Scania annual report 2004

Reconciliation of 2004 2003 2002
effective tax Amount % Amount % Amount %
Income after
financial items 6 014 4 604 3 722
Swedish statutory tax – 1,684 – 28 – 1,289 – 28 – 1,042 – 28
Tax effect and
percentage influence:
Difference between Swedish
and foreign tax rates – 86 – 1 26 1 32 1
Tax-exempt income 36 1 12 0 31 1
Non-deductible expenses
including goodwill
amortisation – 169 – 3 – 158 – 3 – 112 – 3
Valuation of tax loss
carry-forwards – 30 – 1 – 25 – 1 35 1
Adjustment for taxes
pertaining to previous years 11 0 – 59 – 1 – 1 0
Capital gain on divestment
of businesses – – 154 4
Other – 13 – – 72 – 2 – 82 – 2
Effective tax – 1,935 – 32 – 1,565 – 34 – 985 – 26
Deferred tax assets and
tax liabilities are attributable
to the following: 2004 2003 2002
Deferred tax assets
Provisions 580 423 293
Fixed assets 291 261 213
Inventories 416 346 367
Unutilised tax loss carry-forwards 3 300 661 801
Other 451 412 518
Offset within tax units – 1,655 – 1,722 – 1,726
Total 383 381 466
3 Unutilised tax loss carry-forwards stem mainly from South America, Sweden,
France and Germany. Of the deferred tax assets attributable to unutilised loss
carry-forwards, SEK 212 m. may be utilised without time constraints.
2004 2003 2002
Deferred tax liabilities
Fixed assets 2,638 2,729 2,766
Tax allocation reserve 4 884 838 749
Other 335 335 271
Offset within tax units – 1,655 – 1,722 – 1,726
Total 2,202 2,180 2,060
Net deferred tax liabilities 1,819 1,799 1,594
4 In Sweden, tax laws permit provisions to an untaxed reserve called a tax
allocation reserve. Deductions for provisions to this reserve are allowed up to
a maximum of 25 percent of taxable profits. Each provision to this reserve may be
freely withdrawn and face taxation, and must be withdrawn no later than the sixth
year after the provision was made.
Reconciliation of net
deferred tax liabilities 2004 2003 2002
1 January 1,799 1,594 1,428
Deferred taxes reported
in the year’s income – 12 209 – 14
Tax assets/tax liabilities
in acquired businesses 16 12 24
Tax assets/tax liabilities in
divested businesses – – – 26
Change in accounting principle 3 – –
Exchange rate differences etc. 13 – 16 182
Net deferred tax liabilities,
31 December 1,819 1,799 1,594
Deferred tax assets related to subsidiaries that reported a loss during
the year were valued on the basis of an assessment that future earnings
capacity makes a valuation possible. In the Scania Group, deferred tax
assets related to tax loss carry-forwards of SEK 243 m. (255 and 459,
respectively) were not included after assessment of the potential for
utilising the tax loss carry-forwards.
Expiration structure of deferred tax assets related to tax loss
carry-forwards not recognised
2005 28
2006 18
2007 4
2008 4
2009 2
2010 and thereafter 70
No expiration date 117
Total 243
NOTE 6 Depreciation/amortisation
Distribution of depreciation or amortisation by function, excluding
depreciation in Customer Finance, which is found in Note 3.
2004 2003 2002
Intangible fixed assets
Research and development expenses – 84 – 2 –
Selling expenses 1 – 211 – 214 – 237
Total – 295 – 216 – 237
Tangible fixed assets
Costs of goods sold – 1,522 – 1,419 – 1,469
Research and development expenses – 106 – 95 – 91
Selling expenses – 245 – 238 – 255
Administrative expenses – 16 – 32 – 41
Total – 1,889 – 1,784 – 1,856
Total depreciation/amortisation – 2,184 – 2,000 – 2,093
1 Goodwill amortisation related to acquisitions of sales and service companies is
recognised as a selling expense.
NOTE 7 Intangible fixed assets
Research
and
develop- Soft-
Goodwill ment 1 ware
Carrying amount, 1 January 2002 1,364 – –
Change in accumulated
acquisition value, 2002 78 573 165
Change in accumulated
amortisation, 2002 – 194 – – 48
Carrying amount, 31 December 2002 1,248 573 117
Change in accumulated
acquisition value, 2003 – 114 660 90
Change in accumulated
amortisation, 2003 – 128 – 2 – 49
Carrying amount, 31 December 2003 1,006 1,231 158
Continued
61 NOTES • SCANIA ANNUAL REPORT 2004