Vodafone 2015 Annual Report Download - page 143

17. Provisions
A provision is a liability recorded in the statement of nancial position, where there is uncertainty over the timing
or amount that will be paid, and is therefore often estimated. The main provisions we hold are in relation to asset
retirement obligations, which include the cost of returning network infrastructure sites to their original condition
at the end of the lease, and claims for legal and regulatory matters. For further details see “Critical accounting
judgements” in note 1 “Basis of preparation” to the consolidated nancial statements.
Accounting policies
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that the Group will
be required to settle that obligation and a reliable estimate can be made of the amount of the obligation. Provisions are measured at the Directors’
best estimate of the expenditure required to settle the obligation at the reporting date and are discounted to present value where the effect
is material.
Asset retirement obligations
In the course of the Group’s activities, a number of sites and other assets are utilised which are expected to have costs associated with
de-commissioning. Theassociated cash outows are substantially expected to occur at the dates of exit of the assets to which they relate,
whicharelong-term in nature, primarily in periods up to 25 years from when the asset is brought into use.
Legal and regulatory
The Group is involved in a number of legal and other disputes, including notications of possible claims. The Directors of the Company, after taking
legal advice, have established provisions after taking into account the facts of each case. The timing of cash outows associated with the majority
of legal claims are typically less than one year, however, for some legal claims the timing of cash ows may be long-term in nature. For a discussion
of certain legal issues potentially affecting the Group see note 30 “Contingent liabilities” to the consolidated nancial statements.
Other provisions
Other provisions comprises various provisions including those for restructuring costs and property. The associated cash outows for restructuring
costs are primarily less than one year. The timing of the cash ows associated with property is dependent upon the remaining term of the
associated lease.
Asset
retirement Legal and
obligations regulatory Other Total
£m £m £m £m
1 April 2013 467 450 653 1,570
Exchange movements (14) (33) (27) (74)
Arising on acquisition 62 92 5159
Amounts capitalised in the year 14 – – 14
Amounts charged to the income statement –140 374 514
Utilised in the year − payments (26) (35) (186) (247)
Amounts released to the income statement –(32) (61) (93)
Other (18) (25) 9(34)
31 March 2014 485 557 767 1,809
Exchange movements (34) (18) (47) (99)
Arising on acquisition –26 59 85
Amounts capitalised in the year 58 – – 58
Amounts charged to the income statement –277 270 547
Utilised in the year − payments (13) (51) (385) (449)
Amounts released to the income statement (30) (100) (96) (226)
Other –143 (19) 124
31 March 2015 466 834 549 1,849
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Annual Report 2015
141