Accounting principles
Provisions for liabilities and charges are set up to cover probable outflows for the benefit of third parties without any equivalent consideration being received by the Group in return. They mainly relate to restructuring costs, industrial, environmental and commercial risks relating to operations such as breach of contract, product returns, and employee-related risks.
These provisions are estimated on the basis of the most likely assumptions or by using statistical methods, depending on the nature of the risks.
Provisions for liabilities and charges are recorded either as Non-current liabilities or as Current liabilities, depending on their type. Provisions for liabilities or disputes which must be settled within 12 months of the closing date, and those linked to the normal operating cycle (such as product returns), are recorded as Current liabilities. Other provisions for liabilities and charges are recorded as Non-current liabilities.
| € millions | 31.12.2021 | 31.12.2020 | 31.12.2019 | ||
|---|---|---|---|---|---|
| Provisions for liabilities and charges | 63.8 | 56.8 | 56.9 | ||
| Non-current provisions (1) | 63.8 | 56.8 | 56.9 | ||
| Current provisions for liabilities and charges | 1,223.3 | 1,224.7 | 1,117.8 | ||
| Provisions for restructuring | 182.5 | 235.1 | 112.9 | ||
| Provisions for product returns | 405.9 | 352.4 | 351.1 | ||
| Other current provisions (1) | 634.9 | 637.3 | 653.7 | ||
| TOTAL | 1,287.1 | 1,281.6 |
1,174.7 |
||
(1) This item notably includes provisions for tax risks and litigation excluding corporate income tax, industrial, environmental and commercial risks relating to operations (breach of contract), personnel costs, investments accounted for under the equity method when the Group’s share in the net asset is negative, as well as risks relating to investigations carried out by competition authorities (note 12.2.2.a and b).
The change in this caption in 2021 can be analysed as follows:
| € millions | 31.12.2019 | 31.12.2020 | Charges (2) |
Reversals (used)(2) |
Reversals (not used)(2) |
Other (1) | 31.12.2021 | ||
|---|---|---|---|---|---|---|---|---|---|
| Provisions for restructuring | 113.0 | 235.1 | 130.5 | -145.2 | -45.4 | 7.5 | 182.5 | ||
| Provisions for product returns | 351.0 | 352.4 | 422.9 | -305.4 | -84.5 | 20.4 | 405.9 | ||
| Other provisions for liabilities and charges | 710.7 | 694.1 | 216.2 | -97.7 | -117.7 | 3.8 | 698.7 | ||
| TOTAL | 1,174.7 | 1,281.6 | 769.6 | -548.3 | -247.6 | 31.7 | 1,287.1 | ||
(1) Mainly resulting from translation differences.
(2) These figures can be analysed as follows:
| € millions | Charges | Reversals (used) | Reversals (not used) | ||
|---|---|---|---|---|---|
| Operating profit | 639.1 | -417.1 | -155.8 | ||
| Other income and expenses | 130.5 | -131.2 | -91.8 | ||
| Net financial income | - | - | - | ||
