Nokia 2008 Annual Report Download - page 193
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16. Longterm loans receivable
Carrying amount Fair value Carrying amount Fair value
2008 2007
EURm EURm EURm EURm
Longterm loans receivables carried at
amortized cost ........................ 27 24 10 10
The longterm loans receivable mainly consist of loans made to suppliers and to customers principally
to support their financing of network infrastructure and services or working capital. Fair value is
estimated based on the current market values of similar instruments. See Note 35 for longterm and
shortterm portion and related maturities.
17. Inventories
2008 2007
EURm EURm
Raw materials, supplies and other.......................................... 519 591
Work in progress ....................................................... 744 1 060
Finished goods ......................................................... 1 270 1 225
Total ................................................................. 2533 2 876
18. Prepaid expenses and accrued income
Prepaid expenses and accrued income totalled EUR 4 538 million in 2008 (EUR 3 070 million in 2007).
In 2008, Nokia and Qualcomm entered into a new 15yearagreement, under the terms of which
Nokia has been granted a license to all Qualcomm’s patents for use in Nokia mobile devices and
Nokia Siemens Networks infrastructure equipment. The financial structure of the agreement included
an upfront payment of EUR 1.7 billion, which is to be amortized over the contract period and on
going royalties payable to Qualcomm. The remaining balance of EUR 1.3 billion of the upfront
payment is included in Prepaid expenses. As part of the licence agreement Nokia also assigned
ownership of a number of patents to Qualcomm. These patents were valued using the income
approach based on projected cash flows, on a discounted basis, over the assigned patents’ estimated
useful life. Based on the valuation and underlying assumptions Nokia determined that the fair value
of these patents was not material.
Prepaid expenses and accrued income primarily consists of VAT and other tax receivables. Prepaid
expenses and accrued income also include prepaid pension costs, accrued interest income and other
accrued income, but no amounts which are individually significant.
F49
Notes to the Consolidated Financial Statements (Continued)