Application and effects of new accounting principles for Peab's housing production

Application and effects of new accounting principles for Peab's housing
production

Change in accounting principle
From 1 January 2010 the Group applies IFRIC 15, Agreements for the Construction
of Real Estate. IFRIC 15 clarifies when revenue from different kinds of
contracts concerning the construction of real estate should be recognised, which
affects Peab's housing project reporting. 

According to the current principle revenue and profit and loss is reported
according to IAS 11, Construction contracts, with the percentage of completion
method calculated on the percentage completion and sales degree. As a result of
the new principle IAS 18, Revenue, will be applied to Peab's housing projects in
Finland and Norway as well as Peab's own single homes in Sweden. Revenue from
these projects will be recognised first when the home is handed over to the
buyer. IAS 11 is still deemed applicable on tenant-owner housing projects in
Sweden and they will continue to be reported according to the percentage of
completion method. However, sales degree will not be taken into account. (See
below). Expenses in the housing projects that will be reported according to IAS
18 will be recognised as work-in-progress in the balance sheet. On account
invoices to customers will be reported as non-interest-bearing liabilities, and
loans to finance housing projects will be reported as interest-bearing
liabilities.

Change in accounting estimates
From 1 January 2010 sales degree will not be taken into account for housing
projects. In tenant-owner housing projects in Sweden where IAS 11 is still
applicable this entails a change in accounting estimates of aggregated profit
which will be applied in future reporting only. No recalculations will be made
for previous periods. Therefore profit and loss effects from adjustments in
sales degree are included in comparable items for 2009 in the Construction
segment. 

Legal reporting and segment reporting
Application of IFRIC 15 has not entailed any changes in Peab's internal project
steering or financial follow-up. Segment reporting will continue to be based on
the percentage of completion method since this mirrors how executive management
and the board monitor the business.

As from the interim report of January-March 2010 a bridge will be created in
segment reporting between Operative reporting according to the percentage of
completion method and Legal reporting.  

The legal reporting of revenue and profit and loss according to IAS 18 will be
postponed and somewhat more uneven compared to reporting according to IAS 11.
Calculating according to the percentage of completion method without taking into
consideration sales degree will result in a faster recognition of revenue in
both legal and operative reporting.

Segment reporting
The table below shows how net sales, operating profit and operating margin are
presented.

                  From 1 January 2010        Recalculated 2009
 
Construction      Percentage of completion   Percentage of completion
                  method                     method
                  excluding sales degree in  including sales degree in
                  Sweden, Norway and Finland Sweden, Norway and Finland
                                             (no changes)
                                              
Civil Engineering No changes                 No changes
                                              
Industry          No changes                 No changes
                                              
Group functions   No changes                 No changes
                                              
TOTAL OPERATIVE
                                              
                                              
Adjustment for    Recalculation of own       Recalculation of own single
                  single
housing reporting homes in Sweden and all    homes in Sweden and all
                  housing projects in Norway housing projects in Norway
                  and                        and
                  Finland according to IAS   Finland according to IAS 18
                  18
                                              
TOTAL LEGAL	


The 2009 income statements and balance sheets have been recalculated per 31
December 2008 and for each quarter in 2009 and are presented in appendix along
with the recalculated segments for each quarter in 2009.




For further information, please contact:
Jesper Göransson, CFO Peab +46 733 371013
Gösta Sjöström, CIO Peab +46 733 371010

Peab AB discloses the information provided herein pursuant to the Securities
Markets Act and/or the Financial Instruments Trading Act. 
The information was submitted for publication at 1.30 p m. on 5 May 2010. 
Previous press releases from Peab are available at www.peab.com



Peab is one of the leading construction and civil engineering companies in the
Nordic countries, with about 13,000 employees and net sales exceeding SEK 35
billion. The Group's subsidiaries have strategically located offices in Sweden,
Norway and Finland. The Corporate Office is located in Förslöv on Bjärehalvön in
southern Sweden. The share is listed on NASDAQ OMX Stockholm. 

Peab Information: 
Gösta Sjöstrom, CIO Peab  +46 733 371010   
gosta.sjostrom@peab.se