Volvo 2004 Annual Report Download - page 70

68 The Volvo Group
Notes to consolidated financial statements
Note 12 Shares and participations
1 Machinery and equipment pertains mainly to production equipment.
2 Includes write-downs, 244.
3 Acquisition costs less accumulated depreciation and amortization.
4 Includes subsidiaries and joint ventures that previously were accounted for
according to the equity method. The disagreement between AB Volvo and
Renault SA regarding the acquisition of Renault V.I was settled during 2004.
The settlement amount, EUR 108 M, has reduced the goodwill pertaining to
the aquisition.
Capital expenditures for property, plant and equipment approved but not yet implemented at December 31, 2004, amounted to SEK 8.2 billion
(6.4; 5.5).
Value in Value in Deprecia- Acquired Trans- Value in Net carrying
Accumulated balance balance tion and and lation Reclassi- balance value in bal-
depreciation and sheet sheet amortiza- Sales/ divested differ- fications sheet ance sheet
amortization 2002 2003 tion 2scrapping operations 4ences and other 2004 2004 3
Goodwill 3,490 3,826 702 (17) 161 (90) (54) 4,528 9,656
Entrance fees,
aircraft engine programs 1,201 1,291 95 ––––1,386 1,372
Product and software
development 491 997 751 – – (8) (2) 1,738 4,831
Other intangible assets 747 816 150 (26) – (16) 63 987 747
Total intangible assets 5,929 6,930 1,698 (43) 161 (114) 7 8,639 16,606
Buildings 6,445 6,763 724 (128) 47 (117) (557) 6,732 10,196
Land and land improvements 454 483 50 (21) 2 (10) (63) 441 3,547
Machinery and equipment 123,695 24,976 3,408 (1,493) 46 (378) (2,002) 24,557 14,973
Construction in progress,
including advance payments ––––––––2,435
Total property, plant
and equipment 30,594 32,222 4,182 (1,642) 95 (505) (2,622) 31,730 31,151
Assets under operating leases 15,842 13,153 4,425 (1,851) 29 (334) (3,957) 11,465 19,534
Total tangible assets 46,436 45,375 8,607 (3,493) 124 (839) (6,579) 43,195 50,685
Depreciation and
amortization by type of asset 2002 2003 2004
Intangible assets 1,586 1,633 1,698
Property, plant and equipment 4,134 4,009 4,182
Assets under operating leases 5,124 4,527 4,425
Total 10,844 10,169 10,305
Capital expenditures
by type of asset 2002 2003 2004
Intangible assets 2,011 1,176 2,287
Property, plant and equipment 4,802 4,939 5,790
Assets under operating leases 5,424 5,566 4,406
Total 12,237 11,681 12,483
Investment property
Investment property is property owned for the purpose of obtaining
rental income and/or appreciation in value. The acquisition cost of
investment property was 1,859 at year-end. Capital expenditures
during 2004 amounted to 20. Accumulated depreciation was 472
at year-end, whereof 68 during 2004. The estimated fair value of
investment property was SEK 2.2 billion at year-end, based on dis-
counted cash flow projections. The required return is based on cur-
rent property market conditions for comparable properties in compar-
able locations. All investment properties were leased during the year.
Net income for the year was affected by 332 in rental income from
investment properties and 66 in direct costs.
The market values of Volvo’s holdings of shares and participations in
listed companies as of December 31, 2004 are shown in the table
below. When the carrying value of an investment exceeds its market
value, it has been assessed that the fair value of the investment is
higher than the quoted market price of this investment.
Peach County Holdings Inc
In 2004, as a part of the restructuring of Henlys Group plc, the con-
vertible debenture loan issued to Henlys was partly converted into
shares in Peach County Holdings (owner of school bus manufacturer
Blue Bird). Volvo’s holding in Peach County Holdings Inc is 42,5%.
Carrying value Market value
Deutz AG 670 169
Total holdings
in listed companies 670 169
Holdings in non-
listed companies 1,333 –
Total shares and
participations 2,003