TomTom 2009 Annual Report Download - page 86

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84 / NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
OF TOMTOM NV
26. PROVISIONS
Claims,
Litigation
(€ in thousands) Warranty & Other Total
Opening balance at 1 January 2008 39,378 56,591 95,969
Increases in provisions 49,931 46,627 96,558
Utilised -41,281 -9,076 -50,357
Released 0 -29,237 -29,237
Opening balance at 1 January 2009 48,028 64,905 112,933
Increases in provisions 42,142 17,564 59,706
Utilised -39,908 -4,209 -44,117
Released 0 -14,172 -14,172
Closing balance at 31 December 2009 50,262 64,088 114,350
Warranty provision
The group generally offers warranties for its personal navigation products. Management estimates the related
provision for future warranty claims based on historical warranty claim information, as well as evaluating recent
trends that might suggest that past cost information may differ from future claims.
Claims, litigation and other provision
The group formed a provision for potential legal and tax risks in various jurisdictions. The legal matters mainly
consist of intellectual property infringement issues. In the normal course of business, the group receives claims
relating to allegations that we have infringed intellectual property assets and the companies making the claims
seek payments which may take the form of licences and/or damages. Some of these claims may be resisted,
some are likely to be settled by negotiation and others are expected to result in litigation.
The cases and claims against the group often raise difficult and complex factual and legal issues which are
subject to many uncertainties and complexities, including but not limited to the facts and circumstances of each
particular case and claim, the jurisdiction in which each suit is brought, and the differences in applicable law. In
the normal course of business, management consults with legal counsel and certain other experts on matters
related to litigation. The group accrues a liability when it is determined that an adverse outcome is more likely
than not, and the amount of the loss can be reasonably estimated. If either the likelihood of an adverse outcome
is reasonably possible or an estimate is not determinable, the matter is disclosed, provided it is material. The
directors are of the opinion that the provision is adequate to resolve these claims.
The methodology used to determine the amount of the liability requires significant judgments and estimates
regarding the costs of settling asserted claims. Due to the fact that there is limited historical data available, the
estimated liability cannot be based upon recent settlement experience for similar types of claims.
Analysis of total provisions
(€ in thousands) 2009 2008
Non-current 57,847 55,702
Current 56,503 57,231
114,350 112,933
27. TRADE PAYABLES
All trade payable balances are due within one year.