Volvo 2013 Annual Report Download - page 146

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Credit loss reserves
The establishment of credit loss provisions for account receivables is recog-
nized as soon as it is probable that a credit loss has incurred. A credit loss
has incurred when there has been an event that has triggered the cus-
tomer’s inability to pay. As of December 31, 2013, the total credit loss
reserves for account receivables amounted to 2.02% (2.45) of total account
receivables.
Refer to Note 4 regarding credit risk.
Non-current receivables Dec 31,
2013 Dec 31,
2012
Other interest-bearingloans to external parties 85 76
Other interest-bearing fi nancial receivables 395 261
Other fi nancial receivables 329 767
Other receivables 2,608 2,320
Non-current receivables
as of December 3113,417 3,425
1 Of non-current receivables 786 (1,190) pertains to fi nancial instruments.
SOURCES OF ESTIMATION UNCERTAINTY
!
Volvo Group Customer fi nancing
receivables total exposure
Dec 31, 2013 Dec 31, 2012
Not due 1–30 31–90 >90 Total Not due 1–30 31–90 >90 Total
Customer fi nancing receivables 74,517 7,956 2,095 471 85,040  72,068 7,221 2,161 630 82,080
Concentration of credit risk
Customer concentration
The ten largest customers in Customer Finance account for 6.8 % (7.7)
ofthe total asset portfolio. The rest of the portfolio is pertinent to a large
number of customers. Hence the credit risk is spread across many markets
and customers.
Concentration by geographical market
The adjacent table discloses the concentration of the customer-fi nancing
portfolio divided into geographical markets.
Read more about the Volvo Group’s overall description credit risks in Note 4,
Financial-risk management.
Read more about Volvo Financial Services’ trend during the year on
page 81.
Geographic market, percentage
of customer-fi nancing portfolio (%).
Europe, 45.7%
North America, 29.4%
Asia, 11.0%
South America, 13.9%
Change of valuation allowance for doubtful
customer-fi nancing receivables for the
Volvo Group 2013 2012
Valuation allowance for doubtful customer-fi nancing
receivables as of December 31, preceding year 1,091 1,150
New valuation allowance charged to income 1,292 835
Reversal of valuation allowance charged to income (437) (252)
Utilization of valuation allowance related to
actual losses (731) (575)
Translation differences (36) (67)
Valuation allowance for doubtful customer-fi nancing
receivables as of December 31 1,179 1,091
The total contractual amount to which the overdue payments pertain are
presented in the table below. In order to provide for occurred but not yet
identifi ed customer-fi nancing receivables overdue, there are additional
reserves of 863 (833). The remaining exposure is secured by liens on the
purchased equipment and, in certain circumstances, other credit enhance-
ments such as personal guarantees, credit insurance, liens on other prop-
erty owned by the borrower etc.
Collaterals taken in possession that meet the criteria for recognition in
the Balance sheet amounted to 132 (200) as of December 31, 2013.
Customer-fi nancing receivables (cont.)
NOTE 16 RECEIVABLES
142
FINANCIAL INFORMATION 2013