Financial Statements 2023

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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)

We evaluated the analysis performed by management regarding indicators of impairment, considering notably future expected orders and deliveries. If an indicator of impairment was identified, we evaluated the integrity of management’s impairment model. For long-lived assets, we evaluated management’s assumptions for the discount rate, the determination of the forecasted revenue (including the timing of expected deliveries or services and estimated selling price), cost to be incurred (including any contractual penalties or inflation impact), the expected gross margin, including performing sensitivity analysis to evaluate the impact of changing some assumptions such as the discount rate or key business parameters (a.o. price, growth rate), and for the assumptions related to useful life of the program in the context of climate change. We also performed inquiry of the Program Controller and Head of Programs to confirm our understanding of the status of the program. The Company operates in a business environment that is exposed to currency volatility. A significant portion of the Company’s revenue is denominated in US dollars, while a major part of its costs is incurred in Euros and, to a lesser extent, in Pound Sterling. In response to these currency risks the Company uses financial instruments (currency forwards) to mitigate the exposure to changes in currency rates. The Company applies cash-flow hedge accounting. The accounting policy allows the Company to re-position the foreign currency hedges and avoid hedge disqualification when a hedged aircraft is postponed. This is conditioned by the Company’s ability to demonstrate the absence of a reduction in the number of hedged aircraft over the foreign currency exchange management hedging horizon. The magnitude of the Company’s hedge portfolio entails a significant “mark to market” valuation risk. Furthermore, potential changes in the delivery assumptions related to aircraft cancellations, customer defaults and aircraft postponement beyond the foreign currency exchange management hedging horizon could lead to disqualification of the associated cash flow hedges and incorrect accounting. Finally, we determined that appropriate disclosures were made in the financial statements.

Accounting for derivative financial instruments and hedge ineffectiveness (Reference is made to Note 37 Financial Instruments of the financial statements) Risk

105

Airbus

Financial Statements 2023