The scrotal on yearlings depends who is measuring them.
My vet studied in the States and says he can run the tape over the scrotal of a bull without touching skin with the measure most US vets give. In other words they don't squeeze the scrotal tape at all. He uses a tape designed to measure babies heads at birth and puts decent pressure, not enough to cause major discomfort, but enough to test how firm the testes are.
40 is considered a very high yearling scrotal. However based on who is measuring them, it could be far less in real terms.
Measured with moderate pressure, the ideal range is 34 to 36 with no problem with the 32 or the 38 and even the odd 40.
That being said it doesn't mean every bull with a large scrotal will have more defects, it just increases the chances.
I also feel that a large swinging scrotal will get injured more easilly than a smaller tighter one, but it needs to be able to allow cooling of the testes.
If in doubt of the pressure to apply when measuring, a device called a coulter tape has a spring loaded measure and applies the same pressure on each bull. I pre measure my bulls to help with culling descisions.