Skanska to reverse earlier

PRESS RELEASE, JANUARY 30, 1997                       08/97

SKANSKA TO REVERSE EARLIER WRITE-OFF OF TRADEMARKS

When Skanska acquired Skåne-Gripen, it had to decide how to deal from an accounting standpoint with the trademarks included in this purchase. Skanska chose to write off the entire value of the ac-quired trademarks in its income statement, as stated in its interim reports for January 1 through June 30 and September 30, 1996 respectively.

In doing so, Skanska’s primary point of departure was its perception of what constituted generally accepted accounting principles. Among other considerations were its opinion as to what types of as-sets should be listed in the balance sheet and its traditionally conservative approach to the valuation of assets. In addition, goodwill, trademarks and other intangible assets had been subject to varying treatment in the accounts of other companies, and no genuine standard practice had been established.

Due to uncertainty on how to apply the recommendation of the Swedish Financial Accounting Standards Council in this field, and the need to adapt the Swedish rule system to international de-velopments, the Council’s recommendation was also in the process of being reassessed at the time of Skanska’s decision on the issue.

In December 1996, the Council’s revised recommendation was finally approved. According to the Stockholm Stock Exchange registration contract, the recommendation also sets the standard for generally accepted accounting principles in Sweden. The revised recommendation stipulates that trademarks shall be treated in the same way as goodwill. Skanska considers it important to continue its support of the Council’s work and, given the changes now introduced, it has chosen to reassess its previous decision on the trademark issue.

As a result, Skanska has decided to reverse its previously reported write-off of SEK 1,100 M in the accounts for 1996, with the value of the trademarks instead being subject to depreciation in accor-dance with the Council’s recommendation.

Skanska’s financial statements as of June 30 and September 30, 1996, as previously published, have been restated on the basis of the above-mentioned changes and the restated statements are enclosed herewith.


Danderyd, January 30, 1997

SKANSKA AB
Group Public Affairs

Adjusted income statement