Volvo 2008 Annual Report Download - page 101

97
Financial information 2008
Specifi cation of deferred tax assets
and tax liabilities 2007 2008
Deferred tax assets:
Unused tax loss carryforwards 1,257 1,839
Other unused tax credits 97 100
Intercompany profi t in inventories 666 810
Valuation allowance for doubtful receivables 589 689
Provisions for warranties 1,510 1,596
Provisions for residual value risks 371 407
Provisions for
post-employment benefi ts 2,876 3,197
Provisions for restructuring measures 23 123
Adjustment to fair value at company
acquisitions 1,782 13
Fair value of derivative instruments 127 1,108
Other deductible temporary differences 3,066 6,366
Deferred tax assets before
deduction for valuation allowance 12,364 16,248
Valuation allowance (156) (245)
Deferred tax assets after
deduction for valuation allowance 12,208 16,003
2007 2008
Deferred tax liabilities:
Accelerated depreciation on property,
plant and equipment 2,660 3,885
Accelerated depreciation on leasing
assets 1,368 1,902
LIFO valuation of inventories 185 263
Capitalized product and
software development 2,021 4,244
Adjustment to fair value at company
acquisitions 2,885 503
Untaxed reserves 1,008 300
Fair value of derivative instruments 197 26
Other taxable temporary differences 2,228 1,960
Deferred tax liabilities 12,552 13,083
Deferred tax assets/liabilities, net1(344) 2,920
1 Deferred taxes are partially recognized in the balance sheet on a net basis
after taking into account offsetting possibilities. Changes in tax rates during
2008 and 2009 have been considered when measuring deferred tax assets
and deferred tax liabilities and have affected the income tax cost of the
year. Deferred tax assets and liabilities have been measured to the tax rates
that are expected to apply to the period when the asset is realized or the
liability is settled. Changes in tax rates are mostly related to Sweden, and
has had a positive effect of about 200.
The cumulative amount of undistributed earnings in foreign subsidiar-
ies, which Volvo currently intends to indefi nitely reinvest outside of
Sweden and upon which deferred income taxes have not been pro-
vided is approximately SEK 45 billion (43) at year end. There are dif-
ferent taxation rules depending on country, in some countries divi-
dends are not taxable and in some countries there are withholding
taxes. See note 36 how Volvo handles equity currency risk.
Note 14 Intangible and tangible assets
Note 13 Minority interests
Intangible assets, acquisition costs Goodwill1
Entrance
fees, industrial
programs
Product and
software
development
Other
intangible
assets
Total
intangible
assets
Value in balance sheet 2007 19,969 3,168 19,123 5,387 47,647
Capital expenditures 0 399 2,150 326 2,875
Sales/scrapping 00(549) (14) (563)
Acquired and divested operations31,028 0 185 381 1,594
Translation differences 3,634 2 2,386 1,287 7,309
Reclassifi cations and other 182 0 (5) (380) (203)
Value in balance sheet 2008 24,813 3,569 23,290 6,987 58,659
Minority interests in income (loss) for the period and in shareholders’ equity consisted mainly of the minority interests in Volvo Aero Norge A/S
(22%), in Wuxi da Hao Power Co, Ltd (30%), in Berliet Maroc S.A (30%), in Shandong Lingong Construction Machinery Co, Ltd (15%) as well
as in Nissan Diesel South Africa (Pty) Ltd (20%).