Investor Presentaiton
CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | NET WORKING CAPITAL
3.5 PROVISIONS
Provision
Provision
Provision for
business
Provision
Jan 1-Dec 31, 2021, MEUR
for warranty
for claims restructuring
for loss
contracts
Other
provisions
Total provisions at beginning of period
67.4
6.3
18.1
28.3
34.5
Total
154.7
Translation differences
2.8
0.0
0.3
1.3
0.3
Increase
Provisions used
Reversal of provisions
Companies acquired
Total provisions at end of period
15.0
5.7
14.3
17.4
20.6
73.0
-21.7
-1.1
-10.5
-10.7
-3.5
-47.7
-4.6
-3.5
-6.2
-5.2
-14.3
-33.8
0.1
0.4
0.9
1.4
58.8
7.4
16.0
31.4
38.6
152.3
Non-current liabilities
Distribution of provisions as of Dec 31, 2021
101.4
Current liabilities
50.9
4.7
Total
152.3
Accounting principles
Provisions
Provisions are recognized when KONE has a current
legal or constructive obligation as a result of past
event, and it is probable that an outflow of resources
will be required to settle the obligation and a reliable
estimate of the amount of the obligation can be made.
Recognition and measurement of a provision generally
employs managerial estimates of the probability and
the amount of the liability.
Provisions for warranties cover the estimated
liability to repair or replace products still under warranty
at the statement of financial position date. This
provision is calculated based on historical experience
of levels of repairs and replacements.
Provision for claims is recognized when the claim
has been received and it is probable that it will be
settled and the settlement amount can be estimated
reliably.
A provision for business restructuring is recognized
only when a detailed and formal plan has been
established, there is a valid expectation that such a
plan will be carried out and the plan has been
communicated.
Provisions for onerous (loss) contracts are
recognized when it is probable that the costs will
exceed the estimated total revenue or other income
arising from the contract. The probable loss is
recognized as an expense immediately.
Other provisions include for example provisions for
contractual and other obligations arising from disputes,
labor relations or other regulatory matters.
Provision
Provision
Provision for
business
Jan 1-Dec 31, 2020, MEUR
for warranty
for claims restructuring
Provision
for loss
contracts
Other
provisions
Total
Total provisions at beginning of period
57.8
3.7
15.2
26.4
24.0
127.1
Translation differences
-1.0
0.0
-0.2
-1.9
-0.4
-3.6
Increase
Provisions used
Reversal of provisions
Companies acquired
Total provisions at end of period
31.4
3.2
20.9
18.5
19.9
94.0
-16.2
-0.1
-16.1
-9.5
-4.6
-46.5
-4.6
-0.5
-1.6
-5.1
-4.6
-16.4
0.2
0.2
67.4
6.3
18.1
28.3
34.5
154.7
Non-current liabilities
Current liabilities
Distribution of provisions as of Dec 31, 2020
39.9
114.7
Total
154.7
56
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