BASF Report 2021 Consoli dated Financial Statements – Notes 260 23 Other provisions Provisions for restructuring measures include severance payments The probable amount required to settle noncurrent provisions is to departing employees or similar personnel expenses as well as discounted if the effect of discounting is material. In this case, the Accounting policies expected costs for site closures, including the costs for demolition provision is recognized at present value. Assumptions must be and similar measures. Provisions are recognized for these expenses made in determining the discount rate (2021: 1.25%; 2020: 1.5%) Other provisions are recognized when there is a present obligation when the relevant measures have been planned and announced by used for calculating noncurrent provisions. Financing costs related as a result of a past event and when there is a probable outflow of management. to unwinding the discount of provisions in subsequent periods are resources whose amount can be reliably estimated. Provisions are shown in other financial result. recognized at the probable settlement value. Provisions for employee obligations primarily consist of variable compensation including associated social security contributions, as Other provisions Provisions for environmental protection and remediation costs well as obligations for granting long-service bonuses. The latter are Million € are recognized for expected costs for rehabilitating contaminated predominantly calculated based on actuarial principles. December 31, 2021 December 31, 2020 sites, recultivating landfills, removal of environmental contamination Of which Of which current current at existing production or storage sites and similar measures. Provisions for obligations from sales and purchase contracts largely comprise obligations arising from rebates granted and other Restoration obligations 158 21 148 21 In addition, other provisions also cover expected costs for price discounts in the Agricultural Solutions segment, warranties Environmental protection and 926 94 693 114 remediation costs restoration obligations for dismantling existing plants and and product liabilities, sales commissions and expected losses on buildings. If BASF is the only responsible party that can be identified, contracts. Employee obligations 2,368 1,907 1,174 754 the provision covers the entire expected obligation. At sites operated Obligations from sales and 1,423 1,379 1,134 1,114 purchase contracts together with one or more partners, the provision generally covers Provisions for litigation, damage claims, warranties and similar only BASF’s share of the expected obligation. The amount of the obligations contain anticipated expenses from lawsuits in which Restructuring measures 279 229 414 371 provision is determined based on the available technical information BASF is the defendant party, as well as obligations under damage Litigation, damage claims, warranties and similar 79 26 205 161 on the site, the technology used, legal regulations, and official claims against BASF and fines. In order to determine the amount of obligations requirements. The calculation accounts for expected significant the provisions, the company takes into consideration the facts Other 486 279 541 290 changes in obligations. related to each case, the size of the claim, compensation awarded Total 5,717 3,935 4,309 2,825 in similar cases and independent expert advice as well as assumptions regarding the probability of a successful claim and the range of possible claims. Actual costs can deviate from these estimates. For more information, see Note 24 on page 262