| | |
| | |
| Estimates Estimates of provisions for future decommissioning and restoration costs are recognised and based on current legal and constructive requirements, technology and price levels. Because actual cash outflows can differ from estimates due to changes in laws, regulations, public expectations, technology, prices and conditions, and can take place many years in the future, the carrying amounts of provisions are regularly reviewed and adjusted to take account of such changes. Significant estimate The discount rate applied to reflect the time value of money in the carrying amount of provisions requires estimation. The discount rate used in the calculation of provisions is the pre-tax rate that reflects current market assessments of the time value of money. Generally, the market assessments of the time value of money can be reflected in the risk-free rate and given the long-term investment nature of oil and gas business, Shell considers it appropriate to use the 20-year US Treasury bond yield return as the risk-free rate. The discount rate applied is reviewed regularly and adjusted following changes in market rates. The discount rate applied to determine the carrying amount of provisions provides a source of estimation uncertainty as referred to in IAS 1.125. Information about decommissioning and restoration provisions and their sensitivity to changes in estimates is presented in Note 24. | |
| | |
plant\u00a0and equipment under construction.
IAS 37 Provisions, Contingent Liabilities and Contingent Assets: Onerous Contracts - Cost of Fulfilling a Contract
The amendments to IAS 37 provide additional clarity on which costs an entity includes when assessing whether a contract is onerous.
The\u00a0amendments specify that the cost of fulfilling a contract comprises the costs that relate directly to the contract. Those costs include
both\u00a0incremental costs and an allocation of other costs, as long as these relate directly to fulfilling a contract.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfFirstTimeAdoptionExplanatory",
"language": "en",
"entity": "scheme:21380068P1DRHMJ8KU70",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjM4OGNmNTNkMzQ4NDQwMzg4MDE2MWIyNjIyMjdmNDIwL3NlYzozODhjZjUzZDM0ODQ0MDM4ODAxNjFiMjYyMjI3ZjQyMF8yMzIvZnJhZzozYmQ1ZjEyZDdlNmU0MDAwYmEyNGNkZTQ2YTZkZGUzYS90ZXh0cmVnaW9uOjNiZDVmMTJkN2U2ZTQwMDBiYTI0Y2RlNDZhNmRkZTNhXzkzNDU4NDg5NzI4NDU_bb4bcce4-9f0c-4411-b582-b1ad38e1e425": {
"value": "
IAS 16 Property, Plant and Equipment: Proceeds before Intended Use
The amendments to IAS 16 prohibit deducting from the cost of an item of property, plant and equipment under construction any proceeds and
related costs from selling items produced while bringing these types of assets to the location and condition necessary for them to be capable
of\u00a0operating in the manner intended by management. Instead, the proceeds and related costs are recognised in the Consolidated Statement
of\u00a0Income in accordance with applicable accounting policies.
Prior to these IAS 16 amendments Shell's policy was to deduct any proceeds and related costs from selling items produced against property,
plant\u00a0and equipment under construction.
IAS 37 Provisions, Contingent Liabilities and Contingent Assets: Onerous Contracts - Cost of Fulfilling a Contract
The amendments to IAS 37 provide additional clarity on which costs an entity includes when assessing whether a contract is onerous.
The\u00a0amendments specify that the cost of fulfilling a contract comprises the costs that relate directly to the contract. Those costs include
both\u00a0incremental costs and an allocation of other costs, as long as these relate directly to fulfilling a contract.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfChangesInAccountingPoliciesExplanatory",
"language": "en",
"entity": "scheme:21380068P1DRHMJ8KU70",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjM4OGNmNTNkMzQ4NDQwMzg4MDE2MWIyNjIyMjdmNDIwL3NlYzozODhjZjUzZDM0ODQ0MDM4ODAxNjFiMjYyMjI3ZjQyMF8yMzIvZnJhZzozYmQ1ZjEyZDdlNmU0MDAwYmEyNGNkZTQ2YTZkZGUzYS90ZXh0cmVnaW9uOjNiZDVmMTJkN2U2ZTQwMDBiYTI0Y2RlNDZhNmRkZTNhXzg4NTEwNjg2MTUyMjIw_855e4bc0-54ba-4f98-bd96-63a4e33470ef": {
"value": "
Nature of the Consolidated Financial Statements
The Consolidated Financial Statements are presented in US dollars (dollars) and comprise the financial statements of the Company and its
subsidiaries, being those entities over which the Company has control, either directly or indirectly, through exposure or rights to their variable
returns and the ability to affect those returns through its power over the entities. Information about subsidiaries at December 31, 2022, can
be\u00a0found in Appendix 1: Significant Subsidiaries and Other Related Undertakings.
Subsidiaries are consolidated from the date on which control is obtained until the date that such control ceases, using consistent accounting
policies. All inter-company balances and transactions, including unrealised profits arising from such transactions, are eliminated. Unrealised losses
are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Non-controlling interest represents the
proportion of income, other comprehensive income and net assets in subsidiaries that are not attributable to the Company\u2019s shareholders.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForSubsidiariesExplanatory",
"language": "en",
"entity": "scheme:21380068P1DRHMJ8KU70",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjM4OGNmNTNkMzQ4NDQwMzg4MDE2MWIyNjIyMjdmNDIwL3NlYzozODhjZjUzZDM0ODQ0MDM4ODAxNjFiMjYyMjI3ZjQyMF8yMzIvZnJhZzozYmQ1ZjEyZDdlNmU0MDAwYmEyNGNkZTQ2YTZkZGUzYS90ZXh0cmVnaW9uOjNiZDVmMTJkN2U2ZTQwMDBiYTI0Y2RlNDZhNmRkZTNhXzg4NTEwNjg2MTUyMjIw_a8894410-5faf-467c-b647-24947e7a8754": {
"value": "
Nature of the Consolidated Financial Statements
The Consolidated Financial Statements are presented in US dollars (dollars) and comprise the financial statements of the Company and its
subsidiaries, being those entities over which the Company has control, either directly or indirectly, through exposure or rights to their variable
returns and the ability to affect those returns through its power over the entities. Information about subsidiaries at December 31, 2022, can
be\u00a0found in Appendix 1: Significant Subsidiaries and Other Related Undertakings.
Subsidiaries are consolidated from the date on which control is obtained until the date that such control ceases, using consistent accounting
policies. All inter-company balances and transactions, including unrealised profits arising from such transactions, are eliminated. Unrealised losses
are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Non-controlling interest represents the
proportion of income, other comprehensive income and net assets in subsidiaries that are not attributable to the Company\u2019s shareholders.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfBasisOfConsolidationExplanatory",
"language": "en",
"entity": "scheme:21380068P1DRHMJ8KU70",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjM4OGNmNTNkMzQ4NDQwMzg4MDE2MWIyNjIyMjdmNDIwL3NlYzozODhjZjUzZDM0ODQ0MDM4ODAxNjFiMjYyMjI3ZjQyMF8yMzIvZnJhZzozYmQ1ZjEyZDdlNmU0MDAwYmEyNGNkZTQ2YTZkZGUzYS90ZXh0cmVnaW9uOjNiZDVmMTJkN2U2ZTQwMDBiYTI0Y2RlNDZhNmRkZTNhXzkzNDU4NDg5NzI1ODE_c8cf4d29-ede1-4fbd-a09c-2f2c98d075b3": {
"value": "
The Consolidated Financial Statements are presented in US dollars (dollars) and comprise the financial statements of the Company and its
subsidiaries, being those entities over which the Company has control, either directly or indirectly, through exposure or rights to their variable
returns and the ability to affect those returns through its power over the entities. Information about subsidiaries at December 31, 2022, can
be\u00a0found in Appendix 1: Significant Subsidiaries and Other Related Undertakings.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForFunctionalCurrencyExplanatory",
"language": "en",
"entity": "scheme:21380068P1DRHMJ8KU70",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjM4OGNmNTNkMzQ4NDQwMzg4MDE2MWIyNjIyMjdmNDIwL3NlYzozODhjZjUzZDM0ODQ0MDM4ODAxNjFiMjYyMjI3ZjQyMF8yMzIvZnJhZzozYmQ1ZjEyZDdlNmU0MDAwYmEyNGNkZTQ2YTZkZGUzYS90ZXh0cmVnaW9uOjNiZDVmMTJkN2U2ZTQwMDBiYTI0Y2RlNDZhNmRkZTNhXzg3OTYwOTMxMzg0Mjc_0e82a385-988a-4a2f-949a-7456e224c369": {
"value": "
Currency translation
Foreign currency transactions are translated using the exchange rate at the dates of the transactions or valuation where items are remeasured.
Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at quarter-end exchange rates of
monetary assets and liabilities denominated in foreign currencies (including those in respect of inter-company balances, unless related to loans
of\u00a0a\u00a0long-term investment nature) are recognised in income unless when recognised in other comprehensive income in respect of cash flow or net
investment hedges. Foreign exchange gains and losses in income are presented within interest and other income or within purchases where not
related to financing. Share capital issued in currencies other than the dollar is translated at the exchange rate at the date of issue.
On consolidation, assets and liabilities of non-dollar entities are translated to dollars at year-end rates of exchange, while their statements of
income, other comprehensive income and cash flows are translated at quarterly average rates. The resulting translation differences are recognised
as currency translation differences within other comprehensive income. Upon sale of all or part of an interest in, or upon liquidation of, an entity,
the appropriate portion of cumulative currency translation differences related to that entity is generally recognised in income.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForForeignCurrencyTranslationExplanatory",
"language": "en",
"entity": "scheme:21380068P1DRHMJ8KU70",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjM4OGNmNTNkMzQ4NDQwMzg4MDE2MWIyNjIyMjdmNDIwL3NlYzozODhjZjUzZDM0ODQ0MDM4ODAxNjFiMjYyMjI3ZjQyMF8yMzIvZnJhZzozYmQ1ZjEyZDdlNmU0MDAwYmEyNGNkZTQ2YTZkZGUzYS90ZXh0cmVnaW9uOjNiZDVmMTJkN2U2ZTQwMDBiYTI0Y2RlNDZhNmRkZTNhXzg3OTYwOTMxMzg0Mjg_06f985e9-1fb3-4f53-9e26-6d3ce365c54b": {
"value": "
Revenue recognition
Revenue from sales of oil, natural gas, chemicals and other products is recognised at the transaction price to which Shell expects to be entitled,
after deducting sales taxes, excise duties and similar levies. For contracts that contain separate performance obligations, the transaction price is
allocated to those separate performance obligations by reference to their relative stand-alone selling prices.
Revenue is recognised when control of the products has been transferred to the customer. For sales by Integrated Gas and Upstream operations,
this generally occurs when the product is physically transferred into a vessel, pipe or other delivery mechanism; for sales by refining operations, it is
either when the product is placed onboard a vessel or offloaded from the vessel, depending on the contractually agreed terms; and for sales of oil
products and chemicals, it is either at the point of delivery or the point of receipt, depending on contractual conditions.
Revenue resulting from hydrocarbon production from properties in which Shell has an interest with partners in joint arrangements is recognised on
the basis of Shell\u2019s volumes lifted and sold. Revenue resulting from the production of oil and natural gas under production-sharing contracts (PSCs)
is recognised for those amounts relating to Shell\u2019s cost recoveries and Shell\u2019s share of the remaining production. Gains and losses on derivative
contracts and the revenue and costs associated with other contracts that are classified as held primarily for the purpose of being traded are
reported on a net basis in the Consolidated Statement of Income. Purchases and sales of hydrocarbons under exchange contracts that are
necessary to obtain or reposition feedstocks for the refinery operations are presented net in the Consolidated Statement of Income.
Revenue resulting from arrangements that are not considered contracts with customers is presented as revenue from other sources.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForRecognitionOfRevenue",
"language": "en",
"entity": "scheme:21380068P1DRHMJ8KU70",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjM4OGNmNTNkMzQ4NDQwMzg4MDE2MWIyNjIyMjdmNDIwL3NlYzozODhjZjUzZDM0ODQ0MDM4ODAxNjFiMjYyMjI3ZjQyMF8yMzIvZnJhZzozYmQ1ZjEyZDdlNmU0MDAwYmEyNGNkZTQ2YTZkZGUzYS90ZXh0cmVnaW9uOjNiZDVmMTJkN2U2ZTQwMDBiYTI0Y2RlNDZhNmRkZTNhXzg3OTYwOTMxMzg0Mjk_b879ec28-eebf-44b5-87d3-4b43dd2f8a20": {
"value": "
Research and development
Development costs that are expected to generate probable future economic benefits are capitalised as intangible assets. All other research and
development expenditure is recognised in income as incurred.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForResearchAndDevelopmentExpenseExplanatory",
"language": "en",
"entity": "scheme:21380068P1DRHMJ8KU70",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjM4OGNmNTNkMzQ4NDQwMzg4MDE2MWIyNjIyMjdmNDIwL3NlYzozODhjZjUzZDM0ODQ0MDM4ODAxNjFiMjYyMjI3ZjQyMF8yMzIvZnJhZzozYmQ1ZjEyZDdlNmU0MDAwYmEyNGNkZTQ2YTZkZGUzYS90ZXh0cmVnaW9uOjNiZDVmMTJkN2U2ZTQwMDBiYTI0Y2RlNDZhNmRkZTNhXzg3OTYwOTMxMzg0MzA_9ff57d57-2686-43ba-8a87-20aa2944d49c": {
"value": "
Exploration costs
Hydrocarbon exploration costs are accounted for under the successful efforts method: exploration costs are recognised in income when incurred,
except that exploratory drilling costs, including in respect of the recapitalisation of the depreciation, are included in property, plant and equipment
pending determination of proved reserves. Exploration costs capitalised in respect of exploration wells that are more than 12 months old are
written off unless: (a)\u00a0proved reserves are booked; or (b)\u00a0(i)\u00a0they have found commercially producible quantities of reserves; and (ii)\u00a0they are
subject to further exploration or appraisal activity in that either drilling of additional exploratory wells is under way or firmly planned for the near
future or other activities are being undertaken to sufficiently progress the assessing of reserves and the economic and operating viability of the
project.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForExplorationAndEvaluationExpenditures",
"language": "en",
"entity": "scheme:21380068P1DRHMJ8KU70",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjM4OGNmNTNkMzQ4NDQwMzg4MDE2MWIyNjIyMjdmNDIwL3NlYzozODhjZjUzZDM0ODQ0MDM4ODAxNjFiMjYyMjI3ZjQyMF8yMzIvZnJhZzozYmQ1ZjEyZDdlNmU0MDAwYmEyNGNkZTQ2YTZkZGUzYS90ZXh0cmVnaW9uOjNiZDVmMTJkN2U2ZTQwMDBiYTI0Y2RlNDZhNmRkZTNhXzg3OTYwOTMxMzg0MzE_33f47405-07de-4f59-9fcb-c99663839b20": {
"value": "
Property, plant and equipment and intangible assets other than goodwill
Recognition
Property, plant and equipment comprise assets owned by Shell, assets held by Shell under lease contracts, and assets operated by Shell as
contractor in PSCs. They include rights and concessions in respect of properties with proved reserves (\"proved properties\") and with no proved
reserves (\"unproved properties\"). Property, plant and equipment, including expenditure on major inspections, and intangible assets are initially
recognised in the Consolidated Balance Sheet at cost where it is probable that they will generate future economic benefits. This includes
capitalisation of decommissioning and restoration costs associated with provisions for asset retirement (see \"provisions\"), certain development
costs (see \"research and development\") and the effects of associated cash flow hedges (see \"financial instruments\") as applicable. Interest is
capitalised as an increase in property, plant and equipment, on major capital projects during construction. The accounting for exploration costs
is\u00a0described separately (see \"exploration costs\"). Intangible assets other than goodwill include liquefied natural gas (LNG) off-take and sales
contracts, environmental certificates, power purchase agreements, software costs, retail customer relationships and trademarks.
Property, plant and equipment and intangible assets other than goodwill are subsequently carried at cost less accumulated depreciation,
depletion and amortisation (including any impairment). Gains and losses on sale are determined by comparing the proceeds with the carrying
amounts of assets sold and are recognised in income, within interest and other income.
An asset is classified as held for sale if its carrying amount will be recovered principally through sale rather than through continuing use, which is
when the sale is highly probable, and it is available for immediate sale in its present condition subject only to terms that are usual and customary
for sales of such assets. Assets classified as held for sale are measured at the lower of the carrying amount upon classification and the fair value
less costs to sell. Assets classified as held for sale and the associated liabilities are presented separately from other assets and liabilities in the
Consolidated Balance Sheet. Once assets are classified as held for sale, property, plant and equipment and intangible assets other than
goodwill\u00a0are no longer subject to depreciation or amortisation.
Depreciation, depletion and amortisation
Property, plant and equipment related to hydrocarbon production activities are in principle depreciated on a unit-of-production basis over the
proved developed reserves of the field concerned, other than assets whose useful lives differ from the lifetime of the field which are depreciated
applying the straight-line method. However, for certain Integrated Gas and Upstream assets, the use for this purpose of proved developed
reserves, which are determined using the Securities and Exchange Commission (SEC) mandated yearly average oil and gas prices, would result in
depreciation charges for these assets which do not reflect the pattern in which their future economic benefits are expected to be consumed as, for
example, it may result in assets with long-term expected lives having accelerated or being fully depreciated within one year. Therefore, in these
instances, other approaches are applied to determine a reserves base for the purpose of calculating depreciation, such as using management\u2019s
expectations of future oil and gas prices rather than yearly average prices and using total proved reserves to provide a phasing of periodic
depreciation charges that more appropriately reflects the expected utilisation of the assets concerned. (See Note 12)
Rights and concessions in respect of proved properties are depleted on the unit-of-production basis over the total proved reserves of the relevant
area. Where individually insignificant, unproved properties may be grouped and depreciated based on factors such as the average concession
term and past experience of recognising proved reserves.
Property, plant and equipment held under lease contracts, capitalised LNG off-take and sales contracts and power purchase agreements are
depreciated or amortised over the term of the respective contract. Other property, plant and equipment and intangible assets other than goodwill
are depreciated or amortised on a straight-line basis over their estimated useful lives. They include energy and chemicals parks (for which the
useful life is generally 20 years), retail service stations (for which the useful life is generally 15 years), onshore power infrastructure (for which the
useful life is generally 30-35 years), offshore wind assets (for which the useful life is generally 25-30 years) and major inspection costs, which are
depreciated over the estimated period before the next planned major inspection (three to five years).
On classification of an asset as held for sale, depreciation ceases.
Estimates of the useful lives and residual values of property, plant and equipment and intangible assets other than goodwill are reviewed annually
and adjusted if appropriate.
Impairment
Intangible assets other than goodwill and assets other than unproved properties (see \"Exploration costs\") are tested for impairment whenever
events or changes in circumstances indicate that the carrying amounts for those assets may not be recoverable. If any such indication of
impairment exists, the carrying amounts of those assets are written down to their recoverable amount, which is the higher of fair value less
costs of disposal (see \"Fair value measurements\") and value in use.
Value in use is determined as the amount of estimated risk-adjusted discounted future cash flows. For this purpose, assets are grouped into cash-
generating units based on separately identifiable and largely independent cash inflows. Estimates of future cash flows used in the evaluation of
impairment of assets are made using management\u2019s forecasts of commodity prices, market supply and demand, potential costs associated with
operational greenhouse gas (GHG) emissions, mainly related to CO\u2082, and forecast product and refining margins. In addition, management takes
into consideration the expected useful lives of the manufacturing facilities, exploration and production assets, and expected production volumes.
The latter takes into account assessments of field and reservoir performance and includes expectations about both proved reserves and volumes
that are expected to constitute proved reserves in the future (unproved volumes), which are risk-weighted utilising geological, production, recovery
and economic projections. Cash flow projections are based on management\u2019s most recent operating plan that represents management's best
estimate and are risked as appropriate. The discount rate is based on a nominal post-tax weighted average cost of capital (WACC). Prior to 2021,
cash flow estimates were discounted at a rate based on Shell's marginal cost of debt. The change in discount rate to a nominal post-tax WACC
has been reflected in a commensurate manner in the risk adjustments to cash flow projections. Using a post-tax discount rate to calculate value
in\u00a0use does not result in a materially different outcome than using a pre-tax discount rate. (See Note 12)
Impairments are reversed as applicable to the extent that the events or circumstances that triggered the original impairment have changed.
Impairment losses and reversals are reported within depreciation, depletion and amortisation.
Upon classification of an asset as held for sale, the carrying amount is impaired if this exceeds the fair value less costs to sell.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForPropertyPlantAndEquipmentExplanatory",
"language": "en",
"entity": "scheme:21380068P1DRHMJ8KU70",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjM4OGNmNTNkMzQ4NDQwMzg4MDE2MWIyNjIyMjdmNDIwL3NlYzozODhjZjUzZDM0ODQ0MDM4ODAxNjFiMjYyMjI3ZjQyMF8yMzIvZnJhZzozYmQ1ZjEyZDdlNmU0MDAwYmEyNGNkZTQ2YTZkZGUzYS90ZXh0cmVnaW9uOjNiZDVmMTJkN2U2ZTQwMDBiYTI0Y2RlNDZhNmRkZTNhXzg3OTYwOTMxMzg0MzE_efcf52ee-bbce-4b0a-9544-e7ca6b0ee63e": {
"value": "
Property, plant and equipment and intangible assets other than goodwill
Recognition
Property, plant and equipment comprise assets owned by Shell, assets held by Shell under lease contracts, and assets operated by Shell as
contractor in PSCs. They include rights and concessions in respect of properties with proved reserves (\"proved properties\") and with no proved
reserves (\"unproved properties\"). Property, plant and equipment, including expenditure on major inspections, and intangible assets are initially
recognised in the Consolidated Balance Sheet at cost where it is probable that they will generate future economic benefits. This includes
capitalisation of decommissioning and restoration costs associated with provisions for asset retirement (see \"provisions\"), certain development
costs (see \"research and development\") and the effects of associated cash flow hedges (see \"financial instruments\") as applicable. Interest is
capitalised as an increase in property, plant and equipment, on major capital projects during construction. The accounting for exploration costs
is\u00a0described separately (see \"exploration costs\"). Intangible assets other than goodwill include liquefied natural gas (LNG) off-take and sales
contracts, environmental certificates, power purchase agreements, software costs, retail customer relationships and trademarks.
Property, plant and equipment and intangible assets other than goodwill are subsequently carried at cost less accumulated depreciation,
depletion and amortisation (including any impairment). Gains and losses on sale are determined by comparing the proceeds with the carrying
amounts of assets sold and are recognised in income, within interest and other income.
An asset is classified as held for sale if its carrying amount will be recovered principally through sale rather than through continuing use, which is
when the sale is highly probable, and it is available for immediate sale in its present condition subject only to terms that are usual and customary
for sales of such assets. Assets classified as held for sale are measured at the lower of the carrying amount upon classification and the fair value
less costs to sell. Assets classified as held for sale and the associated liabilities are presented separately from other assets and liabilities in the
Consolidated Balance Sheet. Once assets are classified as held for sale, property, plant and equipment and intangible assets other than
goodwill\u00a0are no longer subject to depreciation or amortisation.
Depreciation, depletion and amortisation
Property, plant and equipment related to hydrocarbon production activities are in principle depreciated on a unit-of-production basis over the
proved developed reserves of the field concerned, other than assets whose useful lives differ from the lifetime of the field which are depreciated
applying the straight-line method. However, for certain Integrated Gas and Upstream assets, the use for this purpose of proved developed
reserves, which are determined using the Securities and Exchange Commission (SEC) mandated yearly average oil and gas prices, would result in
depreciation charges for these assets which do not reflect the pattern in which their future economic benefits are expected to be consumed as, for
example, it may result in assets with long-term expected lives having accelerated or being fully depreciated within one year. Therefore, in these
instances, other approaches are applied to determine a reserves base for the purpose of calculating depreciation, such as using management\u2019s
expectations of future oil and gas prices rather than yearly average prices and using total proved reserves to provide a phasing of periodic
depreciation charges that more appropriately reflects the expected utilisation of the assets concerned. (See Note 12)
Rights and concessions in respect of proved properties are depleted on the unit-of-production basis over the total proved reserves of the relevant
area. Where individually insignificant, unproved properties may be grouped and depreciated based on factors such as the average concession
term and past experience of recognising proved reserves.
Property, plant and equipment held under lease contracts, capitalised LNG off-take and sales contracts and power purchase agreements are
depreciated or amortised over the term of the respective contract. Other property, plant and equipment and intangible assets other than goodwill
are depreciated or amortised on a straight-line basis over their estimated useful lives. They include energy and chemicals parks (for which the
useful life is generally 20 years), retail service stations (for which the useful life is generally 15 years), onshore power infrastructure (for which the
useful life is generally 30-35 years), offshore wind assets (for which the useful life is generally 25-30 years) and major inspection costs, which are
depreciated over the estimated period before the next planned major inspection (three to five years).
On classification of an asset as held for sale, depreciation ceases.
Estimates of the useful lives and residual values of property, plant and equipment and intangible assets other than goodwill are reviewed annually
and adjusted if appropriate.
Impairment
Intangible assets other than goodwill and assets other than unproved properties (see \"Exploration costs\") are tested for impairment whenever
events or changes in circumstances indicate that the carrying amounts for those assets may not be recoverable. If any such indication of
impairment exists, the carrying amounts of those assets are written down to their recoverable amount, which is the higher of fair value less
costs of disposal (see \"Fair value measurements\") and value in use.
Value in use is determined as the amount of estimated risk-adjusted discounted future cash flows. For this purpose, assets are grouped into cash-
generating units based on separately identifiable and largely independent cash inflows. Estimates of future cash flows used in the evaluation of
impairment of assets are made using management\u2019s forecasts of commodity prices, market supply and demand, potential costs associated with
operational greenhouse gas (GHG) emissions, mainly related to CO\u2082, and forecast product and refining margins. In addition, management takes
into consideration the expected useful lives of the manufacturing facilities, exploration and production assets, and expected production volumes.
The latter takes into account assessments of field and reservoir performance and includes expectations about both proved reserves and volumes
that are expected to constitute proved reserves in the future (unproved volumes), which are risk-weighted utilising geological, production, recovery
and economic projections. Cash flow projections are based on management\u2019s most recent operating plan that represents management's best
estimate and are risked as appropriate. The discount rate is based on a nominal post-tax weighted average cost of capital (WACC). Prior to 2021,
cash flow estimates were discounted at a rate based on Shell's marginal cost of debt. The change in discount rate to a nominal post-tax WACC
has been reflected in a commensurate manner in the risk adjustments to cash flow projections. Using a post-tax discount rate to calculate value
in\u00a0use does not result in a materially different outcome than using a pre-tax discount rate. (See Note 12)
Impairments are reversed as applicable to the extent that the events or circumstances that triggered the original impairment have changed.
Impairment losses and reversals are reported within depreciation, depletion and amortisation.
Upon classification of an asset as held for sale, the carrying amount is impaired if this exceeds the fair value less costs to sell.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsOtherThanGoodwillExplanatory",
"language": "en",
"entity": "scheme:21380068P1DRHMJ8KU70",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
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"value": "
Depreciation, depletion and amortisation
Property, plant and equipment related to hydrocarbon production activities are in principle depreciated on a unit-of-production basis over the
proved developed reserves of the field concerned, other than assets whose useful lives differ from the lifetime of the field which are depreciated
applying the straight-line method. However, for certain Integrated Gas and Upstream assets, the use for this purpose of proved developed
reserves, which are determined using the Securities and Exchange Commission (SEC) mandated yearly average oil and gas prices, would result in
depreciation charges for these assets which do not reflect the pattern in which their future economic benefits are expected to be consumed as, for
example, it may result in assets with long-term expected lives having accelerated or being fully depreciated within one year. Therefore, in these
instances, other approaches are applied to determine a reserves base for the purpose of calculating depreciation, such as using management\u2019s
expectations of future oil and gas prices rather than yearly average prices and using total proved reserves to provide a phasing of periodic
depreciation charges that more appropriately reflects the expected utilisation of the assets concerned. (See Note 12)
Rights and concessions in respect of proved properties are depleted on the unit-of-production basis over the total proved reserves of the relevant
area. Where individually insignificant, unproved properties may be grouped and depreciated based on factors such as the average concession
term and past experience of recognising proved reserves.
Property, plant and equipment held under lease contracts, capitalised LNG off-take and sales contracts and power purchase agreements are
depreciated or amortised over the term of the respective contract. Other property, plant and equipment and intangible assets other than goodwill
are depreciated or amortised on a straight-line basis over their estimated useful lives. They include energy and chemicals parks (for which the
useful life is generally 20 years), retail service stations (for which the useful life is generally 15 years), onshore power infrastructure (for which the
useful life is generally 30-35 years), offshore wind assets (for which the useful life is generally 25-30 years) and major inspection costs, which are
depreciated over the estimated period before the next planned major inspection (three to five years).
On classification of an asset as held for sale, depreciation ceases.
Estimates of the useful lives and residual values of property, plant and equipment and intangible assets other than goodwill are reviewed annually
and adjusted if appropriate.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForDepreciationExpenseExplanatory",
"language": "en",
"entity": "scheme:21380068P1DRHMJ8KU70",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjM4OGNmNTNkMzQ4NDQwMzg4MDE2MWIyNjIyMjdmNDIwL3NlYzozODhjZjUzZDM0ODQ0MDM4ODAxNjFiMjYyMjI3ZjQyMF8yMzIvZnJhZzozYmQ1ZjEyZDdlNmU0MDAwYmEyNGNkZTQ2YTZkZGUzYS90ZXh0cmVnaW9uOjNiZDVmMTJkN2U2ZTQwMDBiYTI0Y2RlNDZhNmRkZTNhXzg3OTYwOTMxNDc4NDc_bfabcedf-6a2b-4802-87b0-1317272d5237": {
"value": "
Impairment
Intangible assets other than goodwill and assets other than unproved properties (see \"Exploration costs\") are tested for impairment whenever
events or changes in circumstances indicate that the carrying amounts for those assets may not be recoverable. If any such indication of
impairment exists, the carrying amounts of those assets are written down to their recoverable amount, which is the higher of fair value less
costs of disposal (see \"Fair value measurements\") and value in use.
Value in use is determined as the amount of estimated risk-adjusted discounted future cash flows. For this purpose, assets are grouped into cash-
generating units based on separately identifiable and largely independent cash inflows. Estimates of future cash flows used in the evaluation of
impairment of assets are made using management\u2019s forecasts of commodity prices, market supply and demand, potential costs associated with
operational greenhouse gas (GHG) emissions, mainly related to CO\u2082, and forecast product and refining margins. In addition, management takes
into consideration the expected useful lives of the manufacturing facilities, exploration and production assets, and expected production volumes.
The latter takes into account assessments of field and reservoir performance and includes expectations about both proved reserves and volumes
that are expected to constitute proved reserves in the future (unproved volumes), which are risk-weighted utilising geological, production, recovery
and economic projections. Cash flow projections are based on management\u2019s most recent operating plan that represents management's best
estimate and are risked as appropriate. The discount rate is based on a nominal post-tax weighted average cost of capital (WACC). Prior to 2021,
cash flow estimates were discounted at a rate based on Shell's marginal cost of debt. The change in discount rate to a nominal post-tax WACC
has been reflected in a commensurate manner in the risk adjustments to cash flow projections. Using a post-tax discount rate to calculate value
in\u00a0use does not result in a materially different outcome than using a pre-tax discount rate. (See Note 12)
Impairments are reversed as applicable to the extent that the events or circumstances that triggered the original impairment have changed.
Impairment losses and reversals are reported within depreciation, depletion and amortisation.
Upon classification of an asset as held for sale, the carrying amount is impaired if this exceeds the fair value less costs to sell
Impairment
The carrying amount of goodwill is tested for impairment at least annually. Impairment is determined for goodwill by assessing the recoverable
amount of each CGU to which the goodwill relates. An impairment loss is recognised when the CGU's recoverable amount is lower than its
carrying amount.
Previously recognised impairment losses of goodwill are not reversed subsequently.
Impairment of the right-of-use asset
Right-of-use assets are subject to existing impairment requirements as set out in \"Property, plant and equipment\", above, and as presented
in Note 12.
",
"dimensions": {
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"language": "en",
"entity": "scheme:21380068P1DRHMJ8KU70",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjM4OGNmNTNkMzQ4NDQwMzg4MDE2MWIyNjIyMjdmNDIwL3NlYzozODhjZjUzZDM0ODQ0MDM4ODAxNjFiMjYyMjI3ZjQyMF8yMzIvZnJhZzozYmQ1ZjEyZDdlNmU0MDAwYmEyNGNkZTQ2YTZkZGUzYS90ZXh0cmVnaW9uOjNiZDVmMTJkN2U2ZTQwMDBiYTI0Y2RlNDZhNmRkZTNhXzg3OTYwOTMxNDc4NDg_e9827299-4c28-4a4b-8f32-300ff6675def": {
"value": "
| | |
| | |
| Judgements and estimates Proved oil and gas reserves Unit-of-production depreciation, depletion and amortisation charges are principally measured based on management\u2019s estimates of proved developed oil and gas reserves. Also, exploration drilling costs are capitalised pending the results of further exploration or appraisal activity (successful efforts method), which may take place for several years before the final investment decision on a development project is taken and before any related proved reserves can be booked. Proved reserves are estimated by internal qualified professionals. The proved reserves are estimated with reasonable certainty by analysis of available geological and engineering data at the time of the estimation, and only include volumes for which access to market is assured with reasonable expectation. Yearly average oil and gas prices are used for the estimation of proved reserves unless prices are defined by contractual arrangements, excluding escalations based upon future conditions. Proved reserves are subject to regular revision, both upward or downward, based on new information from the drilling of additional wells, observation of long-term reservoir performance under producing conditions, updates of development plans and changes in economic factors, including product prices, contract terms, legislation or development plans. Changes to estimates of proved developed reserves affect prospectively the amounts of depreciation, depletion and amortisation charged and, consequently, the carrying amounts of exploration and production assets. Generally, in the normal course of business the diversity of the asset portfolio will limit the net effect of such revisions. The outcome of, or assessment of plans for, exploration or appraisal activity may result in the related capitalised exploration drilling costs being recognised in income in that period. Judgement is involved in determining when to use an alternative reserves base in order to appropriately reflect the expected utilisation of the assets concerned (see \"Depreciation, depletion and amortisation\"). Information about the carrying amounts of exploration and production assets and the amounts charged to income, including depreciation, depletion and amortisation and the quantitative impact of the use of an alternative reserves base, is presented in Note 12. Impairment For the purposes of determining whether impairment of assets has occurred, and the extent of any impairment loss or its reversal, the key assumptions management uses in estimating risk-adjusted future cash flows for value in use measures are future oil and gas prices and refining margins. In addition, management uses other assumptions such as potential costs associated with operational GHG emissions and expected production volumes appropriate to the local circumstances and environment. These assumptions and the judgements of management that are based on them are subject to change as new information becomes available. Changes in assumptions could affect the carrying amounts of assets, and any impairment losses and reversals will affect income. Changes in economic conditions can affect the rate used to discount future cash flow estimates or the risk adjustment in the future cash flows. Judgement is applied to conclude whether changes in assumptions or economic conditions are an indicator that an asset may\u00a0be impaired or that an impairment loss recognised in prior periods\u00a0may no longer exist, or may have decreased. Expected production volumes, which comprise proved reserves and unproved volumes, are used for impairment testing because management believes this to be the most appropriate indicator of expected future cash\u00a0flows. Reserves\u00a0estimates are inherently imprecise. Furthermore, projections about unproved volumes are based on information that is necessarily less\u00a0robust than that available for mature reservoirs. Estimation is involved with respect to the expected life of energy and chemicals parks, including management\u2019s view on the future development of refining margins. The determination of cash-generating units requires judgement. Changes in this determination could impact the calculation of value in\u00a0use and therefore the conclusion on the recoverability of assets\u2019 carrying amounts when performing an impairment test. Judgement, which is subject to change as new information becomes available, can be required in determining when an asset is classified as\u00a0held for sale. A\u00a0change in that judgement could result in impairment charges affecting income, depending on whether classification requires a write-down of the asset to its fair value less costs to sell. In assessing the value in use, the estimated risk-adjusted future post-tax cash flows are discounted to their present value using a post-tax discount rate that reflects Shell\u2019s post-tax WACC. The discount rate applied does not reflect asset-specific risks for which future cash flow estimates have been adjusted. Significant estimates Assumptions about future commodity prices and refining margins used in the impairment testing in, respectively, Integrated Gas and Upstream and Chemicals and Products (see Note 12) are regularly assessed by management, noting that management does not necessarily consider short-term increases or decreases in prices as being indicative of long-term levels. The price methodology applied is based on Shell management\u2019s understanding and interpretation of demand and supply fundamentals in the near term, taking into account various other factors such as\u00a0industry rationalisation and energy transition in the long term. Future commodity prices and refining margins used in impairment testing provide a source of estimation uncertainty as referred to in\u00a0paragraph 125 of IAS 1 Presentation of Financial Statements (IAS 1.125). Information about the carrying amounts of assets and impairments and\u00a0their sensitivity to changes in significant estimates is presented in\u00a0Notes 11 and 12. | |
| | |
| | |
| | |
| Judgements and estimates A lease term includes optional lease periods where it is reasonably certain Shell will exercise the option to extend or not exercise the option to terminate the lease. Determination of the lease term is subject to judgement and has an impact on the measurement of the lease liability and related right-of-use asset. When assessing the lease term at the commencement date, Shell takes into consideration the broader economics of the contract. Reassessment of the lease term is performed upon changes in circumstances that may affect the probability that an option to extend or to terminate the lease will be exercised. Where the rate implicit in the lease is not readily available, an incremental borrowing rate is applied. This incremental borrowing rate reflects the rate of interest that the lessee would have to pay to borrow over a similar term, with a similar security, the funds necessary to obtain an asset of a similar nature and value to the right-of-use asset in a similar economic environment. Determination of the incremental borrowing rate requires estimation. | |
| | |
| | |
| | |
| Judgements and estimates Tax liabilities are recognised when it is considered probable that there will be a future outflow of funds to a taxing authority. In such cases, provision is made for the amount that is expected to be settled, where this can be reasonably estimated. Provisions for uncertain income tax positions/treatments are measured at the most likely amount or the expected value, whichever method is more appropriate. Generally, uncertain tax treatments are assessed on an individual basis, except where they are expected to be settled collectively. It is assumed that taxing authorities will examine positions taken if they have the right to do so and that they have full knowledge of the relevant information. A change in estimate of the likelihood of a future outflow and/or in the expected amount to be settled would be recognised in income in the period in which the change occurs. This requires the application of judgement as to the ultimate outcome, which can change over time depending on facts and circumstances. Judgements mainly relate to transfer pricing, including inter-company financing, interpretation of PSCs, expenditure deductible for tax purposes and taxation arising on disposal. | |
| | |
| | |
| | |
| Judgements and estimates continued Deferred tax assets are recognised only to the extent it is considered probable that those assets will be recoverable. This involves an assessment of when those assets are likely to reverse, and a judgement as to whether or not there will be sufficient taxable profits available to offset the assets when they do reverse. This requires assumptions regarding future profitability and is therefore inherently uncertain. To the extent assumptions regarding future profitability change, there can be an increase or decrease in the amounts recognised in respect of deferred tax assets as well as in the amounts recognised in income in the period in which the change occurs. Taxation information, including charges and deferred tax assets and liabilities, is presented in Note 22. Income taxes include taxes at higher rates levied on income from certain Integrated Gas and Upstream activities. | |
| | |
| | |
| | |
| Significant judgements and estimates Defined benefit obligations and plan assets, and the resulting liabilities and assets that are recognised, require significant estimation as these are subject to volatility as (actuarial) assumptions regarding future outcomes and market values change. Substantial judgement is required in determining the actuarial assumptions, which vary for the different plans to reflect local conditions but are determined under a common process in consultation with independent actuaries. The assumptions applied in respect of each plan are reviewed annually and adjusted where necessary to reflect changes in experience and actuarial recommendations. Actuarial assumptions applied in determining defined benefit obligations provide a source of estimation uncertainty as referred to in IAS 1.125. Information about the amounts reported in respect of defined benefit pension plans, assumptions applicable to the principal plans and their sensitivity to changes in significant estimates is presented in Note 23. | |
| | |
| | |
| | |
| Estimates Estimates of provisions for future decommissioning and restoration costs are recognised and based on current legal and constructive requirements, technology and price levels. Because actual cash outflows can differ from estimates due to changes in laws, regulations, public expectations, technology, prices and conditions, and can take place many years in the future, the carrying amounts of provisions are regularly reviewed and adjusted to take account of such changes. Significant estimate The discount rate applied to reflect the time value of money in the carrying amount of provisions requires estimation. The discount rate used in the calculation of provisions is the pre-tax rate that reflects current market assessments of the time value of money. Generally, the market assessments of the time value of money can be reflected in the risk-free rate and given the long-term investment nature of oil and gas business, Shell considers it appropriate to use the 20-year US Treasury bond yield return as the risk-free rate. The discount rate applied is reviewed regularly and adjusted following changes in market rates. The discount rate applied to determine the carrying amount of provisions provides a source of estimation uncertainty as referred to in IAS 1.125. Information about decommissioning and restoration provisions and their sensitivity to changes in estimates is presented in Note 24. | |
| | |
| | |
| | |
| Judgement Judgement is required to determine whether contracts to buy or sell LNG are capable of being settled on a net basis. Due to the limited liquidity in the LNG market and the lack of net settlement history, contracts to buy or sell LNG are not considered capable of being settled on a net basis. As a result, these contracts are accounted for on an accrual basis and not as a financial instrument. | |
| | |
| | |
| | |
| Estimate Where available, fair value measurements are derived from prices quoted in active markets for identical assets or liabilities. In the absence of such information, other observable inputs are used to estimate fair value. Inputs derived from external sources are corroborated or otherwise verified, as appropriate. In the absence of publicly available information, fair value is determined using estimation techniques that take into account market perspectives relevant to the asset or liability, in as far as they can reasonably be ascertained, based on predominantly unobservable inputs. For derivative contracts where publicly available information is not available, fair value estimations are generally determined using models and other valuation methods, the key inputs for which include future prices, volatility, price correlation, counterparty credit risk and market liquidity, as appropriate; for other assets and liabilities, fair value estimations are generally based on the net present value of expected future cash flows. | |
| | |
",
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"language": "en",
"entity": "scheme:21380068P1DRHMJ8KU70",
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}
},
"id3VybDovL2RvY3MudjEvZG9jOjM4OGNmNTNkMzQ4NDQwMzg4MDE2MWIyNjIyMjdmNDIwL3NlYzozODhjZjUzZDM0ODQ0MDM4ODAxNjFiMjYyMjI3ZjQyMF8yMzIvZnJhZzozYmQ1ZjEyZDdlNmU0MDAwYmEyNGNkZTQ2YTZkZGUzYS90ZXh0cmVnaW9uOjNiZDVmMTJkN2U2ZTQwMDBiYTI0Y2RlNDZhNmRkZTNhXzg3OTYwOTMxMzg0MzY_0724868f-44dd-4995-be6c-0233ff54c0f1": {
"value": "
Goodwill
Goodwill is initially measured as the excess of the aggregate of the consideration transferred and the amount recognised for any non-controlling
interest over the fair value of the identifiable assets acquired and liabilities assumed in a business combination at the acquisition date. The amount
recognised for any non-controlling interest is measured as a percentage of the identified net assets of the acquiree based on the present
ownership's proportionate share. At the acquisition date, acquired goodwill is allocated to each cash-generating unit (CGU), or groups of CGUs,
expected to benefit from the combination's synergies. The CGU to which goodwill is allocated represents the lowest level at which the goodwill
will be monitored and managed.
Goodwill is not amortised and is subsequently measured at the initial amount recognised less any accumulated impairment losses.
Impairment
The carrying amount of goodwill is tested for impairment at least annually. Impairment is determined for goodwill by assessing the recoverable
amount of each CGU to which the goodwill relates. An impairment loss is recognised when the CGU's recoverable amount is lower than its
carrying amount.
Previously recognised impairment losses of goodwill are not reversed subsequently.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsAndGoodwillExplanatory",
"language": "en",
"entity": "scheme:21380068P1DRHMJ8KU70",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjM4OGNmNTNkMzQ4NDQwMzg4MDE2MWIyNjIyMjdmNDIwL3NlYzozODhjZjUzZDM0ODQ0MDM4ODAxNjFiMjYyMjI3ZjQyMF8yMzIvZnJhZzozYmQ1ZjEyZDdlNmU0MDAwYmEyNGNkZTQ2YTZkZGUzYS90ZXh0cmVnaW9uOjNiZDVmMTJkN2U2ZTQwMDBiYTI0Y2RlNDZhNmRkZTNhXzg3OTYwOTMxMzg0MzY_2e4c8ecb-e936-40fc-889c-044247aef16e": {
"value": "
Goodwill
Goodwill is initially measured as the excess of the aggregate of the consideration transferred and the amount recognised for any non-controlling
interest over the fair value of the identifiable assets acquired and liabilities assumed in a business combination at the acquisition date. The amount
recognised for any non-controlling interest is measured as a percentage of the identified net assets of the acquiree based on the present
ownership's proportionate share. At the acquisition date, acquired goodwill is allocated to each cash-generating unit (CGU), or groups of CGUs,
expected to benefit from the combination's synergies. The CGU to which goodwill is allocated represents the lowest level at which the goodwill
will be monitored and managed.
Goodwill is not amortised and is subsequently measured at the initial amount recognised less any accumulated impairment losses.
Impairment
The carrying amount of goodwill is tested for impairment at least annually. Impairment is determined for goodwill by assessing the recoverable
amount of each CGU to which the goodwill relates. An impairment loss is recognised when the CGU's recoverable amount is lower than its
carrying amount.
Previously recognised impairment losses of goodwill are not reversed subsequently.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForGoodwillExplanatory",
"language": "en",
"entity": "scheme:21380068P1DRHMJ8KU70",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjM4OGNmNTNkMzQ4NDQwMzg4MDE2MWIyNjIyMjdmNDIwL3NlYzozODhjZjUzZDM0ODQ0MDM4ODAxNjFiMjYyMjI3ZjQyMF8yMzIvZnJhZzozYmQ1ZjEyZDdlNmU0MDAwYmEyNGNkZTQ2YTZkZGUzYS90ZXh0cmVnaW9uOjNiZDVmMTJkN2U2ZTQwMDBiYTI0Y2RlNDZhNmRkZTNhXzg3OTYwOTMxMzg0MzY_5b5dc46c-f39f-445d-9d9c-ea1559e1b04a": {
"value": "
Goodwill
Goodwill is initially measured as the excess of the aggregate of the consideration transferred and the amount recognised for any non-controlling
interest over the fair value of the identifiable assets acquired and liabilities assumed in a business combination at the acquisition date. The amount
recognised for any non-controlling interest is measured as a percentage of the identified net assets of the acquiree based on the present
ownership's proportionate share. At the acquisition date, acquired goodwill is allocated to each cash-generating unit (CGU), or groups of CGUs,
expected to benefit from the combination's synergies. The CGU to which goodwill is allocated represents the lowest level at which the goodwill
will be monitored and managed.
Goodwill is not amortised and is subsequently measured at the initial amount recognised less any accumulated impairment losses.
Impairment
The carrying amount of goodwill is tested for impairment at least annually. Impairment is determined for goodwill by assessing the recoverable
amount of each CGU to which the goodwill relates. An impairment loss is recognised when the CGU's recoverable amount is lower than its
carrying amount.
Previously recognised impairment losses of goodwill are not reversed subsequently.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsAndGoodwillExplanatory",
"language": "en",
"entity": "scheme:21380068P1DRHMJ8KU70",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjM4OGNmNTNkMzQ4NDQwMzg4MDE2MWIyNjIyMjdmNDIwL3NlYzozODhjZjUzZDM0ODQ0MDM4ODAxNjFiMjYyMjI3ZjQyMF8yMzIvZnJhZzozYmQ1ZjEyZDdlNmU0MDAwYmEyNGNkZTQ2YTZkZGUzYS90ZXh0cmVnaW9uOjNiZDVmMTJkN2U2ZTQwMDBiYTI0Y2RlNDZhNmRkZTNhXzg3OTYwOTMxMzg0Mzc_efefbb32-c825-4dbc-9d5c-a7db0538599b": {
"value": "
Leases
A contract, or part of a contract, that conveys the right to control the use of an identified asset for a period of time in exchange for payments to
be\u00a0made to the owners (lessors) is accounted for as a lease. Contracts are assessed to determine whether a contract is, or contains, a lease at the
inception of a contract or when the terms and conditions of a contract are significantly changed. The lease term is the non-cancellable period of a
lease, together with contractual options to extend or to terminate the lease early, where it is reasonably certain that an extension option will be
exercised or a termination option will not be exercised.
At the commencement of a lease contract, a right-of-use asset and a corresponding lease liability are recognised, unless the lease term is 12
months or less. The commencement date of a lease is the date on which the underlying asset is made available for use. The lease liability is
measured at an amount equal to the present value of the lease payments during the lease term that are not paid at that date. The lease liability
includes contingent rentals and variable lease payments that depend on an index, rate, or where they are fixed payments in substance. The lease
liability is remeasured when the contractual cash flows of variable lease payments change due to a change in an index or rate when the lease
term changes following a reassessment.
Lease payments are discounted using the interest rate implicit in the lease. If that rate is not readily available, the incremental borrowing rate
is\u00a0applied. The incremental borrowing rate reflects the rate of interest that the lessee would have to pay to borrow over a similar term, with a
similar security, the funds necessary to obtain an asset of a similar nature and value to the right-of-use asset in a similar economic environment.
In general, a corresponding right-of-use asset is recognised for an amount equal to each lease liability, adjusted by the amount of any pre-paid
lease payment relating to the specific lease contract. The depreciation on right-of-use assets is recognised in income unless capitalised as
exploration drilling cost (see \"exploration cost\") or capitalised when the right-of-use asset is used to construct another asset.
Where Shell is the lessor in a lease arrangement at inception, the lease arrangement will be classified as a finance lease or an operating lease.
Classification is based on the extent to which the risks and rewards incidental to ownership of the underlying asset lie with the lessor or the lessee.
Where Shell, usually in its capacity as operator, has entered into a lease contract on behalf of a joint arrangement, a lease liability is recognised
to the extent that Shell has primary responsibility for the lease liability. A finance sublease is subsequently recognised if the related right-of-use
asset is subleased to the joint arrangement. This is usually the case when the joint arrangement has the right to direct the use and obtains
substantially all of the economic benefits from using the asset.
Impairment of the right-of-use asset
Right-of-use assets are subject to existing impairment requirements as set out in \"Property, plant and equipment\", above, and as presented
in Note 12.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForLeasesExplanatory",
"language": "en",
"entity": "scheme:21380068P1DRHMJ8KU70",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
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"value": "
Joint arrangements and associates
Arrangements under which Shell has contractually agreed to share control (see \"Nature of the Consolidated Financial Statements\" for the
definition of control) with another party or parties are joint ventures where the parties have rights to the net assets of the arrangement, or
joint\u00a0operations where the parties have rights to the assets and obligations for the liabilities relating to the arrangement. Investments in
entities over which Shell has the right to exercise significant influence but neither control nor joint control are classified as associates.
Information about\u00a0incorporated joint arrangements and associates at December 31, 2022, can be found in Appendix 1: Significant
Subsidiaries and Other Related Undertakings.
Investments in joint ventures and associates are accounted for using the equity method, under which the investment is initially recognised at
cost\u00a0and subsequently adjusted for the Shell share of post-acquisition income less dividends received and the Shell share of other comprehensive
income and other movements in equity, together with any loans of a long-term investment nature. Where necessary, adjustments are made to the
financial statements of joint ventures and associates to bring the accounting policies used into line with those of Shell. In an exchange of assets
and liabilities for an interest in a joint venture, the non-Shell share of any excess of the fair value of the assets and liabilities transferred over
the\u00a0pre-exchange carrying amounts is recognised in income. Unrealised gains on other transactions between Shell and its joint ventures and
associates are eliminated to the extent of Shell\u2019s interest in them; unrealised losses are treated similarly but may also result in an assessment
of\u00a0whether the asset transferred is impaired.
Shell recognises its assets and liabilities relating to its interests in joint operations, including its share of assets held jointly and liabilities incurred
jointly with other partners.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentInAssociatesAndJointVenturesExplanatory",
"language": "en",
"entity": "scheme:21380068P1DRHMJ8KU70",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
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"value": "
Inventories
Inventories are stated at cost or net realisable value, whichever is lower. Cost comprises direct purchase costs (including transportation),
and\u00a0associated costs incurred in bringing inventories to their present condition and location, and is determined using the first-in, first-out (FIFO)
method for oil, gas and chemicals and by the weighted average cost method for materials.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForMeasuringInventories",
"language": "en",
"entity": "scheme:21380068P1DRHMJ8KU70",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
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"value": "
Taxation
The charge for current tax is calculated based on the income reported by the Company and its subsidiaries, as adjusted for items that are
non-taxable or disallowed and using rates that have been enacted or substantively enacted by the balance sheet date.
Deferred tax is determined, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their
carrying amounts in the Consolidated Balance Sheet and on unused tax losses and credits carried forward.
Deferred tax assets and liabilities are calculated using the enacted or substantively enacted rates that are expected to apply when an asset
is\u00a0realised or a liability is settled. They are not recognised where they arise on the initial recognition of goodwill or of an asset or liability in a
transaction (other than in a business combination) that, at the time of the transaction, affects neither accounting nor taxable profit, or in respect
of\u00a0taxable temporary differences associated with subsidiaries, joint ventures and associates where the reversal of the respective temporary
difference can be controlled by Shell and it is probable that it will not reverse in the foreseeable future.
Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which the deductible
temporary differences, unused tax losses and credits carried forward can be utilised.
Income tax receivables and payables as well as deferred tax assets and liabilities include provisions for uncertain income tax positions/treatments.
Income taxes are recognised in income except when they relate to items recognised in other comprehensive income, in which case the tax is
recognised in other comprehensive income. Income tax assets and liabilities are presented separately in the Consolidated Balance Sheet except
where there is a right of offset within fiscal jurisdictions and an intention to settle such balances on a net basis.
2. Significant accounting policies, judgements and estimates continued",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForIncomeTaxExplanatory",
"language": "en",
"entity": "scheme:21380068P1DRHMJ8KU70",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjM4OGNmNTNkMzQ4NDQwMzg4MDE2MWIyNjIyMjdmNDIwL3NlYzozODhjZjUzZDM0ODQ0MDM4ODAxNjFiMjYyMjI3ZjQyMF8yMzIvZnJhZzozYmQ1ZjEyZDdlNmU0MDAwYmEyNGNkZTQ2YTZkZGUzYS90ZXh0cmVnaW9uOjNiZDVmMTJkN2U2ZTQwMDBiYTI0Y2RlNDZhNmRkZTNhXzg3OTYwOTMxMzg0NDM_f8e359ee-7f33-4d07-88a8-3d14d9f52e8b": {
"value": "
Taxation
The charge for current tax is calculated based on the income reported by the Company and its subsidiaries, as adjusted for items that are
non-taxable or disallowed and using rates that have been enacted or substantively enacted by the balance sheet date.
Deferred tax is determined, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their
carrying amounts in the Consolidated Balance Sheet and on unused tax losses and credits carried forward.
Deferred tax assets and liabilities are calculated using the enacted or substantively enacted rates that are expected to apply when an asset
is\u00a0realised or a liability is settled. They are not recognised where they arise on the initial recognition of goodwill or of an asset or liability in a
transaction (other than in a business combination) that, at the time of the transaction, affects neither accounting nor taxable profit, or in respect
of\u00a0taxable temporary differences associated with subsidiaries, joint ventures and associates where the reversal of the respective temporary
difference can be controlled by Shell and it is probable that it will not reverse in the foreseeable future.
Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which the deductible
temporary differences, unused tax losses and credits carried forward can be utilised.
Income tax receivables and payables as well as deferred tax assets and liabilities include provisions for uncertain income tax positions/treatments.
Income taxes are recognised in income except when they relate to items recognised in other comprehensive income, in which case the tax is
recognised in other comprehensive income. Income tax assets and liabilities are presented separately in the Consolidated Balance Sheet except
where there is a right of offset within fiscal jurisdictions and an intention to settle such balances on a net basis.
2. Significant accounting policies, judgements and estimates continued",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForDeferredIncomeTaxExplanatory",
"language": "en",
"entity": "scheme:21380068P1DRHMJ8KU70",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
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"value": "
Retirement benefits
Benefits in the form of retirement pensions and health care and life insurance are provided to certain employees and retirees under defined benefit
and defined contribution plans.
Obligations under defined benefit plans are calculated annually by independent actuaries using the projected unit credit method, which takes into
account employees\u2019 years of service and, for pensions, average or final pensionable remuneration, and are discounted to their present value using
interest rates of high-quality corporate bonds denominated in the currency in which the benefits will be paid and of a duration consistent with the
plan obligations. Where plans are funded, payments are made to independently managed trusts; assets held by those trusts are measured at fair
value. Defined benefit plan surpluses are recognised as assets to the extent that they are considered recoverable, which is generally by way of
a\u00a0refund or lower future employer contributions.
The amounts recognised in income in respect of defined benefit plans mainly comprise service cost and net interest. Service cost comprises
principally the increase in the present value of the obligation for benefits resulting from employee service during the period (current service cost)
and also amounts relating to past service and settlements or amendments of plans. Plan amendments are changes to benefits and are generally
recognised when all legal and regulatory approvals have been received and the effects have been communicated to members. Net interest is
calculated using the net defined benefit liability or asset matched against the discount rate yield curve at the beginning of each year for each
plan.\u00a0Remeasurements of the net defined benefit liability or asset resulting from actuarial gains and losses, and the return on plan assets excluding
the amount recognised in income, are recognised in other comprehensive income.
For defined contribution plans, pension expense represents the amount of employer contributions payable for the period.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForEmployeeBenefitsExplanatory",
"language": "en",
"entity": "scheme:21380068P1DRHMJ8KU70",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjM4OGNmNTNkMzQ4NDQwMzg4MDE2MWIyNjIyMjdmNDIwL3NlYzozODhjZjUzZDM0ODQ0MDM4ODAxNjFiMjYyMjI3ZjQyMF8yMzIvZnJhZzozYmQ1ZjEyZDdlNmU0MDAwYmEyNGNkZTQ2YTZkZGUzYS90ZXh0cmVnaW9uOjNiZDVmMTJkN2U2ZTQwMDBiYTI0Y2RlNDZhNmRkZTNhXzg3OTYwOTMxMzg0NDY_0a7521d3-4ea2-4721-9c43-e683eedfc7ae": {
"value": "
Provisions
Provisions are recognised at the balance sheet date at management\u2019s best estimate of the expenditure required to settle the present obligation.
Non-current amounts are discounted at a rate intended to reflect the time value of money. The carrying amounts of provisions and the discount
rate applied are regularly reviewed and adjusted for new facts or changes in law, technology or financial markets.
Provisions for decommissioning and restoration costs, which arise principally in connection with hydrocarbon production facilities, oil products
manufacturing facilities and pipelines, are measured on the basis of current requirements, technology and price levels; the present value is
calculated using amounts discounted over the useful economic life of the assets. The liability is recognised (together with a corresponding amount
as part of the related property, plant and equipment) once a legal or constructive obligation arises to dismantle an item of property, plant and
equipment and to restore the site on which it is located and when a reasonable estimate can be made. The effects of changes resulting from
revisions to the timing or the amount of the original estimate of the provision are reflected on a prospective basis, generally by adjustment to the
carrying amount of the related property, plant and equipment. However, where there is no related asset, or the change reduces the carrying
amount to nil, the effect, or the amount in excess of the reduction in the related asset to nil, is recognised in income.
Shell reviews its energy and chemicals parks on a regular basis to determine whether any changes in assumptions, including expected life,
trigger\u00a0the need to recognise a provision for decommissioning and restoration.
Redundancy provisions are recognised when a detailed formal plan identifies the business or part of the business concerned, the location and
number of employees affected, a detailed estimate of the associated costs and an appropriate timeline, and the employees affected have been
notified of the plan's main features.
An onerous contract provision is recognised when the unavoidable cost of meeting the obligations under the contract exceeds the economic
benefits expected to be received under it. The unavoidable cost under a contract is the lower of the cost of fulfilling the contract and any
compensation or penalties arising from failure to fulfil it. The cost of fulfilling a contract comprises the costs that relate directly to the contract.
Before an onerous provision is recognised Shell first recognises any impairment loss that has occurred on assets dedicated to that contract.
Other provisions are recognised in income in the period in which an obligation arises and the amount can be reasonably estimated. Provisions are
measured based on current legal requirements and existing technology where applicable. Recognition of any joint and several liability is based on
management\u2019s best estimate of the final pro rata share of the liability. Provisions are determined independently of expected insurance recoveries.
Recoveries are recognised when virtually certain of realisation.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForProvisionsExplanatory",
"language": "en",
"entity": "scheme:21380068P1DRHMJ8KU70",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjM4OGNmNTNkMzQ4NDQwMzg4MDE2MWIyNjIyMjdmNDIwL3NlYzozODhjZjUzZDM0ODQ0MDM4ODAxNjFiMjYyMjI3ZjQyMF8yMzIvZnJhZzozYmQ1ZjEyZDdlNmU0MDAwYmEyNGNkZTQ2YTZkZGUzYS90ZXh0cmVnaW9uOjNiZDVmMTJkN2U2ZTQwMDBiYTI0Y2RlNDZhNmRkZTNhXzg3OTYwOTMxMzg0NDY_ffdf9fe1-5f04-474f-9cb9-6751bf5d4428": {
"value": "
Provisions
Provisions are recognised at the balance sheet date at management\u2019s best estimate of the expenditure required to settle the present obligation.
Non-current amounts are discounted at a rate intended to reflect the time value of money. The carrying amounts of provisions and the discount
rate applied are regularly reviewed and adjusted for new facts or changes in law, technology or financial markets.
Provisions for decommissioning and restoration costs, which arise principally in connection with hydrocarbon production facilities, oil products
manufacturing facilities and pipelines, are measured on the basis of current requirements, technology and price levels; the present value is
calculated using amounts discounted over the useful economic life of the assets. The liability is recognised (together with a corresponding amount
as part of the related property, plant and equipment) once a legal or constructive obligation arises to dismantle an item of property, plant and
equipment and to restore the site on which it is located and when a reasonable estimate can be made. The effects of changes resulting from
revisions to the timing or the amount of the original estimate of the provision are reflected on a prospective basis, generally by adjustment to the
carrying amount of the related property, plant and equipment. However, where there is no related asset, or the change reduces the carrying
amount to nil, the effect, or the amount in excess of the reduction in the related asset to nil, is recognised in income.
Shell reviews its energy and chemicals parks on a regular basis to determine whether any changes in assumptions, including expected life,
trigger\u00a0the need to recognise a provision for decommissioning and restoration.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForDecommissioningRestorationAndRehabilitationProvisionsExplanatory",
"language": "en",
"entity": "scheme:21380068P1DRHMJ8KU70",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjM4OGNmNTNkMzQ4NDQwMzg4MDE2MWIyNjIyMjdmNDIwL3NlYzozODhjZjUzZDM0ODQ0MDM4ODAxNjFiMjYyMjI3ZjQyMF8yMzIvZnJhZzozYmQ1ZjEyZDdlNmU0MDAwYmEyNGNkZTQ2YTZkZGUzYS90ZXh0cmVnaW9uOjNiZDVmMTJkN2U2ZTQwMDBiYTI0Y2RlNDZhNmRkZTNhXzg3OTYwOTMxMzg0NDg_40ed615d-6da9-42bf-b17a-04770244e3aa": {
"value": "
Financial instruments
Financial assets and liabilities are presented separately in the Consolidated Balance Sheet except where there is a legally enforceable right
of\u00a0offset and Shell has the intention to settle on a net basis or realise the asset and settle the liability simultaneously.
Financial assets
Financial assets are classified at initial recognition and subsequently measured at amortised cost, fair value through other comprehensive income
or fair value through profit or loss. The classification of financial assets is determined by the contractual cash flows and where applicable the
business model for managing the financial assets.
Debt instruments are measured at amortised cost, if the objective of the business model is to hold the financial asset in order to collect contractual
cash flows and the contractual terms give rise to cash flows that are solely payments of principal and interest. It is initially recognised at fair value
plus or minus transaction costs that are directly attributable to the acquisition or issue of the financial asset. Subsequently, the financial asset is
measured using the effective interest method less any impairment. Gains and losses are recognised in profit or loss when the asset is derecognised,
modified or impaired.
All equity instruments and other debt instruments are recognised at fair value. For equity instruments, on initial recognition, an irrevocable election
(on an instrument-by-instrument basis) can be made to designate these as at fair value through other comprehensive income instead of fair value
through profit or loss. Dividends received on equity instruments are recognised as other income in profit or loss when the right of payment has
been established, except when Shell benefits from such proceeds as a recovery of part of the cost of the financial asset, in which case such gains
are recorded in other comprehensive income.
Investments in securities
Investments in securities (\"securities\") comprise equity and debt securities. Equity securities are carried at fair value. Generally, unrealised holding
gains and losses are recognised in other comprehensive income. On sale, net gains and losses previously accumulated in other comprehensive
income are transferred to retained earnings. Debt securities are generally carried at fair value with unrealised holding gains and losses recognised
in other comprehensive income. On sale, net gains and losses previously accumulated in other comprehensive income are recognised in income.
Impairment of financial assets
The expected credit loss model is applied for recognition and measurement of impairments in financial assets measured at amortised cost or at
fair\u00a0value through other comprehensive income. The expected credit loss model is also applied for financial guarantee contracts to which IFRS 9
applies and which are not accounted for at fair value through profit or loss. The loss allowance for the financial asset is measured at an amount
equal to the 12-month expected credit losses. If the credit risk on the financial asset has increased significantly since initial recognition, the loss
allowance for the financial asset is measured at an amount equal to the lifetime expected credit losses. Changes in loss allowances are recognised
in profit or loss. For trade receivables, a simplified impairment approach is applied recognising expected lifetime losses from initial recognition.
Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand, including offsetting bank overdrafts, short-term bank deposits, money market funds,
reverse repos and similar instruments that generally have a maturity of three months or less at the date of purchase.
Financial liabilities
Financial liabilities are measured at amortised cost, unless they are required to be measured at fair value through profit or loss, such as instruments
held for trading, or Shell has opted to measure them at fair value through profit or loss. Debt and trade payables are recognised initially at fair
value based on amounts exchanged, net of transaction costs, and subsequently at amortised cost except for fixed rate debt subject to fair value
hedging which is remeasured for the hedged risk (see below). Interest expense on debt is accounted for using the effective interest method, and
other than interest capitalised, is recognised in income. For financial liabilities that are measured under the fair value option, the change in the fair
value related to own credit risk is recognised in other comprehensive income. The remaining fair value change is recognised at fair value through
profit or loss.
Derivative contracts and hedges
Derivative contracts are used in the management of interest rate risk, foreign exchange risk, commodity price risk, and foreign currency
cash\u00a0balances. Derivatives that are not closely related to the host contract in terms of economic characteristics and risks and the host contract of
which is not a financial asset are separated from their host contract and recognised at fair value with the associated gains and losses recognised
in income.
Contracts to buy or sell a non-financial item that can be settled net in cash are accounted for as financial instruments, with the exception of those
contracts that were entered into and continue to be held for the purpose of the receipt or delivery of a non-financial item in accordance with
Shell\u2019s expected purchase, sale or usage requirements. Gains or losses arising from changes in the fair value of derivatives that are not designated
as effective hedging instruments are recognised in income.
Certain derivative contracts qualify and are designated either: as a fair value hedge of the change in fair value of a recognised asset or liability
or\u00a0an unrecognised firm commitment; or as a cash flow hedge for the change in cash flows to be received or paid relating to a recognised asset
or\u00a0liability or a highly probable forecast transaction; or as a net investment hedge of the change in foreign exchange rates associated with net
investments in foreign operations with a different functional currency than Shell\u2019s functional currency.
A change in the fair value of a hedging instrument designated as a fair value hedge is recognised in income, together with the consequential
adjustment to the carrying amount of the hedged item. The effective portion of a change in fair value of a derivative contract designated as a
cash\u00a0flow hedge is recognised in other comprehensive income until the hedged transaction occurs; any ineffective portion is recognised in income.
Where the hedged item is a non-financial asset or liability, the amount in accumulated other comprehensive income is transferred to the initial
carrying amount of the asset or liability (reclassified to the balance sheet); a net investment hedge is accounted for similarly to a cash flow hedge.
Gains or losses on the hedging instrument relating to the effective portion of the hedge are recognised in other comprehensive income while any
gains or losses relating to the ineffective portion are recognised in the income statements. On disposal of the foreign operation, the cumulative
value of any such gains or losses recorded in other comprehensive income is reclassified to the income statement.
The effective portion of a change due to retranslation at quarter-end exchange rates in the carrying amount of debt and the principal amount of
derivative contracts used to hedge net investments in foreign operations is recognised in other comprehensive income until the related investment
is\u00a0sold or liquidated; any ineffective portion is recognised in income.
All relationships between hedging instruments and hedged items are documented, as well as risk management objectives and strategies for
undertaking hedge transactions. The effectiveness of hedges is also continually assessed and hedge accounting is discontinued when there is
a\u00a0change in the risk management strategy.
Unless designated as hedging instruments, contracts to sell or purchase non-financial items that can be settled net as if the contracts were financial
instruments and that do not meet expected own-use requirements (typically, forward sale and purchase contracts for commodities in trading
operations), and contracts that are or contain written options, are recognised at fair value; associated gains and losses are recognised in income.
Derivatives that are held primarily for the purpose of trading are presented as current in the Consolidated Balance Sheet.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory",
"language": "en",
"entity": "scheme:21380068P1DRHMJ8KU70",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjM4OGNmNTNkMzQ4NDQwMzg4MDE2MWIyNjIyMjdmNDIwL3NlYzozODhjZjUzZDM0ODQ0MDM4ODAxNjFiMjYyMjI3ZjQyMF8yMzIvZnJhZzozYmQ1ZjEyZDdlNmU0MDAwYmEyNGNkZTQ2YTZkZGUzYS90ZXh0cmVnaW9uOjNiZDVmMTJkN2U2ZTQwMDBiYTI0Y2RlNDZhNmRkZTNhXzkzNDU4NDg5NjE3NDc_fdbda3c3-febe-4de9-baf0-d1a2874cc4b9": {
"value": "
Financial assets
Financial assets are classified at initial recognition and subsequently measured at amortised cost, fair value through other comprehensive income
or fair value through profit or loss. The classification of financial assets is determined by the contractual cash flows and where applicable the
business model for managing the financial assets.
Debt instruments are measured at amortised cost, if the objective of the business model is to hold the financial asset in order to collect contractual
cash flows and the contractual terms give rise to cash flows that are solely payments of principal and interest. It is initially recognised at fair value
plus or minus transaction costs that are directly attributable to the acquisition or issue of the financial asset. Subsequently, the financial asset is
measured using the effective interest method less any impairment. Gains and losses are recognised in profit or loss when the asset is derecognised,
modified or impaired.
All equity instruments and other debt instruments are recognised at fair value. For equity instruments, on initial recognition, an irrevocable election
(on an instrument-by-instrument basis) can be made to designate these as at fair value through other comprehensive income instead of fair value
through profit or loss. Dividends received on equity instruments are recognised as other income in profit or loss when the right of payment has
been established, except when Shell benefits from such proceeds as a recovery of part of the cost of the financial asset, in which case such gains
are recorded in other comprehensive income.
Investments in securities
Investments in securities (\"securities\") comprise equity and debt securities. Equity securities are carried at fair value. Generally, unrealised holding
gains and losses are recognised in other comprehensive income. On sale, net gains and losses previously accumulated in other comprehensive
income are transferred to retained earnings. Debt securities are generally carried at fair value with unrealised holding gains and losses recognised
in other comprehensive income. On sale, net gains and losses previously accumulated in other comprehensive income are recognised in income.
Impairment of financial assets
The expected credit loss model is applied for recognition and measurement of impairments in financial assets measured at amortised cost or at
fair\u00a0value through other comprehensive income. The expected credit loss model is also applied for financial guarantee contracts to which IFRS 9
applies and which are not accounted for at fair value through profit or loss. The loss allowance for the financial asset is measured at an amount
equal to the 12-month expected credit losses. If the credit risk on the financial asset has increased significantly since initial recognition, the loss
allowance for the financial asset is measured at an amount equal to the lifetime expected credit losses. Changes in loss allowances are recognised
in profit or loss. For trade receivables, a simplified impairment approach is applied recognising expected lifetime losses from initial recognition.
Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand, including offsetting bank overdrafts, short-term bank deposits, money market funds,
reverse repos and similar instruments that generally have a maturity of three months or less at the date of purchase.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialAssetsExplanatory",
"language": "en",
"entity": "scheme:21380068P1DRHMJ8KU70",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjM4OGNmNTNkMzQ4NDQwMzg4MDE2MWIyNjIyMjdmNDIwL3NlYzozODhjZjUzZDM0ODQ0MDM4ODAxNjFiMjYyMjI3ZjQyMF8yMzIvZnJhZzozYmQ1ZjEyZDdlNmU0MDAwYmEyNGNkZTQ2YTZkZGUzYS90ZXh0cmVnaW9uOjNiZDVmMTJkN2U2ZTQwMDBiYTI0Y2RlNDZhNmRkZTNhXzkzNDU4NDg5NzIyMzg_f8aa65d5-8a96-4c2f-b726-e0491bae2672": {
"value": "
Impairment of financial assets
The expected credit loss model is applied for recognition and measurement of impairments in financial assets measured at amortised cost or at
fair\u00a0value through other comprehensive income. The expected credit loss model is also applied for financial guarantee contracts to which IFRS 9
applies and which are not accounted for at fair value through profit or loss. The loss allowance for the financial asset is measured at an amount
equal to the 12-month expected credit losses. If the credit risk on the financial asset has increased significantly since initial recognition, the loss
allowance for the financial asset is measured at an amount equal to the lifetime expected credit losses. Changes in loss allowances are recognised
in profit or loss. For trade receivables, a simplified impairment approach is applied recognising expected lifetime losses from initial recognition.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfFinancialAssetsExplanatory",
"language": "en",
"entity": "scheme:21380068P1DRHMJ8KU70",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjM4OGNmNTNkMzQ4NDQwMzg4MDE2MWIyNjIyMjdmNDIwL3NlYzozODhjZjUzZDM0ODQ0MDM4ODAxNjFiMjYyMjI3ZjQyMF8yMzIvZnJhZzozYmQ1ZjEyZDdlNmU0MDAwYmEyNGNkZTQ2YTZkZGUzYS90ZXh0cmVnaW9uOjNiZDVmMTJkN2U2ZTQwMDBiYTI0Y2RlNDZhNmRkZTNhXzkzNDU4NDg5NzIyMzk_b8724609-7807-43bc-8ed1-e6cf1968dfe6": {
"value": "
Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand, including offsetting bank overdrafts, short-term bank deposits, money market funds,
reverse repos and similar instruments that generally have a maturity of three months or less at the date of purchase.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyToDetermineComponentsOfCashAndCashEquivalents",
"language": "en",
"entity": "scheme:21380068P1DRHMJ8KU70",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjM4OGNmNTNkMzQ4NDQwMzg4MDE2MWIyNjIyMjdmNDIwL3NlYzozODhjZjUzZDM0ODQ0MDM4ODAxNjFiMjYyMjI3ZjQyMF8yMzIvZnJhZzozYmQ1ZjEyZDdlNmU0MDAwYmEyNGNkZTQ2YTZkZGUzYS90ZXh0cmVnaW9uOjNiZDVmMTJkN2U2ZTQwMDBiYTI0Y2RlNDZhNmRkZTNhXzkzNDU4NDg5NjE3NDk_3b27da3b-1275-4cf3-ab5e-a107511d22ca": {
"value": "
Financial liabilities
Financial liabilities are measured at amortised cost, unless they are required to be measured at fair value through profit or loss, such as instruments
held for trading, or Shell has opted to measure them at fair value through profit or loss. Debt and trade payables are recognised initially at fair
value based on amounts exchanged, net of transaction costs, and subsequently at amortised cost except for fixed rate debt subject to fair value
hedging which is remeasured for the hedged risk (see below). Interest expense on debt is accounted for using the effective interest method, and
other than interest capitalised, is recognised in income. For financial liabilities that are measured under the fair value option, the change in the fair
value related to own credit risk is recognised in other comprehensive income. The remaining fair value change is recognised at fair value through
profit or loss.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialLiabilitiesExplanatory",
"language": "en",
"entity": "scheme:21380068P1DRHMJ8KU70",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjM4OGNmNTNkMzQ4NDQwMzg4MDE2MWIyNjIyMjdmNDIwL3NlYzozODhjZjUzZDM0ODQ0MDM4ODAxNjFiMjYyMjI3ZjQyMF8yMzIvZnJhZzozYmQ1ZjEyZDdlNmU0MDAwYmEyNGNkZTQ2YTZkZGUzYS90ZXh0cmVnaW9uOjNiZDVmMTJkN2U2ZTQwMDBiYTI0Y2RlNDZhNmRkZTNhXzg3OTYwOTMxMzg0NTg_4281d8c1-f151-481e-80e2-2d265793afc4": {
"value": "
Derivative contracts and hedges
Derivative contracts are used in the management of interest rate risk, foreign exchange risk, commodity price risk, and foreign currency
cash\u00a0balances. Derivatives that are not closely related to the host contract in terms of economic characteristics and risks and the host contract of
which is not a financial asset are separated from their host contract and recognised at fair value with the associated gains and losses recognised
in income.
Contracts to buy or sell a non-financial item that can be settled net in cash are accounted for as financial instruments, with the exception of those
contracts that were entered into and continue to be held for the purpose of the receipt or delivery of a non-financial item in accordance with
Shell\u2019s expected purchase, sale or usage requirements. Gains or losses arising from changes in the fair value of derivatives that are not designated
as effective hedging instruments are recognised in income.
Certain derivative contracts qualify and are designated either: as a fair value hedge of the change in fair value of a recognised asset or liability
or\u00a0an unrecognised firm commitment; or as a cash flow hedge for the change in cash flows to be received or paid relating to a recognised asset
or\u00a0liability or a highly probable forecast transaction; or as a net investment hedge of the change in foreign exchange rates associated with net
investments in foreign operations with a different functional currency than Shell\u2019s functional currency.
A change in the fair value of a hedging instrument designated as a fair value hedge is recognised in income, together with the consequential
adjustment to the carrying amount of the hedged item. The effective portion of a change in fair value of a derivative contract designated as a
cash\u00a0flow hedge is recognised in other comprehensive income until the hedged transaction occurs; any ineffective portion is recognised in income.
Where the hedged item is a non-financial asset or liability, the amount in accumulated other comprehensive income is transferred to the initial
carrying amount of the asset or liability (reclassified to the balance sheet); a net investment hedge is accounted for similarly to a cash flow hedge.
Gains or losses on the hedging instrument relating to the effective portion of the hedge are recognised in other comprehensive income while any
gains or losses relating to the ineffective portion are recognised in the income statements. On disposal of the foreign operation, the cumulative
value of any such gains or losses recorded in other comprehensive income is reclassified to the income statement.
The effective portion of a change due to retranslation at quarter-end exchange rates in the carrying amount of debt and the principal amount of
derivative contracts used to hedge net investments in foreign operations is recognised in other comprehensive income until the related investment
is\u00a0sold or liquidated; any ineffective portion is recognised in income.
All relationships between hedging instruments and hedged items are documented, as well as risk management objectives and strategies for
undertaking hedge transactions. The effectiveness of hedges is also continually assessed and hedge accounting is discontinued when there is
a\u00a0change in the risk management strategy.
Unless designated as hedging instruments, contracts to sell or purchase non-financial items that can be settled net as if the contracts were financial
instruments and that do not meet expected own-use requirements (typically, forward sale and purchase contracts for commodities in trading
operations), and contracts that are or contain written options, are recognised at fair value; associated gains and losses are recognised in income.
Derivatives that are held primarily for the purpose of trading are presented as current in the Consolidated Balance Sheet.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForDerivativeFinancialInstrumentsExplanatory",
"language": "en",
"entity": "scheme:21380068P1DRHMJ8KU70",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjM4OGNmNTNkMzQ4NDQwMzg4MDE2MWIyNjIyMjdmNDIwL3NlYzozODhjZjUzZDM0ODQ0MDM4ODAxNjFiMjYyMjI3ZjQyMF8yMzIvZnJhZzozYmQ1ZjEyZDdlNmU0MDAwYmEyNGNkZTQ2YTZkZGUzYS90ZXh0cmVnaW9uOjNiZDVmMTJkN2U2ZTQwMDBiYTI0Y2RlNDZhNmRkZTNhXzg3OTYwOTMxMzg0NTg_a7914364-1c16-4d54-9814-3e3e7901e428": {
"value": "
Derivative contracts and hedges
Derivative contracts are used in the management of interest rate risk, foreign exchange risk, commodity price risk, and foreign currency
cash\u00a0balances. Derivatives that are not closely related to the host contract in terms of economic characteristics and risks and the host contract of
which is not a financial asset are separated from their host contract and recognised at fair value with the associated gains and losses recognised
in income.
Contracts to buy or sell a non-financial item that can be settled net in cash are accounted for as financial instruments, with the exception of those
contracts that were entered into and continue to be held for the purpose of the receipt or delivery of a non-financial item in accordance with
Shell\u2019s expected purchase, sale or usage requirements. Gains or losses arising from changes in the fair value of derivatives that are not designated
as effective hedging instruments are recognised in income.
Certain derivative contracts qualify and are designated either: as a fair value hedge of the change in fair value of a recognised asset or liability
or\u00a0an unrecognised firm commitment; or as a cash flow hedge for the change in cash flows to be received or paid relating to a recognised asset
or\u00a0liability or a highly probable forecast transaction; or as a net investment hedge of the change in foreign exchange rates associated with net
investments in foreign operations with a different functional currency than Shell\u2019s functional currency.
A change in the fair value of a hedging instrument designated as a fair value hedge is recognised in income, together with the consequential
adjustment to the carrying amount of the hedged item. The effective portion of a change in fair value of a derivative contract designated as a
cash\u00a0flow hedge is recognised in other comprehensive income until the hedged transaction occurs; any ineffective portion is recognised in income.
Where the hedged item is a non-financial asset or liability, the amount in accumulated other comprehensive income is transferred to the initial
carrying amount of the asset or liability (reclassified to the balance sheet); a net investment hedge is accounted for similarly to a cash flow hedge.
Gains or losses on the hedging instrument relating to the effective portion of the hedge are recognised in other comprehensive income while any
gains or losses relating to the ineffective portion are recognised in the income statements. On disposal of the foreign operation, the cumulative
value of any such gains or losses recorded in other comprehensive income is reclassified to the income statement.
The effective portion of a change due to retranslation at quarter-end exchange rates in the carrying amount of debt and the principal amount of
derivative contracts used to hedge net investments in foreign operations is recognised in other comprehensive income until the related investment
is\u00a0sold or liquidated; any ineffective portion is recognised in income.
All relationships between hedging instruments and hedged items are documented, as well as risk management objectives and strategies for
undertaking hedge transactions. The effectiveness of hedges is also continually assessed and hedge accounting is discontinued when there is
a\u00a0change in the risk management strategy.
Unless designated as hedging instruments, contracts to sell or purchase non-financial items that can be settled net as if the contracts were financial
instruments and that do not meet expected own-use requirements (typically, forward sale and purchase contracts for commodities in trading
operations), and contracts that are or contain written options, are recognised at fair value; associated gains and losses are recognised in income.
Derivatives that are held primarily for the purpose of trading are presented as current in the Consolidated Balance Sheet.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForDerivativeFinancialInstrumentsAndHedgingExplanatory",
"language": "en",
"entity": "scheme:21380068P1DRHMJ8KU70",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjM4OGNmNTNkMzQ4NDQwMzg4MDE2MWIyNjIyMjdmNDIwL3NlYzozODhjZjUzZDM0ODQ0MDM4ODAxNjFiMjYyMjI3ZjQyMF8yMzIvZnJhZzozYmQ1ZjEyZDdlNmU0MDAwYmEyNGNkZTQ2YTZkZGUzYS90ZXh0cmVnaW9uOjNiZDVmMTJkN2U2ZTQwMDBiYTI0Y2RlNDZhNmRkZTNhXzg3OTYwOTMxMzg0NTg_ef74d2a4-d35e-47a3-b73f-fb9009661a37": {
"value": "
Derivative contracts and hedges
Derivative contracts are used in the management of interest rate risk, foreign exchange risk, commodity price risk, and foreign currency
cash\u00a0balances. Derivatives that are not closely related to the host contract in terms of economic characteristics and risks and the host contract of
which is not a financial asset are separated from their host contract and recognised at fair value with the associated gains and losses recognised
in income.
Contracts to buy or sell a non-financial item that can be settled net in cash are accounted for as financial instruments, with the exception of those
contracts that were entered into and continue to be held for the purpose of the receipt or delivery of a non-financial item in accordance with
Shell\u2019s expected purchase, sale or usage requirements. Gains or losses arising from changes in the fair value of derivatives that are not designated
as effective hedging instruments are recognised in income.
Certain derivative contracts qualify and are designated either: as a fair value hedge of the change in fair value of a recognised asset or liability
or\u00a0an unrecognised firm commitment; or as a cash flow hedge for the change in cash flows to be received or paid relating to a recognised asset
or\u00a0liability or a highly probable forecast transaction; or as a net investment hedge of the change in foreign exchange rates associated with net
investments in foreign operations with a different functional currency than Shell\u2019s functional currency.
A change in the fair value of a hedging instrument designated as a fair value hedge is recognised in income, together with the consequential
adjustment to the carrying amount of the hedged item. The effective portion of a change in fair value of a derivative contract designated as a
cash\u00a0flow hedge is recognised in other comprehensive income until the hedged transaction occurs; any ineffective portion is recognised in income.
Where the hedged item is a non-financial asset or liability, the amount in accumulated other comprehensive income is transferred to the initial
carrying amount of the asset or liability (reclassified to the balance sheet); a net investment hedge is accounted for similarly to a cash flow hedge.
Gains or losses on the hedging instrument relating to the effective portion of the hedge are recognised in other comprehensive income while any
gains or losses relating to the ineffective portion are recognised in the income statements. On disposal of the foreign operation, the cumulative
value of any such gains or losses recorded in other comprehensive income is reclassified to the income statement.
The effective portion of a change due to retranslation at quarter-end exchange rates in the carrying amount of debt and the principal amount of
derivative contracts used to hedge net investments in foreign operations is recognised in other comprehensive income until the related investment
is\u00a0sold or liquidated; any ineffective portion is recognised in income.
All relationships between hedging instruments and hedged items are documented, as well as risk management objectives and strategies for
undertaking hedge transactions. The effectiveness of hedges is also continually assessed and hedge accounting is discontinued when there is
a\u00a0change in the risk management strategy.
Unless designated as hedging instruments, contracts to sell or purchase non-financial items that can be settled net as if the contracts were financial
instruments and that do not meet expected own-use requirements (typically, forward sale and purchase contracts for commodities in trading
operations), and contracts that are or contain written options, are recognised at fair value; associated gains and losses are recognised in income.
Derivatives that are held primarily for the purpose of trading are presented as current in the Consolidated Balance Sheet.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForHedgingExplanatory",
"language": "en",
"entity": "scheme:21380068P1DRHMJ8KU70",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjM4OGNmNTNkMzQ4NDQwMzg4MDE2MWIyNjIyMjdmNDIwL3NlYzozODhjZjUzZDM0ODQ0MDM4ODAxNjFiMjYyMjI3ZjQyMF8yMzIvZnJhZzozYmQ1ZjEyZDdlNmU0MDAwYmEyNGNkZTQ2YTZkZGUzYS90ZXh0cmVnaW9uOjNiZDVmMTJkN2U2ZTQwMDBiYTI0Y2RlNDZhNmRkZTNhXzg3OTYwOTMxMzg0NTA_e5ab0563-4e01-45ba-9bf5-133f88c03114": {
"value": "
Fair value measurements
Fair value measurements are estimates of the amounts for which assets or liabilities could be transferred at the measurement date, based on
the\u00a0assumption that such transfers take place between participants in principal markets and, where applicable, taking highest and best use
into\u00a0account.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForFairValueMeasurementExplanatory",
"language": "en",
"entity": "scheme:21380068P1DRHMJ8KU70",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjM4OGNmNTNkMzQ4NDQwMzg4MDE2MWIyNjIyMjdmNDIwL3NlYzozODhjZjUzZDM0ODQ0MDM4ODAxNjFiMjYyMjI3ZjQyMF8yMzIvZnJhZzozYmQ1ZjEyZDdlNmU0MDAwYmEyNGNkZTQ2YTZkZGUzYS90ZXh0cmVnaW9uOjNiZDVmMTJkN2U2ZTQwMDBiYTI0Y2RlNDZhNmRkZTNhXzg3OTYwOTMxMzg0NTE_297dfc63-1203-4105-9dba-56ef97609c5c": {
"value": "
Share-based compensation plans
The fair value of share-based compensation expense arising from the Performance Share Plan (PSP) and the Long-term Incentive Plan (LTIP) -
Shell\u2019s\u00a0main equity-settled plans - is estimated using the average Monte Carlo fair values and is recognised in income from the date of grant over
the vesting period with a corresponding increase directly in equity. The model projects and averages the results for a range of potential outcomes
for the vesting conditions, the principal assumptions for which are the share price volatility and dividend yields for Shell and four of its main
competitors using respectively three years and 10 years of historical data.
Shares held in trust
Shares in the Company, which are held by employee share ownership trusts and trust-like entities, are not included in assets but are reflected
at\u00a0cost as a deduction from equity as shares held in trust.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForSharebasedPaymentTransactionsExplanatory",
"language": "en",
"entity": "scheme:21380068P1DRHMJ8KU70",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjM4OGNmNTNkMzQ4NDQwMzg4MDE2MWIyNjIyMjdmNDIwL3NlYzozODhjZjUzZDM0ODQ0MDM4ODAxNjFiMjYyMjI3ZjQyMF8yMzIvZnJhZzozYmQ1ZjEyZDdlNmU0MDAwYmEyNGNkZTQ2YTZkZGUzYS90ZXh0cmVnaW9uOjNiZDVmMTJkN2U2ZTQwMDBiYTI0Y2RlNDZhNmRkZTNhXzg3OTYwOTMxMzg0NTM_a713ec80-33e3-4ffd-b290-abe0001f3dc5": {
"value": "
Acquisitions and sales of interests in a business
Assets acquired and liabilities assumed when control is obtained over a business, and when an interest or an additional interest is acquired in
a\u00a0joint operation which is a business, are recognised at their fair value at the date of the acquisition; the amount of the purchase consideration
above this value is recognised as goodwill. When control is obtained, any non-controlling interest is recognised as the proportionate share of the
identifiable net assets. The acquisition of a non-controlling interest in a subsidiary and the sale of an interest while retaining control are accounted
for as transactions within equity. The difference between the purchase consideration or sale proceeds after tax and the relevant proportion of the
non-controlling interest, measured by reference to the carrying amount of the interest\u2019s net assets at the date of acquisition or sale, is recognised
in\u00a0retained earnings as a movement in equity attributable to Shell plc shareholders.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsExplanatory",
"language": "en",
"entity": "scheme:21380068P1DRHMJ8KU70",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjM4OGNmNTNkMzQ4NDQwMzg4MDE2MWIyNjIyMjdmNDIwL3NlYzozODhjZjUzZDM0ODQ0MDM4ODAxNjFiMjYyMjI3ZjQyMF8yMzIvZnJhZzozYmQ1ZjEyZDdlNmU0MDAwYmEyNGNkZTQ2YTZkZGUzYS90ZXh0cmVnaW9uOjNiZDVmMTJkN2U2ZTQwMDBiYTI0Y2RlNDZhNmRkZTNhXzg3OTYwOTMxMzg0NTQ_bf414e75-5ae9-4e1e-aa26-8696102d8ead": {
"value": "
Emission schemes and related environmental programmes
Emission certificates, biofuel certificates and renewable power certificates (together \"environmental certificates\") held for trading purposes are
recognised at cost or net realisable value, whichever is lower, and classified under inventory.
Emission trading schemes
Emission certificates acquired for compliance purposes are initially recognised at cost and classified under intangible assets. In the schemes
where\u00a0a cap is set for emissions, the associated emission certificates granted are recognised at cost, which may be zero. An emission liability
is\u00a0recognised under other liabilities when actual emissions occur that give rise to an obligation. To the extent the liability is covered by emission
certificates held for compliance purposes, the liability is measured with reference to the value of these emission certificates held and for the
remaining uncovered portion at market value. The associated expense is presented under \"Production and manufacturing expenses\". Both
the\u00a0emission certificates and the emission liability are derecognised upon settling the liability with the respective regulator.
Biofuel programmes
Biofuel certificates acquired that are held for compliance purposes are initially recognised at cost under intangible assets. Self-generated biofuel
certificates are recognised at nil value, as they primarily offset the obligation. A biofuel liability is recognised under other liabilities when the
obligation arises under local regulations. To the extent covered by biofuel certificates held for compliance purposes, the liability is measured with
reference to the value of these certificates held and for the remaining uncovered portion at market value. The associated expense is presented
under \"purchases\". Biofuel certificates and the biofuel liability are both derecognised upon settling the liability with the respective regulator.
Renewable power programmes
Renewable power certificates acquired for compliance purposes are initially recognised at cost as an intangible asset. Self-generated renewable
power certificates are generally transferred to the customer upon sales of electricity. A renewable power liability is recognised under other
liabilities when electricity sales take place that give rise to an obligation to retire renewable power certificates. The associated cost is recognised
in \"purchases\" in the income statement. If the obligation relates to power consumed in business operations, it is presented in other liabilities with
cost reflected in \"Production and manufacturing expenses\". To the extent covered by renewable power certificates held for compliance purposes,
the liability is measured with reference to the value of these renewable power certificates and for the remaining uncovered portion at market
value. Renewable power certificates and the renewable power liability are derecognised upon settling the liability with the respective regulator.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForEnvironmentRelatedExpenseExplanatory",
"language": "en",
"entity": "scheme:21380068P1DRHMJ8KU70",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjM4OGNmNTNkMzQ4NDQwMzg4MDE2MWIyNjIyMjdmNDIwL3NlYzozODhjZjUzZDM0ODQ0MDM4ODAxNjFiMjYyMjI3ZjQyMF8yMzIvZnJhZzozYmQ1ZjEyZDdlNmU0MDAwYmEyNGNkZTQ2YTZkZGUzYS90ZXh0cmVnaW9uOjNiZDVmMTJkN2U2ZTQwMDBiYTI0Y2RlNDZhNmRkZTNhXzkzNDU4NDg5NzI1MjU_9046d194-a392-4c7e-b1fa-e22e58e945f0": {
"value": "
Emission trading schemes
Emission certificates acquired for compliance purposes are initially recognised at cost and classified under intangible assets. In the schemes
where\u00a0a cap is set for emissions, the associated emission certificates granted are recognised at cost, which may be zero. An emission liability
is\u00a0recognised under other liabilities when actual emissions occur that give rise to an obligation. To the extent the liability is covered by emission
certificates held for compliance purposes, the liability is measured with reference to the value of these emission certificates held and for the
remaining uncovered portion at market value. The associated expense is presented under \"Production and manufacturing expenses\". Both
the\u00a0emission certificates and the emission liability are derecognised upon settling the liability with the respective regulator.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForEmissionRightsExplanatory",
"language": "en",
"entity": "scheme:21380068P1DRHMJ8KU70",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjM4OGNmNTNkMzQ4NDQwMzg4MDE2MWIyNjIyMjdmNDIwL3NlYzozODhjZjUzZDM0ODQ0MDM4ODAxNjFiMjYyMjI3ZjQyMF8yMzgvZnJhZzo5OTY4ODFmMjViOGY0MDIzYjk1NTczMzUyMjc4YTEzNS90ZXh0cmVnaW9uOjk5Njg4MWYyNWI4ZjQwMjNiOTU1NzMzNTIyNzhhMTM1XzkzNDU4NDkwNTcyNDc_b7848094-f9a3-4130-8235-efe39fc062a5": {
"value": "
Deferred tax assets
In general, it is expected that sufficient deferred tax liabilities and forecasted taxable profits within the planning period of 10 years are available
for recovery of the deferred tax assets recognised at December 31, 2022. Integrated Gas and Upstream deferred tax assets recognised are
expected to be recovered within the period of production of each asset. For deferred tax assets of $303 million as at December 31, 2022 (2021:
$711\u00a0million) this period extends beyond 10 years. Deferred tax assets in Chemicals and Products and in Marketing expected to be recovered
in\u00a0more than 10 years are $382\u00a0million as at December 31, 2022 (2021: $854\u00a0million). In Chemicals and Products, cash flows beyond 10 years
(for a maximum of an additional 10 years) were further risked to determine recoverability of deferred tax assets beyond 10 years (see\u00a0Note 22).
22. Taxation
Compared with 2021, the decrease in the weighted average of statutory tax rates reflects a lower proportion of earnings in the Upstream segment
subject to relatively higher tax rates.
The amount and timing of settlement in respect of these provisions are uncertain and dependent on various factors that are not always within
management\u2019s control. Reviews of estimated future decommissioning and restoration costs and the discount rate applied are carried out regularly.
The discount rate applied at December 31, 2022, was 3.25% (2021: 2%). An increase of 0.5% or a decrease of 0.5% in the discount rate could
result in a decrease of $1.2\u00a0billion (2021: $1.5\u00a0billion) or an increase of $1.3\u00a0billion (2021: $1.7\u00a0billion) of decommissioning and restoration
provisions, respectively. Such increase or decrease will be reflected in the carrying amount of the related asset. Where applicable that carrying
amount is to be tested for impairment.
In 2022, there was a decrease of $3,309 million in the decommissioning and restoration provision as a result of the change in the discount rate,
partly offset by an increase in the provision resulting from changes in cost estimates of $3,009 million, reported within remeasurements and other
movements.
Other provisions at December 31, 2022, include amounts recognised in respect of employee benefits.
The decommissioning and restoration provision at December 31, 2022, is expected to be utilised within:
",
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}
},
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"value": "
Dividend resilience
External stakeholders have requested disclosures on how climate change affects dividend-paying capacity. If a further impairment had been
recognised in 2022 using any of the climate change scenarios described above, this would not have impacted the ability to pay dividends in
this\u00a0financial year because of the strong cash flow generation and financial reserves. Had Shell applied the IEA NZE50 scenario (see above),
and\u00a0if this had led to a decrease in the recoverable amount of Integrated Gas and Upstream assets of $17-23 billion and recognition of an
equivalent impairment, this would not have impacted the distributable reserves available to Shell from which to pay dividends in 2022. This
is\u00a0on\u00a0the basis that such impairment would have resulted in part-realisation of the merger reserve recognised by the Company of $234 billion
as at December 31, 2022.
A forward-looking statement regarding future dividend-paying capacity cannot be provided because of unknown risks and uncertainties that
could\u00a0cause actual results, performance or events to differ materially from those expressed or implied in these statements.
29. Dividends
[A]Relates to environmental certificates held for compliance purposes.
11. Goodwill and other intangible\u00a0assets
[A]Includes the reclassification to assets classified as held for sale. (See Note 18).
[B]Includes impairments as presented in Note 12.
[C]Includes the reclassification from goodwill following the completion of a purchase price allocation in Renewables and Energy Solutions.
[D]Includes other intangible assets from acquisitions, power purchase agreements, retail customer relationships, trademarks and $583 million related to software.
[A]Includes the reclassification to assets classified as held for sale. (See Note 18).
[B]Includes impairment as presented in Note 12.
[C]Includes $456\u00a0million related to software.
Goodwill at December 31, 2022, related principally to the acquisition of BG Group plc in 2016, allocated to Integrated Gas ($4,945 million)
and\u00a0Upstream ($5,294 million) at the operating segment level, and to Pennzoil-Quaker State Company ($1,714 million), a lubricants business
in\u00a0the Chemicals and Products segment based largely in North America.
Additions to goodwill in 2022 mainly related to goodwill recognised from acquisitions in Marketing ($1,178\u00a0million) and Renewables and Energy
Solutions ($775\u00a0million).",
"dimensions": {
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},
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"value": "
|
Obligation (presented under Other payables, see Note 19) |
| | | | | |
| |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
Additions covered by government grants | | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
Additions covered by government grants | | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
[A]Emission certificates that were allocated free of charge at an equivalent fair value at grant date.
Environmental certificates acquired that are held for compliance purposes are recognised at cost under intangible assets. In addition, a portfolio
of\u00a0environmental certificates is held for trading purposes and classified under inventory (see Note 2 and Note 16). Environmental certificates held
for trading purposes can be redesignated for compliance purposes and then settle compliance obligations.
Cost recognised in the Consolidated Statement of Income represents the compliance cost associated with emissions or with products sold during
the year. The liability at year-end represents the compliance cost recognised over current and past compliance periods to the extent not settled
to\u00a0date. Liabilities are settled in line with compliance periods, which depend on the scheme and may not coincide with the calendar year.
The figures present compliance schemes only, excluding voluntary activities.
19. Trade\u00a0and\u00a0other\u00a0payables
| | | | | |
| |
| | | |
| | | | | |
| | | | | |
| | | | | |
Sales taxes, excise duties and similar levies | | | | | |
Amounts due to joint ventures and associates | | | | | |
Accruals and deferred income | | | | | |
| | | | | |
[A]Includes obligations under environmental compliance schemes of $4,710\u00a0million as at December 31, 2022 (2021: $4,016\u00a0million). (See Note 5).
The fair value of financial liabilities included above approximates the carrying amount and was determined from predominantly
unobservable inputs.
Other payables include amounts due to joint arrangement partners and in respect of other project-related items.
Information about offsetting, collateral and liquidity risk is presented in Note 25.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfTradeAndOtherPayablesExplanatory",
"language": "en",
"entity": "scheme:21380068P1DRHMJ8KU70",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
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"value": "
7. Capital management
Shell manages its businesses to deliver strong cash flows to sustain its strategy and for profitable growth. Management's current priorities for
applying Shell's cash are:
| | | | |
| | | | |
Cash capex within $23-27 billion (2021: $19-22 billion) \u25aaIncludes inorganic capex | | | Targeting AA credit metrics through the cycle \u25aaContinued focus on Net debt reduction in upcycle \u25aaDivest for value \u25aaInvest for value |
Significant shareholder distributions | | |
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfObjectivesPoliciesAndProcessesForManagingCapitalExplanatory",
"language": "en",
"entity": "scheme:21380068P1DRHMJ8KU70",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
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"value": "
8. Segment information
General information
Shell is an international energy company engaged in the principal aspects of the energy and petrochemicals industries and reports its business
through segments. With effect from January 1, 2022, the reporting segments are aligned with Shell\u2019s Powering Progress strategy. The Renewables
and Energy Solutions business is now reported separately from Integrated Gas. Shales assets in Canada are now reported as part of the
Integrated Gas segment instead of the Upstream segment. The Oil Products and Chemicals segments are reorganised into two segments \u2013
Marketing, and Chemicals and Products. Prior period comparatives have been revised to conform with current year presentation. The reporting
segment changes have no impact at a Group level.
The Integrated Gas segment includes liquefied natural gas (LNG), conversion of natural gas into gas-to-liquids (GTL) fuels and other products. The
segment includes natural gas and liquids exploration and extraction, and the operation of the upstream and midstream infrastructure necessary
to\u00a0deliver gas and liquids to market as well as the marketing, trading and optimisation of LNG, including LNG as a fuel for heavy-duty vehicles.
The Upstream segment includes exploration and extraction of crude oil, natural gas and natural gas liquids. It also markets and transports oil and
gas, and operates the infrastructure necessary to deliver them to the market.
The Marketing segment comprises the Mobility, Lubricants, and Sectors & Decarbonisation businesses. The Mobility business operates Shell\u2019s
retail\u00a0network including electric vehicle charging services. The Lubricants business produces, markets and sells lubricants for road transport, and
machinery used in manufacturing, mining, power generation, agriculture and construction. The Sectors & Decarbonisation business sells fuels,
speciality products and services including low-carbon energy solutions to a broad range of commercial customers including the aviation, marine,
commercial road transport and agricultural sectors.
The Chemicals and Products segment includes chemicals manufacturing plants with their own marketing network, and refineries which turn crude
oil and other feedstocks into a range of oil products which are moved and marketed around the world for domestic, industrial and transport use.
The segment also includes the pipeline business, trading of crude oil, oil products and petrochemicals, and oil sands activities (the extraction of
bitumen from mined oil sands and its conversion into synthetic crude oil).
The Renewables and Energy Solutions segment includes Shell\u2019s Integrated Power activities, comprising electricity generation, marketing and
trading of power and pipeline gas, and digitally enabled customer solutions. The segment also includes production and supply of decarbonised
hydrogen, development of commercial carbon capture and storage hubs, as well as trading of carbon credits and investment in nature-based
projects that avoid or reduce carbon.
The Corporate segment covers the non-operating activities supporting Shell, comprising Shell\u2019s holdings and treasury organisation, its self-
insurance activities and its headquarters and central functions. All finance expense and income and related taxes are included in Corporate
segment earnings rather than in the earnings of business segments.
Basis of segmental reporting
Sales between segments are based on prices generally equivalent to commercially available prices. Third-party revenue and non-current assets
information by geographical area are based on the country of operation of the Group subsidiaries that report this information. Separate disclosure
is provided for the UK as this is the Company\u2019s country of domicile.
Segment earnings are presented on a current cost of supplies basis (CCS earnings). On this basis, the purchase price of volumes sold during the
period is based on the current cost of supplies during the same period after making allowance for the tax effect. CCS earnings therefore exclude
the effect of changes in the oil price on inventory carrying amounts. CCS earnings attributable to Shell plc shareholders is the earnings measure
used by the Chief Executive Officer for the purposes of making decisions about allocating resources and assessing performance.
Finance expense and income related to core financing activities, as well as related taxes, are included in the Corporate segment earnings rather
than in the earnings of the business segments.
Information by segment on a current cost of supplies basis is as follows:
[A]Includes $11,708 million of revenue from sources other than from contracts with customers, which mainly comprises the impact of fair value accounting of commodity derivatives. This amount
includes both the reversal of prior losses of $9,815\u00a0million\u00a0related to sales contracts and prior gains of $7,201\u00a0million\u00a0related to purchase contracts that were previously recognised and where
physical settlement has taken place during 2022.
[B]Includes the full write-down of the Nord Stream 2 loan amounting to $1,126 million. (See Note 6).
[C]Impairment losses comprise Property, plant and equipment ($1,799 million, see Note 12), Goodwill ($361 million) and Other intangible assets ($153\u00a0million).
[D]Impairment reversals fully comprise Property, plant and equipment. (See Note 12).
[A]Revised to conform with reporting segment changes applicable from 2022.
[B]Includes $126 million of revenue from sources other than from contracts with customers, which mainly comprises the impact of fair value accounting of commodity derivatives. This amount
includes both the reversal of prior losses of $4,824\u00a0million related to sales contracts and prior gains of $4,892\u00a0million related to purchase contracts that were previously recognised and
where physical settlement had taken place during 2021.
[C]Impairment losses mainly comprise Property, plant and equipment ($3,894 million, see Note 12) and Goodwill ($167\u00a0million).
[D]Impairment reversals fully comprise Property, plant and equipment. (See Note 12).
Information by geographical area is as follows:
[A]Includes $11,708 million of revenue from sources other than from contracts with customers, which mainly comprises the impact of fair value accounting of commodity derivatives. This amount
includes both the reversal of prior losses of $9,815\u00a0million\u00a0related to sales contracts and prior gains of $7,201\u00a0million\u00a0related to purchase contracts that were previously recognised and where
physical settlement has taken place during 2022.
[B]Includes the full write-down of the Nord Stream 2 loan amounting to $1,126 million. (See Note 6).
[C]Impairment losses comprise Property, plant and equipment ($1,799 million, see Note 12), Goodwill ($361 million) and Other intangible assets ($153\u00a0million).
[D]Impairment reversals fully comprise Property, plant and equipment. (See Note 12).
[A]Revised to conform with reporting segment changes applicable from 2022.
[B]Includes $126 million of revenue from sources other than from contracts with customers, which mainly comprises the impact of fair value accounting of commodity derivatives. This amount
includes both the reversal of prior losses of $4,824\u00a0million related to sales contracts and prior gains of $4,892\u00a0million related to purchase contracts that were previously recognised and
where physical settlement had taken place during 2021.
[C]Impairment losses mainly comprise Property, plant and equipment ($3,894 million, see Note 12) and Goodwill ($167\u00a0million).
[D]Impairment reversals fully comprise Property, plant and equipment. (See Note 12).
Information by geographical area is as follows:
[A]Includes $11,708 million of revenue from sources other than from contracts with customers, which mainly comprises the impact of fair value accounting of commodity derivatives. This amount
includes both the reversal of prior losses of $9,815\u00a0million\u00a0related to sales contracts and prior gains of $7,201\u00a0million\u00a0related to purchase contracts that were previously recognised and where
physical settlement has taken place during 2022.
[B]Includes the full write-down of the Nord Stream 2 loan amounting to $1,126 million. (See Note 6).
[C]Impairment losses comprise Property, plant and equipment ($1,799 million, see Note 12), Goodwill ($361 million) and Other intangible assets ($153\u00a0million).
[D]Impairment reversals fully comprise Property, plant and equipment. (See Note 12).
[A]Revised to conform with reporting segment changes applicable from 2022.
[B]Includes $126 million of revenue from sources other than from contracts with customers, which mainly comprises the impact of fair value accounting of commodity derivatives. This amount
includes both the reversal of prior losses of $4,824\u00a0million related to sales contracts and prior gains of $4,892\u00a0million related to purchase contracts that were previously recognised and
where physical settlement had taken place during 2021.
[C]Impairment losses mainly comprise Property, plant and equipment ($3,894 million, see Note 12) and Goodwill ($167\u00a0million).
[D]Impairment reversals fully comprise Property, plant and equipment. (See Note 12).
Information by geographical area is as follows:
[A]Includes $11,708 million of revenue from sources other than from contracts with customers, which mainly comprises the impact of fair value accounting of commodity derivatives. This amount
includes both the reversal of prior losses of $9,815\u00a0million\u00a0related to sales contracts and prior gains of $7,201\u00a0million\u00a0related to purchase contracts that were previously recognised and where
physical settlement has taken place during 2022.
[B]Includes the full write-down of the Nord Stream 2 loan amounting to $1,126 million. (See Note 6).
[C]Impairment losses comprise Property, plant and equipment ($1,799 million, see Note 12), Goodwill ($361 million) and Other intangible assets ($153\u00a0million).
[D]Impairment reversals fully comprise Property, plant and equipment. (See Note 12).
[A]Revised to conform with reporting segment changes applicable from 2022.
[B]Includes $126 million of revenue from sources other than from contracts with customers, which mainly comprises the impact of fair value accounting of commodity derivatives. This amount
includes both the reversal of prior losses of $4,824\u00a0million related to sales contracts and prior gains of $4,892\u00a0million related to purchase contracts that were previously recognised and
where physical settlement had taken place during 2021.
[C]Impairment losses mainly comprise Property, plant and equipment ($3,894 million, see Note 12) and Goodwill ($167\u00a0million).
[D]Impairment reversals fully comprise Property, plant and equipment. (See Note 12).
Information by geographical area is as follows:
[A]Includes $11,708 million of revenue from sources other than from contracts with customers, which mainly comprises the impact of fair value accounting of commodity derivatives. This amount
includes both the reversal of prior losses of $9,815\u00a0million\u00a0related to sales contracts and prior gains of $7,201\u00a0million\u00a0related to purchase contracts that were previously recognised and where
physical settlement has taken place during 2022.
[B]Includes the full write-down of the Nord Stream 2 loan amounting to $1,126 million. (See Note 6).
[C]Impairment losses comprise Property, plant and equipment ($1,799 million, see Note 12), Goodwill ($361 million) and Other intangible assets ($153\u00a0million).
[D]Impairment reversals fully comprise Property, plant and equipment. (See Note 12).
[A]Revised to conform with reporting segment changes applicable from 2022.
[B]Includes $126 million of revenue from sources other than from contracts with customers, which mainly comprises the impact of fair value accounting of commodity derivatives. This amount
includes both the reversal of prior losses of $4,824\u00a0million related to sales contracts and prior gains of $4,892\u00a0million related to purchase contracts that were previously recognised and
where physical settlement had taken place during 2021.
[C]Impairment losses mainly comprise Property, plant and equipment ($3,894 million, see Note 12) and Goodwill ($167\u00a0million).
[D]Impairment reversals fully comprise Property, plant and equipment. (See Note 12).
Information by geographical area is as follows:
fundamentals. They are related to: i) Integrated Gas for $3,449\u00a0million, mainly relating to the Queensland Curtis LNG asset; and ii) Upstream
for\u00a0$2,504\u00a0million, mainly related to two offshore projects in Brazil and an asset in the US Gulf of Mexico.
Impairment losses in 2021 were predominantly triggered by the reclassifications to assets held for sale, or portfolio developments. They were
mainly related to three refineries in the USA within Chemicals and Products impaired on classification as held for sale ($1,537\u00a0million), and
exploration and evaluation assets both within Integrated Gas ($600 million) and Upstream ($373 million).
Impairment losses in 2020 were mainly triggered by Shell's revision of the mid- and long-term commodity price and refining margin outlook
reflecting the expected effects of the macroeconomic environment and the COVID-19 pandemic as well as energy market demand and supply
fundamentals. The impairment losses for exploration and production assets related primarily to Integrated Gas ($11,539\u00a0million), including
the\u00a0Queensland Curtis LNG and Prelude floating LNG operations, and Upstream ($8,629\u00a0million), including assets in the Gulf of Mexico,
unconventional assets in North America, offshore assets in Brazil and Europe and a project in Nigeria (OPL 245). The impairment losses
for\u00a0manufacturing, supply and distribution related primarily to Chemicals and Products ($6,493\u00a0million), including assets in Europe and the
shutdown of the Convent oil products manufacturing facility in the USA.
For impairment testing purposes, the respective carrying amounts of property, plant and equipment and intangible assets were compared with
their value in use. Cash flow projections used in the determination of value in use were made using management\u2019s forecasts of commodity prices,
market supply and demand, potential costs associated with operational GHG emissions, product margins including forecast refining margins
and\u00a0expected production volumes (see Note 2).
The discount rate is based on a nominal post-tax weighted average cost of capital (WACC) of 5% (2021: 5%) for Power activities and a nominal
post-tax WACC of 6.5% (2021: 6.5%) for all other businesses. Prior to 2021 the rate used by Shell was 6% for all activities and was based on a
pre-tax discount rate reflecting the marginal cost of debt, current market assessments of the time value of money and residual risk. The change in
2021 in the discount rate to a nominal post-tax WACC has been reflected in a commensurate manner in the risk adjustments to post-tax cash flow
projections. The impact of the change in the 2021 impairment valuation technique was not material compared with the previous impairment
valuation technique. The pre-tax discount rate used for goodwill testing ranged between 5-12% (2021: 7-11%), see Note 11.
Oil and gas price assumptions applied for impairment testing are reviewed and, where necessary, adjusted on a periodic basis. Reviews include
comparison with available market data and forecasts that reflect developments in demand such as global economic growth, technology efficiency,
policy measures and, in supply, consideration of investment and resource potential, cost of development of new supply, and behaviour of major
resource holders. The near-term commodity price assumptions applied in impairment testing in 2022 were as follows:
",
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}
},
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"value": "
8. Segment information
General information
Shell is an international energy company engaged in the principal aspects of the energy and petrochemicals industries and reports its business
through segments. With effect from January 1, 2022, the reporting segments are aligned with Shell\u2019s Powering Progress strategy. The Renewables
and Energy Solutions business is now reported separately from Integrated Gas. Shales assets in Canada are now reported as part of the
Integrated Gas segment instead of the Upstream segment. The Oil Products and Chemicals segments are reorganised into two segments \u2013
Marketing, and Chemicals and Products. Prior period comparatives have been revised to conform with current year presentation. The reporting
segment changes have no impact at a Group level.
The Integrated Gas segment includes liquefied natural gas (LNG), conversion of natural gas into gas-to-liquids (GTL) fuels and other products. The
segment includes natural gas and liquids exploration and extraction, and the operation of the upstream and midstream infrastructure necessary
to\u00a0deliver gas and liquids to market as well as the marketing, trading and optimisation of LNG, including LNG as a fuel for heavy-duty vehicles.
The Upstream segment includes exploration and extraction of crude oil, natural gas and natural gas liquids. It also markets and transports oil and
gas, and operates the infrastructure necessary to deliver them to the market.
The Marketing segment comprises the Mobility, Lubricants, and Sectors & Decarbonisation businesses. The Mobility business operates Shell\u2019s
retail\u00a0network including electric vehicle charging services. The Lubricants business produces, markets and sells lubricants for road transport, and
machinery used in manufacturing, mining, power generation, agriculture and construction. The Sectors & Decarbonisation business sells fuels,
speciality products and services including low-carbon energy solutions to a broad range of commercial customers including the aviation, marine,
commercial road transport and agricultural sectors.
The Chemicals and Products segment includes chemicals manufacturing plants with their own marketing network, and refineries which turn crude
oil and other feedstocks into a range of oil products which are moved and marketed around the world for domestic, industrial and transport use.
The segment also includes the pipeline business, trading of crude oil, oil products and petrochemicals, and oil sands activities (the extraction of
bitumen from mined oil sands and its conversion into synthetic crude oil).
The Renewables and Energy Solutions segment includes Shell\u2019s Integrated Power activities, comprising electricity generation, marketing and
trading of power and pipeline gas, and digitally enabled customer solutions. The segment also includes production and supply of decarbonised
hydrogen, development of commercial carbon capture and storage hubs, as well as trading of carbon credits and investment in nature-based
projects that avoid or reduce carbon.
The Corporate segment covers the non-operating activities supporting Shell, comprising Shell\u2019s holdings and treasury organisation, its self-
insurance activities and its headquarters and central functions. All finance expense and income and related taxes are included in Corporate
segment earnings rather than in the earnings of business segments.
Basis of segmental reporting
Sales between segments are based on prices generally equivalent to commercially available prices. Third-party revenue and non-current assets
information by geographical area are based on the country of operation of the Group subsidiaries that report this information. Separate disclosure
is provided for the UK as this is the Company\u2019s country of domicile.
Segment earnings are presented on a current cost of supplies basis (CCS earnings). On this basis, the purchase price of volumes sold during the
period is based on the current cost of supplies during the same period after making allowance for the tax effect. CCS earnings therefore exclude
the effect of changes in the oil price on inventory carrying amounts. CCS earnings attributable to Shell plc shareholders is the earnings measure
used by the Chief Executive Officer for the purposes of making decisions about allocating resources and assessing performance.
Finance expense and income related to core financing activities, as well as related taxes, are included in the Corporate segment earnings rather
than in the earnings of the business segments.
Information by segment on a current cost of supplies basis is as follows:
[A]Includes $11,708 million of revenue from sources other than from contracts with customers, which mainly comprises the impact of fair value accounting of commodity derivatives. This amount
includes both the reversal of prior losses of $9,815\u00a0million\u00a0related to sales contracts and prior gains of $7,201\u00a0million\u00a0related to purchase contracts that were previously recognised and where
physical settlement has taken place during 2022.
[B]Includes the full write-down of the Nord Stream 2 loan amounting to $1,126 million. (See Note 6).
[C]Impairment losses comprise Property, plant and equipment ($1,799 million, see Note 12), Goodwill ($361 million) and Other intangible assets ($153\u00a0million).
[D]Impairment reversals fully comprise Property, plant and equipment. (See Note 12).
[A]Revised to conform with reporting segment changes applicable from 2022.
[B]Includes $126 million of revenue from sources other than from contracts with customers, which mainly comprises the impact of fair value accounting of commodity derivatives. This amount
includes both the reversal of prior losses of $4,824\u00a0million related to sales contracts and prior gains of $4,892\u00a0million related to purchase contracts that were previously recognised and
where physical settlement had taken place during 2021.
[C]Impairment losses mainly comprise Property, plant and equipment ($3,894 million, see Note 12) and Goodwill ($167\u00a0million).
[D]Impairment reversals fully comprise Property, plant and equipment. (See Note 12).
Information by geographical area is as follows:
[A]Includes $11,708 million of revenue from sources other than from contracts with customers, which mainly comprises the impact of fair value accounting of commodity derivatives. This amount
includes both the reversal of prior losses of $9,815\u00a0million\u00a0related to sales contracts and prior gains of $7,201\u00a0million\u00a0related to purchase contracts that were previously recognised and where
physical settlement has taken place during 2022.
[B]Includes the full write-down of the Nord Stream 2 loan amounting to $1,126 million. (See Note 6).
[C]Impairment losses comprise Property, plant and equipment ($1,799 million, see Note 12), Goodwill ($361 million) and Other intangible assets ($153\u00a0million).
[D]Impairment reversals fully comprise Property, plant and equipment. (See Note 12).
[A]Revised to conform with reporting segment changes applicable from 2022.
[B]Includes $126 million of revenue from sources other than from contracts with customers, which mainly comprises the impact of fair value accounting of commodity derivatives. This amount
includes both the reversal of prior losses of $4,824\u00a0million related to sales contracts and prior gains of $4,892\u00a0million related to purchase contracts that were previously recognised and
where physical settlement had taken place during 2021.
[C]Impairment losses mainly comprise Property, plant and equipment ($3,894 million, see Note 12) and Goodwill ($167\u00a0million).
[D]Impairment reversals fully comprise Property, plant and equipment. (See Note 12).
Information by geographical area is as follows:
[A]Includes $11,708 million of revenue from sources other than from contracts with customers, which mainly comprises the impact of fair value accounting of commodity derivatives. This amount
includes both the reversal of prior losses of $9,815\u00a0million\u00a0related to sales contracts and prior gains of $7,201\u00a0million\u00a0related to purchase contracts that were previously recognised and where
physical settlement has taken place during 2022.
[B]Includes the full write-down of the Nord Stream 2 loan amounting to $1,126 million. (See Note 6).
[C]Impairment losses comprise Property, plant and equipment ($1,799 million, see Note 12), Goodwill ($361 million) and Other intangible assets ($153\u00a0million).
[D]Impairment reversals fully comprise Property, plant and equipment. (See Note 12).
[A]Revised to conform with reporting segment changes applicable from 2022.
[B]Includes $126 million of revenue from sources other than from contracts with customers, which mainly comprises the impact of fair value accounting of commodity derivatives. This amount
includes both the reversal of prior losses of $4,824\u00a0million related to sales contracts and prior gains of $4,892\u00a0million related to purchase contracts that were previously recognised and
where physical settlement had taken place during 2021.
[C]Impairment losses mainly comprise Property, plant and equipment ($3,894 million, see Note 12) and Goodwill ($167\u00a0million).
[D]Impairment reversals fully comprise Property, plant and equipment. (See Note 12).
Information by geographical area is as follows:
[A]Includes the reclassification to assets classified as held for sale. (See Note 18).
[B]Includes impairments as presented in Note 12.
[C]Includes the reclassification from goodwill following the completion of a purchase price allocation in Renewables and Energy Solutions.
[D]Includes other intangible assets from acquisitions, power purchase agreements, retail customer relationships, trademarks and $583 million related to software.
[A]Includes the reclassification to assets classified as held for sale. (See Note 18).
[B]Includes impairment as presented in Note 12.
[C]Includes $456\u00a0million related to software.
Goodwill at December 31, 2022, related principally to the acquisition of BG Group plc in 2016, allocated to Integrated Gas ($4,945 million)
and\u00a0Upstream ($5,294 million) at the operating segment level, and to Pennzoil-Quaker State Company ($1,714 million), a lubricants business
in\u00a0the Chemicals and Products segment based largely in North America.
Additions to goodwill in 2022 mainly related to goodwill recognised from acquisitions in Marketing ($1,178\u00a0million) and Renewables and Energy
Solutions ($775\u00a0million).
12. Property, plant\u00a0and\u00a0equipment
[A]Includes right-of-use assets under leases. (See Note 21).
[B]Includes the reclassification to assets classified as held for sale. (See Note 18).
[C]Includes $6,177\u00a0million relating to impairment reversals mainly in Integrated Gas and Upstream (see table 'Impairments' below).
[A]Includes right-of-use assets under leases. (See Note 21).
[B]Includes the reclassification to assets classified as held for sale. (See Note 18).
Additions in 2022 included an acquisition of an interest in an oil field in South America within Upstream, an acquisition of a renewable
energy\u00a0platform in Asia within Renewables and Energy Solutions and an acquisition of certain fuel and convenience retail sites in North
America\u00a0within Marketing.
The carrying amount of property, plant and equipment at December 31, 2022, included $27,277 million (2021: $37,006 million) of assets
under\u00a0construction. This amount excludes exploration and evaluation assets.
The carrying amount of exploration and production assets at December 31, 2022, included rights and concessions in respect of proved and
unproved properties of $7,662 million (2021: $8,849 million). Exploration and evaluation assets principally comprise rights and concessions
in\u00a0respect of unproved properties and capitalised exploration drilling costs.
Approaches applied to determine an alternative reserves base for the purpose of calculating depreciation include management's expectations
of\u00a0the future oil and gas prices rather than yearly average prices and using total proved reserves to provide a phasing of periodic depreciation
charges that more appropriately reflects the expected utilisation of the assets concerned. (See Note 2)
At December 31, 2022, there were no assets for which management's expectations of the future oil and gas prices were applied rather than yearly
average prices (carrying amount of such assets at December 31, 2021: $1,634\u00a0million). If no alternative reserves base had been used for those
assets, the pre-tax depreciation charge for the years ended December 31, 2021, and December 31, 2020, would have been respectively
$1,184\u00a0million and $1,012\u00a0million higher.
The carrying amount of assets at December 31, 2022, for which total proved reserves were applied rather than total proved developed reserves
for the calculation of depreciation, was $26,129\u00a0million (2021: $17,462\u00a0million). If no alternative reserves base had been used for those assets,
the pre-tax depreciation charge for the year ended December 31, 2022, would have been $792\u00a0million higher (2021: $1,168\u00a0million, 2020:
$2,476\u00a0million).
Contractual commitments for the purchase and lease of property, plant and equipment at December 31, 2022, amounted to $6,693\u00a0million
(2021: $5,984\u00a0million).
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfDepreciationAndAmortisationExpenseExplanatory",
"language": "en",
"entity": "scheme:21380068P1DRHMJ8KU70",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjM4OGNmNTNkMzQ4NDQwMzg4MDE2MWIyNjIyMjdmNDIwL3NlYzozODhjZjUzZDM0ODQ0MDM4ODAxNjFiMjYyMjI3ZjQyMF8yNDQvZnJhZzpmMjE5MGM0ZjNkZTY0ZDM0YTcxZWM2ZWNiYTM2ZmM0Ny90ZXh0cmVnaW9uOmYyMTkwYzRmM2RlNjRkMzRhNzFlYzZlY2JhMzZmYzQ3XzU2MzE_496cf902-e6ca-4b6a-bcb0-7ca7c1c89c46": {
"value": "international energy company",
"dimensions": {
"concept": "ifrs-full:DescriptionOfNatureOfEntitysOperationsAndPrincipalActivities",
"language": "en",
"entity": "scheme:21380068P1DRHMJ8KU70",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjM4OGNmNTNkMzQ4NDQwMzg4MDE2MWIyNjIyMjdmNDIwL3NlYzozODhjZjUzZDM0ODQ0MDM4ODAxNjFiMjYyMjI3ZjQyMF8yNDcvZnJhZzo1YWM3MWJkNTg3YWQ0Nzk3YWJjZDc5YTQxMjc5YWVlMi90ZXh0cmVnaW9uOjVhYzcxYmQ1ODdhZDQ3OTdhYmNkNzlhNDEyNzlhZWUyXzg4NTEwNjg2MDM3MjIx_5f178c94-fb86-4635-bd6c-c1d996543ecf": {
"value": "
9. Interest\u00a0and\u00a0other\u00a0income
| | | |
|
| | | |
| | | |
Dividend income (from investments in equity securities) | | | |
Net gains on sale and revaluation of non-current assets and businesses | | | |
Net foreign exchange (losses)/gains on financing activities | | | |
| | | |
| | | |
In 2022, \"Other\" includes the full write-down of the Nord Stream 2 loan amounting to $1,126\u00a0million. (See Note 6). The remaining income
in\u00a0\"Other\" mainly relates to amounts recognised in respect of sublease income from partners in joint operations (2022: $319 million, 2021:
$313 million, 2020: $426 million).
In 2021, \"Net gains on sale of non-current assets and businesses\" arose mainly in respect of gains on the sale of Integrated Gas assets in Australia
and Norway, and Upstream assets in the USA and Nigeria.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfFinanceIncomeExpenseExplanatory",
"language": "en",
"entity": "scheme:21380068P1DRHMJ8KU70",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjM4OGNmNTNkMzQ4NDQwMzg4MDE2MWIyNjIyMjdmNDIwL3NlYzozODhjZjUzZDM0ODQ0MDM4ODAxNjFiMjYyMjI3ZjQyMF8yNDcvZnJhZzo1YWM3MWJkNTg3YWQ0Nzk3YWJjZDc5YTQxMjc5YWVlMi90ZXh0cmVnaW9uOjVhYzcxYmQ1ODdhZDQ3OTdhYmNkNzlhNDEyNzlhZWUyXzg4NTEwNjg2MDM3MjIx_8cb9cc86-fd3b-46e3-8fe5-55040f03cfca": {
"value": "
9. Interest\u00a0and\u00a0other\u00a0income
| | | |
|
| | | |
| | | |
Dividend income (from investments in equity securities) | | | |
Net gains on sale and revaluation of non-current assets and businesses | | | |
Net foreign exchange (losses)/gains on financing activities | | | |
| | | |
| | | |
In 2022, \"Other\" includes the full write-down of the Nord Stream 2 loan amounting to $1,126\u00a0million. (See Note 6). The remaining income
in\u00a0\"Other\" mainly relates to amounts recognised in respect of sublease income from partners in joint operations (2022: $319 million, 2021:
$313 million, 2020: $426 million).
In 2021, \"Net gains on sale of non-current assets and businesses\" arose mainly in respect of gains on the sale of Integrated Gas assets in Australia
and Norway, and Upstream assets in the USA and Nigeria.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfFinanceIncomeExplanatory",
"language": "en",
"entity": "scheme:21380068P1DRHMJ8KU70",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjM4OGNmNTNkMzQ4NDQwMzg4MDE2MWIyNjIyMjdmNDIwL3NlYzozODhjZjUzZDM0ODQ0MDM4ODAxNjFiMjYyMjI3ZjQyMF8yNDcvZnJhZzo1YWM3MWJkNTg3YWQ0Nzk3YWJjZDc5YTQxMjc5YWVlMi90ZXh0cmVnaW9uOjVhYzcxYmQ1ODdhZDQ3OTdhYmNkNzlhNDEyNzlhZWUyXzg4NTEwNjg2MDM3MjIx_9de8d128-1714-4c58-ac27-867b5cfd3887": {
"value": "
9. Interest\u00a0and\u00a0other\u00a0income
| | | |
|
| | | |
| | | |
Dividend income (from investments in equity securities) | | | |
Net gains on sale and revaluation of non-current assets and businesses | | | |
Net foreign exchange (losses)/gains on financing activities | | | |
| | | |
| | | |
In 2022, \"Other\" includes the full write-down of the Nord Stream 2 loan amounting to $1,126\u00a0million. (See Note 6). The remaining income
in\u00a0\"Other\" mainly relates to amounts recognised in respect of sublease income from partners in joint operations (2022: $319 million, 2021:
$313 million, 2020: $426 million).
In 2021, \"Net gains on sale of non-current assets and businesses\" arose mainly in respect of gains on the sale of Integrated Gas assets in Australia
and Norway, and Upstream assets in the USA and Nigeria.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfInterestIncomeExplanatory",
"language": "en",
"entity": "scheme:21380068P1DRHMJ8KU70",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjM4OGNmNTNkMzQ4NDQwMzg4MDE2MWIyNjIyMjdmNDIwL3NlYzozODhjZjUzZDM0ODQ0MDM4ODAxNjFiMjYyMjI3ZjQyMF8yNDcvZnJhZzo1YWM3MWJkNTg3YWQ0Nzk3YWJjZDc5YTQxMjc5YWVlMi90ZXh0cmVnaW9uOjVhYzcxYmQ1ODdhZDQ3OTdhYmNkNzlhNDEyNzlhZWUyXzg4NTEwNjg2MDM3MjIx_ac02ff30-5136-45d5-a089-e68b9d1c4343": {
"value": "
9. Interest\u00a0and\u00a0other\u00a0income
| | | |
|
| | | |
| | | |
Dividend income (from investments in equity securities) | | | |
Net gains on sale and revaluation of non-current assets and businesses | | | |
Net foreign exchange (losses)/gains on financing activities | | | |
| | | |
| | | |
In 2022, \"Other\" includes the full write-down of the Nord Stream 2 loan amounting to $1,126\u00a0million. (See Note 6). The remaining income
in\u00a0\"Other\" mainly relates to amounts recognised in respect of sublease income from partners in joint operations (2022: $319 million, 2021:
$313 million, 2020: $426 million).
In 2021, \"Net gains on sale of non-current assets and businesses\" arose mainly in respect of gains on the sale of Integrated Gas assets in Australia
and Norway, and Upstream assets in the USA and Nigeria.
10. Interest\u00a0expense
| | | |
|
| | | |
Interest incurred and similar charges | | | |
Interest expense related to leases | | | |
Less: interest capitalised | | | |
Other net (gains)/losses on fair value and cash flow hedges of debt | | | |
| | | |
| | | |
The rate applied in determining the amount of interest capitalised in 2022 was 4.0% (2021: 4.0%; 2020: 4.5%).
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfInterestIncomeExpenseExplanatory",
"language": "en",
"entity": "scheme:21380068P1DRHMJ8KU70",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjM4OGNmNTNkMzQ4NDQwMzg4MDE2MWIyNjIyMjdmNDIwL3NlYzozODhjZjUzZDM0ODQ0MDM4ODAxNjFiMjYyMjI3ZjQyMF8yNDcvZnJhZzo1YWM3MWJkNTg3YWQ0Nzk3YWJjZDc5YTQxMjc5YWVlMi90ZXh0cmVnaW9uOjVhYzcxYmQ1ODdhZDQ3OTdhYmNkNzlhNDEyNzlhZWUyXzg4NTEwNjg2MDM3MjIx_efd4b92c-1fac-422c-8b42-0a43dc621f17": {
"value": "
9. Interest\u00a0and\u00a0other\u00a0income
| | | |
|
| | | |
| | | |
Dividend income (from investments in equity securities) | | | |
Net gains on sale and revaluation of non-current assets and businesses | | | |
Net foreign exchange (losses)/gains on financing activities | | | |
| | | |
| | | |
In 2022, \"Other\" includes the full write-down of the Nord Stream 2 loan amounting to $1,126\u00a0million. (See Note 6). The remaining income
in\u00a0\"Other\" mainly relates to amounts recognised in respect of sublease income from partners in joint operations (2022: $319 million, 2021:
$313 million, 2020: $426 million).
In 2021, \"Net gains on sale of non-current assets and businesses\" arose mainly in respect of gains on the sale of Integrated Gas assets in Australia
and Norway, and Upstream assets in the USA and Nigeria.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfOtherOperatingIncomeExplanatory",
"language": "en",
"entity": "scheme:21380068P1DRHMJ8KU70",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjM4OGNmNTNkMzQ4NDQwMzg4MDE2MWIyNjIyMjdmNDIwL3NlYzozODhjZjUzZDM0ODQ0MDM4ODAxNjFiMjYyMjI3ZjQyMF8yNTAvZnJhZzo4YTZkMDYwOTVjOWE0YjEyYTQ1ZWFhMGRmMjhkNmFhZi90ZXh0cmVnaW9uOjhhNmQwNjA5NWM5YTRiMTJhNDVlYWEwZGYyOGQ2YWFmXzg4NTEwNjg2MDM2MzM4_13e53d37-7330-4eb5-8baa-aad0a50a2539": {
"value": "
10. Interest\u00a0expense
| | | |
|
| | | |
Interest incurred and similar charges | | | |
Interest expense related to leases | | | |
Less: interest capitalised | | | |
Other net (gains)/losses on fair value and cash flow hedges of debt | | | |
| | | |
| | | |
The rate applied in determining the amount of interest capitalised in 2022 was 4.0% (2021: 4.0%; 2020: 4.5%).
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfInterestExpenseExplanatory",
"language": "en",
"entity": "scheme:21380068P1DRHMJ8KU70",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjM4OGNmNTNkMzQ4NDQwMzg4MDE2MWIyNjIyMjdmNDIwL3NlYzozODhjZjUzZDM0ODQ0MDM4ODAxNjFiMjYyMjI3ZjQyMF8yNTMvZnJhZzozZGJlZTE0NDY0MDM0ZmNkOWExNGFlZDI5NGNhNGU5Ny90ZXh0cmVnaW9uOjNkYmVlMTQ0NjQwMzRmY2Q5YTE0YWVkMjk0Y2E0ZTk3Xzg4NTEwNjg2MDQwOTc1_33484079-f948-4fe4-8585-7cccf72c5cf1": {
"value": "
11. Goodwill and other intangible\u00a0assets
[A]Includes the reclassification to assets classified as held for sale. (See Note 18).
[B]Includes impairments as presented in Note 12.
[C]Includes the reclassification from goodwill following the completion of a purchase price allocation in Renewables and Energy Solutions.
[D]Includes other intangible assets from acquisitions, power purchase agreements, retail customer relationships, trademarks and $583 million related to software.
[A]Includes the reclassification to assets classified as held for sale. (See Note 18).
[B]Includes impairment as presented in Note 12.
[C]Includes $456\u00a0million related to software.
Goodwill at December 31, 2022, related principally to the acquisition of BG Group plc in 2016, allocated to Integrated Gas ($4,945 million)
and\u00a0Upstream ($5,294 million) at the operating segment level, and to Pennzoil-Quaker State Company ($1,714 million), a lubricants business
in\u00a0the Chemicals and Products segment based largely in North America.
Additions to goodwill in 2022 mainly related to goodwill recognised from acquisitions in Marketing ($1,178\u00a0million) and Renewables and Energy
Solutions ($775\u00a0million).",
"dimensions": {
"concept": "ifrs-full:DisclosureOfIntangibleAssetsAndGoodwillExplanatory",
"language": "en",
"entity": "scheme:21380068P1DRHMJ8KU70",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjM4OGNmNTNkMzQ4NDQwMzg4MDE2MWIyNjIyMjdmNDIwL3NlYzozODhjZjUzZDM0ODQ0MDM4ODAxNjFiMjYyMjI3ZjQyMF8yNTYvZnJhZzo0MmU0MmEyNTBhNjc0M2MxODFkMTFjMzFmZTE3ZjYxYS90ZXh0cmVnaW9uOjQyZTQyYTI1MGE2NzQzYzE4MWQxMWMzMWZlMTdmNjFhXzg4NTEwNjg2MDU1NDA4_35566ab6-97b3-4518-b331-76e31eaf8c28": {
"value": "
12. Property, plant\u00a0and\u00a0equipment
[A]Includes right-of-use assets under leases. (See Note 21).
[B]Includes the reclassification to assets classified as held for sale. (See Note 18).
[C]Includes $6,177\u00a0million relating to impairment reversals mainly in Integrated Gas and Upstream (see table 'Impairments' below).
[A]Includes right-of-use assets under leases. (See Note 21).
[B]Includes the reclassification to assets classified as held for sale. (See Note 18).
Additions in 2022 included an acquisition of an interest in an oil field in South America within Upstream, an acquisition of a renewable
energy\u00a0platform in Asia within Renewables and Energy Solutions and an acquisition of certain fuel and convenience retail sites in North
America\u00a0within Marketing.
The carrying amount of property, plant and equipment at December 31, 2022, included $27,277 million (2021: $37,006 million) of assets
under\u00a0construction. This amount excludes exploration and evaluation assets.
The carrying amount of exploration and production assets at December 31, 2022, included rights and concessions in respect of proved and
unproved properties of $7,662 million (2021: $8,849 million). Exploration and evaluation assets principally comprise rights and concessions
in\u00a0respect of unproved properties and capitalised exploration drilling costs.
Approaches applied to determine an alternative reserves base for the purpose of calculating depreciation include management's expectations
of\u00a0the future oil and gas prices rather than yearly average prices and using total proved reserves to provide a phasing of periodic depreciation
charges that more appropriately reflects the expected utilisation of the assets concerned. (See Note 2)
At December 31, 2022, there were no assets for which management's expectations of the future oil and gas prices were applied rather than yearly
average prices (carrying amount of such assets at December 31, 2021: $1,634\u00a0million). If no alternative reserves base had been used for those
assets, the pre-tax depreciation charge for the years ended December 31, 2021, and December 31, 2020, would have been respectively
$1,184\u00a0million and $1,012\u00a0million higher.
The carrying amount of assets at December 31, 2022, for which total proved reserves were applied rather than total proved developed reserves
for the calculation of depreciation, was $26,129\u00a0million (2021: $17,462\u00a0million). If no alternative reserves base had been used for those assets,
the pre-tax depreciation charge for the year ended December 31, 2022, would have been $792\u00a0million higher (2021: $1,168\u00a0million, 2020:
$2,476\u00a0million).
Contractual commitments for the purchase and lease of property, plant and equipment at December 31, 2022, amounted to $6,693\u00a0million
(2021: $5,984\u00a0million).
fundamentals. They are related to: i) Integrated Gas for $3,449\u00a0million, mainly relating to the Queensland Curtis LNG asset; and ii) Upstream
for\u00a0$2,504\u00a0million, mainly related to two offshore projects in Brazil and an asset in the US Gulf of Mexico.
Impairment losses in 2021 were predominantly triggered by the reclassifications to assets held for sale, or portfolio developments. They were
mainly related to three refineries in the USA within Chemicals and Products impaired on classification as held for sale ($1,537\u00a0million), and
exploration and evaluation assets both within Integrated Gas ($600 million) and Upstream ($373 million).
Impairment losses in 2020 were mainly triggered by Shell's revision of the mid- and long-term commodity price and refining margin outlook
reflecting the expected effects of the macroeconomic environment and the COVID-19 pandemic as well as energy market demand and supply
fundamentals. The impairment losses for exploration and production assets related primarily to Integrated Gas ($11,539\u00a0million), including
the\u00a0Queensland Curtis LNG and Prelude floating LNG operations, and Upstream ($8,629\u00a0million), including assets in the Gulf of Mexico,
unconventional assets in North America, offshore assets in Brazil and Europe and a project in Nigeria (OPL 245). The impairment losses
for\u00a0manufacturing, supply and distribution related primarily to Chemicals and Products ($6,493\u00a0million), including assets in Europe and the
shutdown of the Convent oil products manufacturing facility in the USA.
For impairment testing purposes, the respective carrying amounts of property, plant and equipment and intangible assets were compared with
their value in use. Cash flow projections used in the determination of value in use were made using management\u2019s forecasts of commodity prices,
market supply and demand, potential costs associated with operational GHG emissions, product margins including forecast refining margins
and\u00a0expected production volumes (see Note 2).
The discount rate is based on a nominal post-tax weighted average cost of capital (WACC) of 5% (2021: 5%) for Power activities and a nominal
post-tax WACC of 6.5% (2021: 6.5%) for all other businesses. Prior to 2021 the rate used by Shell was 6% for all activities and was based on a
pre-tax discount rate reflecting the marginal cost of debt, current market assessments of the time value of money and residual risk. The change in
2021 in the discount rate to a nominal post-tax WACC has been reflected in a commensurate manner in the risk adjustments to post-tax cash flow
projections. The impact of the change in the 2021 impairment valuation technique was not material compared with the previous impairment
valuation technique. The pre-tax discount rate used for goodwill testing ranged between 5-12% (2021: 7-11%), see Note 11.
Oil and gas price assumptions applied for impairment testing are reviewed and, where necessary, adjusted on a periodic basis. Reviews include
comparison with available market data and forecasts that reflect developments in demand such as global economic growth, technology efficiency,
policy measures and, in supply, consideration of investment and resource potential, cost of development of new supply, and behaviour of major
resource holders. The near-term commodity price assumptions applied in impairment testing in 2022 were as follows:
|
Commodity price assumptions [A] |
| | | | |
| | | | |
| | | | |
Henry Hub natural gas ($/MMBtu) | | | | |
[A]Money of the day.
For periods after 2026, the real-terms price assumptions applied were: $65 per barrel (/b) (2021: $60/b) for Brent crude oil, $4.00 per\u00a0million
British thermal units (/MMBtu) (2021: $3.00/MMBtu) for Henry Hub natural gas.
The main sensitivities in relation to impairment are the commodity price assumptions in Integrated Gas and Upstream, refining margins in
Chemicals and Products and discount rates in all segments. A change of -10% or +10% in the commodity price assumptions over the entire
cash\u00a0flow projection period would ceteris paribus result in some $2-5\u00a0billion impairment or some $2-4\u00a0billion impairment reversal, respectively,
in\u00a0Integrated Gas and Upstream. Refining margins included in the Operating Plan are at an average of $6.22/bbl. A change of -$1/bbl or
+$1/bbl long-term refining margins over the entire cash flow projection period would ceteris paribus result in some $1-3\u00a0billion impairment or
some $1-3 billion impairment reversal, respectively, in Chemicals and Products. A change of +1% in the discount factor would ceteris paribus
result\u00a0in some $1-3 billion impairment in Integrated Gas, up to $1\u00a0billion impairment in each of the following segments: Upstream, Chemicals
and\u00a0Products and Renewables and Energy Solutions, and would have no significant impact on Marketing and Corporate.
|
Capitalised exploration drilling costs |
Exploration drilling costs capitalised for periods greater than one year at December 31, 2022, analysed according to the most recent year of
activity, are presented in the table above. These comprise $443 million relating to six projects where drilling activities were under way or firmly
planned for the future, and $1,369 million relating to 19 projects awaiting development concepts.
",
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}
},
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"value": "
13. Joint\u00a0ventures\u00a0and\u00a0associates
|
Shell share of comprehensive income of joint ventures and associates |
[A]Includes an impairment charge of $1,614\u00a0million related to Sakhalin-2. (See Note 6).
|
Carrying amount of interests in joint ventures and associates |
[A]Includes 29% (2021: 26%) of sales and 16% (2021: 16%) purchases in transactions with one joint venture operating in the oil trading business.
These transactions principally comprise sales and purchases of goods and services in the ordinary course of business. Related balances
outstanding at December 31, 2022, and 2021, are presented in Notes 15 and 19.
|
Other arrangements in respect of joint ventures and associates |
[A]Commitments to make purchases from joint ventures and associates mainly relate to contracts associated with LNG processing fees and transportation capacity. Shell has other purchase
obligations related to joint ventures and associates that are not fixed or determinable and are principally intended to be resold in a short period of time through sales agreements with third
parties. These include long-term LNG and natural gas purchase commitments and commitments to purchase refined products or crude oil at market prices. Shell has stopped all spot purchases
of Russian crude, LNG, and of cargoes of refined products directly exported from Russia. (See Note 6).",
"dimensions": {
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"value": "
13. Joint\u00a0ventures\u00a0and\u00a0associates
|
Shell share of comprehensive income of joint ventures and associates |
[A]Includes an impairment charge of $1,614\u00a0million related to Sakhalin-2. (See Note 6).
|
Carrying amount of interests in joint ventures and associates |
[A]Includes 29% (2021: 26%) of sales and 16% (2021: 16%) purchases in transactions with one joint venture operating in the oil trading business.
These transactions principally comprise sales and purchases of goods and services in the ordinary course of business. Related balances
outstanding at December 31, 2022, and 2021, are presented in Notes 15 and 19.
|
Other arrangements in respect of joint ventures and associates |
[A]Commitments to make purchases from joint ventures and associates mainly relate to contracts associated with LNG processing fees and transportation capacity. Shell has other purchase
obligations related to joint ventures and associates that are not fixed or determinable and are principally intended to be resold in a short period of time through sales agreements with third
parties. These include long-term LNG and natural gas purchase commitments and commitments to purchase refined products or crude oil at market prices. Shell has stopped all spot purchases
of Russian crude, LNG, and of cargoes of refined products directly exported from Russia. (See Note 6).",
"dimensions": {
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},
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"value": "
13. Joint\u00a0ventures\u00a0and\u00a0associates
|
Shell share of comprehensive income of joint ventures and associates |
[A]Includes an impairment charge of $1,614\u00a0million related to Sakhalin-2. (See Note 6).
|
Carrying amount of interests in joint ventures and associates |
[A]Includes 29% (2021: 26%) of sales and 16% (2021: 16%) purchases in transactions with one joint venture operating in the oil trading business.
These transactions principally comprise sales and purchases of goods and services in the ordinary course of business. Related balances
outstanding at December 31, 2022, and 2021, are presented in Notes 15 and 19.
|
Other arrangements in respect of joint ventures and associates |
[A]Commitments to make purchases from joint ventures and associates mainly relate to contracts associated with LNG processing fees and transportation capacity. Shell has other purchase
obligations related to joint ventures and associates that are not fixed or determinable and are principally intended to be resold in a short period of time through sales agreements with third
parties. These include long-term LNG and natural gas purchase commitments and commitments to purchase refined products or crude oil at market prices. Shell has stopped all spot purchases
of Russian crude, LNG, and of cargoes of refined products directly exported from Russia. (See Note 6).",
"dimensions": {
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"value": "
14. Investments\u00a0in\u00a0securities
|
Investments in securities |
As at December 31, 2022, investments included equity securities comprising interests in which Shell has no significant influence, debt securities
principally comprising a portfolio required to be held by the Company\u2019s internal insurance entities as security for their activities, and assets held
in\u00a0escrow in relation to the Group's UK pension arrangements.
|
Investments in securities measured using predominantly unobservable inputs [A] |
[A]Based on expected dividend flows, adjusted for country and other risks as appropriate and discounted to their present value.
\"Other movements\" in 2022 includes a reclassification to property, plant and equipment, as a result of obtaining title to assets in a project in Asia.
",
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},
"id3VybDovL2RvY3MudjEvZG9jOjM4OGNmNTNkMzQ4NDQwMzg4MDE2MWIyNjIyMjdmNDIwL3NlYzozODhjZjUzZDM0ODQ0MDM4ODAxNjFiMjYyMjI3ZjQyMF8yNjUvZnJhZzoxMTk1ZTA5ZDgzZDg0YWE5ODIzODU4Yzc5NmIzMTVhNy90ZXh0cmVnaW9uOjExOTVlMDlkODNkODRhYTk4MjM4NThjNzk2YjMxNWE3Xzg4NTEwNjg2MDQwNzMz_d0fde4f2-7881-4223-a642-1816d2cad842": {
"value": "
15. Trade\u00a0and\u00a0other\u00a0receivables
| | | | | |
| |
| | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
Amounts due from joint ventures and associates | | | | | |
Prepayments and deferred charges | | | | | |
| | | | | |
The fair value of financial assets included above approximates the carrying amount and was determined from predominantly unobservable inputs.
Other receivables at December 31, 2022, include receivables from certain governments in their capacity as joint arrangement partners of
$717\u00a0million (2021: $1,225\u00a0million), after provisions for impairments, that are overdue in part or in full. Recoverability and timing thereof are
subject to uncertainty, however, the ultimate risk of default on the carrying amount is considered to be low. Other receivables at December 31,
2022, also included current income tax receivables of $363\u00a0million (2021: $550\u00a0million) and non-current income tax receivables of $469\u00a0million
(2021: $366\u00a0million).
Provisions for impairments deducted from trade and other receivables amounted to $1,510\u00a0million at December 31, 2022 (2021: $1,497 million).
Allowance for expected credit losses - trade receivables
Shell uses a provision matrix to calculate expected credit losses (ECLs) for trade receivables. The provision matrix is initially based on Shell\u2019s
historical observed default rates. Shell calculates the ECL to adjust the historical credit loss experienced with forward-looking information.
The ECL at December 31, 2022, is $214\u00a0million (2021: $155\u00a0million), which represents 0.45-0.54% (2021: 0.45-0.51%) of all trade receivables.
A loss allowance provision of $841\u00a0million (2021: $876\u00a0million) was established, in addition to all other impairments to trade receivables
as at December 31, 2022, that are outside of the provision matrix calculations.
In addition, at December 31, 2022, Shell is entitled to future contractual payments under operating leases of $389\u00a0million (2021: $431\u00a0million).
",
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"language": "en",
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}
},
"id3VybDovL2RvY3MudjEvZG9jOjM4OGNmNTNkMzQ4NDQwMzg4MDE2MWIyNjIyMjdmNDIwL3NlYzozODhjZjUzZDM0ODQ0MDM4ODAxNjFiMjYyMjI3ZjQyMF8yNjUvZnJhZzoxMTk1ZTA5ZDgzZDg0YWE5ODIzODU4Yzc5NmIzMTVhNy90ZXh0cmVnaW9uOjExOTVlMDlkODNkODRhYTk4MjM4NThjNzk2YjMxNWE3XzkzNDU4NDg4NDA5NjM_981cc8cb-dffb-4c59-a93f-185e9db903a6": {
"value": "
Allowance for expected credit losses - trade receivables
Shell uses a provision matrix to calculate expected credit losses (ECLs) for trade receivables. The provision matrix is initially based on Shell\u2019s
historical observed default rates. Shell calculates the ECL to adjust the historical credit loss experienced with forward-looking information.
The ECL at December 31, 2022, is $214\u00a0million (2021: $155\u00a0million), which represents 0.45-0.54% (2021: 0.45-0.51%) of all trade receivables.
A loss allowance provision of $841\u00a0million (2021: $876\u00a0million) was established, in addition to all other impairments to trade receivables
as at December 31, 2022, that are outside of the provision matrix calculations.",
"dimensions": {
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},
"id3VybDovL2RvY3MudjEvZG9jOjM4OGNmNTNkMzQ4NDQwMzg4MDE2MWIyNjIyMjdmNDIwL3NlYzozODhjZjUzZDM0ODQ0MDM4ODAxNjFiMjYyMjI3ZjQyMF8yNjUvZnJhZzoxMTk1ZTA5ZDgzZDg0YWE5ODIzODU4Yzc5NmIzMTVhNy90ZXh0cmVnaW9uOjExOTVlMDlkODNkODRhYTk4MjM4NThjNzk2YjMxNWE3XzkzNDU4NDg4NDA5NjQ_626965fa-ae92-44d7-9905-a707fdc6d95b": {
"value": "
Lease contracts where Shell is the lessor are classified as finance leases or operating leases. Receivables for lease contracts classified as finance
leases are as follows:
| | |
| | |
| | |
| | |
| | |
| | |
Total undiscounted lease payments receivable | | |
| | |
| | |
In addition, at December 31, 2022, Shell is entitled to future contractual payments under operating leases of $389\u00a0million (2021: $431\u00a0million).
21. Leases
Shell has lease contracts in Integrated Gas and Upstream, principally for floating production storage and offloading units, subsea equipment,
drilling and ancillary equipment, service vessels, LNG vessels and land and buildings; in Marketing, principally for land and retail sites; in
Chemicals and Products, principally for plant pipeline and machinery, tankers and storage capacity; in Renewables and Energy Solutions,
principally for power generation, storage capacity and land; and in Corporate, principally for land and buildings. Shell\u2019s obligations under
its\u00a0leases are secured on the leased assets.
Right-of-use assets
Right-of-use assets are included in property, plant and equipment for the following amounts:
[A]Includes the reclassification of right-of-use assets to assets held for sale. (See Note 18).
[B]\"Other\" mainly includes lease contracts for retail sites, land and buildings in Marketing, Renewables and Energy Solutions and Corporate.
[A]Includes the reclassification of right-of-use assets to assets held for sale. (See Note 18).
[B]\"Other\" mainly includes lease contracts for retail sites, land and buildings in Marketing, Renewables and Energy Solutions and Corporate.
Lease arrangements
Lease liabilities are secured on the leased assets.
Shell also has certain lease contracts of items with lease terms of 12 months or less. For these lease contracts, Shell applies the \"short-term lease\"
recognition exemption. Lease expenses not included in the measurement of lease liability are:
|
Lease expenses not included in the measurement of lease liability |
The total cash outflow in respect of leases representing repayment of principal and payment of interest in 2022 was $6,280\u00a0million
(2021:\u00a0$6,777\u00a0million), recognised in the Consolidated Statement of Cash Flows within Cash flows from financing activities.
The future lease payments under lease contracts and the carrying amounts at December\u00a031, by\u00a0payment date are as follows:
[A]Future cash outflows in respect of leases may differ from lease liabilities recognised due to future decisions that may be taken by Shell in respect of the use of leased assets. These decisions
may result in variable lease payments being made. In addition, Shell may reconsider whether it will exercise extension options or termination options, where future reconsideration is not
reflected in the lease liabilities. There is no exposure to these potential additional payments in excess of the recognised lease liabilities until these decisions have been taken by Shell.
",
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"value": "
16. Inventories
| | |
| |
| | |
| | |
Environmental certificates | | |
| | |
| | |
[A]Further analysis of lease liabilities is provided in Note 21.
Shell has access to international debt capital markets via two commercial paper (CP) programmes, a Euro medium-term note (EMTN) programme
and a US universal shelf (US shelf) registration. Issuances under the CP programmes are supported by a committed credit facility and cash.
Under the CP programmes, Shell can issue debt of up to $10,000\u00a0million with maximum maturities ranging between 183 days and 364 days
depending on the form of the notes issued; and $10,000\u00a0million with maturities not exceeding 397 days.
The EMTN programme is updated each year, most recently in September 2022. During 2022, no debt was issued under this programme
(2021: no debt issued).
The US shelf registration provides Shell with the flexibility to issue debt securities, ordinary shares, preferred shares and warrants.
The\u00a0registration\u00a0is updated every three years and was last updated in March 2021. During 2022, no debt was issued under the US shelf
registration\u00a0(2021: $1,500\u00a0million).
On December 13, 2019, Shell refinanced its revolving credit facilities (RCF), which are linked to the Secured Overnight Financing Rate (SOFR), at
pre-agreed margins. In December 2022, Shell renewed the short-dated tranche of the facility of $1,920\u00a0million to expire in 2023 (2021: expiring
in 2022) with two further one year bank extension options, that would take final maturity to 2025. The additional RCF tranches are: $320\u00a0million
expiring in 2025 (2021: expiring in 2025) and $7,680\u00a0million expiring in 2026 (2021: expiring in 2026), a total RCF of $9,920 million. The terms
and availability are not conditional on Shell\u2019s financial ratios nor its financial credit ratings. The interest and fees paid on these facilities are linked
to Shell\u2019s progress towards reaching its short-term Net Carbon Footprint intensity target.
The following tables compare contractual cash flows for debt excluding lease liabilities at December\u00a031 with the carrying amount in the
Consolidated Balance Sheet. Contractual amounts reflect the effects of changes in foreign exchange rates; differences from carrying amounts
reflect the effects of discounting, premiums and, where fair value hedge accounting is applied, fair value adjustments. Interest is estimated
assuming interest rates applicable to variable-rate debt remain constant and there is no change in aggregate principal amounts of debt other
than repayment at scheduled maturity, as reflected in the table.
Interest rate swaps have been entered into against certain fixed rate debt affecting the effective interest rate on these balances (see Note 25).
The fair value of debt excluding lease liabilities at December 31, 2022, was $51,959 million (2021: $67,066 million), mainly determined from
the prices quoted for those securities.",
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"value": "
22. Taxation
Compared with 2021, the decrease in the weighted average of statutory tax rates reflects a lower proportion of earnings in the Upstream segment
subject to relatively higher tax rates.
[A]Mainly relates to changes in the discount rate and inflation assumptions.
[B]Experience adjustments arise from differences between the actuarial assumptions made in respect of the year and actual outcomes.
[C]Includes $782 million to reflect the impact of prescription drug rebates.
[D]Mainly relates to updates in mortality assumptions.
Defined benefit plan obligations
[A]Includes pension plans in Germany ($2,538\u00a0million) and Canada ($3,497\u00a0million) as the largest pension plans in the rest of the world.
[A]Includes pension plans in Germany ($3,282 million) and Canada ($4,325 million) as the largest pension plans in the rest of world.
[B]Includes the netted amount of $294 million received from the captive structure in relation to the pension plans reinsured in rest of the world.
[A]'Debt repurchase agreements' are mainly related to UK member defined pension plans to fund liability-driven investments. In addition to these contracts, derivatives including interest rate and
inflation swaps are used in the principal defined benefit plan in the Netherlands for liability matching strategies.
Employer contributions to funded defined benefit pension plans are based on actuarial valuations in accordance with local regulations and are
estimated to be $836 million in 2023.
Characteristics of significant defined benefit and defined contribution plans and regulatory framework
The Netherlands
The principal defined benefit pension plan in the Netherlands is a funded career-averaged pension arrangement with retired employees drawing
benefits as an annuity, with a surplus of $3,378\u00a0million reported as at December 31, 2022, (2021: $1,756 million surplus). Whilst the plan was
closed to employees hired or rehired after July 1, 2013, it currently remains open for ongoing accrual for existing active members. 23% (2021:
26%) of the overall defined benefit liability in the Netherlands relates to active members. From July 1, 2013, onwards new employees in the
Netherlands are entitled to membership of a defined contribution pension plan.
In line with Dutch regulations, the defined benefit pension plan has a joint Trustee Board with trustee representatives nominated by the Company,
the Central Staff Council and retired members. The defined benefit pension plan also has an Accountability Council comprised of members
nominated by the company, the Central Staff Council and retired members. Furthermore, there is a Supervisory Committee which includes external
experts from the pension industry to oversee management, compliance and operations of the fund. The defined contribution pension plan has a
one-tier Trustee Board with an independent chair, and trustee representatives nominated by the company and the Central Staff Council (currently
no retired members in the fund to act as trustee) as well as two executive board members. The defined contribution fund also has an
Accountability Council comprised of members nominated by the company and the Central Staff Council.
The Dutch House of Representatives approved a new regulatory framework for pensions in the Netherlands in December 2022. The regulatory
framework for pensions is subject to approval by the Dutch Senate. The new regulation would have to be implemented by January 2027.
When\u00a0effective, these regulatory changes will have an impact on both the defined benefit pension plan and the defined contribution pension
plan.\u00a0As a consequence, such changes would have an impact on the Dutch pension plans which requires consent of the Central Staff Council.
UK
The three largest defined benefit pension plans for employees in the UK are funded final salary pension arrangements with retired employees
mainly drawing benefits as an annuity with the option to take a portion as a lump sum. The three plans are separate and independent plans
and\u00a0cannot be netted against each other. In total, the plans reported a surplus of $4,172\u00a0million as at December 31, 2022 (2021: surplus of
$3,807\u00a0million), which is after netting of unfunded plans of $317\u00a0million (2021: $473\u00a0million) which are reported as non-current liabilities on the
balance sheet. All three plans were closed to new employees hired or rehired, however, two plans currently remain open for ongoing accrual
for\u00a0existing active members. 17% (2021: 20%) of the overall defined benefit liability in the UK relates to active members. From March 1, 2013,
onwards new employees in the UK are entitled to membership of a defined contribution pension plan.
In line with UK regulations, the principal defined benefit pension plan is governed by a corporate trustee whose board is comprised of four trustee
directors nominated by the company including the chair and four member-nominated trustee directors. The defined contribution pension plan is
governed by a corporate trustee whose board is comprised of three company-nominated directors including the chair and two member-nominated
trustee directors. The trustees are responsible for administering the plans in line with the Trust Deed and Regulations, including setting the
investment strategy for the pension plans\u2019 assets and paying member benefits, and are required to act in the best interests of the members
of the pension plans.
USA
The principal defined benefit pension plan in the USA is a funded final average pay pension plan with a surplus of $318\u00a0million reported as at
December 31, 2022 (2021: $182 million surplus). After retirement, all retirees can choose to draw their benefits as an annuity, whereas others
also\u00a0have the choice to take their benefit in a lump sum. There is also an unfunded defined benefit pension plan with a deficit of $868\u00a0million
(2021: $1,129 million deficit). The benefits under this plan are taken primarily in a lump sum. In addition, the company provides a defined
contribution benefit plan. The funded defined benefit, unfunded defined benefit, and together with Shell's defined contribution pension plans
are\u00a0subject to the provisions of the Employee Retirement Income Security Act (ERISA). 24% (2021: 24%) of the overall defined liability of the
funded defined benefit plan in the USA relates to active members.
Both the funded defined benefit pension plan and the defined contribution pension plan are governed by trustees who are appointed by the Plan
Sponsor and are named fiduciaries with respect to the plans. The trustees are generally responsible for investment-related matters, appointing
the\u00a0Plan Administrator, maintaining general oversight and deciding appeals of participants.
USA OPEB
The company also sponsors \"other post-retirement employee benefits\" (OPEB) mainly in the USA. The OPEB plans in the USA provide medical,
dental, and vision benefits as well as life insurance benefits to eligible retired employees. The plans are unfunded, and the company and retirees
share the costs with a deficit of $2,135\u00a0million reported as at December 31, 2022 (2021: $4,067 million deficit). The plan that provides post-
retirement medical benefits in the USA is closed to employees hired or rehired on or after January 1, 2017. Certain life insurance benefits are
paid\u00a0by the company.
Significant funding requirements:
\u25aaAdditional contributions to the Dutch defined benefit pension plan would be required if the 12-month rolling average local funding percentage
falls below 105% for six months or more. At the most recent (2022) funding valuation the local funding percentage was above this level.
\u25aaThere are no set minimum statutory funding requirements for the UK plans. A professional qualified independent actuary, appointed by the
trustee board, undertakes a local funding valuation typically every three years. The most recent completed funding valuation for the principal
defined benefit plan was undertaken as at December 31, 2020, and revealed a funding ratio of 103% and therefore no sponsor contributions
(except for salary sacrifice contributions) were payable under the schedule of contributions.
\u25aaUnder the Pension Protection Act, US pension plans are subject to minimum required contribution levels based on the funding position.
No contributions are required based on the most recent funding valuation.
Associated risks to which retirement benefits are exposed
There are inherent risks associated with defined benefit pension and OPEB plans. These risks are related to various assumptions made on valuation
of the liabilities and the cash funding requirement of the underlying plans. Volatility in capital markets or government policies, and the resulting
consequences for investment performance, interest and inflation rates, as well as changes in assumptions for mortality, retirement age or
pensionable remuneration at retirement, could result in significant changes to the funding level of future liabilities, and in case of a shortfall,
there\u00a0could be a requirement to make substantial cash contributions (depending on the applicable local regulations).
These inherent risks are managed by a pension forum, chaired by the Chief Financial Officer, which oversees Shell\u2019s pension strategy, policy
and\u00a0operations. The forum is supported by a risk committee in reviewing the results of the assurance process with respect to the pension risk.
Investment strategies
Long-term investment strategies of plans are generally determined by the relevant pension plan trustees using a structured asset/liability
modelling\u00a0approach to define the asset mix that best meets the objectives of optimising returns within agreed risk levels while maintaining
adequate funding levels.
Principal and actuarial assumptions
The principal assumptions applied in determining the present value of defined benefit obligations and their bases were as follows:
\u25aarates of increase in pensionable remuneration, pensions in payment and health-care costs: historical experience and management\u2019s
long-term expectation;
\u25aadiscount rates: prevailing long-term AA corporate bond yields, chosen to match the currency and duration of the relevant obligation; and
\u25aamortality rates: published standard mortality tables for the individual countries concerned adjusted for Shell experience where statistically
significant.
The weighted averages for those assumptions and related sensitivity information at December 31, 2022 are presented below. Sensitivity
information indicates by how much the defined benefit obligations would increase or decrease if a given assumption were to increase or decrease
with no change in other assumptions. The sensitivity analyses may not be representative of an actual change in the defined benefit obligation as
it\u00a0is unlikely that changes in assumptions would occur in isolation from one another. The weighted averages are at nominal terms and based on
market expectations at December 31, 2022.
| | | | | | | | |
| | | | $ million, except where indicated |
| | | | Effect of using alternative assumptions |
| Assumptions used at nominal rates | | Increase/(decrease) in defined benefit obligations |
| | | | | | |
Rate of increase in pensionable remuneration [A] | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Rate of increase in pensions in payment | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Discount rate for pension plans | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Inflation rate for defined benefit obligation [B] | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Expected age at death for persons aged 60: | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Rate of increase in health-care costs [C] | | | | | | | | |
Discount rate for health-care plans [C] | | | | | | | | |
[A]Based on active members.
[B]Excluding US funds in the weighted average inflation rate, because of the insignificant impact on the defined benefit obligation.
[C]Mainly related to post-retirement health-care benefits in the USA.
32. Employees
[A]Excludes employees seconded to joint ventures and associates.
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"value": "
25. Financial\u00a0instruments
Financial instruments in the Consolidated Balance Sheet include investments in securities (see Note 14), cash and cash equivalents (see Note 17),
finance debt (see Note 20) and derivative contracts.
Risks
In the normal course of business, financial instruments of various kinds are used for the purposes of managing exposure to interest rate, foreign
exchange and commodity price movements.
Treasury standards are applicable to all subsidiaries and each subsidiary is required to adopt a treasury policy consistent with these standards.
These policies cover: financing structure; interest rate and foreign exchange risk management; insurance; counterparty risk management; and use
of derivative contracts. Wherever possible, treasury operations are carried out through specialist regional organisations without removing from
each subsidiary the responsibility to formulate and implement appropriate treasury policies.
Apart from forward foreign exchange contracts to meet known commitments, the use of derivative contracts by most subsidiaries is not permitted
by their treasury policy.
Other than in exceptional cases, the use of external derivative contracts is confined to specialist trading and central treasury organisations that
have appropriate skills, experience, supervision, control and reporting systems.
Shell\u2019s operations expose it to market, credit and liquidity risk, as described below.
Market risk
Market risk is the possibility that changes in interest rates, foreign exchange rates or the prices of crude oil, natural gas, LNG, refined products,
chemical feedstocks, power and environmental certificates will adversely affect the value of assets, liabilities or expected future cash flows.
Interest rate risk
Most debt is raised from central borrowing programmes. Shell\u2019s policy continues to be to have debt principally denominated in dollars and to
maintain a largely floating interest rate exposure profile; however, Shell has issued a significant amount of fixed rate debt in recent years, taking
advantage of historically low interest rates available in debt markets. As a result, the majority of the debt portfolio at December 31, 2022, is at
fixed rates and this reduces Shell\u2019s adverse exposure to rising floating dollar interest rates (see Note 2).
The financing of most subsidiaries is structured on a floating-rate basis, and any further interest rate risk management is only applied under
exceptional circumstances.
On the basis of the floating-rate net cash position at December 31, 2022, (both issued and hedged), and assuming other factors (principally
foreign exchange rates and commodity prices) remained constant and that no further interest rate management action was taken, an increase
in\u00a0interest rates of 1% would have increased 2022 income before taxation by $234\u00a0million (2021: $174\u00a0million increase).
The carrying amounts and maturities of debt and borrowing facilities are presented in Note 20. Interest expense is presented in Note 10.
Foreign exchange risk
Many of the markets in which Shell operates are priced, directly or indirectly, in dollars. As a result, the functional currency of most Integrated Gas
and Upstream entities and those with significant cross-border business is the dollar. For Chemicals and Products entities, the functional currency is
typically the local currency. Consequently, Shell is exposed to varying levels of foreign exchange risk when an entity enters into transactions that
are not denominated in its functional currency, when foreign currency monetary assets and liabilities are translated at the balance sheet date and
as a result of holding net investments in operations that are not dollar-functional. Each entity is required to adopt treasury policies that are
designed to measure and manage its foreign exchange exposures by reference to its functional currency.
Foreign exchange gains and losses arise in the normal course of business from the recognition of receivables and payables and other monetary
items in currencies other than an entity\u2019s functional currency. Foreign exchange risk may also arise in connection with capital expenditure. For
major projects, an assessment is made at the final investment decision stage of whether to hedge any resulting exposure.
Assuming other factors (principally interest rates and commodity prices) remained constant and that no further foreign exchange risk management
action were taken, a 10% appreciation against the dollar at December\u00a031 of the main currencies to which Shell is exposed would have the
following effects:
| | | | | |
| |
| Increase/(decrease) in income before taxation | | |
| | | | | |
10% appreciation against the dollar of: | | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
The above sensitivity information was calculated by reference to carrying amounts of assets and liabilities at December 31 only. The effect on
income before taxation arises in connection with monetary balances denominated in currencies other than an entity\u2019s functional currency; the
effect on net assets arises principally from the translation of assets and liabilities of entities that are not dollar-functional.
Foreign exchange gains and losses included in income are presented in Note 9.
Commodity price risk
Certain subsidiaries have a mandate to trade crude oil, natural gas, LNG, refined products, chemical feedstocks, power and environmental
certificates, and to use commodity derivative contracts (forwards, futures, swaps and options) as a means of managing price and timing risks
arising from this trading activity. In effecting these transactions, the entities concerned operate within procedures and policies designed to ensure
that risks, including those relating to the default of counterparties, are managed within authorised limits. A department that is independent from
Shell's traders monitors market risk exposures daily.
Value-at-risk (VAR) techniques based on variance/covariance or Monte Carlo simulation models are used to make a statistical assessment of the
market risk arising from possible future changes in market values for commodity positions held by these subsidiaries over a 1-day holding period
and within a 95% confidence level. The calculation of potential changes in fair value takes into account positions, the history of price movements
and the correlation of these price movements. Models are regularly reviewed against actual fair value movements to ensure integrity is
maintained. The VAR average and year-end positions in respect of commodities traded in active markets, which are presented in the table below,
are calculated on a diversified basis in order to reflect the effect of offsetting risk within combined portfolios. 2022 was a year of high market
volatility driving higher VAR than historic levels. As a result, Shell operated with enhanced risk management protocols.
As part of Shell's normal business, commodity derivative hedge contracts are entered into for mitigation of future purchases, sales and inventory.
Net gains before tax on derivative contracts, excluding those accounted for as hedges, were $1,331 million in 2022 (2021: $8,377\u00a0million losses;
2020: $3,295\u00a0million gains).
Certain contracts, mainly to hedge price risk relating to forecast commodity transactions, were designated in cash flow hedging relationships
and\u00a0are presented after the offset of related margin balances with exchanges. Contracts to hedge foreign exchange risks were also designated
in\u00a0cash flow hedging relationships and the net carrying amount of these contracts at December 31, 2022, was a liability of $828\u00a0million
(2021:\u00a0$173\u00a0million liability). See Note 28 for the accumulated balance recognised within other comprehensive income.
Certain interest rate and currency swaps were designated in fair value hedges, principally in respect of debt for which the net carrying amount
of\u00a0the related derivative contracts, net of accrued interest, at December 31, 2022, was a liability of $2,191\u00a0million (2021: $250\u00a0million liability).
In 2022, \u20ac3\u00a0billion (2021: \u20ac3\u00a0billion) of debt instruments were designated as hedges of net investments in foreign operations, relating to the
foreign exchange risk arising between certain intermediate holding companies and their subsidiaries. See Note 28 for the accumulated balance
recognised within other comprehensive income.
In the course of trading operations, certain contracts are entered into for delivery of commodities that are accounted for as derivatives.
The\u00a0resulting price exposures are managed by entering into related derivative contracts. These contracts are managed on a fair value basis
and\u00a0the maximum exposure to liquidity risk is the undiscounted fair value of derivative liabilities.
For a minority of commodity derivatives contracts, carrying amounts cannot be derived from quoted market prices or other observable inputs,
in\u00a0which case fair value is estimated using valuation techniques such as Black-Scholes, option spread models and extrapolation using quoted
spreads with assumptions developed internally based on observable market activity.
Other contracts include certain contracts that are held to sell or purchase commodities and others containing embedded derivatives, which
are\u00a0required to be recognised at fair value because of pricing or delivery conditions, even though they were entered into to meet operational
requirements. These contracts are expected to mature in 2023-2025, with certain contracts having early termination rights (for either party).
Valuations are derived from other observable inputs.
The contractual maturities of derivative liabilities at December 31 compare with their carrying amounts in the Consolidated Balance Sheet as
follows:
|
Net carrying amounts of derivative contracts measured using predominantly unobservable inputs |
Included in net gains/(losses) recognised in revenue in 2022 were unrealised net gains totalling $449\u00a0million relating to assets and liabilities
held\u00a0at December 31, 2022 (2021: $175\u00a0million losses).
Unrecognised day one gains or losses
Certain long-term commodity contracts extend to periods where observable pricing data are limited and their value may include estimates.
Where\u00a0this is more than an insignificant part of the overall contract valuation, any gains or losses will be deferred. Valuation techniques are
further\u00a0described in Note 2. The unrecognised gains on these derivative contracts at December 31, 2022, were as follows:
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Risks
In the normal course of business, financial instruments of various kinds are used for the purposes of managing exposure to interest rate, foreign
exchange and commodity price movements.
Treasury standards are applicable to all subsidiaries and each subsidiary is required to adopt a treasury policy consistent with these standards.
These policies cover: financing structure; interest rate and foreign exchange risk management; insurance; counterparty risk management; and use
of derivative contracts. Wherever possible, treasury operations are carried out through specialist regional organisations without removing from
each subsidiary the responsibility to formulate and implement appropriate treasury policies.
Apart from forward foreign exchange contracts to meet known commitments, the use of derivative contracts by most subsidiaries is not permitted
by their treasury policy.
Other than in exceptional cases, the use of external derivative contracts is confined to specialist trading and central treasury organisations that
have appropriate skills, experience, supervision, control and reporting systems.
Shell\u2019s operations expose it to market, credit and liquidity risk, as described below.
Market risk
Market risk is the possibility that changes in interest rates, foreign exchange rates or the prices of crude oil, natural gas, LNG, refined products,
chemical feedstocks, power and environmental certificates will adversely affect the value of assets, liabilities or expected future cash flows.
Interest rate risk
Most debt is raised from central borrowing programmes. Shell\u2019s policy continues to be to have debt principally denominated in dollars and to
maintain a largely floating interest rate exposure profile; however, Shell has issued a significant amount of fixed rate debt in recent years, taking
advantage of historically low interest rates available in debt markets. As a result, the majority of the debt portfolio at December 31, 2022, is at
fixed rates and this reduces Shell\u2019s adverse exposure to rising floating dollar interest rates (see Note 2).
The financing of most subsidiaries is structured on a floating-rate basis, and any further interest rate risk management is only applied under
exceptional circumstances.
On the basis of the floating-rate net cash position at December 31, 2022, (both issued and hedged), and assuming other factors (principally
foreign exchange rates and commodity prices) remained constant and that no further interest rate management action was taken, an increase
in\u00a0interest rates of 1% would have increased 2022 income before taxation by $234\u00a0million (2021: $174\u00a0million increase).
The carrying amounts and maturities of debt and borrowing facilities are presented in Note 20. Interest expense is presented in Note 10.
Foreign exchange risk
Many of the markets in which Shell operates are priced, directly or indirectly, in dollars. As a result, the functional currency of most Integrated Gas
and Upstream entities and those with significant cross-border business is the dollar. For Chemicals and Products entities, the functional currency is
typically the local currency. Consequently, Shell is exposed to varying levels of foreign exchange risk when an entity enters into transactions that
are not denominated in its functional currency, when foreign currency monetary assets and liabilities are translated at the balance sheet date and
as a result of holding net investments in operations that are not dollar-functional. Each entity is required to adopt treasury policies that are
designed to measure and manage its foreign exchange exposures by reference to its functional currency.
Foreign exchange gains and losses arise in the normal course of business from the recognition of receivables and payables and other monetary
items in currencies other than an entity\u2019s functional currency. Foreign exchange risk may also arise in connection with capital expenditure. For
major projects, an assessment is made at the final investment decision stage of whether to hedge any resulting exposure.
Assuming other factors (principally interest rates and commodity prices) remained constant and that no further foreign exchange risk management
action were taken, a 10% appreciation against the dollar at December\u00a031 of the main currencies to which Shell is exposed would have the
following effects:
| | | | | |
| |
| Increase/(decrease) in income before taxation | | |
| | | | | |
10% appreciation against the dollar of: | | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
The above sensitivity information was calculated by reference to carrying amounts of assets and liabilities at December 31 only. The effect on
income before taxation arises in connection with monetary balances denominated in currencies other than an entity\u2019s functional currency; the
effect on net assets arises principally from the translation of assets and liabilities of entities that are not dollar-functional.
Foreign exchange gains and losses included in income are presented in Note 9.
Commodity price risk
Certain subsidiaries have a mandate to trade crude oil, natural gas, LNG, refined products, chemical feedstocks, power and environmental
certificates, and to use commodity derivative contracts (forwards, futures, swaps and options) as a means of managing price and timing risks
arising from this trading activity. In effecting these transactions, the entities concerned operate within procedures and policies designed to ensure
that risks, including those relating to the default of counterparties, are managed within authorised limits. A department that is independent from
Shell's traders monitors market risk exposures daily.
Value-at-risk (VAR) techniques based on variance/covariance or Monte Carlo simulation models are used to make a statistical assessment of the
market risk arising from possible future changes in market values for commodity positions held by these subsidiaries over a 1-day holding period
and within a 95% confidence level. The calculation of potential changes in fair value takes into account positions, the history of price movements
and the correlation of these price movements. Models are regularly reviewed against actual fair value movements to ensure integrity is
maintained. The VAR average and year-end positions in respect of commodities traded in active markets, which are presented in the table below,
are calculated on a diversified basis in order to reflect the effect of offsetting risk within combined portfolios. 2022 was a year of high market
volatility driving higher VAR than historic levels. As a result, Shell operated with enhanced risk management protocols.
The above sensitivity information was calculated by reference to carrying amounts of assets and liabilities at December 31 only. The effect on
income before taxation arises in connection with monetary balances denominated in currencies other than an entity\u2019s functional currency; the
effect on net assets arises principally from the translation of assets and liabilities of entities that are not dollar-functional.
Foreign exchange gains and losses included in income are presented in Note 9.
Commodity price risk
Certain subsidiaries have a mandate to trade crude oil, natural gas, LNG, refined products, chemical feedstocks, power and environmental
certificates, and to use commodity derivative contracts (forwards, futures, swaps and options) as a means of managing price and timing risks
arising from this trading activity. In effecting these transactions, the entities concerned operate within procedures and policies designed to ensure
that risks, including those relating to the default of counterparties, are managed within authorised limits. A department that is independent from
Shell's traders monitors market risk exposures daily.
Value-at-risk (VAR) techniques based on variance/covariance or Monte Carlo simulation models are used to make a statistical assessment of the
market risk arising from possible future changes in market values for commodity positions held by these subsidiaries over a 1-day holding period
and within a 95% confidence level. The calculation of potential changes in fair value takes into account positions, the history of price movements
and the correlation of these price movements. Models are regularly reviewed against actual fair value movements to ensure integrity is
maintained. The VAR average and year-end positions in respect of commodities traded in active markets, which are presented in the table below,
are calculated on a diversified basis in order to reflect the effect of offsetting risk within combined portfolios. 2022 was a year of high market
volatility driving higher VAR than historic levels. As a result, Shell operated with enhanced risk management protocols.
As part of Shell's normal business, commodity derivative hedge contracts are entered into for mitigation of future purchases, sales and inventory.
Net gains before tax on derivative contracts, excluding those accounted for as hedges, were $1,331 million in 2022 (2021: $8,377\u00a0million losses;
2020: $3,295\u00a0million gains).
Certain contracts, mainly to hedge price risk relating to forecast commodity transactions, were designated in cash flow hedging relationships
and\u00a0are presented after the offset of related margin balances with exchanges. Contracts to hedge foreign exchange risks were also designated
in\u00a0cash flow hedging relationships and the net carrying amount of these contracts at December 31, 2022, was a liability of $828\u00a0million
(2021:\u00a0$173\u00a0million liability). See Note 28 for the accumulated balance recognised within other comprehensive income.
Certain interest rate and currency swaps were designated in fair value hedges, principally in respect of debt for which the net carrying amount
of\u00a0the related derivative contracts, net of accrued interest, at December 31, 2022, was a liability of $2,191\u00a0million (2021: $250\u00a0million liability).
In 2022, \u20ac3\u00a0billion (2021: \u20ac3\u00a0billion) of debt instruments were designated as hedges of net investments in foreign operations, relating to the
foreign exchange risk arising between certain intermediate holding companies and their subsidiaries. See Note 28 for the accumulated balance
recognised within other comprehensive income.
In the course of trading operations, certain contracts are entered into for delivery of commodities that are accounted for as derivatives.
The\u00a0resulting price exposures are managed by entering into related derivative contracts. These contracts are managed on a fair value basis
and\u00a0the maximum exposure to liquidity risk is the undiscounted fair value of derivative liabilities.
For a minority of commodity derivatives contracts, carrying amounts cannot be derived from quoted market prices or other observable inputs,
in\u00a0which case fair value is estimated using valuation techniques such as Black-Scholes, option spread models and extrapolation using quoted
spreads with assumptions developed internally based on observable market activity.
Other contracts include certain contracts that are held to sell or purchase commodities and others containing embedded derivatives, which
are\u00a0required to be recognised at fair value because of pricing or delivery conditions, even though they were entered into to meet operational
requirements. These contracts are expected to mature in 2023-2025, with certain contracts having early termination rights (for either party).
Valuations are derived from other observable inputs.
The contractual maturities of derivative liabilities at December 31 compare with their carrying amounts in the Consolidated Balance Sheet as
follows:
|
Net carrying amounts of derivative contracts measured using predominantly unobservable inputs |
Included in net gains/(losses) recognised in revenue in 2022 were unrealised net gains totalling $449\u00a0million relating to assets and liabilities
held\u00a0at December 31, 2022 (2021: $175\u00a0million losses).
Unrecognised day one gains or losses
Certain long-term commodity contracts extend to periods where observable pricing data are limited and their value may include estimates.
Where\u00a0this is more than an insignificant part of the overall contract valuation, any gains or losses will be deferred. Valuation techniques are
further\u00a0described in Note 2. The unrecognised gains on these derivative contracts at December 31, 2022, were as follows:
",
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},
"id3VybDovL2RvY3MudjEvZG9jOjM4OGNmNTNkMzQ4NDQwMzg4MDE2MWIyNjIyMjdmNDIwL3NlYzozODhjZjUzZDM0ODQ0MDM4ODAxNjFiMjYyMjI3ZjQyMF8yODkvZnJhZzo2OTZjYWFmZmI2MmQ0ZjIwOWNhMjVhMDhjMWVlMGYyNS90ZXh0cmVnaW9uOjY5NmNhYWZmYjYyZDRmMjA5Y2EyNWEwOGMxZWUwZjI1Xzg3OTYwOTMwNzU2NzA_ecfc8755-fd4b-4cd6-b829-83f4e1da43bf": {
"value": "
Fair value measurements
The net carrying amounts of derivative contracts held at December 31, categorised according to the predominant source and nature of inputs
used\u00a0in determining the fair value of each contract, were as follows:
|
Net carrying amounts of derivative contracts measured using predominantly unobservable inputs |
Included in net gains/(losses) recognised in revenue in 2022 were unrealised net gains totalling $449\u00a0million relating to assets and liabilities
held\u00a0at December 31, 2022 (2021: $175\u00a0million losses).
",
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"id3VybDovL2RvY3MudjEvZG9jOjM4OGNmNTNkMzQ4NDQwMzg4MDE2MWIyNjIyMjdmNDIwL3NlYzozODhjZjUzZDM0ODQ0MDM4ODAxNjFiMjYyMjI3ZjQyMF8yODkvZnJhZzo2OTZjYWFmZmI2MmQ0ZjIwOWNhMjVhMDhjMWVlMGYyNS90ZXh0cmVnaW9uOjY5NmNhYWZmYjYyZDRmMjA5Y2EyNWEwOGMxZWUwZjI1XzkzNDU4NDg5MDU1MTU_71c8d224-ba9a-484a-8743-a8b938bea4d7": {
"value": "
Fair value measurements
The net carrying amounts of derivative contracts held at December 31, categorised according to the predominant source and nature of inputs
used\u00a0in determining the fair value of each contract, were as follows:
|
Net carrying amounts of derivative contracts measured using predominantly unobservable inputs |
Included in net gains/(losses) recognised in revenue in 2022 were unrealised net gains totalling $449\u00a0million relating to assets and liabilities
held\u00a0at December 31, 2022 (2021: $175\u00a0million losses).
",
"dimensions": {
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"language": "en",
"entity": "scheme:21380068P1DRHMJ8KU70",
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},
"id3VybDovL2RvY3MudjEvZG9jOjM4OGNmNTNkMzQ4NDQwMzg4MDE2MWIyNjIyMjdmNDIwL3NlYzozODhjZjUzZDM0ODQ0MDM4ODAxNjFiMjYyMjI3ZjQyMF8yOTIvZnJhZzozMTU2OWNiMGUxZmY0OWZjODFkNjU1YzBkMmJkYWNhYy90ZXh0cmVnaW9uOjMxNTY5Y2IwZTFmZjQ5ZmM4MWQ2NTVjMGQyYmRhY2FjXzg4NTEwNjg2MDQyOTUz_5f8c1bba-7004-4d9f-9493-1e8a81d2bdfb": {
"value": "
26. Share capital
Issued and fully paid ordinary shares of \u20ac0.07 each\u00a0[A]
| | | | | | | | |
| | | | |
| | | | | | | | |
| | | | | | | | |
Repurchases of shares before assimilation | | | | | | | | |
Assimilation of ordinary A and B shares into ordinary shares | | | | | | | | |
Repurchases of B shares on January 27 and 28, 2022, cancelled as ordinary shares on February 2 and 3, 2022 | | | | | | | | |
Repurchases of shares after assimilation | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
[A]Share capital at December 31, 2022, and 2021, also included 50,000 issued and fully paid sterling deferred shares of \u00a31 each.
On January 29, 2022, as part of the Simplification announced on December 20, 2021, the Company's A and B shares were assimilated into a
single line of ordinary shares. This is reflected in the above table.
At the Company\u2019s Annual General Meeting (AGM) on May 24, 2022, the Board was authorised to allot ordinary shares in the Company, and to
grant rights to subscribe for or to convert any security into ordinary shares in the Company, up to an aggregate nominal amount of \u20ac177.0\u00a0million
(representing 2,530\u00a0million ordinary shares of \u20ac0.07 each), and to list such shares or rights on any stock exchange. This authority expires at the
earlier of the close of business on August 24, 2023, and the end of the AGM to be held in 2023, unless previously renewed, revoked or varied
by\u00a0the Company in a general meeting.
At the May\u00a024, 2022, AGM, shareholders granted the Company the authority to repurchase (i) up to 758\u00a0million ordinary shares \"on-
market\" (excluding any treasury shares), less the number of ordinary shares purchased or committed to be purchased in terms of the buyback
contracts (\"off-market\"), made under the authority in (ii); and (ii) up to 758\u00a0million ordinary shares off-market, less any on-market purchases made
under the authority in (i).
In the case of both on-market and off-market purchases of the ordinary shares, the minimum price, exclusive of expenses, which may be paid for
an\u00a0ordinary share is \u20ac0.07 and the maximum price, exclusive of expenses, which may be paid for an ordinary share is the higher of: (i) an amount
equal to 5% above the average market value for an ordinary share for the five business days immediately preceding the date of the purchase;
and\u00a0(ii) the higher of the price of the last independent trade and the highest current independent bid in relation to ordinary shares on the trading
venues where the purchase is carried out. The authorities for both on-market and off- market purchases of the ordinary shares will expire at the
earlier of the close of business on August\u00a024, 2023, and the end of the AGM of the Company to be held in 2023. Ordinary shares purchased
by\u00a0the Company pursuant to these authorities will either be cancelled or held in treasury. Treasury shares are shares in the Company which are
owned by the Company itself.
28. Other\u00a0reserves
|
Other reserves attributable to Shell plc shareholders |
The merger reserve and share premium reserve were established as a consequence of the Company becoming the single parent company of Royal
Dutch Petroleum Company and The \"Shell\" Transport and Trading Company, plc, now The Shell Transport and Trading Company Limited, in 2005.
The merger reserve increased in 2016 following the issuance of shares for the acquisition of BG Group plc.
The capital redemption reserve was established in connection with repurchases of shares of the Company.
The share plan reserve is in respect of equity-settled share-based compensation plans (see Note 27). The movement comprises the net of the
charge for the year and the release as a result of vested awards.
Accumulated other comprehensive income comprises the following:
|
Accumulated other comprehensive income attributable to Shell plc shareholders |
",
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"language": "en",
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},
"id3VybDovL2RvY3MudjEvZG9jOjM4OGNmNTNkMzQ4NDQwMzg4MDE2MWIyNjIyMjdmNDIwL3NlYzozODhjZjUzZDM0ODQ0MDM4ODAxNjFiMjYyMjI3ZjQyMF8yOTIvZnJhZzozMTU2OWNiMGUxZmY0OWZjODFkNjU1YzBkMmJkYWNhYy90ZXh0cmVnaW9uOjMxNTY5Y2IwZTFmZjQ5ZmM4MWQ2NTVjMGQyYmRhY2FjXzg4NTEwNjg2MDQyOTUz_61ae152e-7c62-493b-a69f-4a58d8c67673": {
"value": "
26. Share capital
Issued and fully paid ordinary shares of \u20ac0.07 each\u00a0[A]
| | | | | | | | |
| | | | |
| | | | | | | | |
| | | | | | | | |
Repurchases of shares before assimilation | | | | | | | | |
Assimilation of ordinary A and B shares into ordinary shares | | | | | | | | |
Repurchases of B shares on January 27 and 28, 2022, cancelled as ordinary shares on February 2 and 3, 2022 | | | | | | | | |
Repurchases of shares after assimilation | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
[A]Share capital at December 31, 2022, and 2021, also included 50,000 issued and fully paid sterling deferred shares of \u00a31 each.
On January 29, 2022, as part of the Simplification announced on December 20, 2021, the Company's A and B shares were assimilated into a
single line of ordinary shares. This is reflected in the above table.
At the Company\u2019s Annual General Meeting (AGM) on May 24, 2022, the Board was authorised to allot ordinary shares in the Company, and to
grant rights to subscribe for or to convert any security into ordinary shares in the Company, up to an aggregate nominal amount of \u20ac177.0\u00a0million
(representing 2,530\u00a0million ordinary shares of \u20ac0.07 each), and to list such shares or rights on any stock exchange. This authority expires at the
earlier of the close of business on August 24, 2023, and the end of the AGM to be held in 2023, unless previously renewed, revoked or varied
by\u00a0the Company in a general meeting.
At the May\u00a024, 2022, AGM, shareholders granted the Company the authority to repurchase (i) up to 758\u00a0million ordinary shares \"on-
market\" (excluding any treasury shares), less the number of ordinary shares purchased or committed to be purchased in terms of the buyback
contracts (\"off-market\"), made under the authority in (ii); and (ii) up to 758\u00a0million ordinary shares off-market, less any on-market purchases made
under the authority in (i).
In the case of both on-market and off-market purchases of the ordinary shares, the minimum price, exclusive of expenses, which may be paid for
an\u00a0ordinary share is \u20ac0.07 and the maximum price, exclusive of expenses, which may be paid for an ordinary share is the higher of: (i) an amount
equal to 5% above the average market value for an ordinary share for the five business days immediately preceding the date of the purchase;
and\u00a0(ii) the higher of the price of the last independent trade and the highest current independent bid in relation to ordinary shares on the trading
venues where the purchase is carried out. The authorities for both on-market and off- market purchases of the ordinary shares will expire at the
earlier of the close of business on August\u00a024, 2023, and the end of the AGM of the Company to be held in 2023. Ordinary shares purchased
by\u00a0the Company pursuant to these authorities will either be cancelled or held in treasury. Treasury shares are shares in the Company which are
owned by the Company itself.
",
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"language": "en",
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"value": "
27. Share-based\u00a0compensation plans\u00a0and\u00a0shares\u00a0held\u00a0in\u00a0trust
|
Share-based compensation expense |
[A]On an incidental basis awards may be cash-settled, where an equity settlement is not possible under local regulations.
The principal share-based employee compensation plans are the PSP and LTIP. Awards of shares and American Depositary Shares (ADS) of the
Company under the PSP and LTIP are granted upon certain conditions to eligible employees. The actual number of shares that may vest ranges
from 0% to 200% of the awards, depending on the outcomes of prescribed performance conditions over a three-year period beginning on
January\u00a01 of the award year.
shares were assimilated into a single line of ordinary shares. Other plans offer eligible employees opportunities to acquire shares and ADSs of the Company or receive cash benefits measured by reference
to\u00a0the Company\u2019s share price.
Shell employee share ownership trusts and trust-like entities purchase the Company\u2019s shares in the open market to meet delivery commitments
under employee share plans. At December 31, 2022, they held a total of 23.9\u00a0million ordinary shares (2021: A shares: 15.6 million and B shares:
4.5 million) and 4.5 million ADSs (2021: 4.5 million).
",
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"value": "
28. Other\u00a0reserves
|
Other reserves attributable to Shell plc shareholders |
The merger reserve and share premium reserve were established as a consequence of the Company becoming the single parent company of Royal
Dutch Petroleum Company and The \"Shell\" Transport and Trading Company, plc, now The Shell Transport and Trading Company Limited, in 2005.
The merger reserve increased in 2016 following the issuance of shares for the acquisition of BG Group plc.
The capital redemption reserve was established in connection with repurchases of shares of the Company.
The share plan reserve is in respect of equity-settled share-based compensation plans (see Note 27). The movement comprises the net of the
charge for the year and the release as a result of vested awards.
Accumulated other comprehensive income comprises the following:
|
Accumulated other comprehensive income attributable to Shell plc shareholders |
",
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"value": "
30. Earnings\u00a0per\u00a0share
| | | |
| | | |
Income/(loss) attributable to Shell plc shareholders ($ million) | | | |
| | | |
Weighted average number of shares used as the basis for determining: | | | |
Basic earnings per share (million of shares) | | | |
Diluted earnings per share (million of shares) | | | |
the\u00a0Directors have allegedly handled \"climate change related risk\". On February 8, 2023, ClientEarth filed the claim with the English High Court
against Shell plc and the current Board of Directors. The claim does not seek monetary relief but asks the Court to order the Directors to: (i) adopt
and implement a different strategy to manage climate risk in compliance with their statutory duties; and (ii) comply immediately with the Dutch
Court Order. The High Court must grant permission for ClientEarth to proceed with this claim.
Louisiana coast litigation
The State of Louisiana and multiple local governments have initiated 43 lawsuits against more than 200 oil and gas companies, claiming either
current or historical oil and gas operations caused or contributed to contamination, land loss and the erosion of the Louisiana coastline. Shell
entities are named in 14 of the suits. Although the State and local parishes fail to claim specified amounts, these claims represent potentially
material matters. The cases are of first impression, arise out of an untested 1980 Louisiana statute and represent a novel attempt to render illegal
operations that federal and state agencies permitted and authorised at the time. In late 2022, certain jurisdictional questions were decided by a
federal appeals court in New Orleans, which resulted in the cases being remanded from federal court back to state court. While disappointed,
management believes the outcome of these matters should ultimately be resolved in a manner favourable to Shell; there remains a high degree
of\u00a0uncertainty, however, concerning the scope of the claims and the ultimate outcomes, as well as their potential effects on future operations,
earnings, cash flows, reputation and Shell\u2019s financial condition.
NAM (Groningen gas field) litigation
Since 1963, NAM \u2013 a joint venture between Shell and ExxonMobil (50%:50%) \u2013 has been producing gas from the Groningen field, the largest
gas field in Western Europe. After smaller tremors in the 1990s and the late 2000s, an earthquake measuring 3.6 on the Richter scale occurred
in\u00a02012, causing damage to properties in the affected area, and the area continues to experience tremor/earthquake-type events. NAM has
received more than 100,000 claims for physical damage to property \u2013 the majority of which have been successfully settled. The Dutch State
has\u00a0taken over the damage-claim-handling from NAM for all claim categories (strengthening, physical damage to property, housing value loss,
emotional damages and loss of living enjoyment), while NAM remains financially responsible. In February 2022, NAM commenced arbitral
proceedings against the State to get clarity on these financial responsibilities. NAM still faces a declining number of claims in civil litigation from
claimants who elect not to use the government arrangement or from claims pre-dating the governmental arrangements. These claims include but
are not limited to housing claims where NAM was found liable for value loss, emotional damages and loss of living enjoyment and other civil
litigation matters.
There remains a high degree of uncertainty concerning the ultimate outcomes and their potential effects on future operations, earnings, cash flows,
reputation and Shell\u2019s financial condition.
Nigerian litigation
Shell subsidiaries and associates operating in Nigeria are parties to various environmental, non-environmental and contractual disputes brought
in\u00a0the courts of Nigeria, England and the Netherlands. These disputes are at different stages in litigation, including at the appellate stage, where
judgements have been rendered against Shell entities in some of these disputes. If taken at face value, the aggregate amount of these judgements
could be seen as material. Management, however, believes that once the outcomes of these matters are ultimately determined, the overall
outcome of these disputes will be favourable to Shell. However, there remains a high degree of uncertainty regarding these cases, as well
as\u00a0their\u00a0potential effect on future operations, earnings, cash flows and Shell\u2019s financial condition.
OPL 245
On January 27, 2017, the Nigeria Federal High Court issued an Interim Order of Attachment for Oil Prospecting Licence 245 (OPL 245), pending
the conclusion of the investigation. SNEPCO applied for and was granted a discharge of this order on constitutional and procedural grounds. Also
in Nigeria, in March 2017, criminal charges alleging official corruption and conspiracy to commit official corruption were filed against SNEPCO,
one current Shell employee and third parties including ENI SpA and one of its subsidiaries. Those proceedings are in abeyance. In January 2020,
criminal charges alleging disobeying direction of law related to tax waivers were filed in Nigeria against Shell Nigeria Ultra Deep Ltd., SNEPCO,
and third parties including Nigeria Agip Exploration Limited (NAE). Those proceedings are ongoing. In March 2017, parties alleging to be
shareholders of Malabu Oil and Gas Company Ltd. (Malabu) filed two actions to challenge the 2011 settlement and the award of OPL 245 to
SNEPCO and an ENI SpA subsidiary by the Federal Government of Nigeria. Both actions are currently stayed awaiting the outcome of appeals
filed against procedural decisions. Those appeal proceedings are ongoing. On May 8, 2018, Human Environmental Development Agenda
(HEDA) sought permission from the Federal High Court of Nigeria to apply for an order to direct the Attorney General of the Federation to revoke
OPL 245 on grounds that the entire Malabu transaction in relation to the OPL is unconstitutional, illegal and void as it was obtained through
fraudulent and corrupt practice. On July 3, 2019, the Nigerian Federal High Court upheld objections from SNEPCO and NAE and struck the
lawsuit filed by HEDA. The suit was struck because of the statute of limitations and lack of jurisdiction to hear the matter. HEDA has appealed
the\u00a0judgement, which is ongoing.
On December 12, 2018, the Federal Republic of Nigeria (FRN) issued a claim form in the UK against Shell and six of its subsidiaries, ENI SpA and
two of its subsidiaries, Malabu as well as two other entities for the amount of $1,092 million plus damages for having participated in a fraudulent
and corrupt scheme leading to the acquisition by Shell and ENI corporate defendants in 2011 of OPL 245. The Shell entities were served with
proceedings in April and May 2019, following which they, and other defendants, challenged the jurisdiction of the English courts. Following
a\u00a0hearing in April 2020, the English High Court rendered judgement in May 2020, dismissing the claims in England and refusing the FRN\u2019s
request for permission to appeal. In September 2020, the UK Court of Appeal also refused the FRN\u2019s permission to appeal, meaning the
case\u00a0is\u00a0now concluded.
On February 14, 2017, Shell plc received a notice of request for indictment from the Milan public prosecutor with respect to this matter. On
December 20, 2017, Shell plc and four former Shell employees including one former executive were remanded to trial in Milan. On May 14, 2018,
a trial commenced in the Court of Milan. The FRN was admitted as a civil claimant by a court decision on July 20, 2018. On September 18, 2018,
Shell was joined to the proceedings as the civilly responsible party for the damages caused by the alleged illegal acts of the four former Shell
employees. Three other Shell entities (Shell UK Ltd, Shell Petroleum Development Company of Nigeria Ltd. and Shell Exploration and Production
Africa Ltd.) also joined the proceedings as responsible civile for their respective former employees at that phase of the proceedings. On March 17,
2021, the Court of Milan acquitted the Shell entities and four former Shell employees of all charges on the grounds that there was no case to
answer. The Court of Milan published the full grounds for its decision on June 9, 2021. The Milan public prosecutor and the FRN appealed the
decision to the Court of Appeal. On July 19, 2022, the Milan public prosecutor withdrew its appeal, meaning the criminal case is closed and the
acquittal of all defendants is final. On November 11, 2022, the Court of Appeal rejected the FRN\u2019s appeal and ordered the FRN to pay legal
costs. The Court of Appeal issued the full grounds for its decision on January 20, 2023.
On September 20, 2018, a guilty judgement was filed by the Milan Judge of the Preliminary Hearing in a separate OPL 245 fast-track trial of two
individuals, neither of whom worked for or on behalf of Shell. That decision was appealed to the Court of Appeal which rendered its judgement on
June 24, 2021, acquitting both individuals. Separate OPL 245 pre-trial criminal proceedings are pending against another individual who also did
not work for or on behalf of Shell.
On October 2, 2019, the US Department of Justice (DOJ) informed Shell that it was closing its inquiry into Shell in relation to OPL 245. It is
understood that the decision was based on the facts available to the DOJ, including ongoing legal proceedings in Europe. On April 22, 2020,
the\u00a0United States Securities and Exchange Commission notified us that it had also closed its inquiry into Shell in relation to OPL 245. On July 21,
2022, the Dutch Public Prosecutor\u2019s office announced it had dismissed its investigation into bribery allegations related to OPL 245.
On October 24, 2022, Re:Common, HEDA and Corner House announced that they filed a complaint at the Court of Appeal in The Hague,
pursuant to Article 12 of the Dutch Code for Criminal Procedure, challenging the decision by the DPP to dismiss its investigation. There remains a
high degree of uncertainty around the OPL 245 matters and contingencies discussed above, as well as their potential effect on future operations,
earnings, cash flows and Shell\u2019s financial condition. Accordingly, at this time, it is not practicable to estimate the magnitude and timing of
any\u00a0possible obligations or payments. Any violation of anti-bribery, anti-corruption or anti-money laundering legislation could have a material
adverse effect on Shell plc\u2019s earnings, cash flows and financial condition.
",
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},
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"value": "
|
Average employee numbers [A] |
| | | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
Renewables and Energy Solutions | | | |
| | | |
- of which Shell Business Service Centre (SBSC) | | | |
| | | |
[A]Employee numbers, including comparatives, have been updated from full time equivalents (FTE) to headcount.
[B]Excludes employees seconded to joint ventures and associates (2022: 2,000 employees; 2021: 2,000 employees; 2020: 2,000 employees).
",
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"concept": "ifrs-full:DisclosureOfInformationAboutEmployeesExplanatory",
"language": "en",
"entity": "scheme:21380068P1DRHMJ8KU70",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
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33.\u00a0Directors\u00a0and\u00a0Senior\u00a0Management
|
Remuneration of Directors of the Company |
Emoluments comprise salaries and fees, annual bonuses (for the period for which performance is assessed) and other benefits. The value of
released awards under long-term incentive plans for the period is in respect of the performance period ending in that year. In 2022, retirement
benefits were accrued in respect of qualifying services under defined benefit plans by one Director.
Further information on the remuneration of the Directors can be found in the Directors\u2019 Remuneration Report on pages 178-182.
|
Directors and Senior Management expense |
Directors and Senior Management comprise members of the Executive Committee and the Non-executive Directors of the Company.
Short-term benefits comprise salaries and fees, annual bonuses delivered in cash and shares (for the period for which performance is assessed),
other benefits and employer social security contributions.
",
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34. Auditor\u2019s\u00a0remuneration
| | | |
| |
| | | |
Fees in respect of the audit of the Consolidated and Parent Company Financial Statements, including audit of consolidation returns | | | |
Other audit fees, principally in respect of audits of accounts of subsidiaries | | | |
| | | |
| | | |
Fees in respect of other non-audit services | | | |
| | | |
Statement of Cash Flows, the cash consideration paid will be reflected as an outflow through 'Cash flow from investing activities'. Measurement
is\u00a0now underway of the fair value of the net assets acquired and any goodwill to be recognised as a result of the acquisition. The acquisition
of\u00a0Nature Energy will be reported through the Marketing operating segment.
On February 28, 2023, Shell completed the sale of its 100% interest in Shell Onshore Ventures LLC, which holds a 51.8% membership interest
in\u00a0Aera Energy LLC, to IKAV. The total consideration is $2\u00a0billion with additional contingent payments based on oil prices and has an effective
date of October 1, 2021.
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