ANNUAL REPORT 2015 CONSOLIDATED FINANCIAL STATEMENTS/NOTES 89 NOTE 3.5 PROVISIONS Accounting policies The provisions in the balance sheet represent the best estimate of the amount that will be required to settle a present legal or constructive obligation arising from a past event, and it is probable that the group will be required to pay an amount that can be reliably estimated. Insurance provisions Insurance provisions are recognised on the basis of the risk relating to future payment of losses, injuries or damages that have already occurred. Insurance provisions primarily cover provisions relating to occupational injuries. Restructuring provisions Costs relating to restructuring are recognised as liabilities when a detailed, formal plan for the restructuring is published for the persons affected by the plan no later than at the reporting date. No provision is made for future operating losses. Other provisions Other provisions consist of different provisions for specific purposes, including onerous contracts which are recognised when the expected benefits to be derived by the group from a contract are lower than the unavoidable cost of meeting its obligations under the contract. Uncertainties and estimates Provisions are particularly associated with estimates on restructuring and insurance provisions. The scope and size of onerous contracts as well as employee and other liabilities related to the restructuring are also estimated. Insurance provisions are assessed based on historical records of, among other things, the number of insurance events and related costs. Note 3.5.a Provisions (EURm) 2015 Provisions at 1 January New provisions during the year Reversals Used during the year Provisions at 31 December Current provisions Non-current provisions Total provisions 2014 Provisions at 1 January New provisions during the year Reversals Used during the year Provisions at 31 December Current provisions Non-current provisions Total provisions INSURANCE PROVISIONS RESTRUCTURING PROVISIONS OTHER PROVISIONS TOTAL 13 5 -4 14 6 8 14 5 5 -4 6 6 6 9 17 -4 -15 7 7 7 27 27 -4 -23 27 19 8 27 16 4 -2 -5 13 5 8 13 22 -9 -8 5 5 5 13 18 -8 -14 9 9 9 51 22 -19 -27 27 19 8 27 Financial comments Provisions primarily pertain to insurance provisions for insurance incidents that have occurred but are not reported, and restructuring provisions. Insurance provisions primarily concern occupational injuries. No major insurance incidents have occurred during the year, however the group has seen an increase in claims related to transportation. Restructuring provisions mainly relate to the decommissioning of facilities and severance payments in connection to the planned closing of Kisslegg, Germany and restructuring of the customer service in Sweden. Minor new provisions were made for redundancies in connection with the efficiency programmes. Restructuring provisions were reduced during the year according to disbursements of termination benefits. Other provisions primarily include onerous contracts. With the exception of occupational injuries, all provisions are expected to be released within one year.
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