Volvo 2014 Annual Report Download - page 141

Specifi cation of deferred tax assets
and tax liabilities Dec 31, 2014 Dec 31, 2013
Deferred tax assets: 
Unused tax-loss carryforwards 5,911 6,581
Other unused tax credits 152 114
Intercompany profi tin inventories 1,299 1,263
Allowance for inventory obsolescence 615 486
Valuation allowance for doubtful receivables 802 656
Provisions for warranties 3,726 2,825
Provisions for residual value risks 249 244
Provisions for post-employmentbenefi ts 4,974 3,747
Provisions for restructuring measures 223 140
Adjustment to fair valueat corporate
acquisitions/divestitures – 441
Market value of derivative instruments 27 28
Land 1,226 1,574
Other deductible temporary differences 4,936 4,352
Deferred tax assets before deduction
for valuation allowance 24,140 22,451
Valuation allowance (336) (125)
Deferred tax assets after deduction
for valuation allowance 23,804 22,326
Netting of deferred tax assets/liabilities (7,973) (9,160)
B/S Deferred tax assets, net 15,831 13,166
Deferred tax liabilities:
Accelerated depreciation on property,
plant and equipment 2,156 3,023
Accelerated depreciation on leasing assets 2,836 2,227
LIFO valuation of inventories 558 362
Capitalized product and software development 2,472 2,435
Adjustment to fair valueat corporate
acquisitions/divestitures 34 –
Untaxed reserves 84 85
Provisions for post-employment benefi ts 39 37
Other taxable temporary differences 2,590 3,396
Deferred tax liabilities 10,769 11,565
Netting of deferred tax assets/liabilities (7,973) (9,160)
B/S Deferred tax liabilities, net 2,796 2,406
Deferred tax assets/liabilities, net113,035 10,760
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 enacted at
the balance-sheet date.
As of December 31, 2014 the total deferred tax assets, after deduction for
valuation allowance, attributable to unused tax-loss carryforwards amounted
to SEK 5,638 M (6,456) of which SEK 2,081 M (2,409) pertains to Sweden,
SEK 1,568 M (1,533) to France and SEK 1,115 M (1,272) to Japan.
The valuation allowance amounted to SEK 336 M (125) of the value of
deferred tax assets. Most of the reserve, SEK 273 M (125), consists of
unused tax-loss carryforwards. Net of the total valuation allowance,
deferred tax assets of SEK 23,804 M (22,326) were recognized in the
Volvo Group’s balance sheet.
The cumulative amount of undistributed earnings in foreign subsidiar-
ies, which the Volvo Group currently intends to indefi nitely reinvest out-
side of Sweden and upon which deferred income taxes have not been
provided is SEK 52 billion (59) at year end. The main part of the undistrib-
uted earnings is pertaining to countries where the dividends are not tax-
able.
Read more in Note 4 for information on how the Volvo Group handles equity
currency 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 Company. At business combinations minority
interests are valued either at fair value or at the minority’s proportionate
share of the acquiree’s net assets. 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.
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 of
Lingong amounted to 139 (218) and the accumulated minority interest at
the end of December 31, 2014, amounted to 1,683 (1,296).
The following table presents summarized fi nancial information for
Shandong Lingong Construction Machinery Co., Lingong:
Summarized income statement 2014 2013
Net sales 7,324 8,990
Operating income 559 927
Income for the period 464 728
Other comprehensive income 829 120
Total comprehensive income 1,293 848
Dividends paid to minority interest – 162
Summarized balance sheet Dec31,
2014 Dec 31, 2013
Non-current assets 1,633 1,415
Marketable securites, cash and cash equivalents 2,584 2,435
Current assets 7,117 5,757
Total assets 11,334 9,607
Non-currentliabilities 187 1,253
Current liabilities 5,536 4,035
Total liabilities 5,723 5,288
Equity attributable to the Volvo Group’s shareholders 3,928 3,023
Minority interests 1,683 1,296
ACCOUNTING POLICY
NOTE 11 MINORITY INTERESTS
FINANCIAL INFORMATION 2014
137