E1. Financial instruments by category and measurement level

AP ACCOUNTING PRINCIPLES

Financial instruments recognized in the balance sheet include cash and cash equivalents, securities, other financial receivables, trade receivables, trade payables, loans and derivatives.

Current investments and derivatives are recognized on the trade date. Available-for-sale financial assets and loans are recognized on the settlement date. Trade receivables and trade payables are recognized in the balance sheet once the invoice has been sent or paid, respectively.

Financial assets are initially recognized at cost, and transaction costs are included for certain instruments that are not measured at fair value. Financial assets are recognized in the balance sheet until the rights in the agreement has been realized or the company no longer has the rights to the asset. Impairment of financial assets takes place when there is objective proof of impairment, such as cessation of an active market or where it is probable that the debtors cannot meet their commitments.

Financial liabilities are recognized at amortized cost, except in cases where they are recognized at fair value using hedge accounting. Financial liabilities are derecognized from the balance sheet when SCA has met its commitments.

SCA recognizes financial instruments with a remaining maturity of less than 12 months as current assets and those liabilities that exceed 12 months as non-current assets and liabilities.

Fair value measurement

For the financial instruments for which market quotations are available, actual prices are used for fair value measurement (Level 1). In the absence of market quotations for the instruments, SCA determines fair values with the aid of common valuation models, using quoted prices of similar assets or liabilities in active markets (Level 2).

For disclosures in a note relating to non-current loans, current market interest rates are taken into account in fair value calculations. The fair value of short-term loans and investments is considered to correspond to the carrying amount, since a change in market interest rates does not have a significant effect on market value.

Classification and subsequent recognition

On the acquisition date, SCA classifies financial instruments into the following categories.

Financial assets measured at fair value through profit or loss

Assets are classified in this category when the intention is to sell in the short term and, if such is the case, they are recognized continuously at fair value through profit or loss.

This category also includes derivatives with positive market values not recognized using hedge accounting. Only financial derivatives were classified in this category during the year.

Held-to-maturity investments

Held-to-maturity investments are defined as financial assets that have determinable payments and that SCA intends to hold to maturity. Assets in this category are measured at amortized cost applying the effective interest method, which means they are accrued so that a constant return is obtained.

Loan and trade receivables

This category comprises loan receivables that have determinable payments and are not quoted in an active market, as well as trade receivables. Receivables arise when SCA provides money, goods or services directly to another party without any intention of conducting trading in the receivables. Assets in this category are measured at amortized cost less a potential provision for impairment.

Available-for-sale financial assets

This category includes assets that are available for sale or that have not been classified in any of the other categories. These assets are measured at fair value through other comprehensive income.

Financial liabilities measured at fair value through profit or loss

This category includes derivatives with negative fair values that are not used for hedge accounting and financial liabilities held for trading. Liabilities in this category are continuously measured at fair value and changes in value are recognized in profit or loss.

Financial liabilities measured at amortized cost

This category includes financial liabilities that are not held for trading. These are recognized initially at fair value, net after transaction costs, and subsequently at amortized cost according to the effective interest method.

Accounting for derivatives used for hedging purposes

All derivatives are initially and continuously recognized at fair value in the balance sheet. Gains and losses on remeasurement of derivatives used for hedging purposes are recognized in accordance with the accounting principles stated in Note E6.

Financial instruments by category and measurement level

SEKm

Note

Measurement level

2015

2014

2013

Financial assets measured at fair value through profit or loss

 

 

 

 

 

Derivatives – Non-current financial assets

E2

2

41

98

Derivatives – Non-current receivables

E2

 

2

Derivatives – Current financial assets

E2

2

465

761

127

Derivatives – Other current receivables

D5

2

70

64

46

Total

 

 

576

825

273

Financial liabilities measured at fair value through profit or loss

 

 

 

 

 

Non-current financial liabilities

E4

2

10,967

12,904

15,796

Current financial liabilities

E4

2

5,634

4,126

521

Derivatives – Non-current financial liabilities

E4

 

23

0

Derivatives – Current financial liabilities

E4

2

467

369

69

Derivatives – Other non-current liabilities

D6

2

12

2

10

Derivatives – Other current liabilities

D6

2

59

106

107

Total

 

 

17,139

17,530

16,503

Loans and receivables

 

 

 

 

 

Non-current financial assets

E2

233

252

27

Current financial assets

E2

41

278

366

Trade receivables

E3

16,829

16,827

15,420

Cash and cash equivalents

E2

5,042

3,815

3,785

Total

 

 

22,145

21,172

19,598

Available-for-sale financial assets

 

 

 

 

 

Non-current financial assets

E2

1,2

83

1,815

1,657

Held-to-maturity investments

 

 

 

 

 

Non-current financial assets

E2

296

276

227

Financial liabilities measured at amortized cost

 

 

 

 

 

Non-current financial liabilities

E4

10,394

11,311

10,979

Current financial liabilities

E4

6,224

9,841

8,534

Trade payables

 

14,351

13,964

12,853

Total

 

 

30,969

35,116

32,366

Derivatives used for hedge accounting

 

 

 

 

 

Non-current financial assets

E2

2

379

794

739

Other non-current assets

 

2

2

2

1

Other current receivables

D5

2

6

26

Non-current financial assets

E2

2

268

213

43

Total

 

 

649

1,015

809

Non-current financial liabilities

E4

2

115

8

296

Other non-current liabilities

D6

2

96

55

26

Current financial liabilities

E4

2

21

304

6

Other current liabilities

D6

2

320

215

133

Total

 

 

552

582

461

These financial instruments are measured at fair value, with the exception of loans and receivables and financial liabilities measured at amortized cost. According to SCA’s assessment, the fair value essentially corresponds to the carrying amount, with the exception of non-current liabilities, the fair value of which is disclosed in Note E4.

Measurement levels

Level 1:Quoted prices on an active market for identical assets or liabilities, such as shares or bonds quoted on the stock exchange.

Level 2:Other observable inputs for the asset or liability than quoted prices included in Level 1, either directly (price quotations) or indirectly (obtained from price quotations), such as forward contracts or interest rate swaps.

Financial instruments in other notes to the balance sheet

 

 

2015

 

2014

 

2013

SEKm

Note

Financial instruments

 

Of which derivatives

 

Financial instruments

 

Of which derivatives

 

Financial instruments

 

Of which derivatives

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Financial assets, cash and cash equivalents

E2

6,848

 

1,153

 

8,204

 

1,768

 

7,069

 

1,009

Other non-current assets

 

2

 

2

 

2

 

2

 

3

 

1

Trade receivables

E3

16,829

 

 

16,827

 

 

15,420

 

Other current receivables

D5

70

 

70

 

70

 

70

 

72

 

72

Total

 

23,749

 

1,225

 

25,103

 

1,840

 

22,564

 

1,082

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Financial liabilities

E4

33,821

 

603

 

38,886

 

704

 

38,712

 

371

Other non-current liabilities

D6

108

 

108

 

57

 

57

 

36

 

36

Trade payables

 

14,351

 

 

13,964

 

 

12,853

 

Other current liabilities

D6

379

 

379

 

321

 

321

 

240

 

240

Total

 

48,659

 

1,090

 

53,228

 

1,082

 

51,841

 

647