Accounting policies

Depreciation 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  
    land and including property, under Total
Tangible assets,   improve- equip- advance plant and operating tangible
Acquisition cost  Buildings ments ment3) payments equipment leases assets
Acquisition costs as of Dec 31, 2010 31,558 12,567 70,514 5,709 120,348 29,095 149,443
 Capital expenditures1) 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)
Acquisition costs as of Dec 31, 2011 32,129 13,258 70,756 6,452 122,595 32,565 155,160
               
Capital expenditures1) 848 348 3,296 5,031 9,523 9,986 19,509
Sales/scrapping (234) (32) (2,121) (13) (2,400) (5,229) (7,629)
Acquired and divested operations  (661) (9) (4,244) (92) (5,006) 69 (4,937)
Translation differences (1,775) (1,276) (3,875) (179) (7,105) (1,438) (8,543)
Reclassified from assets held for sale 706 49 4,584 57 5,396 219 5,615
Reclassifications and other 1,211 260 1,855 (3,592) (266) 2,196 1,930
Acquisition costs as of Dec 31, 2012 32,224 12,598 70,251 7,664 122,737 38,368 161,105
           Total    
        Construction investment    
    Land and Machinery in progress, property, Assets  
Tangible assets,   land and including property, under Total
Accumulated    improve- equip- advance plant and operating tangible
depreciation  Buildings ments ment3) payments equipment leases6) assets
Accumulated depreciation as of Dec 31,  2010 15,567 1,066 49,473 - 66,106 9,448 75,554
 Depreciation4) 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)
Accumulated depreciation as of Dec 31,2011 16,316 1,135 50,604 - 68,055 8,643 76,698
               
Depreciation 4) 1,176 91 4,681 - 5,948 5,616 11,564
Sales/scrapping (102) (13) (1,835) - (1,950) (2,577) (4,527)
Acquired and divested operations  (499) (24) (2,873) - (3,396) (162) (3,558)
Translation differences (1,131) (81) (3,078) - (4,290) (385) (4,675)
Reclassified from assets held for sale 496 23 3,003 - 3,522 109 3,631
Reclassifications and other (73) (18) (65) - (156) (1,898) (2,054)
Accumulated depreciation as of Dec 31, 2012 16,183 1,113 50,437 - 67,733 9,346 77,079
               
               
Net value in balance sheet as of Dec 31, 20112),5) 15,813 12,123 20,152 6,452 54,540 23,922 78,462
Net value in balance sheet as of Dec 31, 2012 2),5) 16,041 11,485 19,814 7,664 55,004 29,022 84,026

1) Includes capitalized borrowing costs of 134 (83).
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 195 (28).
5) Of which, investment property 754 (883) and property, plant and equipment 54,250 (53,657).
6) The increase is mainly explained by capital expenditure in the rental business.

Reclassifications and other mainly consist of assets under operating lease 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 amounted to 1,474 (1,625) at year-end. Capital expenditures during 2012 amounted to 22 (39). Accumulated depreciation amounted to 720 (742) at year-end, of which 45 (53) refers 2012. The estimated fair value of investment properties amounted to SEK 2.3 billion (2.5) at year-end. 95% of the investment properties were leased out during the year (91). Net income for the year was affected by 220 (235) in rental income from investment properties and of 44 (53) in direct costs.