Scania annual report 2004

Accounting principles
The Annual Report of the Scania Group has
cial reports resulting from these new and amended
evaluated at the present value of expected
Acquisitions of companies are reported
been prepared in compliance with the Annual
recommendations are described below.
disbursements, taking into account inflation,
according to the purchase method of accounting.
Accounts Act, the current recommendations of
the Swedish Financial Accounting Standards
Council and the statements of its Emerging
RR 29 Employee Benefits
Through the implementation of RR 29, defined
expected future pay increases and using a discount
interest rate equivalent to the interest rate
on top-rated corporate or government bonds
This means that the assets and liabilities in the
acquired company are accounted for at acquisition
values assigned by the purchaser according
Issues Task Force. The recommendations of the
benefit plans in all of the Group’s subsidiaries are
with a remaining maturity corresponding to the
to an acquisition analysis. If the acquisition value
Council are based on the international accounting
being reported according to common principles.
obligations in question. For plans that are fun-
of the shares exceeds the value of the company’s
principles adopted by the International
Until the end of 2003, such plans had been
ded, the fair value of the plan assets is subtrac-
net assets according to the acquisition analysis,
Accounting Standards Board.
reported according to each country’s local
ted from the estimated present value
the difference is reported as goodwill on consoli-
New accounting recommendations
in 2004
Beginning in 2004, Scania is applying the
regulations.
The difference that arose due to the restatement
of liabilities as per 1 January 2004 was
reported as a reduction in the provision for defined
of the obligation. Actuarial gains and losses on
obligations and plan assets are credited or charged
directly to earnings when they arise.
In the case of some plans in the Group that
dation. Only earnings arising after the date of
acquisition are included in the shareholders’
equity of the Group. Divested companies are
included in the consolidated financial statements
Swedish Financial Accounting Standards
benefit plans and an equivalent increase in
are classified as defined benefit and which are
until and including the divestment date.
Council’s Recommendation RR 29 Employee
shareholders’ equity.
multi-employer plans, sufficient information can-
Minority interests in net income and share-
Benefits as well as the Emerging Issues Task
Within the Scania Group, there are a number
not be obtained to calculate Scania’s share of the
holders’ equity are reported separately.
Force’s Statement URA 43 Reporting of Special
Payroll Tax and Pension Fund Profit Tax. Certain
changes in existing regulations occurred, which
of both defined contribution and defined benefit
pension and similar plans, some of which have
assets that are managed by special foundations,
plans. For this reason, these plans are reported
as defined contribution, in accordance with point
30 of RR 29. This applies to the portion of the
Associated companies
“Associated companies” refers to companies in
shall be applied beginning in 2004. These changes
funds or the equivalent. The plans are financed by
Swedish ITP occupational pension plan that is
which Scania has a long-term ownership interest
occurred as a consequence of the efforts to
payments from Group companies and to some
administered via the retirement insurance com-
and possesses a significant influence. Associated
harmonise Swedish accounting rules and the
extent by employees.
pany Alecta as well as the Dutch Pensioenfonds
companies are accounted for using the equity
international accounting standards adopted by
Plans in which Scania only pays fixed contri-
Metaal en Techniek administered via MN Services
method. This means that in the consolidated
the International Accounting Standards Board
butions and has no obligation to pay additional
and Bedrijfstakpensioenfonds Metalektro
financial statements, holdings in associated
(IASB). As a consequence of these harmonisa-
contributions if the assets of the plan are insuffi-
administered via PVF Achmea. See also Note 15
companies are valued at the Group’s share of the
tion efforts, beginning with 2004 the Annual
cient to pay all compensation to the employee
for further information on the reporting of pensions.
shareholders’ equity of the associated company
Accounts Act allows financial instruments to be
are classified as defined contribution plans. The
Other long-term compensation to employees
after adjusting for the Group’s share of surplus
reported at fair value in compliance with IAS 39
Group’s expenditures for defined contribution
consists of the present value of the obligation
and deficit values, respectively. In this way,
Financial Instruments: Recognition and Measure-
plans are reported as an expense during the
calculated according to the projected unit cre-
Scania’s share of the earnings in an associated
ment, which has also influenced the rules in RR
period when the employees render the services
dit method less the fair value of any plan
company is included in consolidated earnings.
27 Financial Instruments: Disclosure and
Classification as well as RR 8 Reporting of
Effects of Changes in Foreign Exchange Rates.
In RR 1:00 Consolidated Financial Statements,
in question.
Defined benefit plans are all plans that are
not classified as defined contribution. These are
calculated according to the “projected unit credit
assets.
Consolidated financial statements
The consolidated financial statements encompass
Foreign currencies
When preparing the consolidated financial statements,
all items in the income statements of
rules on reporting reverse acquisitions have been
method”, for the purpose of fixing the present
Scania AB and all subsidiaries. “Subsidiaries”
foreign subsidiaries are translated to Swedish
incorporated, in accordance with the International
value of the obligations for each plan. Actuarial
refers to companies in which Scania directly or
kronor using the average exchange rates during
Financial Reporting Standard IFRS 3 Business
calculations are performed each year and are
indirectly owns more than 50 percent of the
the year. All balance sheet items except net
Combinations. The changes in Scania’s account-
based on actuarial assumptions that
voting rights of the shares or otherwise has a
income are translated using the exchange rates
ing principles and in the presentation in its finan-
are set on the closing day. The obligations are
controlling influence.
on the respective balance sheet date (closing day
53 ACCOUNTING PRINCIPLES • SCANIA ANNUAL REPORT 2004