23. Provisions
Details of provisions as of December 31, 2016 and 2017, are as follows:
2016 | 2017 | |||||||
(In millions of Korean won) | ||||||||
Provisions for unused loan commitments |
₩ | 189,349 | ₩ | 178,202 | ||||
Provisions for payment guarantees |
126,428 | 88,809 | ||||||
Provisions for financial guarantee contracts |
4,333 | 2,682 | ||||||
Provisions for restoration cost |
84,854 | 95,194 | ||||||
Others |
132,753 | 203,146 | ||||||
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Total |
₩ | 537,717 | ₩ | 568,033 | ||||
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Changes in provisions for unused loan commitments, payment guarantees for the years ended December 31, 2016 and 2017, are as follows:
2016 | ||||||||||||
Provisions for unused loan commitments |
Provisions for payment guarantees |
Total | ||||||||||
(In millions of Korean won) | ||||||||||||
Beginning |
₩ | 195,385 | ₩ | 158,454 | ₩ | 353,839 | ||||||
Effects of changes in foreign exchange rate |
204 | 737 | 941 | |||||||||
Provision(reversal) |
(6,240 | ) | (32,763 | ) | (39,003 | ) | ||||||
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Ending |
₩ | 189,349 | ₩ | 126,428 | ₩ | 315,777 | ||||||
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2017 | ||||||||||||
Provisions for unused loan commitments |
Provisions for payment guarantees |
Total | ||||||||||
(In millions of Korean won) | ||||||||||||
Beginning |
₩ | 189,349 | ₩ | 126,428 | ₩ | 315,777 | ||||||
Effects of changes in foreign exchange rate |
(1,316 | ) | (3,369 | ) | (4,685 | ) | ||||||
Provision(reversal) |
(9,850 | ) | (34,250 | ) | (44,100 | ) | ||||||
Business combination |
19 | — | 19 | |||||||||
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Ending |
₩ | 178,202 | ₩ | 88,809 | ₩ | 267,011 | ||||||
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Changes in provisions for financial guarantee contracts for the years ended December 31, 2016 and 2017, are as follows:
2016 | 2017 | |||||||
(In millions of Korean won) | ||||||||
Beginning |
₩ | 3,809 | ₩ | 4,333 | ||||
Provision (Reversal) |
(2,958 | ) | (1,651 | ) | ||||
Business combination |
3,482 | — | ||||||
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Ending |
₩ | 4,333 | ₩ | 2,682 | ||||
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Changes in provisions for restoration cost for the years ended December 31, 2016 and 2017, are as follows:
2016 | 2017 | |||||||
(In millions of Korean won) | ||||||||
Beginning |
₩ | 75,351 | ₩ | 84,854 | ||||
Provision |
3,886 | 5,150 | ||||||
Reversal |
(967 | ) | (1,211 | ) | ||||
Used |
(5,940 | ) | (7,049 | ) | ||||
Unwinding of discount |
1,890 | 2,078 | ||||||
Effects of changes in discount rate |
6,941 | 10,510 | ||||||
Business combination |
3,693 | 862 | ||||||
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Ending |
₩ | 84,854 | ₩ | 95,194 | ||||
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Provisions for restoration cost are the present value of estimated costs to be incurred for the restoration of the leased properties. Actual expenses are expected to be incurred at the end of each lease contract. Three-year historical data of expired leases were used to estimate the average lease period. Also, the average restoration expense based on actual three-year historical data and the three-year historical average inflation rate were used to estimate the present value of estimated costs.
Changes in other provisions for the years ended December 31, 2016 and 2017, are as follows:
2016 | ||||||||||||||||||||||||
Membership rewards program |
Dormant accounts |
Litigations | Greenhouse gas emission liabilities1 |
Others | Total | |||||||||||||||||||
(In millions of Korean won) | ||||||||||||||||||||||||
Beginning |
₩ | 8,630 | ₩ | 41,091 | ₩ | 71,240 | ₩ | 69 | ₩ | 53,831 | ₩ | 174,861 | ||||||||||||
Increase |
26,336 | 32,464 | 1,589 | 434 | 9,007 | 69,830 | ||||||||||||||||||
Decrease |
(26,176 | ) | (23,159 | ) | (52,206 | ) | (145 | ) | (10,252 | ) | (111,938 | ) | ||||||||||||
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Ending |
₩ | 8,790 | ₩ | 50,396 | ₩ | 20,623 | ₩ | 358 | ₩ | 52,586 | ₩ | 132,753 | ||||||||||||
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2017 | ||||||||||||||||||||||||
Membership rewards program |
Dormant accounts |
Litigations | Greenhouse gas emission liabilities1 |
Others2 | Total | |||||||||||||||||||
(In millions of Korean won) | ||||||||||||||||||||||||
Beginning |
₩ | 8,790 | ₩ | 50,396 | ₩ | 20,623 | ₩ | 358 | ₩ | 52,586 | ₩ | 132,753 | ||||||||||||
Increase |
81,171 | 5,133 | 6,046 | — | 45,164 | 137,514 | ||||||||||||||||||
Decrease |
(74,849 | ) | (50,479 | ) | (2,906 | ) | (181 | ) | (10,469 | ) | (138,884 | ) | ||||||||||||
Business Combination |
— | — | — | — | 71,763 | 71,763 | ||||||||||||||||||
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Ending |
₩ | 15,112 | ₩ | 5,050 | ₩ | 23,763 | ₩ | 177 | ₩ | 159,044 | ₩ | 203,146 | ||||||||||||
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1 | As of December 31, 2016 and 2017, the estimated greenhouse gas emission is 117,831 tons 112,121 tons, respectively. |
2 | As of December 31, 2017, the group’s provision on incomplete sales on cardssurance are ₩26,926 million. |