PSA_GROUP_REGISTRATION_DOCUMENT_2017

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2017 Notes to the consolidated financial Statements at December 2017

CURRENT AND NON-CURRENT PROVISIONS NOTE 10

ACCOUNTING POLICIES In accordance with IAS 37 “Provisions, Contingent Liabilities and Contingent Assets” , a provision is recognised when, at the balance sheet date, the Group has a present obligation towards a third party, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and no inflow of resources of an equivalent amount is expected. Provisions for restructuring costs are recognised only when the restructuring has been announced and the Group has drawn up or has started to implement a detailed formal plan. In application of IFRIC 21 “Levies charged by public authorities” , taxes levied by public authorities are recognised as of the date of their tax generating event.

Provisions are discounted only when the effect is material. In this case, the discount rate is based on a risk-free rate. Warranties A provision is recorded to cover the estimated cost of vehicle and spare parts warranties at the time of sale to independent dealer networks or end-customers. Revenues from the sale of extended warranties or maintenance contracts are recognised over the period during which the service is provided.

Recognised in equity during the period

Change in scope of consolidation and other

Releases (unused provisions)

31 December

Releases (utilisations)

31 December 2017

2016 Additions

(in million euros)

Pensions (Note 7.1.E)

1,235

172

(112)

(1)

104

(5)

1,393

Other employee benefit obligations and other TOTAL NON-CURRENT PROVISIONS

194

36

(30)

-

-

3

203

1,429 208 924 679

(142)

(1)

104

(2)

1,596 1,446

Warranties

(548)

(82)

-

473

Commercial and tax claims and litigations

(54)

- -

97 56

717

648

130 (104)

Restructuring plans (1)

996 788

(512)

(7)

1,321

Long-term and operating contract losses

442

313

(331) (54)

(15)

- - -

52

461 832

Other

364 104

(152) (310)

570

TOTAL CURRENT PROVISIONS Of which Opel Vauxhall Automotive segment

3,374 2,014 (1,549)

1,248

4,777

1,384

1,857

The main additions for restructuring plans in 2017 are discussed in Note 5.4.B. (1)

The provision for warranties mainly concerns sales of new vehicles, where the contractual obligations generally cover two years. It corresponds to the expected cost of warranty claims related to vehicles and replacement parts. The amount expected to be

recovered from suppliers is recognised as an asset, under “Miscellaneous other receivables” (Note 6.3.A). Provisions for tax claims concern a number of claims primarily outside France, and notably in Brazil.

194

GROUPE PSA - 2017 REGISTRATION DOCUMENT