JOTUN GROUP
39
Inventories
Inventories consist of the Group’s stock of raw materials and finished goods. Inventories are valued at the lowest of cost and net
realisable value.
The cost of raw materials is determined using the weighted average cost method. The cost of finished goods includes raw materials and
other direct materials, wages and a proportion of other indirect manufacturing costs.
The amounts stated below are net of allowances for obsolete inventories.
(NOK THOUSAND) 31.12.2018 31.12.2017
Raw materials 1 210 387 1 195 411
Finished goods 1 630 304 1 380 352
Total 2 840 690 2 575 763
Total allowance for obsolete inventories 133 734 126 204
Provisions
10
11
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.
2018 Total
(NOK THOUSAND) Claims Environmental Other provisions
Balance as of 1 January 238 732 71 625 48 898 359 256
Provisions arising during the year 301 024 1 000 32 769 334 793
Utilised –71 290 –4 258 –29 360 –104 909
Unused amounts reversed –25 234 –5 418 –549 –31 201
Currency translation effects 179 292 –2 812 –2 342
Balance as of 31 December 443 411 63 241 48 946 555 597
Current, ref. note 17 436 574 40 741 37 610 514 924
Non-current 6 837 22 500 11 336 40 673
Total 443 411 63 241 48 946 555 597
2017 Total
(NOK THOUSAND) Claims Environmental Other provisions
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 effect –271 –258 –2 –531
Balance as of 31 December 238 732 71 625 48 898 359 256
Current, ref. note 17 229 654 45 125 48 765 323 545
Non-current 9 078 26 500 133 35 711
Total 238 732 71 625 48 898 359 256
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 three years (ref. note 17), and all will have been
payable within five 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 2020. These provisions are
estimates of amounts payable or expected to become payable.