Review of 2010 – USD version - Skanska

Note
06 Continued
Reconciliation with statement of financial position Dec 31, 2010 Dec 31, 2009 Jan 1, 2009
Equity and liabilities
Financial instruments 2,372.0 2,676.3 2,833.2
Other liabilities
Equity 3,056.3 2,805.6 2,402.3
Pensions 178.7 308.6 401.4
Tax liabilities 388.1 361.6 322.7
Provisions 744.5 704.6 646.6
Gross amount due to customers for
contract work 2,489.6 2,351.0 2,142.3
Trade and other payables 1 2,193.9 2,445.7 2,499.5
Total equity and liabilities 11,423.2 11,653.5 11,248.1
1 Other operating liabilities, totaling USD 2,417.9 M (2,595.4), were reported in the statement
of financial position together with trade accounts payable of USD 1,575.8 M (1,744.9). The total
item in the statement of financial position amounted to USD 3,993.7 M (4,340.3). See Note 30.
Accrued interest expenses, checks issued but not cash, liabilities for unpaid properties etc. were
reported as other financial operating liabilities. Other non-financial operating liabilities were, for
example, interim items other than accrued interest, VAT liabilities, pension-related liabilities and
other employee-related liabilities.
Financial assets and liabilities at fair value through profit or loss
Financial assets and liabilities at fair value through profit or loss belong to the category
that has been identified as such on the first recognition date or consist of derivatives.
The amounts for 2010 and 2009 are attributable to derivatives.
Hedge accounted derivatives
Derivatives belong to the category “Financial assets and liabilities at fair value through
profit or loss.” Skanska separately reports hedge accounted derivatives. The amounts
for 2010 and 2009 are related to forward currency contracts for hedging of net investments
outside Sweden.
Fair value
There are three different levels for setting fair value.
The first level uses the official price quotation in an active market.
The second level, which is used when a price quotation in an active market does not
exist, calculates fair value by discounting future cash flows based on observable market
rates for each respective maturity and currency.
The third level uses substantial elements of input data that are not observable in the
market.
Fair values for the categories “At fair value through profit or loss” and “Hedged
accounted derivatives” have been set according to the second level above. In calculating
fair value in the borrowing portfolio, Skanska takes into account current market interest
rates, which include the credit risk premium that Skanska is estimated to pay for its borrowing.
Fair value of financial instruments with option elements is calculated using the
Black-Scholes model. The fair value of assets totaling USD 31.0 M and liabilities totaling
USD 33.4 M have been calculated according to this level.
Skanska has no assets or liabilities whose fair value has been set according to price
quotations in an active market or another method.
Skanska Review of 2010 – USD version Notes, including accounting and valuation principles 115