G15 Right-of-use assets
Leases with Sandvik as lessee
|
Land and buildings |
Plant and machinery |
Fixture and fittings |
Total |
|---|---|---|---|---|
Accumulated acquisition cost |
|
|
|
|
At January 1, 2022 |
4,542 |
407 |
1,172 |
6,121 |
Discontinued operations |
–213 |
–43 |
–114 |
–369 |
Additions |
903 |
108 |
324 |
1,335 |
Remeasurements |
311 |
16 |
–2 |
325 |
Business combinations |
476 |
–2 |
49 |
523 |
Divestments and disposals |
–383 |
–59 |
–246 |
–689 |
Reclassifications |
0 |
0 |
–17 |
–14 |
Translation differences for the year |
391 |
27 |
89 |
508 |
At December 31, 2022 |
6,028 |
454 |
1,254 |
7,740 |
Depreciation and impairment losses |
|
|
|
|
At January 1, 2022 |
1,463 |
187 |
631 |
2,281 |
Discontinued operations |
–76 |
–28 |
–60 |
–165 |
Depreciation for the year |
801 |
104 |
310 |
1,215 |
Impairment losses |
21 |
2 |
1 |
23 |
Reversal of impairment losses |
–1 |
0 |
0 |
–1 |
Divestments and disposals |
–361 |
–54 |
–239 |
–654 |
Reclassifications |
–31 |
0 |
–37 |
–67 |
Translation differences for the year |
107 |
11 |
47 |
165 |
At December 31, 2022 |
1,922 |
223 |
653 |
2,798 |
Net carrying amount |
|
|
|
|
At December 31, 2022 |
4,106 |
231 |
602 |
4,941 |
|
|
|
|
|
Accumulated acquisition cost |
|
|
|
|
At January 1, 2023 |
6,028 |
454 |
1,254 |
7,740 |
Additions |
1,064 |
158 |
497 |
1,719 |
Remeasurements |
258 |
9 |
–9 |
257 |
Business combinations |
0 |
– |
–19 |
–19 |
Divestments and disposals |
–372 |
–68 |
–316 |
–755 |
Reclassifications |
42 |
–3 |
0 |
39 |
Translation differences for the year |
–228 |
–10 |
–25 |
–266 |
At December 31, 2023 |
6,792 |
541 |
1,383 |
8,716 |
Depreciation and impairment losses |
|
|
|
|
At January 1, 2023 |
1,922 |
223 |
653 |
2,798 |
Depreciation for the year |
901 |
113 |
351 |
1,364 |
Impairment losses |
15 |
0 |
0 |
16 |
Reversal of impairment losses |
–12 |
0 |
0 |
–12 |
Divestments and disposals |
–328 |
–66 |
–309 |
–702 |
Reclassifications |
–5 |
–4 |
–23 |
–32 |
Translation differences for the year |
–82 |
–7 |
–9 |
–98 |
At December 31, 2023 |
2,410 |
258 |
663 |
3,332 |
Net carrying amount |
|
|
|
|
At December 31, 2023 |
4,382 |
283 |
720 |
5,384 |
|
2022 |
2023 |
|---|---|---|
Cost of goods and services sold |
–375 |
–476 |
Selling expenses |
–382 |
–400 |
Administrative expenses |
–370 |
–401 |
Research and development expenses |
–88 |
–87 |
Total |
–1,215 |
–1,364 |
|
2022 |
2023 |
|---|---|---|
Cost of goods and services sold |
–1 |
–4 |
Selling expenses |
–1 |
– |
Other operating expenses |
–20 |
– |
Research and Development expenses |
0 |
– |
Total |
–22 |
–4 |
Contracts not yet commenced
Contracts not yet commenced amounted to SEK 641 million (989). For maturity analysis of the lease liability, see note G28.
Sandvik as lessor
Investments in financial leases amounted to SEK 6,449 million (5,573). During 2023, the selling profit for equipment subject to finance lease contracts amounted to SEK 1,248 million (887) and are recognized within sale of goods. Finance income amounted to SEK 357 million (233).
During 2023, the selling profit for equipment subject to operational lease contacts is presented in note G3 under Rental Fleet. The planned residual value of the Group’s rental fleet amounted to SEK 1,366 million (1,327). Depreciation for the year amounted to SEK 534 million (510). Gain on disposed assets amounted to SEK 60 million (–6). Variable fees amounted to SEK –106 million (–71).
As of December 31, 2023, the future minimum lease payments under non-cancellable operating leases amounted to SEK 805 million (783).
|
Finance leases |
Operating leases |
|---|---|---|
2024 |
3,243 |
513 |
2025 |
2,295 |
195 |
2026 |
698 |
88 |
2027 |
158 |
8 |
2028 |
36 |
1 |
2029 or later |
19 |
– |
Total undiscounted lease payments |
6,449 |
805 |
|
2022 |
2023 |
|---|---|---|
Depreciations for the year |
–1,215 |
–1,364 |
Impairment losses/reversal of impairment losses |
–22 |
–4 |
Interest expenses related to lease liabilities |
–165 |
–225 |
Expenses for low value assets |
–52 |
–38 |
Expenses for short-term leases |
–49 |
–24 |
Expenses related to variable lease expenses not included in the lease liability |
–21 |
–24 |
Gains/losses related to sale and leaseback transactions |
0 |
–1 |
Total amounts recognized in the income statement |
–1,524 |
–1,680 |
The total cash outflow for leases during the year |
–1,500 |
–1,617 |
§ Accounting principles
Sandvik as a lessee
Lease contracts are recognized as Right-of-Use (RoU) assets and interest-bearing liabilities. The lease liability is presented within other interest-bearing liabilities and measured by the present value of future unpaid lease payments. The RoU asset is presented within non-current assets and valued at cost less amortization and impairment, if applicable. The asset is depreciated on a straight-line basis over the estimated contract period.
For each lease contract Sandvik assesses, if it is reasonably certain to extend the lease, to purchase the underlying asset or terminate the lease. The lessee determines the length of the contract period based on factors such as the importance of building to the business and any planned or made leasehold investments.
Sandvik separates non-lease components from the lease components in contracts referring to buildings. For all other asset classes, non-lease components are included in the calculation of a RoU asset and lease liability.
Sandvik applies the two expedients concerning leases, leases shorter than one year and low-value assets that are not considered in the RoU assets and lease liabilities.
Sandvik as a lessor
In a financial lease contract Sandvik recognizes a non-current and current customer-financing receivable at an amount equal to the net investment in the lease. Expected credit losses is reflected in the valuation of the customer-financing receivable at initial recognition and the provision is reassessed during the contract period. Revenue is recognized in accordance with revenue recognition principles.
In an operating lease contract the asset is classified as rental fleet and is subject to the Group’s depreciation policies. The cost of an asset comprises the acquisition value and any initial direct costs related to the contract. The lease revenue is recognized on a straight-line basis over the lease contract period.
Sandvik Financial Services offers financing of equipment, mainly to customers in the mining and construction sectors. Sandvik Financial Services is responsible for identifying and assessing its key risks related to end customer financing, as well as managing and monitoring them. Risk management is carried out in accordance with the Sandvik policies. For more information, see note G28.