The Group’s recognized net sales pertain mainly to revenues from sales of goods and services. Net sales are, if the occasion arises, reduced by the value of discounts granted and by returns.
Revenue from the sale of goods is recognized when significant risks and rewards of ownership have been transferred to external parties, normally when the goods are delivered to the customer. However, if the sale of goods is combined with a buy-back agreement or a residual value guarantee, the transaction is recognized as an operating lease transaction if significant risks in regard to the goods are retained in Volvo. Revenue is then recognized over the period of the residual value commitment. If the residual value risk commitment is not significant and the sale was made to an independent party or in combination with a commitment from the customer to buy a new Volvo product in connection to a buy-back option, the revenue is recognized at the time of sale and a provision is made to reflect the estimated residual value risk ().
Revenue from the sale of workshop services is recognized when the service is provided. Interest income in conjunction with finance leasing or instalment contracts is recognized during the underlying contract period. Revenue for maintenance contracts are recognized in line with the allocation of associated costs over the contract period.
Interest income is recognized on a continuous basis and dividend income when the right to receive dividend is obtained.
Hard and soft products
The Volvo Group’s product range is divided into hard and soft products. The sale of new vehicles, machinery and engines comprise hard products. Soft products include all products and services apart from the sale of new and used vehicles, machinery and engines and some extended product offerings, that are sold to customers to provide the customer with an enhanced experience and greater satisfaction.
Refer to World-class services for more information about the Volvo Group’s services.
Refer to for information regarding net sales by product and market.