Founded in 1987, Huawei is a leading global provider of information and communications

(vii) Other  provisions
The Group makes provisions for onerous 
contracts, outstanding litigations and claims 
based on project budgets, contract terms, 
available knowledge, legal advice and past 
experience. The Group recognises provisions 
to the extent that it has a present legal or 
constructive obligation as a result of a past 
event; that it is probable that an outflow 
of resources will be required to settle the 
obligation; and that the amount can be reliably 
estimated. Judgement is required in making 
such estimates and the ultimate outcome may 
be different.
The Group makes provisions for onerous 
contracts in respect of losses arising from 
non-cancellable procurement agreements when 
there is a change in the Group’s procurement 
demands such that the Group may not proceed 
with committed purchase orders or use the 
goods concerned. Provisions are made taking 
into account the contract terms, the suppliers’ 
losses resulting from the Group’s termination 
of the agreements and the extent to which 
the goods under the committed purchase 
orders will no longer be used in the Group’s 
production. Judgement is required in making 
the estimates and the ultimate outcome may 
be different. The Group regularly updates its 
production plan and procurement demands, 
estimates probable losses, and adjusts 
provisions accordingly.