Electrolux 1996 Annual Report Download - page 41

Notes to the financial statements
Group Parent company
1. OPERATING EXPENSE (SEKm) 1996 1995 1996 1995
Operating expense includes the following items:
Gain/Loss on sale of real estate 58––
Gain/Loss on divestment of operations and shares 109 37 –127 –180
Total 114 45 –127 –180
Operating expense includes translation differences and adjustments for inflation in the amount of SEK 17m (–11).
See “Accounting principles” on page 35 regarding translation of foreign subsidiaries.
Group Parent company
2. DEPRECIATION ACCORDING TO PLAN (SEKm) 1996 1995 1996 1995
Brand names, etc. ––67 66
Goodwill, etc. 272 282 ––
Machinery, equipment and tools 3,739 3,699 193 169
Buildings, leasehold rights, etc. 412 410 55
Land improvements 15 16 00
Total 4,438 4,407 265 240
Group Parent company
3. FINANCIAL ITEMS (SEKm) 1996 1995 1996 1995
Dividends
From subsidiaries ––995 2,020
Other 17 37 11 0
Interest income
From subsidiaries ––231 259
Other 1,436 1,221 514 424
Interest expense
To subsidiaries –––180 – 377
Other –2,613 –2,371 –1,273 –1,075
Exchange differences
On loans and forward contracts as hedges
for equity in subsidiaries ––190 794
On other loans and borrowings, net 122 31 10
Other financial items –39 –204 7–241
Total –1,198 –1,295 526 1,814
Premiums on forward contracts intended as hedges for equity in subsidiaries have been amortized as interest in the amount of SEK145m (293).
In connection with consolidation, the differences in the parent company on loans and forward contracts intended as hedges for equity in
subsidiaries have been taken directly to equity after deduction of deferred taxes. The net change in equity is SEK 32m (1,630).
Other Group financial income and expense includes interest income of SEK 217m (113) and interest expense of SEK 205m (105) referring
to interest arbitrage transactions. Receivables and liabilities referring to interest arbitrage amounted to SEK 3,608m (85) at year-end and have
been reported at net value.
Group Parent company
4. TAXES (SEKm) 1996 1995 1996 1995
This item includes the following:
Income taxes –1,175 – 1,015 –135 –2
Deferred taxes –62 –195 ––
Minority interests in taxes 69 22 ––
Group share of taxes in associated companies –14 –11 ––
Total –1,182 – 1,199 –135 –2
As of December 31, 1996 the Group had a tax-loss carry-forward of SEK4,559m (3,893), which has not been included in computation
of deferred taxes.
Current tax litigation
Subsequent to a tax audit, the Swedish Tax Board made a number of decisions regarding income tax for the parent company in 1994–95.
Although several appeals have been lodged against these decisions, a provision of approximately SEK 60m has been made, which would be
sufficient if all the appeals were to be rejected.
In 1995 the Swedish Tax Board decided that taxable income would be increased by approximately SEK 1.3 billion, which corresponds
to an increase in tax of approximately SEK 350 million, and refers to the fiscal treatment of the result arising from liquidation of a foreign
subsidiary. An appeal has been lodged, but the court has not yet rendered its decision. All the experts consulted by Electrolux agree that
there is no legal basis for the action by the Tax Board, so that a provision to cover the amount in question is not considered necessary.
37
Electrolux Annual Report 1996