Volvo 2012 Annual Report Download - page 131

Earnings per share
The long-term share-based incentive programs decided by the Annual
General Meeting 2011 create a dilution effect.
No other transactions have occurred that affected, or will have an effect on,
the compilation of the reported number of shares.
Information regarding shares (other) 2012 2 011
Number of shares, December 31, in millions 2,028 2,027
Average number of shares before dilution
in millions 2,028 2,027
Average number of shares after dilution
in millions 2,030 2,028
Average share price, SEK 88.44 94.84
Net income attributable to Parent
Company shareholders 11, 0 3 9 17,751
Basic earnings per share, SEK 5.44 8.76
Diluted earnings per share, SEK 5.44 8.75
Change in other reserves Hedge reserve Available-for-sale
reserve Total
Balance as ofJanuary 1, 2012 (57) 67 10
Change in fair value of commodity contracts 4 – 4
Other changes 4 – 4
Reclassification of shares in Deutz1–(35) (35)
Fair value adjustments regardingholdings in Japanese companies – 32 32
Fair value adjustments regarding other holdings –(1) (1)
Balance as of December 31, 2012 (49) 63 14
1 In 2012 an additional 18% of the shares in Deutz AG was acquired and thereby the company is recognized as an associated company.
The Volvo Group’s acumulative amount of exchange difference deferred to equity relating to assets held for sale amount to SEK 0 million (33).
Read more about investments in associated companies in Note 5.
Volvo Group’s post-employment benefits, such as pensions, healthcare
and other benefits are mainly settled by means of regular payments to
independent authorities or bodies that assume pension obligations and
administer pensions through defined-contribution plans.
The remaining post-employment benefits are defined-benefit plans;
that is, the obligations remain within the Volvo Group or are secured by
proprietary pension foundations. The Volvo Group’s defined-benefit plans
relate mainly to subsidiaries in the U.S. and comprise both pensions and
other benefits, such as healthcare. Other large-scale defined-benefit
plans apply to salaried employees in Sweden (mainly through the Swedish
ITP pension plan) and employees in France and Great Britain.
present value of obligations at year-end, less fair value of plan assets,
unrecognized actuarial gains or losses and unrecognized unvested past
service costs.
As a supplement to IAS 19, Volvo Group applies UFR 4*, in accordance
with the recommendation from the Swedish Financial Reporting Board, in
calculating the Swedish pension liabilities.
For defined contribution plans, premiums are recognized as incurred in
profit and loss according to function.
IAS 19 will be amended as of January 1, 2013.
Read more about new accounting principles 2012 and later in Note 1 and changes
in Volvo Group financial reporting in Note 31.
* UFR 4 states how Swedish special payroll tax and Swedish yield tax should be
accounted for regarding the part of the net pension liability that is attributable to
Swedish entities. Swedish special payroll tax is shown as a receivable/liability on
the difference compared to the legal pension liability. Swedish yield tax is con-
sidered when estimating expected return on plan asset.
SOURCES OF ESTIMATION UNCERTAINTY
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Assumptions when calculating pensions and other
post-employment benefits
Provisions and costs for post-employment benefits, mainly pensions and
health-care benefits, are dependent on assumptions used by actuaries in
calculating such amounts. The appropriate assumptions and actuarial cal-
culations are made separately for the respective countries of the Volvo
Group’s operations which result in obligations for postemployment benefits.
ACCOUNTING POLICY
The Volvo Group applies IAS 19, Employee Benefits, for post-employment
benefits. In accordance with IAS 19, actuarial calculations should be
made for all defined-benefit plans in order to determine the present value
of obligations for benefits vested by its current and former employees.
The actuarial calculations are prepared annually and are based upon
actuarial assumptions that are determined close to the balance-sheet
date each year. Changes in the present value of obligations due to revised
actuarial assumptions and experience adjustments constitute actuarial
gains or losses. These are expensed according to function over the
employees’ average remaining service period to the extent they exceed
the corridor value for each plan.
Deviations between the expected return on plan assets and the actual
return are also treated as actuarial gains or losses. Provisions for post-
employment benefits in the Volvo Group’s balance sheet correspond to the
NOTE 20
PROVISIONS FOR POST-EMPLOYMENT BENEFITS
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