32 JOTUN GROUP 9 INVENTORIES Inventories consist of the Group’s stock of raw materials and finished goods. Inventories are valued at the lowest value of cost and net realisable value. Cost of inventories is assigned by using weighted average cost formula. Production cost for finished goods includes direct materials and wages as well as share of indirect manufacturing costs. Deduction has been made for obsolescence. (NOK THOUSAND) 31.12.2016 31.12.2015 Raw materials 850 961 915 750 Finished goods 1 190 470 1 282 733 Total 2 041 432 2 198 483 Total allowance for obsolete inventories 112 419 88 652 10 PROVISIONS PROVISIONS 2016 (NOK THOUSAND) CLAIMS ENVIRONMENTAL OTHER TOTAL Balance as of 1 January 55 817 78 984 15 392 150 192 Provisions arising during the year 250 483 18 014 37 078 305 575 Utilised –62 958 –10 255 –15 392 –88 605 Unused amounts reversed –16 280 –14 373 – –30 653 Currency translation effects –5 453 –5 –4 724 –10 182 Balance as of 31 December 221 609 72 365 32 354 326 327 Current, ref. note 16 212 531 47 765 32 354 292 649 Non-current 9 078 24 600 302 33 980 Total 221 609 72 365 32 656 326 630 PROVISIONS 2015 (NOK THOUSAND) CLAIMS ENVIRONMENTAL OTHER TOTAL Balance as of 1 January 52 355 40 805 21 889 115 048 Provisions arising during the year 11 202 44 000 15 197 70 399 Utilised –3 802 –5 821 –22 160 –31 783 Unused amounts reversed –7 735 – – –7 735 Currency translation effect 3 797 – 467 4 264 Balance as of 31 December 55 817 78 984 15 392 150 192 Current, ref. note 16 47 882 54 379 15 392 117 653 Non-current 7 934 24 605 – 32 539 Total 55 817 78 984 15 392 150 192 CLAIMS Claims consist of a number of separate and specific warranty claims arising from products sold. By nature, the related amounts and timing of any outflows are difficult to predict. Assumptions used to calculate the provision for claims are based on technical assessments of product failures and the related expected repair costs for each specific case. It is expected that most of these costs will be payable in the next financial year (see note 16), and all will have been payable within three years after the reporting date. ENVIRONMENTAL PROVISIONS Jotun Group has recorded provisions for environmental liabilities at some currently or formerly owned, leased and third party sites throughout the world. Pre-studies and analysis of relevant areas have been undertaken to reliably estimate the provisions that have been recognised. The majority of the non-current liability amount will be realised within 2018. These provisions are estimates of amounts payable or expected to become payable.
Jotun Annual Report 2016
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