Mercedes 2015 Annual Report Download - page 236

E | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 243
23. Provisions for other risks
The development of provisions for other risks is summarized
in table  E.57.
Product warranties
Daimler issues various types of product warranties, under which
it generally guarantees the performance of products delivered
and services rendered for a certain period. The provision for
these product warranties covers expected costs for legal
and contractual warranty claims as well as expected costs for
policy coverage, recall campaigns and buyback commitments.
The provision for buyback commitments represents the expected
costs related to the Group’s obligation under certain condi-
tions to repurchase vehicles from customers. Buybacks may
occur for a number of reasons including litigation, compliance
with laws and regulations in a particular region and customer
satisfaction issues. The utilization date of product warranties
depends on the incidence of the warranty claims and can
span the entire term of the product warranties. The cash out-
flow for non-current product warranties is principally
expected within a period until 2018.
Personnel and social costs
Provisions for personnel and social costs primarily comprise
expected expenses of the Group for employee anniversary
bonuses, profit sharing arrangements and management bonuses
as well as early retirement and partial retirement plans.
The additions recorded to the provisions for profit sharing
and management bonuses in the reporting year usually result
in cash outflows in the following year. The cash outflow
for non-current provisions for personnel and social costs is
primarily expected within a period until 2026.
Other
Provisions for other risks include obligations for expected reduc-
tions in revenue already recognized such as bonuses, discounts
and other price reduction commitments. They also include
expected costs in connection with liability and litigation risks,
provisions for optimization programs, provisions for environ-
mental protection risks, as well as provisions for other taxes and
various other risks which cannot be allocated to other categories.
Further information on other provisions for other risks
is provided in Notes 5 and 29.
Provisions for other risks
Product
warranties
Personnel and
social costs Other Total
In millions of euros
Balance at December 31, 2014 4,988 3,941 5,050 13,979
thereof current 2,423 1,806 3,038 7,267
thereof non-current 2,565 2,135 2,012 6,712
Additions 3,267 2,334 3,193 8,794
Utilizations -2,448 -1,769 -1,975 -6,192
Reversals -261 -71 -518 -850
Addition of accrued interest and effects of changes in discount rates 23 -22 19 20
Currency translation and other changes 92 -49 36 79
Balance at December 31, 2015 5,661 4,364 5,805 15,830
thereof current 2,589 2,189 4,932 9,710
thereof non-current 3,072 2,175 873 6,120
E.57