31. Provisions

Excel

(€ in thousands)

2014

2013

Non-current

48,496

55,857

Current

34,074

23,975

TOTAL

82,570

79,832

The movements in each category of provisions are as follows:

Excel

(€ in thousands)

Warranty

Claims & litigations

Other

Total

BALANCE AS AT 31 DECEMBER 2012

35,791

36,439

9,230

81,460

Increases in provisions

19,022

11,105

5,320

35,447

Utilised

–18,805

–5,362

–895

–25,062

Released

–3,435

–8,578

0

–12,013

BALANCE AS AT 31 DECEMBER 2013

32,573

33,604

13,655

79,832

Increases in provisions

20,188

13,086

6,913

40,187

Utilised

–20,266

–1,721

–2,418

–24,405

Released

206

–12,9981

–252

–13,044

BALANCE AS AT 31 DECEMBER 2014

32,701

31,971

17,898

82,570

  1. In 2014, we recorded a gain of €8.2m as a result of changes in estimates in our claims and litigation provision.
Accounting policy

Provisions are recognised when:

Provisions are measured at management's best estimate of the expenditure required to settle the obligation at the balance sheet date, and are discounted to present value where the effect is material.

Provisions for warranty costs are recognised at the date of sale of the relevant products, at management's best estimate of the expenditure required to settle the group's obligation. Warranty costs are recorded within cost of sales.

Significant estimates

Warranty provision

The group generally offers warranties for its 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.

From the total warranty provision of €32.7 million, it is estimated that an amount of €20.1 million will be utilised within 12 months.

Claims and litigation

The group made a provision for potential legal, tax and other risks in various jurisdictions. The legal matters consist mainly of intellectual property infringement issues. In the normal course of business, the group receives claims relating to allegations that it has infringed intellectual property assets. In such cases, the companies making the claims seek payments that may take the form of licenses and/or damages. While these claims will 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 such claims and 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 the likelihood of an adverse outcome is reasonably possible or an estimate is not determinable, the matter is disclosed, provided it is material. Management is of the opinion that the provision is adequate to resolve these claims.

The methodology used to determine the amount of the liability requires significant judgements 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.

Based on the best estimate, the portion of the claims and litigation provision expected to be settled in the coming twelve months amounts to approximately €9.7 million.

Other provisions

Other provisions include an amount of €8.4 million (2013: €6.8 million) related to the defined benefit pension plan in Germany as disclosed in note 6. Personnel expenses, and the remainder relates mainly to provisions for expected earn-out payments. The amount of 'Other provisions' estimated to be settled/utilised within the coming twelve months amounted to €4.2 million.