Volvo 2010 Annual Report Download - page 114

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Derecognition of financial assets
Financial assets that have been transferred in such a way that part or
all of the financial assets do not qualify for derecognition, are included
in reported assets of the Volvo Group. In accordance with IAS 39
Financial Instruments, Recognition and Measurement, an evaluation
is made whether substantially all the risks and rewards have been
transferred to an external party. When Volvo has concluded that it is
not the case, the part of the financial assets that reflect Volvo’s con-
tinuous involvement are being recognized. On December 31, 2010,
Volvo recognizes SEK 1.2 billion (2.2) corresponding to Volvo’s con-
tinuous involvement, mostly within the customer financing operations.
Financial assets and liabilities measured at fair value
December 31, 2009 December 31, 2010
Assets Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
Financial assets
at fair value through profit and loss
Currency risk contracts
– commercial exposure – 467 – 467 – 197 – 197
Raw materials contracts – 42 – 42 – 168 – 168
Interest risk contracts
– financial exposure – 3,848 – 3,848 – 3,863 – 3,863
Marketable securities – 16,676 – 16,676 – 9,767 – 9,767
Available for sale financial assets
Shares and participations for which:
a market value can be calculated 707 – – 707 836 – – 836
Total 707 21,033 – 21,740 836 13,995 14,831
Liabilities
Financial liabilities
at fair value through profit and loss
Currency risk contracts
– commercial exposure – 281 – 281 – 79 – 79
Raw materials contracts – 58 – 58 – 41 – 41
Interest risk contracts
– financial exposure – 3,285 – 3,285 – 4,487 – 4,487
Total – 3,624 – 3,624 – 4,607 – 4,607
The levels in the table above reflect to what extent market values have
been used when valuating financial assets and liabilities. Financial
instruments in level 1 are valued based on unadjusted quoted market
prices for identical assets or liabilities. Level 2 instruments are valued
based on inputs, other than quoted prices within level 1, that are
observable either directly (as prices) or indirectly (derived from prices).
Level 3 instruments would be valued based on unobservable inputs,
i.e. using a valuation technique based on assumptions. Volvo has no
financial instruments classified as level 3 instruments.
FINANCIAL INFORMATION 2010
110