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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) 31.12.2017 31.12.2016
Raw materials 1 195 411 850 961
Finished goods 1 380 352 1 190 470
Total 2 575 763 2 041 432
Total allowance for obsolete inventories 126 204 112 419
10 PROVISIONS
Provisions consist mainly of product liability claims and environmental remediation costs related to specific cases or events occurring
before the year end, and where the costs involved are not certain, but based on best estimates.
PROVISIONS 2017
(NOK THOUSAND) CLAIMS ENVIRONMENTAL OTHER TOTAL
Balance as of 1 January 221 609 72 365 32 354 326 327
Provisions arising during the year 217 066 4 000 48 898 269 964
Utilised –187 709 –4 481 –32 352 –224 542
Unused amounts reversed –11 963 – – –11 963
Currency translation effects –271 –258 –2 –531
Balance as of 31 December 238 732 71 625 48 898 359 256
Current, ref. note 16 229 654 45 125 48 765 323 545
Non-current 9 078 26 500 133 35 711
Total 238 732 71 625 48 898 359 256
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 32 052 292 348
Non-current 9 078 24 600 302 33 980
Total 221 609 72 365 32 354 326 327
PRODUCT LIABILITY CLAIMS
Product liability 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 product
liability 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 2019. These provisions are
estimates of amounts payable or expected to become payable.