Volvo 2013 Annual Report Download - page 139

Specifi cation of deferred tax assets
and tax liabilities Dec 31, 2013 Dec 31, 2012
Deferred tax assets:  
Unused tax-loss carryforwards 6,581 5,232
Other unused tax credits 114 171
Intercompany profi tin inventories 1,263 1,026
Allowance for inventory obsolescence 486 443
Valuation allowance for doubtful receivables 656 568
Provisions for warranties 2,825 2,257
Provisions for residual value risks 244 302
Provisions for post-employmentbenefi ts 3,747 6,560
Provisions for restructuring measures 140 219
Adjustment to fair valueduring corporate
acquisitions/divestitures 441 1
Market value of derivative instruments 28 33
Land 1,574 1,872
Other deductible temporary differences 4,352 4,602
Deferred tax assets before deduction
for valuation allowance 22,451 23,287
Valuation allowance (125) (191)
Deferred tax assets after deduction
for valuation allowance 22,326 23,096
Netting of deferred tax assets/liabilities (9,160) (7,220)
B/S Deferred tax assets, net 13,166 15,876
Deferred tax liabilities:
Accelerated depreciation on property, plant and
equipment 3,023 3,176
Accelerated depreciation on leasing assets 2,227 2,064
LIFO valuation of inventories 362 362
Capitalized product and software development 2,435 3,393
Untaxed reserves 85 92
Provisions for post-employment benefi ts 37 686
Other taxable temporary differences 3,396 2,298
Deferred tax liabilities 11,565 12,070
Netting of deferred tax assets/liabilities (9,160) (7,220)
B/S Deferred tax liabilities, net 2,406 4,850
Deferred tax assets/liabilities, net110,760 11,026
1 The deferred tax assets and liabilities above are partially recognized in the
balance sheet on a net basis after taking into account offsetting possibilities.
Deferred tax assets and liabilities have been measured at the tax rates that are
expected to apply during the period when the asset is realized or the liability is
settled, according to the tax rates and tax regulations that have been resolved or
announced at the balance-sheet date.
The total deferred tax assets attributable to unused tax-loss carryforwards
amounted to 6,581 (5,232) of which 2,409 (1,815) pertains to Sweden,
1,533 (1,278) to France and 1,295 (1,409) to Japan.
The cumulative amount of undistributed earnings in foreign subsidiaries,
which the Volvo Group currently intends to indefi nitely reinvest outside of
Sweden and upon which deferred income taxes have not been provided is
SEK 59 billion (60) at year end. The main part of the undistributed earnings
is pertaining to countries where the dividends are not taxable.
Refer to Note 4 for information on how the Volvo Group handles equity cur-
rency risk.
Minority interests are interest attributable to non-controlling shareholders.
Minority interests are presented in the equity, separately from the equity
of the owners of the parent (IFRS 10). At business combinations minority
interests are valued either at fair value or at the minority’s proportionate
share of the acquiree’s net assets (IFRS 3). Minority interests are assigned
the minority shareholder’s portion of the equity of the subsidiary. Changes
in a parent’s ownership interest in a subsidiary that do not result in a loss
of control are accounted for as equity transactions (IFRS 10).
Subsidiaries with minority interests
The Volvo Group has a few non-wholly owned subsidiaries of which one of
the subsidiaries are considered to have a signifi cant minority interest.
Shandong Lingong Construction Machinery Co., Lingong, in China has a
minority interest holding amounting to 30% share and voting rights in the
company. During the year, the profi t allocated to the minority interest
amounts to 218 (206) and the accumulated minority interest of Lingong
at the end of December 31, 2013, amounts to 1,296 (1,203).
The following table presents summarized fi nancial information for Shan-
dong Lingong Construction Machinery Co., Lingong:
Summarized income statement 2013 2012
Net sales 8,990 9,595
Operating income 927 989
Income for the period 728 688
Other comprehensive income 120 (190)
Total comprehensive income 848 498
Dividends paid to minority interest 162 –
Summarized balance sheet Dec 31,
2013 Dec 31, 2012
Non-current assets 1,415 1,371
Current assets 8,192 7,778
Total assets 9,607 9,149
Non-currentliabilities 1,253 1,573
Current liabilities 4,035 3,566
Total liabilities 5,288 5,139
Equity attributable to the Volvo Group’s shareholders 3,023 2,807
Minority interests 1,296 1,203
ACCOUNTING POLICY
NOTE 11 MINORITY INTERESTS
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