Provisions are liabilities the amount or payment date of which are uncertain. Provisions are established on the basis of a current obligation following from past events, whose fulfillment will cause an outflow of resources embodying economic benefits. The provision amount is calculated on the basis of a reliable estimate of such outflow as at the balance sheet date.
Provisions for granted guarantees and sureties are calculated as the difference between the expected value of the balance sheet exposure which will result from a granted off-balance sheet liability and the present value of expected future cash flows obtained from the balance sheet exposure resulting from the granted liability.
The provision for restructuring costs is recognized only if, in addition to the general criteria for recognizing provisions, also the specific criteria pertaining to provisions for restructuring costs are satisfied. These include, among others, holding a detailed, formal restructuring plan and evoking a justified expectation of the parties to which the plan pertains that restructuring actions will be taken (through commencement of implementation of the plan or announcement of its key elements).