Philips 2007 Annual Report Download - page 157

Philips Annual Report 2007 163
The changes during 2007 were as follows:
January 1, 2007:
Changes in book value:
December 31, 2007:
Other intangible assets in 2007 consist of:
In 2007, a reclassication was made of EUR 100 million following nalization of
The estimated amortization expense for these other intangible assets
for each of the ve succeeding years is:
The expected weighted average remaining life of other intangibles
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in 2006 and have indenite useful lives. These brands are used together
otherwise marketed amounted to EUR 63 million (2006: EUR 57 million).
to EUR 20 million (2006: EUR 18 million).
The changes in 2006 and 2007 were as follows:
Balance as of January 1:
Balance as of December 31:
the forecast cash ows. The discount rates are determined for each
that are extrapolated for another ve years with reduced growth
to the nalization of purchase price accounting related to acquisitions
for the effects of the nal purchase price allocation completed in 2007),
on page 138 of this Annual Report for a specication of goodwill
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Accrued liabilities
Accrued liabilities are summarized as follows:
2006 2007
Personnel-related costs:
- Salaries and wages 492 433
- Accrued holiday entitlements 185 178
- Other personnel-related costs 120 169
Fixed-assets-related costs:
- Gas, water, electricity, rent and other 71 62
Taxes:
- Income tax payable 519 154
- Other taxes payable 2 12
Communication & IT costs 47 31
Distribution costs 64 109
Sales-related costs:
- Commissions payable 65 43
- Advertising and marketing-related costs 119 66
- Other sales-related costs 180 206
Material-related accruals 167 134
Interest-related accruals 118 110
Deferred income 478 564
Derivative instruments - liabilities note 35 101 144
Other accrued liabilities 569 569
3,297 2,984
Please refer to note 6 for a specication of income tax payable.
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Provisions
Provisions are summarized as follows:
2006 2007
long-
term
short-
term
long-
term
short-
term
Provision for dened-benet
plans (see note 20) 787 91 745 68
Other postretirement benets
(see note 21) 337 36 390 23
Postemployment benets and
obligatory severance payments 92 50 113 13
Deferred tax liabilities
(see note 6) 488 121 686 1
Product warranty 17 348 133 190
Loss contingencies
(environmental remediation
and product liability) 483 93 432 49
Other provisions 213 137 228 33
2,417 876 2,727 377
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Product warranty
The provision for product warranty reects the estimated costs
of replacement and free-of-charge services that are expected to be
incurred by the Group with respect to products sold. The changes
in the provision for product warranty are as follows:
2005 2006 2007
Balance as of January 1 353 378 365
Changes:
Additions 491 438 360
Utilizations (472) (443) (369)
Releases (7) − (6)
Translation differences 20 (13) (16)
Changes in consolidation (7) 5 (11)
Balance as of December 31 378 365 323
Loss contingencies (environmental remediation and product liability)
This provision includes accrued losses recorded with respect to
environmental remediation and product liability (including asbestos)
obligations which are probable and reasonably estimatable. Please
refer to note 27.
The changes in this provision are as follows:
2005 2006 2007
Balance as of January 1 275 287 576
Changes:
Additions 27 370 16
Utilizations (43) (39) (66)
Releases (3) (5) (1)
Translation differences 31 (37) (44)
Balance as of December 31 287 576 481
Postemployment benets and obligatory severance payments
The provision for postemployment benets covers benets provided
to former or inactive employees after employment but before
retirement, including salary continuation, supplemental unemployment
benets and disability-related benets.
The provision for obligatory severance payments covers the Company’s
commitment to pay employees a lump sum upon the employee’s
dismissal or resignation. In the event that a former employee has
passed away, the Company may have a commitment to pay a lump
sum to the deceased employee’s relatives.
Other provisions
Other provisions include provisions for employee jubilee funds totaling
EUR 79 million (2006: EUR 88 million) and expected losses on existing
projects/orders totaling EUR 14 million (2006: EUR 14 million).
Group nancial statements
Notes to the group nancial statements
Company nancial statements 250 Corporate governance246 Reconciliation of
non-US GAAP information 258 The Philips Group in the last ten years 260
Investor information