2.4 Provisions
CHF million |
| Warranty and customer returns |
| Restructuring |
| Other |
| Total |
Provisions 30 June 2021 |
| 13.3 |
| 4.2 |
| 9.2 |
| 26.7 |
Additions |
| 7.2 |
| 0.2 |
| 3.4 |
| 10.8 |
Releases |
| –1.3 |
| –2.8 |
| –6.6 |
| –10.7 |
Usage |
| –7.0 |
| –5.9 |
| –4.6 |
| –17.5 |
Translation exchange differences |
| 0.1 |
| 0.1 |
| 0.0 |
| 0.2 |
Provisions 30 June 2020 |
| 14.3 |
| 12.6 |
| 17.0 |
| 43.9 |
Additions |
| 9.0 |
| 10.5 |
| 7.8 |
| 27.3 |
Releases |
| –1.0 |
| –1.0 |
| –0.7 |
| –2.7 |
Usage |
| –8.2 |
| –4.0 |
| –5.5 |
| –17.7 |
Acquisition of businesses |
| 0.1 |
| 0.0 |
| 0.0 |
| 0.1 |
Translation exchange differences |
| –0.5 |
| –0.4 |
| –1.2 |
| –2.1 |
Provisions 1 July 2019 |
| 14.9 |
| 7.5 |
| 16.6 |
| 39.0 |
The provision for warranty and customer returns covers customer warranty claims and voluntary concessions as well as customer returns.
The movements as well as the ending balance of the provision for restructuring mainly relates to ongoing initiatives to address the Covid-19 pandemic, which were approved by the Board of Directors.
Other provisions mainly comprise those relating to environmental risks, litigation, and sales agents' indemnities.
Accounting principles
Provisions are recognized when:
- the Group has a present obligation (legal or constructive) as a result of a past event;
- it is probable that a use of resources will be required to settle the obligation; and
- the amount of the obligation can be reliably estimated.
A restructuring is a program planned and controlled by the Management that materially changes the manner in which the business is conducted. Costs relating to restructuring plans or agreements, including the reduction of excess staff, the discontinuation of certain activities, the streamlining of facilities and operations, and other restructuring measures, are recorded in the period in which the Group commits itself to a detailed formal plan.
Use of accounting estimates
In the course of their ordinary operating activities, Group companies can face claims from third parties. Provisions for pending claims are measured on the basis of the information available and a realistic estimate of the expected outflow of resources. The outcome of these proceedings may result in claims against the Group that cannot be met at all or in full through provisions or insurance cover.
Significant judgment is required to determine the costs of restructuring plans. The actual cost might deviate from the original plan.