NOTE F37 Contingent liabilities
- Index
- 36 NOTE F36 Commitments to acquire property, plant, and equipment, and intangible assets
- 37 NOTE F37 Contingent liabilities
- 38 NOTE F38 Dividends proposed for distribution
- 39 NOTE F39 Associates and joint ventures
- 40 NOTE F40 Joint operations
- 41 NOTE F41 Non-controlling interests (continuing operations)
- 42 NOTE F42 Related parties
- 43 NOTE F43 Events after the reporting period
- 44 NOTE F44 List of companies included in the consolidation scope
Accounting policy
A contingent liability is:
- a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity, or
- a present obligation that arises from past events but is not recognized because:
- it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation, or
- the amount of the obligation cannot be measured with sufficient reliability.
Contingent liabilities are not recognized in the consolidated financial statements, except if they arise from a business combination. They are disclosed unless the possibility of an outflow of economic benefits is remote.
In € million |
2017 |
2016 |
||
Liabilities and commitments of third parties guaranteed by the Company |
706 |
792 |
||
Environmental contingent liabilities |
317 |
307 |
||
Litigation and other major commitments |
1 |
16 |
||
Total |
1,024 |
1,115 |
The liabilities and commitments of third parties guaranteed by the Company relate mainly to guarantees given in the framework of:
- RusVinyl, the joint venture with SIBUR for the construction and operation of a PVC plant in Russia. A guarantee of €133 million at December 31, 2017 (€152 million at the end of 2016) has been provided on a several basis by each sponsor, SolVin/Solvay and Sibur, for the benefit of the lenders and which corresponds for each to 50% of the amount in principal of RusVinyl project finance plus interests and costs, and
- VAT payment (€195 million at December 31, 2017, €295 million at December 31, 2016).
Within the framework of the annual review of contingent liabilities, environmental contingent liabilities for a total amount of €317 million have been identified at December 31, 2017 (€307 million at December 31, 2016).