Accounting policies
Provisions are recognised in the balance sheet whenever the Group has a present obligation (legal or implicit) as a result of a past event and it is probable that a reasonably estimated outflow of resources embodying economic benefits will be required to settle the obligation.
Restructuring provision
Provisions for restructuring costs are set up whenever a formal restructuring plan has been approved by the Group and the restructuring has started to be implemented or has been announced publicly.
Provisions for restructuring include all liabilities to be paid with the implementation of the plan, including employee termination payments. These provisions do not include any estimated future operating losses or estimated profits from the disposal of assets.
Legal claims provision
Provisions related with litigation against Group Companies are set up in accordance with risk assessments carried out by the Group, with the support and advice of its lawyers and legal advisers.
2023 |
|
Opening balance |
|
Set up, reinforced and transfers |
|
Unused and reversed |
|
Used |
|
Closing balance |
|---|---|---|---|---|---|---|---|---|---|---|
Taxes |
|
24 |
|
4 |
|
(2) |
|
- |
|
26 |
Legal claims |
|
32 |
|
15 |
|
(0) |
|
(26) |
|
22 |
Others |
|
25 |
|
7 |
|
(1) |
|
(0) |
|
31 |
|
|
82 |
|
26 |
|
(4) |
|
(26) |
|
79 |
2022 |
|
Opening balance |
|
Set up, reinforced and transfers |
|
Unused and reversed |
|
Used |
|
Closing balance |
|---|---|---|---|---|---|---|---|---|---|---|
Taxes |
|
13 |
|
12 |
|
(1) |
|
- |
|
24 |
Legal claims |
|
9 |
|
25 |
|
(2) |
|
(0) |
|
32 |
Others |
|
12 |
|
16 |
|
(0) |
|
(2) |
|
25 |
|
|
34 |
|
52 |
|
(2) |
|
(2) |
|
82 |
Provisions for tax are aimed to cover possible future disbursements resulting from the tax litigation described in note 24. These are all cases in dispute in several courts, for which there is no date to be concluded.
The ongoing lawsuits for which the Group constitutes provisions essentially relate to commercial, labour and regulatory disputes, from which it is estimated that may result in future disbursements. Since these are several legal proceedings related to different periods, their payment (if it occurs) should be phased over time upon completion of the respective court proceedings.
The provision for other litigation is intended to cover the estimated future disbursements related to liabilities assumed by the Group as a result of past transactions, such as guarantees provided by the sale of business. Since they are mostly events that are not yet in dispute with the counterparty, the probability of short-term disbursement is considered remote.