global company with a diverse business portfolio, the Iveco Group, 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. All significant matters are described below.
The outcome of any current or future proceedings, claims, or investigations cannot be predicted with certainty. Adverse decisions in some of
these proceedings, claims, or investigations could require the Iveco Group 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 the Iveco Group\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, Iveco Group recognizes specific provisions for this purpose. Contingent liabilities estimated by the Group, for which no
provisions have been recognized since an outflow of resources is not considered probable at the present time, were not material at 31 December
2022 and 2021.
Although the ultimate outcome of legal matters pending against the Iveco Group and its subsidiaries cannot be predicted, the Iveco Group
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, except for the following cases.
Other litigation and investigation
Follow on Damages Claims: in 2011 Iveco S.p.A. and Iveco Magirus AG (together \"Iveco\"), which, following the Demerger, are now part of Iveco
Group N.V., and its competitors in the European Union were subject to an investigation by the European Commission (the \u201cCommission\u201d) into
certain business practices in the European Union (in the period 1997-2011) in relation to Medium & Heavy trucks. On 19 July 2016, the
Commission announced a settlement with CNH Industrial (\"the Decision\") including a settlement with Iveco. In particular, Iveco received a
reduction in its fine for cooperating with the European Commission throughout the investigation, and received a fine of \u20ac494.6 million. Similar
decisions were taken, by the Commission, with reference to the other competitors. Following the Decision, Iveco S.p.A. and Iveco Magirus AG
(\"IMAG\") have been named as defendants in many proceedings across Europe and Israel. These damage claims could result in substantial
liabilities for the Group as well as incurring in significant defense costs, which may have a material adverse effect on its operations and financial
condition. The extent and outcome of these claims, in the absence of any final judgement, cannot be reliably predicted at this time and, therefore,
the Group did not recognize any specific provision for these claims. This current position will be reassessed from time to time and updated as
necessary. In accordance with IAS 37 \u2013 Provisions, Contingent Liabilities and Contingent Assets (paragraph 92), no further information is
disclosed so as not to prejudice the Group\u2019s position
FPT Emissions Investigation: on 22 July 2020, a number of CNH Industrial'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. (\"FPT\"), which is now part of the Iveco Group N.V., installed in certain Ducato (a vehicle
manufactured and distributed by Stellantis) and Iveco Daily vehicles. FPT is providing its full cooperation to properly address the requests
received. FPT, other companies of Iveco Group, and in certain instances CNH Industrial and other third parties have received various requests for
compensation by German and Austrian customers on various contractual and tort grounds, including requests for damages resulting out of 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 type approval regulations regarding emissions. In certain instances, other customers have brought judicial claims on
the same legal and factual bases. Although, at the date hereof, Iveco Group has no evidence of any wrongdoing, it 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. Therefore, Iveco Group did not recognize any specific provision in relation to this investigation.
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27. Commitments and contingencies
As a global company with a diverse business portfolio, the Iveco Group, 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. All significant matters are described below.
The outcome of any current or future proceedings, claims, or investigations cannot be predicted with certainty. Adverse decisions in some of
these proceedings, claims, or investigations could require the Iveco Group 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 the Iveco Group\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, Iveco Group recognizes specific provisions for this purpose. Contingent liabilities estimated by the Group, for which no
provisions have been recognized since an outflow of resources is not considered probable at the present time, were not material at 31 December
2022 and 2021.
Although the ultimate outcome of legal matters pending against the Iveco Group and its subsidiaries cannot be predicted, the Iveco Group
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, except for the following cases.
Other litigation and investigation
Follow on Damages Claims: in 2011 Iveco S.p.A. and Iveco Magirus AG (together \"Iveco\"), which, following the Demerger, are now part of Iveco
Group N.V., and its competitors in the European Union were subject to an investigation by the European Commission (the \u201cCommission\u201d) into
certain business practices in the European Union (in the period 1997-2011) in relation to Medium & Heavy trucks. On 19 July 2016, the
Commission announced a settlement with CNH Industrial (\"the Decision\") including a settlement with Iveco. In particular, Iveco received a
reduction in its fine for cooperating with the European Commission throughout the investigation, and received a fine of \u20ac494.6 million. Similar
decisions were taken, by the Commission, with reference to the other competitors. Following the Decision, Iveco S.p.A. and Iveco Magirus AG
(\"IMAG\") have been named as defendants in many proceedings across Europe and Israel. These damage claims could result in substantial
liabilities for the Group as well as incurring in significant defense costs, which may have a material adverse effect on its operations and financial
condition. The extent and outcome of these claims, in the absence of any final judgement, cannot be reliably predicted at this time and, therefore,
the Group did not recognize any specific provision for these claims. This current position will be reassessed from time to time and updated as
necessary. In accordance with IAS 37 \u2013 Provisions, Contingent Liabilities and Contingent Assets (paragraph 92), no further information is
disclosed so as not to prejudice the Group\u2019s position
FPT Emissions Investigation: on 22 July 2020, a number of CNH Industrial'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. (\"FPT\"), which is now part of the Iveco Group N.V., installed in certain Ducato (a vehicle
manufactured and distributed by Stellantis) and Iveco Daily vehicles. FPT is providing its full cooperation to properly address the requests
received. FPT, other companies of Iveco Group, and in certain instances CNH Industrial and other third parties have received various requests for
compensation by German and Austrian customers on various contractual and tort grounds, including requests for damages resulting out of 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 type approval regulations regarding emissions. In certain instances, other customers have brought judicial claims on
the same legal and factual bases. Although, at the date hereof, Iveco Group has no evidence of any wrongdoing, it 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. Therefore, Iveco Group did not recognize any specific provision in relation to this investigation.
Commitments and guarantees
Iveco Group provided guarantees on the debt or commitments of third parties and performance guarantees mainly in the interest of an associate
providing financing solutions to customers and a joint venture related to commercial commitments of defense vehicles, totaling \u20ac409 million and
\u20ac452 million as of 31 December 2022 and 2021, respectively.
",
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Commitments and guarantees
Iveco Group provided guarantees on the debt or commitments of third parties and performance guarantees mainly in the interest of an associate
providing financing solutions to customers and a joint venture related to commercial commitments of defense vehicles, totaling \u20ac409 million and
\u20ac452 million as of 31 December 2022 and 2021, respectively.
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28. Segment reporting
The segment information disclosed in these Consolidated Financial Statements reflects the identifiable reporting segments of the Company and
the financial information that the Chief Operating Decision Maker (\u201cCODM\u201d) reviewed to assess performance and make decisions about resource
allocation. The segments are organized based on products and services provided by Iveco Group.
Iveco Group has three operating segments:
\u25aaCommercial and Specialty Vehicles designs, manufactures and distributes a full range of light, medium, and heavy vehicles for the
transportation and distribution of goods under the IVECO brand, city-buses, commuter buses under the IVECO BUS (previously Iveco Irisbus)
and HEULIEZ BUS brands, quarry and mining equipment under the IVECO ASTRA brand, firefighting vehicles under the MAGIRUS brand, and
vehicles for civil defense and peace-keeping missions under the IDV brand.
\u25aaPowertrain designs, manufactures and distributes, under the FPT Industrial brand, a range of combustion engines, alternative propulsion
systems, transmission systems and axles for on- and off-road applications, as well as for marine and power generation.
\u25aaFinancial Services offers a range of financial products and services to dealers and customers. Financial Services provides and administers
retail financing to customers for the purchase or lease of new and used vehicles sold by brand dealers and distributors of the Group or directly
by subsidiaries of the Group. In addition, Financial Services provides wholesale financing to brand dealers and distributors of the Group.
Wholesale financing consists primarily of floor plan financing and allows the dealers to purchase and maintain a representative inventory of
products. Financial Services also provides trade receivables factoring services to Iveco Group Industrial Activities legal entities. Additionally,
Financial Services grants support to CNH Industrial, by providing financial services for their European brands, dealers and customers under a
vendor and service agreement, receiving a fee for the services rendered.
The activities carried out by the two industrial segments Commercial and Specialty Vehicles and Powertrain, and as well as by the holding
company Iveco Group N.V., 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 the segment performance and make decisions about resource allocation
based upon Adjusted EBIT, which is deemed to more fully reflect Industrial Activities segments' profitability. With reference to Financial Services,
historically and through 2021, the CODM assessed the performance of the segment and made decisions about resource allocation on the basis of
net income. Effective 1 January 2022, the CODM began to assess Financial Services segment performance and make decisions about resource
allocation on the basis of Adjusted EBIT, which now Iveco Group believes more fully reflect segment profitability. Adjusted EBIT is defined as
EBIT before restructuring costs and non-recurring items. In particular, non-recurring items are specifically disclosed items that management
considers rare or discrete events that are infrequent in nature and not reflective of on-going operational activities.
The following table summarizes Adjusted EBIT by reportable segment:
| | | |
| | | |
Commercial and Specialty Vehicles | | | |
| | | |
Unallocated items, eliminations and other | | | |
Adjusted EBIT of Industrial Activities | | | |
| | | |
| | | |
| | | |
A reconciliation from Adjusted EBIT to Iveco Group's consolidated Profit/(loss) before taxes for the years ended 31 December 2022 and 2021 is
provided below:
| | | |
| | | |
Adjusted EBIT of Industrial Activities | | | |
Adjusted EBIT of Financial Services | | | |
| | | |
| | | |
| | | |
Financial income/(expenses) | | | |
Profit/(loss) before taxes | | | |
(1) In the year ended 31 December 2022, this item primarily includes \u20ac44 million charge in connection with our Russian and Ukrainian operations, due to the impairment of certain assets,
\u20ac14 million related to the first time adoption of hyperinflationary accounting in T\u00fcrkiye, \u20ac30 million spin-off costs, \u20ac40 million loss for the impairment of certain development costs and
other assets, primarily related to the bus business, as a consequence of the acceleration in emission-related technological transition, \u20ac4 million related to the impairment of certain
assets held for sale, \u20ac36 million gain on the final step of Chinese joint ventures\u2019 restructuring, and \u20ac52 million gain from the disposal of certain fixed assets in Australia. In the year
ended 31 December 2021, this item primarily included the pre- and after-tax gain of \u20ac8 million from the sale of a 30.1% interest in Naveco, as well as the positive impact of \u20ac11 million
from the sale of investments by a joint venture accounted for under the equity method, \u20ac46 million spin-off costs, and a loss of \u20ac21 million due to the impairment of certain assets held
for sale.
No segment asset is expected to be reported to the CODM for assessing performance and allocating resources. Additional reportable segment
information is provided as follows.
Additional reportable segment information
Net Revenues by reportable segment for the years ended 31 December 2022 and 2021 are provided in Note 1.
Depreciation and amortization by reportable segment for the years ended 31 December 2022 and 2021 are provided below:
| | | |
| | | |
Commercial and Specialty Vehicles | | | |
| | | |
Unallocated items, eliminations and other | | | |
Total Industrial Activities | | | |
| | | |
Total Depreciation and Amortization(*) | | | |
(*)\u00a0 Excluding depreciation of assets on operating lease and assets sold with buy-back commitment.
Expenditures for long-lived assets by operating segments for the years ended 31 December 2022 and 2021 are provided below:
| | | |
| | | |
Commercial and Specialty Vehicles | | | |
| | | |
Unallocated items, eliminations and other | | | |
Total Industrial Activities | | | |
| | | |
Total Expenditures for long-lived assets(*) | | | |
(*) Excluding vehicles sold under buy-back commitments and operating leases.
29. Information by geographical area
The Company has its principal office in Turin, Italy. Revenues earned in Italy from external customers were \u20ac2,777 million and \u20ac2,582 million in
2022 and 2021, respectively. Revenues earned in the rest of the world from external customers were \u20ac11,580 million and \u20ac10,069 million in 2022
and 2021, respectively. The following table highlights revenues earned from external customers in the rest of the world by destination:
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
South East and Japan Sub-region, excluding Pakistan | | | |
| | | |
T\u00fcrkiye, Caucasus and South Central Asia Sub-region | | | |
| | | |
| | | |
| | | |
| | | |
| | | |
Australia and New Zealand | | | |
| | | |
| | | |
| | | |
| | | |
| | | |
Total revenues from external customers in the rest of the world | | | |
Total non-current assets located in Italy, excluding financial assets, deferred tax assets, defined benefit assets and rights arising under insurance
contracts, were \u20ac2,088 million and \u20ac1,859 million at 31 December 2022 and 2021, respectively, and the total of such assets located in the rest of
the world totaled \u20ac2,813 million and \u20ac3,115 million at 31 December 2022 and 2021, respectively. The following highlights non-current assets by
geographical area in the rest of the world:
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
Total non-current assets in the rest of the world | | | |
In 2022 and 2021, no single external customer of Iveco Group accounted for 10 per cent or more of consolidated revenues.
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28. Segment reporting
The segment information disclosed in these Consolidated Financial Statements reflects the identifiable reporting segments of the Company and
the financial information that the Chief Operating Decision Maker (\u201cCODM\u201d) reviewed to assess performance and make decisions about resource
allocation. The segments are organized based on products and services provided by Iveco Group.
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Market risk
We operate in numerous markets worldwide and are exposed to market risks stemming from fluctuations in currency and interest rates.
The exposure to foreign currency risk arises both in connection with the geographical distribution of our industrial activities compared to the
markets in which we sell our products, and in relation to the use of external borrowing denominated in foreign currencies.
The exposure to interest rate risk arises from the need to fund industrial and financial operating activities and the necessity to deploy surplus
funds. Changes in market interest rates may have the effect of either increasing or decreasing our profit/(loss), thereby indirectly affecting the
costs and returns of financing and investing transactions.
We regularly assess our exposure to foreign currency and interest rate risk and manage those risks through the use of derivative financial
instruments in accordance with our established risk management policies.
Our policy permits derivatives to be used only for managing the exposure to fluctuations in exchange and interest rates connected with future
cash flows and assets and liabilities, and not for speculative purposes.
We utilize derivative financial instruments designated as fair value hedges, mainly to hedge:
\u25aathe currency risk on financial instruments denominated in foreign currency;
\u25aathe interest rate risk on fixed rate loans and borrowings.
The instruments used for these hedges are mainly currency swaps, forward contracts, interest rate swaps and combined interest rate and
currency financial instruments.
We use derivative financial instruments as cash flow hedges for the purpose of pre-determining:
\u25aathe exchange rate at which forecasted transactions denominated in foreign currencies will be accounted for;
\u25aathe interest paid on borrowings, both to match the fixed interest received on loans (customer financing activity), and to achieve a pre-defined
mix of floating versus fixed rate funding structured loans.
The exchange rate exposure on forecasted commercial flows is hedged by currency swaps, forward contracts and currency options. Interest rate
exposures are usually hedged by interest rate swaps and, in limited cases, by forward rate agreements.
Counterparties to these agreements are major and diverse financial institutions.
Information on the fair value of derivative financial instruments held at the balance sheet date is provided in Note 18 \u201cDerivative assets and
Derivative liabilities\u201d.
Currency risk
We are exposed to risk resulting from changes in exchange rates, which can affect our earnings and invested equity.
Where one of our subsidiaries incurs costs in a currency different from that of its revenues, any change in exchange rates can affect the profit/
(loss) of that company. In 2022 the total net trade flows exposed to currency risk amounted to the equivalent of 13% of our revenue (9% in 2021).
The principal exchange rates to which we are exposed are the following:
\u25aaEUR/GBP, predominately in relation to sales on the U.K. market;
\u25aaEUR/BRL, predominately in relation to import on the Brazilian market;
\u25aaEUR/TRY, predominately in relation to sales on the T\u00fcrkiye market;
\u25aaEUR/PLN, predominately in relation to sales on the Polish market;
\u25aaEUR/CZK, predominately in relation to the production of Commercial and Specialty Vehicles (Bus) in Czech Republic.
Trade flows exposed to changes in these exchange rates in 2022 made up approximately 67% of the exposure to currency risk from trade
transactions.
It is the Group\u2019s policy to use derivative financial instruments to hedge a pre-determined 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 risk
beyond that date where it is believed to be appropriate) and to hedge completely the exposure resulting from firm commitments.
Group\u2019s 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 foreign currencies different from the subsidiary\u2019s functional
currency.
Group\u2019s subsidiaries may have functional currency different from the euro, which is the Group presentation currency. The income statements of
those subsidiaries are converted into euros 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 euros.
The assets and liabilities of consolidated companies whose functional currency is different from the euro may acquire converted values in euros
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).
We monitor our principal exposure to translation exchange risk, although there was no specific hedging in place at 31 December 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 31 December 2022 resulting from a hypothetical change of 10% in the exchange rates amounts to
approximately \u20ac291 million (\u20ac187 million at 31 December 2021). The valuation model for currency options assumes that market volatility at year-
end remains unchanged.
The underlying transactions (consisting of receivables, payables, and future trade flows) for which we put in place, as hedging transactions, the
derivative financial instruments analyzed in the above mentioned sensitivity analysis, were not considered. 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), financing themselves 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) will be reformed by the authority and gradually replaced with alternative benchmark
rates (SOFR). Despite the uncertainty around the timing and precise nature of these changes, the existing benchmark interest rates are still
applied as reference rates.
Group Treasury is managing the Group\u2019s IBOR transition plan. The greatest change will be amendments to the contractual terms of the IBOR-
referenced floating-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 floating-rate debt will move to SOFR at the beginning of July 2025 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 floating-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, ABCP, 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 31
December 2022, resulting from a hypothetical, unfavorable and instantaneous change of 10%\u00a0in market interest rates, would have been
approximately \u20ac1 million (\u20ac1 million at 31 December 2021).
Floating rate financial instruments consist principally of cash and cash equivalents, wholesale receivables, debt, and ABCPs. The effect of the
sale of receivables is also considered in the sensitivity analysis as well as the effect of hedging derivative instruments. This analysis doesn\u2019t
include cash and cash equivalent from hyperinflationary countries which could have distorting effects on the results of the analysis and the
change in fair value of foreign exchange rate derivatives instruments.
A hypothetical change of 10% in short-term interest rates at 31 December 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 \u20ac8 million (\u20ac5 million at 31 December 2021).
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 limited 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 31 December 2022 linked to commodity prices would not have been significant (not significant at 31 December 2021).
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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 31 December 2022 and 2021:
| | | | | | | | |
| | |
| | | | | | | | |
Equity investments measured at fair value through other comprehensive income | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | |
| | | | | | | | |
Equity investments measured at fair value through other comprehensive income | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
The following table provides a reconciliation from the opening balance to the closing balance for fair value measurements categorized in Level 3
in 2022 and 2021:
| | | |
| | | |
| | | |
| | | |
Gains/(Losses) recognized in Other comprehensive income/(loss) | | | |
Transfer from Level 3 to Level 1 | | | |
| | | |
| | | |
managers of Iveco Group with strategic responsibility and members of their families were also considered related parties.
As of 31 December 2022, based on public information available and in reference to Company's files, Exor N.V. held 42.5% of Iveco Group\u2019s
voting power and had the ability to significantly influence the decisions submitted to a vote of Iveco Group\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 Iveco Group N.V. as of 31 December 2022.
In addition, Iveco Group 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
Iveco Group did not enter into any significant transactions with Exor\u00a0N.V. during the years ended 31 December 2022 and 2021.
In connection with the establishment of Fiat Industrial (now CNH Industrial) through the demerger from Fiat (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 Iveco Group with administrative services such as accounting, 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. After the Demerger, the Stellantis MSA has been
duplicated at the same terms and conditions between Iveco Group and Stellantis.
Furthermore, Iveco Group and Stellantis might 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 | | | |
Iveco Group and CNH Industrial entered into agreements, primarily of commercial nature, but also covering general administrative and specific
technical matters as well as services provided by CNH Industrial N.V., as follows:
Master Service Agreements: in relation to certain services provided by either Iveco Group to CNH Industrial and vice versa, in connection with the
execution of the Demerger Deed, Iveco Group and CNH Industrial 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, in connection with the
execution of the Demerger Deed, Iveco Group and CNH Industrial entered into a ten-year Engine Supply Agreement (\u201cESA\u201d) whereby Iveco
Group will sell to CNH Industrial diesel, CNG and LNG engines and provide post-sale services.
Financial Service Agreement: in relation to certain financial services activities carried out by either Iveco Group to CNH Industrial or vice versa, in
connection with the execution of the Demerger Deed, Iveco Group and CNH Industrial 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.
Transactions with joint ventures
Iveco Group sells commercial vehicles and provides technical services to joint ventures such as IVECO - OTO MELARA Societ\u00e0 Consortile a
responsabilit\u00e0 limitata.
Net revenues from joint ventures totaled \u20ac260 million in 2022 (\u20ac398 million in 2021) and trade receivables from joint ventures totaled \u20ac14 million at
31 December 2022 (\u20ac3 million at 31 December 2021).
At 31 December 2022 and 2021, Iveco Group had provided guarantees on commitments of its joint ventures for an amount of \u20ac161 million and
\u20ac186 million, respectively, mainly related to IVECO - OTO MELARA Societ\u00e0 Consortile a responsabilit\u00e0 limitata.
Transactions with associates
Iveco Group sells trucks and commercial vehicles and provides services to associates. In 2022, revenues from associates totaled \u20ac89 million
(\u20ac190 million in 2021). In 2022, cost of sales from associates totaled \u20ac13 million (\u20ac15 million in 2021). At 31 December 2022 receivables from
associates amounted to \u20ac12 million (\u20ac11 million at 31 December 2021). Trade payables to associates amounted to \u20ac13 million at 31 December
2022 (\u20ac18\u00a0million at 31 December 2021). At 31 December 2022 and 2021, Iveco Group had provided guarantees on commitments of its
associates for an amount of \u20ac244 million and \u20ac256 million related to CNH Industrial Capital Europe S.a.S.
Transactions with unconsolidated subsidiaries
In the years ended 31 December 2022 and 2021, there were no material transactions with unconsolidated subsidiaries.
Compensation to Directors and Key Management
The fees of the Directors of Iveco Group 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 \u20ac7 million in 2022 (no compensation in 2021 as Iveco Group had not its separate Board of Directors during that year).
The aggregate expense incurred for the compensation of Executives with strategic responsibilities of the Group amounted to approximately
\u20ac15\u00a0million and \u20ac16 million in 2022, and 2021 respectively. These amounts included the notional compensation cost for share-based payments.
35. Companies included in the scope of the Consolidated Financial Statements
The main legal entities comprising the Iveco Group at 31 December 2022, including major subsidiaries, joint ventures and associates, are
provided below:
| | |
| | |
SUBSIDIARIES CONSOLIDATED LINE-BY-LINE | | |
Amce-Automotive Manufacturing Co.Ethiopia | | |
Astra Veicoli Industriali S.p.A. | | |
| | |
CNH Industrial Argentina S.A. | | |
CNH Industrial Finance France S.A. | | |
| | |
Fiat Powertrain Technologies (Chongqing) Co., Ltd. | | |
Fiat Powertrain Technologies Management (Shanghai) Co. Ltd. | | |
Fiat Powertrain Technologies of North America, Inc. | | |
FPT - Powertrain Technologies France SAS | | |
FPT INDUSTRIAL BRASIL LTDA. | | |
| | |
| | |
Green & Advanced Transport Ecosystem S.p.A. | | |
| | |
IAV-Industrie-Anlagen-Verpachtung GmbH | | |
IC Financial Services S.A. | | |
IC Financial Services UK Limited | | |
| | |
| | |
| | |
Iveco (China) Commercial Vehicle Sales Co. Ltd | | |
| | |
| | |
| | |
Iveco Arac Sanayi VE Ticaret A.S. | | |
| | |
| | |
| | |
| | |
IVECO CAPITAL BULGARIA EAD | | |
Iveco Capital Services S.R.L. | | |
Iveco Capital Slovakia s.r.o. | | |
Iveco Capital Solutions S.p.A. | | |
Iveco Czech Republic A.S. | | |
| | |
IVECO DEFENCE VEHICLES ROMANIA S.R.L. | | |
Iveco Defence Vehicles S.p.A. | | |
| | |
| | |
| | |
| | |
| | |
Iveco Group Switzerland SA | | |
| | |
| | |
| | |
| | |
| | |
Iveco Magirus Fire Fighting GmbH | | |
| | |
Iveco Nord Nutzfahrzeuge GmbH | | |
| | |
Iveco Nord-Ost Nutzfahrzeuge GmbH | | |
| | |
Iveco Otomotiv Ticaret A.S. | | |
Iveco Participations s.a.s. | | |
Iveco Pension Trustee Ltd | | |
| | |
Iveco Portugal-Comercio de Veiculos Industriais S.A. | | |
| | |
| | |
| | |
| | |
| | |
| | |
Iveco South Africa Works (Pty) Ltd | | |
Iveco Sud-West Nutzfahrzeuge GmbH | | |
| | |
| | |
| | |
Iveco Truck Centrum s.r.o. | | |
Iveco Truck Services S.R.L. | | |
Iveco Trucks Australia Limited | | |
| | |
Iveco West Nutzfahrzeuge GmbH | | |
MAGIRUS CAMIVA S.a.s. (societ\u00e8 par actions simplifi\u00e8e) | | |
| | |
| | |
| | |
Mediterranea de Camiones S.L. | | |
| | |
| | |
| | |
Potenza Technology Holdings Limited | | |
Potenza Technology Limited | | |
SAIC Fiat Powertrain Hongyan Co. Ltd. | | |
Seddon Atkinson Vehicles Ltd | | |
Soci\u00e9t\u00e9 Charolaise de Participations SAS | | |
Soci\u00e9t\u00e9 de Diffusion de Vehicules Industriels-SDVI S.A.S. | | |
| | |
Transolver Services S.A.S. | | |
UAB \"IVECO CAPITAL BALTIC\" (In liquidation) | | |
Zona Franca Alari Sepauto S.A. | | |
| | |
JOINTLY-CONTROLLED ENTITIES ACCOUNTED FOR USING THE EQUITY METHOD | | |
| | |
IVECO - OTO MELARA Societ\u00e0 Consortile a responsabilit\u00e0 limitata | | |
| | |
| | |
| | |
SUBSIDIARIES VALUED AT COST | | |
| | |
FPT INDUSTRIAL INDIA PRIVATE LIMITED | | |
| | |
| | |
ASSOCIATED COMPANIES ACCOUNTED FOR USING THE EQUITY METHOD | | |
CNH Industrial Capital Europe S.a.S.(2) | | |
Transolver Finance Establecimiento Financiero de Credito S.A. | | |
| | |
ASSOCIATED COMPANIES VALUED AT COST | | |
| | |
| | |
| | |
| | |
| | |
OTHER COMPANIES VALUED AT FVTPL | | |
Naveco (Nanjing IVECO Motor Co.) Ltd. | | |
(1) After the Demerger CIFINS S.p.A. is owned 50.00% by Iveco Group and 50.00% by CNH Industrial.
(2) This percentage represents the interest held by Iveco Group through its 50% interest in CIFINS S.p.A.
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32. Related party transactions
In accordance with IAS 24 \u2013 Related Party Disclosures, Iveco Group\u2019s related parties are companies and persons capable of exercising control,
joint control or significant influence over the Group. As of 31 December 2022 and 2021, related parties included Iveco Group\u2019s parent company
Exor N.V. and its subsidiaries and affiliates, including CNH Industrial post-Demerger, Stellantis N.V. (formerly Fiat Chrysler Automobiles N.V.
which, effective 16 January 2021, merged with Peugeot S.A. by means of a cross-border legal merger) and its subsidiaries and affiliates
(\"Stellantis\"), and Iveco Group's unconsolidated subsidiaries, associates or joint ventures. In addition, the members of the Board of Directors and
managers of Iveco Group with strategic responsibility and members of their families were also considered related parties.
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Compensation to Directors and Key Management
The fees of the Directors of Iveco Group 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 \u20ac7 million in 2022 (no compensation in 2021 as Iveco Group had not its separate Board of Directors during that year).
The aggregate expense incurred for the compensation of Executives with strategic responsibilities of the Group amounted to approximately
\u20ac15\u00a0million and \u20ac16 million in 2022, and 2021 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. 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.
The Cash flows for income tax payments net of refunds in 2022 amount to \u20ac99 million (\u20ac92 million in 2021).
Total interest of \u20ac119 million was paid and interest of \u20ac170 million was received in 2022 (interest of \u20ac36 million was paid and interest of \u20ac24 million
was received in 2021, respectively).
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 vehicles under buy-back commitments, 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.
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 | | | |
Liquidity absorbed by the increase in receivables from financing activities in 2022 was primarily a result of increased financing activities.
Cash generated by \u201cOther changes\u201d of \u20ac683 million in 2022 (\u20ac581 million in 2021) primarily derived from the change in receivables from and
payables to CNH Industrial.
For consideration for the acquisition and disposal of subsidiaries and of other investments, refer to section \"Business Combinations\" above and to
Note 14.
Financing activities
The net change in debt 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 above).
Changes in 2022 and 2021 are summarized as follows:
| | | |
| | | |
Change in asset-backed financing | | | |
Change in borrowings from banks and other debt | | | |
| | | |
| | | |
Net change in derivative assets and derivatives liabilities | | | |
Net change in debt and derivative assets/liabilities | | | |
Reconciliation of changes in liabilities arising from financing activities may be analyzed as follows:
| | | |
| | | |
Total Debt at beginning of year (1) | | | |
Derivative (assets)/liabilities at beginning of year | | | |
Total liabilities from financing activities at beginning of year | | | |
| | | |
| | | |
Total liabilities from financing activities at end of year | | | |
| | | |
Total Debt at end of year (1) | | | |
Derivative (assets)/liabilities at end of year | | | |
(1) Excluding Debt payable to CNH Industrial.
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34. Subsequent events
Iveco Group has evaluated subsequent events through 2 March 2023, which is the date the financial statements were authorized for issuance,
and identified the following:
\u25aaOn 24 January 2023, IDV, the brand of Iveco Group specialised in defence and civil protection equipment, announced it entered into an
agreement to acquire a controlling stake in MIRA UGV, the Uncrewed Ground Vehicle division of HORIBA MIRA, a global provider of
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}
},
"id3VybDovL2RvY3MudjEvZG9jOjQ4NDdjOTRhYThjNTQ3MDY5ZDk1MmQzN2Q4YTIzOTBmL3NlYzo0ODQ3Yzk0YWE4YzU0NzA2OWQ5NTJkMzdkOGEyMzkwZl82MTYvZnJhZzo2ZTZmMTkzODk5Njk0ODMzOWEzZGYzZmNkZWZiN2ExYy90ZXh0cmVnaW9uOjZlNmYxOTM4OTk2OTQ4MzM5YTNkZjNmY2RlZmI3YTFjXzMyOTg1MzQ4ODQyNjk_d802267c-f6bd-4df7-8594-59ce8b74713a": {
"value": "
35. Companies included in the scope of the Consolidated Financial Statements
The main legal entities comprising the Iveco Group at 31 December 2022, including major subsidiaries, joint ventures and associates, are
provided below:
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SUBSIDIARIES CONSOLIDATED LINE-BY-LINE | | |
Amce-Automotive Manufacturing Co.Ethiopia | | |
Astra Veicoli Industriali S.p.A. | | |
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CNH Industrial Argentina S.A. | | |
CNH Industrial Finance France S.A. | | |
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Fiat Powertrain Technologies (Chongqing) Co., Ltd. | | |
Fiat Powertrain Technologies Management (Shanghai) Co. Ltd. | | |
Fiat Powertrain Technologies of North America, Inc. | | |
FPT - Powertrain Technologies France SAS | | |
FPT INDUSTRIAL BRASIL LTDA. | | |
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Green & Advanced Transport Ecosystem S.p.A. | | |
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IAV-Industrie-Anlagen-Verpachtung GmbH | | |
IC Financial Services S.A. | | |
IC Financial Services UK Limited | | |
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Iveco (China) Commercial Vehicle Sales Co. Ltd | | |
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Iveco Arac Sanayi VE Ticaret A.S. | | |
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IVECO CAPITAL BULGARIA EAD | | |
Iveco Capital Services S.R.L. | | |
Iveco Capital Slovakia s.r.o. | | |
Iveco Capital Solutions S.p.A. | | |
Iveco Czech Republic A.S. | | |
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IVECO DEFENCE VEHICLES ROMANIA S.R.L. | | |
Iveco Defence Vehicles S.p.A. | | |
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Iveco Group Switzerland SA | | |
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Iveco Magirus Fire Fighting GmbH | | |
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Iveco Nord Nutzfahrzeuge GmbH | | |
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Iveco Nord-Ost Nutzfahrzeuge GmbH | | |
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Iveco Otomotiv Ticaret A.S. | | |
Iveco Participations s.a.s. | | |
Iveco Pension Trustee Ltd | | |
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Iveco Portugal-Comercio de Veiculos Industriais S.A. | | |
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Iveco South Africa Works (Pty) Ltd | | |
Iveco Sud-West Nutzfahrzeuge GmbH | | |
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Iveco Truck Centrum s.r.o. | | |
Iveco Truck Services S.R.L. | | |
Iveco Trucks Australia Limited | | |
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Iveco West Nutzfahrzeuge GmbH | | |
MAGIRUS CAMIVA S.a.s. (societ\u00e8 par actions simplifi\u00e8e) | | |
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Mediterranea de Camiones S.L. | | |
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Potenza Technology Holdings Limited | | |
Potenza Technology Limited | | |
SAIC Fiat Powertrain Hongyan Co. Ltd. | | |
Seddon Atkinson Vehicles Ltd | | |
Soci\u00e9t\u00e9 Charolaise de Participations SAS | | |
Soci\u00e9t\u00e9 de Diffusion de Vehicules Industriels-SDVI S.A.S. | | |
| | |
Transolver Services S.A.S. | | |
UAB \"IVECO CAPITAL BALTIC\" (In liquidation) | | |
Zona Franca Alari Sepauto S.A. | | |
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JOINTLY-CONTROLLED ENTITIES ACCOUNTED FOR USING THE EQUITY METHOD | | |
| | |
IVECO - OTO MELARA Societ\u00e0 Consortile a responsabilit\u00e0 limitata | | |
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SUBSIDIARIES VALUED AT COST | | |
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FPT INDUSTRIAL INDIA PRIVATE LIMITED | | |
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ASSOCIATED COMPANIES ACCOUNTED FOR USING THE EQUITY METHOD | | |
CNH Industrial Capital Europe S.a.S.(2) | | |
Transolver Finance Establecimiento Financiero de Credito S.A. | | |
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ASSOCIATED COMPANIES VALUED AT COST | | |
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OTHER COMPANIES VALUED AT FVTPL | | |
Naveco (Nanjing IVECO Motor Co.) Ltd. | | |
(1) After the Demerger CIFINS S.p.A. is owned 50.00% by Iveco Group and 50.00% by CNH Industrial.
(2) This percentage represents the interest held by Iveco Group through its 50% interest in CIFINS S.p.A.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfSignificantInvestmentsInSubsidiariesExplanatory",
"language": "en",
"entity": "scheme:549300ZWF2ZJDD9EOR96",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
}
}
}