Fiat College Essay Example

owning the goods.

The adoption of IFRS led to a 1,106 million increase in tangible assets by December 31, 2004. This change affected various accounting policies, including the treatment of sales of receivables. Previously, under Italian GAAP, all receivables sold through securitization or factoring transactions were removed from the company's records. However, with the implementation of IFRS, if there is a controlling entity indicated by their relationship's substance, an SPE (Special Purpose Entity security vehicle) must be consolidated. As a result, all securitization transactions have been reversed.

The de-recognition of a financial asset under IAS 39 can only happen if there is a significant transfer of risks and rewards of ownership, which leads to an increase in trade and financial receivables, as well as financial debt balances. This results in a deteriorated net debt on the balance sheet. By adopting IFRS, Fiat allows minority investors to have better access to information about the company's economic performance. The implementation of IFRS enhances transparency in management and transactions, instilling confidence among minority investors and generating positive market expectations. Furthermore, other competitors such as Peugeot and Volkswagen are also following the global trend of adopting IFRS.

Investors will gain insight into the performance of Fiat and its competitors. They will witness collaborative efforts resulting in successful resolutions for major strategies and financial issues, consequently improving key financial indicators. It is important to mention that Fiat lacks innovation and has not introduced any new car models. Additionally, the ongoing economic slowdown in Europe remains a challenge. Lastly, there has been an endeavor to diversify into unrelated industries.