The light is an engine malfunction light and is registered by the vehicle's ECM (engine control module), the vehicle's onboard computer. The computer is set to read variables from the car's many sensors. If a sensor gives a reading that is out of spec, it lights the light. Under the dashboard by the driver's knee is a socket that is called an OBD11 (onboard diagnostics version 2) port. When a OBD11 code reader is connected to it, it gives a P Code and this tells what is wrong. Garages will normally read the code for free in the hope of getting the work. Connecting and reading literally takes less than two minutes. I have a reader called FIXD which relays information to my iPhone.
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FIXD and the app
FIXD Automotive Understand Your Car
Volvo P Codes showing just how much information is discoverable!
Thread OBDII to Volvo Code Conversion List