Volvo 2011 Annual Report Download - page 128

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Reported in operating income12011  2010
SEK M Gains/
losses Interest
income Interest
expenses  Gains/
losses Interest
income Interest
expenses
Financial assets and liabilities at fair value through
profit and loss2
Currency riskcontracts-commercial exposure3(91) – – 661 – –
Loans receivable and other receivables      
Accounts receivables / trade payables 65 – – (239) – –
Customer financing receivables VFS 68 4,862 – 58 5,144 –
Financial assets available for sale      
Shares and participations for which a market value can be calculated 20 – – 40 – –
Shares and participations for which a market value cannot be calculated 25 – – 10 – –
Financial liabilities valued at amortized cost4– – (2,456)  – – (2,830)
Effect on operating income 87 4,862 (2,456) 530 5,144 (2,830)
Reported in net financial items5     
Financial assets and liabilities at fair value through
profit and loss
Marketable securities 224 – – 290 – –
Interest and currencyrate riskcontracts- financial exposure6(409) – –  (1,319) – –
Loans receivable and other receivables – 3 – – 7 –
Cash and Cash equivalents7– 545 –  (274) 423 –
Financial liabilities valued at amortized cost6771 – (2,642) 1,560 – (2,591)
Effect on net financial items 586 548 (2,642) 257 430 (2,591)
1 Information is provided regarding changes in provisions for doubtful receivables
and customer financing in Notes 15 and 16, Accounts receivable and customer
financing receivables, as well as in Note 8, Other financial income and expenses.
2 Accrued and realized interest is included in gains and losses related to Financial
assets and liabilities at fair value through profit and loss.
3 Volvo uses forward contracts and currency options to hedge the value of future
payment flows in foreign currency. Both unrealized and realized result on currency
risk contracts are included in the table. Refer to Note 4, Goals and policies in
financial risk management.
4 Interest expenses attributable to financial liabilities valued at amortized cost rec-
ognized in operating income include interest expenses for financing operational
leasing activities, not classified as financial instruments.
5 In gains, losses, income and expenses related to financial instruments recognized
in Net financial items, 569 (520) was recognized under other financial income
and expenses. Refer to Note 9, Other financial income and expenses for further
information. Interest expenses attributable to pensions, 191 (276) are not included
in this table.
6 Gains and losses related to changes in foreign currency rates on currency rate
risk contracts for financial exposure is neg 746 (neg 1,637) and 771 (1,560) for
financial liabilities valued at amortized cost. Refer to Note 9, Other financial income
and expenses for further information.
7 The net effect of gains and losses related to the devaluation in Venezuela 2010
was neg 274.
Derecognition of financial assets
Financial assets that have been transferred are included in full or in part
in the reported assets of the Volvo Group pursuant to the degree the risk
and rewards related to the asset have been transferred to the recipient. In
line with IAS 39, Financial Instruments, Recognition and Measurement, an
evaluation is performed to establish whether, substantially, all the risks
and rewards have been transferred to an external party. Where Volvo con-
cludes this is not the case, the portion of the financial assets correspond-
ing to Volvo’s continuous involvement is recognized. At December 31,
2011, assets corresponding to Volvo’s continuous involvement, primarily
within customer financing operations, in an amount of SEK 0.6 billion (1.2)
were recognized by Volvo.
Gains, losses, interest income and expenses related to financial
instruments
The table below shows how gains and losses as well as interest income
and expenses have affected income after financial items in the Volvo
Group divided on the different categories of financial instruments.
NOTES TO FINANCIAL STATEMENTS
FINANCIAL INFORMATION 2011
124