Financial investments, financial receivables and shareholdings where ownership is less than 20 percent and the Group has no significant influence are recognized as financial non-current assets.
Financial investments and financial receivables are recognized as financial cur- rent assets.
See also Note 6, ”Financial instruments.” Financial non-current assets
2006 2005
Financial investments
Financial assets carried at fair value through profit or loss
Securities 92
Derivatives 8 15
Financial assets available for sale1 958 359
Financial receivables, interest-bearing
Receivable from associated companies 12 5
Receivable from joint ventures 5 0
Restricted cash 371 410
Other interest-bearing receivables 146 355
Total 1,500 1,236
of which interest-bearing financial
non-current assets 1,433 1,070
of which non-interest-bearing financial
non-current assets 67 166
Financial current assets
2006 2005
Financial investments
Financial assets carried at fair value through profit and loss
Securities 202
Derivatives 116 35
Hold-to-maturity investments 655 476
Financial assets available for sale 747 105 Financial receivables, interest-bearing
Receivable from associated companies 10 0
Restricted cash 708 633
Discounted operating receivables 340 152 Other interest-bearing receivables 376 859
Total 3,154 2,260
of which interest-bearing financial current assets 3,038 2,225 of which non-interest-bearing current financial assets 116 35 1 Including SEK 59 M (59) in shares carried at cost. The shares are carried at cost because they are not listed and
their fair value cannot be reliably estimated. During 2006, shareholdings were not affected by any impairment losses. In 2005 there was an impairment loss of SEK –2 M in the Residential Development business stream, which was charged to financial items. The impairment loss was based on net realizable value.
Associated companies
Associated companies are reported in compliance with IAS 28, ”Investments in Associates.” See ”Accounting and valuation principles,” Note 1.
The carrying amount of associated companies was SEK 39 M (39).
Of this amount, SEK 0 M (3) was attributable to ”aircraft leasing companies.” Share of income in associated companies is recognized in the income state- ment, with the exception of share of income in ”aircraft leasing companies,” which is recognized under financial items.
Information on the Group’s share of revenue, income, assets, liabilities and equity in associated companies
2006 2005 Revenue 115 136 Income 15 7 Assets 226 355 Equity 1 –1,046 –1,046 Liabilities 1,272 1,401 226 355
1 Reconciliation between equity and carrying amount of holdings according to the equity method of accounting 2006 2005
Equity in associated companies –1,046 –1,046 Adjustments for losses not recognized 1,085 1,085 Carrying amount according to balance sheet 39 39 Information on losses in associated companies not posted because the carrying value of Skanska’s holding ”is already zero”
Group 2006 2005
Loss for the year –5
Losses in prior years –1,085 –1,080
The losses occurred in partly owned limited partnerships (aircraft leasing) for which the Group has no obligation to provide additional capital.
Other matters
The associate companies have no liabilities or contingent liabilities which the Group may become responsible for paying. Nor are there any obligations for fur- ther investments.
Notes, including accounting and valuation principles
100 Skanska Annual Report 2006
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:
Cost Net realizable value Total 2006 2005 2006 2005 2006 2005 Commercial Development 5,415 5,356 168 448 5,583 5,804 Other commercial properties 941 882 15 514 956 1,396 Residential Development 5,209 3,207 79 75 5,288 3,282 Total 11,565 9,445 262 1,037 11,827 10,482
Fair value of current-asset properties
The fair value of completed commercial properties on December 31, 2006 was estimated at about SEK 3.5 billion (4.6), partly in collaboration with external appraisers. This included partly owned properties with a corresponding carrying amount of SEK 2.5 billion (3.2).
Including projects recognized as completed on January 1, 2007, estimated total fair value was about SEK 4.1 billion (4.8), with a corresponding carrying amount of SEK 2.9 billion (3.4).
Other properties had an estimated fair value that largely coincides with their carrying amount of SEK 8.9 billion (7.1).
Information on assessed value for tax purposes of current-asset properties in Sweden
Corresponding Assessed value carrying amount 2006 2005 2006 2005
Buildings 2,031 2,759 3,359 3,796
Land 1,788 1,928 1,931 1,850
Total 3,819 4,687 5,290 5,646
Assets pledged
Current-asset properties used as collateral for loans and other obligations totaled SEK 5 M (5). See Note 33.
Other matters
Information on capitalized interest is reported in Note 15, ”Borrowing costs.” Skanska has committed itself to investing SEK 686 M in current-asset properties. For a further description of the respective business streams, see Note 4,
”Segment reporting.”
Income from current-asset properties comes mainly from Commercial Develop- ment and Residential Development.
Completed properties, properties under construction and development proper- ties are all reported as current-asset properties.
Divestments of current-asset properties
2006 2005
Divestment proceeds
Commercial Development 2,966 4,430
Other commercial properties 390 820
Residential Development 4,455 4,150
7,811 9,400
Carrying amount
Commercial Development –1,666 –2,804
Other commercial properties –291 –574
Residential Development –3,418 –3,347
–5,375 –6,725
Gross income
Commercial Development 1,300 1,626
Other commercial properties 99 246
Residential Development 1,037 803
2,436 2,675
Breakdown of divestments by Commercial Development among completed projects, properties under construction and development properties
Properties under Completed construction and
properties development properties Total 2006 2005 2006 2005 2006 2005
Divestment proceeds 2,010 3,430 956 1,000 2,966 4,430 Carrying amount –916 –2,231 –750 –573 –1,666 –2,804 Gross income 1,094 1,199 206 427 1,300 1,626
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 in 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 2006, impairment losses totaling SEK 7 M (1) were reversed. The reason for this was that net realizable value increased during the year.
Reversals of
Impairment losses impairment losses Total 2006 2005 2006 2005 2006 2005 Commercial Development 0 0 Other commercial properties –72 –9 1 –72 –8 Residential Development –12 –40 7 –5 –40 Total –84 –49 7 1 –77 –48
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 balance sheet items among the various business streams can be seen below.
Balance sheet item Business stream 2006 2005
Commercial Development Commercial Development 5,583 5,804
Other commercial properties Construction 956 1,396
Residential Development Residential Development 5,288 3,282
Notes, including accounting and valuation principles
Skanska Annual Report 2006 101
Note 22 continued