Swiss health-care group Roche Holding took a surprise additional provision of 1.2 billion Swiss francs ($811 million) to cover liabilities from a vitamins price-fixing case and reported basically flat nine-month core sales. The new charge brings to 4.39 billion francs the amount Roche has set aside to cover the cost of punitive fines and legal challenges from customers that overpaid for vitamins in the early 1990s as a result of an international cartel. Roche recently agreed to sell the vitamins business to Dutch company DSM for 2.25 billion euros ($2.23 billion), but retained liability for all legal action.
Roche said it can't rule out further provisions but stuck by its 2002 sales and profit targets. Nine-month sales in the company's core drugs and diagnostics businesses rose 1.3% to 19.27 billion francs.
If Roche's liabilities are increasing due to this provision, what other account will be affected so as to maintain the equality of assets and liabilities required under double-entry bookkeeping?