Financial Statements 2021

2. Notes to the IFRS Consolidated Financial Statements / 2.1 Basis of Preparation

In view of overall commercial relationships, contract adjustments may occur, and must be considered on a case by case basis. Estimates and judgements are subject to change based on new information as contracts and related programmes progress. Furthermore, the complex design and manufacturing processes of the Company’s industry require challenging integration and coordination along the supply chain including an ongoing assessment of suppliers’ assertions which may additionally impact the outcome of these monitoring processes. A restructuring provision is recognised when the Company has developed a detailed formal plan for the restructuring and has raised a valid expectation in those affected that it will carry out the restructuring by starting to implement the plan or announcing its main features to those affected by it. The measurement of a restructuring provision is at the best estimate of the anticipated costs and includes only the direct expenditures arising from the restructuring, which are those amounts that are both necessarily entailed by the restructuring and not associated with the ongoing activities of the Company. Hedge accounting —The hedge portfolio covers a large portion of the Company’s highly probable forecasted transactions derived from its commercial activities. The Company makes estimates and judgement in assessing the highly probable criteria of the forecasted transactions, in order to anticipate future events, as risk of future cancellations of orders (see “– Note 37: Financial Instruments”). Employee benefits — The Company accounts for pension and other post-retirement benefits in accordance with actuarial valuations. These valuations rely on statistical and other factors in order to anticipate future events. The actuarial assumptions may differ materially from actual developments mainly due to changing market and economic conditions and therefore result in a significant change in post-retirement employee benefit obligations and the related future expenses (see “– Note 31: Post-Employment Benefits”). Legal contingencies — The Company is party to litigations related to a number of matters as described in “– Note 38: Litigation and Claims”. The outcome of these matters may have a material effect on the Financial Position, results of operations or cash flows of the Company. Management regularly analyses current information concerning these matters and provides provisions for probable cash outflows, including the estimate

of legal expenses to resolve the matters. Internal and external lawyers are used for these assessments. In making the decision regarding the need for provisions, management considers the degree of probability of an unfavourable outcome and the ability to make a sufficiently reliable estimate of the amount of loss. The filing of a suit or formal assertion of a claim against the Airbus companies or the disclosure of any such suit or assertion, does not automatically indicate that a provision may be appropriate. Income taxes — The Company operates and earns income in numerous countries and is subject to changing tax laws inmultiple jurisdictions within these countries. Significant judgements are necessary in determining the worldwide income tax liabilities. Although management believes that it has made reasonable estimates about the final outcome of tax uncertainties, no assurance can be given that the final tax outcome of these matters will be consistent with what is reflected in the historical income tax provisions. At each end of the reporting period, the Company assesses whether the realisation of future tax benefits is probable to recognise deferred tax assets. This assessment requires the exercise of judgement on the part of management with respect to, among other things, benefits that could be realised from available tax strategies and future taxable income, as well as other positive and negative factors. The recorded amount of total deferred tax assets could be reduced, through valuation allowances recognition, if estimates of projected future taxable income and benefits from available tax strategies are lowered, or if changes in current tax regulations are enacted that impose restrictions on the timing or extent of the Company’s ability to utilise future tax benefits. The basis for the recoverability test of deferred tax assets is the same as the Company’s latest operative planning also taking into account certain qualitative aspects regarding the nature of the temporary differences. Qualitative factors include but are not limited to an entity’s history of planning accuracy, performance records, business model, backlog, existence of long-term contracts as well as the nature of temporary differences (see “– Note 17: Income Taxes”). Other subjects that involve assumptions and estimates are further described in the respective notes (see “– Note 8: Acquisitions and Disposals”, “– Note 19: Intangible Assets” and “– Note 22: Contract Assets, Contract Liabilities and Trade Receivables, and Trade Liabilities”).

5.

Change in Accounting Policies and Disclosures

The accounting policies applied by the Company in preparation of its 2021 year-end Consolidated Financial Statements are the same as applied for the previous year. Other than that, amendments, improvements to and interpretations of standards effective from 1 January 2021 have no material impact on the Consolidated Financial Statements. New, Revised or Amended IFRSs Applied from 1 January 2021 Amendments to IFRS 16 Leases: COVID-19 – Related Rent Concessions beyond 30 June 2021

In March 2021, the IASB issued COVID-19-related Rent Concessions beyond 30 June 2021 to extend by another year the practical relief to lessees in accounting for rent concessions occurring as a direct consequence of COVID-19.

The Company has applied in advance of its effective date the practical expedient retrospectively to all rent concessions that meet the conditions of the practical expedient and has accounted for them in the same manner as for a resolution of a contingency that fixes previously variable lease payments.

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Airbus / Financial Statements 2021