Volvo 2012 Annual Report Download - page 146

Reported in operating income12012 2011
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 exposure3272 – – (91) – –
Loans receivable and other receivables
Accounts receivables / trade payables (125) – – 65 – –
Customer financing receivables VFS 23 5,037 – 68 4,862 –
Financial assets available for sale
Shares and participations for which a market value can be calculated 15 – – 20 – –
Shares and participations for which a market value cannot be calculated 27 – – 25 – –
Financial liabilities valued at amortized cost4– – (2,373) – – (2,456)
Effect on operating income 212 5,037 (2,373) 87 4,862 (2,456)
Reported in net financial items5      
Financial assets and liabilities at fair value through
profit and loss
Marketable securities 154 – – 224 – –
Interest and currency rate risk contracts- financial exposure6294 – – (409) – –
Loans receivable and other receivables – 3 – – 3 –
Cash and Cash equivalents – 390 – – 545 –
Financial liabilities valued at amortized cost6(227) –(2,464) 771 –(2,642)
Effect on net financial items 221 393 (2,464) 586 548 (2,642)
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 recog-
nized in Net financial items, neg 1 (569) 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, 117 (191) 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 218 (neg 746) and neg 227 (771) for
financial liabilities valued at amortized cost. Refer to Note 9, Other financial
income and expenses for further information.
Derecognition of financial assets
Volvo Group is involved in cash enhancement activities such as factoring and
discounting. Financial assets that have been transferred are included in full
or in part in the reported assets of the Volvo Group dependent on the risk
and rewards related to the asset have been transferred to the recipient. In
accordance with IAS 39, Financial Instruments, Recognition and Measure-
ment, an evaluation is performed to establish whether, substantially, all the
risks and rewards have been transferred to an external party. Where the
Volvo Group concludes this is not the case, the portion of the financial assets
corresponding to the Volvo Group’s continuous involvement is recognized.
When all the risk and rewards are not considered to be transferred the
amount is kept on the balance sheet. Transferred financial asset that does
not fulfill the requirements for derecognition amount to SEK 0.3 billion (0.6).
Transferred financial assets for which substantially all risks and rewards
have been transferred are derecognized. Continuing involvements in
these assets are reflected in the Volvo Group’s balance sheet. External
credit guarantees relating to these financial assets are recognized to fair
value as provisions in the balance sheet and amount to 118.
Volvo Group’s maximum exposure to loss is considered being the total
recourse relating to the transferred assets, i.e. the total amount Volvo Group
would have to pay in case of default of the customers. This risk exposure is
considered not to be material for the Volvo Group as it does not exceed SEK
0.3 billion. This is the total exposure for the Volvo Group but the likelihood for
all customers being in default at the same time is considered to be immaterial.
See note 24 Contingent Liabilities for information regarding contingent liabilities
for credit guarantees.
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 2012
142