18. Current receivables and Other current assets

The composition of the Current receivables and Other current assets is as follows:

(€ million)

At 31 December 2013At 31 December 2012
Trade receivables 2,406 2,702
Receivables from financing activities 3,671 3,727
Current tax receivables 291 236
Other current assets:    
Other current receivables 1,860 1,776
Accrued income and prepaid expenses 442 387
Total Other current assets 2,302 2,163
Total Current receivables and Other current assets 8,670 8,828

The analysis by due date (excluding the Accrued income and prepaid expenses item) is as follows:

 At 31 December 2013At 31 December 2012
(€ million)due within
one year
due between
one and five years
due beyond five yearsTotaldue within
one year
due between
one and five years
due beyond
five years
Total
Trade receivables 2,389 15 2 2,406 2,660 42 - 2,702
Receivables from financing activities 2,776 863 32 3,671 2,688 1,014 25 3,727
Current tax receivables 206 44 41 291 145 27 64 236
Other current receivables 1,637 184 39 1,860 1,416 326 34 1,776
Total Current receivables 7,008 1,106 114 8,228 6,909 1,409 123 8,441

Trade receivables

Trade receivables, amounting to €2,406 million at 31 December 2013 (€2,702 million at 31 December 2012), are shown net of allowances for doubtful accounts of €344 million at 31 December 2013 (€347 million at 31 December 2012). Changes in these allowances, which are calculated on the basis of historical losses on receivables, were as follows in 2013:

(€ million)At 31 December 2012

Provision

Use and
other changes 

At 31 December 2013
Allowances for doubtful accounts 347 47 (50) 344

The amount of trade receivables of Chrysler at 31 December 2013 is €847 million (€909 million at 31 December 2012). Substantially all the trade receivables of Chrysler and its U.S. subsidiary guarantors are unconditionally pledged as securities for certain debts of Chrysler (see Note 27).

Receivables from financing activities

Receivables from financing activities mainly relate to the business of financial services companies fully consolidated by Fiat (primarily dealer and retail financing).

(€ million)

At 31 December 2013At 31 December 2012
Dealer financing 2,286 2,108
Retail financing 970 1,115
Finance leases 297 331
Other 118 173
Total Receivables from financing activities 3,671 3,727

Receivables from financing activities decreased by €56 million over the period; net of foreign exchange translation effects, mainly from changes in the Real Brazilian/Euro rate, Receivables from financing activities increased by €331 million.

Other receivables from financing activities includes, amongst other, financial receivables from jointly controlled financial services entities (FGA Capital group) of €27 million (€58 million at 31 December 2012) and Financial receivables from companies under joint control, associates and unconsolidated subsidiaries of €33 million (€56 million at 31 December 2012).

Receivables from financing activities are shown net of an allowance for doubtful accounts determined on the basis of specific insolvency risks. At 31 December 2013, the allowance amounts to €119 million (€101 million at 31 December 2012). Changes in the allowance accounts during the year are as follows:  

(€ million)

At 31 December 2012

ProvisionUse and
other changes 

At 31 December 2013

Allowances for doubtful accounts 101 89 (71) 119

Finance lease receivables refer to vehicles leased out under finance lease arrangements, mainly by the Luxury Brands operating segment. This item may be analyzed as follows, gross of an allowance of €5 million at 31 December 2013 (€5 million at 31 December 2012):

 At 31 December 2013At 31 December 2012
(€ million)

due
within
one year

due between one
and five years

due
beyond
five years

Total

due
within
one year

due between one
and five years

due
beyond
five years

Total
Receivables for future minimum lease payments 104 223 8 335 123 236 5 364
Less: unrealized interest income (14) (18) (1) (33) (11) (17) - (28)
Present value of future minimum lease payments 90 205 7 302 112 219 5 336

Receivables for dealer financing are typically generated by sales of vehicles and are generally managed under dealer network financing programs as a component of the portfolio of the financial services companies. These receivables are interest bearing, with the exception of an initial limited, non-interest bearing period. The contractual terms governing the relationships with the dealer networks vary from country to country, although payment terms range from two to six months.

Other current assets

At 31 December 2013, Other current assets mainly consist of Other tax receivables for VAT and other indirect taxes of €966 million (€871 million at 31 December 2012), Receivables from employees of €150 million (€76 million at 31 December 2012) and Accrued income and prepaid expenses of €442 million (€387 million at 31 December 2012).

Transfer of financial assets

The Group transfers certain of its financial, trade and tax receivables, mainly through factoring transactions. Factoring transactions may be either with recourse or without recourse; certain without recourse transfers include deferred payment clauses (for example, when the payment by the factor of a minor part of the purchase price is dependent on the total amount collected from the receivables), requiring first loss cover, meaning that the transferor takes priority participation in the losses, or require 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 IAS 39 for the derecognition of the assets since the risks and rewards connected with collection are not transferred, and accordingly the Group continues to recognize the receivables transferred by this means in its balance sheet and recognizes a financial liability of the same amount under Asset-backed financing (Note 27). The gains and losses arising from the transfer of these assets are only recognized when the assets are derecognized in the Group’s balance sheet.

At 31 December 2013, the carrying amount of transferred financial assets not derecognized and the related liabilities was as follows:

  At 31 December 2013 At 31 December 2012
(€ million)

Trade
receivables

Receivables from
financing activities

Current tax receivables

 Total

Trade
receivables

Receivables from
financing activities

Current tax receivables

 Total

Carrying amount of assets transferred and not derecognized 123 440 33 596 9 405 35 449
Carrying amount of the related liabilities 123 440 33 596 9 405 35 449

At 31 December 2013, the Group had receivables and bills due after that date which had been transferred without recourse and which were accordingly derecognized amounting to €3,576 million (€3,631 million at 31 December 2012). The transfers related to trade receivables and other receivables for €2,864 million (€2,932 million at 31 December 2012) and financial receivables for €712 million (€699 million at 31 December 2012). These amounts include receivables of €2,177 million (€2,179 million at 31 December 2012), mainly due from the sales network, transferred to jointly controlled financial services companies (FGA Capital).