Volvo 2014 Annual Report Download - page 168

164
Reported in operating income12014 2013
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 derivatives3(42)–– 39––
Loans receivable and other receivables
Accounts receivables / trade payables
1(1,190)–– 629––
Customer fi nancing receivables VFS
189 4,829 – 128 4,705 –
Financial assets available for sale
Shares and participations for which a market value can be calculated 55 – – 43 – –
Shares and participations for which a market value cannot be calculated 16 – – 19 – –
Financial liabilities valued at amortized cost4––(1,847) ––(1,704)
Effect on operating income (1,072) 4,829 (1,847) 858 4,705 (1,704)
Reported in net fi nancial items5
Financial assets and liabilities at fair value
through the income statement2
Marketable securities – 46 – – 94 –
Interest and currency rate risk derivatives3, 6 1,567 9 99 1,987 (5) (56)
Loans receivable and other receivables
Cash and Cash equivalents – 273 – – 292 –
Financial liabilities valued at amortized cost6(391) – (1,661) (1,678) – (2,171)
Effect on net fi nancial items 1,176 328 (1,562) 309 381 (2,227)
1 Information is provided regarding changes in provisions for doubtful receivables
and customer fi nancing in Notes 15 and 16, Accounts receivable and customer
fi nancing receivables, as well as in Note 8, Other operating 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 The Volvo Group uses forward contracts and currency options to hedge the
value of future cash fl ows in foreign currency. Both unrealized and realized result
on currency risk contracts is included in the table. Read more in Note 4, Goals
and policies in fi nancial risk management.
4 Interest expenses attributable to fi nancial liabilities valued at amortized cost
recognized in operating income include interest expenses for fi nancing opera-
tional leasing activities.
5 In gains, losses, income and expenses related to fi nancial instruments recog-
nized in Net fi nancial items, SEK 1,176 M (309) was recognized under other
fi nancial income and expenses.
Read more in Note 9, Other fi nancial income and expenses for further
information. Interest expenses attributable to pensions, SEK 432 M (583)
arenot included in this table.
Derecognition of fi nancial 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 that 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 fi nancial 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 fi nancial asset that does not fulfi ll the requirements for derecogni-
tion amounted to SEK 0.1 bn (0.4).
Transferred fi nancial assets for which substantially all risks and rewards
have been transferred are derecognized continuously. Involvement in
these assets are refl ected in the Volvo Group’s balance sheet as part of
the external credit guarantees, which are recognized at fair value as provi-
sions in the balance sheet and amounted to SEK 650 M (79).
The Volvo Group’s maximum exposure to loss is considered being the
total recourse relating to transferred assets are that are part of the
reported credit guarantees, i.e. the total amount Volvo Group would have
to pay in case of default of the customers. The likelihood for all customers
being in default at the same time is considered to be unlikely. The gross
exposure for the Volvo Group amounted to SEK 6.6 billion related to credit
guarantees issued for customers and others. This amount has not been
reduced by the value of counter guarantees received or other collaterals
such as the right to repossess the product.
Read more in Note 24 regarding Contingent Liabilities.
Gains, losses, interest income and expenses related
to fi nancial instruments
The table below shows how gains and losses as well as interest income
and expenses have affected income after fi nancial items in the Volvo
Group divided on the different categories of fi nancial instruments.
FINANCIAL INFORMATION 2014