Gamma Holding NV, a Dutch textile company, provided the following information in its consolidated income statement for the year 2009 (note that “result” is equivalent to “income”):

Notes to the financial statements provided the following information related to provisions recognized in 2008 and 2009:

Required: 

a. Determine the percentage growth in income (loss) before tax (group result before taxation) from 2008 to 2009.    

b. What impact do provisions have on income before tax?  

c . What can cause the ending balance in provisions to change from one year to the next?  

d. Determine what income (loss) before tax would have been in 2008 and 2009 if there had been no change in the ending balance of “other provisions.” What would the percentage growth in income (loss) before tax have been in this case?    

e. Is there any additional information you might like to have with respect to provisions for the time period presented earlier?

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2009 2008 € x 1,000,000 Group result before taxation (45.8) (34.1) Income tax (4.6) (0.1) Net group result from continuing operations. (50.4) (34.2) Notes to the financial statements provided the following information related to provisions recognized in 2008 and 2009: € x 1,000,000 19 Other provisions Total The composition and changes were as follows: Restructuring Other 11.5 Balance at 31-12-2007.. 6.4 17.9 Changes in 2008. Additions charged to the income statement.. 27.0 1.7 28.7 Release credited to the income statement. (1.4) (1.4) Payments.. (11.3) (2.6) (13.9) Transfer to liabilities directly related to discontinued operations (0.4) (0.4) Exchange rate differences (0.1) (0.1) Balance at 31-12-2008.. 25.7 5.1 30.8