2.5Provisions and Contingent Liabilities
2024 | 2023 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
in CHF 1 000 | Warranties | Others | Total | Warranties | Others | Total | ||||||
As at January 1 | 4 914 | 3 313 | 8 227 | 5 100 | 2 685 | 7 785 | ||||||
Increase | 2 760 | 2 711 | 5 470 | 2 405 | 3 973 | 6 378 | ||||||
Utilization | -2 969 | -4 369 | -7 339 | -2 405 | -2 308 | -4 713 | ||||||
Reversals | - | - | - | -186 | -1 020 | -1 206 | ||||||
Translation differences | - | 12 | 12 | - | -17 | -17 | ||||||
As at December 31 | 4 705 | 1 666 | 6 371 | 4 914 | 3 313 | 8 227 | ||||||
of which current provisions | 3 772 | 537 | 4 309 | 4 052 | 3 313 | 7 365 | ||||||
of which non-current provisions | 932 | 1 129 | 2 062 | 862 | - | 862 | ||||||
Provisions for warranties were calculated considering experienced returns in the past as well as current sales developments. They generally cover product and replacement costs for a warranty period of five years. Product liability incidents with property, plant and equipment damages were considered separately on a case-by-case basis.
Other provisions mainly included expected costs for non-income tax risks and for legal litigations.
As at December 31, 2024 and 2023, there were no contingent liabilities.
In the course of its ordinary operating activities, Belimo provides warranties to its customers for which a provision is recognized. The amount recognized as provision is the best estimate required to settle the present obligation at the reporting date. This measurement involves various management assumptions and estimates. The assessment is challenged annually and may change in the following year depending on the future changes in warranty processes.
Provisions are recognized when the Group has a present obligation because of a past event, an outflow of resources embodying economic benefits is probable, and the amount of the obligation can be reliably estimated. They are discounted if the effect is material. Provisions are measured at the reporting date, based on the best estimate of the future outflow of economic benefits. Depending on the development and outcome of the events, claims may arise that are lower or higher than the recognized provision. The actual payments may, therefore, differ from the provisions.
Contingent liabilities are disclosed when the Group has a present obligation because of a past event, but the outflow of resources embodying economic benefits is not probable, or the amount of the obligation cannot be measured with sufficient reliability.