Volvo 2011 Annual Report Download - page 109

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CUSTOMER-FINANCING RECEIVABLES
15
NOTE
Credit loss reserves
The establishment of credit loss reserves on customer-financing receivables
is dependent on estimates including assumptions regarding past dues, repos-
session rates and the recovery rate on the underlying collaterals. At December
31, 2011, the total credit loss reserves in the Customer Finance segment
amounted to 1.33 % (1.69) of the total credit portfolio in the segment.
Refer to Note 4 for a description of the credit risk and Note 30 for further
information regarding customer-financing receivables.
Non-current customer-financing receivables
Allocation of non-current customer-
financing receivables 2011 2010
Installment credits 17,457 15,673
Financial leasing 22,454 19,620
Other receivables 707 732
Total 40,618 36,025
The effective interest rate for non-current customer-financing receivables
was 6.98 % as per December 31, 2011.
Current customer-financing receivables
Allocation of current customer-
financing receivables 2011 2010
Installment credits 11,079 11,988
Financial leasing 11,425 10,860
Dealerfinancing 13,820 12,598
Other receivables 1,757 1,217
Total 38,081 36,663
The effective interest rate for current customer-financing receivables was
6.44% as per December 31, 2011.
Credit risk in the customer-financing operations
Customer-financing receivables 2011 2010
Customer-financing receivables gross 79,849 74,013
Valuation allowance for doubtful
customer-financing receivables (1,150) (1,325)
Whereof specific reserve (374) (530)
Whereof other reserve (776) (795)
Customer-financing receivables, net 78,699 72,688
Customer financing receivables
(days/ MSEK) payments due
2011 2010
Not due 1–30 31–90 >90 Total Not due 1–30 31–90 >90 Total
Overdue amount – 391 230 648 1,269 – 490 405 805 1,700
Valuation allowance for doubtful customer
financing receivables (99) (63) (40) (172) (374) (91) (56) (74) (308) (530)
Customer financing receivables,
net book value (99) 328 190 476 895 (91) 434 331 497 1,170
The table above presents overdue payments within the customer financing operations in relation to specific reserves. It is not unusual for a receivable
to be settled a couple of days after its due date, which impacts the age interval of one to 30 days.
SOURCE OF UNCERTAINTY IN THE ESTIMATES
!
Non-current and current receivables recognized in Volvo’s customer
financing operations.
2016 or later
702
2015
2,512
2014
6,181
2013
13,815
2012
17,408
Non-current customer-financing
receivables maturities
105