IAS 37, contingent liability, increased tariff rates on goods imported into the US.

AB Electrolux (publ) – Annual report – 31 December 2017

Industry: manufacturing

Note 25 Contingent liabilities (extract)

Legal proceedings (extract)

In November 2017, the U.S. Department of Commerce (DOC) informed the Group that it has set a preliminary and significantly increased tariff rate of 72.41% on washing machines manufactured in Mexico by Electrolux and imported into the U.S. between February 2016 and January 2017. If the Preliminary tariff rate is determined as final, it could have a one-time cost to Electrolux of up to USD 70m in 2018. This preliminary tariff rate is significantly higher than it would have been if the DOC had considered actual data for the period. It is Electrolux position that the DOC set this preliminary tariff rate by improperly citing, as the basis for this decision, a failure on behalf of Electrolux to submit the data in a timely manner. A decision on the final established rate is expected to be issued during March, 2018. Electrolux intends to vigorously contest any decision which is not based on actual data and, if necessary, submit an appeal.