Volvo 2013 Annual Report Download - page 145

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Credit loss reserves
The establishment of credit loss reserves on customer-fi nancing receivables
is dependent on estimates including assumptions regarding past dues, repos-
session rates and the recovery rate on the underlying collaterals. As of
December 31, 2013, the total credit loss reserves in the Customer Finance
segment amounted to 1.31% (1.23) of the total credit portfolio in the segment.
Refer to Note 4 for a description of the credit risk, interest and currency risks
and Note 30 for further information regarding customer-fi nancing receivables.
Volvo Group Non-current customer-fi nancing receivables
Allocation of non-current customer-
fi nancing receivables Dec 31,
2013 Dec 31,
2012
Installment credits 21,850 19,314
Financial leasing 21,040 21,115
Other receivables 902 727
B/S Non-current customer fi nancing
receivables as of December 31 43,792 41,156
The effective interest rate for non-current customer-fi nancing receivables
amounted to 5.61 % (6.31) as of December 31, 2013.
Volvo Group Current customer-fi nancing receivables
Allocation of current customer-
fi nancing receivables Dec 31,
2013 Dec 31,
2012
Installment credits 11,597 10,884
Financial leasing 13,808 13,748
Dealerfi nancing 13,676 14,079
Other receivables 988 1,122
B/S Current customer fi nancing
receivables as of December 31 40,069 39,833
The effective interest rate for current customer-fi nancing receivables
amounted to 5.63% (6.06) as of December 31, 2013.
Volvo Group Credit risk in the customer-fi nancing operations
Volvo Group Customer-fi nancing
receivables Dec 31,
2013 Dec 31,
2012
Customer-fi nancing receivables gross 85,040 82,080
Valuation allowance for doubtful customer-fi nancing
receivables (1,179) (1,091)
Whereof specifi c reserve (316) (258)
Whereof other reserve (863) (833)
Customer-fi nancing receivables, net 83,861 80,989
Volvo Group Customer-fi nancing
receivables (days/SEK M)
payments due
Dec 31, 2013 Dec 31, 2012
Not due 1–30 31–90 >90 Total Not due 1–30 31–90 >90 Total
Overdue amount – 863 279 626 1,768 – 407 331 404 1,142
Valuation allowance for doubtful customer fi nancing
receivables (84) (70) (37) (125) (316) (64) (42) (43)(109)(258)
Customer-fi nancing receivables,
net book value (84) 793 242 501 1,452 (64) 365 288 295 884
The table above presents overdue payments within the customer fi nancing operations in relation to specifi c reserves. It is not unusual for a receivable
to be settled a couple of days after its due date, which impacts the age interval of 1–30 days.
SOURCES OF ESTIMATION UNCERTAINTY
!
Non-current and current receivables recognized in the Volvo Group’s
customer fi nancing operations.
2018
3,096
2019 or later
844
2017
7,398
2016
13,414
2015
19,040
Volvo Group Non-current customer-
fi nancing receivables maturities
MSEK
NOTE 15 CUSTOMER-FINANCING RECEIVABLES
141