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1、 CONSOLIDATED FINANCIAL STATEMENTS OF SAMSUNG ELECTRONICS CO.,LTD.AND ITS SUBSIDIARIES INDEX TO FINANCIAL STATEMENTS Page Independent Auditors Report 1-4 Consolidated Financial Statements Consolidated Statements of Financial Position 5-7 Consolidated Statements of Profit or Loss 8 Consolidated State

2、ments of Comprehensive Income 9 Consolidated Statements of Changes in Equity 10-13 Consolidated Statements of Cash Flows 14-15 Notes to the Consolidated Financial Statements 16 Independent Auditors Report English Translation of Independent Auditors Report Originally Issued in Korean on February 15,2

3、023 To the Shareholders and the Board of Directors of Samsung Electronics Co.,Ltd.Audit Opinion We have audited the accompanying consolidated financial statements of Samsung Electronics Co.,Ltd.and its subsidiaries(the“Company”),which comprise the consolidated statements of financial position as of

4、December 31,2022 and 2021,and the consolidated statements of profit or loss,the consolidated statements of comprehensive income,the consolidated statements of changes in equity and the consolidated statements of cash flows,for the years then ended,and notes to the consolidated financial statements,i

5、ncluding a summary of significant accounting policies.In our opinion,the accompanying consolidated financial statements present fairly,in all material respects,the consolidated financial position of the Company as of December 31,2022 and 2021,and its consolidated financial performance and its consol

6、idated cash flows for the years then ended in accordance with Korean International Financial Reporting Standards(“K-IFRS”).Basis for Audit Opinion We conducted our audits in accordance with the Korean Standards on Auditing(“KSAs”).Our responsibilities under those standards are further described in t

7、he Auditors Responsibilities for the Audit of the Consolidated Financial Statements section of our report.We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in the Republic of Korea,and we have fulfill

8、ed our other ethical responsibilities in accordance with these requirements.We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.Key Audit Matter The key audit matter is a matter that,in our professional judgment,was of most signi

9、ficance in our audit of the consolidated financial statements of the current period.This matter was addressed in the context of our audit of the consolidated financial statements as a whole,and in forming our opinion thereon,and we do not provide a separate opinion on this matter.(A)Sales deduction

10、related to sales promotion activities Reasons why the matter was determined to be a key audit matter:The Device eXperience(DX)business division performs sales promotion activities,such as price or volume discounts and incentives,based on explicit or implicit agreements with customers,including retai

11、l and telecommunication companies.As disclosed in Notes 2(Significant Accounting Policies)and 3(Critical Accounting Estimates and Assumptions),these activities are recognized as deductions from revenue at the expected payment amount.As for the appropriateness of the revenue deduction amounts,such am

12、ounts may involve significant management estimates and judgments.In addition,we believe that those amounts could be material to the consolidated financial statements.As such,we determined the sales deduction related to sales promotion activities as a key audit matter.Deloitte Anjin LLC 9F.,One IFC,1

13、0,Gukjegeumyung-ro,Youngdeungpo-gu,Seoul 07326,Korea Tel:+82(2)6676 1000 Fax:+82(2)6674 2114 www.deloitteanjin.co.kr Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited(“DTTL”),its global network of member firms,and their related entities(collectively,the“Deloitte organization”).DTTL(

14、also referred to as“Deloitte Global”)and each of its member firms and related entities are legally Consolidated and independent entities,which cannot obligate or bind each other in respect of third parties.DTTL and each DTTL member firm and related entity is liable only for its own acts and omission

15、s,and not those of each other.DTTL does not provide services to clients.Please see to learn more.Deloitte Touche Tohmatsu Limited is a private company limited by guarantee incorporated in England&Wales under company number 07271800,and its registered office is Hill House,1 Little New Street,London,E

16、C4a,3TR,United Kingdom.How the Key Audit Matter was addressed in the audit:Our audit procedures with respect to the Companys sales promotion activities related to the sales of products included,but were not limited to the following:Obtained an understanding of managements accounting policies,process

17、es and internal controls related to the sales deduction.Obtained an understanding and evaluated the Companys information technology system related to the sales deduction.Assessed the Companys internal controls relating to the approval process of the sales deduction policy.Evaluated the Companys inte

18、rnal controls relating to the approval process of the sales deduction estimation and post-settled amounts.Evaluated the estimates and accompanying assumptions by inspecting supporting documentation relating to the sales deduction transactions.Examined the sales deduction amount by comparing the sale

19、s deduction estimates to post-settled amounts and inspecting supporting documentation.Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements Management is responsible for the preparation and fair presentation of the accompanying consolidated financ

20、ial statements in accordance with K-IFRS,and for such internal control as they determine is necessary to enable the preparation of consolidated financial statements that are free from material misstatement,whether due to fraud or error.In preparing the consolidated financial statements,management of

21、 the Company is responsible for assessing the Companys ability to continue as a going concern,disclosing,as applicable,matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations,or has no realistic

22、 alternative but to do so.Those charged with governance are responsible for overseeing the Companys financial reporting process.Auditors Responsibilities for the Audit of the Consolidated Financial Statements Our objectives are to obtain reasonable assurance about whether the consolidated financial

23、statements as a whole are free from material misstatement,whether due to fraud or error,and to issue an auditors report that includes our opinion.Reasonable assurance is a high level of assurance,but is not a guarantee that an audit conducted in accordance with KSAs will always detect a material mis

24、statement when it exists.Misstatements can arise from fraud or error and are considered material if,individually or in the aggregate,they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.As part of an audit in acc

25、ordance with KSAs,we exercise professional judgment and maintain professional skepticism throughout the audit.We also:Identify and assess the risks of material misstatement of the consolidated financial statements,whether due to fraud or error,design and perform audit procedures responsive to those

26、risks,and obtain audit evidence that is sufficient and appropriate to provide a basis for our audit opinion.The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error,as fraud may involve collusion,forgery,intentional omissions,misrepresentatio

27、ns,or-2-the override of internal control.Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances,but not for the purpose of expressing an opinion on the effectiveness of the Companys internal control.Evaluate the

28、 appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.Conclude on the appropriateness of the managements use of the going concern basis of accounting and,based on the audit evidence obtained,whether a material uncertain

29、ty exists related to events or conditions that may cast significant doubt on the Companys ability to continue as a going concern.If we conclude that a material uncertainty exists,we are required to draw attention in our auditors report to the related disclosures in the consolidated financial stateme

30、nts or,if such disclosures are inadequate,to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditors report.However,future events or conditions may cause the Company to cease to continue as a going concern.Evaluate the overall presentation,structure

31、 and content of the consolidated financial statements,including the disclosures,and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.Obtain sufficient appropriate audit evidence regarding the financial informat

32、ion of the entities or business activities within the Company to express an opinion on the consolidated financial statements.We are responsible for the direction,supervision and performance of the group audit.We are solely responsible for our audit opinion.We communicate with those charged with gove

33、rnance regarding,among other matters,the planned scope and timing of the audit and significant audit findings,including any significant deficiencies in internal control that we identify during our audit.We also provide those charged with governance with a statement that we have complied with relevan

34、t ethical requirements regarding independence,and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence,and where applicable,related safeguards.From the matters communicated with those charged with governance,we determine those matter

35、s that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters.We describe these matters in our auditors report unless law or regulation precludes public disclosure about the matter or when,in extremely rare circum

36、stances,we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.The engagement partner on the audit resulting in this independent auditors report is By

37、ung Moon Yoo.Seoul,Korea February 15,2023 -3-Notice to Readers This report is effective as of February 15,2023,the auditors report date.Certain subsequent events or circumstances may have occurred between the auditors report date and the time the auditors report is read.Such events or circumstances

38、could significantly affect the financial statements and may result in modifications to the auditors report.-4-Samsung Electronics Co.,Ltd.and its subsidiaries CONSOLIDATED STATEMENTS OF FINANCIAL POSITION The above consolidated statements of financial position should be read in conjunction with the

39、accompanying notes.(In millions of Korean won,in thousands of US dollars(Note 2.29)December 31,December 31,December 31,December 31,Notes 2022 2021 2022 2021 KRW KRW USD USD Assets Current assets Cash and cash equivalents 4,28 49,680,710 39,031,415 38,477,921 30,229,997 Short-term financial instrumen

40、ts 4,28 65,102,886 81,708,986 50,422,462 63,283,957 Short-term financial assets at amortized cost 4,28 414,610 3,369,034 321,117 2,609,331 Short-term financial assets at fair value through profit or loss 4,6,28 29,080 40,757 22,523 31,566 Trade receivables 4,5,7,28 35,721,563 40,713,415 27,666,503 3

41、1,532,713 Non-trade receivables 4,7,28 6,149,209 4,497,257 4,762,589 3,483,145 Prepaid expenses 2,867,823 2,336,252 2,221,141 1,809,437 Inventories 8 52,187,866 41,384,404 40,419,724 32,052,397 Other current assets 4,28 6,316,834 5,081,665 4,892,415 3,935,772 218,470,581 218,163,185 169,206,395 168,

42、968,315 Non-current assets Financial assets at fair value through other comprehensive income 4,6,28 11,397,012 13,965,839 8,827,034 10,816,602 Financial assets at fair value through profit or loss 4,6,28 1,405,468 1,525,344 1,088,541 1,181,385 Investment in associates and joint ventures 9 10,893,869

43、 8,932,251 8,437,348 6,918,066 Property,plant and equipment 10 168,045,388 149,928,539 130,151,868 116,120,291 Intangible assets 11 20,217,754 20,236,244 15,658,737 15,673,057 Net defined benefit assets 14 5,851,972 2,809,590 4,532,377 2,176,039 Deferred income tax assets 25 5,101,318 4,261,214 3,95

44、0,992 3,300,328 Other non-current assets 4,7,28 7,041,145 6,798,952 5,453,397 5,265,819 229,953,926 208,457,973 178,100,294 161,451,587 Total assets 448,424,507 426,621,158 347,306,689 330,419,902 -5-Samsung Electronics Co.,Ltd.and its subsidiaries CONSOLIDATED STATEMENTS OF FINANCIAL POSITION The a

45、bove consolidated statements of financial position should be read in conjunction with the accompanying notes.(In millions of Korean won,in thousands of US dollars(Note 2.29)December 31,December 31,December 31,December 31,Notes 2022 2021 2022 2021 KRW KRW USD USD Liabilities and Equity Current liabil

46、ities Trade payables 4,28 10,644,686 13,453,351 8,244,355 10,419,678 Short-term borrowings 4,5,12,28 5,147,315 13,687,793 3,986,617 10,601,254 Other payables 4,28 17,592,366 15,584,866 13,625,362 12,070,545 Advances received 17 1,314,934 1,224,812 1,018,422 948,622 Withholdings 4,28 1,298,244 1,294,

47、052 1,005,496 1,002,249 Accrued expenses 4,17,28 29,211,487 27,928,031 22,624,421 21,630,379 Current income tax liabilities 4,250,397 6,749,149 3,291,951 5,227,245 Current portion of long-term liabilities 4,12,13,28 1,089,162 1,329,968 843,561 1,030,066 Provisions 15 5,844,907 5,372,872 4,526,905 4,

48、161,312 Other current liabilities 4,17,28 1,951,354 1,492,239 1,511,331 1,155,744 78,344,852 88,117,133 60,678,421 68,247,094 Non-current liabilities Debentures 4,13,28 536,093 508,232 415,206 393,628 Long-term borrowings 4,12,28 3,560,672 2,866,156 2,757,756 2,219,850 Long-term other payables 4,28

49、2,753,305 2,991,440 2,132,446 2,316,883 Net defined benefit liabilities 14 268,370 465,884 207,854 360,829 Deferred income tax liabilities 25 5,111,332 23,198,205 3,958,748 17,967,108 Long-term provisions 15 1,928,518 2,306,994 1,493,645 1,786,777 Other non-current liabilities 4,17,28 1,171,761 1,26

50、7,183 907,535 981,439 15,330,051 33,604,094 11,873,190 26,026,514 Total liabilities 93,674,903 121,721,227 72,551,611 94,273,608 -6-Samsung Electronics Co.,Ltd.and its subsidiaries CONSOLIDATED STATEMENTS OF FINANCIAL POSITION The above consolidated statements of financial position should be read in

51、 conjunction with the accompanying notes.(In millions of Korean won,in thousands of US dollars(Note 2.29)December 31,December 31,December 31,December 31,Notes 2022 2021 2022 2021 KRW KRW USD USD Equity attributable to owners of the Company Preference shares 18 119,467 119,467 92,528 92,528 Ordinary

52、shares 18 778,047 778,047 602,601 602,601 Share premium 4,403,893 4,403,893 3,410,834 3,410,834 Retained earnings 19 337,946,407 293,064,763 261,740,930 226,979,906 Other components of equity 20 1,938,328(2,128,473)1,501,243(1,648,512)345,186,142 296,237,697 267,348,136 229,437,357 Non-controlling i

53、nterests 31 9,563,462 8,662,234 7,406,942 6,708,937 Total equity 354,749,604 304,899,931 274,755,078 236,146,294 Total liabilities and equity 448,424,507 426,621,158 347,306,689 330,419,902 -7-Samsung Electronics Co.,Ltd.and its subsidiaries CONSOLIDATED STATEMENTS OF PROFIT OR LOSS The above consol

54、idated statements of profit or loss should be read in conjunction with the accompanying notes.(In millions of Korean won,in thousands of US dollars(Note 2.29)For the years ended December 31,Notes 2022 2021 2022 2021 KRW KRW USD USD Revenue 29 302,231,360 279,604,799 234,079,475 216,555,107 Cost of s

55、ales 21 190,041,770 166,411,342 147,188,160 128,886,293 Gross profit 112,189,590 113,193,457 86,891,315 87,668,814 Selling and administrative expenses 21,22 68,812,960 61,559,601 53,295,930 47,678,173 Operating profit 29 43,376,630 51,633,856 33,595,385 39,990,641 Other non-operating income 23 1,962

56、,071 2,205,695 1,519,632 1,708,320 Other non-operating expense 23 1,790,176 2,055,971 1,386,499 1,592,358 Share of net profit of associates and joint ventures 9 1,090,643 729,614 844,708 565,089 Financial income 24 20,828,995 8,543,187 16,132,145 6,616,735 Financial expense 24 19,027,689 7,704,554 1

57、4,737,026 5,967,210 Profit before income tax 46,440,474 53,351,827 35,968,345 41,321,217 Income tax expense 25(9,213,603)13,444,377(7,135,975)10,412,727 Profit for the year 55,654,077 39,907,450 43,104,320 30,908,490 Profit attributable to Owners of the Company 54,730,018 39,243,791 42,388,632 30,39

58、4,483 Non-controlling interests 924,059 663,659 715,688 514,007 Earnings per share(in Korean won,in US dollars)26 -Basic 8,057 5,777 6.24 4.47-Diluted 8,057 5,777 6.24 4.47 -8-Samsung Electronics Co.,Ltd.and its subsidiaries CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME The above consolidated stat

59、ements of comprehensive income should be read in conjunction with the accompanying notes.(In millions of Korean won,in thousands of US dollars(Note 2.29)For the years ended December 31,Notes 2022 2021 2022 2021 KRW KRW USD USD Profit for the year 55,654,077 39,907,450 43,104,320 30,908,490 Other com

60、prehensive income(loss)Items that will not be reclassified subsequently to profit or loss:Gain(loss)on valuation of financial assets at fair value through other comprehensive income,net of tax 6,20(1,969,498)2,980,896(1,525,385)2,308,717 Share of other comprehensive income(loss)of associates and joi

61、nt ventures,net of tax 9,20(6,318)51,816(4,893)40,132 Remeasurement of net defined benefit liabilities(assets),net of tax 14,20 1,153,679(524,606)893,529(406,310)Items that may be reclassified subsequently to profit or loss:Share of other comprehensive income(loss)of associates and joint ventures,ne

62、t of tax 9,20(44,192)160,163(34,227)124,047 Gain on overseas business translation,net of tax 20 4,884,886 7,283,620 3,783,365 5,641,195 Gain(loss)on valuation of cash flow hedge derivatives 20(12,893)50,410(9,986)39,043 Other comprehensive income(loss)for the year,net of tax 4,005,664 10,002,299 3,1

63、02,403 7,746,824 Total comprehensive income for the year 59,659,741 49,909,749 46,206,723 38,655,314 Comprehensive income attributable to:Owners of the Company 58,745,107 49,037,912 45,498,335 37,980,071 Non-controlling interests 914,634 871,837 708,388 675,243 -9-Samsung Electronics Co.,Ltd.and its

64、 subsidiaries CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY The above consolidated statements of changes in equity should be read in conjunction with the accompanying notes.(In millions of Korean won)2021 KRW Notes Preference shares Ordinary shares Share premium Retained earnings Other components of

65、equity Accumulated other comprehensive income attributable to assets held-for-sale Equity attributable to owners of the parent company Non-controlling interests Total Balance as of January 1,2021 119,467 778,047 4,403,893 271,068,211(8,687,155)(12,132)267,670,331 8,277,685 275,948,016 Profit for the

66、 year -39,243,791-39,243,791 663,659 39,907,450 Gain(loss)on valuation of financial assets at fair value through other comprehensive income,net of tax 6,20-3,232,934(359,117)-2,873,817 107,079 2,980,896 Share of other comprehensive income(loss)of associates and joint ventures,net of tax 9,20-225,464

67、-225,464(13,485)211,979 Gain on overseas business translation,net of tax 20-7,164,982-7,164,982 118,638 7,283,620 Remeasurement of net defined benefit liabilities,net of tax 14,20-(520,552)-(520,552)(4,054)(524,606)Gain on valuation of cash flow hedge derivatives 20-50,410-50,410-50,410 Reclassifica

68、tion to held-for-sale -(12,132)12,132-Total comprehensive income for the year -42,476,725 6,549,055 12,132 49,037,912 871,837 49,909,749 Dividends declared 19-(20,480,721)-(20,480,721)(32,005)(20,512,726)Capital transaction under common control -12,553 12,553 Changes in consolidated entities -(477,6

69、17)(477,617)Other -548 9,627-10,175 9,781 19,956 Total transactions with owners -(20,480,173)9,627-(20,470,546)(487,288)(20,957,834)Balance as of December 31,2021 119,467 778,047 4,403,893 293,064,763(2,128,473)-296,237,697 8,662,234 304,899,931 -10-Samsung Electronics Co.,Ltd.and its subsidiaries C

70、ONSOLIDATED STATEMENTS OF CHANGES IN EQUITY The above consolidated statements of changes in equity should be read in conjunction with the accompanying notes.(In thousands of US dollars(Note 2.29)2021 USD Notes Preference shares Ordinary shares Share premium Retained earnings Other components of equi

71、ty Accumulated other comprehensive income attributable to assets held-for-sale Equity attributable to owners of the parent company Non-controlling interests Total Balance as of January 1,2021 92,528 602,601 3,410,834 209,943,483(6,728,239)(9,396)207,311,811 6,411,102 213,722,913 Profit for the year

72、-30,394,483-30,394,483 514,007 30,908,490 Gain(loss)on valuation of financial assets at fair value through other comprehensive income,net of tax 6,20-2,503,921(278,138)-2,225,783 82,934 2,308,717 Share of other comprehensive income(loss)of associates and joint ventures,net of tax 9,20-174,623-174,62

73、3(10,444)164,179 Gain on overseas business translation,net of tax 20-5,549,309-5,549,309 91,886 5,641,195 Remeasurement of net defined benefit liabilities,net of tax 14,20-(403,170)-(403,170)(3,140)(406,310)Gain on valuation of cash flow hedge derivatives 20-39,043-39,043-39,043 Reclassification to

74、held-for-sale -(9,396)9,396-Total comprehensive income for the year -32,898,404 5,072,271 9,396 37,980,071 675,243 38,655,314 Dividends declared 19-(15,862,406)-(15,862,406)(24,788)(15,887,194)Capital transaction under common control -9,722 9,722 Changes in consolidated entities -(369,916)(369,916)O

75、ther -425 7,456-7,881 7,574 15,455 Total transactions with owners -(15,861,981)7,456-(15,854,525)(377,408)(16,231,933)Balance as of December 31,2021 92,528 602,601 3,410,834 226,979,906(1,648,512)-229,437,357 6,708,937 236,146,294 -11-Samsung Electronics Co.,Ltd.and its subsidiaries CONSOLIDATED STA

76、TEMENTS OF CHANGES IN EQUITY The above consolidated statements of changes in equity should be read in conjunction with the accompanying notes.(In millions of Korean won)2022 KRW Notes Preference shares Ordinary shares Share premium Retained earnings Other components of equity Accumulated other compr

77、ehensive income attributable to assets held-for-sale Equity attributable to owners of the parent company Non-controlling interests Total Balance as of January 1,2022 119,467 778,047 4,403,893 293,064,763(2,128,473)-296,237,697 8,662,234 304,899,931 Profit for the year -54,730,018-54,730,018 924,059

78、55,654,077 Gain(loss)on valuation of financial assets at fair value through other comprehensive income,net of tax 6,20-(38,937)(1,867,530)-(1,906,467)(63,031)(1,969,498)Share of other comprehensive income(loss)of associates and joint ventures,net of tax 9,20-(51,848)-(51,848)1,338(50,510)Gain on ove

79、rseas business translation,net of tax 20-4,863,930-4,863,930 20,956 4,884,886 Remeasurement of net defined benefit liabilities,net of tax 14,20-1,122,367-1,122,367 31,312 1,153,679 Loss on valuation of cash flow hedge derivatives 20-(12,893)-(12,893)-(12,893)Total comprehensive income for the year -

80、54,691,081 4,054,026-58,745,107 914,634 59,659,741 Dividends declared 19-(9,809,437)-(9,809,437)(5,523)(9,814,960)Capital transactions under common control -(176)(176)Changes in consolidated entities -124 124 Others -12,775-12,775(7,831)4,944 Total transactions with owners -(9,809,437)12,775-(9,796,

81、662)(13,406)(9,810,068)Balance as of December 31,2022 119,467 778,047 4,403,893 337,946,407 1,938,328-345,186,142 9,563,462 354,749,604-12-Samsung Electronics Co.,Ltd.and its subsidiaries CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY The above consolidated statements of changes in equity should be re

82、ad in conjunction with the accompanying notes.(In thousands of US dollars(Note 2.29)2022 USD Notes Preference shares Ordinary shares Share premium Retained earnings Other components of equity Accumulated other comprehensive income attributable to assets held-for-sale Equity attributable to owners of

83、 the parent company Non-controlling interests Total Balance as of January 1,2022 92,528 602,601 3,410,834 226,979,906(1,648,512)-229,437,357 6,708,937 236,146,294 Profit for the year -42,388,632-42,388,632 715,688 43,104,320 Gain(loss)on valuation of financial assets at fair value through other comp

84、rehensive income,net of tax 6,20-(30,157)(1,446,410)-(1,476,567)(48,818)(1,525,385)Share of other comprehensive income(loss)of associates and joint ventures,net of tax 9,20-(40,156)-(40,156)1,036(39,120)Gain on overseas business translation,net of tax 20-3,767,134-3,767,134 16,231 3,783,365 Remeasur

85、ement of net defined benefit liabilities,net of tax 14,20-869,278-869,278 24,251 893,529 Loss on valuation of cash flow hedge derivatives 20-(9,986)-(9,986)-(9,986)Total comprehensive income for the year -42,358,475 3,139,860-45,498,335 708,388 46,206,723 Dividends declared 19-(7,597,451)-(7,597,451

86、)(4,277)(7,601,728)Capital transactions under common control -(136)(136)Changes in consolidated entities -96 96 Others -9,895-9,895(6,066)3,829 Total transactions with owners -(7,597,451)9,895-(7,587,556)(10,383)(7,597,939)Balance as of December 31,2022 92,528 602,601 3,410,834 261,740,930 1,501,243

87、-267,348,136 7,406,942 274,755,078-13-Samsung Electronics Co.,Ltd.and its subsidiaries CONSOLIDATED STATEMENTS OF CASH FLOWS The above consolidated statements of cash flows should be read in conjunction with the accompanying notes.(In millions of Korean won,in thousands of US dollars(Note 2.29)For t

88、he years ended December 31,Notes 2022 2021 2022 2021 KRW KRW USD USD Operating activities Profit for the year 55,654,077 39,907,450 43,104,320 30,908,490 Adjustments 27 33,073,439 49,055,633 25,615,519 37,993,797 Changes in assets and liabilities arising from operating activities 27(16,998,948)(16,2

89、86,884)(13,165,758)(12,614,262)Cash generated from operations 71,728,568 72,676,199 55,554,081 56,288,025 Interest received 2,136,795 1,406,706 1,654,957 1,089,500 Interest paid (714,543)(434,441)(553,417)(336,476)Dividends received 529,421 299,033 410,039 231,602 Income tax paid (11,498,895)(8,842,

90、049)(8,905,943)(6,848,204)Net cash from operating activities 62,181,346 65,105,448 48,159,717 50,424,447 Investing activities Net decrease in short-term financial instruments 15,214,321 10,917,128 11,783,556 8,455,362 Net decrease(increase)in short-term financial assets at amortized cost 3,050,104(3

91、36,959)2,362,319(260,976)Net decrease in short-term financial assets at fair value through profit or loss 11,677 30,694 9,044 23,773 Disposal of long-term financial instruments 8,272,909 10,216,082 6,407,403 7,912,399 Acquisition of long-term financial instruments (4,393,754)(6,981,810)(3,402,981)(5

92、,407,442)Disposal of financial assets at fair value through other comprehensive income 496,090 2,919,888 384,224 2,261,466 Acquisition of financial assets at fair value through other comprehensive income (37,687)(1,121,201)(29,189)(868,375)Disposal of financial assets at fair value through profit or

93、 loss 166,315 350,212 128,812 271,241 Acquisition of financial assets at fair value through profit or loss (158,244)(208,262)(122,561)(161,300)Disposal of investment in associates and joint ventures 13,233 19,169 10,249 14,846 Acquisition of investment in associates and joint ventures (907,958)(47,0

94、90)(703,217)(36,471)Disposal of property,plant and equipment 217,878 358,284 168,747 277,492 Acquisition of property,plant and equipment (49,430,428)(47,122,106)(38,284,077)(36,496,272)Disposal of intangible assets 23,462 1,752 18,171 1,357 Acquisition of intangible assets (3,696,304)(2,706,915)(2,8

95、62,803)(2,096,517)Cash outflow from business combinations (31,383)(5,926)(24,306)(4,590)Cash inflow from sale of assets-held-for-sale -661,168-512,077 Cash inflow(outflow)from other investing activities (413,035)8,129(319,897)6,296 Net cash used in investing activities (31,602,804)(33,047,763)(24,47

96、6,506)(25,595,633)-14-Samsung Electronics Co.,Ltd.and its subsidiaries CONSOLIDATED STATEMENTS OF CASH FLOWS The above consolidated statements of cash flows should be read in conjunction with the accompanying notes.(In millions of Korean won,in thousands of US dollars(Note 2.29)For the years ended D

97、ecember 31,Notes 2022 2021 2022 2021 KRW KRW USD USD Financing activities Net decrease in short-term borrowings 27(8,339,149)(2,616,943)(6,458,706)(2,026,833)Increase in long-term borrowings 27 271,997 58,279 210,663 45,137 Repayment of debentures and long-term borrowings 27(1,508,465)(894,749)(1,16

98、8,313)(692,987)Dividends paid (9,814,426)(20,510,350)(7,601,315)(15,885,353)Net decrease in non-controlling interests (6)(27,270)(5)(21,121)Net cash used in financing activities (19,390,049)(23,991,033)(15,017,676)(18,581,157)Reclassification to assets held-for-sale -139-108 Effect of foreign exchan

99、ge rate changes (539,198)1,582,046(417,611)1,225,300 Net increase in cash and cash equivalents 10,649,295 9,648,837 8,247,924 7,473,065 Cash and cash equivalents Beginning of the year 39,031,415 29,382,578 30,229,997 22,756,932 End of the year 49,680,710 39,031,415 38,477,921 30,229,997 -15-Samsung

100、Electronics Co.,Ltd.and its subsidiaries NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31,2022 and 2021,and For the years ended December 31,2022 and 2021 1.General Information 1.1 Company Overview Samsung Electronics Co.,Ltd.(“SEC”)was incorporated under the laws of the Republic of K

101、orea in 1969 and listed its shares on the Korea Stock Exchange in 1975.SEC and its subsidiaries(collectively referred to as the“Company”)operate four business divisions:DX,DS,SDC and Harman.DX(Device eXperience)division includes digital TVs,refrigerators,mobile phones and communication systems.DS(De

102、vice Solutions)division includes memory,foundry,and system LSI.SDC includes display panels products.Harman division includes connected car systems,audio and visual products,enterprise automation solutions and connected services.The Company is domiciled in the Republic of Korea and is located in Suwo

103、n,the Republic of Korea.These consolidated financial statements have been prepared in accordance with Korean International Financial Reporting Standards(“Korean IFRS”)1110,Consolidated Financial Statements.SEC,as the controlling company,consolidates its 232 subsidiaries,including Samsung Display and

104、 Samsung Electronics America.The Company also applies the equity method of accounting for its 37 associates and joint ventures,including Samsung Electro-Mechanics Co.,Ltd.1.2 Consolidated Subsidiaries The consolidated subsidiaries as of December 31,2022 are as follows:Area Subsidiaries Industry Perc

105、entage of ownership(%)1 America Samsung Electronics America,Inc.(SEA)Sale of electronic devices 100.0 Samsung International,Inc.(SII)Manufacture of electronic devices 100.0 Samsung Mexicana S.A.de C.V(SAMEX)Manufacture of electronic devices 100.0 Samsung Electronics Home Appliances America,LLC(SEHA)

106、Manufacture of home appliances 100.0 Samsung Research America,Inc.(SRA)R&D 100.0 Samsung Next LLC(SNX)Management of overseas subsidiaries 100.0 Samsung Next Fund LLC(SNXF)Technology business,venture capital investments 100.0 NeuroLogica Corp.Manufacture and sale of medical equipment 100.0 Samsung HV

107、AC America,LLC Sale of air conditioning products 100.0 Joyent,Inc.Cloud services 100.0 Dacor Holdings,Inc.Management of overseas subsidiaries 100.0 Dacor,Inc.Manufacture and sale of home appliances 100.0 SmartThings,Inc.Sale of smart home electronics 100.0 TeleWorld Solutions,Inc.(TWS)Installation&o

108、ptimization of network devices 100.0 1 Ownership represents the Companys ownership of the voting rights in each entity,including subsidiaries ownerships.-16-Samsung Electronics Co.,Ltd.and its subsidiaries NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Area Subsidiaries Industry Percentage of owners

109、hip(%)1 America Samsung Semiconductor,Inc.(SSI)Sale of semiconductor and display panels 100.0 Samsung Austin Semiconductor LLC.(SAS)Manufacture of semiconductors 100.0 Samsung Oak Holdings,Inc.(SHI)Management of overseas subsidiaries 100.0 SEMES America,Inc.Semiconductor equipment services 100.0 Sam

110、sung Electronics Canada,Inc.(SECA)Sale of electronic devices 100.0 AdGear Technologies Inc.Digital advertising platforms 100.0 Samsung Electronica da Amazonia Ltda.(SEDA)Manufacture and sale of electronic devices 100.0 Samsung Electronics Mexico S.A.de C.V.(SEM)Sale of electronic devices 100.0 Samsu

111、ng Electronics Digital Appliance Mexico,S.A.de C.V.(SEDAM)Manufacture of home appliances 100.0 Samsung Electronics Latinoamerica(Zona Libre),S.A.(SELA)Sale of electronic devices 100.0 Samsung Electronics Latinoamerica Miami,Inc.(SEMI)Sale of electronic devices 100.0 Samsung Electronica Colombia S.A.

112、(SAMCOL)Sale of electronic devices 100.0 Samsung Electronics Argentina S.A.(SEASA)Marketing and services 100.0 Samsung Electronics Chile Limitada(SECH)Sale of electronic devices 100.0 Samsung Electronics Peru S.A.C.(SEPR)Sale of electronic devices 100.0 Samsung Electronics Venezuela,C.A.(SEVEN)Marke

113、ting and services 100.0 Samsung Electronics Panama.S.A.(SEPA)Consulting 100.0 Harman International Industries,Inc.Management of overseas subsidiaries 100.0 Harman Becker Automotive Systems,Inc.Manufacture and sale of audio products,R&D 100.0 Harman Connected Services,Inc.Connected service provider 1

114、00.0 Harman Connected Services Engineering Corp.Connected service provider 100.0 Harman da Amazonia Industria Eletronica e Participacoes Ltda.Manufacture and sale of audio products 100.0 Harman de Mexico,S.de R.L.de C.V.Manufacture of audio products 100.0 Harman do Brasil Industria Eletronica e Part

115、icipacoes Ltda.Sale of audio products,R&D 100.0 Harman Financial Group LLC Management company 100.0 Harman International Industries Canada Ltd.Sale of audio products 100.0 Harman International Mexico,S.de R.L.de C.V.Sale of audio products 100.0 Harman KG Holding,LLC Management of overseas subsidiari

116、es 100.0 Harman Professional,Inc.Sale of audio products,R&D 100.0 Beijing Integrated Circuit Industry International Fund,L.P Venture capital investments 61.4 China Materialia New Materials 2016 Limited Partnership Venture capital investments 99.0 1 Ownership represents the Companys ownership of the

117、voting rights in each entity,including subsidiaries ownerships.-17-Samsung Electronics Co.,Ltd.and its subsidiaries NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Area Subsidiaries Industry Percentage of ownership(%)1 Europe&CIS Samsung Electronics(UK)Ltd.(SEUK)Sale of electronic devices 100.0 Samsu

118、ng Electronics Ltd.(SEL)Management of overseas subsidiaries 100.0 Samsung Semiconductor Europe Limited(SSEL)Sale of semiconductor and display panels 100.0 Samsung Electronics GmbH(SEG)Sale of electronic devices 100.0 Samsung Electronics Holding GmbH(SEHG)Management of overseas subsidiaries 100.0 Sam

119、sung Semiconductor Europe GmbH(SSEG)Sale of semiconductor and display panels 100.0 Samsung Electronics France S.A.S(SEF)Sale of electronic devices 100.0 Samsung Electronics Italia S.P.A.(SEI)Sale of electronic devices 100.0 Samsung Electronics Iberia,S.A.(SESA)Sale of electronic devices 100.0 Samsun

120、g Electronics Portuguesa,Unipessoal,Lda.(SEP)Sale of electronic devices 100.0 Samsung Electronics Hungarian Private Co.,Ltd.(SEH)Manufacture and sale of electronic devices 100.0 Samsung Electronics Europe Logistics B.V.(SELS)Logistics 100.0 Samsung Electronics Benelux B.V.(SEBN)Sale of electronic de

121、vices 100.0 Samsung Electronics Europe Holding Cooperatief U.A.(SEEH)Management of overseas subsidiaries 100.0 Samsung Electronics Nordic Aktiebolag(SENA)Sale of electronic devices 100.0 Samsung Electronics Slovakia s.r.o.(SESK)Manufacture of TV and monitors 100.0 Samsung Display Slovakia,s.r.o.(SDS

122、K)Toll processing of display panels 100.0 Samsung Electronics Polska,SP.Zo.o(SEPOL)Sale of electronic devices 100.0 Samsung Electronics Poland Manufacturing SP.Zo.o(SEPM)Manufacture of home appliances 100.0 Samsung Electronics Romania LLC(SEROM)Sale of electronic devices 100.0 Samsung Electronics Au

123、stria GmbH(SEAG)Sale of electronic devices 100.0 Samsung Electronics Switzerland GmbH(SESG)Sale of electronic devices 100.0 Samsung Electronics Czech and Slovak s.r.o.(SECZ)Sale of electronic devices 100.0 Samsung Electronics Baltics SIA(SEB)Sale of electronic devices 100.0 Samsung Electronics Greec

124、e S.M.S.A(SEGR)Sale of electronic devices 100.0 Samsung Electronics Air Conditioner Europe B.V.(SEACE)Sale of air conditioning products 100.0 Samsung Nanoradio Design Center(SNDC)R&D 100.0 Samsung Denmark Research Center ApS(SDRC)R&D 100.0 Samsung Cambridge Solution Centre Limited(SCSC)R&D 100.0 SAM

125、SUNG Zhilabs,S.L.Development and sale of network solutions 100.0 Foodient Ltd.R&D 100.0 Samsung Electronics Rus Company LLC(SERC)Sale of electronic devices 100.0 Samsung Electronics Rus Kaluga LLC(SERK)Manufacture of TV 100.0 Samsung Electronics Ukraine Company LLC(SEUC)Sale of electronic devices 10

126、0.0 Samsung R&D Institute Ukraine(SRUKR)R&D 100.0 Samsung Electronics Central Eurasia LLP(SECE)Sale of electronic devices 100.0 Samsung Electronics Overseas B.V.(SEO)Sale of electronic devices 100.0 Samsung R&D Institute Rus LLC(SRR)R&D 100.0 Samsung Electronics Caucasus Co.,Ltd.(SECC)Marketing 100.

127、0 Samsung Electronics Uzbekistan Ltd.(SEUZ)Marketing 100.0 1 Ownership represents the Companys ownership of the voting rights in each entity,including subsidiaries ownerships.-18-Samsung Electronics Co.,Ltd.and its subsidiaries NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Area Subsidiaries Industr

128、y Percentage of ownership(%)1 Europe&CIS AKG Acoustics GmbH Manufacture and sale of audio products 100.0 Apostera UA,LLC Connected Service Provider 100.0 Harman Audio Iberia Espana Sociedad Limitada Sale of audio products 100.0 Harman Automotive UK Limited Manufacture of audio products 100.0 Harman

129、Becker Automotive Systems GmbH Manufacture and sale of audio products,R&D 100.0 Harman Becker Automotive Systems Italy S.R.L.Sale of audio products 100.0 Harman Becker Automotive Systems Manufacturing Kft Manufacture of audio products,R&D 100.0 Harman Belgium SA Sale of audio products 100.0 Harman C

130、onnected Services AB.Connected service provider 100.0 Harman Finland Oy Connected service provider 100.0 Harman Connected Services GmbH Connected service provider 100.0 Harman Connected Services Poland Sp.zoo Connected service provider 100.0 Harman Connected Services UK Ltd.Connected service provide

131、r 100.0 Harman Consumer Nederland B.V.Sale of audio products 100.0 Harman Deutschland GmbH Sale of audio products 100.0 Harman Finance International GP S.a.r.l Management of overseas subsidiaries 100.0 Harman France SNC Sale of audio products 100.0 Harman Holding GmbH&Co.KG Management company 100.0

132、Harman Hungary Financing Ltd.Financing company 100.0 Harman Inc.&Co.KG Management of overseas subsidiaries 100.0 Harman International Estonia OU R&D 100.0 Harman International Industries Limited Sale of audio products,R&D 100.0 Harman International Romania SRL R&D 100.0 Harman Finance International,

133、SCA Financing company 100.0 Harman Management GmbH Management of overseas subsidiaries 100.0 Harman Professional Kft Manufacture of audio products,R&D 100.0 Harman Professional Denmark ApS Sale of audio products,R&D 100.0 Red Bend Software Ltd.Software design 100.0 Red Bend Software SAS Software des

134、ign 100.0 Studer Professional Audio GmbH Sale of audio products,R&D 100.0 Harman Connected Services OOO Connected service provider 100.0 Harman RUS CIS LLC Sale of audio products 100.0 1 Ownership represents the Companys ownership of the voting rights in each entity,including subsidiaries ownerships

135、.-19-Samsung Electronics Co.,Ltd.and its subsidiaries NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Area Subsidiaries Industry Percentage of ownership(%)1 Middle East&Africa Samsung Gulf Electronics Co.,Ltd.(SGE)Sale of electronic devices 100.0 Samsung Electronics Turkiye(SETK)Sale of electronic de

136、vices 100.0 Samsung Electronics Industry and Commerce Ltd.(SETK-P)Manufacture of electronic devices 100.0 Samsung Electronics Levant Co.,Ltd.(SELV)Sale of electronic devices 100.0 Samsung Electronics Maghreb Arab(SEMAG)Sale of electronic devices 100.0 Samsung Electronics Egypt S.A.E(SEEG)Manufacture

137、 and sale of electronic devices 100.0 Samsung Electronics Israel Ltd.(SEIL)Marketing 100.0 Samsung Electronics Tunisia S.A.R.L(SETN)Marketing 100.0 Samsung Electronics Pakistan(Private)Ltd.(SEPAK)Marketing 100.0 Samsung Electronics Saudi Arabia Ltd.(SESAR)Sale of electronic devices 100.0 Samsung Sem

138、iconductor Israel R&D Center,Ltd.(SIRC)R&D 100.0 Corephotonics Ltd.R&D 100.0 Samsung Electronics South Africa(Pty)Ltd.(SSA)Sale of electronic devices 100.0 Samsung Electronics South Africa Production(Pty)Ltd.(SSAP)Manufacture of TV and monitors 100.0 Samsung Electronics West Africa Ltd.(SEWA)Marketi

139、ng 100.0 Samsung Electronics East Africa Ltd.(SEEA)Marketing 100.0 Global Symphony Technology Group Private Ltd.Management of overseas subsidiaries 100.0 Harman Connected Services Morocco Connected service provider 100.0 Harman Industries Holdings Mauritius Ltd.Management of overseas subsidiaries 10

140、0.0 Red Bend Ltd.Manufacture of audio products 100.0 Asia(Excluding China)Samsung Asia Pte.Ltd.(SAPL)Management of overseas subsidiaries 100.0 Samsung Electronics Singapore Pte.Ltd.(SESP)Sale of electronic devices 100.0 Samsung Malaysia Electronics(SME)Sdn.Bhd.(SME)Sale of electronic devices 100.0 S

141、amsung Electronics Display(M)Sdn.Bhd.(SDMA)Manufacture of electronic devices 100.0 Samsung Electronics(M)Sdn.Bhd.(SEMA)Manufacture of home appliances 100.0 Samsung Vina Electronics Co.,Ltd.(SAVINA)Sale of electronic devices 100.0 Samsung Electronics Vietnam Co.,Ltd.(SEV)Manufacture of electronic dev

142、ices 100.0 Samsung Electronics Vietnam THAINGUYEN Co.,Ltd.(SEVT)Manufacture of communication equipment 100.0 Samsung Electronics HCMC CE Complex Co.,Ltd.(SEHC)Manufacture and sale of electronic devices 100.0 Samsung Display Vietnam Co.,Ltd.(SDV)Manufacture of display panels 100.0 DOWOOINSYS VINA COM

143、PANY LIMITED Manufacture of display components 100.0 PT Samsung Electronics Indonesia(SEIN)Manufacture and sale of electronic devices 100.0 PT Samsung Telecommunications Indonesia(STIN)Sale of electronic devices and services 100.0 Thai Samsung Electronics Co.,Ltd.(TSE)Manufacture and sale of electro

144、nic devices 91.8 Laos Samsung Electronics Sole Co.,Ltd.(LSE)Marketing 100.0 Samsung Electronics Philippines Corporation(SEPCO)Sale of electronic devices 100.0 Samsung Electronics Australia Pty.Ltd.(SEAU)Sale of electronic devices 100.0 Samsung Electronics New Zealand Limited(SENZ)Sale of electronic

145、devices 100.0 Samsung India Electronics Private Ltd.(SIEL)Manufacture and sale of electronic devices 100.0 Red Brick Lane Marketing Solutions Pvt.Ltd.Marketing 100.0 Samsung Display Noida Private Limited(SDN)Manufacture of display panels 100.0 Samsung R&D Institute India-Bangalore Private Limited(SR

146、I-B)R&D 100.0 Samsung R&D Institute BanglaDesh Limited(SRBD)R&D 100.0 Samsung Nepal Services Pvt,Ltd.(SNSL)Service 100.0 Samsung Japan Corporation(SJC)Sale of semiconductor and display panels 100.0 1 Ownership represents the Companys ownership of the voting rights in each entity,including subsidiari

147、es ownerships.-20-Samsung Electronics Co.,Ltd.and its subsidiaries NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Area Subsidiaries Industry Percentage of ownership(%)1 Asia(Excluding China)Samsung R&D Institute Japan Co.,Ltd.(SRJ)R&D 100.0 Samsung Electronics Japan Co.,Ltd.(SEJ)Sale of electronic d

148、evices 100.0 Harman International Industries PTY Ltd.Management of overseas subsidiaries 100.0 Harman Connected Services Corp.India Pvt.Ltd.Connected service provider 100.0 Harman International(India)Private Limited Sale of audio products,R&D 100.0 Harman International Japan Co.,Ltd.Sale of audio pr

149、oducts,R&D 100.0 Harman Singapore Pte.Ltd.Sale of audio products 100.0 China Samsung(CHINA)Investment Co.,Ltd.(SCIC)Sale of electronic devices 100.0 Samsung Electronics Hong Kong Co.,Ltd.(SEHK)Sale of electronic devices 100.0 Samsung Electronics Taiwan Co.,Ltd.(SET)Sale of electronic devices 100.0 T

150、ianjin Samsung Electronics Co.,Ltd.(TSEC)Manufacture of TV and monitors 91.2 Suzhou Samsung Electronics Co.,Ltd.(SSEC)Manufacture of home appliances 88.3 Samsung Suzhou Electronics Export Co.,Ltd.(SSEC-E)Manufacture of home appliances 100.0 Samsung Electronics Suzhou Computer Co.,Ltd.(SESC)R&D 100.0

151、 Tianjin Samsung Telecom Technology Co.,Ltd.(TSTC)Manufacture of communication equipment 90.0 Beijing Samsung Telecom R&D Center(SRC-Beijing)R&D 100.0 Samsung Electronics China R&D Center(SRC-Nanjing)R&D 100.0 Samsung Mobile R&D Center China-Guangzhou(SRC-Guangzhou)R&D 100.0 Samsung R&D Institute Ch

152、ina-Shenzhen(SRC-Shenzhen)R&D 100.0 Shanghai Samsung Semiconductor Co.,Ltd.(SSS)Sale of semiconductor and display panels 100.0 Samsung(China)Semiconductor Co.,Ltd.(SCS)Manufacture of semiconductors 100.0 Samsung SemiConductor Xian Co.,Ltd.(SSCX)Sale of semiconductor and display panels 100.0 Samsung

153、Electronics Suzhou Semiconductor Co.,Ltd.(SESS)Toll processing of semiconductors 100.0 Tianjin Samsung LED Co.,Ltd.(TSLED)Manufacture of LED 100.0 Samsung Semiconductor(China)R&D Co.,Ltd.(SSCR)R&D 100.0 Samsung Display Dongguan Co.,Ltd.(SDD)Manufacture of display panels 100.0 Samsung Display Tianjin

154、 Co.,Ltd.(SDT)Manufacture of display panels 95.0 SEMES(XIAN)Co.,Ltd.Semiconductor equipment services 100.0 Samsung Semiconductor Investment L.P.Technology business,Venture capital investments 99.0 Harman(China)Technologies Co.,Ltd.Manufacture of audio products 100.0 Harman(Suzhou)Audio and Infotainm

155、ent Systems Co.,Ltd.Sale of audio products 100.0 Harman Automotive Electronic Systems(Suzhou)Co.,Ltd.Manufacture of audio products,R&D 100.0 Harman Commercial(Shanghai)Co.,Ltd.Sale of audio products 100.0 Harman Connected Services Solutions(Chengdu)Co.,Ltd.Connected service provider 100.0 Harman Hol

156、ding Limited Sale of audio products 100.0 Harman International(China)Holdings Co.,Ltd.Sale of audio products,R&D 100.0 Harman Technology(Shenzhen)Co.,Ltd.Sale of audio products,R&D 100.0 1 Ownership represents the Companys ownership of the voting rights in each entity,including subsidiaries ownershi

157、ps.-21-Samsung Electronics Co.,Ltd.and its subsidiaries NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Area Subsidiaries Industry Percentage of ownership(%)1 Domestic Samsung Display Co.,Ltd.Manufacture and sale of display panels 84.8 SU Materials Manufacture of display components 50.0 STECO Co.,Ltd

158、.Manufacture of semiconductor components 70.0 SEMES Co.,Ltd.Manufacture and sale of semiconductor/FPD 91.5 Samsung Electronics Service Co.,Ltd.Repair services for electronic devices 99.3 Samsung Electronics Service Customer Satisfaction Co.,Ltd.Call center for repair services for electronic devices

159、100.0 Samsung Electronics Sales Co.,Ltd.Sale of electronic devices 100.0 Samsung Electronics Logitech Co.,Ltd.General logistics agency 100.0 Samsung Medison Co.,Ltd.Manufacture and sale of medical equipment 68.5 Stella Forest of Hope Manufacture of food 100.0 Mirero System Co.,Ltd.Development and su

160、pply of semiconductor process defect and quality control software 99.9 Dowooinssys Co.,Ltd.Manufacture of display components 69.0 Gf-System Co.,Ltd.Manufacture of display components 100.0 Harman International Korea Software development and supply,etc.100.0 Samsung Venture Capital Union#21 Technology

161、 business,Venture capital investments 99.0 Samsung Venture Capital Union#22 Technology business,Venture capital investments 99.0 Samsung Venture Capital Union#26 Technology business,Venture capital investments 99.0 Samsung Venture Capital Union#28 Technology business,Venture capital investments 99.0

162、 Samsung Venture Capital Union#29 Technology business,Venture capital investments 99.0 Samsung Venture Capital Union#32 Technology business,Venture capital investments 99.0 Samsung Venture Capital Union#33 Technology business,Venture capital investments 99.0 Samsung Venture Capital Union#37 Technolo

163、gy business,Venture capital investments 99.0 Samsung Venture Capital Union#40 Technology business,Venture capital investments 99.0 Samsung Venture Capital Union#42 Technology business,Venture capital investments 99.0 Samsung Venture Capital Union#43 Technology business,Venture capital investments 99

164、.0 Samsung Venture Capital Union#45 Technology business,Venture capital investments 99.0 Samsung Venture Capital Union#48 Technology business,Venture capital investments 99.0 Samsung Venture Capital Union#52 Technology business,Venture capital investments 99.0 Samsung Venture Capital Union#55 Techno

165、logy business,Venture capital investments 99.0 Samsung Venture Capital Union#56 Technology business,Venture capital investments 99.0 Samsung Venture Capital Union#57 Technology business,Venture capital investments 99.0 Growth type private equity trust specialized in semiconductors Investment on semi

166、conductor industry 66.7 System LSI Mutual benefit private equity trust Investment on semiconductor industry 62.5 1 Ownership represents the Companys ownership of the voting rights in each entity,including subsidiaries ownerships.-22-Samsung Electronics Co.,Ltd.and its subsidiaries NOTES TO THE CONSO

167、LIDATED FINANCIAL STATEMENTS 1.3 Summary of Financial Data of Major Consolidated Subsidiaries Summary of financial data of major consolidated subsidiaries is as follows:(1)2022(In millions of Korean won)As of December 31,2022 For the year ended December 31,2022 Major subsidiaries1 Assets Liabilities

168、 Sales Profit(loss)for the year Samsung Display 57,302,567 7,282,718 30,779,405 4,365,588 Samsung Electronics America,Inc.(SEA)37,883,156 12,258,315 46,738,920 219,670 Samsung Asia Pte.Ltd.(SAPL)26,894,611 2,678,285 -8,699,679 Harman and its subsidiaries2 17,102,324 6,380,456 13,211,151 631,019 Sams

169、ung(China)Semiconductor Co.,Ltd.(SCS)17,095,000 2,970,835 9,679,757 638,385 Samsung Electronics Vietnam THAINGUYEN Co.,Ltd.(SEVT)15,718,299 2,358,140 36,336,963 2,721,701 Samsung(CHINA)Investment Co.,Ltd.(SCIC)13,830,988 9,764,636 2,865,831 257,878 Samsung Semiconductor,Inc.(SSI)12,199,102 5,930,369

170、 43,009,331 88,467 Samsung Electronics Vietnam Co.,Ltd.(SEV)10,931,037 1,408,387 23,667,565 1,646,165 Samsung Electronics Europe Holding Cooperatief U.A.(SEEH)10,841,515 6,272,800 -57,997 Samsung Austin Semiconductor LLC.(SAS)9,301,017 828,494 3,663,909 208,879 Samsung Display Vietnam Co.,Ltd.(SDV)7

171、,471,680 1,608,448 25,773,970 1,301,926 Samsung India Electronics Private Ltd.(SIEL)6,772,537 3,571,863 16,180,492 508,510 Shanghai Samsung Semiconductor Co.,Ltd.(SSS)5,067,891 2,858,382 21,370,622 318,578 Samsung Eletronica da Amazonia Ltda.(SEDA)4,600,508 1,342,517 7,485,104 (38,490)Samsung Electr

172、onics HCMC CE Complex Co.,Ltd.(SEHC)3,732,057 980,448 6,253,401 386,119 Thai Samsung Electronics Co.,Ltd.(TSE)3,263,473 486,820 4,824,734 168,524 Samsung Electronics(UK)Ltd.(SEUK)2,819,792 1,708,064 5,929,357 243,396 Samsung Electronics Benelux B.V.(SEBN)2,377,730 597,044 2,834,008 25,411 Samsung El

173、ectronics Hungarian Private Co.Ltd.(SEH)2,374,317 452,628 3,935,745 199,742 Samsung Electronics Europe Logistics B.V.(SELS)2,194,975 2,021,491 15,409,984 20,347 Samsung Display Dongguan Co.,Ltd.(SDD)2,135,132 265,835 2,556,608 111,643 SEMES Co.,Ltd.2,065,558 602,323 2,889,238 185,762 Samsung Electro

174、nics GmbH(SEG)1,968,273 1,907,132 6,567,011 3,695 Samsung Electronics Mexico S.A.De C.V.(SEM)1,816,895 996,002 3,270,016 110,386 1 Summary of condensed financial information is based on separate financial statements of each subsidiary.2 Consolidated financial data of an intermediate company that inc

175、ludes Harman International Industries,Inc.and its subsidiaries.-23-Samsung Electronics Co.,Ltd.and its subsidiaries NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (2)2021(In millions of Korean won)As of December 31,2021 For the year ended December 31,2021 Major subsidiaries1 Assets Liabilities Sales

176、 Profit(loss)for the year Samsung Display 54,967,156 9,081,737 28,755,975 2,770,060 Samsung Electronics America,Inc.(SEA)42,982,054 19,246,751 42,325,524 823,914 Samsung(China)Semiconductor Co.,Ltd.(SCS)19,049,536 5,168,738 7,341,018 1,708,832 Samsung Electronics Vietnam THAINGUYEN Co.,Ltd.(SEVT)17,

177、521,446 3,425,127 32,184,024 2,298,273 Harman and its subsidiaries2 15,887,380 6,104,012 10,015,092 357,612 Samsung Asia Pte.Ltd.(SAPL)14,683,789 58,381 -4,668,478 Samsung Electronics Europe Holding Cooperatief U.A.(SEEH)14,651,496 8,998,502 -24,527 Samsung Semiconductor,Inc.(SSI)13,744,799 7,955,06

178、0 33,895,805 74,531 Samsung(CHINA)Investment Co.,Ltd.(SCIC)13,599,093 9,685,278 2,615,685 451,062 Samsung Electronics Vietnam Co.,Ltd.(SEV)13,023,272 2,085,411 21,583,038 1,455,704 Samsung Austin Semiconductor LLC(SAS)8,705,085 958,537 3,703,472 759,206 Shanghai Samsung Semiconductor Co.,Ltd.(SSS)7,

179、765,126 5,799,690 31,326,186 325,397 Samsung India Electronics Private Ltd.(SIEL)7,765,019 3,236,745 12,222,643 522,672 Samsung Display Vietnam Co.,Ltd.(SDV)6,821,066 2,486,703 21,722,446 981,311 Samsung Eletronica da Amazonia Ltda.(SEDA)4,589,505 1,671,097 6,020,523 490,202 Samsung Electronics HCMC

180、 CE Complex Co.,Ltd.(SEHC)3,129,104 919,721 6,551,242 472,666 Thai Samsung Electronics Co.,Ltd.(TSE)3,018,358 474,223 4,443,031 142,191 Samsung Electronics(UK)Ltd.(SEUK)2,925,062 1,992,367 5,621,922 241,403 Samsung Electronics Benelux B.V.(SEBN)2,612,357 766,034 2,569,603 284,816 Samsung Electronics

181、 Hungarian Private Co.,Ltd.(SEH)2,504,075 641,004 4,357,137 157,616 Samsung Electronics Europe Logistics B.V.(SELS)2,305,275 2,144,805 14,700,517 13,943 Samsung Electronics GmbH(SEG)2,289,391 2,228,650 6,385,080 2,158 Samsung Display Dongguan Co.,Ltd.(SDD)2,149,277 339,425 3,987,674 163,637 Samsung

182、International,Inc.(SII)2,125,719 1,041,168 7,948,982 105,444 Samsung Electronics Taiwan Co.,Ltd.(SET)2,033,992 1,459,353 5,638,204 50,966 1 Summary of condensed financial information is based on separate financial statements of each subsidiary.2 Consolidated financial data of an intermediate company

183、 that includes Harman International Industries,Inc.and its subsidiaries.-24-Samsung Electronics Co.,Ltd.and its subsidiaries NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 1.4 Changes in Consolidation Scope Changes in consolidation scope during the year ended December 31,2022 are as follows:Change A

184、rea Subsidiary Description Included Europe&CIS Samsung R&D Institute Ukraine(SRUKR)Establishment Samsung Electronics Uzbekistan Ltd.(SEUZ)Establishment Apostera GmbH Acquisition Apostera UA,LLC Acquisition Asia(Excluding China)DOWOOINSYS VINA COMPANY LIMITED Establishment Red Brick Lane Marketing So

185、lutions Pvt.Ltd.Acquisition Domestic Samsung Venture Capital Union#57 Establishment Stella Forest of Hope Establishment Excluded America Dacor Canada Co.Liquidation Europe&CIS AMX UK Limited Liquidation Harman International s.r.o Liquidation Apostera GmbH Merger 2.Significant Accounting Policies 2.1

186、 Basis of Presentation The principal accounting policies used to prepare the consolidated financial statements are set out below.Except for the effect of the amendments to the Korean IFRS and new interpretations set out below,the principal accounting policies used to prepare the consolidated financi

187、al statements as of and for the year ended December 31,2022 are consistent with those used to prepare the consolidated financial statements as of and for the year ended December 31,2021.The Company maintains its accounting records in Korean won and prepares the statutory financial statements in Kore

188、an language(Hangul)in accordance with International Financial Reporting Standards as adopted by the Republic of Korea(“Korean IFRS”).The accompanying consolidated financial statements have been restructured,and translated into English from the Korean language financial statements.Certain information

189、 attached to the Korean language financial statements that are not required for a fair presentation of the Companys financial position,financial performance or cash flows,are not presented in the accompanying consolidated financial statements.The consolidated financial statements of the Company have

190、 been prepared in accordance with Korean IFRS.These are the standards,subsequent amendments and related interpretations issued by the International Accounting Standards Board(IASB)that have been adopted by the Republic of Korea.Korean IFRS permits the use of critical accounting estimates in the prep

191、aration of the consolidated financial statements and requires management judgments in applying the accounting policies.The areas involving a higher degree of judgment or complexity,or areas where assumptions and estimates are significant to the consolidated financial statements,are disclosed in Note

192、 3.-25-Samsung Electronics Co.,Ltd.and its subsidiaries NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 2.2 Changes in Accounting Policies and Disclosures (A)New and amended standards adopted by the Company The Company applied the following amended and/or enacted standards for the first time for thei

193、r annual reporting period commencing on January 1,2022:Amendments to Korean IFRS 1116,Lease The amendments to Korean IFRS 1116 introduced a practical expedient that provided practical relief to lessees in accounting for rent concessions occurring as a direct consequence of COVID-19.The amendments ex

194、tend the practical expedient to apply to reduction in lease payments originally due on or before June 30,2022.The application of amendments does not have a significant impact on the Companys year-end consolidated financial statements.Amendments to Korean IFRS 1103,Business Combinations The amendment

195、s update Korean IFRS 1103 so that it refers to the amended conceptual framework for financial reporting for assets and liabilities recognized upon business combination,along with adding requirement that for transactions and other events within the scope of IAS 37 or IFRIC 21,an acquirer applies IAS

196、37 or IFRIC 21 to identify the liabilities it has assumed in a business combination.The amendments also add an explicit statement that an acquirer does not recognize contingent assets acquired in a business combination.The application of amendments does not have a significant impact on the Companys

197、year-end consolidated financial statements.Amendments to Korean IFRS 1016,Property,Plant and Equipment The amendments prohibit deducting from the cost of an item of property,plant and equipment any proceeds from selling items produced while bringing that asset to the location and condition necessary

198、 for it to be capable of operating in the manner intended by management.Instead,an entity recognizes the proceeds from selling such items,and the cost of producing those items,in profit or loss.The application of amendments does not have a significant impact on the Companys year-end consolidated fin

199、ancial statements.Amendments to Korean IFRS 1037,Provisions,Contingent Liabilities and Contingent Assets The amendments specify that the cost of fulfilling a contract comprises the costs that relate directly to the contract,and that costs that relate directly to a contract consist of both the increm

200、ental costs of fulfilling that contract and an allocation of other costs that relate directly to fulfilling contracts.The application of the amendments does not have a significant impact on the Companys year-end consolidated financial statements.-26-Samsung Electronics Co.,Ltd.and its subsidiaries N

201、OTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (B)New and amended standards not yet adopted by the Company The amended accounting standards issued that are not mandatory for the annual reporting periods commencing on January 1,2022 and has not been early adopted by the Company are as follows:Amendmen

202、ts to Korean IFRS 1001 Presentation of Financial Statements The amendments clarify that the classification of liabilities as current or non-current is based on the rights that are in existence at the end of the reporting period,specify that classification is unaffected by expectations about whether

203、an entity will exercise its right to defer settlement of a liability,and elucidate that settlement refers to the transfer to the counterparty of cash,equity instruments,other assets or services.The amendments are effective for annual reporting periods beginning on or after January 1,2023,with earlie

204、r application permitted.Amendments to Korean IFRS 1001 Presentation of Financial Statements The amendments require companies to define and disclose their material accounting policy information instead of its significant accounting policies.The amendments explain how an entity can identify material a

205、ccounting policy information.The amendments to K-IFRS 1001 are effective for annual periods beginning on or after January 1,2023,with earlier application permitted and are applied prospectively.Amendments to Korean IFRS 1008 Accounting Policies,Changes in Accounting Estimates and Errors The amendmen

206、ts clarify the definition of a change in accounting estimates,and specify how to distinguish from a change in accounting policies.The amendments are effective for annual periods beginning on or after January,1 2023 to changes in accounting policies and changes in accounting estimates that occur on o

207、r after the beginning of that period,with earlier application permitted.Amendments to Korean IFRS 1012,Income Taxes The amendments add to the initial recognition exemption that the initial recognition exemption does not apply to transactions in which equal amounts of deductible and taxable temporary

208、 differences arise on initial recognition.The amendments are effective for annual reporting periods beginning on or after January 1,2023,with earlier application permitted.-27-Samsung Electronics Co.,Ltd.and its subsidiaries NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 2.3 Consolidation The Compan

209、y prepares the consolidated financial statements in accordance with Korean IFRS 1110 Consolidated Financial Statements.(A)Subsidiaries Subsidiaries are all entities(including the special purpose entities)over which the Company has control.The Company controls the corresponding investee when it is ex

210、posed,or has rights,to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.Consolidation of a subsidiary begins from the date the Company obtains control of a subsidiary and ceases when the Company loses control of t

211、he subsidiary.The Company applies the acquisition method to account for business combinations.The consideration transferred is measured at the fair values of the assets transferred,and identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are initi

212、ally measured at their fair values at the acquisition date.The Company recognizes any non-controlling interest in the acquiree on an acquisition-by-acquisition basis in the event of liquidation at the non-controlling interests proportionate share of the recognized amounts of acquirees identifiable n

213、et assets.Acquisition-related costs are expensed as incurred.The excess of consideration transferred,of any non-controlling interest in the acquired entity,and acquisition-date fair value of any previous equity interest in the acquired entity over the fair value of the net identifiable assets acquir

214、ed is recorded as goodwill.If those amounts are less than the fair value of the net identifiable assets of the business acquired,the difference is recognized directly in the profit or loss as a bargain purchase.Balances of receivables and payables,income and expenses and unrealized gains or losses o

215、n transactions between the entities within the Company are eliminated.Accounting policies of subsidiaries are changed where necessary to ensure consistency with the policies adopted by the Company.(B)Changes in ownership interests in subsidiaries without change of control Transactions with non-contr

216、olling interests that do not result in loss of control are accounted for as equity transactions that is,as transactions with the owners in their capacity as owners.The difference between the fair value of any consideration paid and the relevant share acquired of the carrying value of net assets of t

217、he subsidiary is recorded in equity.Gains or losses on disposals of non-controlling interests are also recorded in equity.(C)Disposal of subsidiaries If the Company loses control of a subsidiary,any investment continuously retained in the subsidiary is re-measured at its fair value at the date when

218、control is lost and any resulting differences are recognized in profit or loss.Such fair value becomes the initial carrying amount for the subsequent measurement of the retained interest accounted for as an associate,joint venture,or financial asset.In addition,any amounts previously recognized in o

219、ther comprehensive income in respect of such entity are accounted as if the Company had directly disposed of the related assets or liabilities.As a result,the previously recognized other comprehensive income are reclassified into profit or loss or equity.(D)Non-controlling interests Each component o

220、f profit or loss and other comprehensive income is attributed to owners of the parent and to non-controlling interests.Total comprehensive income is attributed to owners of the parent and to non-controlling interests even if this results in a negative balance of non-controlling interests.-28-Samsung

221、 Electronics Co.,Ltd.and its subsidiaries NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (E)Associates Associates are all entities over which the Company has significant influence but does not have control,generally investees of which from 20%to 50%voting shares are owned by the Company.Investments

222、in associates are accounted for using the equity method of accounting,after initially being recognized at cost.Unrealized gains on transactions between the Company and its associates are eliminated to the extent of the Companys interest in the associates.If the Companys share of losses of an associa

223、te equals or exceeds its interest in the associate(including long-term interests that,in substance,form part of the Companys net investment in the associate),the Company discontinues recognizing its share of further losses.After the Companys interest is reduced to zero,additional losses are provided

224、 for,and a liability is recognized,only to the extent that the Company has incurred legal or constructive obligations or made payments on behalf of the associate.If there is objective evidence of impairment for the investment in the associate,the Company recognizes the difference between the recover

225、able amount of the associate and its carrying amount as an impairment loss.If an associate uses accounting policies other than those of the Company for like transactions and events in similar circumstances,adjustments shall be made,if necessary,to make the associates accounting policies conform to t

226、hose of the Company when the associates financial statements are used by the entity in applying the equity method.(F)Joint arrangements A joint arrangement of which two or more parties have joint control is classified as either a joint operation or a joint venture.A joint operator has rights to the

227、assets,and obligations for the liabilities,relating to the joint operation and recognizes the assets,liabilities,revenues and expenses relating to its interest in a joint operation.A joint venturer has rights to the net assets relating to the joint venture and accounts for that investment using the

228、equity method.2.4 Foreign Currency Translation (A)Functional and presentation currency Items included in the consolidated financial statements of each of the Companys entities are measured using the currency of the primary economic environment in which each entity operates(the“functional currency”).

229、The consolidated financial statements are presented in Korean won,which is the parent companys functional and presentation currency.(B)Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transacti

230、ons or valuation where items are re-measured.Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in profit or loss.Exchange differe

231、nces arising on non-monetary financial assets and liabilities such as equity instruments at fair value through profit or loss and equity instruments at fair value through other comprehensive income are recognized in profit or loss and other comprehensive income,respectively,as part of the fair value

232、 gain or loss.(C)Translation into the presentation currency The results and financial position of all the foreign entities that have a functional currency different from the presentation currency of the Company are translated into the presentation currency as follows:Assets and liabilities for each

233、consolidated statement of financial position presented are translated at the closing rate at the end of the reporting date.Income and expenses for each consolidated statement of profit or loss are translated at average exchange rates,unless this average is not a reasonable approximation of the cumul

234、ative effect of the rates prevailing on the transaction dates,in which case income and expenses are translated at the as-of rate on the dates of the transactions.All resulting exchange differences are recognized in other comprehensive income.-29-Samsung Electronics Co.,Ltd.and its subsidiaries NOTES

235、 TO THE CONSOLIDATED FINANCIAL STATEMENTS 2.5 Cash and Cash Equivalents Cash and cash equivalents include cash on hand,deposits held at call with banks,and other short-term investment assets with high liquidity that are readily convertible to a known amount of cash and are subject to an insignifican

236、t risk of change in value.2.6 Financial Assets (A)Classification From January 1,2018,the initial application date for Korean IFRS 1109 Financial Instruments,the Company classifies its financial assets in the following measurement categories:-Financial assets measured at fair value(changes in fair va

237、lue recognized in either other comprehensive income,or profit or loss)-Financial assets measured at amortized cost.The classification depends on the Companys business model for managing the financial assets and the contractual terms of the cash flows.For financial assets measured at fair value,gains

238、 and losses will either be recorded in profit or loss or other comprehensive income.For investments in debt instruments,this will depend on the business model in which the investment is held.The Company reclassifies debt investments only when its business model for managing those assets changes.For

239、investments in equity instruments that are not held for trading,classification will depend on whether the Company has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income.Changes in fair value of the inv

240、estments in equity instruments that are not elected to be accounted for as other comprehensive income are recognized in profit or loss.(B)Measurement At initial recognition,the Company measures a financial asset at its fair value.In the case of financial asset not measured at fair value through prof

241、it or loss,transaction costs that are directly attributable to the acquisition of the financial asset or the issuance of the financial liabilities are added to its fair value.Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or loss.Hybrid(comb

242、ined)contracts with embedded derivatives are considered in their entirety when determining whether their cash flows solely consist of the payments of principal and interest.a)Debt instruments Subsequent measurement of debt instruments depends on the Companys business model for managing the asset and

243、 the cash flow characteristics of the asset.The Company classifies its debt instruments into one of the following three measurement categories:Financial assets measured at amortized cost Assets that are held for collection of contractual cash flows where those cash flows represent solely the payment

244、s of principal and interest are measured at amortized cost.A gain or loss on a debt investment that is subsequently measured at amortized cost and is not part of a hedging relationship is recognized in profit or loss when the asset is derecognized or impaired.Interest income from these financial ass

245、ets is included in financial income using the effective interest rate method.-30-Samsung Electronics Co.,Ltd.and its subsidiaries NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Financial assets measured at fair value through other comprehensive income Assets that are held for collection of contractu

246、al cash flows and for selling the financial assets,where the assets cash flows represent solely the payments of principal and interest,are measured at fair value through other comprehensive income.Movements in the carrying amount are taken through other comprehensive income,except for the recognitio

247、n of impairment loss(reversal of impairment loss),interest income and foreign exchange gains and losses which are recognized in profit or loss.When the financial assets are derecognized,the cumulative gain or loss previously recognized in other comprehensive income is reclassified from equity to pro

248、fit or loss.Interest income from these financial assets is included in financial income using the effective interest rate method.Foreign exchange gains and losses are presented in financial income or financial expenses and impairment losses are presented in other non-operating expenses.Financial ass

249、ets measured at fair value through profit or loss Assets that do not meet the criteria for amortized cost or fair value through other comprehensive income are measured at fair value through profit or loss.A gain or loss on a debt investment that is subsequently measured at fair value through profit

250、or loss and is not part of a hedging relationship is recognized in profit or loss and presented in the consolidated statement of profit or loss within other non-operating income or other non-operating expenses in the year in which it arises.b)Equity instruments The Company subsequently measures all

251、equity investments at fair value.Where the Companys management has elected to present fair value gains and losses on equity investments in other comprehensive income,there is no subsequent reclassification of fair value gains and losses to profit or loss following the derecognition of the investment

252、.When the financial asset is derecognized,the cumulative gain or loss on valuation of financial assets at fair value through other comprehensive income recognized in equity is reclassified to retained earnings.Dividend income from such investments continue to be recognized in profit or loss as other

253、 non-operating income when the right to receive the payments is established.Changes in the fair value of financial assets at fair value through profit or loss are recognized in other non-operating income or other non-operating expenses in the consolidated statements of profit or loss as applicable.(

254、C)Impairment The Company assesses on a forward-looking basis the expected credit losses associated with its debt instruments carried at amortized cost and fair value through other comprehensive income.The impairment methodology applied depends on whether there has been a significant increase in cred

255、it risk.For trade receivables,the Company applies the simplified approach,which requires expected lifetime losses to be recognized from initial recognition of the receivables.(D)Recognition and derecognition Regular way purchases and sales of financial assets are recognized or derecognized on a trad

256、e date basis.Financial assets are derecognized when the rights to receive cash flows from the financial assets have expired or have been transferred and the Company has transferred substantially all the risks and rewards of ownership.If a transfer does not result in derecognition because the Company

257、 has retained substantially all the risks and rewards of ownership of the transferred asset,the Company continues to recognize the transferred asset in its entirety and recognizes a financial liability for the consideration received.The Company classifies the financial liability as borrowings in the

258、 consolidated statement of financial position.-31-Samsung Electronics Co.,Ltd.and its subsidiaries NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (E)Offsetting of financial instruments Financial assets and liabilities are offset and the net amount is reported in the statements of financial position

259、when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the assets and settle the liability simultaneously.The legally enforceable right must not be contingent on future events and must be enforceable in the normal cour

260、se of business,even in the event of default,insolvency or bankruptcy of the Company or the counterparty.2.7 Trade Receivables Trade receivables are amounts due from customers for inventories sold or services performed in the ordinary course of business.If collection is expected within one year or le

261、ss,they are classified as current assets.If collection is expected beyond one year,they are presented as non-current assets.Trade receivables are recognized initially at transaction price and subsequently measured at amortized cost using the effective interest method,less loss allowance,unless the t

262、rade receivables bear significant financial component.2.8 Inventories Inventories are stated at the lower of cost and net realizable value.Cost is determined using the average cost method,except for materials in transit.The cost of finished goods and work in progress comprises raw materials,direct l

263、abor,other direct costs and related production overheads(based on normal operating capacity).It excludes costs of idle plant and abnormal waste.Net realizable value is the estimated selling price in the ordinary course of business,less applicable variable selling expenses.The Company regularly estim

264、ates the changes in future customer demand in the products that may cause a significant change in the valuation allowance and recognizes the valuation allowance if there is any case such as excess,obsolescence and decline in market value.Loss on valuation of inventories is recorded as cost of sales.

265、2.9 Property,Plant and Equipment Property,plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses.Historical cost includes expenditures that are directly attributable to the acquisition.Subsequent costs are included in the assets carrying amount or reco

266、gnized as a separate asset,as appropriate,only when it is probable that future economic benefits associated with the cost will flow to the Company and the cost can be measured reliably.The carrying amounts of the replaced parts are derecognized and the repairs and maintenance expenses are recognized

267、 in profit or loss in the period they are incurred.Depreciation on tangible assets is calculated using the straight-line method to allocate the difference between their cost and their residual values over their estimated useful lives.Land is not depreciated.Costs that are directly attributable to th

268、e acquisition,construction or production of a qualifying asset,including capitalized interest costs,form part of the cost of that asset and are amortized over the estimated useful lives.The Companys policy is that property,plant and equipment should be depreciated over the following estimated useful

269、 lives:Estimated useful lives Buildings and structures 15,30 years Machinery and equipment 5 years Other 5 years -32-Samsung Electronics Co.,Ltd.and its subsidiaries NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS The depreciation method,residual values and useful lives of property,plant and equipmen

270、t are reviewed,and adjusted if appropriate,at the end of each reporting period.An assets carrying amount is written down immediately to its recoverable amount if the assets carrying amount is greater than its estimated recoverable amount.Gains and losses on disposals are determined by comparing the

271、proceeds with the carrying amount and are recognized within the consolidated statement of profit or loss as other non-operating income or other non-operating expenses.2.10 Borrowing Costs General and specific borrowing costs that are directly attributable to the acquisition,construction or productio

272、n of a qualifying asset are capitalized during the period of time that is required to complete and prepare the asset for its intended use.Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs el

273、igible for capitalization.Other borrowing costs are expensed in the period in which they are incurred.2.11 Intangible Assets Goodwill represents the excess of the cost of acquisition over the fair value of the Companys share of the net identifiable assets of the acquired subsidiaries,associates,join

274、t ventures and businesses at the date of acquisition.Goodwill on an acquisition of businesses is included in intangible assets and goodwill on an acquisition of associates and joint ventures shares is included in the investments in associates and joint ventures.Intangible assets,except for goodwill,

275、are initially recognized at their historical cost and carried at cost less accumulated amortization and accumulated impairment losses.Internally generated development costs are the aggregate costs recognized after meeting the asset recognition criteria,including technical feasibility,and determined

276、to have future economic benefits.Membership rights and certain trademarks are regarded as intangible assets with an indefinite useful life and not amortized because there is no foreseeable limit to the period over which the assets are expected to be utilized.However,the Company records impairment ba

277、sed on its reasonable estimation of the benefits associated with the membership rights and assessment of impairment indicators,such as a decline in the market value.Intangible assets with definite useful lives such as trademarks,licenses,and other intangible assets,are amortized using the straight-l

278、ine method over their estimated useful lives.The Companys policy is that intangible assets should be amortized over the following estimated useful lives:Estimated useful lives Development costs 2 years Trademarks,licenses and other intangible assets 3-25 years 2.12 Impairment of Non-Financial Assets

279、 Goodwill or intangible assets with indefinite useful lives are not subject to amortization and are tested annually for impairment.Assets that are subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

280、An impairment loss is recognized for the amount by which the assets carrying amount exceeds its recoverable amount.The recoverable amount is the higher of an assets fair value less costs to sell and value in use.For the purposes of assessing impairment,assets are grouped at the lowest level for whic

281、h there are separately identifiable cash flows(cash-generating units).Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at the end of each reporting period.-33-Samsung Electronics Co.,Ltd.and its subsidiaries NOTES TO THE CONSOL

282、IDATED FINANCIAL STATEMENTS 2.13 Assets Held-for-Sale(Disposal Group)Non-current assets(or disposal groups)are classified as assets held-for-sale when their carrying amount is to be recovered principally through a sale transaction and the sale is considered highly probable.The assets are measured at

283、 the lower of their carrying amount and the fair value less costs to sell.Gain or loss on disposal is determined by comparing the proceeds with the carrying amount of relevant assets,and is recognized in the statements of profit or loss as other non-operating income or other non-operating expenses.2

284、.14 Financial Liabilities (A)Classification and measurement The Company shall classify all financial liabilities as financial liabilities measured subsequently at amortized cost,except for the following:-Financial liabilities at fair value through profit or loss.Such liabilities,including derivative

285、s that are liabilities,shall be subsequently measured at fair value.-Financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition or when the continuing involvement approach applies.Such financial liabilities are measured based on the methodology described

286、 in Note 2.6 Financial Assets.-Financial guarantee contracts.After the initial recognition,an issuer of such a contract shall subsequently measure it at the higher of:(a)The amount of the loss allowance determined based on the expected credit losses.(b)The amount initially recognized less the cumula

287、tive amount of income recognized in accordance with the principles of Korean IFRS 1115 Revenue from Contracts with Customers,when appropriate.-Commitments to provide loan at below-market interest rate.An issuer of such a commitment shall subsequently measure it at the higher of:(a)The amount of the

288、loss allowance determined based on the expected credit losses.(b)The amount initially recognized less the cumulative amount of income recognized in accordance with the principles of Korean IFRS 1115 Revenue from Contracts with Customers,when appropriate.-Contingent consideration recognized by an acq

289、uirer in a business combination to which Korean IFRS 1103 Business Combinations applies.Such contingent consideration shall subsequently be measured at fair value with changes recognized in profit or loss.(B)Derecognition Financial liabilities are removed from the consolidated statements of financia

290、l position when it is extinguished;for example,when the obligation specified in the contract is discharged or cancelled or expired or when the terms of an existing financial liability are substantially modified.The difference between the carrying amount of a financial liability extinguished or trans

291、ferred to another party and the consideration paid(including any non-cash assets transferred or liabilities assumed)is recognized in profit or loss.2.15 Trade Payables Trade payables are amounts due to suppliers for inventories purchased or services received in the ordinary course of business.If pay

292、ment is expected to be made within 12 months,they are classified as current liabilities.If not,they are presented as non-current liabilities.Non-current trade payables are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method.-34-Samsung E

293、lectronics Co.,Ltd.and its subsidiaries NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 2.16 Borrowings Borrowings are recognized initially at fair value,net of transaction costs,and are subsequently measured at amortized cost.Any difference between cost and the redemption value is recognized in the

294、consolidated statement of profit or loss over the period of the borrowings using the effective interest method.If the Company has an indefinite right to defer payment for a period longer than 12 months after the end of the reporting date,such liabilities are recorded as non-current liabilities,other

295、wise,they are recorded as current liabilities.2.17 Provisions and Contingent Liabilities A provision is recognized when the Company has present legal or constructive obligation as a result of a past event,it is probable that an outflow of resources embodying economic benefits will be required to set

296、tle the obligation,and a reliable estimate can be made of the amount of the obligation.Provisions are not recognized for future operating losses.Provisions are measured at present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects the curren

297、t market assessments of the time value of money and the risks specific to the obligation.The increase in the provision due to the passage of time is recognized as interest expense.The Company discloses a contingent liability if there is a possible obligation from past events in which the existence m

298、ay only be identified through the occurrence of uncertain future events;or there is a present obligations that the possibility on the outflow of economic resources is uncertain;or the amount of economic resources required to settle the present obligation cannot be reasonably estimated.2.18 Employee

299、Benefits The Company has a variety of retirement pension plans including a defined benefit plan and a defined contribution plan.A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate fund.The Company has no legal or constructive obligation to p

300、ay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service received in the current and prior periods.For a defined contribution plans,the Company pays contributions to annuity plans that are managed either publicly or privately

301、 on a mandatory,contractual or voluntary basis.The Company has no further future payment obligations once the contributions have been paid.The contributions are recognized as employee benefit expense when they are due.Prepaid contributions are recognized as an asset to the extent that a cash refund

302、or a reduction in the future payments is available.A defined benefit plan is a pension plan that is not a defined contribution plan.Typically,a defined benefit plan establishes an amount of pension benefit that an employee will receive upon retirement,usually dependent on one or more factors such as

303、 age,years of service and compensation.The liability(asset)recognized in the consolidated statement of financial position with respect to the defined benefit pension plan is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets.The

304、defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method.The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using the interest rates of high-quality corporate bonds that are deno

305、minated in the currency in which the benefits will be paid and that have the terms to maturity approximating to the terms of the related pension obligation.Actuarial gains and losses resulting from the changes in actuarial assumptions,and the differences between the previous actuarial assumptions an

306、d what has actually occurred,are recognized in other comprehensive income in the period in which they were incurred.When plan amendments,curtailments and settlements occur,past service costs or gain or loss from settlements are immediately recognized in profit or loss.-35-Samsung Electronics Co.,Ltd

307、.and its subsidiaries NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 2.19 Financial Guarantee Contract Financial guarantee contracts are contracts that require the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payments when du

308、e.The liability is initially measured at fair value and then subsequently measured at the higher of the following,and is recognized in the consolidated statements of financial position within other financial liabilities:-the amount determined in accordance with the expected credit loss model and -th

309、e amount initially recognized less the cumulative amount of income recognized in accordance with Korean IFRS 1115 Revenue from Contracts with Customers,where appropriate.2.20 Current and Deferred Tax The tax expense for the year comprises current and deferred tax.Current and deferred tax is recogniz

310、ed in profit or loss,except to the extent that it relates to the items recognized in other comprehensive income or directly in equity.The tax expense is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period.Deferred tax is recognized for temporar

311、y differences arising between the tax bases of assets and liabilities and their carrying amounts as expected tax consequences at the recovery or settlement of the carrying amounts of those assets and liabilities.However,deferred tax assets and liabilities are not recognized if they arise from initia

312、l recognition of an asset or liability in a transaction other than a business combination that,at the time of the transaction,affects neither the accounting nor taxable profit.Deferred tax assets are recognized only to the extent that it is probable that a future taxable profit will be available aga

313、inst which the temporary differences can be utilized.A deferred tax liability is recognized for taxable temporary differences associated with investments in subsidiaries,associates,and interests in joint ventures,except to the extent that the Company is able to control the timing of the reversal of

314、the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.In addition,a deferred tax asset is recognized for deductible temporary differences arising from such investments to the extent that it is probable the temporary difference will rever

315、se in the foreseeable future and taxable profit will be available against which the temporary difference can be utilized.Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset the current tax assets against the current tax liabilities and when the deferred

316、 income tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities with an intention to settle the balances on a net basis.2.21 Derivative Instruments The Company initially recognizes rights and obligations

317、from derivative contracts as assets and liabilities at fair value.Gain or loss arising from these contracts are recognized in profit or loss.Qualified hedged amount from cash flow hedge and hedge of a net investment in a foreign operation is deferred in equity.The Company applies cash flow hedge acc

318、ounting to hedge the price risk associated with inventory purchase and other.The effective portion of changes in fair value of derivatives that are designated and qualify as cash flow hedges is recognized in other comprehensive income,and the ineffective portion is recognized in financial income or

319、expenses.2.22 Dividend Dividend is recognized as a liability when approved by the Companys shareholders.-36-Samsung Electronics Co.,Ltd.and its subsidiaries NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 2.23 Share Capital Ordinary shares and preference shares with no repayment obligations are class

320、ified as equity.When the Company or a subsidiary acquires the Companys ordinary shares,the acquisition costs,including direct transaction costs,are deducted from equity until the redemption or reissuance as treasury shares.Consideration received on the reissuance of treasury shares is credited to eq

321、uity attributable to owners of the parent company.2.24 Revenue Recognition Revenue mainly comprises the fair value of the consideration received or receivable for the sale of goods in the ordinary course of the Companys activities.Revenue is shown net of value-added tax,returns,sales incentives and

322、discounts and after eliminating intercompany transactions.The Company applied Korean IFRS 1115 Revenue from Contracts with Customers to the annual period beginning January 1,2018.The Company shall recognize revenue in accordance with Korean IFRS 1115 Revenue from Contracts with Customers by applying

323、 the following 5 steps:Identify the contracts with the customers,Identify the separate performance obligations,Determine the transaction price of the contract,Allocate the transaction price to each of the separate performance obligations,and Recognize the revenue as each performance obligation is sa

324、tisfied.(A)Identification of performance obligations The Company exports various products and merchandise in accordance with Incoterms Group C trading conditions(Incoterms CIF and other).Since the seller provides the shipping service after the control of the product or merchandise has been transferr

325、ed to the customer,the shipping service(including insurance)is recognized as a separate performance obligation.(B)Performance obligations satisfied over time The Company delivers products to customers and installs them in accordance with the system air conditioner contracts awarded by the Public Pro

326、curement Service.According to Korean IFRS 1115 Revenue from Contracts with Customers the Company should recognize revenue over time if the Company creates or enhances an asset(for example,work in progress)that the customer controls as the asset is created or enhanced.The Company recognizes the reven

327、ue from system air conditioner installation over time as the customer controls the outcome of the service.(C)Variable consideration The Company estimates amount of variable consideration by using the expected value method or the most likely amount method,depending on which method the Company expects

328、 to better predict the amount of consideration.The Company recognizes revenue only to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur,and classifies the amount which the Company does not expect to be entitled as contract

329、 liabilities.The Company measures refund liability at the amount of consideration received for which the Company does not expect to be entitled.The Company has a right to recover the product from the customer when the customer exercises his right of return and recognizes an asset and a corresponding

330、 adjustment to cost of sales.The asset is measured with reference to the former carrying amount of the product less the costs to recover the products.(D)Allocation of the transaction price The transaction price in an arrangement must be allocated to each separate performance obligation based on the

331、relative standalone selling prices of the goods or services being provided to a customer.The Company determines the standalone selling price for each separate performance obligation by using methods such as the adjusted market assessment approach.-37-Samsung Electronics Co.,Ltd.and its subsidiaries

332、NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 2.25 Leases A lease is a contract,whereby the lessor conveys to the lessee,the right to control the use of an identified asset for a period of time in exchange for consideration.At inception of a contract,the Company assesses whether the contract is,or

333、contains,a lease.However,the Company did not reassess all contracts at initial application of Korean IFRS 1116 Leases because the Company applied the practical expedient to contracts entered into before January 1,2019.For a contract that is,or contains,a lease,both lessee and lessor account for each lease component within the contract as a lease separately from the non-lease components of the cont