G24 Other provisions

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	Warranties	Restructuring	Employee benefits	Environmental obligations	Legal disputes	Other obligations	Total
Balance at January 1, 2019	458	1,188	571	359	295	404	3,275
Provisions made during the year	85	1,681	355	100	–40	574	2,756
Provisions used during the year	–116	–945	–318	–59	–27	–195	–1,659
Unutilized provisions reversed during the year	–59	–177	–17	–5	–29	–136	–422
Reclassifications	–	0	0	–	–	1	1
Business combinations	46	–156	55	–2	3	–4	–58
Translation differences	30	3	–23	5	6	–27	–7
Balance at December 31, 2019	445	1,595	622	398	208	618	3,885
of which current	374	1,442	221	60	171	425	2,693
of which non-current	71	154	401	338	37	192	1,193

Balance at January 1, 2020	445	1,595	622	398	208	618	3,885
Provisions made during the year	225	2,088	285	67	62	367	3,094
Provisions used during the year	–157	–846	–296	–11	–32	–204	–1,545
Unutilized provisions reversed during the year	–70	–232	–54	–2	–16	–73	–447
Reclassifications	2	15	–16	1	7	–16	–7
Business combinations	1	0	4	0	0	4	9
Translation differences	–23	–44	–17	–23	–32	–61	–200
Balance at December 31, 2020	423	2,576	529	431	196	635	4,790
of which current	313	2,188	182	61	162	474	3,381
of which non-current	110	388	346	369	34	161	1,409

Accounting principles

Warranties

A provision for warranties is recognized when the underlying products or services are sold. The provision is based on historical warranty data and a weighing of all possible outcomes against their associated probabilities.

Restructuring

A provision for restructuring is recognized when the Group has approved a detailed and formal restructuring plan and the restructuring has either commenced or has been announced publicly. Future operating costs are not provided for.

Employee benefits

A provision for personnel-related benefits is recognized in accordance with agreements entered for long-term incentive programs, local bonus programs, part-time pensions and other personnel obligations.

Environmental obligations

An environmental provision is recognized when there is a legal obligation for a clean up.

Site restoration

Provision for costs for restoring contaminated land is made in accordance with the Group’s published environmental principles when there is a legal requirement or other binding commitment to restore established contaminated land and when the cost can be measured with reasonable precision. Site restoration is included in environmental obligations.

Legal disputes

Legal disputes include provisions for claims which, at the balance sheet date, had not been closed.

Other obligations

Other obligations include provisions for onerous contracts and obligations within the scope of Sandvik Försäkring AB’s operations. Provisions classified as current are expected to result in an outflow of resources within twelve months from the balance sheet date.

Provisions

A provision is recognized in the balance sheet when the Group has a legal or constructive obligation as a result of a past event, and it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount can be made. If the effect is material, the provision is determined by discounting the expected future cash flows at a pre-tax rate that reflects the current market assessments of the time value of money and, where appropriate, the risks specific to the liability. The provisions are mainly related to warranty commitments, restructuring, environmental obligations, long-term incentives and legal disputes and claims, such as value-added tax issues, and customer and supplier claims relating to ongoing or finished projects.

Termination benefits

When employment is terminated, a provision is recognized only when the entity is demonstrably committed either to terminate the employment of an employee or a group of employees before the normal retirement age or provide termination benefits as a result of an offer made to encourage voluntary redundancy. In the latter case, a liability and an expense are recognized if it is probable that the offer will be accepted and the number of employees that will accept the offer can be reliably estimated.

Critical estimates and key judgments

Disputes

Sandvik is party to a number of disputes and legal proceedings in the ordinary course of business. Management consults with legal experts on issues related to legal disputes and with other experts internal or external to the Company on issues related to the ordinary course of business. It is management’s best estimate that neither the Parent Company, nor any subsidiary, is involved in legal proceedings or arbitration that may be deemed to have a materially negative effect on the business, the financial position or results of operations.

For additional information on risks related to disputes, refer to the Enterprise Risk Management section.