3.8 Provisions
Provisions consist mainly of product liability claims and environmental remediation costs related to
specific cases or events that have occurred before the year end, and where the costs involved are not
certain, but based on best estimates.
2019
(NOK THOUSAND) Claims Environmental Other Total
Balance as of 1 January 443 411 63 241 48 946 555 597
Provisions arising during the year 203 220 4 000 69 147 276 367
Utilised -105 958 -8 467 -29 058 -143 483
Unused amounts reversed -45 851 -337 -1 768 -47 956
Currency translation effects 1 817 - 1 068 2 884
Balance as of 31 December 496 639 58 437 88 335 643 410
Current, ref. Note 3.7 291 149 937 77 550 369 636
Non-current 205 490 57 500 10 786 273 776
Total 496 639 58 437 88 335 643 411
2018
(NOK THOUSAND) Claims Environmental Other Total
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 effect 179 292 -2 812 -2 342
Balance as of 31 December 443 411 63 241 48 946 555 597
Current, ref. Note 3.7 436 574 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
Other provisions include obligations relating to the ongoing restructuring and close down of the
factory of Jotun Paints Inc. in the US. The provision is expected to be utilised within the next year.
Product liability claims are reported as other operating expenses, ref. Note 2.4.
Accounting policy
Back to Notes for the Group
A provision for a liability is made when a legal or constructive obligation exists, payment is probable
(more likely than not), and the liability is possible to estimate. If any of the recognition criteria are not
met, the liability is considered a contingent liability and no provision shall be recorded, but instead
described in Note 3.9.
Estimate and judgement
Product liability claims consist of various warranty claims arising from products sold. By nature, the
related amounts and timing of any outflows are difficult to predict. Assumptions used to calculate
provisions 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, and all will have been payable within five years after the reporting
date.
The 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.
JOTUN GROUP
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