Reading the codes is fairly straightforward. Find the diagnostic sockets at the front right hand side of the engine compartment. Remove cover from the sockets marked A and insert the wire into socket 2. Turn the ignition to on. With pen and paper ready, press the button by A once for more than 1 second and less than 3 seconds. The red light will flash the code, watch it and count the number of flashes in a 3 flash series. Press the button again, and read the second code. Repeat a third time. The system stores only three codes. It will repeat the sequence if you missed or are unsure about the codes you read the first time through.

To clear the codes, push and hold the button down for 5 seconds. The LED will come on. Push and hold the button for another 5 seconds. The light should go out and the codes are cleared.

To interpret the codes see:
http://scandcar.com/en/volvo-850-s70-v70-mainmenu-16/volvo-850-foutcodes-mainmenu-18.html