Product-Related Liabilities

12 Months Ended

Dec. 31, 2017

Product Warranties Disclosures [Abstract]

Product-Related Liabilities

11. Product Related Liabilities

Autoliv is exposed to product liability and warranty claims in the event that the Company’s products fail to perform as represented and such failure results, or is alleged to result, in bodily injury, and/or property damage or other loss. The Company has reserves for product risks. Such reserves are related to product performance issues including recall, product liability and warranty issues. For further information, see Note 16.

The Company records liabilities for product related risks when probable claims are identified and when it is possible to reasonably estimate costs. Provisions for warranty claims are estimated based on prior experience, likely changes in performance of newer products, and the mix and volume of the products sold. The provisions are recorded on an accrual basis.

The decrease in reserves in 2017 was mainly due to a decrease in recall related issues and payments. A majority of the Company’s recall related issues as of December 31, 2017 are covered by insurance. Insurance receivables are included within other current assets in the Consolidated Balance Sheet. For 2016 the increase in reserves was mainly due to recall related issues, while 2015 was split between warranty and recall related issues. Cash payments in 2017 were mainly recall related, while 2016 were mainly warranty related. 2015 were split between warranty and recall related issues. The table below summarizes the change in the balance sheet position of the product related liabilities.

DECEMBER 31	2017			2016			2015
Reserve at beginning of the year	$	120.1		$	60.8		$	51.3
Change in reserve		39.8			91.4			37.9
Cash payments		(45.1	)		(30.6	)		(26.5	)
Translation difference		2.9			(1.5	)		(1.9	)
Reserve at end of the year	$	117.7		$	120.1		$	60.8