APC 2009 Annual Report Download - page 160

2009 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC158
CONSOLIDATED FINANCIAL STATEMENTS
5NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note23 Provisions for contingencies
Economic
risks Customer risks Product risks Environmental risks Restructuring Other risks Provisions
Dec. 31, 2007 309 53 165 43 56 84 710
Long-term portion 85 45 25 30 7 72 264
Additions 64 10 68 1 122 40 305
Discounting effect 0 - 0 0 0 1 1
Utilizations (52) (10) (40) (2) (41) (18) (163)
Reversals of surplus provisions (31) (10) (10) - (8) (5) (64)
Translation adjustments 2 1 2 (1) (3) 1 2
Changes in the scope
ofconsolidation and other 32 (16) 22 2 6 3 49
Dec. 31, 2008 324 28 207 43 132 106 840
Long-term portion 121 24 49 30 11 67 302
Additions 64 63 109 2 182 48 468
Discounting effect 0 0 (1) 0 0 0 (1)
Utilizations (21) (2) (41) (2) (96) (11) (173)
Reversals of surplus provisions (31) (8) (22) 0 (7) (12) (80)
Translation adjustments (3) (1) (1) 1 2 (1) (3)
Changes in the scope
ofconsolidation and other 85 0 13 0 (3) 2 97
Dec. 31, 2009 418 80 264 44 210 132 1,148
Long-term portion 131 31 79 27 28 80 375
(a) Economic risks
These include tax risks arising from tax audits performed by various
local tax administrations and financial risks arising primarily on
guarantees given to third parties in relation to certain assets and
liabilities.
Changes in the scope of consolidation and other amounted to
EUR 85million and corresponded primarily to the reclassifi cation
of tax provisions that were previously recorded under current tax
liabilities.
(b) Customer risks
These provisions primarily concern liability claims arising from alleged
defects in products sold to customers and other third parties and
are determined on a case-by-case basis. They also cover projected
losses on various long-term contracts in an amount of EUR 11million.
(c) Product risks
These provisions comprise:
•provisions recorded on a statistical basis for the residual cost of
product warranties not covered by insurance. Such warranties
may run up to 18months;
•provisions to cover disputes concerning defective product;
•provisions to cover recalls of clearly identifi ed products.
(d) Environmental risks
These provisions are primarily set aside to cover potential reclamation
costs.
(e) Restructuring
New provisions were set aside during the year to cover the costs of
restructuring plans in Europe and the United States (note7).