30 Noncurrent and current other provisions

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€ million

 

Obligations arising from sales

 

Employee expenses

 

Litigation and legal risks

 

Miscellaneous provisions*

 

Total

 

 

 

 

 

 

 

 

 

 

 

*

Prior-year figures adjusted due to the separate presentation of the provisions for litigation and legal risks.

Balance at Jan. 1, 2014

 

18,537

 

5,380

 

1,380

 

7,044

 

32,341

Foreign exchange differences

 

214

 

29

 

19

 

40

 

303

Changes in consolidated Group

 

3

 

3

 

1

 

0

 

6

Utilized

 

7,045

 

3,030

 

238

 

2,061

 

12,373

Additions/New provisions

 

9,715

 

1,678

 

363

 

2,785

 

14,541

Unwinding of discount/effect of change in discount rate

 

77

 

229

 

12

 

1

 

319

Reversals

 

962

 

198

 

232

 

759

 

2,151

Balance at Dec. 31, 2014

 

20,539

 

4,091

 

1,306

 

7,049

 

32,986

of which current

 

10,090

 

1,753

 

426

 

4,805

 

17,075

of which noncurrent

 

10,448

 

2,338

 

880

 

2,244

 

15,910

Balance at Jan. 1, 2015

 

20,539

 

4,091

 

1,306

 

7,049

 

32,986

Foreign exchange differences

 

214

 

−19

 

−143

 

32

 

83

Changes in consolidated Group

 

0

 

0

 

0

 

1

 

2

Utilized

 

7,517

 

1,429

 

236

 

1,901

 

11,082

Additions/New provisions

 

19,270

 

1,668

 

7,697

 

2,747

 

31,382

Unwinding of discount/effect of change in discount rate

 

5

 

−22

 

4

 

4

 

−9

Reversals

 

1,185

 

142

 

219

 

858

 

2,404

Balance at Dec. 31, 2015

 

31,326

 

4,148

 

8,409

 

7,075

 

50,958

of which current

 

17,075

 

1,733

 

2,073

 

4,908

 

25,788

of which noncurrent

 

14,251

 

2,415

 

6,336

 

2,168

 

25,170

The obligations arising from sales contain provisions covering all risks relating to the sale of vehicles, components and genuine parts through to the disposal of end-of-life vehicles. They primarily comprise warranty obligations, calculated on the basis of losses to date and estimated future losses. They also include provisions for discounts, bonuses and similar allowances which are incurred after the balance sheet date, but for which there is a legal or constructive obligation attributable to sales revenue before the balance sheet date.

The increase in obligations arising from sales is largely due to the recognition of provisions for the implementation of field measures and of repurchases in connection with the diesel issue. Please refer to the “Key events” section for further information.

Provisions for employee expenses are recognized for long-service awards, time credits, partial retirement arrangements, severance payments and similar obligations, among other things.

The increase in the provisions for litigation and legal risks results primarily from the provisions recognized in connection with the diesel issue to cover currently known legal risks, including appropriate legal defense and legal advice expenses amounting to €7.0 billion. These are subject to what are in part considerable estimation risks because the comprehensive and extensive investigations are still at an early stage, the factors involved are so complex, and the discussions with the authorities are still ongoing. In addition, the provisions for litigation and legal risks contain amounts relating to a large number of legal disputes and official proceedings in which Volkswagen Group companies become involved in Germany and internationally in the course of their operating activities. In particular, such legal disputes and other proceedings may occur in relation to suppliers, dealers, customers, employees, or investors. Please refer to the “Litigation” section for a discussion of the legal risks.

Miscellaneous provisions relate to a wide range of identifiable specific risks, price risks and uncertain obligations, which are measured in the amount of the expected settlement value.

Miscellaneous provisions include provisions amounting to €459 million (previous year: €417 million) relating to the insurance business.