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1、 SAMSUNG ELECTRONICS CO.,LTD.AND ITS SUBSIDIARIES Consolidated Financial Statements December 31,2023 and 2022 (With Independent Auditors Report Thereon)Contents Page Independent Auditors Report 1 Consolidated Statements of Financial Position 4 Consolidated Statements of Profit or Loss 7 Consolidated

2、 Statements of Comprehensive Income 8 Consolidated Statements of Changes in Equity 9 Consolidated Statements of Cash Flows 13 Notes to the Consolidated Financial Statements 15 152,Teheran-ro,Gangnam-gu,Seoul 06236(Yeoksam-dong,Gangnam Finance Center 27th Floor)Republic of Korea Independent Auditors

3、Report To the Shareholders and Board of Directors of Samsung Electronics Co.,Ltd.:Opinion We have audited the consolidated financial statements of Samsung Electronics Co.,Ltd.and its subsidiaries(“the Group”),expressed in Korean won,which comprise the consolidated statement of financial position as

4、of December 31,2023,and the consolidated statements of profit or loss,comprehensive income,changes in equity and cash flows for the year then ended,and notes,comprising material accounting policy information and other explanatory information.In our opinion,the accompanying consolidated financial sta

5、tements present fairly,in all material respects,the consolidated financial position of the Group as of December 31,2023 and its consolidated financial performance and cash flows for the year then ended in accordance with Korean International Financial Reporting Standards(“Korean IFRS”).Basis for Opi

6、nion We conducted our audit in accordance with International Standards on Auditing(“ISAs”)and Korean Standards on Auditing(“KSAs”).Our responsibilities under those standards are further described in the Auditors Responsibilities for the Audit of the Consolidated Financial Statements section of our r

7、eport.We are independent of the Group in accordance with the International Ethics Standards Board for Accountants International Code of Ethics for Professional Accountants(including International Independence Standards)(“IESBA Code”)together with the ethical requirements that are relevant to our aud

8、it of the consolidated financial statements in the Republic of Korea,and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code.We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

9、Key Audit Matters Key audit matters are those matters that,in our professional judgment,were of most significance in our audit of the consolidated financial statements as of and for the year ended December 31,2023.These matters were addressed in the context of our audit of the consolidated financial

10、 statements as a whole,and in forming our opinion thereon,and we do not provide a separate opinion on these matters.1)Valuation of memory semiconductor inventory at net realizable value The memory semiconductor products manufactured and sold by the Groups Device Solutions(DS)division have been affec

11、ted by price erosion in the current financial year due to weak demand caused by macroeconomic uncertainties.As disclosed in Note 2,Material Accounting Policies,and Note 3,Material Accounting Estimates and Assumptions,to the consolidated financial statements,the Group values its inventories at the lo

12、wer of cost and net realizable value.Due to the uncertainty associated with estimating future demand and selling prices,and the complexity of the measurement process in estimating net realizable value of the inventories,we believe the potential for error is significant and thus identified the estima

13、tion of memory semiconductor inventories net realizable value as a key audit matter.The primary audit procedures we performed to address this key audit matter are as follows:Evaluating the reasonableness of the Groups accounting policies and understanding the processes and internal controls applied

14、to the valuation of inventories at lower of cost or net realizable value;Evaluating the design and testing the operating effectiveness of the internal controls established for the lower of cost or net realizable value method of inventory valuation;Evaluating the appropriateness of the underlying dat

15、a used to determine the net realizable value of inventory which includes forecast sales price,on a sample basis;Evaluating the reasonableness of estimates by retrospectively comparing the estimated sales price and the actual sales price;and Evaluating reasonableness of inventory valuation by assessi

16、ng the reasonableness of the assumptions used to determine estimates including the forecast sale price and costs associated with sale and checking the mathematical accuracy of inventory valuation by performing recalculations.ssssssssssssssssssssssssssss -2-2)Sales deduction related to sales promotio

17、n activities The Groups Device eXperience(DX)division performs sales promotion activities,which includes providing price or volume discounts and incentives to customers including retail and telecommunication companies,based on explicit or implicit agreements.As disclosed in Note 2,Material Accountin

18、g Policies,and Note 3,Material Accounting Estimates and Assumptions,of the consolidated financial statements,the Group estimates the expected expenditures on sales promotion activities at the time of revenue recognition and deducts the amount from revenue.We identified the amount of sales deductions

19、 from promotional activities as a key audit matter because the calculation of sales deductions involves significant estimates and judgements by management and is subject to possible bias and the amount is material to the consolidated financial statements.The primary audit procedures we performed to

20、address this key audit matter are as follow:Evaluating the Groups accounting policies and understanding the processes and internal controls relating to the applied to sales deductions;Evaluating the design and testing the operating effectiveness of internal controls over the approval of the sales de

21、duction policy;Evaluating the design and testing the operating effectiveness of internal controls over the sales deduction estimates and the approval of post-settlement adjustments;Evaluating the accuracy of the estimates by inspecting,on a sample basis,the documentation supporting sales deductions

22、estimates on a sampling basis;and Evaluating the accuracy and completeness of sales deductions by comparing,on a sample basis,the period-end estimates to amounts settled subsequent to the period-end and by examining relevant documentation.Other Matters The consolidated financial statements of the Gr

23、oup for the year ended December 31,2022 were audited by another auditor who expressed an unmodified opinion on those financial statements on February 15,2023.The procedures and practices utilized in the Republic of Korea to audit such consolidated financial statements may differ from those generally

24、 accepted and applied in other countries.The accompanying consolidated financial statements as of and for the years ended December 31,2023 and 2022 have been translated into United States dollars solely for the convenience of the reader.We have audited the translation and,in our opinion,the consolid

25、ated financial statements expressed in Korean won have been translated into dollars on the basis set forth in Note 2.18 to the consolidated financial statements.Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements Management is responsible for th

26、e preparation and fair presentation of the consolidated financial statements in accordance with Korean IFRS,and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement,whether due to fraud

27、 or error.In preparing the consolidated financial statements,management is responsible for assessing the Groups 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 liquida

28、te the Group or to cease operations,or has no realistic alternative but to do so.Those charged with governance are responsible for overseeing the Groups financial reporting process.Auditors Responsibilities for the Audit of the Consolidated Financial Statements Our objectives are to obtain reasonabl

29、e assurance about whether the consolidated financial 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 a

30、ccordance with ISAs and KSAs will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if,individually or in aggregate,they could reasonably be expected to influence the economic decisions of users taken on the basis of these co

31、nsolidated financial statements.-3-As part of an audit in accordance with ISAs and 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 f

32、raud or error,design and perform audit procedures responsive to those risks,and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error,as fraud may

33、involve collusion,forgery,intentional omissions,misrepresentations,or 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 t

34、he effectiveness of the internal controls.Evaluate the appropriateness of accounting policies used in the preparation of the consolidated financial statements and reasonableness of accounting estimates and related disclosures made by management.Conclude on the appropriateness of managements use of t

35、he going concern basis of accounting and,based on the audit evidence obtained,whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Groups ability to continue as a going concern.If we conclude that a material uncertainty exists,we are required t

36、o draw attention in our auditors report to the related disclosures in the consolidated financial statements 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 m

37、ay cause the Group to cease to continue as a going concern.Evaluate the overall presentation,structure 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 ac

38、hieves fair presentation.Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements.We are responsible for the direction,supervision and performance of the gro

39、up audit.We remain solely responsible for our audit opinion.We communicate with those charged with governance 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

40、audit.We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence,and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence,and where appliable,related sa

41、feguards.From the matters communicated with those charged with governance,we determine those matters 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 unl

42、ess law or regulation precludes public disclosure about the matter or when,in extremely rare circumstances,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 co

43、mmunication.The engagement partner on the audit resulting in this independent auditors report is Han,Sang Hyun.Seoul,Korea February 19,2024 This report is effective as of February 19,2024.Certain subsequent events or circumstances which may occur between the audit report date and the time of reading

44、 this report,could have a material impact on the accompanying consolidated financial statements and notes thereto.Accordingly,the readers of the audit report should understand that the above audit report has not been updated to reflect the impact of such subsequent events or circumstances,if any.Sam

45、sung 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 accompanying notes.-4-(In millions of Korean won,in thousands of US dollars(Note 2.18)December 31,December 31,Dec

46、ember 31,December 31,Notes 2023 2022 2023 2022 KRW KRW USD USD Assets Current assets Cash and cash equivalents 4,28 69,080,893 49,680,710 52,890,158 38,036,865 Short-term financial instruments 4,28 22,690,924 65,102,886 17,372,771 49,844,491 Short-term financial assets at amortized cost 4,28 608,281

47、 414,610 465,716 317,436 Short-term financial assets at fair value through profit or loss 4,6,28 27,112 29,080 20,758 22,264 Trade receivables 4,5,7,28 36,647,393 35,721,563 28,058,213 27,349,373 Non-trade receivables 4,7,28 6,633,248 6,149,209 5,078,590 4,707,997 Prepaid expenses 3,366,130 2,867,82

48、3 2,577,198 2,195,681 Inventories 8 51,625,874 52,187,866 39,526,134 39,956,410 Other current assets 4,28 5,038,838 6,316,834 3,857,868 4,836,335 Assets held-for-sale 33 217,864-166,802-195,936,557 218,470,581 150,014,208 167,266,852 Non-current assets Financial assets at fair value through other co

49、mprehensive income 4,6,28 7,481,297 11,397,012 5,727,879 8,725,854 Financial assets at fair value through profit or loss 4,6,28 1,431,394 1,405,468 1,095,913 1,076,063 Investments in associates and joint ventures 9 11,767,444 10,893,869 9,009,466 8,340,634 Property,plant and equipment 10 187,256,262

50、 168,045,388 143,368,344 128,659,991 Intangible assets 11 22,741,862 20,217,754 17,411,771 15,479,247 Net defined benefit assets 14 4,905,219 5,851,972 3,755,565 4,480,424 Deferred income tax assets 25 10,211,797 5,101,318 7,818,422 3,905,704 Other non-current assets 4,7,28 14,174,148 7,041,145 10,8

51、52,104 5,390,887 259,969,423 229,953,926 199,039,464 176,058,804 Total assets 455,905,980 448,424,507 349,053,672 343,325,656 Samsung Electronics Co.,Ltd.and its subsidiaries CONSOLIDATED STATEMENTS OF FINANCIAL POSITION The above consolidated statements of financial position should be read in conju

52、nction with the accompanying notes.-5-(In millions of Korean won,in thousands of US dollars(Note 2.18)December 31,December 31,December 31,December 31,Notes 2023 2022 2023 2022 KRW KRW USD USD Liabilities and Equity Current liabilities Trade payables 4,28 11,319,824 10,644,686 8,666,757 8,149,853 Sho

53、rt-term borrowings 4,5,12,28 7,114,601 5,147,315 5,447,127 3,940,920 Other payables 4,28 15,324,119 17,592,366 11,732,551 13,469,180 Advances received 17 1,492,602 1,314,934 1,142,776 1,006,748 Withholdings 4,28 892,441 1,298,244 683,276 993,970 Accrued expenses 4,17,28 26,013,273 29,211,487 19,916,

54、449 22,365,087 Current income tax liabilities 3,358,715 4,250,397 2,571,521 3,254,216 Current portion of long-term liabilities 4,12,13,28 1,308,875 1,089,162 1,002,109 833,891 Provisions 15 6,524,876 5,844,907 4,995,618 4,475,015 Other current liabilities 4,17,28 2,308,472 1,951,354 1,767,427 1,494,

55、008 Liabilities held-for-sale 33 61,654-47,204-75,719,452 78,344,852 57,972,815 59,982,888 Non-current liabilities Debentures 4,13,28 537,618 536,093 411,615 410,447 Long-term borrowings 4,12,28 3,724,850 3,560,672 2,851,844 2,726,145 Long-term other payables 4,28 5,488,283 2,753,305 4,201,975 2,108

56、,003 Net defined benefit liabilities 14 456,557 268,370 349,552 205,471 Deferred income tax liabilities 25 620,549 5,111,332 475,109 3,913,371 Long-term provisions 15 2,878,450 1,928,518 2,203,817 1,476,524 Other non-current liabilities 4,17,28 2,802,356 1,171,761 2,145,558 897,132 16,508,663 15,330

57、,051 12,639,470 11,737,093 Total liabilities 92,228,115 93,674,903 70,612,285 71,719,981 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 accompanying notes.-6

58、-(In millions of Korean won,in thousands of US dollars(Note 2.18)December 31,December 31,December 31,December 31,Notes 2023 2022 2023 2022 KRW KRW USD USD Equity attributable to owners of the parent company Preference shares 18 119,467 119,467 91,467 91,467 Ordinary shares 18 778,047 778,047 595,693

59、 595,693 Share premium 4,403,893 4,403,893 3,371,737 3,371,737 Retained earnings 19 346,652,238 337,946,407 265,406,117 258,740,703 Other components of equity 20,33 1,280,130 1,938,328 980,102 1,484,036 353,233,775 345,186,142 270,445,116 264,283,636 Non-controlling interests 31 10,444,090 9,563,462

60、 7,996,271 7,322,039 Total equity 363,677,865 354,749,604 278,441,387 271,605,675 Total liabilities and equity 455,905,980 448,424,507 349,053,672 343,325,656 Samsung Electronics Co.,Ltd.and its subsidiaries CONSOLIDATED STATEMENTS OF PROFIT OR LOSS The above consolidated statements of profit or los

61、s should be read in conjunction with the accompanying notes.-7-(In millions of Korean won,in thousands of US dollars(Note 2.18)For the years ended December 31,Notes 2023 2022 2023 2022 KRW KRW USD USD Revenue 29 258,935,494 302,231,360 198,247,859 231,396,319 Cost of sales 21 180,388,580 190,041,770

62、 138,110,266 145,501,003 Gross profit 78,546,914 112,189,590 60,137,593 85,895,316 Selling and administrative expenses 21,22 71,979,938 68,812,960 55,109,743 52,685,021 Operating profit 29 6,566,976 43,376,630 5,027,850 33,210,295 Other non-operating income 23 1,180,448 1,962,071 903,782 1,502,213 O

63、ther non-operating expense 23 1,083,327 1,790,176 829,424 1,370,606 Share of net profit of associates and joint ventures 9 887,550 1,090,643 679,532 835,025 Financial income 24 16,100,148 20,828,995 12,326,699 15,947,229 Financial expense 24 12,645,530 19,027,689 9,681,752 14,568,101 Profit before i

64、ncome tax 11,006,265 46,440,474 8,426,687 35,556,055 Income tax benefit 25(4,480,835)(9,213,603)(3,430,646)(7,054,178)Profit for the year 15,487,100 55,654,077 11,857,333 42,610,233 Profit attributable to Owners of the parent company 14,473,401 54,730,018 11,081,218 41,902,749 Non-controlling intere

65、sts 1,013,699 924,059 776,115 707,484 Earnings per share(in Korean won,in US dollars)26 -Basic 2,131 8,057 1.63 6.17-Diluted 2,131 8,057 1.63 6.17 Samsung Electronics Co.,Ltd.and its subsidiaries CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME The above consolidated statements of comprehensive incom

66、e should be read in conjunction with the accompanying notes.-8-(In millions of Korean won,in thousands of US dollars(Note 2.18)For the years ended December 31,Notes 2023 2022 2023 2022 KRW KRW USD USD Profit for the year 15,487,100 55,654,077 11,857,333 42,610,233 Other comprehensive income Items th

67、at 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 1,481,091(1,969,498)1,133,962(1,507,900)Share of other comprehensive income(loss)of associates and joint ventures,net of tax 9,20 13,

68、150(6,318)10,068(4,837)Remeasurement of net defined benefit liabilities(assets),net of tax 14,20(828,298)1,153,679(634,167)883,287 Items that may be reclassified subsequently to profit or loss:Share of other comprehensive income(loss)of associates and joint ventures,net of tax 9,20 61,962(44,192)47,

69、440(33,835)Foreign currency translation differences for foreign operations,net of tax 20 2,621,479 4,884,886 2,007,074 3,739,998 Gain(loss)on valuation of cash flow hedge derivatives 20 927(12,893)710(9,871)Other comprehensive income for the year,net of tax 3,350,311 4,005,664 2,565,087 3,066,842 To

70、tal comprehensive income for the year 18,837,411 59,659,741 14,422,420 45,677,075 Comprehensive income attributable to:Owners of the parent company 17,845,661 58,745,107 13,663,110 44,976,807 Non-controlling interests 991,750 914,634 759,310 700,268 Samsung Electronics Co.,Ltd.and its subsidiaries C

71、ONSOLIDATED STATEMENTS OF CHANGES IN EQUITY The above consolidated statements of changes in equity should be read in conjunction with the accompanying notes.-9-(In millions of Korean won)For the year ended December 31,2022 Notes Preference shares Ordinary shares Share premium Retained earnings Other

72、 components of equity 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 55,654,077 Loss on valuation of

73、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)Foreign currency translation differences for forei

74、gn operations 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 -54

75、,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 transaction under common control -(176)(176)Changes in consolidated entities -124 124 Other -12,775 12,775(7,831)4,944 Total transactions with owners -(9,809,437)12,775(9,796,662)(

76、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 Samsung Electronics Co.,Ltd.and its subsidiaries CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY The above consolidated statements of changes in equity should be read in co

77、njunction with the accompanying notes.-10-(In thousands of US dollars(Note 2.18)For the year ended December 31,2022 Notes Preference shares Ordinary shares Share premium Retained earnings Other components of equity Equity attributable to owners of the parent company Non-controlling interests Total B

78、alance as of January 1,2022 91,467 595,693 3,371,737 224,378,130(1,629,615)226,807,412 6,632,035 233,439,447 Profit for the year -41,902,749-41,902,749 707,484 42,610,233 Loss on valuation of financial assets at fair value through other comprehensive income,net of tax 6,20-(29,812)(1,429,830)(1,459,

79、642)(48,258)(1,507,900)Share of other comprehensive income(loss)of associates and joint ventures,net of tax 9,20-(39,696)(39,696)1,024(38,672)Foreign currency translation differences for foreign operations,net of tax 20-3,723,953 3,723,953 16,045 3,739,998 Remeasurement of net defined benefit liabil

80、ities,net of tax 14,20-859,314 859,314 23,973 883,287 Loss on valuation of cash flow hedge derivatives 20-(9,871)(9,871)-(9,871)Total comprehensive income for the year -41,872,937 3,103,870 44,976,807 700,268 45,677,075 Dividends declared 19-(7,510,364)-(7,510,364)(4,229)(7,514,593)Capital transacti

81、on under common control -(135)(135)Changes in consolidated entities -95 95 Other -9,781 9,781(5,995)3,786 Total transactions with owners -(7,510,364)9,781(7,500,583)(10,264)(7,510,847)Balance as of December 31,2022 91,467 595,693 3,371,737 258,740,703 1,484,036 264,283,636 7,322,039 271,605,675 Sams

82、ung Electronics Co.,Ltd.and its subsidiaries CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY The above consolidated statements of changes in equity should be read in conjunction with the accompanying notes.-11-(In millions of Korean won)For the year ended December 31,2023 Notes Preference shares Ordina

83、ry shares Share premium Retained earnings Other components of equity Equity attributable to owners of the parent company Non-controlling interests Total Balance as of January 1,2023 119,467 778,047 4,403,893 337,946,407 1,938,328 345,186,142 9,563,462 354,749,604 Profit for the year -14,473,401-14,4

84、73,401 1,013,699 15,487,100 Gain(loss)on valuation of financial assets at fair value through other comprehensive income,net of tax 6,20-4,041,867(2,554,690)1,487,177(6,086)1,481,091 Share of other comprehensive income of associates and joint ventures,net of tax 9,20-70,157 70,157 4,955 75,112 Foreig

85、n currency translation differences for foreign operations,net of tax 20-2,611,915 2,611,915 9,564 2,621,479 Remeasurement of net defined benefit assets,net of tax 14,20-(797,916)(797,916)(30,382)(828,298)Gain on valuation of cash flow hedge derivatives 20-927 927-927 Total comprehensive income for t

86、he year -18,515,268(669,607)17,845,661 991,750 18,837,411 Dividends declared 19-(9,809,437)-(9,809,437)(101,984)(9,911,421)Capital transactions under common control -(9,368)(9,368)Changes in consolidated entities -230 230 Others -11,409 11,409-11,409 Total transactions with owners -(9,809,437)11,409

87、(9,798,028)(111,122)(9,909,150)Balance as of December 31,2023 119,467 778,047 4,403,893 346,652,238 1,280,130 353,233,775 10,444,090 363,677,865 Samsung Electronics Co.,Ltd.and its subsidiaries CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY The above consolidated statements of changes in equity should

88、 be read in conjunction with the accompanying notes.-12-(In thousands of US dollars(Note 2.18)For the year ended December 31,2023 Notes Preference shares Ordinary shares Share premium Retained earnings Other components of equity Equity attributable to owners of the parent company Non-controlling int

89、erests Total Balance as of January 1,2023 91,467 595,693 3,371,737 258,740,703 1,484,036 264,283,636 7,322,039 271,605,675 Profit for the year -11,081,218-11,081,218 776,115 11,857,333 Gain(loss)on valuation of financial assets at fair value through other comprehensive income,net of tax 6,20-3,094,5

90、60(1,955,938)1,138,622(4,660)1,133,962 Share of other comprehensive income of associates and joint ventures,net of tax 9,20-53,714 53,714 3,794 57,508 Foreign currency translation differences for foreign operations,net of tax 20-1,999,752 1,999,752 7,322 2,007,074 Remeasurement of net defined benefi

91、t assets,net of tax 14,20-(610,906)(610,906)(23,261)(634,167)Gain on valuation of cash flow hedge derivatives 20-710 710-710 Total comprehensive income for the year -14,175,778(512,668)13,663,110 759,310 14,422,420 Dividends declared 19-(7,510,364)-(7,510,364)(78,082)(7,588,446)Capital transactions

92、under common control -(7,172)(7,172)Changes in consolidated entities -176 176 Others -8,734 8,734-8,734 Total transactions with owners -(7,510,364)8,734(7,501,630)(85,078)(7,586,708)Balance as of December 31,2023 91,467 595,693 3,371,737 265,406,117 980,102 270,445,116 7,996,271 278,441,387 Samsung

93、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.-13-(In millions of Korean won,in thousands of US dollars(Note 2.18)For the years ended December 31,Notes 2023 2022

94、 2023 2022 KRW KRW USD USD Operating activities Profit for the year 15,487,100 55,654,077 11,857,333 42,610,233 Adjustments 27 36,519,534 33,073,439 27,960,321 25,321,899 Changes in assets and liabilities arising from operating activities 27(5,458,745)(16,998,948)(4,179,359)(13,014,844)Cash generate

95、d from operations 46,547,889 71,728,568 35,638,295 54,917,288 Interest received 4,786,010 2,136,795 3,664,296 1,635,987 Interest paid (844,691)(714,543)(646,718)(547,073)Dividends received 269,169 529,421 206,083 405,339 Income tax paid (6,620,950)(11,498,895)(5,069,175)(8,803,859)Net cash from oper

96、ating activities 44,137,427 62,181,346 33,792,781 47,607,682 Investing activities Net decrease in short-term financial instruments 39,421,565 15,214,321 30,182,192 11,648,486 Net decrease(increase)in short-term financial assets at amortized cost (195,616)3,050,104(149,769)2,335,240 Net decrease in s

97、hort-term financial assets at fair value through profit or loss 2,718 11,677 2,081 8,940 Disposal of long-term financial instruments 4,565,426 8,272,909 3,495,411 6,333,958 Acquisition of long-term financial instruments (5,307,770)(4,393,754)(4,063,769)(3,363,974)Disposal of financial assets at fair

98、 value through other comprehensive income 6,521,568 496,090 4,993,085 379,820 Acquisition of financial assets at fair value through other comprehensive income (124,488)(37,687)(95,311)(28,854)Disposal of financial assets at fair value through profit or loss 63,962 166,315 48,971 127,335 Acquisition

99、of financial assets at fair value through profit or loss (130,459)(158,244)(99,883)(121,156)Disposal of investment in associates and joint ventures 33,457 13,233 25,616 10,132 Acquisition of investment in associates and joint ventures (78,690)(907,958)(60,247)(695,157)Disposal of property,plant and

100、equipment 98,341 217,878 75,292 166,813 Acquisition of property,plant and equipment (57,611,292)(49,430,428)(44,108,728)(37,845,242)Disposal of intangible assets 11,744 23,462 8,992 17,963 Acquisition of intangible assets (2,922,875)(3,696,304)(2,237,830)(2,829,988)Cash outflow from business combina

101、tions (356,511)(31,383)(272,954)(24,028)Cash outflow from other investing activities (913,897)(413,035)(699,705)(316,230)Net cash used in investing activities (16,922,817)(31,602,804)(12,956,556)(24,195,942)Samsung Electronics Co.,Ltd.and its subsidiaries CONSOLIDATED STATEMENTS OF CASH FLOWS The ab

102、ove consolidated statements of cash flows should be read in conjunction with the accompanying notes.-14-(In millions of Korean won,in thousands of US dollars(Note 2.18)For the years ended December 31,Notes 2023 2022 2023 2022 KRW KRW USD USD Financing activities Net increase(decrease)in short-term b

103、orrowings 27 2,145,400(8,339,149)1,642,575(6,384,673)Increase in long-term borrowings 27 354,712 271,997 271,577 208,248 Repayment of debentures and long-term borrowings 27(1,219,579)(1,508,465)(933,742)(1,154,921)Dividends paid (9,864,474)(9,814,426)(7,552,502)(7,514,184)Net decrease in non-control

104、ling interests (9,118)(6)(6,981)(4)Net cash used in financing activities (8,593,059)(19,390,049)(6,579,073)(14,845,534)Reclassification to assets held-for-sale 33(14,153)-(10,836)-Effect of foreign exchange rate changes 792,785(539,198)606,977(412,822)Net increase in cash and cash equivalents 19,400

105、,183 10,649,295 14,853,293 8,153,384 Cash and cash equivalents Beginning of the year 49,680,710 39,031,415 38,036,865 29,883,483 End of the year 69,080,893 49,680,710 52,890,158 38,036,867 Samsung Electronics Co.,Ltd.and its subsidiaries NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -15-As of Decem

106、ber 31,2023 and 2022,and For the years ended December 31,2023 and 2022 1.General Information 1.1 Company Overview Samsung Electronics Co.,Ltd.(“SEC”)was incorporated under the laws of the Republic of Korea in 1969 and listed its shares on the Korea Stock Exchange in 1975.SEC and its subsidiaries(col

107、lectively referred to as the“Company”)operate four business divisions:DX,DS,SDC and Harman.DX(Device eXperience)division comprises businesses for digital televisions,refrigerators,smartphones and communication systems.DS(Device Solutions)division comprises businesses for memory,foundry,and system La

108、rge Scale Integration(LSI).SDC includes display panels products.Harman division includes connected car systems,audio and visual products,enterprise automation solutions and connected services.SEC is domiciled in the Republic of Korea and is located in Suwon,the Republic of Korea.These consolidated f

109、inancial 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 Samsung Electronics America.The Company als

110、o 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 31,2023 are as follows:Region Subsidiaries Business Percentage of ownership(%)(*)America Samsung E

111、lectronics 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)Manufacture of home appliances 100.0 Sams

112、ung Research America,Inc.(SRA)R&D 100.0 Samsung Next LLC(SNX)Management of overseas subsidiaries 100.0 Samsung Next Fund LLC(SNXF)Venture capital investment fund 100.0 NeuroLogica Corp.Manufacture and sale of medical equipment 100.0 Samsung HVAC America,LLC Sale of air conditioning products 100.0 Jo

113、yent,Inc.Cloud services 100.0 SmartThings,Inc.Sale of smart home electronics 100.0 TeleWorld Solutions,Inc.(TWS)Installation of network devices 100.0 Samsung Semiconductor,Inc.(SSI)Sale of semiconductor and display panels 100.0 Samsung Federal,Inc.(SFI)R&D 100.0 Samsung Austin Semiconductor LLC.(SAS

114、)Manufacture of semiconductors 100.0 Samsung Oak Holdings,Inc.(SHI)Management of overseas subsidiaries 100.0 SEMES America,Inc.Semiconductor equipment maintenance 100.0 Samsung Display America Holdings,Inc.(SDAH)Management of overseas subsidiaries 100.0 eMagin Corporation Development and manufacture

115、 of display panels 100.0 Samsung Electronics Canada,Inc.(SECA)Sale of electronic devices 100.0 AdGear Technologies Inc.Digital advertising platforms 100.0 Samsung Electronics Co.,Ltd.and its subsidiaries NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -16-(*)Ownership represents the Companys ownershi

116、p of the voting rights in each entity,including subsidiaries ownerships.Region Subsidiaries Business Percentage of ownership(%)(*)America Samsung Eletronica 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 1

117、00.0 Samsung Electronics Digital Appliance Mexico,SA de CV(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 Colomb

118、ia S.A.(SAMCOL)Sale of electronic devices 100.0 Samsung Electronics Argentina S.A.(SEASA)Marketing and related 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

119、.A.(SEVEN)Marketing and related 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.Conne

120、cted service provider 100.0 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 Indu

121、stria Eletronica e Participacoes 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

122、 of overseas subsidiaries 100.0 Harman Professional,Inc.Sale of audio products,R&D 100.0 Roon Labs,LLC.Sale of audio products 100.0 Beijing Integrated Circuit Industry International Fund,L.P Venture capital investment fund 61.4 China Materialia New Materials 2016 Limited Partnership Venture capital

123、investment fund 99.0 (*)Ownership represents the Companys ownership of the voting rights in each entity,including subsidiaries ownerships.Samsung Electronics Co.,Ltd.and its subsidiaries NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -17-Region Subsidiaries Business Percentage of ownership(%)(*)Euro

124、pe&CIS Samsung Electronics(UK)Ltd.(SEUK)Sale of electronic devices 100.0 Samsung 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 Samsu

125、ng Electronics Holding GmbH(SEHG)Management of overseas subsidiaries 100.0 Samsung 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.

126、0 Samsung Electronics Iberia,S.A.(SESA)Sale of electronic devices 100.0 Samsung 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.(SEL

127、S)Logistics 100.0 Samsung Electronics Benelux B.V.(SEBN)Sale of electronic devices 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(S

128、ESK)Manufacture of TV and monitors 100.0 Samsung Display Slovakia,s.r.o.,v likvidacii(SDSK)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 Sams

129、ung Electronics Romania LLC(SEROM)Sale of electronic devices 100.0 Samsung Electronics Austria 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 Samsu

130、ng Electronics Baltics SIA(SEB)Sale of electronic devices 100.0 Samsung Electronics Greece 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 Resear

131、ch Center ApS(SDRC)R&D 100.0 Samsung Cambridge Solution Centre Limited(SCSC)R&D 100.0 SAMSUNG 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)Manufactu

132、re of TV 100.0 Samsung Electronics Ukraine Company LLC(SEUC)Sale of electronic devices 100.0 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

133、Institute Rus LLC(SRR)R&D 100.0 Samsung Electronics Caucasus Co.Ltd(SECC)Marketing 100.0 Samsung Electronics Uzbekistan Ltd.(SEUZ)Marketing 100.0 (*)Ownership represents the Companys ownership of the voting rights in each entity,including subsidiaries ownerships.Samsung Electronics Co.,Ltd.and its s

134、ubsidiaries NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -18-Region Subsidiaries Business Percentage of ownership(%)(*)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 au

135、dio products 100.0 Harman 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 aud

136、io products 100.0 Harman Connected 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

137、.Connected service provider 100.0 Harman Consumer Nederland B.V.Sale of audio products 100.0 Harman Deutschland GmbH Sale of audio products 100.0 Harman France SNC Sale of audio products 100.0 Harman Holding GmbH&Co.KG Management company 100.0 Harman Hungary Financing Ltd.Financing company 100.0 Har

138、man 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 Management GmbH Management of overseas subsidiaries 100.0 Harman Professional

139、Kft Manufacture of audio products,R&D 100.0 Harman Professional Denmark ApS Sale of audio products,R&D 100.0 Red Bend Software SAS Software design 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 S

140、ale of audio products 100.0(*)Ownership represents the Companys ownership of the voting rights in each entity,including subsidiaries ownerships.Samsung Electronics Co.,Ltd.and its subsidiaries NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -19-Region Subsidiaries Business Percentage of ownership(%)*

141、Middle East&Africa Samsung Gulf Electronics Co.,Ltd.(SGE)Sale of electronic devices 100.0 Samsung Electronics Turkiye(SETK)Sale of electronic devices 100.0 Samsung Electronics Industry and Commerce Ltd.(SETK-P)Manufacture of electronic devices 100.0 Samsung Electronics Levant Co.,Ltd.(SELV)Sale of e

142、lectronic devices 100.0 Samsung Electronics Maghreb Arab(SEMAG)Sale of electronic devices 100.0 Samsung Electronics Egypt S.A.E(SEEG)Manufacture 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

143、Electronics Pakistan(Private)Ltd.(SEPAK)Marketing 100.0 Samsung Electronics Saudi Arabia Ltd.(SESAR)Sale of electronic devices 100.0 Samsung Semiconductor 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

144、Samsung Electronics South Africa Production(Pty)Ltd.(SSAP)Manufacture of TV and monitors 100.0 Samsung Electronics West Africa Ltd.(SEWA)Marketing 100.0 Samsung Electronics East Africa Ltd.(SEEA)Marketing 100.0 Global Symphony Technology Group Private Ltd.Management of overseas subsidiaries 100.0 Ha

145、rman Connected Services Morocco Connected service provider 100.0 Harman Industries Holdings Mauritius Ltd.Management of overseas subsidiaries 100.0 Red Bend Ltd.Manufacture of audio products 100.0 Asia(Excluding China)Samsung Asia Pte.Ltd.(SAPL)Management of overseas subsidiaries 100.0 Samsung Elect

146、ronics Singapore Pte.Ltd.(SESP)Sale of electronic devices 100.0 Samsung Malaysia Electronics(SME)Sdn.Bhd.(SME)Sale of electronic devices 100.0 Samsung Electronics Display(M)Sdn.Bhd.(SDMA)Manufacture of electronic devices 100.0 Samsung Electronics(M)Sdn.Bhd.(SEMA)Manufacture of home appliances 100.0

147、Samsung Vina Electronics Co.,Ltd.(SAVINA)Sale of electronic devices 100.0 Samsung Electronics Vietnam Co.,Ltd.(SEV)Manufacture of electronic devices 100.0 Samsung Electronics Vietnam THAINGUYEN Co.,Ltd.(SEVT)Manufacture of communication equipment 100.0 Samsung Electronics HCMC CE Complex Co.,Ltd.(SE

148、HC)Manufacture and sale of electronic devices 100.0 Samsung Display Vietnam Co.,Ltd.(SDV)Manufacture of display panels 100.0 DOWOOINSYS VINA COMPANY LIMITED Manufacture of display panel components 100.0 PT Samsung Electronics Indonesia(SEIN)Manufacture and sale of electronic devices 100.0 PT Samsung

149、 Telecommunications Indonesia(STIN)Sale of electronic devices and services 100.0 Thai Samsung Electronics Co.,Ltd.(TSE)Manufacture and sale of electronic devices 91.8 Laos Samsung Electronics Sole Co.,Ltd(LSE)Marketing 100.0 Samsung Electronics Philippines Corporation(SEPCO)Sale of electronic device

150、s 100.0 Samsung Electronics Australia Pty.Ltd.(SEAU)Sale of electronic devices 100.0 Samsung Electronics New Zealand Limited(SENZ)Sale of electronic devices 100.0 Samsung India Electronics Private Ltd.(SIEL)Manufacture and sale of electronic devices 100.0 Red Brick Lane Marketing Solutions Pvt.Ltd.M

151、arketing 100.0 Samsung Display Noida Private Limited(SDN)Manufacture of display panels 100.0 Samsung R&D Institute India-Bangalore Private Limited(SRI-Bangalore)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 Corporat

152、ion(SJC)Sale of semiconductor and display panels 100.0(*)Ownership represents the Companys ownership of the voting rights in each entity,including subsidiaries ownerships.Samsung Electronics Co.,Ltd.and its subsidiaries NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -20-Region Subsidiaries Business

153、Percentage of ownership(%)(*)Asia(Excluding China)Samsung R&D Institute Japan Co.,Ltd.(SRJ)R&D 100.0 Samsung Electronics Japan Co.,Ltd.(SEJ)Sale of electronic devices 100.0 Harman Connected Services Corp.India Pvt.Ltd.Connected service provider 100.0 Harman International(India)Private Limited Sale o

154、f audio products,R&D 100.0 Harman International Industries PTY Ltd.Management of overseas subsidiaries 100.0 Harman International Japan Co.,Ltd.Sale of audio products,R&D 100.0 Harman Singapore Pte.Ltd.Sale of audio products 100.0 China Samsung(CHINA)Investment Co.,Ltd.(SCIC)Sale of electronic devic

155、es 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 Tianjin Samsung Electronics Co.,Ltd.(TSEC)Manufacture of TV and monitors 91.2 Suzhou Samsung Electronics Co.,Ltd.(SSEC)Manufacture of home ap

156、pliances 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 Tianjin Samsung Telecom Technology Co.,Ltd.(TSTC)Manufacture of communication equipment 90.0 Beijing Samsung Telecom R&D Center(SRC-Beijing

157、)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 China-Shenzhen(SRC-Shenzhen)R&D 100.0 Shanghai Samsung Semiconductor Co.,Ltd.(SSS)Sale of semiconductor and display panels 100.0 Samsung(China

158、)Semiconductor Co.,Ltd.(SCS)Manufacture of semiconductors 100.0 Samsung SemiConductor Xian Co.,Ltd.(SSCX)Sale of semiconductor and display panels 100.0 Samsung Electronics Suzhou Semiconductor Co.,Ltd.(SESS)Toll processing of semiconductors 100.0 Tianjin Samsung LED Co.,Ltd.(TSLED)Manufacture of LED

159、 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 Co.,Ltd.(SDT)Manufacture of display panels 95.0 SEMES(XIAN)Co.,Ltd.Semiconductor/FPD equipment services 100.0 Samsung Semiconductor Investm

160、ent L.P.Venture capital investment fund 99.0 Harman(China)Technologies Co.,Ltd.Manufacture of audio products 100.0 Harman(Suzhou)Audio and Infotainment 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 Comm

161、ercial(Shanghai)Co.,Ltd.Sale of audio products 100.0 Harman Connected Services Solutions(Chengdu)Co.,Ltd.Connected service provider 100.0 Harman Holding 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.,Lt

162、d.Sale of audio products,R&D 100.0 (*)Ownership represents the Companys ownership of the voting rights in each entity,including subsidiaries ownerships.Samsung Electronics Co.,Ltd.and its subsidiaries NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -21-Region Subsidiaries Business Percentage of owner

163、ship(%)(*)Domestic Samsung Display Co.,Ltd.Manufacture and sale of display panels 84.8 SU Materials Manufacture of display panel components 50.0 STECO Co.,Ltd.Manufacture of semiconductor components 70.0 SEMES Co.,Ltd.Manufacture and sale of semiconductor/FPD 91.5 Samsung Electronics Service Co.,Ltd

164、.Repair services for electronic devices 99.3 Samsung Electronics Service Customer Satisfaction Co.,Ltd.Call center for repair services for electronic devices 100.0 Samsung Electronics Sales Co.,Ltd.Sale of electronic devices 100.0 Samsung Electronics Logitech Co.,Ltd.General logistics agency 100.0 S

165、amsung 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 supply of semiconductor process defect and quality control software 99.9 Dowooinsys Co.,Ltd.Manufacture of display panel components 69.0 Gf-Syst

166、em Co.,Ltd.Manufacture of display panel components 100.0 Harman International Korea Software development and supply 100.0 Samsung Venture Capital Union#21 Venture capital investment fund 99.0 Samsung Venture Capital Union#22 Venture capital investment fund 99.0 Samsung Venture Capital Union#26 Ventu

167、re capital investment fund 99.0 Samsung Venture Capital Union#28 Venture capital investment fund 99.0 Samsung Venture Capital Union#29 Venture capital investment fund 99.0 Samsung Venture Capital Union#32 Venture capital investment fund 99.0 Samsung Venture Capital Union#33 Venture capital investmen

168、t fund 99.0 Samsung Venture Capital Union#37 Venture capital investment fund 99.0 Samsung Venture Capital Union#40 Venture capital investment fund 99.0 Samsung Venture Capital Union#42 Venture capital investment fund 99.0 Samsung Venture Capital Union#43 Venture capital investment fund 99.0 Samsung

169、Venture Capital Union#45 Venture capital investment fund 99.0 Samsung Venture Capital Union#48 Venture capital investment fund 99.0 Samsung Venture Capital Union#52 Venture capital investment fund 99.0 Samsung Venture Capital Union#55 Venture capital investment fund 99.0 Samsung Venture Capital Unio

170、n#56 Venture capital investment fund 99.0 Samsung Venture Capital Union#57 Venture capital investment fund 99.0 Samsung Venture Capital Union#62 Venture capital investment fund 99.0 Growth Type Private Equity Trust Specialized in Semiconductors Investment in semiconductor industry 66.7 System LSI Mu

171、tual Benefit Private Equity Trust Investment in semiconductor industry 62.5 Semiconductor Ecosystem Private Equity Trust Investment in semiconductor industry 66.7(*)Ownership represents the Companys ownership of the voting rights in each entity,including subsidiaries ownerships.Samsung Electronics C

172、o.,Ltd.and its subsidiaries NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -22-1.3 Summary of Financial Data of Major Consolidated Subsidiaries Summary of financial data of major consolidated subsidiaries is as follows:(1)2023(In millions of Korean won)As of December 31,2023 For the year ended Decem

173、ber 31,2023 Major subsidiaries(*1)Assets Liabilities Sales Profit(loss)for the year Samsung Display Co.,Ltd.65,328,568 7,266,213 27,083,336 8,268,314 Samsung Electronics America,Inc.(SEA)41,926,899 15,322,780 39,551,809 477,338 Samsung Asia Pte.Ltd.(SAPL)22,234,942 282,614 -14,140,195 Harman and its

174、 subsidiaries(*2)17,956,557 6,009,675 14,367,766 896,384 Samsung Austin Semiconductor LLC.(SAS)16,714,945 7,791,914 4,109,744 301,778 Samsung(China)Semiconductor Co.,Ltd.(SCS)15,808,283 870,453 8,693,788 877,892 Samsung Semiconductor,Inc.(SSI)12,796,440 6,276,293 23,465,031 136,458 Samsung Electroni

175、cs Vietnam THAINGUYEN Co.,Ltd.(SEVT)12,554,481 3,593,527 30,639,349 2,240,480 Samsung(CHINA)Investment Co.,Ltd.(SCIC)10,222,557 8,797,991 3,148,858 189,887 Samsung Electronics Europe Holding Cooperatief U.A.(SEEH)9,660,481 4,585,806 -103,387 Samsung India Electronics Private Ltd.(SIEL)7,738,259 3,37

176、3,730 15,216,331 1,153,256 Samsung Display Vietnam Co.,Ltd.(SDV)7,383,485 1,570,459 24,200,246 1,143,824 Samsung Electronics Vietnam Co.,Ltd.(SEV)7,301,860 2,215,062 20,154,119 1,476,382 Samsung Eletronica da Amazonia Ltda.(SEDA)5,542,627 1,587,911 7,222,304 333,812 Shanghai Samsung Semiconductor Co

177、.,Ltd.(SSS)5,262,086 4,552,030 15,649,307 244,210 Samsung Electronics HCMC CE Complex Co.,Ltd.(SEHC)4,043,677 843,736 6,152,983 402,418 Thai Samsung Electronics Co.,Ltd.(TSE)3,039,379 640,512 4,213,492 150,510 Samsung Electronics(UK)Ltd.(SEUK)2,902,722 1,976,067 5,859,133 185,113 SEMES Co.,Ltd.2,187

178、,919 659,607 2,502,143 58,754 Samsung Electronics Mexico S.A.De C.V.(SEM)2,153,032 1,038,115 3,638,080 148,873 Samsung Electronics GmbH(SEG)2,097,706 2,033,152 6,374,670 (3,157)Samsung International,Inc.(SII)1,879,442 383,763 6,553,383 141,226 Samsung Electronics Taiwan Co.,Ltd.(SET)1,797,627 1,139,

179、056 4,108,479 56,467 Samsung Electronics Benelux B.V.(SEBN)1,794,552 639,120 2,833,717 140,313 Samsung Electronics Europe Logistics B.V.(SELS)1,639,004 1,443,005 15,462,852 4,984 (*1)Summary of condensed financial information is based on separate financial statements of each subsidiary.(*2)Consolida

180、ted financial data of an intermediate company,Harman International Industries,Inc.and its subsidiaries.Samsung Electronics Co.,Ltd.and its subsidiaries NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -23-(2)2022(In millions of Korean won)As of December 31,2022 For the year ended December 31,2022 Majo

181、r subsidiaries(*1)Assets Liabilities Sales Profit(loss)for the year Samsung Display Co.,Ltd.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 subsidiaries(*

182、2)17,102,324 6,380,456 13,211,151 631,019 Samsung(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 Samsu

183、ng Semiconductor,Inc.(SSI)12,199,102 5,930,369 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

184、208,879 Samsung Display Vietnam Co.,Ltd.(SDV)7,471,680 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,

185、508 1,342,517 7,485,104 (38,490)Samsung Electronics 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

186、)2,377,730 597,044 2,834,008 25,411 Samsung Electronics 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

187、,558 602,323 2,889,238 185,762 Samsung Electronics 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

188、financial data of an intermediate company,Harman International Industries,Inc.and its subsidiaries.Samsung Electronics Co.,Ltd.and its subsidiaries NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -24-1.4 Changes in Consolidation Scope Changes in consolidation scope during the year ended December 31,2

189、023 are as follows:Change Area Subsidiary Description Included Domestic Samsung Venture Capital Union#62 Establishment Semiconductor Ecosystem Private Equity Trust Establishment America Samsung Federal,Inc.(SFI)Establishment Samsung Display America Holdings,Inc.(SDAH)Establishment eMagin Corporation

190、 Acquisition Roon Labs,LLC.Acquisition Excluded America Dacor Holdings,Inc.Merger Dacor,Inc.Merger Europe&CIS Red Bend Software Ltd.Liquidation Harman Finance International GP S.a.r.l Liquidation Harman Finance International,SCA Liquidation Harman Automotive UK Limited Liquidation 2.Material Account

191、ing Policies The followings are material accounting policies applied on financial statements.Unless mentioned otherwise,these policies are consistent throughout the accounting periods denoted.2.1 Basis of Presentation The Companys financial statements have been written in accordance with the Korean

192、International Financial Reporting Standards(“Korean IFRS”).The Korean IFRS refers to standards selected by the Republic of Korea among accounting standards and interpretations published by International Accounting Standards Board(IASB).The Korean IFRS permits application of material accounting estim

193、ates on the financial statements and requires managements judgements in applying accounting policies.The areas involving a higher degree of judgment or complexity,or areas where assumptions and estimates are material to the financial statements are disclosed in Note 3.Samsung Electronics Co.,Ltd.and

194、 its subsidiaries NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -25-2.2 Changes in Accounting Policies and Disclosures (A)New and amended standards adopted by the Company The Company applied the following amended standards for the first time for the annual reporting period commencing on January 1,2

195、023:Amendments to Korean IFRS 1001,Presentation of Financial Statements The amendments replace the term significant accounting policy information with material accounting policy and clarify its meaning.These amendments do not result in a change in accounting policy but affects the accounting policy

196、information disclosed in the consolidated financial statements.In addition,IFRS Practice Statement 2,Making Materiality Judgments has been amended to provide guidance on the application of the concept of materiality.The Company has adopted the amendments to the standard and discloses the Companys ma

197、terial accounting policies in Note 2.Amendments to Korean IFRS 1008,Accounting Policies,Changes in Accounting Estimates and Errors The amendments clarify how accounting estimates are defined and distinguished from changes in accounting policies.The adoption of the amendments does not have a signific

198、ant impact on the Companys consolidated financial statements.Amendments to Korean IFRS 1012,Income Tax The amendments add to a condition to the initial recognition exemption that the initial recognition exemption does not apply to transactions in which equal amounts of deductible and taxable tempora

199、ry differences arise on initial recognition.The adoption of the amendments does not have a significant impact on the Companys consolidated financial statements.Amendments to Korean IFRS 1012,Income Tax The amendments clarify that Korean IFRS 1012,Income Taxes,applies to income taxes arising from tax

200、 law enacted or substantively enacted to implement the Pillar Two Model Rules issued by the Organization for Economic Co-operation and Development(OECD).However,a temporary exemption from the requirements of Korean IFRS 1012,Income Taxes,has been adopted to allow the Company to neither recognize nor

201、 disclose deferred tax assets and liabilities relating to Pillar Two income taxes.(B)New and amended standards not yet adopted by the Company The amended accounting standards that have been issued but not yet effective for the annual reporting period commencing on January 1,2023 which have not been

202、early adopted by the Company are as follows:Amendments to Korean IFRS 1001,Presentation of Financial Statements The amendments to Korean-IFRS 1001 clarify that the classification of liabilities as current or non-current should be based on rights that are in existence at the end of the reporting peri

203、od and that the classification is unaffected by managements intentions or expectations about whether an entity will exercise its right to defer settlement of a liability.The amendments also introduce a definition of settlement to make clear that settlement includes the transfer to the counterparty o

204、f the entitys own equity instruments,however,it would be excluded if an option to settle the liability by the transfer of the entitys own equity instruments is recognized separately from the liability as an equity component of a compound financial instrument.The amendments are applied for annual per

205、iods beginning on or after January 1,2024,with early application permitted.Samsung Electronics Co.,Ltd.and its subsidiaries NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -26-Amendments to Korean IFRS 1116,Leases The amendments add requirements for the subsequent measurement of sale-and-leaseback tr

206、ansactions that are accounted for as sales in accordance with Korean IFRS 1115,Revenue from Contracts with Customers.The amendments require the seller-lessee to calculate the lease payments or revised lease payments in a way that does not result in the seller-lessee recognizing any gain or loss for

207、the rights of use that the seller-lessee continues to retain after the lease commences.The amendments are effective for annual reporting periods beginning on or after January 1,2024,with early application permitted.Amendments to Korean IFRS 1007,Statement of Cash Flows,and 1107,Financial Instruments

208、:Presentation The amendments add to the disclosure objectives in Korean IFRS 1007,Statement of Cash Flows,that information about supplier financing arrangements should be disclosed to enable users of financial statements to assess the impact of those arrangements on the Companys liabilities and cash

209、 flows.The amendments also amend Korean IFRS 1107,Financial Instruments:Presentation,to add supplier financing arrangements as an example of a requirement to disclose information about an entitys exposure to concentrations of liquidity risk.The amendments are effective for annual reporting periods b

210、eginning on or after January 1,2024,and include specific transitional provisions for the first annual period in which they are applied.Early application is permitted.2.3 Consolidation The Company prepares its consolidated financial statements in accordance with Korean IFRS 1110,Consolidated Financia

211、l Statements.(A)Non-controlling interests Each component of profit or loss and other comprehensive income is attributable to the owners of the parent and the non-controlling interests,and total comprehensive income is attributable to the owners of the parent and the non-controlling interests,even if

212、 the non-controlling interests have a negative balance.(B)Elimination of intercompany transactions Intercompany transactions,balances,income and expenses and unrealized gains and losses(excluding foreign exchange gains and losses)are eliminated on consolidation.The Companys share of unrealized losse

213、s on transactions with associates accounted for using the equity method are eliminated in the same way as unrealized gains unless there is evidence of impairment of the asset.2.4 Functional and Presentation Currency (A)Functional and presentation currency The Company measures the items included in t

214、he financial statements of each component using the currency of the primary economic environment in which each it operates(“functional currency”).The functional currency of the parent company is Korean won(KRW)and the consolidated financial statements are presented in Korean won(KRW).Samsung Electro

215、nics Co.,Ltd.and its subsidiaries NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -27-(B)Translation into the presentation currency The results and financial position of all entities subjected to consolidation that have a functional currency different from the parents presentation currency are transl

216、ated into the parents presentation currency as follows:(1)Assets and liabilities are translated at the closing rate at the end of the reporting date.(2)Income and expenses in the statement of profit or loss are translated at average exchange rates for the period.However,if this average rate is not a

217、 reasonable approximation of the cumulative effect of the exchange rates at the dates of the transactions,the transactions are translated at the exchange rates at the dates of transactions.(3)Exchange differences arising on translation in(1)and(2)above are recognized in other comprehensive income.2.

218、5 Cash and Cash Equivalents Cash and cash equivalents include cash on hand,deposits held at call with banks,and highly liquid short-term investment assets that are readily convertible to known amounts of cash at the date of acquisition and which are subject to an insignificant risk of changes in val

219、ue.2.6 Financial Assets (A)Classification Financial instruments are classified based on the business model for managing the financial assets and the contractual cash flow characteristics of the financial asset.The Company considers the contractual terms of the relevant financial instrument and asses

220、ses whether the contractual cash flows consist solely of payments of principal and interest on the principal amount outstanding.(B)Impairment The Company assesses the expected credit losses of debt instruments carried at amortized cost or fair value through other comprehensive income on a forward-lo

221、oking basis.However,the Company applies the simplified approach for trade receivables,which requires expected credit losses to be recognized over the life of the receivable from initial recognition.2.7 Trade Receivables Trade receivables are recognized at initial transaction price,unless they contai

222、n a significant financing component,and are subsequently measured at amortized cost using the effective interest method less any allowance for impairment.2.8 Inventories The Company determines the unit cost of inventories,except for materials in transit,using the average cost method.The cost of fini

223、shed goods and work in progress comprises raw materials,direct labor,other direct costs and related production overheads based on normal operating capacity,excluding the cost of idle production equipment and scrapping costs.The Company measures inventories at the lower of cost and net realizable val

224、ue.Net realizable value is the estimated selling price in the ordinary course of business less the applicable variable selling expenses,and reflects the decrease in selling price,the increase in costs to completion,or decrease in value due to excess or obsolete inventory.Samsung Electronics Co.,Ltd.

225、and its subsidiaries NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -28-2.9 Property,Plant and Equipment Depreciation of property,plant and equipment begins when assets are considered by management to be available for their intended use,such as in the production of products.The Companys property,pla

226、nt and equipment is depreciated on a straight-line method over the estimated useful lives of the assets,less any residual values.Land is not depreciated.Costs that are directly attributable to the acquisition,construction of a qualifying asset,including capitalized interest costs,are depreciated ove

227、r the estimated useful lives.The estimated useful lives of property,plant and equipment used by the Company for each asset category are as follows:Estimated useful lives Buildings and structures 15,30 years Machinery and equipment 5 years Other 5 years 2.10 Intangible Assets Goodwill represents the

228、excess of the cost of an acquisition over the fair value of the identifiable net assets of subsidiaries,associates and joint ventures,businesses and other entities acquired at the date of acquisition and is recognized as an intangible assets in respect of acquisitions of businesses of subsidiaries a

229、nd as an investment in associates and joint ventures in respect of acquisitions of interests in associates and joint ventures.Intangible assets,other than goodwill,are initially recognized at their historical cost and are subsequently stated at cost less accumulated amortization and accumulated impa

230、irment losses.Membership rights are regarded as intangible assets with indefinite useful life and not amortized as there are no foreseeable restrictions on their use.However,whenever there is an indication of impairment,such as a decline in the market value of membership rights,a reasonable estimate

231、 is made to reflect the impairment.Intangible assets with finite useful lives,such as patents,trademarks and other intangible assets,are amortized on a straight-line method over their estimated useful lives.The estimated useful lives of intangible assets used by the Company are as follows:Estimated

232、useful lives Patents,trademarks and other intangible assets 3-25 years 2.11 Financial Liabilities The Company classifies financial liabilities into financial liabilities at fair value through profit or loss and other financial liabilities and recognizes them on the consolidated statement of financia

233、l position when the Company becomes a party to a contract,depending on the substance of the contractual terms.Samsung Electronics Co.,Ltd.and its subsidiaries NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -29-2.12 Employee Benefits The Company operates various types of post-employment benefit plans

234、,including defined benefit plans and defined contribution plans.The defined benefit liability(asset)recognized in the consolidated statement of financial position in respect of defined benefit plans is the present value of the defined benefit obligation at the reporting date less the fair value of p

235、lan assets,less any deficit(excess of plan assets over the asset recognition threshold)and is calculated annually by an independent actuary using the projected unit credit method.2.13 Income Tax Expense The Company applies the exemption to the recognition and disclosure of deferred tax assets and li

236、abilities related to the Pillar Two Model Rules of OECD.Furthermore,as the relevant legislation will be effective from January 1,2024,the Company has not recognized any current tax expense related to Pillar Two in the fiscal year ended December 31,2023.The Company recognizes deferred tax liabilities

237、 for taxable temporary differences associated with investments in subsidiaries,associates and joint ventures,except where the Company is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

238、Deferred tax assets are recognized for deductible temporary differences arising on these assets only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilized.2.

239、14 Derivative Instruments The Company recognizes its rights and obligations under derivative contracts as assets and liabilities at fair value and records gains and losses on these contracts in the statement of profit or loss.However,effective portion of changes in the fair value of cash flow hedges

240、 are deferred in equity.The Company applies cash flow hedge accounting for hedges of risks including changes in the price of inventories.The effective portion of the change in fair value of a derivative that is designated as a cash flow hedge is recognized in other comprehensive income,while the ine

241、ffective portion is recognized in financial income or financial expense.Samsung Electronics Co.,Ltd.and its subsidiaries NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -30-2.15 Revenue Recognition The Companys revenue primarily represents the fair value of the consideration received or receivable fo

242、r the sale of goods in the ordinary course of the Companys activities.Revenue is net of value-added tax,returns,sales incentives,discounts and others.(A)Identification of performance obligations The Company is required to transfer control of goods and services under contracts with customers.For the

243、export of products and goods under Incoterms Group C terms(such as CIF),the Company recognize the transportation services(including insurance)provided after the control of the goods has passed to the customer as a separate performance obligation.(B)Performance obligations satisfied at a point of tim

244、e The Companys revenue is primarily derived from the sale of goods and is recognized when control of the goods passes to the customer.(C)Performance obligations satisfied over time The Company recognizes revenue over time for sales of software,transportation services,installation services,and etc.wh

245、ere the customer has direct control over the outcome during the performance of the service.(D)Variable consideration The Company provides a variety of sales promotions including incentives,promotion and sales allowances.Where these sales promotion policies result in variability in the consideration

246、promised to customers,the Company estimates the variable consideration using either the expected value or the most likely amount whichever method the Company expects to better predict the amount of consideration to which it will be entitled.The estimate of variable consideration is included in trans

247、action price only to the extent that it is highly probable that a significant portion of the cumulative revenue already recognized will not be reversed.Revenue and contract liabilities are recognized when the related revenue is earned or when the decision to pay the variable consideration to the cus

248、tomer is made,whichever is later.The Company recognizes contract liabilities(refund liabilities)after the sale of products to customers by estimating the return rate using the expected value methods based on historical experience.When the customer exercises its right to return the product,the Compan

249、y recognizes the asset as a refund asset and adjusts cost of sales by the amount of the right to collect the product from the customer.The right to collect the product is measured by deducting the cost of collecting the product from the historical carrying amount of the product.Samsung Electronics C

250、o.,Ltd.and its subsidiaries NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -31-2.16 Leases (A)Lessee accounting The Company applies the practical expedient of Korean IFRS 1116,Leases,and does not separate the non-lease elements from the lease elements and accounts for the non-lease elements relating

251、 to each lease element as a single lease element.At the commencement date of a lease,the Company recognizes a right-of-use asset(the lease asset)representing the right to use the underlying asset and a lease liability representing the obligation to make lease payments.The right-of-use asset is prese

252、nted in the consolidated statement of financial position as property,plant and equipment and the lease liability is presented as current portion of long-term liabilities or long-term borrowings.Lease liabilities are measured at the inception of the lease at the present value of the lease payments ou

253、tstanding at that date,discounted at the Companys incremental borrowing rate.For short-term leases(lease terms of 12 months or less at the inception of the lease)and low value assets(underlying assets of USD 5,000 or less),lease payments are recognized as expenses on a straight-line basis over the l

254、ease term applying the simplified practical expedient.(B)Lessor accounting The Company,as a lessor,determines whether a lease is a finance or an operating lease at the inception of the lease.Leases that transfer substantially all the risk and rewards of ownership of the leased assets are classified

255、as finance leases and all leases other than finance leases are classified as operating leases.Lease income from operating leases is recognized on a straight-line basis over the lease term,while initial direct costs incurred during the negotiation and contracting phase of an operating lease are added

256、 to the carrying amount of the leased asset and expensed over the lease term against the lease income.2.17 Government Grants Government grants relating to revenues are deferred and recognized in the consolidated statement of profit or loss in the same period in which they are matched with revenues o

257、r expenses related to the purpose for which the grant was made.Government grants received related to the acquisition of assets are treated as deferred income and credited to the consolidated statement of profit or loss over the useful lives of the related assets.2.18 Convenience Translation into Uni

258、ted States Dollar Amounts The US dollar amounts provided in the consolidated financial statements represent supplementary information solely for the convenience of the reader.All Korean won amounts are expressed in US dollar at the rate of W 1,306.1 to$1,the average exchange rate for the year ended

259、December 31,2023.Such presentation is not in accordance with generally accepted accounting principles and should not be construed as a representation that the Korean won amounts shown could be readily converted,realized or settled in US dollars at this or any other rate.2.19 Approval of the Consolid

260、ated Financial Statements The consolidated financial statements of the Company were approved by the Board of Directors on January 31,2024,and may be approved as amended at the Annual General Shareholders Meetings.Samsung Electronics Co.,Ltd.and its subsidiaries NOTES TO THE CONSOLIDATED FINANCIAL ST

261、ATEMENTS -32-3.Material Accounting Estimates and Assumptions The Company makes estimates and assumptions concerning the future.Estimates and assumptions are continuously evaluated and are based on historical experience and future events that are reasonably foreseeable under the circumstances.These e

262、stimates may differ from actual results.The estimates and assumptions that have the most significant risk of causing a material adjustment to the carrying amounts of assets and liabilities in the next financial year are as follows.(A)Revenue recognition The Company recognizes a liability for a produ

263、ct return and a right to the returned goods that are expected to be returned by customers following the sale of products to customers.At the point of sale,the Company estimates the return using the expected value method based on accumulated experience at the portfolio level and the Companys revenue

264、is affected by changes in the expected return.Revenue from the sale of goods recognized at the point of transfer of control is the contractual consideration less consideration paid to customers in relation to certain sales promotion activities.Based on the historical experience and terms of contract

265、s,the Company makes reasonable estimates of the sales deductions which affect the Companys revenue (B)Provision for warranty The Company provides warranties for products sold.At the end of each reporting period,the Company recognizes a provision for warranties based on its best estimate of the amoun

266、t it believes is necessary to provide for future and current warranty obligations.These best estimates are based on historical experience.(C)Fair value of financial instruments The fair value of financial instruments that are not traded in an active market is determined by using various valuation te

267、chniques and assumptions based on market conditions prevailing at the end of each reporting period.(D)Impairment of financial assets In measuring the allowance for impairment losses on financial assets,the Company make assumptions about the risk of default and expected credit rates.In making these a

268、ssumptions and selecting the inputs for the impairment calculations,the Company makes judgment based on past experience and current and forecast of future economic conditions at the reporting date.(E)Lease In determining the lease term,the Company considers all relevant facts and circumstances that

269、provide an economic incentive to exercise a renewal option,or not to exercise a termination option.The period covered by the renewal option(or the period covered by the termination option)is included in the lease term only if it is reasonably certain that the lessee will exercise(or not exercise)the

270、 renewal option.The lease term is reassessed when the option is actually exercised(or not exercised)or when the Company becomes committed to exercise(or not exercise)the option.The Company only changes its assessment of whether it is reasonably certain the renewal option will be exercised(or not)if

271、there is a significant event or change in circumstances within the lessees control that affects the calculation of the lease term.Samsung Electronics Co.,Ltd.and its subsidiaries NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -33-(F)Net defined benefit liabilities(assets)The net defined benefit liab

272、ilities(assets)are dependent on a number of factors which are determined using actuarial methods based on a number of assumptions.Among the assumptions used to determine the net defined benefit liabilities(assets)is the discount rate,and changes in these assumptions will affect the carrying amount o

273、f the net defined benefit liability(asset).At the end of each year the Company determines an appropriate discount rate,taking into account the interest rates on high-quality corporate bonds,which represents the interest rate that should be used to determine the present value of the estimated future

274、cash outflows expected to be required to settle the net defined benefit liability(asset).Some key assumptions relating to the net defined benefit liability(asset)are based on current market conditions.(G)Impairment of goodwill and intangible assets that have indefinite useful life The Company tests

275、goodwill and intangible assets with indefinite useful life for impairment annually.The recoverable amount of a cash-generating unit or asset,including goodwill,is determined based on a value-in-use calculation.These calculations are based on estimates.(H)Income taxes Income taxes on the Companys tax

276、able income are calculated by applying tax laws and decisions of tax authorities in various countries,and,therefore,there is uncertainty in determining the final tax effect.The Company has recognized current and deferred tax based on its best estimate of the tax consequences expected to be payable i

277、n future periods as a result of the Companys operating activities up to the reporting date.However,the actual future final tax liability may not be consistent with the related assets and liabilities recognized,and such differences may affect the current and deferred tax assets and liabilities when t

278、he final tax effect is determined.The Company is subject to additional income taxes,calculated in accordance with the method prescribed by tax laws,when a certain amount is not used for investment,wage growth,etcetera,in a given period.The related tax effect is reflected in the measurement of curren

279、t and deferred income taxes for the period,and the amount of income tax payable by the Company depends on the level of investment,wage growth,etcetera in each year,resulting in uncertainty in determining the final tax effects.The Company assesses uncertainty over its tax positions and,if the Company

280、 concludes that it is not probably that the tax authorities will accept a uncertain tax position,the effect of the uncertainty is recognized in the consolidated financial statements for each uncertain tax position using the method that is expected to provide a better estimate of the resolution of th

281、e uncertainty,which is more likely of the following methods.(1)Most likely amount:the single most probable amount within a range of possible outcomes.(2)Expected value:the sum of the probability-weighted amounts in a range of possible outcomes.Samsung Electronics Co.,Ltd.and its subsidiaries NOTES T

282、O THE CONSOLIDATED FINANCIAL STATEMENTS -34-4.Financial Instruments by Category (A)Categorizations of financial assets and liabilities as of December 31,2023 and 2022 are as follows:(1)As of December 31,2023 (In millions of Korean won)Financial assets measured at amortized cost Financial assets meas

283、ured at fair value through other comprehensive income Financial assets measured at fair value through profit or loss Other financial assets(*)Total Financial assets Cash and cash equivalents 69,080,893-69,080,893 Short-term financial instruments 22,690,924-22,690,924 Short-term financial assets at a

284、mortized cost 608,281-608,281 Short-term financial assets at fair value through profit or loss-27,112-27,112 Trade receivables 36,647,393-36,647,393 Financial assets at fair value through other comprehensive income -7,481,297-7,481,297 Financial assets at fair value through profit or loss -1,431,394

285、-1,431,394 Other 14,294,254-475,244 70,777 14,840,275 Total 143,321,745 7,481,297 1,933,750 70,777 152,807,569 (*)Other financial assets include derivatives designated as hedging instruments.(In millions of Korean won)Financial liabilities measured at amortized cost Financial liabilities measured at

286、 fair value through profit or loss Other financial liabilities(*)Total Financial liabilities Trade payables 11,319,824-11,319,824 Short-term borrowings 504,552-6,610,049 7,114,601 Other payables 13,996,395-13,996,395 Current portion of long-term liabilities 310,436-998,439 1,308,875 Debentures 537,6

287、18-537,618 Long-term borrowings-3,724,850 3,724,850 Long-term other payables 4,907,875-4,907,875 Other 11,330,545 49,904 33,559 11,414,008 Total 42,907,245 49,904 11,366,897 54,324,046 (*)Other financial liabilities include lease liabilities,which are not subject to categorization,collateralized bor

288、rowings and derivatives designated as hedging instruments.Samsung Electronics Co.,Ltd.and its subsidiaries NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -35-(2)As of December 31,2022 (In millions of Korean won)Financial assets measured at amortized cost Financial assets measured at fair value throu

289、gh other comprehensive income Financial assets measured at fair value through profit or loss Other financial assets(*)Total Financial assets Cash and cash equivalents 49,680,710-49,680,710 Short-term financial instruments 65,102,886-65,102,886 Short-term financial assets at amortized cost 414,610-41

290、4,610 Short-term financial assets at fair value through profit or loss-29,080-29,080 Trade receivables 35,721,563-35,721,563 Financial assets at fair value through other comprehensive income -11,397,012-11,397,012 Financial assets at fair value through profit or loss -1,405,468-1,405,468 Other 9,945

291、,209-334,263 61,404 10,340,876 Total 160,864,978 11,397,012 1,768,811 61,404 174,092,205 (*)Other financial assets include derivatives designated as hedging instruments.(In millions of Korean won)Financial liabilities measured at amortized cost Financial liabilities measured at fair value through pr

292、ofit or loss Other financial liabilities(*)Total Financial liabilities Trade payables 10,644,686 -10,644,686 Short-term borrowings 1,577,958 -3,569,357 5,147,315 Other payables 16,328,237 -16,328,237 Current portion of long-term liabilities 215,143 -874,019 1,089,162 Debentures 536,093 -536,093 Long

293、-term borrowings 33,846 -3,526,826 3,560,672 Long-term other payables 2,289,236 -2,289,236 Other 12,047,761 334,415 27,353 12,409,529 Total 43,672,960 334,415 7,997,555 52,004,930 (*)Other financial liabilities include lease liabilities,which are not subject to categorization,collateralized borrowin

294、gs and derivatives designated as hedging instruments.Samsung Electronics Co.,Ltd.and its subsidiaries NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -36-(B)Net gains or losses on each category of financial assets and liabilities for the years ended December 31,2023 and 2022 are as follows:(1)2023 (I

295、n millions of Korean won)Financial assets measured at amortized cost Financial assets measured at fair value through other comprehensive income Financial assets measured at fair value through profit or loss Other financial assets(*)Total Financial assets Gain on valuation (other comprehensive income

296、)-1,481,091 -58,290 1,539,381 Gain(loss)on valuation/disposal(profit or loss)(64,758)-213,308 436 148,986 Reclassification from other comprehensive income to profit or loss-1,169 1,169 Interest income 4,357,792 -230 -4,358,022 Foreign exchange differences (profit or loss)(98,522)-(98,522)Dividend in

297、come-161,509 2,694 -164,203 Impairment/reversal (profit or loss)(74,594)-(74,594)(*)Other financial assets include derivatives designated as hedging instruments.(In millions of Korean won)Financial liabilities measured at amortized cost Financial liabilities measured at fair value through profit or

298、loss Other financial liabilities(*)Total Financial liabilities Loss on valuation (other comprehensive income)-(16,809)(16,809)Loss on valuation/disposal (profit or loss)-(116,167)(126)(116,293)Reclassification from other comprehensive income to profit or loss-(337)(337)Interest expense(510,865)-(419

299、,388)(930,253)Foreign exchange differences (profit or loss)162,844 -61,920 224,764 (*)Other financial liabilities include lease liabilities,which are not subject to categorization,collateralized borrowings and derivatives designated as hedging instruments.Samsung Electronics Co.,Ltd.and its subsidia

300、ries NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -37-(2)2022 (In millions of Korean won)Financial assets measured at amortized cost Financial assets measured at fair value through other comprehensive income Financial assets measured at fair value through profit or loss Other financial assets(*)To

301、tal Financial assets Gain(loss)on valuation (other comprehensive income)-(1,969,498)-53,180 (1,916,318)Gain(loss)on valuation/disposal(profit or loss)(36,550)-83,332 474 47,256 Reclassification from other comprehensive income to profit or loss-310 310 Interest income 2,720,213 -266 -2,720,479 Foreig

302、n exchange differences (profit or loss)(822,011)-(822,011)Dividend income-413,467 1,134 -414,601 Impairment/reversal (profit or loss)(19,124)-(19,124)(*)Other financial assets include derivatives designated as hedging instruments.(In millions of Korean won)Financial liabilities measured at amortized

303、 cost Financial liabilities measured at fair value through profit or loss Other financial liabilities(*)Total Financial liabilities Loss on valuation (other comprehensive loss)-(10,621)(10,621)Loss on valuation/disposal (profit or loss)-(91,056)(45)(91,101)Reclassification from other comprehensive i

304、ncome to profit or loss-59 59 Interest expense(322,529)-(440,486)(763,015)Foreign exchange differences (profit or loss)574,771 -155,952 730,723 (*)Other financial liabilities include lease liabilities,which are not subject to categorization,collateralized borrowings and derivatives designated as hed

305、ging instruments Samsung Electronics Co.,Ltd.and its subsidiaries NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -38-5.Transfer of Financial Assets The Company discounted trade receivables through factoring arrangements with banks during the years ended December 31,2023 and 2022.Trade receivables pr

306、ovided as collaterals in factoring transactions have not been derecognized as they do not meet the requirements for derecognition of financial assets as the Company retains substantially all the risks and rewards,including the recourse in the event of default by the debtor.Financial liabilities reco

307、gnized in these transactions are classified as short-term borrowings on the consolidated statement of financial position(refer to Note 12).The carrying amount of the discounted trade receivables and the associated liabilities as of December 31,2023 and 2022 are as follows:(In millions of Korean won)

308、December 31,2023 December 31,2022 Carrying amount of the discounted trade receivables(*)6,610,049 3,569,357 Carrying amount of the associated liabilities 6,610,049 3,569,357 (*)Discounted trade receivables includes trade receivables between consolidated entities.6.Financial Assets at Fair Value (A)D

309、etails of financial assets at fair value as of December 31,2023 and 2022 are as follows:(1)Financial assets at fair value through other comprehensive income (In millions of Korean won)December 31,2023 December 31,2022 Non-current Equity instruments 7,481,297 11,397,012 (2)Financial assets at fair va

310、lue through profit or loss (In millions of Korean won)December 31,2023 December 31,2022 Current Debt instruments 27,112 29,080 Non-current Equity instruments 812,358 773,063 Debt instruments 619,036 632,405 Subtotal 1,431,394 1,405,468 Total 1,458,506 1,434,548 Samsung Electronics Co.,Ltd.and its su

311、bsidiaries NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -39-(B)Changes in financial assets at fair value for the years ended December 31,2023 and 2022 are as follows:(1)Financial assets at fair value through other comprehensive income (In millions of Korean won)2023 2022 Balance as of January 1 11

312、,397,012 13,965,839 Acquisition 124,897 35,013 Disposal(5,918,616)(20,913)Fair value valuation gain(loss)1,548,022 (2,636,448)Other 329,982 53,521 Balance as of December 31 7,481,297 11,397,012 (2)Financial assets at fair value through profit or loss (In millions of Korean won)2023 2022 Balance as o

313、f January 1 1,405,468 1,525,344 Acquisition 146,392 158,244 Disposal(81,113)(80,718)Fair value valuation gain(loss)(38,110)(198,594)Other(1,243)1,192 Balance as of December 31 1,431,394 1,405,468 (C)Changes in gain(loss)on valuation of financial assets at fair value through other comprehensive incom

314、e for the years ended December 31,2023 and 2022 are as follows:(In millions of Korean won)2023 2022 Balance as of January 1 3,636,478 6,222,980 Fair value valuation gain(loss)1,548,022 (2,636,448)Reclassification to retained earnings due to disposals(4,935,379)49,946 Balance as of December 31 249,12

315、1 3,636,478 Income tax effects on equity(54,702)(887,369)Total 194,419 2,749,109 Samsung Electronics Co.,Ltd.and its subsidiaries NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -40-(D)Details of listed equity securities of financial assets at fair value as of December 31,2023 and 2022 are as follows

316、:(In millions of Korean won,number of shares and percentage)December 31,2023 December 31,2022 Number of shares owned Percentage of ownership(*)(%)Acquisition cost Carrying amount(Market value)Carrying amount(Market value)Samsung Heavy Industries Co.,Ltd.134,027,281 15.2 932,158 1,038,711 684,879 Hot

317、el Shilla Co.,Ltd.2,004,717 5.1 13,957 131,108 166,592 iMarketKorea Inc.647,320 1.9 324 5,560 6,538 SFA Engineering Corporation 2,100,000 5.8 22,050 63,840 132,642 Wonik Holdings Co.,Ltd.3,518,342 4.6 30,821 11,857 11,945 Wonik IPS Co.,Ltd.3,701,872 7.5 32,428 125,679 91,621 Wacom Co.,Ltd.8,398,400

318、5.3 62,013 50,358 46,750 Corning Incorporated 80,000,000 9.4 3,980,636 3,140,978 3,238,205 Other 561,530 1,030,123 5,142,573 Total 5,635,917 5,598,214 9,521,745 (*)Ownership represents the Companys ownership of the ordinary shares issued by each entity.7.Trade and Non-Trade Receivables (A)Trade and

319、non-trade receivables as of December 31,2023 and 2022 are as follows:December 31,2023 December 31,2022(In millions of Korean won)Trade Non-trade Trade Non-trade Receivables 37,026,738 7,474,967 36,238,032 7,051,536 Less:Loss allowance(355,456)(82,224)(312,221)(78,101)Subtotal 36,671,282 7,392,743 35

320、,925,811 6,973,435 Less:Non-current (23,889)(759,495)(204,248)(824,226)Current 36,647,393 6,633,248 35,721,563 6,149,209 (B)Movements in the loss allowance for receivables for the years ended December 31,2023 and 2022 are as follows:2023 2022(In millions of Korean won)Trade Non-trade Trade Non-trade

321、 Balance as of January 1 312,221 78,101 310,880 72,805 Bad debt expense(reversal)62,964 (297)8,784 7,312 Write-off(18,875)(124)(3,557)(6,154)Other(854)4,544 (3,886)4,138 Balance as of December 31 355,456 82,224 312,221 78,101 Samsung Electronics Co.,Ltd.and its subsidiaries NOTES TO THE CONSOLIDATED

322、 FINANCIAL STATEMENTS -41-(C)The details of trade and non-trade receivables classified by past due date for the purpose of measuring expected credit losses as of December 31,2023 and 2022 are as follows:December 31,2023 December 31,2022(In millions of Korean won)Trade Non-trade Trade Non-trade Recei

323、vables not past due 33,633,006 7,077,413 33,177,298 5,890,018 Past due:Less than 31 days past due(*)2,262,296 269,390 2,206,622 981,889 31 days to 90 days past due 478,371 15,369 642,859 52,972 More than 90 days past due 653,065 112,795 211,253 126,657 Subtotal 3,393,732 397,554 3,060,734 1,161,518

324、Total 37,026,738 7,474,967 36,238,032 7,051,536 (*)The Company does not consider the credit risk of non-trade receivables that are overdue for less than or equal to 31 days has been significantly increased.(D)The maximum exposure to current credit risk is equivalent to the carrying amount of receiva

325、bles as of December 31,2023.The Company has entered into insurance contracts with insurers for its major receivables.8.Inventories Inventories as of December 31,2023 and 2022 are as follows:December 31,2023 December 31,2022(In millions of Korean won)Gross amount Valuation allowance Carrying amount G

326、ross amount Valuation allowance Carrying amount Finished goods 16,120,367 (1,567,353)14,553,014 17,526,178 (1,493,952)16,032,226 Work in process 26,501,664 (4,303,216)22,198,448 21,612,965 (1,535,446)20,077,519 Raw materials and supplies 15,222,937 (1,525,583)13,697,354 16,268,974 (1,289,694)14,979,

327、280 Materials in transit 1,177,058 -1,177,058 1,098,841 -1,098,841 Total 59,022,026 (7,396,152)51,625,874 56,506,958 (4,319,092)52,187,866 Inventories recognized as an expense for the year ended December 31,2023 amount to W 177,539,372 million (2022:W 186,396,549 million).The amount includes a loss

328、on the valuation of inventories.Samsung Electronics Co.,Ltd.and its subsidiaries NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -42-9.Investments in Associates and Joint Ventures (A)Changes in investments in associates and joint ventures for the years ended December 31,2023 and 2022 are as follows:(

329、In millions of Korean won)2023 2022 Balance as of January 1 10,893,869 8,932,251 Acquisition 78,690 1,006,998 Disposal(33,464)(20,894)Share of profit 887,550 1,090,643 Other(*)(59,201)(115,129)Balance as of December 31 11,767,444 10,893,869 (*)Other consists of dividends,(reversal of)impairment,and

330、reclassification.(B)Major investments in associates and joint ventures as of December 31,2023 are as follows:(1)Investments in associates Investee Nature of relationship with associate Percentage of ownership(%)(*1)Principal business location Fiscal period-end Samsung Electro-Mechanics Co.,Ltd.Manuf

331、acture and supply electronic components including passive components,circuit boards,and modules 23.7 Korea December Samsung SDS Co.,Ltd.Provide IT services including computer programming,system integration and management and logistical services 22.6 Korea December Samsung Biologics Co.,Ltd.Investmen

332、t in new business 31.2 Korea December Samsung SDI Co.,Ltd.(*2)Manufacture and supply electronic parts including secondary cell batteries 19.6 Korea December Cheil Worldwide,Inc.Advertising agency 25.2 Korea December(*1)Ownership represents the Companys ownership of the ordinary shares issued by each

333、 entity.(*2)The Companys ownership of ordinary shares outstanding is 20.6%.(2)Investments in joint ventures Investee Nature of relationship with joint venture Percentage of ownership(%)(*1)Principal business location Fiscal period-end Samsung Corning Advanced Glass,LLC Manufacture and supply industrial glass products 50.0 Korea December(*1)Ownership represents the Companys ownership of the ordinar