28. Other Provisions

Provisions are recognized if an obligation toward a third party exists, the outflow of resources is probable, and the likely amount of the obligation can be estimated reliably. The calculation of provisions is determined based on the best possible estimation of the parameters. Long-term provisions are discounted using a discount rate dependent on when they are expected to be settled, provided the interest effect is material.

Provisions for personnel expenses primarily comprise provisions for annual bonuses, vacation pay, anniversary payments, and severance agreements. The provisions for marketing and selling expenses relate in particular to provisions for product returns, cooperative advertising allowances, and other marketing-related obligations. Provisions for litigation and similar risks include provisions for litigation in Brazil amounting to €79 million (previous year: €111 million), risks in connection with customs audits in the amount of €10 million (previous year: €12 million) and patent risks amounting to €13 million (previous year: €16 million). The miscellaneous provisions relate to a wide variety of matters and companies and also include provisions for restructuring. The performance-related purchase price components resulting from the Chantecaille acquisition are also reported under other provisions.