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Jotun Annual Report 2016

20 JOTUN GROUP Environmental provisions are made when there is a present obligation, it is probable that expenditures for remediation work will be required, and the cost can be measured within a reasonable range of possible outcomes. Generally, the timing of recognition coincides with the commitment to a formal plan of action or, if earlier, on divestment or on closure of inactive sites. Expenditures that relate to an existing condition caused by past operations and do not contribute to current or future earnings are expensed. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost. 17. CONTINGENT LIABILITIES AND ASSETS Contingent liabilities are not recognised in the annual accounts. Significant contingent liabilities are disclosed, with the exception of contingent liabilities that are unlikely to be incurred. Contingent assets (unless virtually certain) are not recognised in the annual accounts but are disclosed if the inflow of economic benefits is probable. 18. EVENTS AFTER THE REPORTING PERIOD New information on the company’s financial position on the end of the reporting period which becomes known after the reporting period is recorded in the annual accounts. Events after the reporting period that do not affect the company’s financial position on the end of the reporting period but which will affect the company’s financial position in the future are disclosed if significant. 19 STANDARDS ISSUED BUT NOT YET EFFECTIVE For comments related to standards issued but not yet effective, see note 23.


Jotun Annual Report 2016
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