Volvo Group's most significant accounting policies are primarily described together with the applicable note. Refer to Note 1, Accounting Policies for a specification. The preparation of AB Volvo’s Consolidated Financial Statements requires the use of estimates, judgements and assumptions that affect the recognized amounts of assets, liabilities and provisions at the date of the financial statements and the recognized amounts of sales and expenses during the periods presented. In preparing these financial statements, Volvo Group’s management has made its best estimates and judgements of certain amounts included in the financial statements, giving due consideration to materiality. Since future results are an unknown quantity, actual results could differ from these estimates due to the application of these assumptions. In accordance with IAS 1, the company is required to provide additional disclosure of accounting policies in which estimates, judgments and assumptions are particularly sensitive and which, if actual results differ, may have a material impact on the financial statements.

 

The sources of uncertainty which has been identified by the Volvo Group and which fulfill those criterias are presented in connection to the items considered to be affected.The adjacent table shows where to find those presentations.

Source of estimation uncertainty Note
Buy-back agreements and residual value guarantees 7, Income
Deferred taxes 10, Income taxes
Impairment of goodwill and other intangible assets 12, Intangible assets
Impairment of tangible assets 13, Tangible assets
Credit loss reserves 15, Customer-financing receivables
16, Receivables
Inventory obsolescence 17, Inventories
Assumptions when calculating pensions and other post-employment benefits 20, Provisions for post-employment benefits
Product warranty costs 21, Other provisions
Legal proceedings 21, Other provisions
Residual value risks 21, Other provisions