Provisions

12 Months Ended

Dec. 31, 2023

Disclosure of other provisions [abstract]

Provisions

4.7. Provisions

Accounting policies

Provision is recognized when Nokia has a present legal or

constructive obligation as a result of past events, it is

probable that an outflow of resources will be required

to settle the obligation and a reliable estimate of the

amount can be made. Management judgment may be

required in determining whether it is probable that an

outflow of economic benefits will be required to settle

the obligation. The amount recognized as a provision

is based on the best estimate of unavoidable costs

required to settle the obligation at the end of the

reporting period.

When estimating the amount of unavoidable costs,

management may be required to consider a range of

possible outcomes and their associated probabilities,

risks and uncertainties surrounding the events and

circumstances, as well as making assumptions about the

timing of payment. Changes in estimates of timing or

amounts of costs required to settle the obligation may

become necessary as time passes and/or more accurate

information becomes available. Nokia assesses the

adequacy of its existing provisions and adjusts the

amounts as necessary based on actual experience

and changes in facts and circumstances at each

reporting date.

Restructuring provision

Nokia provides for the estimated cost to restructure when a

detailed formal plan of restructuring has been completed,

approved by management, and announced. Restructuring costs

consist primarily of personnel restructuring charges. The other

main components are costs associated with exiting real estate

locations, and costs of terminating certain other contracts

directly linked to the restructuring. At 31 December 2023, the

restructuring provision amounted to EUR 255 million including

personnel and other restructuring costs. The provision consists

primarily of amounts related to the announcements made by

Nokia on 16 March 2021 and 19 October 2023. The majority of

the restructuring cash outflows is expected to occur over the

next two years.

Warranty provision Nokia provides for the estimated liability to repair or replace products under standard warranty at the time revenue is recognized. The provision estimate is based on historical experience of the level of repairs and replacements. Cash outflows related to the warranty provision are generally expected to occur in the next 18 months.	Project loss provision Nokia provides for onerous contracts based on the lower of the expected cost of fulfilling the contract and the expected cost of terminating the contract. An onerous contract is a contract in which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it. Project loss provisions relate to contracts with customers and are evaluated at a contract level. The majority of the project loss provision utilization is expected to occur over the next two years.
Litigation and environmental provisions Nokia provides for the estimated future settlements related to legal proceedings based on the probable outcome of the claims. Nokia also provides for environmental remediation when Nokia becomes obliged, legally or constructively, to rectify environmental damage relating to soil, groundwater, surface water or sediment contamination. Cash outflows related to the litigation and environmental liabilities are inherently uncertain and generally occur over several periods. For a presentation of legal matters potentially affecting Nokia, refer to Note 6.1. Commitments, contingencies and legal proceedings.
	Other provisions Nokia provides for various legal and constructive obligations such as material liability, indirect tax provisions, divestment- related provisions, employee-related provisions other than restructuring provisions and asset retirement obligations. Cash outflows related to other provisions are generally expected to occur over the next two years.

			Litigation and	Project
EURm	Restructuring	Warranty	environmental(2)	losses	Other	Total
1 January 2023	193	221	253	207	561	1 435
Charged to income statement
Additions	316	177	52	10	204	759
Reversals	—	(51)	(13)	—	(199)	(263)
Total charged to income statement	316	126	39	10	5	496
Utilized during year(1)	(254)	(147)	(29)	(107)	(109)	(646)
Translation differences and other	—	—	(12)	—	(11)	(23)
31 December 2023	255	200	251	110	446	1 262
Non-current	75	20	156	89	178	518
Current	180	180	95	21	268	744

(1)The utilization of restructuring provision includes items transferred to accrued expenses, of which EUR 65 million remained in accrued expenses at 31 December 2023.

(2)Environmental provision was EUR 154 million at 31 December 2023 (EUR 155 million at 31 December 2022).