Airbus - Financial Statements 2022

2. Notes to the IFRS Consolidated Financial Statements Operational Assets and Liabilities

Capitalised Development Costs

The Company has capitalised development costs in the amount of €1,482 million as of 31 December 2022 (€1,286 million as of 31 December 2021), for Airbus programmes (€785 million), Airbus Defence and Space (€372 million) and Airbus Helicopters (€325 million). The Company believes that its current portfolio of aircraft and helicopters, which represents a significant portion of its Capitalised Development Costs, could play a pivotal role in achieving near term targets set out by the Company and its Each year the Company assesses whether there is an indication that a non ‑ financial asset or a cash generating unit (“CGU”) to which the asset belongs may be impaired. In addition, intangible assets with an indefinite useful life, intangible assets not yet available for use and goodwill are tested for impairment annually, irrespective of whether there is any indication for impairment. An impairment loss is recognised in the amount by which the asset’s carrying amount exceeds its recoverable amount. For the purpose of impairment testing, any goodwill is allocated to the CGU or group of CGUs in a way that reflects the way goodwill is monitored for internal management purposes. The discounted cash flow method is used to determine the recoverable amount of a CGU or the group of CGUs to which goodwill is allocated. The discounted cash flow method is particularly sensitive to the selected discount rates and estimates of future cash flows by management. Discount rates are based on the weighted average cost of capital (“WACC”) for a CGU or the groups of CGUs. The discount rates are calculated based on a risk ‑ free rate of interest and a market risk premium. In addition, the discount rates reflect the current Impairment Tests

customers’ decarbonisation ambitions. This will be achieved by the replacement of less fuel efficient aircraft. The Company’s commitment to certify all current aircraft and helicopter programmes to be capable of flying on 100% SAF by 2030 would further substantiate their useful life. Therefore, management estimates that there is no impact on the useful life of capitalised development costs resulting from the Company’s journey towards sustainable aerospace.

market assessment of the risks specific to each group of CGUs by taking into account specific peer group information on beta factors, leverage and cost of debt. Consequently, slight changes to these elements can materially affect the resulting valuation and therefore the amount of a potential impairment charge. These estimates are influenced by several assumptions including the growth rate of CGUs where a rate of 1% has been applied, the increase of deliveries in the coming years, the availability and composition of future defence and institutional budgets, and foreign exchange fluctuations or implications arising from the volatility of capital markets. Cash flow projections take into account past experience and represent management’s best estimate of future developments which align with the Company’s climate ‑ related commitments. The Company tested the intangible assets for which an indicator of impairment was identified. In particular, the Company tested the intangible assets associated with some aircraft programmes and concluded that no impairment was necessary.

As of 31 December 2022 and 2021, goodwill was allocated to CGUs or group of CGUs and is summarised in the following schedule:

Airbus Helicopters

Airbus Defence

Consolidated Airbus

Airbus

and Space Eliminations

(In € million)

10,816

199

2,150

0

Goodwill as of 31 December 2022

13,165

Goodwill as of 31 December 2021

10,731

139

2,158

0

13,028

The goodwill mainly relates to the creation of the Company in 2000 and the Airbus Combination in 2001. The annual impairment tests performed in 2022 led to no impairment charge. The Company performed sensitivity tests in order to confirm that the recoverability of its long ‑ lived assets was not impaired by climate change. No reasonably possible changes in the main assumptions used (including climate change) would cause the value in use of the goodwill to fall below its carrying value.

General Assumptions Applied in the Planning Process

The basis for determining the recoverable amount is the value in use of the CGUs. Generally, cash flow projections used for

the Company’s impairment testing are based on operative planning.

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