www.brickboard.com/RWD/volvo/1284826/740...40_rear_end_740.html
The second issue, and here's where you run into trouble, is the speedometer. In the rear axle is a tone ring that generates a signal to operate the speedometer, and the ABS, if equipped. 88 and earlier cars had a tone ring with 96 teeth, 89 and later had 48. What does this mean? If you do the conversion as described, the speedometer will run at half speed and the ABS will malfunction immediately. You can fix the ABS by swapping the tone rings on both front wheels, but if there is a solution for the speedometer, I was not able to find it in the two years I owned my 88 wagon with a 90 rear end in it, though I tried several different possibilities. Theoretically, you could change the tone ring, but that appears to be a lot more trouble than it's worth---you have to completely disassemble the differential to do so, something that is best avoided due to the fact that there are shims to adjust the clearance of the various parts, which were correctly set up at the factory, and should be left undisturbed unless you really know what you are doing. In other words, whatever axle you end up installing, it is a much better plan to swap the entire unit as opposed to disassembling the ring and pinion.
