Volvo 2011 Annual Report Download - page 95

Joint ventures
Joint ventures are companies over which Volvo has controlling influence
together with one or more external parties. As stated in Note 1 concern-
ing principles for consolidation, joint ventures are recognized by applying
the proportionate consolidation method, in accordance with IAS 31 Inter-
ests in Joint ventures.
Associated companies
Associated companies are companies in which Volvo has a significant
influence, which is normally when Volvo’s holdings equal at least 20% but
less than 50% of the voting rights. Holdings in associated companies are
recognized in accordance with the equity method. The Group’s share of
recognized income in such companies is included in the consolidated
statement of profit or loss under Income from participations in associated
companies, less, where appropriate, depreciation of surplus values and
the effect of applying different accounting policies. Income from associ-
ated companies is included in operating income since the Volvo invest-
ments are of operating nature. For practical reasons, some of the associ-
ated companies are included in the consolidated financial statements
with a certain time lag, normally one quarter. Dividends from associated
companies are not included in consolidated income. In the consolidated
balance sheet, the carrying amount of shareholdings in associated com-
panies is affected by Volvo’s share of the company’s net income, less
depreciation of surplus values and dividends received.
Shares and participations in other companies
Holdings that do not provide Volvo with significant influence, which generally
means that Volvo’s holding corresponds to less than 20% of the votes, are
recognized as shares and participations in other companies. For listed
shares, the carrying amount is equivalent to the market value. Unlisted
shares and participations, in which fair value cannot reasonably be deter-
mined, are measured at cost less any impairment losses.
SHARES AND PARTICIPATIONS
5
NOTE
Joint ventures
Group holdings of shares in joint ventures are listed below.
Dec 31, 2011 Dec 31, 2010
Shares in joint ventures Holding percentage Holding percentage
Shanghai Sunwin Bus Corp.,
China 50  50
Dong Feng Nissan Diesel
Motor Co., Ltd., China 50  50
VE Commercial Vehicles,
Ltd., India 501 501
Xian Silver Bus Corp., China – 50
1 Direct and indirect ownership.
Volvo’s share of joint ventures’ income
statements 2011 2010
Net sales 4,196 4,178
Operating income 323 127
Income after financial items 379 169
Income taxes (73) (66)
Volvo’s share of income for
the period 306 103
Volvo’s share of joint ventures’ balance
sheets Dec 31, 2011 Dec 31, 2010
Non-current assets 1,915 1,932
Current assets 2,248 2,206
Total assets 4,163 4,138
Shareholders’ equity 2,505 2,627
Provisions 274 294
Long-term liabilities 6 12
Current liabilities 1,378 1,205
Total shareholders’ equity and liabilities 4,163 4,138
At December 31, 2011, guarantees amounting to 0 (78) were issued by
AB Volvo for the benefit of joint ventures. At the same date, Volvo’s share
of contingent liabilities in its joint ventures totaled 38 (46).
Volvo’s share of total
number of employees
2011 2010
Number
of
employ-
ees
of which
women,
%
Number
of
employ-
ees
of which
women,
%
Shanghai Sunwin Bus Corp. 453 16  455 16
Xian Silver Bus Corp. – –  144 21
Dong Feng Nissan Diesel
Motor Co., Ltd. 152 13  141 14
VE Commercial Vehicles, Ltd. 3,600 1  1,479 1
Volvo's share of
total number of
employees 4,205 3 2,219 7
ACCOUNTING POLICIES
91