Chrysler 2013 Annual Report Download - page 205

204 Consolidated
Financial Statements
at 31 December 2013
Notes
26. Other provisions
Changes in Other provisions are as follows:
(€ million)
At 31
December
2012 Charge Utilization
Release to
income
Translation
differences
Changes in
the scope of
consolidation
and other
changes
At 31
December
2013
Warranty provision 3,617 1,962 (1,720) (13) (194) 4 3,656
Restructuring provision 261 41 (90) (21) (2) 2 191
Investment provision 13 - - - (2) 1 12
Other risks 4,899 8,279 (7,507) (217) (222) 4 5,236
Total Other provisions 8,790 10,282 (9,317) (251) (420) 11 9,095
The effect of discounting these provisions is €21 million in 2013.
The warranty provision represents the best estimate of commitments given by the Group for contractual, legal, or constructive obligations
arising from product warranties given for a specified period of time beginning at the date of sale to the end customer. This estimate is principally
based on assumptions regarding the lifetime warranty costs of each vehicle and each model year of that vehicle line, as well as historical claims
experience for vehicles. The Group establishes provisions for product warranty obligations when the related sale is recognized. Warranty
provisions also include management’s best estimate of the costs that are expected to be incurred in connection with product defects that
could result in a general recall of vehicles, which are estimated by making an assessment of the historical occurrence of defects on a case-by-
case basis and are accrued when a reliable estimate of the amount of the obligation can be made.
The restructuring provision at 31 December 2013 consists of termination benefits of €106 million (€194 million at 31 December 2012) payable
to employees in connection with restructuring plans, manufacturing rationalization costs of €15 million (€21 million at 31 December 2012) and
other costs of €70 million (€46 million at 31 December 2012). These provisions are related to car mass-market operations for €94 million,
Components €28 million and Other activities €69 million.
The provision for other risks represents the amounts provided by the individual companies of the Group in connection mainly with contractual
and commercial risks and disputes. Details of this item are as follows:
(€ million) At 31 December 2013 At 31 December 2012
Sales incentives 2,993 2,622
Legal proceedings and other disputes 545 528
Commercial risks 371 393
Environmental risks 29 36
Indemnities 62 62
Other reserves for risk and charges 1,236 1,258
Total Other risks 5,236 4,899