Nokia 2012 Annual Report Download - page 251

18. Inventories
2012 2011
EURm EURm
Raw materials, supplies and other ............................................ 409 789
Work in progress .......................................................... 352 516
Finished goods ............................................................ 777 1 025
Total .................................................................... 1 538 2 330
During 2012 the Group recognized an expense of EUR 55 million (EUR 0 million in 2011 and 2010)
within cost of sales to write-down the inventories to net realizable value.
19. Prepaid expenses and accrued income
2012 2011
EURm EURm
Social security, VAT and other taxes .......................................... 1 384 1 906
Deferred cost of sales ...................................................... 145 114
Other prepaid expenses and accrued income ................................... 1 852 2 468
Total .................................................................... 3 381 4 488
In 2012, other prepaid expenses and accrued income included advance payments to Qualcomm of
EUR 972 million (EUR 1 069 million in 2011). In 2008, Nokia and Qualcomm entered into a new
15 year agreement, under the terms of which Nokia was granted a license to all Qualcomm’s patents
for the use in Nokia mobile devices and Nokia Siemens Networks infrastructure equipment. The
financial structure of the agreement included an upfront payment of EUR 1.7 billion, which is amortized
over the contract period and ongoing royalties payable to Qualcomm. As part of the licence agreement,
Nokia also assigned ownership of a number of patents to Qualcomm. These patents were valued using
the income approach based on projected cash flows, on a discounted basis, over the assigned patents’
estimated useful life. Based on the valuation and underlying assumptions Nokia determined that the
fair value of these patents were not material.
Prepaid expenses and accrued income also include accrued interest income and various other prepaid
expenses and accrued income, but no amounts which are individually significant.
20. Valuation and qualifying accounts
Allowanced on assets to which they apply:
Balance at
beginning
of year
Charged to
costs and
expenses Deductions(1)
Balance
at end
of year
EURm EURm EURm EURm
2012
Allowance for doubtful accounts ....................... 284 53 (89) 248
Excess and obsolete inventory ........................ 457 403 (389) 471
2011
Allowance for doubtful accounts ....................... 363 131 (210) 284
Excess and obsolete inventory ........................ 301 345 (189) 457
2010
Allowance for doubtful accounts ....................... 391 117 (145) 363
Excess and obsolete inventory ........................ 361 124 (184) 301
(1) Deductions include utilization and releases of the allowances.
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