Review of 2010 – USD version - Skanska

Note
22
Current-asset properties/Project development
Current-asset properties are reported in compliance with IAS 2, "Inventories." See
"Accounting and valuation principles," Note 1. The allocation of items in the statement
of financial position among the various business streams can be seen below.
Business stream Dec 31, 2010 Dec 31, 2009 Jan 1, 2009
Commercial Property Development 1,469.9 1,786.6 1,552.8
Residential Development 1,529.6 1,409.0 1,545.9
Total 2,999.6 3,195.6 3,098.7
Impairment losses/reversals of impairment losses
Current-asset properties are valued in compliance with IAS 2, “Inventories,” and are
thus carried at cost or net realizable value, whichever is lower. Adjustments to net
realizable value via an impairment loss are recognized, as are reversals of previous
impairment losses, in the income statement under “Cost of sales.” Net realizable value
is affected by the type and location of the property and by the yield requirement in the
market.
The following table shows that during 2010, impairment losses totaling USD 3.1 M
(1.3) were reversed. The reason for this was the net realizable value increased during the
year.
For a further description of the respective business streams, see Note 4, “Operating
segments.”
Completed properties, properties under construction and development properties
are all reported as current-asset properties.
Impairment losses
Reversals of
impairment losses
Total
2010 2009 2010 2009 2010 2009
Commercial Property
Development –0.6 –10.3 3.1 1.3 2.5 –9.0
Residential Development –19.3 –5.2 –19.3 –5.2
Total –19.8 –15.5 3.1 1.3 –16.8 –14.2
Carrying amount
Completed properties Properties under construction Development properties Total current-asset properties
Dec 31,
2010
Dec 31,
2009
Jan 1,
2009
Dec 31,
2010
Dec 31,
2009
Commercial Property
Development 1 711.9 461.7 289.0 317.8 864.1 860.7 440.2 460.8 403.1 1,469.9 1,786.6 1,552.8
Residential Development 68.9 136.1 185.5 522.4 415.8 617.5 938.3 857.1 742.8 1,529.6 1,409.0 1,545.9
Total 780.8 597.8 474.6 840.2 1,279.9 1,478.2 1,378.5 1,317.9 1,145.9 2,999.6 3,195.6 3,098.7
1 Of the amount for properties under construction, USD 317.8 M, USD 24.0 M consisted of properties completed during 2010 and USD 293.8 M of ongoing projects.
Jan 1,
2009
Dec 31,
2010
Dec 31,
2009
Jan 1,
2009
Dec 31,
2010
Dec 31,
2009
Jan 1,
2009
Commercial Property Development Residential Development Total current-asset properties
2010 2009 2010 2009 2010 2009
Carrying amount
January 1 1,786.6 1,403.0 1,409.0 1,001.3 3,195.6 2,404.2
Change in accounting principle 149.8 544.6 694.4
Adjusted carrying amount, January 1 1,786.6 1,552.8 1,409.0 1,545.9 3,195.6 3,098.7
Investments 433.5 567.0 744.6 406.8 1,178.1 973.7
Carrying amount, properties divested –733.8 –372.4 –606.0 –646.3 –1,339.8 –1,018.7
Impairment losses/reversals of impairment losses 2.5 –9.0 –19.3 –5.2 –16.8 –14.2
The year's provision for intra-Group profits in contracting work –10.3 –12.5 –10.3 –12.5
Reclassifications –20.0 –36.8 3.1 28.5 –16.9 –8.4
Exchange rate differences for the year 11.3 97.7 –1.8 79.4 9.6 177.0
December 31 1,469.9 1,786.6 1,529.6 1,409.0 2,999.6 3,195.6
The carrying amount of current-asset properties is allocated between properties carried
at cost and properties carried at net realizable value, as shown in the following table:
Dec 31,
2010
Cost Net realizable value Total
Dec 31,
2009
Commercial Property Development 1,452.4 1,653.0 1,472.5 17.5 133.6 80.3 1,469.9 1,786.6 1,552.8
Residential Development 1,463.5 1,331.4 1,492.3 66.1 77.6 53.6 1,529.6 1,409.0 1,545.9
Total 2,915.9 2,984.4 2,964.8 83.6 211.2 133.9 2,999.6 3,195.6 3,098.7
Jan 1,
2009
Dec 31,
2010
Dec 31,
2009
Jan 1,
2009
Dec 31,
2010
Dec 31,
2009
Jan 1,
2009
Skanska Review of 2010 – USD version Notes, including accounting and valuation principles 129