Accounting policies

Depreciation/amortization periods  
Type-specific tools 2 to 8 years
Assets under operating leases 3 to 5 years
Machinery 5 to 20 years
Buildings and investment properties 25 to 50 years
Land improvements 20 years

Sources of estimation uncertainty

           Total    
        Construction investment    
    Land and Machinery in progress, property, Assets  
Tangible assets,   land and including property, under Total
acquisition   improve- equip- advance plant and operating tangible
costs Buildings ments ment(3 payments equipment leases assets
 Balance-sheet amount 2009 31,859 12,641 68,851 4,578 117,929 31,993 149,922
 Capital expenditures(1 617 119 3,806 2,446 6,988 4,893 11,881
 Sales/scrapping (472) (105) (1,730) (7) (2,314) (5,459) (7,773)
 Acquired and divested operations 0 0 0 0 0 223 223
 Translation differences (912) 50 (1,308) (148) (2,318) (2,843) (5,161)
 Reclassifications and other 466 (138) 895 (1,160) 63 288 351
Balance-sheet amount 2010 31,558 12,567 70,514 5,709 120,348 29,095 149,443
               
Capital expenditures(1 548 266 3,947 3,455 8,216 7,414 15,630
Sales/scrapping (299) (88) (1,969) 0 (2,356) (4,786) (7,142)
Acquired and divested operations  36 10 64 0 110 1,503 1,613
Translation differences 373 411 889 (33) 1,640 122 1,762
Reclassified to assets held for sale (706) (49) (4,586) (57) (5,398) (131) (5,529)
Reclassifications and other 619 141 1,897 (2,622) 35 (652) (617)
Balance-sheet amount 2011 32,129 13,258 70,756 6,452 122,595 32,565 155,160
           Total    
        Construction investment    
    Land and Machinery in progress, property, Assets  
Accumulated    land and including property, under Total
depreciation   improve- equip- advance plant and operating tangible
and amortization Buildings ments ment(3 payments equipment leases assets
 Balance-sheet amount 2009 14,780 1,042 46,827 - 62,649 11,605 74,254
 Depreciation and amortization(4 1,207 98 4,772 - 6,077 4,410 10,487
 Sales/scrapping (224) (22) (1,549) - (1,795) (3,082) (4,877)
 Acquired and divested operations 0 0 0 - 0 (55) (55)
 Translation differences (192) (20) (691) - (903) (1,142) (2,045)
 Reclassifications and other (4) (32) 114 - 78 (2,288) (2,210)
Balance-sheet amount 2010 15,567 1,066 49,473 - 66,106 9,448 75,554
               
Depreciation and amortization (4 1,191 77 4,856 - 6,124 4,621 10,745
Sales/scrapping (260) (9) (1,647) - (1,916) (2,407) (4,323)
Acquired and divested operations  0 0 (18) - (18) 0 (18)
Translation differences 338 20 819 - 1,177 20 1,197
Reclassified to assets held for sale (496) (23) (2,980) - (3,499) (94) (3,593)
Reclassifications and other (24) 4 101 - 81 (2,945) (2,864)
Balance-sheet amount 2011 16,316 1,135 50,604 - 68,055 8,643 76,698
               
               
Net value in balance sheet 2010(2 ,(5 15,991 11,501 21,041 5,709 54,242 19,647 73,889
Net value in balance sheet 2011(2, (5 15,813 12,123 20,152 6,452 54,540 23,922 78,462

1) Includes capitalized borrowing costs of 83 (67).
2) Acquisition costs less accumulated depreciation, amortization and write-downs.
3) Machinery and equipment pertains mainly to production related assets.
4) Of which write-down 28 (26).
5) Of which, investment property 883 (948) and property, plant and equipment 53,657 (153,294).

Reclassifications and other mainly consist of assets under operating leases related to legal sales transactions, where revenue is deferred and accounted for as operating lease revenue. Assets classified as inventory will, when the operating lease model is applied for revenue recognition, be reclassified from inventory to assets under operating leases, when the legal sales transaction occurs. If the product is returned after the lease period, there will again be a reclassification from assets under operating leases to inventory. When a buy-back agreement has expired, but the related product is not returned, the cost and the accumulated depreciation are reversed in reclassification and other, within the line item assets under operating leases. Most reclassifications within tangible assets relate to construction in progress, which are reclassified to the respective category within property, plant and equipment.

 Investment properties
The acquisition cost of the investment properties was 1,625 (1,692) at year-end. Capital expenditures during 2011 amounted to 39 (11). Accumulated depreciation was 742 (744) at year-end, of which 53 (55) during 2011. The estimated fair value of investment properties was SEK 2.5 billion (1.8) at year-end. 91% of the investment properties were leased out during the year (89). Net income for the year was affected by 235 (223) in rental income from investment properties and 53 (63) in direct costs.