Saab 2015 Annual Report Download - page 106

FINANCIAL INFORMATION – FINANCIAL STATEMENTS
NOTE 36 OTHER LIABILITIES
Group
MSEK 31-12-2015 31-12-2014
Other long-term liabilities
Liabilities to previous owners and minority owners 68 76
Liabilities related to employees 44 46
Other 24 19
Total 136 141
Of which liabilities due for payment more than five years
after closing day 112 32
Other current liabilities
Value-added tax 275 328
Employee withholding taxes 216 226
Liabilities to associated companies and joint ventures 3 21
Other 231 403
Total 725 978
Parent Company
MSEK 31-12-2015 31-12-2014
Value-added tax 66 222
Employee withholding taxes 143 141
Other 402 458
Total 611 821
Of which liabilities due for payment more than five years
after closing day 14 -
Saab considers that there is no significant difference between book and fair value.
NOTE 37 ACCRUED EXPENSES AND
DEFERRED INCOME
Group Parent Company
MSEK 31-12-2015 31-12-2014 31-12-2015 31-12-2014
Accrued expenses
Vacation pay liability 980 995 700 719
Accrued project costs 715 944 532 508
Social security expenses 696 613 568 473
Expected invoices 433 306 193 144
Personnel liabilities 232 263 159 165
Claims reserve 57 80 10 11
Royalties and
commissions 51 60 31 39
Other 332 285 137 365
Total accrued
expenses 3,496 3,546 2,330 2,424
Deferred income
Liabilities to customers 3,035 2,038 1,382 1,528
Capitalised changes in
value related to forward
contract rollovers - - 218 194
Other 18 25 -21 21
Total deferred income 3,053 2,063 1,579 1,743
Total 6,549 5,609 3,909 4,167
Saab considers that there is no significant difference between book and fair value.
NOTE 38 FINANCIAL RISK MANAGEMENT
AND FINANCIAL INSTRUMENTS
Saab’s financial assets and liabilities and contractual obligations give rise to
financial risks. These risks are managed to a large extent with various financial
instruments.
Group Treasury is responsible for managing the financial risks. The Board of
Directors of Saab has established a Group Treasury Policy, which provides an
overall description of the management of the financial risks and treasury opera-
tions. The goal is to identify and actively manage the financial risks in order to
reduce any negative impact on the Group’s results, competitive strength and
financial flexibility.
The financial risks are defined as follows:
• Foreign currency risk
• Liquidity risk
• Refinancing risk
• Interest rate risk
• Commodity price risk
• Credit and counterparty risk
• Pension obligations
Group Treasury has a risk mandate expressed as VaR (Value at Risk) of MSEK 50
(50). The mandate is divided between management of the financial risks related to
fixed price tenders, electricity trading and trading. Risks are managed through
various portfolios and reported daily according to defined risk measures.
Management of the Group’s funding, customer financing and guarantees is
centralised in Group Treasury. Management of insurance is centralised in the
Group’s insurance company, Lansen Försäkrings AB.
ACCOUNTING PRINCIPLES
Recognition and valuation of financial assets and liabilities
A financial asset or liability is recognised in the statement of financial position
when the company becomes party to the instrument’s contractual terms.
Accounts receivable are recognised in the statement of financial position when
an invoice has been sent.
A financial asset is removed from the statement of financial position when the
rights in the contract are realised, expire or the company loses control over the
asset. The same applies to part of a financial asset. A financial liability is removed
from the statement of financial position when the obligation in the agreement has
been discharged or otherwise extinguished. The same applies to part of a finan-
cial liability.
On each reporting date, Saab evaluates whether there are objective indica-
tions that a financial asset or pool of financial assets is in need of write-down.
Financial assets and liabilities are offset and recognised as a net amount in the
statement of financial position when there is a legal right to a set-off and when the
intent is to settle the items with a net amount or to realise the asset and settle the
liability at the same time. Exceptions are made for derivatives where derivatives
with positive values are recognised as assets and derivatives with negative values
are recognised as liabilities.
Financial instruments are initially recognised at cost, corresponding to the
instrument’s fair value plus transaction expenses. The same applies to all financial
instruments with the exception of those in the category financial assets at fair value
through profit or loss. The instruments are subsequently recognised at fair value or
amortised cost, depending on how they have been classified as follows. The fair
value of listed financial assets and liabilities is determined using market prices. Saab
also applies various valuation methods to determine the fair value of financial assets
and liabilities traded on an inactive market or unlisted holdings. These valuation
methods are based on the valuation of similar instruments, discounted cash flows
or accepted valuation models such as Garman-Kohlhagens. Amortised cost is
determined based on the effective interest rate calculated on the acquisition date.
Classification of financial assets and liabilities
The Group’s financial assets and liabilities are classified according to the following
categories, which determine how each item is valued.
Financial assets and liabilities at fair value through profit or loss:
Assets and liabilities in this category are measured at fair value with changes in
value recognised in profit or loss. This category consists of two subgroups: (i) finan-
cial assets and liabilities held for trading, and (ii) other financial assets and liabilities
that the company initially chose to measure at fair value through profit or loss.
102 – SAAB ANNUAL REPORT 2015