Review of 2010 – USD version - Skanska

29 Provisions Note
Note
Provisions are reported in compliance with IAS 37, “Provisions, Contingent Liabilities
and Contingent Assets.” See “Accounting and valuation principles,” Note 1.
Provisions are allocated in the statement of financial position between non-current
liabilities and current liabilities. Provisions are both interest-bearing and non-interestbearing.
Provisions that are part of Skanska’s operating cycle are recognized as current.
Interest-bearing provisions that fall due within a year are treated as current.
2010 2009
Non-current provisions
Interest-bearing 4.1 7.4
Current provisions
Interest-bearing 3.1 2.9
Non-interest-bearing 737.3 694.4
Total 744.5 704.6
The amount for interest-bearing provisions included USD 3.8 M (5.7) in provision to the
employee fund in Sweden.
Normal cycle time for “Other provisions” is about 1–3 years.
Provisions for warranty obligations refer to expenses that may arise during the warranty
period. Such provisions in Construction are based on individual assessments of
each project or average experience-based cost, expressed as a percentage of sales during
a five-year period. The expenses are charged to each project on a continuous basis.
Provisions for warranty obligations in other business streams are based on individual
assessments of each project. The change in 2010 was mainly related to Construction.
Provisions for legal disputes refer to provisions in the Construction business stream
for projects that have been completed.
The provision to the employee fund in Sweden refers to a refund of surplus funds
from the retirement insurance company SPP, now Alecta. The provision is used in consultation
with trade union representatives to enable employees with reduced work capacity
to remain employed on a part-time basis. The employee is compensated for loss of
income and loss of future pension benefits.
Employee-related provisions included such items as the cost of profit-sharing, certain
bonus programs and other obligations to employees.
Among provisions for environmental obligations are the costs of restoring gravel pits
to their natural state in Swedish operations.
The change in provisions, allocated among the reserve for legal disputes, provision for warranty obligations and other provisions, can be seen in the following table.
Legal disputes Warranty obligations Other provisions Total
2010 2009 2010 2009 2010 2009 2010 2009
January 1 165.1 122.8 285.8 197.2 253.8 326.7 704.6 646.6
Provisions for the year 104.1 68.1 115.3 81.1 73.8 78.4 293.1 227.6
Provisions utilized –54.4 –27.8 –53.3 –15.4 –100.0 –134.3 –207.7 –177.6
Unutilized amounts that were reversed,
change in value –17.1 –6.3 –14.6 –3.0 –27.3 –19.6 –59.0 –28.9
Exchange rate differences –1.1 8.8 1.3 18.3 0.7 20.1 0.9 47.2
Reclassifications –11.0 –0.4 11.2 7.6 12.2 –17.5 12.5 –10.3
December 31 185.7 165.1 345.7 285.8 213.1 253.8 744.5 704.6
Specification of "Other provisions"
2010 2009
Provisions for restructuring measures 21.6 58.7
Employee fund, Sweden 3.8 5.7
Employee-related provisions 69.8 59.5
Environmental obligations 19.3 17.1
Provision for social insurance contributions on pensions 14.6 38.1
Miscellaneous provisions 84.1 74.6
Total 213.1 253.8
30
Trade and other payables
Non-interest-bearing liabilities in business operations are recognized
as “Trade and other payables.” Such liabilities are part of the Group’s
operating cycle and are recognized as current liabilities.
Dec 31, 2010 Dec 31, 2009 Jan 1, 2009
Accounts payable to joint ventures 0.6 0.8 1.0
Other trade payables 1,575.2 1,744.0 1,816.1
Other operating liabilities to
joint ventures 1.3 1.3 8.4
Other operating liabilities 1 1,133.0 1,262.7 1,382.1
Accrued expenses and prepaid income 1,283.6 1,331.5 1,322.2
Total 3,993.7 4,340.3 4,529.8
of which financial instruments reported in Note 6,
"Financial instruments and financial risk management."
Accounts payable 1,575.8 1,744.9 1,817.2
Other operating liabilities including
accrued interest expenses 224.0 149.7 213.1
1,799.8 1,894.5 2,030.3
of which non-financial instruments 2,193.9 2,445.7 2,499.5
1 “Other operating liabilities” included USD 89.2 M (99.6) for checks issued but not yet cash in
the U.S. and the U.K. See “Accounting and valuation principles,” Note 1.
136 Notes, including accounting and valuation principles Skanska Review of 2010 – USD version