2012 Half year financial report

The breakdown and changes in provisions for risks during the period were as follows:

 

In thousands of Euros
Balance as of 31
December 2011 
Allocations  Applications Reclassifications Delta
exchange rate
Balance as of 30 June 2012
Provision for product warranties
14,735 6,458 (5,542)
61 15,712
Provision for quality-related events
392
(59)

333
Risk provisions on investments
195



195
Provision for contractual risks
3,993

(58)
3,935
Provisions for guarantee risks
76



76
Provision for tax risks
36



36
Other provisions for risks 6,117 241 (977) (77) 35 5,339
Total 25,544 6,699 (6,578) (135) 96 25,626
 

The breakdown between the current and non-current portion of long-term provisions is as follows:

In thousands of Euros As of 30 June 2012 As of 31 December 2011 Change
Non-current portion      
Provision for product warranties 4,864 4,523 341
Provision for quality-related events 241 242 (1)
Risk provisions on investments 195 195
Provision for contractual risks 3,935 3,993 (58)
Provisions for guarantee risks   
Provision for tax risks
Other provisions for risks and charges 3,306 3,476 (170)
Total non-current portion 12,541 12,429 112


In thousands of Euros As of 30 June 2012 As of 30 December 2012 Change
Current portion      
In thousands of Euros 10,848 10,212 636
Provision for product warranties 92 150 (58)
Provision for quality-related events
Risk provisions on investments
Provision for contractual risks   
Provisions for guarantee risks 76 76
Provision for tax risks 36 36
Other provisions for risks and charges 2,033 2,641 (608)
Total current portion 13,085 13,115 (30)
 

The product warranty provision relates to allocations for technical assistance on products covered by customer service which are estimated to be provided over the contractually envisaged warranty period. This period varies according to the type of goods sold and the sales market, and is also determined by customer take-up to commit to a scheduled maintenance plan.

The provision increased during the period by €/000 6,458 and was used for €/000 5,542 in relation to charges incurred during the period.

The provision for quality-related events covers possible costs that could arise as a result of faulty components provided by suppliers.

Risk provisions for investments cover the portion of negative shareholders' equity of the subsidiaries Piaggio China Co. Ltd and AWS do Brasil, as well as charges that may arise from said.

The provision of contractual risks refers mainly to charges which may arise from the ongoing negotiation of a supply contract.

The provision for tax risks concerns council tax for the Scorzè site.

“Other provisions” include provisions for legal risks for €/000 3,624.