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FINANCIAL INFORMATION – FINANCIAL STATEMENTS
NOTE 21 SHARES IN ASSOCIATED
COMPANIES AND JOINT VENTURES
ACCOUNTING PRINCIPLES
Associated companies are companies over which the Group has a significant,
but not decisive, influence over operating and financial controls, usually through a
shareholding of between 20 and 50 per cent of the votes. Joint ventures are com-
panies in which the Group, through a cooperative agreement with one or more
parties, shares a decisive influence over operating and financial controls. As of
the date that significant influence in an associated company and shared decisive
influence in a joint venture arises, the shares in the associated company or joint
venture are recognised according to the equity method in the consolidated
accounts. The equity method is applied as of the date when significant or shared
decisive influence ceases.
The equity method means that the carrying amount of the shares in associated
companies and joint ventures corresponds to the Group’s share of the associa-
ted companies’ and joint ventures’ equity based on an application of the Group’s
accounting principles as well as Group goodwill and any remaining Group sur-
plus or deficit values. “Share in income of associated companies and joint ventu-
res” in the income statement comprises the Group’s share of the net income after
tax and the non-controlling interests in associated companies and joint ventures
adjusted for any depreciation, impairment loss or dissolution of acquired surplus
and deficit values determined in the same way as for operating acquisitions. Divi-
dends received from associated companies and joint ventures reduce the carry-
ing amount of the investment.
If the Group’s share of the accumulated deficit in an associated company or
joint venture exceeds the carrying amount of the shares in the Group, the value of
the shares is reduced to nil. Losses are also offset against long-term uncollatera-
lised financial balances that in their economic significance represent part of the
owner-company’s net investment in the associated company or joint venture.
Subsequent losses are not recognised as a liability in the consolidated accounts
as long as the Group has not issued any guarantees to cover losses arising in the
associated company or joint venture.
When significant influence over the associated company or shared decisive
influence over the joint venture ceases but the Group retains an interest in the
company, the remaining shares are initially recognised at fair value. The gain or
loss that arises is recognised in profit or loss.
Associated companies and joint ventures Group
MSEK 2015 2014
Carrying amount, 1 January 397 367
Acquisition of associated companies and joint ventures 195 34
Sale of associated companies -6 -123
Share in associated companies’ and joint ventures’
income1) 40 18
New share issues 15 9
Reclassifications - 47
Translation differences and internal gains -14 47
Dividends -25 -2
Carrying amount, 31 December 602 397
1) Share in associated companies’ and joint ventures’ net income and non-controlling interests.
The Group’s associated companies and joint ventures are held for operating
purposes, i.e., they are related to operations of the business areas or in the venture
portfolio and are therefore recognised in operating income.
In 2015, Saab acquired UMS Skeldar AG, an associated company, and
VriconInc. a joint venture.
Aggregate net income for Saab’s associated companies amounts to MSEK 94
(27) and other comprehensive income to MSEK -22 (119), producing net compre-
hensive income of MSEK 72 (146). For Saab’s joint ventures, net income amounts
to MSEK 16 (29) and other comprehensive income to MSEK -1 (4), producing net
comprehensive income of MSEK 15 (33). Saab’s share of income in associated
companies and joint ventures amounts to MSEK 40 (18). Shares in associated
companies and joint ventures as of 31 December 2015 include goodwill of
MSEK101 (79).
The Group’s share of sales, income, assets, liabilities and the carrying amount
of shares in associated companies and joint ventures is as follows.
92 – SAAB ANNUAL REPORT 2015