Econocom - 2019 Universal registration document

230 2019 annual report 06 consolidated financial statements notes to the consolidated financial statements Provisions 16. The Group recognises provisions when it has a legal or constructive obligation towards a third party as a result of past events which is likely to result in an outflow of resources that can be measured reliably. The amount recognised represents the best estimate of the expenditure expected to be required to settle the present obligation, taking into account the risks and uncertainties known at the reporting date. Long-term provisions Long-term provisions cover risks which are not reasonably expected to materialise for several ژ years, and concern employee-related risks. They are discounted if required. Short-term provisions Short-term provisions primarily correspond to provisions for claims related to the Group’s normal operating cycle and which are expected to be settled within 12 months. They mainly include: provisions for employee-related risks • (including risks arising from reorganisation measures); tax and legal risks (disputes in progress • with clients, suppliers, agents or tax authorities); deferred commissions, (calculated • contract-by-contract based on the residual value of leased assets, less any residual commercial value of the contracts concerned); other provisions. • Some disputes are described in note ژ 24 – Assessments made by Management and sources of uncertainty. Contingent liabilities Other than the general risks described in note ژ 19, the Group did not identify any material risks not provisioned in its financial statements. Provisions for restructuring and employee-related risks Provisions for restructuring and employee-related risks in the amount of €6.7 million cover future costs related particularly to the ongoing transformation of the Digital Services & Solutions business line, on the one hand, and litigation with former employees, on the other. Provisions for tax, legal and commercial risks This item includes provisions for legal and commercial risks in the amount of €17.2 million, which mainly cover the risks related to ongoing litigation with clients. Provisions for other risks Provisions for other risks (€8.5 million) cover risks of a very varied nature, of which nearly three-quarters in France.