NOTES
84•Consolidated financial statements
PANDORAANNUAL REPORT 2014
SECTION 3: INVESTED CAPITAL ANDWORKING CAPITAL ITEMS, CONTINUED
PROVISIONS
Earn-outs,
Sales
acquisition of
return and
non-controlling
warranty
Other
DKKmillion
interests
provisions
provisions
Total
Provisions at 1 January 2014
-
458
48
506
Provisionsmade in 2014
-
774
86
860
Utilised in the year
-
-543
-7
-550
Unused amounts reversed
-
-75
-29
-104
Reclassifications
-
33
-33
-
Exchange rate adjustments
-
23
4
27
Provisions at 31December 2014
-
670
69
739
Provisions are recognised in the consolidated balance sheet:
Current
-
670
8
678
Non-current
-
-
61
61
Total provisions at 31December 2014
-
670
69
739
Provisions at 1 January 2013
-
416
54
470
Provisionsmade in2013
-
492
35
527
Utilised in the year
-
-423
-7
-430
Unused amounts reversed
-
-20
-34
-54
Exchange rate adjustments
-
-7
-
-7
Provisions at 31December 2013
-
458
48
506
Provisions are recognised in the consolidated balance sheet:
Current
-
458
13
471
Non-current
-
-
35
35
Total provisions at 31December 2013
-
458
48
506
3.5
Sales return andwarrantyprovisions
In2014, provisions forwarranty claimswere reclassified so
that they arenowpresented togetherwith returnprovisions.
This is due to a change in thehandlingofwarranty claims,
whichnowmainly lead to replacements insteadof repairs.
PANDORAonlyprovides return rights to customers
in some countries. Sales returnprovisions in2014mainly
related to theAmericas,DKK460million (2013:DKK
353million).
Other provisions
Other provisions include aprovision for onerous contracts
due to the future relocationof PANDORA’s office in
Denmarkwhichmay lead to aperiodof rent payments for an
empty location.
Earn-outs, acquisitionof non-controlling interests
The earn-out payment provisionDKK0million (2013:DKK
0million) relates to the acquisitionof thenon-controlling
interests inPANDORA JewelryCentralWestern EuropeA/S.
Accountingpolicies
Provisions are recognisedwhenPANDORAhas apresent
obligation (legal or constructive) as a result of apast event and
it is probable that anoutflowof resources embodyingeconomic
benefitswill be required to settle theobligationanda reliable
estimatecanbemadeof theamount of theobligation.The
expense relating toanyprovision is recognised in the income
statement net of any reimbursement.
Aprovision for estimated sales returns is recognisedwhen
there is historical experienceorwhena reasonablyaccurate
estimateof expected future returns canotherwisebemade.The
provision is recognisedat thegrossmarginon theexpected
returns.
Significant accountingestimates
In somecountries, PANDORAhas provided return rights
tocustomers.Theprovision is toa largeextent basedon
historical returnpatterns andchanges in future returnpatterns
may therefore result inchanges compared to theprovision
recognised. Provisions arealsomadeonacasebycasebasis
whenPANDORAexpects to takeback specificgoods for
commercial reasons.
