LensCrafters 2012 Annual Report Download - page 234

ANNUAL REPORT 2012> 148 |
The balance is detailed below:
(thousands of Euro) Legal risk Self-insurance Tax provision Other risks Returns Total
Balance as of December 31, 2011 4,899 5,620 1,796 9,927 31,094 53,337
Increases 1,647 7,395 10,525 11,229 18,233 49,029
Decreases (5,981) (8,186) (132) (8,383) (12,736) (35,419)
Business combinations - - - - - 0
Foreign translation difference and other
movements 14 (60) (39) (296) (534) (914)
Balance as of December 31, 2012 578 4,769 12,150 12,477 36,057 66,032
Other risks mainly includes provisions for licensing expenses and advertising expenses
required by existing license agreements of Euro5.3 million (Euro5.2 million as of December
31, 2011), which are based upon advertising expenses that the Group is required to incur
under the license agreements.
The Company is self-insured for certain losses relating to workers’ compensation, general
liability, auto liability, and employee medical benefits for claims filed and for claims
incurred but not reported. The Company’s liability is estimated using historical claims
experience and industry averages; however, the final cost of the claims may not be known
for over five years.
Legal risk includes provisions for various litigated matters that have occurring in the
ordinary course of business.
The tax provision mainly includes the accrual related to tax audit on Luxottica S.r.l. for fiscal
year 2007 of approximately Euro10.0 million.
19. SHORT-TERM
PROVISIONS FOR
RISKS AND OTHER
CHARGES