Volvo 2013 Annual Report Download - page 166

Reported in operating income12013 2012
SEK M Gains/ losses Interest income Interest expenses Gains/ losses Interest income Interest expenses
Financial assets and liabilities at fair value through
the income statement2
Currency risk derivatives339 – – 49 – –
Loans receivable and other receivables
Accounts receivables / trade payables 629 – – (125) – –
Customer financing receivables VFS 128 4,705 – 104 5,104 –
Financial assets available for sale
Shares and participations for which a market value can be calculated 42 – – 18 – –
Shares and participations for which a market value cannot be calculated 20 – – 18 – –
Financial liabilities valued at amortized cost4– – (1,704) – – (2,373)
Effect on operating income 858 4,705 (1,704) 64 5,104 (2,373)
Reported in net financial items5
Financial assets and liabilities at fair value through
the income statement
Marketable securities 94  – 154 –
Interest and currency rate risk derivatives3, 6 1,987 (5) (56) 449 21 (188)
Loans receivable and other receivables
Cash and Cash equivalents  292  – 278 –
Financial liabilities valued at amortized cost6(1,678) (2,171) (227) –(2,150)
Effect on net financial items 309 381 (2,227) 222 453 (2,338)
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 the income statement.
3 Volvo uses forward contracts and currency options to hedge the value of future
cash 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
recognized in operating income include interest expenses for financing opera-
tional leasing activities, not classified as financial instruments.
5 In gains, losses, income and expenses related to financial instruments recog-
nized in Net financial items, SEK 309 M (222) 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,
SEK 583 M (611) are not included in this table.
6 Refer to Note 9, Other financial income and expenses for further information.
Derecognition of financial assets
The 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 Measurement, an evaluation is performed to establish whether, sub-
stantially, 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 consid-
ered to be transferred the amount is kept on the balance sheet. Trans-
ferred financial asset that does not fulfill the requirements for derecogni-
tion amount to SEK 0,4 billion (0,3).
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 79 (118).
The 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 0,6 billion (0,3). 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 unlikely.
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.
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FINANCIAL INFORMATION 2013