Volvo 2007 Annual Report Download - page 133
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Please find page 133 of the 2007 Volvo annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report. Financial information 2007 129
Various categories of fi nancial instruments are treated separately as specifi ed in the notes above. Below is an account of derivative instruments
and options.
Outstanding derivative instruments for dealing
with currency and interest-rate risks related
to fi nancial assets and liabilities
Dec 31, 2006 Dec 31, 2007
Notional Carrying Notional Carrying
amount value amount value
Interest-rate swaps
– receivable position 92,651 2,412 103,738 2,519
– payable position 30,578 (598) 47,415 (512)
Forwards and futures
– receivable position 114,886 209 21,776 8
– payable position 80,331 (197) 24,164 (6)
Foreign exchange derivative contracts
– receivable position 8,077 124 18,521 359
– payable position 18,423 (124) 19,636 (595)
Options purchased
– receivable position 290 21 503 11
– payable position 200 (4) 503 (11)
Options written
– receivable position 603 3 647 2
– payable position 442 (5) 155 0
Total 1,841 1,775
Gains, losses, interest income and expenses related to fi nancial instruments
2006 2007
Gains/ Interest Interest Gains/ Interest Interest
Losses income expenses Losses income expenses
Financial assets and liabilities
at fair value through profi t and loss
Marketable securities 807 0 0 898 0 0
Derivatives for fi nancial exposure (214) 0 0 (403) 0 0
Loans originated by the company
and accounts receivables 0 66 0 0 37 0
Financial assets available for sale
Shares and participations for which a market
value can be calculated 0 – – 8 – –
Shares and participations for which a market
value cannot be calculated 137 – – 98 – –
Cash and cash equivalents – 180 0 – 249 0
Financial liabilities valued at amortized cost 32 0 (2,835) 3 0 (4,048)
Effect on income 762 246 (2,835) 604 286 (4,048)
Net effect of foreign exchange gains and losses
2006 2007
Derivative instruments 2,020 1,364
Cash and cash equivalents 362 (191)
Loans originated by the company and Financial liabilities value at amortized cost – Volvo internal (4,647) (133)
Loans originated by the company and Financial liabilities value at amortized cost – External 2,296 (965)
Net effect 31 75
Volvo has chosen to apply hedge accouting for a loan of 1 billion euro
borrowed during the second quarter. Fair value of the outstanding
hedge instrument amounts to 159 (0). Volvo has also applied hedge
accounting for hedge of a currency risk in future repayment of a loan
in foreing currency for which the outgoing fair value of the hedge
instrument amouts to (148) 0. This hedge is designated as a cash-
fl ow hedge and changes in fair value has affected the cash-fl ow
hedge reserve within equity. Changes in market value on the instru-
ments used for hedging of risk in fi nancial assets and liabilities for
which hedge accounting has not been applied are reported in net
fi nancial income and expense, see Note 11.