Financial Statements 2023

Page 10

Estimations related to revenues and costs at completion for the accounting of onerous contracts and material over time contracts (Reference is made to the disclosure on Note 4 Material Accounting Policies, Note 5 Key Estimates and Judgements, Note 12 Revenues and Gross Margin and Note 24 Provisions, Contingent Assets and Contingent Liabilities of the financial statements)

We challenged management’s key assumptions by discussing and reviewing correspondence with customers, considered the accuracy or appropriateness, and consistency of similar estimates made in previous years and corroborated the key assumptions with the latest contractual information.

Finally, we determined that appropriate disclosures were made in the financial statements.

Recoverability of key program assets - long-lived assets (Reference is made to the disclosures on Note 4 Material Accounting Policies, Note 19 Intangible Assets and Note 20 Property, Plant and Equipment of the financial statements) Risk

Recoverability of capitalized program development costs, other intangible assets and jigs and tools (long-lived assets) needs to be tested if there is an indicator of impairment or the reversal thereof.

The main estimates to determine if an impairment of long-lived assets has to be recognized are the future cash flows and the appropriate discount rates.

Due to the inherent uncertainty involved in forecasting future revenues and costs and interpreting contractual and commercial positions in determining impairments especially for material early-stage/multi-year programs, this is a key audit area. We considered whether the key judgments and assumptions indicated a management override of controls that may represent a risk of material misstatement due to fraud. Inherent uncertainties also include that new or amended climate change related laws and regulations, political decisions and/or social context may result in the need to revise existing estimates. Climate change related estimation processes, measurement systems and reporting standards are expected to further develop over time, which also might result in changes in estimates. Our audit procedures included, amongst others, evaluating the appropriateness of the Company’s accounting policies related to estimations for recoverability of assets according to IAS 36 “Impairment of assets” and IAS 38 “Intangible assets” and evaluating whether the accounting policies have been applied consistently or whether changes, if any, are appropriate in the circumstances. We evaluated the design and implementation and, if considered appropriate in the context of our audit of the financial statements, tested the operating effectiveness of controls for identifying and recording impairments of long-lived assets.

Our audit approach

104

Airbus

Financial Statements 2023