Scania annual report 2002

NOTE 6 Taxes
Tax expense/income for the year 2002 2001 2000
Current tax –990 –642 –1,088
Deferred tax 14 163 –168
Share of tax of associated companies –9 –17 –115
Total –985 –496 –1,371
Deferred tax is attributable
to the following: 2002
Deferred tax related to
temporary differences –83
Deferred tax related to
changes in tax rates 0
Deferred tax revenue in tax value
of loss carry-forwards
capitalised during the year 350
Deferred tax expense due to
utilisation of previously capitalised
tax value of loss carry-forwards –253
Total 14
Reconciliation of 2002 2001 2000
effective tax Amount % Amount % Amount %
Income after financial items 3,722 1,541 4,454
Swedish statutory tax 1,042 28 431 28 1,247 28
Tax effect and
percentage influence:
Valuation of tax loss
carry-forwards –35 –1 106 7 45 1
Difference between Swedish
and foreign tax rates –32 –1 –71 –5 61 1
Tax-exempt income –31 –1 –32 –2 –62 –1
Capital gain on divestment
of businesses –154 –4 – – – –
Non-deductible expenses
including goodwill amortisation 112 3 143 9 89 2
Adjustment for taxes pertaining
to previous years 1 0 –30 –2 –9 0
Other 82 2 –51 –3 0 0
Effective tax 985 26 496 32 1,371 31
During the year, Swedish car operations were divested; the
capital gain SEK 550 m. groupwise, did not lead to any tax burden.
During 2002, the tax rate changed in the following countries:
Australia, Chile, France, South Korea, Luxemburg, the Netherlands,
Russia, Slovakia and Switzerland, which had a marginal effect.
Deferred tax assets and
liabilities are attributable to the
following: 2002 2001 2000
Deferred tax assets
Provisions 293 212 269
Property, plant and equipment 213 171 77
Inventories 367 363 308
Tax loss carry-forwards 1 801 801 525
Other 518 349 295
Offset within tax units –1,726 –933 –839
Total 466 963 635
Deferred tax liabilities
Property, plant and equipment 2,766 2,190 1,951
Tax allocation reserve 2 749 807 873
Other 271 327 286
Offset within tax units –1,726 –933 –839
Total 2,060 2,391 2,271
Net deferred tax liabilities 1,594 1,428 1,636
Reconciliation of net deferred
tax liabilities:
1 January 1,428
Tax assets/tax liabilities
in acquired businesses 24
Tax assets/tax liabilities
in divested businesses –26
Deferred taxes reported
in the year’s income –14
Exchange rate differences etc. 182
Net deferred tax liabilities, 31 December 1,594
1 Tax loss carry-forwards stem mainly from Sweden, Latin America, France, Great
Britain and Germany. Of the deferred tax assets attributable to tax loss carryforwards,
SEK 385 m. may be utilised without time constraints. For tax assets
valued during 2002 related to subsidiaries that reported a loss during the year,
Scania believes that the future earnings capacity of each company makes a
valuation possible. In the Scania Group, deferred tax assets of SEK 459 m
related to tax loss carry-forwards were not included after assessment of the
potential for utilising the tax loss carry-forwards and due to a ceiling on annual
future utilisation. Of the loss carry-forwards not included, SEK 245 m. has no
expiration date, while SEK 214 m. will expire as follows: SEK 2 m. in 2003.
SEK 42 m. in 2004, SEK 20 m. in 2005, SEK 2 m. in 2006, SEK 21 m. in 2007
and SEK 127 m. in 2008 or later. Deferred tax has not been reported for
temporary differences attributable to investments in subsidiaries and associated
companies, since these holdings are essentially of long-term nature.
2 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, but must be withdrawn no later than the sixth year
following the year the provision was made.
NOTE 7 Depreciation/amortisation
Distribution of depreciation or amortisation by function, excluding
depreciation in Customer Finance operations, which is found in
Note 2.
Intangible fixed assets 2002 2001 2000
Research and development expenses –
Selling expenses –237 –188 –83
Total –237 –188 –83
Tangible fixed assets 2002 2001 2000
Cost of goods sold –1,469 –1,504 –1,411
Research and development expenses –91 –106 –84
Selling expenses –255 –314 –372
Administrative expenses –41 –45 –49
Total –1,856 –1,969 –1,916
Total depreciation/amortisation –2,093 –2,157 –1,999
In addition, reduction in value of vehicles
delivered with repurchase guarantees
and short-term leasing, which is
included in “Cost of goods sold” –549 –583 –344
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