Electrolux 2003 Annual Report Download - page 71

Electrolux Annual Report 2003 69
Notes
Reclassifications
In accordance with Swedish GAAP, Electrolux has recorded advances
received from customers as a reduction to inventory. Under US GAAP,
such items have been classified as a current liability.
Adjustments of prior years amount to 20-F filing
Accounting for pensions
The US GAAP information for the year ending December 31, 2002
and 2001, as included in the 2002 Annual Report has been adjusted in
accordance with the filing of the 2002 Form 20-F. It has been adjusted
to reflect the prepaid expenses for unrecognized actuarial losses in
accordance with SFAS 87 related to the Swedish Pension Funds.
Years ended December 31
2002 2001
Net income according to 2002 Annual Report 5,308 3,711
Effect of adjustment
Pensions (net of tax –12) — 30
Net income according to US GAAP
per 2002 20-F filing 5,308 3,741
Comprehensive income according to
2002 Annual Report 2,122 5,605
Effect of adjustment
Pensions (net of tax 54) — –140
Comprehensive income according to
US GAAP per 2002 20-F filing 2,122 5,465
Shareholders’ equity according to
2002 Annual Report 27,580 28,667
Effect of adjustment
Pensions (net of tax 30, 30) –76 –76
Shareholders’ equity according to
US GAAP per 2002 20-F filing 27,504 28,591
Consolidated statement of cash flow
The statement of cash flow presented in AB Electrolux financial statements
differs from the statement of cash flows according to SFAS 95. The main
differences are the following: SFAS 95 requires a reconciliation of cash
and cash equivalents (liquid assets with maturities of three months or less
when acquired), whereas Electrolux also includes financial instruments
with maturities of three months or more at the time of acquisition in liquid
assets; SFAS 95 requires that changes in long-term accounts receivable
are included in cash flows from operating activities, whereas Electrolux
includes these changes as investments. SFAS 95 requires changes in
long-term loans to be reported gross showing proceeds and principal
payments, whereas Electrolux presents a net amount.
Recently issued accounting standards
SFAS 149 In April 2003, the FASB issued SFAS 149, “Amendment of
Statement 133 on Derivative Instruments and Hedging Activities.” SFAS
149 amends SFAS 133 for decisions made:
1. as part of the Derivatives Implementation Group process that effectively
required amendments to SFAS 133,
2. in connection with other FASB projects dealing with financial instru-
ments, and
3. in connection with implementation issues raised in relation to the
application of the definition of a derivative.
SFAS 149 is effective for contracts entered into or modified after June 30,
2003, with certain exceptions, and for hedging relationships designated
after June 30, 2003. Adoption of SFAS 149 did not have a material
impact on the Group’s consolidated financial statements.
SFAS 150 In May 2003, the FASB issued SFAS 150, “Accounting for
Certain Financial Instruments with Characteristics of Both Liabilities and
Equity”, to establish standards for how an issuer classifies and measures
certain financial instruments with characteristics of both liabilities and
equity. It requires that an issuer classify a financial instrument within its
scope as a liability (or an asset in some circumstances).
SFAS 150 is effective for financial instruments entered into or modified
after May 31, 2003, and otherwise is effective at the beginning of the first
interim period beginning after June 15, 2003, except for certain provisions
which have been deferred. There was no impact on the Group’s consoli-
dated financial statements as a result of adopting SFAS 150.
EITF 00-21 In January 2003, the Emerging Issues Task Force (EITF)
issued EITF 00-21, “Accounting for Revenue Arrangements with Multiple
Deliverables”. EITF 00-21 addresses the issues of:
1. how to determine whether an arrangement involving multiple deliver-
ables contains more than one unit of accounting; and
2. how arrangement consideration should be measured and allocated to
the separate units of accounting in the arrangement. EITF 00-21 does
not change otherwise applicable revenue recognition criteria.
EITF 00-21 is effective for revenue arrangements entered into fiscal
periods beginning after June 15, 2003. There was no impact in the
Group’s consolidated financial statement as a result of adopting EITF 00-21.
SAB 104 On December 17, 2003, the Staff of the Securities and
Exchange Commission issued Staff Accounting Bulletin 104 (SAB 104),
“Revenue Recognition”, which supercedes SAB 101,” Revenue
Recognition in Financial Statements”. SAB 104’s primary purpose is to
rescind accounting guidance contained in SAB 101 related to multiple
element revenue arrangements, superceded as a result of the issuance of
EITF 00-21, “Accounting for Revenue Arrangements with Multiple Deliver-
ables”. The revenue recognition principles of SAB 101 remain largely
unchanged by the issuance of SAB 104. There was no impact in the
Group’s consolidated financial statements as a result of adopting SAB 104.
FIN 46 In January 2003, the FASB issued Interpretation 46, “Consoli-
dation of Variable Interest Entities”. A variable interest entity is a legal
entity that lacks either:
1. equity interest holders as a group that lack the characteristics of a
controlling financial interest, including: decision making ability and an
interest in the entity’s residual risks and rewards or
2. the equity holders have not provided sufficient equity investment to permit
the entity to finance its activities without additional subordinated financial
support.
Interpretation 46 requires a variable interest entity created after Febru-
ary, 2003 to be consolidated if any of its interest holders are entitled to a
majority of the entity’s residual return or are exposed to a majority of its
expected losses as of December 31, 2003. This party is referred to as the
primary beneficiary. There was no impact in the Group’s consolidated
financial statements as a result of adopting FIN 46.
FIN 46 (R) In December 2003, the FASB issued FASB Interpretation
46 (R), “Consolidation of Variable Interest Entities”. FIN 46 (R) replaces
FIN 46 and clarifies the accounting for interests in variable interest entities.
The Group will begin to apply FIN 46 (R) to entities considered to be
variable interest entities for periods after December 31, 2003. Electrolux
is in the process of assessing the impact of FIN 46 (R).
Note 30 continued