Credit risk describes the Group's risk from financial assets and arises if a counterparty does not fulfill its contractual payment obligation to Skanska. Credit risk is divided into financial credit risk, which refers to risk from interest-bearing assets, and customer credit risk, which refers to the risk from trade accounts receivable.
Financial credit risk − risk in interest-bearing assets
Financial risk is the risk that the Group runs in its relations with financial counterparties in the case of deposits of surplus funds, bank account balances and investments in financial assets. Credit risk also arises when using derivative instruments and consists of the risk that a potential gain will not be realized in case the counterparty does not fulfill its part of the contract. In order to reduce the credit risk in derivatives, Skanska has signed standardized netting (ISDA) agreements with all financial counterparties with which it enters into derivative contracts.
Skanska endeavors to limit the number of financial counterparties, which must possess a rating at least equivalent to BBB+ at Standard & Poor’s or the equivalent rating at Moody’s. The permitted exposure volume per counterparty is dependent on the counterparty’s credit rating and the maturity of the exposure.
Maximum exposure is equivalent to the fair value of the assets and amounted to SEK 13,740 M. The average maturity of interest-bearing assets amounted to 0.4 (0.5) years on December 31, 2011.
Customer credit risk − risk in trade accounts receivable
Customer credit risks are managed within the Skanska Group's common procedures for identifying and managing risks: the Skanska Tender Approval Procedure (STAP) and the Operational Risk Assessment (ORA).
Skanska's credit risk with regard to trade receivables has a high degree of risk diversification, due to the large number of projects of varying sizes and types with numerous different customer categories in a large number of geographic markets.
The portion of Skanska's operations related to construction projects extends only limited credit, since projects are invoiced in advanced as much as possible. In other operations, the extension of credit is limited to customary invoicing periods.
| Trade account receivable | 2011 | 2010 |
| Carrying amount |
18,044 |
17,069 |
| Impairment losses |
689 |
513 |
| Cost |
18,733 |
17,582 |
| Change in impairment losses, trade acount receivable | 2011 | 2010 |
| January 1 |
513 |
542 |
| Impairment loss/reversal of impairment loss of the year |
230 |
18 |
| Impairment losses settled |
-21 |
-9 |
| Exchange rate differences |
-33 |
-38 |
| December 31 |
689 |
513 |
Risk in other operating receivables including shares Other financial operating receivables consist of accrued interest income, deposits, receivables for properties divested etc. No operating receivables on the closing day were past due and there were no impairment losses. Other financial operating receivables are reported by time interval with respect to when the amounts fall due in the future.
| | 2011 | 2010 |
| Due within 30 days |
34 |
123 |
| Due in over 30 days but no more than 1 year |
125 |
31 |
| Due in more than one year |
0 |
0 |
| Total |
159 |
154 |
Holdings of less than 20 percent of voting power in a company are reported as shares. Their carrying amount is SEK 38M (41). Shares are subject to changes in value. Impairment losses on shares total SEK –11 M (–6), of which SEK -5 M (0) during the year.