The 2014 IFRS-based balance sheet published by Volkswagen AG, the well-known German automaker, listed an account called “provisions” (divided into current and non-current categories) with a total balance (in million euros) of 32,986 (2014) and 32,341 (2013). The account covers obligations arising from sales and other miscellaneous items. Footnotes to the financial statements included the following statement and account information:

In accordance with International Accounting Standard (IAS) 37, provisions are recognized where a present obligation exists to third parties as a result of a past event; where a future outflow of resources is probable; and where a reliable estimate of that outflow can be made. Provisions . . . are recognized at their (expected) settlement value discounted to the balance sheet date. Discounting is based on market interest rates.
December 31, 2013, balance: .....................32,341
Increases .......................................................15,169
Decreases ...................................................(14,524)
December 31, 2014, balance ......................32,986

REQUIRED:
a. Discuss differences between how provisions are accounted for under IFRS and how contingencies are accounted for under U.S. GAAP.
b. Explain how the increases listed above (15,169) affected the basic accounting equation, and list what kinds of items might be reflected in the 15,169 increase amount.
c. Explain how the decreases listed above (14,524) affected the basic accounting equation, and list what kinds of items might be reflected in the 14,524 decrease amount.
d. The amounts listed are as of December 31, 2014, prior to the 2015 emissions scandal discussed earlier in the chapter. Discuss the probable changes to this account as of December 31, 2015.