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30 Noncurrent and current other provisions

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€ million

  

Obligations arising from sales

  

Employee expenses

  

Litigation and legal risks

  

Miscel­laneous provisions

  

Total

1

Due to the initial application of IFRS 16, the values in the opening balance were adjusted.

 

  

 

  

 

  

 

  

 

  

 

Balance at Jan. 1, 20191

  

27,035

  

5,155

  

4,913

  

7,639

  

44,742

Foreign exchange differences

  

199

  

15

  

−14

  

41

  

241

Changes in consolidated Group

  

−1

  

3

  

−1

  

0

  

2

Classified as held for sale

  

33

  

10

  

–

  

12

  

55

Utilization

  

9,442

  

1,899

  

1,913

  

2,404

  

15,658

Additions/New provisions

  

11,618

  

2,633

  

2,835

  

3,486

  

20,572

Unwinding of discount/effect of change in discount rate

  

3

  

225

  

−29

  

20

  

220

Reversals

  

2,391

  

128

  

531

  

795

  

3,845

Balance at Dec. 31, 2019

  

26,988

  

5,993

  

5,260

  

7,976

  

46,217

of which current

  

13,468

  

2,466

  

3,112

  

5,388

  

24,434

of which noncurrent

  

13,520

  

3,527

  

2,147

  

2,588

  

21,783

Balance at Jan. 1, 2020

  

26,988

  

5,993

  

5,260

  

7,976

  

46,217

Foreign exchange differences

  

−653

  

−56

  

−170

  

−222

  

−1,101

Changes in consolidated Group

  

18

  

16

  

0

  

522

  

556

Utilization

  

9,625

  

2,275

  

2,347

  

2,086

  

16,333

Additions/New provisions

  

10,890

  

2,707

  

1,781

  

4,393

  

19,771

Unwinding of discount/effect of change in discount rate

  

17

  

108

  

−20

  

0

  

105

Reversals

  

1,637

  

223

  

586

  

1,117

  

3,564

Balance at Dec. 31, 2020

  

25,998

  

6,270

  

3,918

  

9,465

  

45,652

of which current

  

12,394

  

2,174

  

2,037

  

6,359

  

22,964

of which noncurrent

  

13,604

  

4,096

  

1,881

  

3,107

  

22,688

The obligations arising from sales contain provisions covering all risks relating to the sale of vehicles, components and genuine parts through to the disposal of end-of-life vehicles. They primarily comprise warranty obligations, calculated on the basis of losses to date and estimated future losses. They also include provisions for discounts, bonuses and similar allowances which are incurred after the balance sheet date, but for which there is a legal or constructive obligation attributable to sales revenue before the balance sheet date.

Provisions for employee expenses are recognized for long-service awards, time credits, partial retirement arrangements, severance payments and similar obligations, among other things.

In addition to residual provisions relating to the diesel issue, the provisions for litigation and legal risks contain amounts related to a large number of legal disputes and official proceedings in which Volkswagen Group companies become involved in Germany and internationally in the course of their operating activities. In particular, such legal disputes and other proceedings may occur in relation to suppliers, dealers, customers, employees, or investors. Please refer to the “Litigation” section for a discussion of the legal risks.

Miscellaneous provisions relate to a wide range of identifiable specific risks, price risks and uncertain obligations, which are measured in the amount of the expected settlement value. Depending the jurisdiction concerned, they also include risk provisions for any non-compliance with legal emissions limits. Their measurement takes into account, among other things, the respective sales volume and the legally defined fee or the cost of acquiring emission rights from other manufacturers. Advantage has been taken of synergies between individual brands of the Volkswagen Group by establishing emission pools where possible.

Miscellaneous provisions additionally include provisions amounting to €1,265 million (previous year: €568 million) relating to the insurance business. The increase is mainly due to the expansion of the consolidated Group following an initial consolidation.