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D1 Provisions | 12 Months Ended
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Dec. 31, 2021
Provisions [abstract] |
D1 Provisions |
|  | Provisions
Provisions |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Restructuring |  |  | Customer related |  |  | Supplier related |  |  | Warranty |  |  | Share-based payments |  |  | Other |  |  | Total |
2021 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Opening balance |  |  | 1,200 |  |  |  | 3,850 |  |  |  | 791 |  |  |  | 987 |  |  |  | 2,107 |  |  |  | 1,531 |  |  |  | 10,466 |
Additions |  |  | 303 |  |  |  | 795 |  |  |  | 1,020 |  |  |  | 455 |  |  |  | 1,367 |  |  |  | 483 |  |  |  | 4,423 |
Reversal of excess amounts |  |  | (98) |  |  |  | (491) |  |  |  | (228) |  |  |  | (153) |  |  |  | (122) |  |  |  | (86) |  |  |  | (1,178) |
Charge d to income statement |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 3,245 |
Utilization |  |  | (785) |  |  |  | (841) |  |  |  | (175) |  |  |  | (109) |  |  |  | (1,837) |  |  |  | (462) |  |  |  | (4,209) |
Reclassifications |  |  | (1) |  |  |  | 104 |  |  |  | (179) |  |  |  | (107) |  |  |  | — |  |  |  | 39 |  |  |  | (144) |
Translation differences |  |  | 20 |  |  |  | 23 |  |  |  | 2 |  |  |  | 1 |  |  |  | 76 |  |  |  | 24 |  |  |  | 146 |
Closing balance |  |  | 639 |  |  |  | 3,440 |  |  |  | 1,231 |  |  |  | 1,074 |  |  |  | 1,591 |  |  |  | 1,529 |  |  |  | 9,504 |
Of which current provisions |  |  | 411 |  |  |  | 1,488 |  |  |  | 1,231 |  |  |  | 320 |  |  |  | 915 |  |  |  | 1,417 |  |  |  | 5,782 |
Of which non-current provisions |  |  | 228 |  |  |  | 1,952 |  |  |  | — |  |  |  | 754 |  |  |  | 676 |  |  |  | 112 |  |  |  | 3,722 |
2020 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Opening balance |  |  | 1,095 |  |  |  | 3,738 |  |  |  | 1,309 |  |  |  | 941 |  |  |  | 1,941 |  |  |  | 1,899 |  |  |  | 10,923 |
Additions |  |  | 1,144 |  |  |  | 1,108 |  |  |  | 535 |  |  |  | 248 |  |  |  | 1,563 |  |  |  | 649 |  |  |  | 5,247 |
Reversal of excess amounts |  |  | (149) |  |  |  | (83) |  |  |  | (438) |  |  |  | (99) |  |  |  | (69) |  |  |  | (323) |  |  |  | (1,161) |
Charge d to income statement |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 4,086 |
Utilization |  |  | (815) |  |  |  | (766) |  |  |  | (595) |  |  |  | (105) |  |  |  | (1,195) |  |  |  | (499) |  |  |  | (3,975) |
Reclassifications |  |  | 9 |  |  |  | (4) |  |  |  | (14) |  |  |  | 3 |  |  |  | (1) |  |  |  | (20) |  |  |  | (27) |
Translation differences |  |  | (84) |  |  |  | (143) |  |  |  | (6) |  |  |  | (1) |  |  |  | (132) |  |  |  | (175) |  |  |  | (541) |
Closing balance |  |  | 1,200 |  |  |  | 3,850 |  |  |  | 791 |  |  |  | 987 |  |  |  | 2,107 |  |  |  | 1,531 |  |  |  | 10,466 |
Of which current provisions |  |  | 1,157 |  |  |  | 1,716 |  |  |  | 791 |  |  |  | 987 |  |  |  | 1,420 |  |  |  | 1,509 |  |  |  | 7,580 |
Of which non-current provisions |  |  | 43 |  |  |  | 2,134 |  |  |  | — |  |  |  | — |  |  |  | 687 |  |  |  | 22 |  |  |  | 2,886 |
Provisions will fluctuate over time depending on the business mix, market mix and, technology shifts. Risk assessment in the ongoing business is performed monthly to identify the need for new additions and reversals. Management uses its best judgment to estimate provisions based on this assessment. Under certain circumstances, provisions are no longer required due to outcomes being more favourable than anticipated, which affect the provision balance as a reversal. In other cases, the outcome can be negative, and if so, a charge is recorded in the income statement. For 2021, the total provision value is SEK 9.5 (10.5) billion, of which SEK 3.7 (2.9) billion is classified as non-current. For more information, see note A1 “Significant accounting policies” and note A2 “Critical accounting estimates and judgments” for key estimation uncertainty regarding timing and amount. Restructuring provisions Restructuring provisions relate to structural efficiency programs that are planned and controlled by management and have a material impact on either the scope of the business undertaken or the manner in which the business is conducted. The scope of the structural efficiency measures involves service delivery, supply and manufacturing, R&D, and selling and administration expenses. Restructuring provisions are recognized based on the expected costs of the respective restructuring programs and primarily consist of personnel costs. Estimation uncertainty exists regarding the execution of the restructuring programs, which may impact the expected timing and realization of costs. Restructuring provisions are reviewed and adjusted regularly based on management’s best estimate. The expected timing and amount of outflows are dependent on whether the plan execution is in line with management’s assessment. The majority of the restructuring provision will be utilized within 1 year. For more information about the restructuring charges booked in the income statement, see note B3 “Expenses by nature.” Customer-related provisions Customer-related provisions mainly consist of provisions for loss-making customer contracts. To measure the customer-related provisions, management estimates the unavoidable costs to fulfil the obligations under the customer contract. If the exit penalty is lower than the estimated costs to fulfil the contract, then the provision value is limited to the exit penalty value. The unavoidable costs to fulfil the contract sometimes differ from management’s estimates. Provisions raised for loss-making customer contracts are therefore regularly reviewed and adjusted based on the latest information available considering the realization of the costs estimated. The expected timing and amount of outflows are dependent on whether the customer contract execution is in line with management’s assessment. The majority of the customer-related provisions will be utilized over 5 years. Supplier-related provisions Supplier-related provisions are for supplier claims/guarantees based on the contractual obligations mostly relating to inventory. The provision is calculated by comparing the committed inventory purchases with the expected usage based on forecast and any excess is provided for based on an assessment of the risk of obsolescence. Therefore, estimation uncertainty exists regarding the forecast and expected usage as well as the assessment of future obsolescence, as this is based on management’s expectations. The expected timing and amount of outflows are dependent on the actual outcome of the supplier claims and guarantees. The majority of the supplier-related provisions will be utilized within 1 year. Warranty provisions Warranty provisions are based on historic quality rates for established products as well as estimates regarding quality rates for new products and costs to remedy the various types of faults predicted. Uncertainty exists regarding the timing and amount as management utilizes the historical trends to estimate the warranty provisions as well as the cost to repair or replace, which may differ from the actual outcomes. New product warranty provisions require further estimation since historical information is not available. These provisions do not include costs for service in additions within customer contracts that are accounted for as separate performance obligations. The expected timing and amount of outflows are dependent on the actual product faults which may occur. The majority of the warranty provisions are expected to be utilized over 2 years. Share-based payments provisions Share-based payments provisions relate to cash-settled share-based programs and are based on the present period’s best estimate of the eventual pay-outs, see note G3 “Share-based compensation” for more information. The uncertainty regarding outflows is relating to the fair value of the underlying instrument during the service period and expected fulfilment of the service conditions. The majority of the share-based payment provisions are expected to be utilized within 1 year. Other provisions Other provisions relate mostly to litigation and patent infringement disputes. Management regularly assesses the likelihood of any adverse outcomes and if deemed probable then a provision is raised based on the best estimate of the expenditure required to settle with the counterpart. There is uncertainty in the final outcome and settlement, therefore management reviews the estimation regularly. Outflows relating to litigation are inherently uncertain in timing and amount and therefore the majority of the provisions are expected to be utilized within 1 year.

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