24. Current debt

At 31 December 2012, current debt totaled €1,294,074 thousand, representing a net increase of €218,642 thousand over 31 December 2011, and related to:

(€ thousand) 31 December 2012 31 December 2011 Change
Intercompany debt:      
- Current account with Fiat Finance S.p.A. 331,403 - 331,403
- Loans from Fiat Finance S.p.A. 900,000 1,000,000 (100,000)
- Liabilities arising from derivative financial instruments 8,282 19,969 (11,687)
- Accrued interest expense 27,089 30,777 (3,688)
Total intercompany debt 1,266,774 1,050,746 216,028
Debt payable to third parties:      
- Advances on factored receivables  27,300 24,686 2,614
Total debt payable to third parties 27,300 24,686 2,614
Total current debt 1,294,074 1,075,432 218,642

The item current account with Fiat Finance S.p.A. represents the balance of the account held with Fiat Finance S.p.A. as part of the Group’s centralized treasury management.

Loans from Fiat Finance relates to financing in euros from Fiat Finance S.p.A. at fixed market rates and due the following year. 

At 31 December 2012, liabilities arising from derivative financial instruments represents the fair value of the two equity swaps on Fiat and Fiat Industrial S.p.A. shares entered into with major banks by Fiat Finance S.p.A., under instruction from Fiat S.p.A., to hedge against an increase in the share price above the exercise price of the stock options granted to the CEO in 2006, as described in Note 7. The fair value of those equity swaps was based on market quotations at the balance sheet date. 

Advances on factored receivables relate to advances on IRES receivable totaling €24,686 thousand (see Note 16) and from Rete Ferroviaria Italiana S.p.A. for the advancement of work on the Bologna-Florence railway line totaling €2,614 thousand (see Note 14).

Current debt is denominated in euros. The carrying amount of that debt is deemed to be in line with its fair value.

Transfer of receivables

At 31 December 2012, the carrying amount of transferred receivables and related liabilities was as follows:

  31 December 2012
(€ thousand) Trade receivables Current taxes receivable Total
Carrying amount of receivables 1,689 26,622 28,311
Carrying amount of the related liabilities 2,614 24,686 27,300

At 31 December 2012, the Company had VAT receivables of €47,000 thousand that had been sold on a non-recourse basis and consequently derecognized (no outstanding receivables sold on a non-recourse basis at 31 December 2011).

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