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"value": "Notes to the Consolidated
Financial Statements
Note 1. General information
Universal Music Group N.V. is a public company with limited liability incorporated under the laws of the Netherlands
and listed on Euronext Amsterdam under the symbol \u2018UMG.AS\u2019. As used herein, the term UMG (\"The Group\") is used for
Universal Music Group N.V. (\u2018the Company\u2019) and its subsidiaries within the meaning of Section 2:24b of the Dutch Civil
Code. UMG\u2019s statutory seat is located in Amsterdam and its principal office is located at:
\u2018s-Gravelandseweg 80,
1217 EW Hilversum The Netherlands.
UMG is the worldwide leader in music, engaged in recorded music, music publishing and merchandising. It owns more
than 50 labels covering all music genres. UMG is home to some of the greatest local and international artists of all time,
including The Beatles, Rolling Stones, U2, Andrea Bocelli, Lady Gaga, Helene Fischer and more, as well as many of the
biggest artists of the year, such as Taylor Swift, BTS, Olivia Rodrigo, Encanto OST and Morgan Wallen.
\u2022 The recorded music business discovers and develops recording artists, marketing and promoting their music across
a wide array of formats and platforms. Its activities also extend to other areas, such as live events, sponsorship, film
and television.
\u2022 The music publishing business discovers and develops songwriters and owns and administers the copyright for
musical compositions used in recordings, public performances and related uses, such as films and advertisements.
\u2022 The merchandising business produces and sells artist-branded and other branded products through multiple sales
channels, including fashion retail, concert touring and the Internet. Its activities also extend to other areas, such as
brand rights management.
Note 2. Basis of preparation 2.1. Statement of compliance The Consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB), IFRS as endorsed by the European Union (EU) and comply with the statutory provisions of Part 9, Book 2 of the Dutch Civil Code. IFRS as endorsed by the EU differs in some respects from IFRS as issued by the IASB. The differences have no impact on the Consolidated financial statements for the years presented. The Consolidated financial statements are prepared by the Board of Management of UMG and authorized for issue on March 30, 2023 and will be submitted for adoption to the Annual General Meeting of Shareholders on May 11, 2023. 2.2. Basis of preparation and consolidation The Consolidated financial statements are: \u2022 prepared on a historical cost basis, unless stated otherwise \u2022 are presented in millions of euros, and rounded to the nearest million, unless stated otherwise \u2022 prepared on the basis that UMG will continue to operate as a going concern The Consolidated financial statements comprise the financial statements of the UMG N.V. and its subsidiaries as at 31 December 2022. Separation from Vivendi Until February 26, 2021, the arrangement that constituted the combined UMG Group was not a legal entity in its own right and was made up of entities under the common control of Vivendi. Until this date, UMG\u2019s scope of combination principally comprised the entities held directly and indirectly by UMG Inc. and UIM B.V. On February 26, 2021, in UMG B.V.\u2019s Consolidated financial statements, the contribution of \u20ac33,000 million was directly recorded as an increase in equity attributable to UMG B.V. shareowners (\u20ac18,500 million in share capital and \u20ac14,500 million in additional paid-in capital), and the contribution of \u20ac33,000 million was fully neutralized in UMG B.V.\u2019s retained earnings. The reorganization of its shareholding structure, which is a common control business combination, has no impact on UMG\u2019s scope of combination or consolidation. On September 21, 2021, the shares of Universal Music Group N.V. (UMG N.V.) started trading on the regulated market of Euronext Amsterdam. Vivendi completed the distribution in kind of UMG shares to Vivendi shareholders on the basis of one UMG N.V. share for every eligible Vivendi share. The detachment date (ex-date) of the distribution in kind was September 21, 2021. Settlement occurred on September 23, 2021. UMG B.V. was converted to UMG N.V. on this date accordingly. Following this transaction and as at December 31, 2022, Vivendi held 10.13% of the share capital of UMG N.V. Transactions with Vivendi are still qualified as transactions with related parties under IAS 24 and are disclosed as such in these Consolidated financial statements. Commercial relationships among UMG and Vivendi subsidiaries prior and upon the separation, are conducted on an arm's length basis on terms and conditions similar to those which would be offered by third parties. Subsidiaries Subsidiaries are all companies over which UMG has control. Control over an entity exists when UMG is exposed to, or has right to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control commences until the date on which control ceases Intra-group balances and transactions, any unrealized gains and losses or income and expenses arising from intra-
group transactions are eliminated in preparing the Consolidated financial statements. Unrealized gains arising from
transactions with associates and joint ventures are eliminated against the investment to the extent of UMG\u2019s interest in
the investee. Unrealized losses are eliminated in the same way as unrealized gains, but only to the extent that there is no
evidence of impairment .
Significant events in the period and accounting estimates and judgements
Impact of global events
The Russia-Ukraine dispute created and magnified multiple threats to the global economic recovery from COVID\u201219
in 2022. Surging inflation and unemployment rates, economic sanctions, supply-chain disruptions causing rise of
commodities prices, and, as a result, volatile financial markets created an adverse change to the business environment
for UMG.
However, in 2022 UMG has demonstrated resilience of its activities to continue to best serve and entertain its customers.
UMG continuously monitors the current and potential consequences of the crisis and continues to make every effort to
ensure the continuity of its activities.
During its financial reporting process, UMG assessed the influence of the global events on the application of its
accounting policies.
Climate change
UMG does not expect that climate change-related risks will have significant impact on the Group and would qualitatively
influence management's decisions.
Accounting estimates and judgements
Application of the accounting policies requires judgements that impact the amounts recognised. All significant
judgements and estimates are disclosed in the notes to the Consolidated financial statements. Information and
considerations regarding areas of significant judgements and estimates have been included in the table below. It is
reasonably possible, that outcomes of these judgements and estimates within the next financial year are different from
the assumptions, which could require a material adjustment to the carrying amount of the asset or liability affected.
Area
Significant judgement Note
Revenue
Significant judgement is required to identify performance obligations under
contracts with customers, whether these performance obligations are satisfied
at a point of time or overtime, and probability that collectability is assured and
significant reversal will not occur.
2.4.5. Revenues and
associated costs
Uncertain tax
positions and
deferred taxes
Judgement in assessing the uncertainty of whether it is probable that a
taxation authority will accept or revise the uncertain tax treatment and, future
results enabling realisation of deferred taxes.
2.4.21. Income taxes
Lease liabilities and
right-of-use assets
Judgement in determining the lease term of contracts with renewal and
termination options at the commencement date of each lease contract.
2.4.11. Leases
Area Significant estimate Note
Revenue
Estimation on the timing of the consequent usage and the amounts that are
probable to be collected.
2.4.5. Revenues and
associated costs
Intangible assets,
including goodwill
and content assets
Assumptions relating to impairment tests performed on each of the Group\u2019s
cash-generating units (CGUs) or intangible assets, future cash flows and
discount rates are updated annually. Estimation of (remaining) useful life for
intangible assets, other than goodwill.
2.4.8. Goodwill and 2.4.9.
Intangible assets, other
than goodwill
Provisions
Estimating the likelihood and timing of potential cash flows relating to royalty
claims and litigation.
2.4.19. Provisions
Artist
royalty advances
Estimates of the future performance of artists and repertoire owners who
are paid advances that are recognized in the Consolidated Statement of
Financial Position.
2.4.9. Intangible assets,
other than goodwill
Share-based
payments - PSUs
Estimation of the grant date fair value and number of equity instruments.
2.4.22. Share-
based payments
Pension liability
Assumptions for discount rates, future pension increases and life expectancy
to calculate the defined benefit obligation.
2.4.20. Employee
benefit plans
For more details on these significant judgement areas and resulting estimates refer to the accounting policies below.
2.3. Financial statement presentation changes and prior years restatements
During 2022 UMG made prior year restatements and updated, compared to the 2021 Consolidated financial statements,
the presentation of the Consolidated Statement of Profit or Loss, the Consolidated Statement of Cash Flows and the
Consolidated Statement of Changes in Equity for and as at December 31, 2021 to further improve transparency and
readability of these statements in line with market practice.
Updates in the Consolidated Statement of Profit or Loss relate to a restatement of amortisation expense from selling,
general and administrative expenses into its own line item and the reclassification of Income and losses from equity
affiliates from within Operating profit to be reported outside of Operating profit to reflect that they do not constitute
operating activities of UMG. Details on the impact on 2021 comparatives for the year ended December 31, 2021 is
presented in the table below.
December 31, 2021
Before Changes
Presentation
Changes
After Changes
Revenues 8,504 - 8,504
Cost of revenues (4,608) - (4,608)
Selling, general and administrative expenses (2,502) 175 (2,327)
Amortisation and impairment losses on intangible assets - (175) (175)
Income/(loss) from equity affiliates 5 (5) -
Operating profit 1,399 (5) 1,394
Financial income 143 - 143
Financial expenses (377) - (377)
(234) - (234)
Income/(loss) from equity affiliates - 5 5
Profit before income taxes 1,165 - 1,165
Income taxes (277) - (277)
Net profit 888 - 888
Of which:
Net profit attributable to equity holders of the parent 886 - 886
Net profit attributable to non-controlling interests 2 - 2
The Consolidated Statement of Cash Flows includes the same reclassification of income and losses from equity affiliates
from Operating profit and adjustments as well as a retrospective adjustment to the comparative period in relation to
the cash flows resulting from bank overdrafts which are repayable on demand. In prior years, cash flows related to
bank overdrafts repayable on demand were reported together with borrowings movements as cash flows from financing
activities. Bank overdrafts are now presented in cash and cash equivalents at the beginning and end of the period.
Repayments of the principal and interest of lease liabilities were previously reporting together under repayment of lease
liabilities. These cash flows are now presented separately as part of cash flows from financing activities.
December 31, 2021
Before Changes Restatement After Changes
Operating activities
Operating profit 1,399 (5) 1,394
Adjustments 275 5 280
Royalty advances payments, net of recoupments (364) - (364)
Gross cash provided by/(used for) operating activities before income tax paid 1,310 - 1,310
Other changes in net working capital 85 - 85
Net cash provided by/(used for) operating activities before income tax paid 1,395 - 1,395
Income tax paid (255) - (255)
Net cash provided by/(used for) operating activities 1,140 - 1,140
Net cash provided by/(used for) investing activities (391) - (391)
Financing activities
Transactions with shareowners (787) - (787)
Proceeds from borrowings 3,185 (9) 3,176
Repayments of borrowings (3,624) - (3,624)
Interest, net (17) - (17)
Other cash items related to financing activities (8) - (8)
Transactions on borrowings and other financial liabilities (464) (9) (473)
Repayment of lease liabilities (86) 16 (70)
Payment of interest of lease liabilities - (16) (16)
Net cash provided by/(used for) financing activities (1,337) (9) (1,346)
Net change in cash and cash equivalents (588) (9) (597)
Foreign currency translation adjustments 32 - 32
Change in cash and cash equivalents (556) (9) (565)
Cash and cash equivalents
At beginning of the period 1,141 (4) 1,137
At end of the period 585 (13) 572
Updates to the Consolidated Statement of Changes in Equity relate to moving the presentation to a columnar format to
improve the readability of the statement.
2.4. Material accounting policy information
2.4.1. Foreign currency
Foreign currency transactions
Foreign currency transactions are initially recorded in the functional currency of the entity at the exchange rate
prevailing at the date of the transaction. At the closing date, foreign currency monetary assets and liabilities are
translated into the entity's functional currency at the exchange rate prevailing on that date with foreign currency
differences recorded to profit and loss.
Financial statements denominated in a foreign currency
Except in cases of significant exchange rate fluctuation, financial statements of subsidiaries, joint ventures or other
associated entities for which the functional currency is not the euro are translated into euros as follows: the Consolidated
Statement of Financial Position is translated at the exchange rate at the end of the period, and the Consolidated
Statement of Profit or Loss and the Consolidated Statement of Cash Flows are translated using average monthly exchange
rates for the period. The resulting translation gains and losses are recorded as foreign currency translation differences
in expenses and income directly recognized in equity. In 2022, UMG did not have any significant foreign operations in
hyper-inflationary economies.
2.4.2. Earnings per share
UMG presents basic and diluted earnings per share (EPS) data for its shares. Basic EPS is calculated by dividing the net
profit or loss attributable to shareholders of UMG by the weighted average number of shares outstanding during the year,
adjusted for the weighted average number of own shares held in the year. Diluted EPS is determined by dividing the profit
or loss attributable to shareholders by the weighted average number of shares outstanding, adjusted for the weighted
average number of own shares held in the year and for the effects of all dilutive potential shares which comprise share
rights granted to employees.
2.4.3.
Consolidated Statement of Cash Flows
The Consolidated Statement of Cash Flows is prepared using the indirect method starting from Operating profit. Dividends
received from equity affiliates and investments are included in the investing cash flow. It also includes any cash flows
arising from the gain or loss of control of subsidiaries. Interest paid, including interest paid on lease liability, is included
in the financing activities.
2.4.4.
Accounting for associates and joint ventures
Associates are entities in which UMG has significant influence, but not control or joint control. Significant influence
is generally obtained by ownership of more than 20% but less than 50% of the voting rights. Joint ventures are the
arrangements in which UMG has joint control.
UMG\u2019s investments in associates and joint ventures are accounted for using the equity method of accounting, meaning
they are initially recognised at cost. The Consolidated financial statements include UMG\u2019s share of the net profit or loss of
the associates and joint ventures whereby the result is determined using the accounting policies of UMG. When UMG\u2019s
share of losses exceeds the carrying amount of the associate or joint venture, the carrying amount is reduced to nil and
recognition of further losses is discontinued except to the extent that UMG has an obligation or has made a payment on
behalf of the associate or joint venture.
2.4.5.
Revenues and associated costs
Revenues from contracts with customers are recorded when performance obligations promised in the contract are
satisfied, and for an amount for which it is highly probable that a significant reversal in the amount of cumulative
revenue recognized will not occur. Revenues are reported net of discounts.
Intellectual property licensing (musical works)
These licenses transfer to a customer either a right to use an entity's intellectual property as it exists at the point in time
at which the license is granted (static license), or a right to access an entity's intellectual property as it exists throughout
the license period (dynamic license).
Revenues are accounted for when the performance obligation promised in the contract is satisfied (static license) or
over time upon satisfaction (dynamic license), i.e., when the seller transfers the control over the right to use/access the
intellectual property and the customer obtains control of the use/access of that license. Consequently, revenues from
static licenses are recognized at the point in time when the license is transferred and the customer is able to use and
benefit from the license. Revenues from dynamic licenses are accounted for over time, over the license period from the
date the customer is able to use and benefit from the license and in line with the sale or usage.
Consideration received in the current year, which represents income from ordinary activities related to the prior years, is
recorded within revenue, unless it was accrued before. Court settlements in relation to the unauthorized usage of UMG's
intellectual property in previous years are recorded in revenue as they relate to activities carried out within the ordinary
course of business.
Analysis of the Agent/Principal relationship in sales transactions involving a third party
If the nature of the entity's undertaking is a performance obligation to provide the specified goods or services itself, then
the entity acts on its own behalf and it is \u201cprincipal\u201d in the sale transaction: it accounts for revenue the gross amount of
consideration to which it expects to be entitled in exchange for the goods or services provided, and the commission due
to the third-party as cost of revenues. If the entity arranges for a third-party to provide the goods or services specified
in the contract, then it recognizes as revenues the net amount of consideration to which it expects to be entitled in
exchange for the goods or services provided.
Financing Component
UMG does not adjust the transaction price for the effects of significant financing component if, at contract inception,
it is expected that the period between customer payment and the transfer of goods or services is one year or less.
This applies to the majority of sales transactions. The transaction price may be variable due to discounts, rebates, or
similar arrangements. In determining the transaction price UMG considers the fair value of any non-cash consideration.
Revenue is only recognized for the part of the consideration for which it is highly probable that a significant reversal in
the amount of cumulative revenue recognized will not occur. Judgement is required in determining the probability and
level of discounts and rebates that will be granted. The estimate is updated throughout the term of the contract.
Revenue recognition by business segment
Recorded Music
The sales of recorded music (physical, digital downloading or streaming) are intellectual property licenses granted by
UMG to distributors or digital platforms and which give them certain rights over UMG's musical works.
Physical sales of recorded music (CDs, DVDs and Vinyls)
These intellectual property licenses are static licenses transferring to the customer a right to use UMG\u2018s recordings as
they exist at the point in time at which the license is granted, i.e., on the physical device sold.
Revenues from the physical sales of recorded music, net of a provision for estimated returns and rebates, if any, are
accounted for, either: (i) upon the sale to the distributor, at the shipping point for products sold free on board (FOB) or on
delivery for products sold free on destination; or (ii) upon the sale to the final customer for consignment sales.
Digital sales of recorded music, via downloading or streaming by subscription or free of charge
These intellectual property licenses are generally dynamic licenses providing a right to access the entire catalogue of
recorded music as it exists throughout the license period considering potential add-ons to, or withdrawals from, the
catalogue during that period.
The consideration paid by the digital platform is variable in the form of a sales-based or a usage-based royalty. Revenues
are then accounted for when these subsequent sales or usages occur. Revenues from digital sales of recorded music, for
which UMG has sufficient, accurate, and reliable data from digital platforms, are recognized at the end of the month in which the sale or usage is made by the end customer. For digital sales of recorded music streaming by subscription or free of charge, certain contracts may include a non- refundable minimum guarantee which is generally recoupable and is in substance an advance payment. In the case of a dynamic license, the minimum guarantee is spread over the period to which it relates and takes into account the amount of royalties that are actually recoupable. The minimum guarantee are apportioned in accordance with the accounting for these royalties. Music Publishing Music Publishing relates to the use by a third party of the copyrights on musical works owned or administered by UMG, which are intellectual property licenses that UMG grants to the third party and which provides a right to access a catalogue of recorded music, as these intellectual property licenses are dynamic licenses. For these contracts, revenues are recognised on the basis of sales and usage royalties, using the best available estimate on the timing of the consequent usage and the amounts that are probable to be collected. Merchandising Revenues from merchandising are recognized when control has been passed either upon sale to the end customer, from direct sales during touring, concessions and over the internet; on delivery for sales by a third-party distributor; or for sales of rights attached to merchandising products when a contract is signed and collectability is probable and on a sales and usage basis. Provisions for estimated returns and price guarantees are deducted from sales of products to customers through distributors. The provisions are estimated based on past sales statistics and take into account the economic environment and product sales forecast to final customers. Associated costs of revenues Cost of revenues primarily includes product costs and artists costs. Selling, general and administrative expenses primarily include salaries and employee benefits, consulting and service fees, insurance costs, travel and entertainment expenses, depreciation of capital expenditure and right of use assets, administrative department costs, value allowances for receivables, restructuring expenses and other operating expenses and are expensed when incurred. Advertising costs are expensed when incurred. Slotting fees and cooperative advertising expenses are recorded as a reduction in revenues. However, cooperative advertising is not treated as a reduction of transaction price but marketing expense and expensed when it is distinct and can be estimated. 2.4.6. Operating segments The operating segments are Recorded Music, Music Publishing and Merchandising. The segments are organized based on the nature of the business. \u2018Corporate Centre\u2019 represents amounts not allocated to the operating segments and includes certain costs related to central activities as well as group enabling functions. The operating segment reporting follows the internal reporting used by Management of UMG, to manage the business, assess the performance based on the available financial information and to allocate the resources. The most important performance measure are EBITDA and Adjusted EBITDA (see definitions in the Appendix to the Annual Report) as management believes this is key in evaluating the results of the segments relative to other companies that operate within the same industry. However, Management also receives information about the segment's revenue and assets. Inter-segment pricing is determined on an arm's length basis. Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. 2.4.7. Business combinations UMG accounts for business combinations using the acquisition method when the acquired set of activities and assets meets the definition of a business and control is transferred to the Group. In determining whether a particular set of activities and assets is a business, UMG assesses whether the set of assets and activities acquired includes, at a minimum, an input and substantive process and whether the acquired set has the ability to produce outputs. Business combinations are recorded using the acquisition method. Under this method, upon the initial consolidation of an entity over which UMG has acquired exclusive control: \u2022 the identifiable assets acquired, and the liabilities assumed are recognized at their fair value on the acquisition date; and \u2022 non-controlling interests are measured either at fair value or at the non-controlling interest's proportionate share of the acquiree\u2019s net identifiable assets. This option is available on a transaction-by-transaction basis. Contingent consideration in a business combination is recorded at fair value on the acquisition date, and any subsequent adjustment occurring after the purchase price allocation period is recognized in the Statement of Profit or Loss. Acquisition-related costs are recognized as expenses when incurred. 2.4.8. Goodwill Goodwill represents the difference between the fair value of the net assets acquired and the transaction price of the acquisition. Goodwill arising on the acquisition of associates and joint ventures is included in the carrying amount of the associates and joint ventures. Subsequently goodwill is measured at its initial amount less accumulated impairment losses. On the acquisition date, to the extent possible, goodwill is allocated to each cash-generating unit likely to benefit from the business combination. 2.4.9. Intangible assets, other than goodwill Content assets include royalty advances to artists, songwriters and co-publishers as well as recorded music and music publishing catalogues, artists\u2019 contracts and rights. Music catalogues, trade names, subscribers\u2019 bases and market shares generated internally are not recognized as intangible assets. Intangible assets separately acquired are recorded at cost, and intangible assets acquired in a business combination are recorded at their fair value at the acquisition date. Amortisation is charged to profit or loss on a straight-line basis over the estimated useful life. UMG believes that straight-line depreciation most accurately reflects the expected pattern of consumption of the future economic benefits embodied in these intangible assets. Management needs to estimate the (remaining) useful lives of such intangible assets. Useful lives are determined based on the expected pattern of the future earnings and the period of the contractual arrangements. Useful life is reviewed at the end of each reporting period. Music catalogues and publishing rights The majority of the music catalogues are amortised over 20 years on a straight-line basis. Some significant catalogues can be amortized over longer period of time. Advances to artists and repertoire owners Royalty advances to artists, songwriters, and co-publishers are capitalized as an asset when their current popularity and past performances provide a reasonable basis to conclude that the probable future recoupment of such royalty advances against earnings otherwise payable to them is reasonably assured. Royalty advances are recognized as an expense as subsequent royalties are earned by the artist, songwriter or co-publisher. Any portion of capitalized royalty advances not deemed to be recoverable against future royalties is expensed during the period in which the loss becomes evident. These expenses are recorded in cost of revenues. Other intangible assets Other intangibles mainly includes software for internal use. Direct internal and external costs incurred for the development of software for internal use, are capitalized during the development stage if the resulting product or process is technically and commercially feasible, cost can be reliably measured, UMG has sufficient resources and the intention to complete its development. Research costs are expensed when incurred. Costs of significant upgrades and enhancements resulting in additional functionality are also capitalized. The software for internal use is generally amortized over 3 years and included within amortisation expense . 2.4.10. Property, plant and equipment Property, plant and equipment are carried at historical cost less any accumulated depreciation and impairment losses. Land and assets under construction are not depreciated. Depreciation is calculated using the straight-line method based on the estimated useful life of the assets. Leasehold improvements are depreciated over a period not longer than the lease term. Useful lives of the main components are reviewed at the end of each reporting period and are as follows: \u2022 buildings: 5 to 40 years; \u2022 equipment and machinery: 3 to 8 years; and \u2022 other: 2 to 10 years. 2.4.11. Leases The main lease contracts for UMG correspond to real estate leases for which UMG is the lessee. Real estate leases for which UMG is the lessee are recorded at the commencement date and result in the recognition of a lease liability equal to the present value of future lease payments against a right-of-use asset relating to leases. Right-of-use assets Right-of-use assets are initially measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognized, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. The recognized right-of-use assets are depreciated on a straight-line basis over the shorter of its estimated useful life and the lease term. Right-of-use assets are subject to impairment. Lease liabilities UMG recognizes lease liabilities initially measured at the present value of future lease payments over the lease term. The lease payments include in-substance fixed payments (less any lease incentives), variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include payments of penalties for terminating a lease, if UMG has the option to terminate and it is reasonably certain that this option will be exercised. In calculating the present value of lease payments, UMG uses the incremental borrowing rate at the lease commencement date if the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. The carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the in-substance fixed lease payments. Short-term leases and leases of low-value assets UMG applies the short-term lease recognition exemption to the real-estate leases with a lease term of 12 months or less from the commencement date and do not contain a purchase option. It also applies the lease of low-value assets recognition exemption to leases of office chattels and other equipment that are considered of low value. Lease payments on short-term leases and leases of low-value assets are recognized as expense on a straight-line basis over the lease term. Estimates in accounting for leases UMG determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised. When determining the lease term, UMG considers all relevant facts and circumstances that create an economic incentive to exercise an extension option, or not to exercise a termination option. These circumstances include UMG\u2019s real estate planning. In estimating the lessee\u2019s incremental borrowing rate, UMG takes into account the residual lease term and its duration to reflect the interest rate of a loan with a similar payment profile to the lease payments . 2.4.12. Impairment of non-financial assets Each time events or changes in the economic environment indicate a risk of impairment of goodwill, content assets and other intangible assets, property, plant and equipment, investments in associates and joint ventures, rights-of-use assets, UMG re-examines the value of these assets. In addition, in accordance with applicable accounting standards, goodwill and intangible assets in progress are all subject to an annual impairment test undertaken in the fourth quarter of each fiscal year. This impairment test is performed to compare the recoverable amount of each Cash Generating Unit (CGU) to the carrying value of the corresponding assets (including goodwill). A CGU is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. UMG operates through different content businesses. Each business offers different products and services that are marketed through various channels. CGUs for goodwill correspond to the UMG's operating segments. The recoverable amount is determined for each individual asset as the higher of: (i) its value in use; and (ii) its fair value (less costs to sell) as described hereafter. If the asset does not generate cash inflows that are largely independent of other assets or groups of assets, the recoverable amount is determined for the group of assets. In particular, in the case of goodwill, an impairment test is performed by UMG for each CGU. The value in use of each asset or group of assets is determined, subject to exceptions, as the discounted value of future cash flows Discounted Cash Flow method (DCF) by using cash flow projections consistent with the budget of the following year and the most recent forecasts prepared by the operating segments. Applied discount rates are determined by reference to available external sources of information, usually based on financial institutions\u2019 benchmarks, and reflect the current assessment by UMG of the time value of money and risks specific to each asset or group of assets. Perpetual growth rates used for the evaluation are those used to prepare budgets for each CGU, and beyond the period covered, are consistent with growth rates estimated by the business by extrapolating growth rates used in the budgets, without exceeding the long-term average growth rate for the markets in which UMG operates. The fair value (less costs to sell) is the price that would be received from the sale of an asset or group of assets in an orderly transaction between market participants at the measurement date, less costs to sell. These values are generally determined based on market data (stock market prices or comparison with similar listed companies, with the value attributed to similar assets or companies in recent transactions) or, in the absence of such data, based on discontinued cash flows. If the recoverable amount is lower than the carrying value of an asset or group of assets, an impairment loss equal to the difference is recognized in Operating profit. In the case of operating segments, this impairment loss is first recorded against goodwill. The impairment losses recognized in respect of property, plant and equipment, and intangible assets (other than goodwill) may be reversed in a later period if the recoverable amount becomes greater than the carrying value, within the limit of impairment losses previously recognized. Impairment losses recognized in respect of goodwill cannot be reversed at a later date. 2.4.13. Financial assets Financial assets are initially recognized at fair value corresponding, in general, to the consideration paid, which is best evidenced by the acquisition cost (including transaction costs, if any). Thereafter, financial assets are measured at fair value or at amortized cost depending on which financial asset category they belong to. Financial assets are classified into the accounting categories \u201cfinancial assets at amortized cost\u201d, \u201cfinancial assets at fair value through other comprehensive income\u201d and \u201cfinancial assets at fair value through profit or loss\u201d. This classification depends on UMG\u2018s business model for managing the financial assets and on contractual terms enabling to determine whether the cash flows are solely payments of principal and interest (SPPI). The financial assets that contain an embedded derivative are considered in full to determine whether their cash flows are SPPI. Financial assets are derecognized when the rights to receive cash flows from the financial assets have expired or have been transferred and UMG has transferred substantially all the risks and rewards of ownership. Financial assets at fair value These include financial assets at fair value through other comprehensive income, derivative financial instruments with a positive value and other financial assets measured at fair value through profit or loss. Most of these financial assets are actively traded in organized financial markets, as their fair value is calculated by reference to the published market price at the period end. Fair value is estimated for financial assets which do not have a published market price on an active market. As a last resort, when a reliable estimate of fair value cannot be made using valuation techniques in the absence of an active market, UMG values financial assets at historical cost, less any impairment losses. These financial assets are recognized initially on trade date when UMG becomes a party to the contractual provisions of the instrument. Dividend income is recognised when the UMG's right to receive payment is established. Financial assets at amortized cost Financial assets at amortised cost include trade receivables, other receivables, loans issued and bank deposits which are not cash equivalents. Loans, receivables and deposits are recognized on the date they are originated. Financial assets at amortized cost consist of debt instruments as described above held within a business model whose objective is to hold financial assets to collect contractual cash flows that are solely payments of principal and interest on the principal amount outstanding. At the end of each period, these assets are measured at amortized cost using the effective interest method. 2.4.14. Impairment of financial assets UMG assesses the expected credit loss associated with its financial assets recognized at amortized cost on a prospective basis. A loss allowance for expected credit loss based on probability of default is recognized at initial recognition. The loss allowance is updated for changes in these expected credit losses at each reporting date to reflect changes in credit risk since initial recognition. To assess whether there has been a significant increase in credit risk, UMG compares the credit risk at the reporting date with the credit risk at the date of initial recognition based on reasonable forward-looking information and events, including credit ratings if available, significant adverse economic changes (actual or expected), financial or business environment that are expected to result in a material change in the borrower's ability to meet its obligations. Trade accounts receivable are initially recognised at their transaction price. Expected loss rates on trade receivables and contract assets are calculated by the relevant operating entities over their lifetime from initial recognition and are based on historical data that also incorporates forward-looking information. In addition, account receivables from customers subject to insolvency proceedings or customers with whom UMG is involved in litigation or a dispute are generally impaired in full. 2.4.15. Cash and cash equivalents Cash and cash equivalents include all cash balances and short-term highly liquid investments with an original maturity of three months or less that are readily convertible into known amounts of cash. Bank overdrafts form an integral part of UMG\u2019s cash management and often fluctuate from being positive to overdrawn and are included as a component of cash and cash equivalents for the purpose of the statement of cash flows. Investments in securities, investments with initial maturities of more than three months without an early termination option and bank accounts subject to restrictions (blocked accounts), other than restrictions due to regulations specific to a country or activity sector (e.g., exchange controls), are not classified as cash equivalents but as financial assets. 2.4.16. Financial liabilities A liability is recognized when UMG becomes party to a contract. Regular way purchases and sales of financial instruments are accounted for at the trade date. Initial measurement of financial liabilities is at fair value, including any attributable transaction costs. Financial liabilities are all classified and subsequently measured at amortized cost, except for financial liabilities at fair value via profit and loss, for example derivatives or contingent consideration in a business acquisition. Such contingent consideration shall subsequently be measured at fair value with changes recognized in profit or loss. For the financial liabilities subsequently measured at amortised cost the effective interest method is applied. The effective interest rate is the internal yield rate that discounts future cash flows over the term of the financial instrument. In addition, where the financial liability comprises an embedded derivative or an equity instrument, the amortized cost is calculated for the debt component only, after separation of the embedded derivative or equity instrument, if the embedded derivative is not closely related to the host contract and therefore needs to be separated. 2.4.17. Derivative financial instruments Derivative financial instruments are recognised initially at fair value. Subsequent accounting for derivatives depends on whether or not the derivatives are designated as hedging instrument in a cash flow, fair value or net investment hedge. Derivatives with positive fair values are recorded as assets and negative fair values as liabilities. UMG did not apply hedge accounting to the derivatives in 2021 and 2022. UMG measures all derivative financial instruments at fair value derived from market prices of the instruments or calculated as the present value of the estimated future cash flows based on observable interest yield curves, basis spread and foreign exchange rates. These calculations are tested for reasonableness by comparing the outcome of the internal valuation with the valuation received from the counterparty. 2.4.18. Inventories Inventories are valued at the lower of cost or net realizable value. Cost comprises purchase costs, production costs and other supply and packaging costs. These are usually calculated using the weighted average cost method. Net realizable value is the estimated selling price in the normal course of business, less estimated completion costs and selling costs. Inventories at UMG mostly comprise of finished goods. 2.4.19. Provisions Provisions are recognized when, at the end of the reporting period, UMG has a legal obligation (statutory, regulatory or contractual) or a constructive obligation, as a result of past events, and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and the obligation can be reliably estimated. Where the effect of the time value of money is material, provisions are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money. If the amount of the obligation cannot be reliably estimated, no provision is recorded and a disclosure is made in the Notes to the Consolidated Financial Statements. Significant judgment is required in determining the amount and probability of resources outflow and discount rates used to calculate the present value of this outflow. Provisions for royalty audit claims Up to the completion of the royalty claim audit, the timing and the amount of the potential pay-outs is uncertain. UMG makes its best possible estimate of the outcome using any available data, including history of claims with rights owners. When the estimate is performed for large homogeneous claims and contract terms, the statistical valuation method is used. Litigation provisions In the ordinary course of business, UMG may be involved in a number of legal and arbitration proceedings and administrative actions. The costs which may result from these proceedings are accrued at the reporting date if UMG has a present obligation toward a third party resulting from a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and the amount of that liability can be quantified or estimated within a reasonable range. The amount of provision recorded is based on a case-by-case assessment of the risk level, and events arising during the course of legal proceedings may require a reassessment of this risk at any time. 2.4.20. Employee benefit plans Defined contribution plans Contributions to defined contribution and multi-employer plans are expensed during the year when related services are provided. Defined benefit plans Defined benefit plans may be funded by investments in various instruments such as insurance contracts or equity and debt investment securities, excluding shares in any UMG entity or debt instruments. Pension expenses and defined benefit obligations are calculated by independent actuaries using the projected unit credit method. This method is based on annually updated assumptions, which include the probability of employees remaining with UMG until retirement, expected changes in future compensation and an appropriate discount rate for each country in which UMG maintains a pension plan. The discount rate is determined for each country by reference to yields on notes issued by investment grade companies having a credit rating of AA and maturities identical to that of the valued plans, generally based on relevant rate indices. The expected return on plan assets is estimated by using the selected discount rate to value the obligations of the previous year. The calculation is performed separately for each plan. A provision is recorded in the Statement of Financial Position equal to the difference between the actuarial value of the related benefits (actuarial liability) and the fair value of any associated plan assets, and this includes past service costs and actuarial gains and losses. The cost of defined benefit plans consists of three components recognized as follows: \u2022 the service cost is included in selling, general and administrative expenses. It comprises current service cost, past service cost resulting from a plan amendment or a curtailment, immediately recognized in profit and loss, and gains and losses on settlement; \u2022 the financial component, recorded in other financial expenses and income, consists of the unwinding of the interest component of the discount, less the expected return on plan assets determined using the discount rate retained for the valuation of the benefit obligation; and \u2022 the remeasurements of the net defined benefit liability (asset), recognized in items of other comprehensive income not reclassified as profit and loss, mainly consist of actuarial gains and losses, i.e., changes in the present value of the defined benefit obligation and plan assets resulting from changes in actuarial assumptions and experience adjustments (representing the differences between the expected effect of some actuarial assumptions applied to previous valuations and the effective impact). Where the value of plan assets exceeds benefit obligations, a financial asset is recognized up to the present value of future refunds and the expected reduction in future contributions. Some other post-employment benefits, such as life insurance and medical coverage (mainly in the United States) are subject to provisions which are assessed through an actuarial calculation comparable to the method used for pension provisions. 2.4.21. Income taxes Differences existing at closing between the tax base value of assets and liabilities and their carrying value in the Consolidated Statement of Financial Position give rise to temporary differences. Pursuant to the liability method, these temporary differences result in the accounting of: \u2022 deferred tax assets, when the tax base value is greater than the carrying value (expected future tax saving); and \u2022 deferred tax liabilities, when the tax base value is lower than the carrying value (expected future tax expense). Deferred tax assets and liabilities are measured at the expected tax rates for the year during which the asset will be realized or the liability settled, based on tax rates (and tax regulations) enacted or substantially enacted by the closing date. They are reviewed at the end of each year, in line with any changes in applicable tax rates. Deferred tax assets are recognized for all deductible temporary differences, tax loss carry-forwards and unused tax credits, insofar as it is probable that a taxable profit will be available, or when a current tax liability exists to make use of those deductible temporary differences, tax loss carry-forwards and unused tax credits, except where the deferred tax asset associated with the deductible temporary difference is generated by initial recognition of an asset or liability in a transaction which is not a business combination, and that, at the transaction date, does not impact net profit, nor tax income or loss. For deductible temporary differences resulting from investments in subsidiaries, joint ventures and other associated entities, deferred tax assets are recorded to the extent that it is probable that the temporary difference will reverse in the foreseeable future and that a taxable profit will be available against which the temporary difference can be utilized. The carrying value of deferred tax assets is reviewed at each closing date, and revalued or reduced to the extent that it is more or less probable that a taxable profit will be available to allow the deferred tax asset to be utilized. When assessing the probability of a taxable profit being available, account is taken, primarily, of prior years\u2019 results, forecasted future results, non-recurring items unlikely to occur in the future and the tax strategy. As such, the assessment of UMG's ability to utilize tax losses carried forward is to a large extent judgement-based. If the future taxable results of UMG proved to differ significantly from those expected, UMG would be required to increase or decrease the carrying value of deferred tax assets with a potentially material impact on UMG's Statement of Financial Position and Statement of Profit or Loss. Deferred tax liabilities are recognized for all taxable temporary differences, except where the deferred tax liability results from goodwill or initial recognition of an asset or liability in a transaction which is not a business combination, and that, at the transaction date, does not impact net profit, tax income or loss. For taxable temporary differences resulting from investments in subsidiaries, joint ventures and other associated entities, deferred tax liabilities are recorded except to the extent that both of the following conditions are satisfied: the parent, investor or venturer is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not be reversed in the foreseeable future. Current tax and deferred tax shall be charged or credited directly to equity, and not profit if the tax relates to items that are credited or charged directly to equity. Current tax liabilities not expected to be paid within the next 12 months are recorded as long term current tax liability. 2.4.22. Share-based payments Equity-settled share-based compensation expense is recognized as a personnel cost over the vesting period of the award at the fair value of the equity instruments granted at the grant date with a corresponding increase in equity. In cases when grant date occurs after the employees to whom the equity instruments were granted have begun rendering services (for example, if a grant of equity instruments is subject to shareholder approval), UMG estimates the grant date fair value of the equity instruments by estimating the fair value of the equity instruments at the end of the reporting period, for the purposes of recognising the services received during the period between service commencement date and grant date. Once the date of grant has been established, UMG revises the earlier estimate so that the amounts recognised for services received in respect of the grant are ultimately based on the grant date fair value of the equity instruments. Fair value of the shares granted is fixed at the grant date and is equal to the share price at the grant date with a deduction for the aggregate discounted value of the dividends that will not be received over the vesting period, unless the conditions of the plan prescribe compensation for the vesting period dividends, and after taking into account the discount for non-transferability during the retention period. The cumulative expense recognized for equity-settled transactions at each reporting date reflects the extent to which the vesting period has expired and UMG\u2019s best estimate of the number of equity instruments that will ultimately vest. The expense or credit in the Statement of Profit or Loss for a period represents the movement in cumulative expense recognized as at the beginning and end of that period. Service and non-market performance conditions are not considered when determining the grant date fair value of awards, but the likelihood of the conditions being met is assessed as part of UMG\u2019s best estimate of the number of equity instruments that will ultimately vest. Market performance conditions are reflected within the grant date fair value. 2.4.23. Related parties A related party is a person or an entity that is related to UMG. These include both people and entities that have, or are subject to, the influence or control of UMG (e.g. key management personnel). Transactions with related parties are accounted for in accordance with the requirements of relevant IFRSs and take into account the substance as well as the legal form. 2.4.24. Contingent liabilities Non-financial guarantees are accounted for as a contingent liability until such time it becomes probable that UMG will be required to make a payment under the guarantee. Contingent liabilities are possible or present obligations of sufficient uncertainty that it does not quality for recognition as a provision, unless it is assumed in a business combination. Contingent liabilities are reviewed continuously to assess whether an outflow of resources has become probable. 2.4.25. Financial guarantees Financial guarantee is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payments when due in accordance with the terms of a debt instrument. Financial guarantees are initially recognised at fair value and are subject to the expected credit loss model, and a credit loss is recognized for expected cash shortfalls. 2.5. Accounting policy changes 2.5.1. Accounting policy changes originating from the IFRS amendments The following accounting policy changes originating from the IFRS amendments became effective as at 1 January 2022, however, the impact from their adoption on the Consolidated financial statements of UMG is not material: \u2022 Reference to the Conceptual Framework \u2013 Amendments to IFRS 3 \u2022 Property, Plant and Equipment: Proceeds before Intended Use \u2013 Amendments to IAS 16 \u2022 Onerous Contracts \u2013 Costs of Fulfilling a Contract \u2013 Amendments to IAS 37 \u2022 Annual Improvements to IFRS Standards 2018-2020, including; \u25e6 IFRS 1 First-time Adoption of International Financial Reporting Standards \u2013 Subsidiary as a first-time adopter \u25e6 IFRS 9 Financial Instruments \u2013 Fees in the \u201910 per cent\u2019 test for derecognition of financial liabilities UMG applied IFRS Practice Statement 2 - Disclosure of Accounting Policies in its Consolidated financial statements. The Practice Statement provides an overview of the general characteristics of materiality, presents a four-step process companies may follow in making materiality judgements when preparing their financial statements and provides guidance on how to make materiality judgements in specific circumstances, namely, how to make materiality judgements about prior-period information, errors and covenants, and in the context of interim reporting. UMG used the guidance of the Practice Statement 2 to optimise its material accounting policy information disclosure to include only material accounting policy information. Accounting policy information is material if, when considered together with other information included in an entity's financial statements, it can reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements. 2.5.2. Impact of standards issued but not yet effective The new and amended standards and interpretations that are issued up to the date of issuance of UMG's financial statements which are effective for the periods starting January 1, 2023 are disclosed below. UMG intends to adopt these new and amended standards and interpretations, if applicable, when they become effective. \u2022 IFRS 17 (including the June 2020 amendments to IFRS 17) Insurance Contracts \u2022 Amendments to IAS 8 Definition of Accounting Estimates \u2022 Amendments to IAS 12 Deferred Tax related to Assets and Liabilities arising from a Single Transaction The amendment to IAS 12 \u2018Deferred Tax related to Assets and Liabilities arising from a Single Transaction\u2019 related to the recognition of deferred tax when UMG accounts for transactions, such as leases or decommissioning obligations, by recognizing both an asset and a liability. UMG is still investigating the impact of the adoption of IAS 12 amendments on its Consolidated financial statements. UMG do not expect that the adoption of all other the standards and amendments listed above will have a material impact on the financial statements of the Group in future periods. Note 3. Segment data
Operating segment data
The operating segment reporting follows the internal reporting used by Management of UMG, to manage the business,
assess the performance based on the available financial information and to allocate the resources. The most important
performance measure are EBITDA and Adjusted EBITDA, non-IFRS measures as management believes this is key in
evaluating the results of the segments relative to other companies that operate within the same industry. EBITDA and
Adjusted EBITDA are defined in the Appendix of the annual report.
Main aggregates of the Statement of profit or loss
(in millions of euros)
Note
Recorded
Music
Music
Publishing
Merchandising
and other
Corporate
centre
Elimination of
intersegment
transactions
Total
Year ended December 31, 2022
External revenue 7,937 1,787 616 - - 10,340
Intercompany revenue - 12 2 - (14) -
Revenues
1
7,937 1,799 618 - (14) 10,340
Adjusted EBITDA 1,900 410 36 (211) - 2,135
Non-cash share-based
compensation expense
23 (73) (15) - (19) - (107)
One time direct-listing
related expenses
- - - - - -
EBITDA 1,827 395 36 (230) - 2,028
Amortisation and
depreciation expense
(204) (162) (2) (9) - (377)
Restructuring expenses (29) - (2) (1) - (32)
Gain/(loss) on sale of assets (1) (1) - - - (2)
Impairment on
intangible assets
- (17) - - - (17)
Other non-recurring items - - - - - -
Operating profit 1,593 215 32 (240) - 1,600
Financial income 37
Financial expenses (735)
Income/(loss) from
equity affiliates
(2)
Profit before income taxes 900
1 2022 External revenues includes a \u20ac71 million benefit in Recorded Music from the settlement of a copyright infringement lawsuit with an internet service provider that
represents revenue other than revenue from contracts with customers.
(in millions of euros)
Note
Recorded
Music
Music
Publishing
Merchandising
and other
Corporate
centre
Elimination of
intersegment
transactions
Total
Year ended December 31, 2021
External revenue 6,821 1,322 361 - - 8,504
Intercompany revenue 1 13 2 - (16) -
Revenues 6,822 1,335 363 - (16) 8,504
Adjusted EBITDA 1,614 307 16 (149) - 1,788
Non-cash share-based
compensation expense
23 - - - (79) - (79)
One time direct-listing
related expenses
- - - (23) - (23)
EBITDA 1,614 307 16 (251) - 1,686
Amortisation and
depreciation expense
(148) (95) (2) (32) - (277)
Restructuring expenses (18) (2) - - - (20)
Gain/(loss) on sale of assets 2 - - - - 2
Impairment on
intangible assets
- - - - - -
Other non-recurring items 3 - - - - 3
Operating profit 1,453 210 14 (283) - 1,394
Financial income 143
Financial expenses (377)
Income/(loss) from
equity affiliates
5
Profit before income taxes
1
1,165
1 Restated amounts are presented in Note 2.3.
Revenues by geographic area
UMG has a global network and operates in local countries, which enables it to maintain the relationships with clients and
to understand the local market, legal and other conditions. As a result, the geographic basis of the operating companies
is the basis in determining the split of revenues from external customers per geographical areas.
Year ended December 31,
Year ended December 31,
(in millions of euros) 2022 2021
U.S. 5,163 50% 4,082 48%
UK 936 9% 785 9%
Japan 699 7% 628 7%
Germany 499 5% 465 6%
France 399 4% 388 5%
Rest of the world
1
2,644 25% 2,156 25%
Total revenues 10,340 100% 8,504 100%
1 Revenues for the Netherlands was \u20ac229 million in 2022 and \u20ac183 million in 2021 .
Disaggregated revenue information
Recorded Music
Year ended December 31,
(in millions of euros) 2022 2021
Streaming revenue 1,420 1,186
Subscription revenue 3,901 3,295
Downloads and other digital revenue
1
337 324
Physical revenue 1,207 1,121
License and other revenue 1,072 896
Recorded Music revenue 7,937 6,822
1 2022 Downloads and other digital revenue includes a \u20ac71 million benefit from the settlement of a copyright infringement lawsuit with an internet service provider that
represents revenue other than revenue from contracts with customers.
Music Publishing
Year ended December 31,
(in millions of euros) 2022 2021
Performance revenue 371 297
Synchronisation revenue 236 199
Digital revenue 1,040 698
Mechanical revenue 97 95
Other revenue 55 46
Music Publishing revenue 1,799 1,335
Subscriptions and streaming represents the largest type of recorded music revenue and is recognised over time and
is 51% (53% in 2021) of total UMG revenues. Physical recorded music revenues are recognised at a point in time and
represent 12% (13% in 2021) of total UMG revenues.
Other Recorded Music revenues mostly include neighbouring rights income which are recognized over time.
Merchandising revenue is recognised at a point in time. Music Publishing revenue is mostly recognised over time.
In 2022, UMG had 3 customers that each individually represented over 10% of total revenues (2 customers in 2021) and
which represented total revenues of 18%, 12% and 10% respectively (18%, 12% and 9% in 2021). Each customer reports
revenues in both Recorded Music and Music Publishing segments.
The amount of revenue recognized for the year ended December 31, 2022 from performance obligations satisfied (or
partially satisfied) in previous periods amounts to \u20ac197 million.
Segment assets
Segment assets by Segment
Segment assets that are reported to the executive board include items that are directly attributable to a segment as
well as those that can be allocated on a reasonable basis. Unallocated assets mainly comprise of cash and deferred tax
assets which are managed at the Group level.
(in millions of euros)
Note
Recorded
Music
Music
Publishing
Merchandising
and other
Corporate
centre
Total
Year ended December 31, 2022
Goodwill 8 709 769 100 - 1,578
Royalty advances, non-
current
9 938 441 214 - 1,593
Catalogues 9 1,247 1,811 - - 3,058
Property, plant & equipment 10 152 5 - 10 167
Other intangible assets 9 23 23 - 73 119
Right of use relating
to leases
11 311 4 1 2 318
Royalty advances, current 9 464 476 44 - 984
Other assets 2,140 616 48 227 3,031
Total segment assets
1
5,984 4,145 407 312 10,848
Unallocated assets 791
Total assets 11,639
Year ended December 31, 2021
Goodwill 8 653 727 100 - 1,480
Royalty advances, non-
current
9 877 559 100 - 1,536
Catalogues 9 1,165 1,817 - - 2,982
Property, plant & equipment 10 111 6 - 50 167
Other intangible assets 9 24 21 - 51 96
Right of use relating
to leases
11 235 27 - 126 388
Royalty advances, current 9 421 362 61 - 844
Other assets 2,913 469 36 191 3,609
Total segment assets
1
6,399 3,988 297 418 11,102
Unallocated assets 992
Total assets 12,094
1 Total segment assets in the Netherlands was \u20ac931 million in 2022 (\u20ac1,769 million in 2021).
Content assets by segment
December 31, 2022
(in millions of euros)
Note
Recorded
Music
Music
Publishing
Merchandising
and other
Total
Catalogues (of music and publishing rights) 1,247 1,811 - 3,058
Royalty advances (to artists and repertoire owners) 1,402 917 258 2,577
Of which:
Non-current
938 441 214 1,593
Current
464 476 44 984
Content assets, net 9 2,649 2,728 258 5,635
Current content assets 464 476 44 984
Non-current content assets 2,185 2,252 214 4,651
December 31, 2021
(in millions of euros)
Note
Recorded
Music
Music
Publishing
Merchandising
and other
Total
Catalogues (of music and publishing rights) 1,165 1,817 - 2,982
Royalty advances (to artists and repertoire owners) 1,298 921 161 2,380
Of which:
Non-current
877 559 100 1,536
Current
421 362 61 844
Content assets, net 9 2,463 2,738 161 5,362
Current content assets 421 362 61 844
Non-current content assets 2,042 2,376 100 4,518
Note 4. Cost of revenues and selling, general and administrative
expenses
Year ended December 31,
(in millions of euros) Note 2022 2021
Included in cost of revenues:
Artist costs 4,704 3,800
Product costs 1,049 808
Of which:
Personnel costs 30 27
Included in selling, general and administrative expenses:
Depreciation of tangible assets 10 35 34
Depreciation of right of use assets 11 74 68
Personnel costs 1,537 1,380
Personnel costs and average employee numbers
Year ended December 31,
(in millions of euros) Note 2022 2021
Salaries 1,202 1,117
Social security and other employment expenses 167 148
Wages and expenses 1,369 1,265
Share-based compensation plans 23 128 79
Employee defined contribution plans 48 41
Employee defined benefit plans 22 6 5
Other 16 17
Personnel costs 1,567 1,407
Annual average number of full-time equivalent employees (in thousands) 9.5 9.1
Note 5. Financial income and expenses
Year ended December 31,
(in millions of euros) Note 2022 2021
Interest income from cash, cash equivalents and other 20 6
Change in fair value of financial instruments through profit or loss - 23
Gain on disposal of consolidated companies - 98
Expected return on plan assets related to employee benefit plans 22 3 3
Gain on derivative instruments at fair value through profit or loss
1
13 -
Foreign exchange gain - 11
Other 1 2
Financial income 37 143
Interest expense on borrowings (47) (21)
Change in fair value of financial instruments through profit or loss (654) (320)
Unwinding of interest component (1) (1)
Interest cost related to employee benefit plans 22 (6) (5)
Interest expenses on lease liabilities 11 (14) (16)
Foreign exchange loss (1) -
Cost of finance (9) (11)
Other (3) (3)
Financial expenses (735) (377)
Net total financial income and (expenses) (698) (234)
1 The net gain on derivative instruments at fair value through profit or loss relates to foreign exchange forward contracts that did not qualify for hedge accounting.
Note 6. Income taxes
Income taxes and income tax paid by geographic area
Year ended December 31,
(in millions of euros) 2022 2021
(Expense)/income
Current
United States (185) (141)
United Kingdom (24) (14)
Rest of Europe (127) (47)
Rest of the world (11) (117)
(347) (319)
Deferred
United States 9 (4)
United Kingdom (1) 16
Rest of Europe 189 27
Rest of the world
1
35 3
232 42
Income taxes (115) (277)
1 Included the deferred tax charge relating to the revaluation gain recorded through profit or loss related to the investments in Spotify, Tencent Music Entertainment and
other investments for an aggregate amount of \u20ac166 million in 2022, compared to \u20ac71 million expense in 2021.
Income tax paid
Year ended December 31,
(in millions of euros) 2022 2021
United States (187) (139)
United Kingdom (22) (20)
Rest of Europe (36) (37)
Rest of the world
1
(10) (59)
Income tax (paid)/collected (255) (255)
1 Includes refunds of \u20ac62 million related to two litigations finalised before tax courts in 2022 (the 2021 amount includes \u20ac3 million payments as assessed for
these litigations).
Effective tax rate Year ended December 31, (in millions of euros) 2022 2021 Net profit 785 888 (Income)/loss from equity affiliates 2 (5) Income taxes 115 277 Profit before income taxes excluding (income)/loss from equity affiliates 902 1,160 Dutch statutory tax rate 25.8% 25.0% Theoretical provision for income taxes based on Dutch statutory tax rate (233) (290) Reconciliation of the theoretical and effective provision for income taxes Earnings tax rate differences 59 32 Impacts of the changes in tax rates 1 (14) Use or recognition of tax attributes 1,2 19 83 Adjustments to tax expense from previous years 26 8 Settled tax litigations 3 90 (11) Withholding taxes (72) (56) United States tax components Base Erosion and Anti-Abuse tax (BEAT) addback 2 - (48) Foreign Derived Intangible Income (FDII) deduction 31 22 State taxes (net of Federal Income Tax benefit) (29) (25) Other (10) 22 Provision for income taxes (115) (277) Effective tax rate 12.7% 23.9% 1 Tax attributes includes tax losses and tax credits, both for the use of previously unrecognized attributes as for prior years attributes recognised this year for expected utilisation in future years. 2 In 2021 in the United States the benefit of \u20ac80 million on the utilisation of tax attributes is, by virtue of how the tax rules apply, largely offset by the Base Erosion and Anti-Abuse Tax addback. In 2022, there is no addback due to a low amount of tax attributes used. 3 This represents the beneficial impact of two litigations finalised before tax courts in 2022 (the 2021 amount reflects the accrual recorded for these litigations in 2021). Excluding previous years\u2019 adjustments and the impacts of the tax litigations to income tax expense, the effective tax rate would have been 27.8% in 2022 and 24.1% in 2021. Deferred tax assets and liabilities Changes in deferred tax assets/(liabilities), net Year ended December 31, (in millions of euros) 2022 2021 Opening balance of deferred tax assets/(liabilities) (446) (482) Income taxes 231 42 Expenses and income directly recorded in equity (14) 4 Other business combinations - - Changes in foreign currency translation adjustments and other (3) (10) Closing balance of deferred tax assets/(liabilities), net (232) (446) Components of deferred tax assets and liabilities Year ended December 31, (in millions of euros) 2022 2021 Deferred tax assets Recognizable deferred taxes Tax attributes 1 98 111 Of which Universal Music US and its subsidiaries 8 8 Universal Music UK and its subsidiaries 51 61 Universal Music and its subsidiaries in the rest of Europe 19 22 Universal Music and its subsidiaries in the rest of the world 20 20 Other 358 415 Of which non-deductible provisions 61 49 employee benefits 37 21 working capital 149 158 Other 111 187 Total gross deferred tax assets 456 526 Deferred taxes, unrecognized Tax attributes 1 (82) (103) Of which Universal Music US and its subsidiaries (6) (5) Universal Music UK and its subsidiaries (38) (59) Universal Music and its subsidiaries in the rest of Europe (18) (19) Universal Music and its subsidiaries in the rest of the world (20) (20) Other (26) (19) Total deferred tax assets, unrecognized (108) (122) Recorded deferred tax assets 348 404 Deferred tax liabilities Asset revaluations 2 (198) (204) Working capital (163) (226) Financial instruments 3 (124) (351) Other (95) (69) Recorded deferred tax liabilities (580) (850) Deferred tax assets/(liabilities), net (232) (446) 1 As shown in this table, the amounts of gross tax attributes (including tax losses and tax credits) were estimated at the end of the relevant fiscal years. As a result, the amount of tax attributes shown in this table and the amount reported to tax authorities at the time of the filing of the tax returns may differ, and if necessary, may need to be adjusted in this table at the end of the following year. Deferred tax assets have not been recognised in respect of gross tax attributes for \u20ac 1,279 million (2021: \u20ac 1,346 million), as it is not probable that there will be future taxable profits within the entities against which these can be utilised. 2 These tax liabilities, stemming from asset revaluations and resulting from the purchase price allocation of entities acquired by UMG, are cancelled upon amortization or divestiture of the related assets and do not and will not generate any current tax liabilities. 3 Primarily related to the deferred tax liabilities stemming from the revaluation of the investments in Spotify, Tencent Music Entertainment and other investments. Tax litigation In the normal course of their business, UMG is subject to tax audits by the relevant tax authorities in the countries in which it conducts or has conducted business. Various tax authorities have proposed ordinary adjustments to the financial results reported by UMG for fiscal year 2021 and prior years, under statutes of limitation applicable to UMG. In litigation situations, UMG's policy is to pay the taxes it intends to contest, and to seek a refund through appropriate legal proceedings. Regarding ongoing tax audits, no provision is recorded where the impact that could result from an unfavourable outcome cannot be reliably assessed. To date, UMG believes that these tax audits are unlikely to have a material impact on the Group's financial position or liquidity Note 7. Earnings per share Year ended December 31, (in millions of euros and shares) 2022 2021 Net profit attributable to equity holders of the parent 782 886 Weighted average number of shares outstanding (after deduction of treasury shares) during the year 1,813 1,813 Potential dilutive effects related to share-based compensation 3 1 Diluted weighted average number of shares 1,816 1,814 Earnings per share (in euros) Basic earnings per share 0.43 0.49 Diluted earnings per share 0.43 0.49 Note 8. Goodwill Changes in goodwill Year ended December 31, (in millions of euros) 2022 2021 Balance as at January 1 Goodwill, gross 1,567 1,451 Accumulated impairment losses (87) (82) Goodwill, net 1,480 1,369 Changes in book value: Acquisitions 19 9 Impairment losses (7) - Foreign currency translation adjustments 86 102 Total changes 98 111 Balance as at December 31 Goodwill, gross 1,678 1,567 Accumulated impairment losses (100) (87) Goodwill, net 1,578 1,480 Goodwill by cash generating unit
Year ended December 31,
(in millions of euros) 2022 2021
Recorded Music 709 653
Music Publishing 769 727
Merchandising & Other 100 100
Closing balance 1,578 1,480
Cash generating units
For impairment testing, goodwill is allocated to cash-generating units, which represent the lowest level at which the
goodwill is monitored internally for management purposes. The cash-generating units correspond to the operating
segments. UMG\u2019s financial reporting is managed at the level of operating segments consistent across the music industry
(Recorded Music, Music Publishing, and Merchandising). UMG test goodwill at the cash-generating units level which
corresponds to the operating segments as disclosed in Note 3 above.
Goodwill impairment test
UMG conducted the full annual impairment test in the fourth quarter of 2022.
The goodwill was tested for impairment by comparing it with a recoverable amount. The recoverable amount is
determined as the higher of the value in use determined by the discounted value of future cash flows (Discounted Cash
Flow method (DCF)) and the fair value (less costs to sell), determined on the basis of market data (stock market prices,
comparable listed companies, comparison with the value attributed to similar assets or companies in recent acquisition
transactions). For a description of the methods used for the impairment test, please refer to Note 2.
Key assumptions used in the impairment tests for the cash-generating units were sales growth rates and the rates used
for discounting the projected cash flows. These cash flow projections were determined using management's internal
forecasts that cover an initial period of 2023 to 2027 that matches the period used for our strategic planning process, after
which a terminal value was calculated. The sales growth rates used to estimate cash flows are based on:
\u2022 past performance, including the label pool revenue forecasts derived from commercial agreements with customers;
\u2022 external market growth assumptions among which is the overall population and corresponding growth in streaming
penetration rate among the population;
\u2022 expected market share developments;
\u2022 industry long-term growth averages.
Key assumptions
2022 2021
In % per year
Compound
Annual Revenue
Growth
2023-2027
Extrapolation
revenue growth
rate after 2027
Pre-tax
discount rates
Compound
Annual Revenue
Growth
2022-2026
Extrapolation
revenue growth
rate after 2026
Pre-tax
discount rates
Recorded Music 5.0% 3.4% 8.2% 7.3% 2.5% 6.9%
Music Publishing 3.9% 3.4% 8.2% 5.6% 2.5% 6.9%
Merchandising 10.8% 2.0% 8.2% 9.4% 2.5% 6.9%
The annual impairment test for Recorded Music, Music Publishing and Merchandising showed significant headroom and
management did not identify an impairment for these CGUs. The sensitivity analysis around the key assumptions in
the impairment tests have indicated that a reasonably possible change in any of the assumptions would not cause the
recoverable amount to be less than the carrying value. Impairment losses presented in the tables above relates to a
disposal of a minor operation within Music Publishing.
Note 9. Content assets (catalogues and royalty advances) and other
intangibles
Net book value
December 31, 2022
(in millions of euros)
Asset value, gross
Accumulated
amortisation and
impairment losses
Net book value
Catalogues (of music and publishing rights) 5,732 (2,674) 3,058
Royalty advances (to artists and repertoire owners) 2,577 - 2,577
Content assets 8,309 (2,674) 5,635
Other intangible assets 489 (370) 119
December 31, 2021
(in millions of euros)
Asset value, gross
Accumulated
amortisation and
impairment losses
Net book value
Catalogues (of music and publishing rights) 5,284 (2,302) 2,982
Royalty advances (to artists and repertoire owners) 2,380 - 2,380
Content assets 7,664 (2,302) 5,362
Other intangible assets 437 (341) 96
Changes in content assets and other intangibles
(in millions of euros)
Catalogues (of
music and
publishing
rights)
Royalty
advances (to
artists and
repertoire
owners)
Other
intangibles
Total
Balance December 31, 2020 2,330 1,859 79 4,268
Amortisation (144) - (31) (175)
Impairment - - - -
Additions 630 1,434 48 2,112
Disposals - - - -
Recoupments - (1,046) - (1,046)
Business combinations - - - -
Changes in foreign currency translation adjustments
and other
166 133 - 299
Balance December 31, 2021 2,982 2,380 96 5,458
Amortisation (233) - (35) (268)
Impairment (10) - - (10)
Additions 137 1,187 54 1,378
Disposals (3) - - (3)
Recoupments - (1,122) - (1,122)
Business combinations 6 - 1 7
Changes in foreign currency translation adjustments
and other
179 132 3 314
Balance December 31, 2022 3,058 2,577 119 5,754
Royalty advance payments, net on the Consolidated Statement of Cash Flows consists of additions and recoupments from
the changes in content assets table above.
The significant music catalogues and publishing rights were acquired through business combinations of BMG Publishing
(BMG) and EMI Recorded Music (EMI). The BMG catalogue was acquired in 2007 with a fair value of \u20ac1,241 million
and has carrying amount of \u20ac378 million (2021: \u20ac413 million) with a remaining useful life of 5 and 35 years for the
respective catalogue components. The EMI catalogue was acquired in 2012 with a fair value of \u20ac1,046 million, and has
a carrying amount of \u20ac548 million (2021: \u20ac553 million) with a remaining useful life of 10 and 40 years for the respective
catalogue components.
Note 10. Property, plant and equipment
(in millions of euros)
Land
and buildings
Equipment
and machinery
Other
fixed assets
Assets under
construction
Total
Cost
Balance as at January 1, 2022 234 111 74 9 428
Additions 4 4 1 24 33
Transfers and reclassifications 5 5 3 (13) -
Disposals (5) (4) (2) (1) (12)
Changes in foreign currency translation
adjustments and other
3 3 2 1 9
Balance as at December 31, 2022 241 119 78 20 458
Depreciation and impairment losses
Balance as at January 1, 2022 (120) (90) (51) - (261)
Depreciation during the year (18) (10) (7) - (35)
Disposals 5 3 3 - 11
Changes in foreign currency translation
adjustments and other
(2) (2) (2) - (6)
Balance as at December 31, 2022 (135) (99) (57) - (291)
Carrying amount
As at January 1 114 21 23 9 167
As at December 31 106 20 21 20 167
(in millions of euros)
Land
and buildings
Equipment
and machinery
Other
fixed assets
Assets under
construction
Total
Cost
Balance as at January 1, 2021 220 77 65 19 381
Additions 3 3 3 4 13
Transfers and reclassifications 4 15 3 (22) -
Disposals (4) - - - (4)
Changes in foreign currency translation
adjustments and other
11 16 3 8 38
Balance as at December 31, 2021 234 111 74 9 428
Depreciation and impairment losses
Balance as at January 1, 2021 (103) (59) (43) - (205)
Depreciation during the year (18) (10) (6) - (34)
Disposals - - - - -
Changes in foreign currency translation
adjustments and other
1 (21) (2) - (22)
Balance as at December 31, 2021 (120) (90) (51) - (261)
Carrying amount
As at January 1 117 18 22 19 176
As at December 31 114 21 23 9 167
Note 11. Leases
Changes in the rights-of-use
Year ended December 31,
(in millions of euros) 2022 2021
Opening balance 388 416
Depreciation (74) (68)
Additions 25 32
Disposals (26) (12)
Foreign currency translations and other 5 20
Closing balance 318 388
Lease liabilities
Year ended December 31,
(in millions of euros) Note 2022 2021
Opening balance 501 525
Additions 26 32
Disposals (26) (15)
Accretion of interest 5 14 16
Payments (100) (86)
Of which interest (14) (16)
Of which principal (86) (70)
Foreign currency translations and other 8 29
Closing balance 423 501
Maturity of lease liabilities
Year ended December 31,
(in millions of euros) 2022 2021
Maturity
< 1 year 77 80
Between 1 and 5 years 228 256
> 5 years 118 165
Lease liabilities 423 501
Cash outflow for leases and lease-related expenses
Total cash outflow and expenses for the leases of real-estate with maturity shorter than 12 months and expense relating
to low-value assets recorded in the Statement of Profit or Loss amounted to \u20ac18 million for the year ended December 31,
2022 (compared to \u20ac13 million for the year ended December 31, 2021).
Note 12. Investments in equity affiliates
UMG has certain interests in joint ventures and companies where UMG has significant influence. The main company
over which UMG had significant influence at the reporting date was Vevo LLC (Vevo). Vevo is a global music videos and
entertainment services platform and its country of incorporation is the United States. UMG owns 49.2% of the voting
interest and the carrying amount of this investment was \u20ac74 million on December 31, 2022 (2021: \u20ac70 million).
Change in value of investments in equity affiliates
Year ended December 31,
(in millions of euros) 2022 2021
Opening balance 109 72
Acquisitions 47 28
Business combinations - -
Write-downs (2) -
Income/(loss) from equity affiliates (2) 5
Change in other comprehensive income 6 5
Dividends (2) (2)
Translation difference - 1
Closing balance 156 109
Note 13. Capital and financial risk management Capital risk management UMG objectives when managing capital are to safeguard UMG\u2019s ability to continue to create value for shareholders, support the sustainable growth of the Group, and to maintain an optimal capital structure that optimizes its cost of capital. As a result, UMG endeavours to maintain a satisfactory economic return for its shareholders and guarantee economic access to external sources of funds. On 31 May 2022, UMG NV announced Baa1/BBB Long Term Credit Ratings from Moody\u2019s and S&P. These investment grade ratings are the financial covenants UMG committed to sustaining. In relation to the EUR RCF, if UMG does not have these ratings by Moody\u2019s and S&P or a comparable rating from an internationally recognized credit rating agency, its Leverage Ratio shall be equal to or below 4.0x. UMG and its subsidiaries are not subject to external capital requirements, other than the financial covenants as disclosed above. To support this strategic goal, UMG management remains focused on the robust performance of the Free Cash Flow, a non-IFRS measure as defined in the definitions in the Appendix to the Annual Report, and effective Working Capital management, details on both are presented below. Free cash flow Year ended December 31, (in millions of euros) 2022 2021 Operating profit 1 1,600 1,394 Amortisation and depreciation expense 377 277 Impairment expense 17 - Changes in provision, net 65 8 (Gain)/loss on sale of assets 2 (2) Other non-recurring items - (3) Adjustments 1 461 280 Royalty advance payments, net of recoupments (148) (364) Other changes in net working capital 74 85 Net cash provided by/(used for) operating activities before income tax paid 1,987 1,395 Income tax paid (255) (255) Net cash provided by/(used for) operating activities 1,732 1,140 Net cash provided by/(used for) investing activities (520) (391) Repayment of lease liabilities and related interest expenses (100) (86) Interest, net (30) (17) Other cash items related to financing activities 4 (8) Free cash flow 1,086 638 1 Restated as described in Note 2.3 Changes in working capital
(in millions of euros)
December
31, 2021
Changes in
operating
working capital
1
Business
combinations
Changes
in foreign
currency
translation
adjustments
Other
2
December
31, 2022
Inventories
3
99 62 - 2 - 163
Trade accounts receivable
and other
1,803 203 1 11 (4) 2,014
Of which:
Trade accounts receivable 550 22 1 4 3 580
Expected credit losses (46) (14) - - (2) (62)
Working capital assets 1,902 265 1 13 (4) 2,177
Trade accounts payable
and other
(4,875) (333) (2) (113) 173 (5,150)
Other non-
current liabilities
(769) (6) (3) (14) 355 (437)
Working capital liabilities (5,644) (339) (5) (127) 528 (5,587)
Net working capital (3,742) (74) (4) (114) 524 (3,410)
1 Excludes content investments.
2 Mainly includes the change in net working capital relating to content investments, capital expenditures and other investments.
3 Total inventory obsolescence expense for the period was \u20ac69 million.
(in millions of euros)
December
31, 2020
Changes in
operating
working capital
1
Business
combinations
Changes
in foreign
currency
translation
adjustments
Other
2
December
31, 2021
Inventories
3
79 17 - 3 - 99
Trade accounts receivable
and other
1,641 126 - 40 (4) 1,803
Of which:
Trade accounts receivable 538 17 - 12 (17) 550
Expected credit losses (62) 9 - (1) 8 (46)
Working capital assets 1,720 143 - 43 (4) 1,902
Trade accounts payable
and other
(4,126) (226) - (201) (322) (4,875)
Other non-
current liabilities
(851) (2) - (19) 103 (769)
Working capital liabilities (4,977) (228) - (220) (219) (5,644)
Net working capital (3,257) (85) - (177) (223) (3,742)
1 Excludes content investments.
2 Mainly includes the change in net working capital relating to content investments, capital expenditures and other investments.
3 Total inventory obsolescence expense for the period was \u20ac40 million.
Financial risk management
UMG business activities expose the Group to a variety of risks associated with financial instruments, including credit risk,
liquidity risk, interest rate risk, foreign currency risk and market risks.
These risks are inherent to how UMG operates as a multinational with locally operating subsidiaries. To manage these
risks, UMG has developed specific policies. The essence of measuring the performance of these policies is to strike a
balance between managing risks and contributing to the financial results of UMG. UMG policies are risk-adverse in that
regard. Enforcement of procedures related to financial risk management is carried out by UMG Group Treasury in line
with the guiding principles of the Group Treasury Policies.
Credit risk
Credit risk can be defined as the risk of loss arising from the failure of a counterparty to perform its obligations under
a contract.
Credit risk maximum exposure is equal to the carrying amounts of Trade and other receivables, refer to Note 14, and Cash
position and borrowings, refer to Note 16, as presented in the Statement of Financial Position. Also, for the derivatives and
assets at fair value via profit and loss, the maximum exposure to credit risk at the end of the reporting period is equal to
the carrying amount, refer to Note 18
Financial assets and liabilities
. The maximum credit risk exposure on guarantees
issued corresponds to their nominal amounts, as presented in Note 17
Contractual obligations and other commitments.
UMG aims to centralize its cash management with its Tier 1 banks, of which all the banks have credit ratings of minimum
of A-.
UMG performs ongoing evaluations of the financial and non-financial condition of UMG customers and adjusts credit
limits when appropriate. In instances where a customer's creditworthiness is determined not to be sufficient to grant the
required credit limit, there are several mitigation tools that can be utilized to close the gap, including reducing payment
terms, cash on delivery, prepayments and pledges on assets.
UMG\u2019s operational subsidiaries have set up procedures and systems to track their trade accounts receivable and recover
outstanding amounts. In addition, some subsidiaries have insured their main client credit risks worldwide with a leading
credit insurer .
Liquidity risk
Liquidity risk is the risk that UMG will not be able to meet its financial obligations as they fall due.
The primary objective of liquidity management is providing sufficient cash to enable UMG to meet its liabilities when due,
under normal and stressed conditions, without incurring losses.
Neither the aged receivables of individual customers, nor the profile of the accounts receivable portfolio per segment,
impose a significant threat to UMG\u2019s liquidity planning.
UMG Treasury provides for the short-term day-to-day cash management needs of the Group by organizing sweeps
between international cash poolings. For medium term financing requirements, UMG Group Treasury determines the
Group's overall debt position and its planned evolution based on the Group\u2019s 13-month rolling cash forecast. A liquidity
analysis is performed to ensure the proper funding is in place to face medium-term needs.
Cash is extracted from countries outside the cash pooling through dividends or thanks to upstream loans. Cash is pooled
up to UMG NV from all territories participating in the international cash pooling.
The objectives of liquidity management are to repay the external debt at the level of UMG NV (\u20ac debt) and to pay the UMG
NV dividend to the Group's shareholders. The list of permitted banks for liquidity management includes eight banks with
minimum rating of A-.
The liquidity analysis includes a buffer of \u20ac400 million to provide for intra-month treasury swings and the incompressible
treasury float. Adequate bank facilities are available as backup for Commercial paper. The maturity schedule for long-
term external debt is maintained above 3 years. UMG Treasury ensures central compliance with financial covenants,
pari-passu, and negative pledge clauses.
Total cash and cash equivalents position as at December 31, 2022, is disclosed in Note 16
Cash positions and borrowings.
Contractual obligations and their timing are disclosed in Note 17
Contractual obligations and other commitments.
In
addition, as at December 31, 2022, UMG has undrawn Revolving Credit Facilities (RCF) of \u20ac1,266 million.
Market risk
Market risk is the possibility that an entity will experience losses due to factors that affect the financial markets. Market
risk includes currency risk and interest rate risk as addressed below, but also risk of change in fair value of the financial
instruments, including those traded on the active markets. As at December 31, 2022, UMG held financial instruments
measured at fair value as disclosed in Note
18, where the exposure of the risk and sensitivity are presented.
UMG risk management policies cover refinancing risk to ensure that under any market circumstances, UMG can
refinance its debt on time and a reasonable cost. The objectives of refinancing risk management are to benefit from
sufficient flexibility granted by the access to various capital markets (EUR CPs and Bonds) and the ability to sell assets to
not rely solely on bank borrowings or commercial paper.
Interest rate risk
Interest rate risk is the risk of the fair value or future cash flows of a financial instrument fluctuating because of changes
in the market interest rates. Financial instruments included in the borrowings create an inherent interest rate risk.
UMG seeks to limit the period over which interest rates on debt are exposed. The preferred method of hedging interest
rate risk is issuing long term fixed-rate bonds. The use of interest-rate plain vanilla derivatives is also authorized. The list
of authorized instruments includes interest rate swaps, FRAs, caps, and floors.
As for currency risk management, interest rate hedging operations are handled solely by UMG Treasury according to
the Group\u2019s strategic goals set by the Group Chief Financial Officer. The speculative use of interest rate derivatives is
strictly prohibited.
As of December 31, 2022, UMG had a ratio of fixed-rate debt to total outstanding debt of approximately 79%, including
lease liabilities. A sensitivity analysis conducted in January 2023 on the gross debt portfolio shows that if short term
EURIBOR were to increase instantaneously by 0.5% from their level of December 31, 2022, with all other variables held
constant, the total change in annualized interest expense result would be \u20ac5 million.
Foreign currency risk
As any multinational group, UMG faces various types of foreign exchange transactional exposures on committed and
expected cash in and outflows, denominated in a currency other than the respective functional currencies of UMG
entities. Subsequently, UMG also faces translational risk, which is the risk resulting from the translation of foreign
operations into the euro. The main currencies that drive the foreign currency risk of UMG are U.S. Dollar, British Pound
and Japanese Yen.
UMG\u2019s exposure to FX transactional risk is greatly limited due to the offsetting of inflows/outflows in the different
currencies to the extent possible as a natural hedge. UMG Treasury mainly manages foreign exchange rate risk exposure
on balance sheet positions, primarily cash concentration in various currencies at the top cash pooling entity. Treasury's
foreign exchange risk management policy is to hedge recognized assets and liabilities nominated in foreign currencies
above a predefined threshold. UMG uses forward exchange rate contracts and foreign exchange swaps to manage this
exposure. All material foreign currency balance sheet exposures are offset by derivatives, so potential foreign currency
rate fluctuations as of December 31, 2022 would have no significant impacts on UMG\u2019s financial results. In 2022, UMG did
not apply hedge accounting to these derivatives. Currency derivatives are not used for speculative purposes. The average
maturity of these contracts is one month.
The table below summarises the net nominal value of the foreign currency balance sheet exposure and foreign exchange
rate derivatives used to offset it as of December 31, 2022.
(in millions of euros) USD GBP JPY Other Total
Nominal value of Balance sheet exposure 294 366 271 392 1,323
Foreign exchange rate derivatives (294) (366) (271) (392) (1,323)
Net exposure - - - - -
Note 14. Trade and other receivables
Year ended December 31,
(in millions of euros) 2022 2021
Trade receivables 1,765 1,598
Other receivables 249 205
Trade receivables, net of value allowance 2,014 1,803
Out of the total amount of trade receivables, \u20ac1,247 million (2021: \u20ac1,094 million) was recognized as accrued revenue as at
31 December, 2022.
Year ended December 31,
(in millions of euros) 2022 2021
Current 1,698 1,543
Overdue 0-30 days 46 44
Overdue 31-150 days 21 11
Overdue >150 days - -
Trade receivables, net of value allowance 1,765 1,598
For the movements of the expected credit loss allowance and the credit risk management policies and procedures of
UMG please refer to Note 13
Capital and financial risk management
.
Note
15. Trade and other accounts payable
Year ended December 31,
(in millions of euros) 2022 2021
Trade accounts payable 138 146
Music royalties to artists and repertoire owners 3,523 3,020
Accrued expenses 401 385
Other payables 711 936
Trade and other accounts payable 4,773 4,487
Contract liabilities 377 388
Trade accounts payable and other 5,150 4,875
Out of the total amount of \u20ac388 million recognized in contract liabilities at the beginning of 2022, \u20ac320 million has been
recognized as revenue for the year ended December 31, 2022.
Note 16. Cash position and borrowings
Cash position
Year ended December 31,
(in millions of euros) 2022 2021
Cash and cash equivalents 439 585
Bank overdrafts (1) (13)
Cash and cash equivalents in the statement of cash flows
1
438 572
1 Restated as described in Note 2.3.
UMG operates in a number of territories where regulations do not authorise participation of local entities to the UMG
global cash pooling. Only dividends and intra-group invoices are available to extract cash from these territories. The
amount of cash held by UMG entities in these countries amounted to \u20ac373 million as of December 31, 2022.
Borrowings and other financial liabilities
December 31, 2022 December 31, 2021
(in millions of euros) Total Long-term Short-term Total Long-term Short-term
Bonds 1,004 987 17 - - -
Term facility - - - 998 798 200
Drawn revolving
credit facilities
125 125 - 1,447 1,447 -
Commercial papers 929 - 929 - - -
Bank overdrafts 1 - 1 13 - 13
Other 191 1 190 137 32 105
Borrowings at
amortized cost
2,250 1,113 1,137 2,595 2,277 318
Cash and cash equivalents (439) - (439) (585) - (585)
Derivative financial assets (1) - (1) - - -
Net debt 1,810 2,010
New borrowings
In February 2022, UMG entered into a short-term floating rate USD 500 million revolving credit facility. At maturity on
November 14, 2022, the facility was extended to November 14, 2023. The facility was renewed for USD 500 million and is
stepping down to USD 350 million by December 30, 2022. By December 31, 2022, no drawing was made from the facility.
On June 30, 2022, UMG issued \u20ac500 million of senior unsecured notes due on June 30, 2027 with a coupon of 3.00% and
\u20ac500 million of senior unsecured notes due on June 30, 2032 with a coupon of 3.75%. On July 1, 2022, the net proceeds
from the issuance of the unsecured senior notes of \u20ac1 billion were used to fully repay the Term loan. See Note 13 for
information on covenants associated with new borrowings.
On July 8, 2022, UMG established a EUR commercial paper program. Under the Program, UMG may issue, from time to
time, commercial paper notes up to a maximum aggregate amount of \u20ac1 billion. The proceeds from the issuance will be
used firstly to pay down UMG\u2019s revolving credit facility and manage short-term liquidity needs from the Group.
Movements of borrowings
(in millions of euros)
Term
facility
Drawn
revolving
credit
facilities
Bonds
Vivendi SE
borrowings
Vivendi SE
credit
lines
drawn
UMG own
credit
lines
drawn
Bank
overdrafts
Commercial
papers
Other
debt
Total
Balance December 31, 2020 - - - 2,368 422 213 5 - 1 3,009
New borrowings 998 1,981 - - 40 20 9 - 137 3,185
Repayments - (556) - (2,368) (465) (235) - - - (3,624)
Translation differences and
other movements
- 22 - - 3 2 (1) - (1) 25
Balance December 31, 2021 998 1,447 - - - - 13 - 137 2,595
New borrowings 8 1,722 1,004 - - - 1 3,117 87 5,939
Repayments (1,006) (3,126) - - - - (13) (2,188) (34) (6,367)
Translation differences and
other movements
- 82 - - - - - - 1 83
Balance December 31, 2022 - 125 1,004 - - - 1 929 191 2,250
Note 17. Contractual obligations and other commitments
UMG\u2019s material contractual obligations and contingent assets and liabilities include:
\u2022 Contractual content commitments. UMG routinely commits to pay agreed amounts to artists and other parties upon
delivery of content or other products (\u201cCreative talent and employment agreements\u201d). Until the artist or the other
party has delivered his or her content or until the recoupment of an advance, UMG discloses its obligation as an
off-balance sheet commitment;
\u2022 Certain contractual obligations relating to the UMG\u2019s business operations, including leases and off-balance sheet
commercial commitments, such as long-term service contracts and purchase or investment commitments; and
\u2022 Commitments related to UMG\u2019s financing: term loan and drawn committed bank credit facilities.
Contractual obligations
The table below analyses UMG\u2019s financial liabilities into relevant maturity groupings based on their contractual
maturities. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12
months equal their carrying balances as the impact of discounting is not significant. Interest on long-term debt is based
on floating rate adjustments according to market expectations.
Minimum future payments as of December 31, 2022
Total minimum future
payments as of
Payments due in
(in millions of euros) Total 1 year 2-5 years After 5 years December 31, 2021
Borrowings and other
financial liabilities
2,506 1,272 640 594 2,618
Lease liabilities 472 90 257 125 562
Music royalties to artists and
repertoire owners
3,542 3,523 12 7 3,034
Creative talent and employment
agreements and others
470 259 197 14 757
Other payables 1,156 950 31 175 1,425
Consolidated statement of
financial position items
8,146 6,094 1,137 915 8,396
Contractual
content commitments
1,562 836 701 25 1,570
Other commitments 247 74 150 23 71
Total off-balance
sheet commitments
1,809 910 851 48 1,641
Total 9,955 7,004 1,988 963 10,037
Note 18. Financial assets and liabilities
The following table shows the carrying amounts and fair values of financial assets and liabilities according to their fair
value hierarchy. Based on the nature, maturity or the magnitude of the amounts, UMG considers that the fair value
of trade and other receivables, short-term deposits, loans receivable, borrowings, trade and other payables are not
materially different from their carrying value.
Fair value hierarchy is based on the transparency of the inputs used and is as follows:
\u2022 Level 1: fair value measurement based on quoted prices in active markets for identical assets or liabilities;
\u2022 Level 2: fair value measurement based on observable market data (other than quoted prices included under Level 1),
being for example, price on the last transactions on over-the-counter (OTC) markets; and
\u2022 Level 3: fair value measurement based on valuation techniques using inputs for the asset or liability that are not
based on observable market data .
December 31, 2022
Fair value
(in millions of euros)
Carrying
amount
Level 1
1
Level 2 Level 3
Financial assets at fair value through profit and loss
Listed equity securities 597 597 - -
Unlisted equity securities - - - -
Warrants - - - -
Other financial assets 51 - 36 15
Trade and other receivables 1 - 1 -
Financial assets at fair value through other
comprehensive income
Listed equity securities through OCI 1 1 - -
Unlisted equity securities 19 - - 19
Financial assets at amortised cost
Trade and other receivables 2,013 - - -
Other financial assets 22 - - -
Total financial assets 2,704 598 37 34
Financial liabilities at amortised cost
Trade and other payables (5,150) - - -
Bonds (1,004) (987) - -
Borrowings, excluding bank overdrafts and bonds (1,262) - - -
Other non-current liabilities (437) - - -
Total financial liabilities (7,853) (987) - -
1 Includes transfer of \u20ac31 million of equity securities from level 2 to level 1 .
December 31, 2021
Fair value
(in millions of euros)
Carrying
amount
Level 1 Level 2 Level 3
Financial assets at fair value through profit and loss
Listed equity securities 1,413 1,413 - -
Unlisted equity securities 44 - 44 -
Warrants 19 - 19 -
Other financial assets 68 - 57 11
Trade and other receivables - - - -
Financial assets at fair value through other
comprehensive income
Listed equity securities through OCI - - - -
Unlisted equity securities 16 - - 16
Financial assets at amortised cost
Trade and other receivables 1,803 - - -
Other financial assets 32 - - -
Total financial assets 3,395 1,413 120 27
Financial liabilities at amortised cost
Trade and other payables (4,875) - - -
Borrowings, excluding bank overdrafts and bonds (2,582) - - -
Other non-current liabilities (769) - - -
Total financial liabilities (8,226) - - -
Listed equity portfolio
December 31, 2022
Number
of shares
held
Ownership
interest
Average
purchase
price
1,2
Stock
market
price
Carrying
value
Change
in value
over
the period
Cumulative
unrealized
captial
gain/(loss)
3
Sensitivity
at +/- 10 pts
(in
thousands)
(\u20ac/share) (in millions of euros)
Spotify 6,487 3.30% 6.58 74.41 483 (856) 440 +48/-48
Tencent
Music Entertainment
12,246 0.76% na 7.80 96 22 96 +10/-10
Other 18 18 18
Total 597 (816) 554
1 Includes acquisition fees and taxes.
2 na: not applicable.
3 Includes revaluation losses, net of liabilities, of \u20ac617 million in 2022 as recognized in Note 5 .
December 31, 2021 Number of shares held Ownership interest Average purchase price 1,2 Stock market price Carrying value Change in value over the period Cumulative unrealized captial gain/(loss) 3 Sensitivity at +/- 10 pts (in thousands) (\u20ac/share) (in millions of euros) Spotify 6,487 3.37% 6.58 206.38 1,339 (330) 1,296 +134/-134 Tencent Music Entertainment 12,246 0.74% na 6.04 74 (119) 74 +7/-7 Total 1,413 (449) 1,370 1 Includes acquisition fees and taxes. 2 na: not applicable. 3 Includes revaluation losses, net of liabilities, of \u20ac315 million in 2021 as recognized in Note 5. Note 19. Equity Share capital UMG has an authorized share capital of \u20ac27,000 million divided into 2,700,000,000 ordinary shares with a nominal value of \u20ac10 per share. On December 31, 2022, the issued and fully paid share capital consisted of 1,813,512,742 ordinary shares with a nominal value of \u20ac10 per share (2021: 1,813,375,796 ordinary shares with a nominal value of \u20ac10 per share). Additional paid-in capital Additional paid-in capital represents the premium paid in excess of the par value of shares at the time of the issuance of new shares. Treasury shares As at December 31, 2022, UMG held 214,235 shares (2021: 466,783 shares) as Treasury shares for the purpose of delivering on a share-based executive incentive plan, refer to Note 23 for more details. Retained Earnings Dividend Distribution On May 12, 2022 the shareholders approved a dividend distribution of \u20ac0.20 per ordinary share, corresponding to a total distribution of \u20ac363 million, payable in June 2022. On July 27, 2022 the directors approved an interim dividend distribution of \u20ac0.24 per ordinary share, corresponding to a total distribution of \u20ac435 million payable in October 2022. UMG plans to annually declare and pay dividends to all holders of the Shares on a pro-rata basis in two semi-annual instalments, in the aggregate amount of no less than 50% of UMG's net profits realized during the relevant financial year, subject to agreed non-cash items. UMG intends to pay an interim dividend in the fourth quarter of each financial year, after the publication of the half-year figures of the Group, and a final dividend in the second quarter of the following financial year, to be paid following approval of the UMG's financial statements at its Annual General Meeting. A proposal will be submitted to the 2022 Annual General Meeting of Shareholders to pay a dividend of \u20ac0.27 per ordinary share corresponding to a total distribution of \u20ac491 million, in cash, from the 2022 retained earnings, payable in Q2 2023. Note 20. Expenses and income directly recognized in equity
Details of changes in equity related to other comprehensive income
Items not subsequently reclassified
to profit & loss
Items to be subsequently reclassified to profit & loss
(in millions of euros)
Actuarial gains/
(losses) related
to employee
defined
benefit plans
Financial
assets at
fair value
through
other
comprenhensive
income
Foreign
currency
translation
adjustments
Other
comprehensive
income from
equity affiliates,
net
Other
comprehensive
income
Balance as of December 31, 2020 (42) (15) (418) (8) (483)
Expenses and income directly recognized
in equity
(6) - 218 5 217
Tax effect 1 2 - - 3
Balance as of December 31, 2021 (47) (13) (200) (3) (263)
Expenses and income directly recognized
in equity
49 8 184 6 247
Tax effect (13) - - - (13)
Balance as of December 31, 2022 (11) (5) (16) 3 (29)
Note 21. Provisions
Year ended December 31,
(in millions of euros) Note 2022 2021
Post-retirement employee benefits 22 166 220
Royalty audit claims 126 116
Deferred employee compensation 31 27
Restructuring costs 16 12
Litigations 5 4
Other 50 56
Provisions 394 435
Deduction of current provisions (103) (80)
Non-current provisions 291 355
Based on the historical utilisation rate, UMG expects the royalty audit claims provision will be utilized mainly within the
next 5 years.
Movements in provisions (in millions of euros) Restructuring Litigation Royalty audit claims Other Total Balance as at January 1, 2022 12 4 116 56 188 Additions 26 - 39 (10) 55 Utilizations (18) - (19) (9) (46) Releases (3) - (15) (8) (26) Changes in foreign currency translation adjustments (1) 1 5 21 26 Balance as at December 31, 2022 16 5 126 50 197 Current 16 - 61 6 83 Non-current - 5 65 44 114 Note 22. Post-retirement employee benefits In accordance with the laws and practices of each country in which it operates, UMG participates in, or maintains, employee benefit plans providing retirement pensions, post-retirement health care, life insurance and other post- employment benefits to eligible (former) employees and such of their beneficiaries who meet the required conditions. Post-retirement benefits are provided for substantially all employees through defined contribution plans, which are integrated with local social security, or defined benefit plans, which are generally managed via group pension plans. The plan funding policy implemented by UMG is consistent with applicable government funding requirements and regulations. Refer to Note 4 for the contribution to defined contribution plans. Post-employment benefits covered in this note relate to defined-benefit pension and other post-retirement defined benefit plans, including medical plans and life insurance. The benefits provided by these plans are based on employees\u2019 years of service and compensation levels. Refer to the table below for the present value of the net defined benefit obligations and plan assets per country as at 31 December. 2022 2021 (in millions of euros) Obligation Fair value of plan assets Net obligation/ (asset) Obligation Fair value of plan assets Net obligation/ (asset) Germany 134 (2) 132 183 (1) 182 United Kingdom 1 - 1 171 (169) 2 United States 19 - 19 20 - 20 Other 40 (39) 1 53 (49) 4 Total 194 (41) 153 427 (219) 208 Germany The post-retirement benefit plans in Germany aim to provide pension benefits to eligible (former) employees and such of their beneficiaries who meet certain conditions. The total obligation as presented above includes multiple plans, from which three are material. These plans are closed to new entrants since 2003 and earlier. In accordance with current regulations, these plans are not funded and are not covered by the plan assets. The main risks for UMG relate to changes in discount rates. United Kingdom In 2021, the largest post-retirement benefit plan related to pension benefits in the United Kingdom for the eligible participants. In December 2017, the fund purchased a buy-in insurance policy, covering pension benefits. This insurancepolicy is an asset to the plan. In late 2021, UMG paid the true-up premium to the insurance company to complete the
plan buyout. Following the completion of the final administrative actions, the final settlement of the scheme has been
reflected in 2022.
United States
The defined benefit liability in the United States mainly relates to the post-retirement medical care benefits. Post-
retirement medical benefit plans in the United States are not covered by plan assets in accordance with local laws
and practices.
Cash flow impact for 2023
In 2023 UMG expects a cash outflow of \u20ac14 million in relation to all defined benefit plans.
Net defined benefit liability
Movements of the net defined benefit obligation for the year ended on December 31, are presented in the table below.
2022
2021
(in millions of euros)
Note Obligation
Fair value
of plan
assets
Net
obligation/
(asset)
Obligation
Fair value
of plan
assets
Net
obligation/
(asset)
Opening balance 427 (219) 208 423 (207) 216
Current service cost 3 - 3 2 - 2
(Gain)/loss on settlements - - - (1) 1 -
Other - - - 1 - 1
Impact on selling & administrative 3 - 3 2 1 3
Interest cost 5 6 - 6 5 - 5
Expected return on plan assets 5 - (3) (3) - (3) (3)
Impact on other financial income 6 (3) 3 5 (3) 2
Included in the statement of profit
or loss
4 9 (3) 6 7 (2) 5
Actuarial losses/(gains) related to:
Experience adjustments 10 51 61 4 (1) 3
Financial assumptions (111) - (111) 3 - 3
Demographic assumptions 1 - 1 - - -
Included in other
comprehensive income
20
(100) 51 (49) 7 (1) 6
Contributions by employers - (12) (12) - (19) (19)
Benefits paid by the fund (121) 121 - (2) 2 -
Benefits paid by the employer (12) 12 - (17) 17 -
Foreign currency and other (9) 9 - 9 (9) -
Closing balance 194 (41) 153 427 (219) 208
of which
wholly or partly funded benefits 38 219
wholly unfunded benefits
1
156 208
assets related to employee
benefit plans
(13) (12)
provisions for employee
benefit plans
166 220
1 Included a current liability of \u20ac14 million as of December 31, 2022 and \u20ac15 million as of December 31, 2021
Assumptions used in the valuation of the net defined benefit liability The mortality tables used for UMG\u2019s major defined benefit schemes in Germany are Richttafeln 2018 G K. Heubeck. Other key assumptions used in the valuation of the net defined benefit plans liability are: rate of compensation increase, discount rate, and expected return on plan assets. The assumptions used to calculate the defined-benefit obligation as of December 31 were as follows: Germany United Kingdom United States Weighted average of all plans 2022 2021 2022 2021 2022 2021 2022 2021 Discount rate 3.75% 0.75% 4.25% 2.00% 5.00% 3.00% 3.58% 1.30% Rate of compensation increase (weighted average) 2.50% 1.75% na na na na 1.93% 0.90% Duration of the benefit obligation (in years) 10.4 16.6 na: not applicable. During 2022, worldwide interest rates increased significantly and this has been reflected in higher discount rates. As such, most defined benefit plans experienced large gains on the financial assumptions. A 50 basis point increase (or a 50 basis point decrease, respectively) to the 2022 discount rate would have led to a decrease of \u20ac0.7 million in pre-tax expense (or an increase of \u20ac0.8 million, respectively) and would have led to a decrease in the defined benefit obligation of \u20ac9.3 million (or an increase of \u20ac10.1 million, respectively), assuming all other assumptions remain unchanged. Pension plan assets allocation Year ended December 31, (in millions of euros) 2022 2021 Insurance contracts 55% 89% Equity securities 20% 4% Debt securities 14% 3% Diversified funds 0% 1% Cash and other 11% 3% Total 100% 100% Note 23. Share-based compensation plans In May 2022, UMG received formal approval from its shareholders to implement an equity plan, the UMG Global Equity Plan. Under the plan, Restricted Stock Units (RSUs) and Performance Stock Units (PSUs) are granted to senior executives to align the interests of the employees of UMG with its shareholders\u2019 interests by providing them with an additional incentive to improve UMG's performance and increase its share price on a long-term basis. In addition, the Annual Incentive Plan (AIP) for these senior executives was modified such that all or a portion of the payment under the plan may be settled in equity at the discretion of UMG. UMG Restricted Stock Units (RSUs) Starting in the last quarter of 2022, and continuing for each year of service under the term of their contracts, senior executives are granted RSUs being a right to receive shares upon vesting. The awards have vesting periods of 2.5 to 8years and will vest in 3 equal instalments, if the service condition is fulfilled. The total number of RSUs granted was
7.29 million and the grant date weighted-average UMG N.V. share market price was \u20ac19.44.
In addition, a one-off RSU award was granted to senior executives with on average 18 months vesting period in 2 equal
instalments. The total number of these RSUs granted was 9.43 million and the grant date weighted-average UMG N.V.
share market price was \u20ac19.84.
There was a small number of RSUs granted with slightly different service conditions. The grant date weighted-average
UMG's share market price was \u20ac19.33 per share corresponding to the total fair value of \u20ac6 million of such awards.
The share rights are dividend-bearing during the service period. The total expense for these awards recognised in 2022
was \u20ac74 million and the total equity reserve at year end was \u20ac78 million.
UMG Performance Stock Units (PSUs)
Starting in the last quarter of 2022, and continuing for each year of service under the term of their contracts, senior
executives are granted PSUs being a right to receive shares upon vesting. The vesting of these rights is subject to the
performance of UMG or operating units within UMG against specific internal and market performance conditions over
a three-calendar year period and continued service over three years by the employee. The share rights are dividend-
bearing during the performance period.
The total number of shares delivered with respect to these PSU\u2019s can range from 0% to 200% of the number of
PSUs granted based on the performance during the performance period. Performance conditions are tailored to each
participant. The performance conditions include target compound annual growth rate for revenues (Revenue CAGR),
adjusted earnings before interest, taxes, depreciation, and amortization (Adjusted EBITDA CAGR) and relative total
shareholder return (TSR).
The total number of PSUs granted was 1.72 million and the grant date weighted-average UMG N.V. fair value per share was
\u20ac21.37 and incorporates a market performance condition.
In addition, a small number of PSU awards with slightly different service and performance conditions were granted during
2022. The estimated grant date UMG's share market price is \u20ac22.51 per share corresponding to the total fair value of
\u20ac24 million of such awards.
The total expense and equity reserve for the above awards recognised in and as at year end 2022 was \u20ac5 million.
Annual Incentive Program (AIP)
In the last quarter of 2022, the AIP for senior executives, which was previously settled only in cash and accrued
throughout the year, was modified to allow UMG the choice of whether to settle in cash or shares of UMG N.V. or a
combination of cash and shares. Such modification did not change the fair value of the award compared to the previously
accrued AIP payable. UMG expects to settle 50% of the 2022 AIP in cash and 50% in shares. UMG has a constructive
obligation to settle 50% of the award in cash. The total AIP expense for the full calendar year starting January 1, 2022,
being the start of the service period for the award, was \u20ac42 million with the cash-settled AIP accrual amounting to 50% of
the total expense.
The vesting conditions of the AIP awards are a one-year service period and certain internally measured performance
conditions including Adjusted EBITDA and cash flow from operations (CFFO). The amount received can vary between 0%
and 200% of the on-target amount based on the actual performance against these performance criteria.
The estimated grant date value is based on UMG's share market price at \u20ac22.51 per share corresponding to the total fair
value of \u20ac21 million for the equity-settled portion of the total AIP.
Estimated future tax obligation
An estimate of the amount that UMG expects to transfer to the tax authority to settle the employees\u2019 tax obligation in
relation to all RSU, PSU and AIP was \u20ac51 million.
All Employee Award
In October 2022, each eligible employee of UMG was granted 100 shares to be vested at the end of the one year service
period. The grant date share price was \u20ac18.85 per share. A total of 0.88 million shares was granted. A total expense and
equity reserve of \u20ac4 million was recognised in and as at year end 2022.
UMG shares granted upon separation from Vivendi and direct listing on the Euronext Amsterdam
In 2021, upon listing of UMG on the Euronext Amsterdam, a number of UMG executives were granted 3,181,754 UMG
shares in total pursuant to the award by Vivendi with vesting conditions related, amongst other things, to the UMG\u2019s
admission to the Euronext Amsterdam. The grant date fair value of these shares was estimated at \u20ac16.54 per share,
primarily based on the enterprise value of \u20ac30,000 million determined in connection with the sale of an additional 10%
of the share capital of Universal Music Group (UMG) to a Tencent-led consortium in December 2020. These awards fully
vested at the listing date and were settled in UMG\u2019s shares held by Vivendi post-separation. UMG recognised an expense
of \u20ac45 million in profit and loss for the year ended December 31, 2021. The awards were fully vested in 2021 and hence
there was no further cost of this award in 2022.
A total of 762,095 UMG shares, constituting a recognition award, were granted and vested to the Executive Vice President,
Chief Financial Officer and President of Operations, Boyd Muir immediately after the UMG\u2019s listing date. These shares
will settle over three years, from which one third was settled in 2021, a further third was settled in 2022 on the first
anniversary of UMG listing and the final third is expected to settle on the second anniversary of the UMG listing. The
grant date fair value of these shares was estimated at UMG\u2019 share market price as of that date and was \u20ac25.25 per share.
UMG recognised an expense of \u20ac19 million in profit and loss for the year ended December 31, 2021. The awards were fully
vested in 2021 and hence there was no further cost of this award in 2022. There is a total equity reserve of \u20ac11 million as
at year end 2022 (2021: \u20ac15 million).
Vivendi Share Awards
Prior to the separation, Vivendi annually granted performance awards to certain UMG executives. These awards are
settled with Vivendi\u2019s own shares or cash. Subject to certain performance conditions, these performance awards vest at
the end of a three-year service period and are settled after an additional two-year retention period. Vivendi continued to
maintain performance share plans for UMG participants in 2021 and 2022. The total expense recognised by UMG in 2022
in relation to these plans was \u20ac1 million (2021: \u20ac1 million).
UMG-Vivendi Performance Awards
In 2021, to compensate for any effect of the distribution on the Vivendi share price, UMG announced that it will issue
its own shares for every Vivendi share earned by the UMG participants of the Vivendi\u2019s performance share plans, which
were granted in 2017 \u2013 2020, while UMG was part of Vivendi. The amount of Vivendi shares (and accordingly UMG shares
in 1-to-1 ratio) estimated to be vested for the 2020 ongoing plan will be further adjusted at the end of the original
performance period of Vivendi\u2019s performance share plans. In relation to this award a total expense of \u20ac2 million was
recognised in 2022 (2021: \u20ac14 million) and total equity reserve of \u20ac15 million (2021: \u20ac14 million) as at year end 2022.
Note 24. Related parties
UMG\u2019s related parties include the Corporate Executives and non-executive board members
Corporate Executive compensation
As of December 31, 2022 and 2021, UMG's Corporate Executives are comprised of 9 (2021: 9) members, of which 2 (2021: 2)
were Executive Directors on the UMG N.V. board. The Corporate executives are as defined in the Appendix of the Annual
Report. The Executive directors are also members of the UMG N.V. board. Their aggregate compensation is presented in
the table below.
Year ended December 31, 2022
(in millions of euros)
Other Corporate
Executives
Executive
Directors
Corporate
Executives
Short-term employee benefits 18 50 68
Post-employment benefits - - -
Other long-term benefits - - -
Termination benefits - - -
Share-based payments 33 - 33
Corporate Executives 51 50 101
Year ended December 31, 2021
(in millions of euros)
Other Corporate
Executives
Executive
Directors
Corporate
Executives
Short-term employee benefits 30 43 73
Post-employment benefits - - -
Other long-term benefits - - -
Termination benefits - - -
Share-based payments 45 2 47
Corporate Executives 75 45 120
Refer to the Remuneration Report section in the Annual Report for more detail.
Non-executive board compensation
As of December 31, 2022 UMG's non-executive board received director fees of \u20ac1 million (2021: \u20ac0.2 million) .
Other related-party transactions
Other related parties include:
\u2022 companies fully consolidated by UMG. The transactions between these companies have been eliminated for the
preparation of UMG\u2019s Annual Financial Statements;
\u2022 companies over which UMG exercises a significant influence or has joint control;
\u2022 all companies that are controlled or jointly controlled by Corporate Executives or their close relatives;
\u2022 minority shareholders exercising a significant influence over UMG\u2019s subsidiaries; and
\u2022 all companies that have a significant influence over UMG.
As of December 31, 2022, transactions with Vivendi are still qualified as transactions with related parties under IAS
24. Commercial relationships among UMG and Vivendi subsidiaries prior and upon the separation, are conducted on
an arm\u2019s length basis on terms and conditions similar to those which would be offered by third parties. During 2021,
a portion of the management fees, share-based compensation plans and other costs of Vivendi SE\u2019s headquarters is
allocated to UMG.
UMG distributes its cash surpluses to shareowners through dividends and share capital reductions (please refer to
Note 19
Equity
). Vivendi and UMG entered into a transition and services agreement in connection with the separation, the
terms of which Vivendi and its subsidiaries will provide to UMG, and UMG will provide to Vivendi and its subsidiaries, on
an interim, transitional basis various services as applicable, including but not limited to: (i) a limited selection of treasury
related services and applications; (ii) a limited selection of accounting services and accounting software related services
and applications; (iii) taxation related services; and (iv) certain employee related principles in connection with the direct
listing on the Euronext Amsterdam.
The balances and transactions with the parties described above are summarised in the table below:
December 31, 2022
(in millions of euros) Associates Shareholders Other Total
Statement of Financial Position
Assets
Cash and cash equivalents - - - -
Trade accounts receivable 49 6 - 55
Loans receivable 17 - - 17
Royalty advances - - 25 25
Liabilities -
Long-term borrowings and other financial liabilities - - - -
Trade accounts payable - 1 - 1
Statement of Profit or Loss
Revenue 275 13 - 288
Cost of revenues - (4) - (4)
Selling, general and administrative expenses (2) (3) (5)
Financial income - - - -
Financial expenses - - - -
Services billed by Shareholders included in profit and loss
Management fees - - - -
Share-based compensation plans - (1) - (1)
December 31, 2021
(in millions of euros) Associates Shareholders Other Total
Statement of Financial Position
Assets
Cash and cash equivalents - - - -
Trade accounts receivable 31 4 - 35
Loans receivable - - - -
Royalty advances - - 21 21
Liabilities
Long-term borrowings and other financial liabilities - - - -
Trade accounts payable - (2) (12) (14)
Statement of Profit or Loss
Revenue 252 10 - 262
Cost of revenues - (12) (9) (21)
Selling, general and administrative expenses (4) (10) - (14)
Financial income - 2 - 2
Financial expenses - (10) - (10)
Services billed by Shareholders included in profit and loss
Management fees - - - -
Share-based compensation plans - (1) - (1)
Note 25. Litigation
In the normal course of its business, Universal Music Group is subject to various lawsuits, arbitrations and
governmental, administrative or other proceedings (collectively referred to herein as \u201cLegal Proceedings\u201d). However, based
on the information currently available, UMG believes that the outcome from these Legal Proceedings will not have a
material impact on UMG's consolidated results of operations and financial position.
Note 26. List of consolidated entities
The Consolidated financial statements comprise the assets and liabilities of approximately 365 legal entities. Set out
below is a list of material subsidiaries, representing more than 75% of UMG's consolidated sales.
All the entities are 100% owned.
Legal entity name
Principal country of business
Universal Music Group N.V. Netherlands
Universal Music Group, Inc. United States
Universal Music Group Holdings, Inc. United States
UMG Recordings, Inc. United States
Universal International Music B.V. Netherlands
Universal Music Entertainment GmbH Germany
Universal Music LLC Japan
Universal Music Holdings Ltd. United Kingdom
Universal Music Group Treasury S.A.S. France
UMG does not have subsidiaries that have non-controlling interests that are material for its Consolidated
financial statements.
Note 27. Statutory auditors fees
Fees for audit services include the audit of the financial statements of the UMG and its subsidiaries. Fees for other audit
services include review of interim financial statements, sustainability, and other audits. Fees for tax services include tax
compliance and tax advice. Fees for other non-audit services include agreed-upon procedures and advisory services.
Fees for tax and other non-audit services are related to the network outside the Netherlands and are in accordance with
local independence regulation.
Year ended December 31,
(in millions of euros) 2022 2021
Deloitte
Accountants B.V.
Ernst & Young
Accountants LLP
Deloitte
Accountants B.V.
Ernst & Young
Accountants LLP
Audit of UMG and its subsidiaries 4 6 4 4
Other statutory services - - - -
Tax services - - - -
Other non-audit services - - - -
Total
1
4 6 4 4
1 Total fees charged by the Dutch organization of Deloitte and Ernst & Young were \u20ac2 million (2021: \u20ac1 million) and \u20ac2 million (2021: \u20ac2 million) respectively.
Note 28. Audit exemptions
UMG has provided guarantees to the following subsidiaries, incorporated in the Netherlands, under the registered
number indicated, under section 403 of Book 2 of the Dutch Civil Code. As these companies\u2019 financial data is consolidated
within these financial statements, the Dutch entities are allowed to prepare abridged financial statements which are
exempt from publication and audit.
Name
Company
Number
Universal International Music B.V. 31018439
Universal Music Publishing International B.V. 31037866
Universal Music Publishing B.V. 32101966
CMHL B.V. 32140273
Universal Production Music B.V. 85798479
Note 29. Subsequent events
In January 2023, UMG entered into an agreement with the owners of the Capitol Records building (the Property). As part
of the agreement UMG contributed \u20ac37 million as a capital contribution and lent \u20ac60 million to the venture while the
Property owners contributed the Property into the venture.
In February 2023, the Revolving Credit Facility agreement was amended with a new maturity date being April 26, 2028.
Around the date when these financial statements were authorised for issue, UMG was in the process of signing a new
short-term floating rate \u20ac500 million revolving credit facility.
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"fact-432": {
"value": "Universal Music Group N.V. is a public company with limited liability incorporated under the laws of the Netherlands and listed on Euronext Amsterdam under the symbol \u2018UMG.AS\u2019. As used herein, the term UMG (\"The Group\") is used for Universal Music Group N.V. (\u2018the Company\u2019) and its subsidiaries within the meaning of Section 2:24b of the Dutch Civil Code. UMG\u2019s statutory seat is located in Amsterdam and its principal office is located at: \u2018s-Gravelandseweg 80, 1217 EW Hilversum The Netherlands. 2.2. Basis of preparation and consolidation The Consolidated financial statements are: \u2022 prepared on a historical cost basis, unless stated otherwise \u2022 are presented in millions of euros, and rounded to the nearest million, unless stated otherwise \u2022 prepared on the basis that UMG will continue to operate as a going concern The Consolidated financial statements comprise the financial statements of the UMG N.V. and its subsidiaries as at 31 December 2022. Separation from Vivendi Until February 26, 2021, the arrangement that constituted the combined UMG Group was not a legal entity in its own right and was made up of entities under the common control of Vivendi. Until this date, UMG\u2019s scope of combination principally comprised the entities held directly and indirectly by UMG Inc. and UIM B.V. On February 26, 2021, in UMG B.V.\u2019s Consolidated financial statements, the contribution of \u20ac33,000 million was directly recorded as an increase in equity attributable to UMG B.V. shareowners (\u20ac18,500 million in share capital and \u20ac14,500 million in additional paid-in capital), and the contribution of \u20ac33,000 million was fully neutralized in UMG B.V.\u2019s retained earnings. The reorganization of its shareholding structure, which is a common control business combination, has no impact on UMG\u2019s scope of combination or consolidation. On September 21, 2021, the shares of Universal Music Group N.V. (UMG N.V.) started trading on the regulated market of Euronext Amsterdam. Vivendi completed the distribution in kind of UMG shares to Vivendi shareholders on the basis of one UMG N.V. share for every eligible Vivendi share. The detachment date (ex-date) of the distribution in kind was September 21, 2021. Settlement occurred on September 23, 2021. UMG B.V. was converted to UMG N.V. on this date accordingly. Following this transaction and as at December 31, 2022, Vivendi held 10.13% of the share capital of UMG N.V. Transactions with Vivendi are still qualified as transactions with related parties under IAS 24 and are disclosed as such in these Consolidated financial statements. Commercial relationships among UMG and Vivendi subsidiaries prior and upon the separation, are conducted on an arm's length basis on terms and conditions similar to those which would be offered by third parties. Subsidiaries Subsidiaries",
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"value": "Universal Music Group N.V.",
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"fact-2": {
"value": "public company with limited liability",
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"entity": "scheme:724500GJBUL3D9TW9Y18",
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},
"fact-3": {
"value": "Netherlands",
"dimensions": {
"concept": "ifrs-full:CountryOfIncorporation",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-4": {
"value": "\u2018s-Gravelandseweg 80, 1217 EW Hilversum The Netherlands",
"dimensions": {
"concept": "ifrs-full:AddressOfRegisteredOfficeOfEntity",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
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"fact-339": {
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"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-5": {
"value": "UMG is the worldwide leader in music, engaged in recorded music, music publishing and merchandising. It owns more than 50 labels covering all music genres. UMG is home to some of the greatest local and international artists of all time, including The Beatles, Rolling Stones, U2, Andrea Bocelli, Lady Gaga, Helene Fischer and more, as well as many of the biggest artists of the year, such as Taylor Swift, BTS, Olivia Rodrigo, Encanto OST and Morgan Wallen. \u2022 The recorded music business discovers and develops recording artists, marketing and promoting their music across a wide array of formats and platforms. Its activities also extend to other areas, such as live events, sponsorship, film and television. \u2022 The music publishing business discovers and develops songwriters and owns and administers the copyright for musical compositions used in recordings, public performances and related uses, such as films and advertisements. \u2022 The merchandising business produces and sells artist-branded and other branded products through multiple sales channels, including fashion retail, concert touring and the Internet. Its activities also extend to other areas, such as brand rights management. ",
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},
"fact-342": {
"value": "2.1. Statement of compliance
The Consolidated financial statements have been prepared in accordance with International Financial Reporting
Standards (IFRS) as issued by the International Accounting Standards Board (IASB), IFRS as endorsed by the European
Union (EU) and comply with the statutory provisions of Part 9, Book 2 of the Dutch Civil Code. IFRS as endorsed by the EU
differs in some respects from IFRS as issued by the IASB. The differences have no impact on the Consolidated financial
statements for the years presented.
The Consolidated financial statements are prepared by the Board of Management of UMG and authorized for issue on
March 30, 2023 and will be submitted for adoption to the Annual General Meeting of Shareholders on May 11, 2023.
",
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"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
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},
"fact-397": {
"value": "The Consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB), IFRS as endorsed by the European Union (EU) and comply with the statutory provisions of Part 9, Book 2 of the Dutch Civil Code. IFRS as endorsed by the EU differs in some respects from IFRS as issued by the IASB. The differences have no impact on the Consolidated financial statements for the years presented. ",
"dimensions": {
"concept": "ifrs-full:StatementOfIFRSCompliance",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
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},
"fact-343": {
"value": "2.2. Basis of preparation and consolidation
The Consolidated financial statements are:
\u2022 prepared on a historical cost basis, unless stated otherwise
\u2022 are presented in millions of euros, and rounded to the nearest million, unless stated otherwise
\u2022 prepared on the basis that UMG will continue to operate as a going concern
The Consolidated financial statements comprise the financial statements of the UMG N.V. and its subsidiaries as at
31 December 2022.
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"fact-341": {
"value": "2.2. Basis of preparation and consolidation The Consolidated financial statements are: \u2022 prepared on a historical cost basis, unless stated otherwise \u2022 are presented in millions of euros, and rounded to the nearest million, unless stated otherwise \u2022 prepared on the basis that UMG will continue to operate as a going concern The Consolidated financial statements comprise the financial statements of the UMG N.V. and its subsidiaries as at 31 December 2022. Separation from Vivendi Until February 26, 2021, the arrangement that constituted the combined UMG Group was not a legal entity in its own right and was made up of entities under the common control of Vivendi. Until this date, UMG\u2019s scope of combination principally comprised the entities held directly and indirectly by UMG Inc. and UIM B.V. On February 26, 2021, in UMG B.V.\u2019s Consolidated financial statements, the contribution of \u20ac33,000 million was directly recorded as an increase in equity attributable to UMG B.V. shareowners (\u20ac18,500 million in share capital and \u20ac14,500 million in additional paid-in capital), and the contribution of \u20ac33,000 million was fully neutralized in UMG B.V.\u2019s retained earnings. The reorganization of its shareholding structure, which is a common control business combination, has no impact on UMG\u2019s scope of combination or consolidation. On September 21, 2021, the shares of Universal Music Group N.V. (UMG N.V.) started trading on the regulated market of Euronext Amsterdam. Vivendi completed the distribution in kind of UMG shares to Vivendi shareholders on the basis of one UMG N.V. share for every eligible Vivendi share. The detachment date (ex-date) of the distribution in kind was September 21, 2021. Settlement occurred on September 23, 2021. UMG B.V. was converted to UMG N.V. on this date accordingly. Following this transaction and as at December 31, 2022, Vivendi held 10.13% of the share capital of UMG N.V. Transactions with Vivendi are still qualified as transactions with related parties under IAS 24 and are disclosed as such in these Consolidated financial statements. Commercial relationships among UMG and Vivendi subsidiaries prior and upon the separation, are conducted on an arm's length basis on terms and conditions similar to those which would be offered by third parties. Subsidiaries Subsidiaries are all companies over which UMG has control. Control over an entity exists when UMG is exposed to, or has right to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control commences until the date on which control ceases . Intra-group balances and transactions, any unrealized gains and losses or income and expenses arising from intra- group transactions are eliminated in preparing the Consolidated financial statements. Unrealized gains arising from transactions with associates and joint ventures are eliminated against the investment to the extent of UMG\u2019s interest in the investee. Unrealized losses are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment 2.4. Material accounting policy information 2.4.1. Foreign currency Foreign currency transactions Foreign currency transactions are initially recorded in the functional currency of the entity at the exchange rate prevailing at the date of the transaction. At the closing date, foreign currency monetary assets and liabilities are translated into the entity's functional currency at the exchange rate prevailing on that date with foreign currency differences recorded to profit and loss. Financial statements denominated in a foreign currency Except in cases of significant exchange rate fluctuation, financial statements of subsidiaries, joint ventures or other associated entities for which the functional currency is not the euro are translated into euros as follows: the Consolidated Statement of Financial Position is translated at the exchange rate at the end of the period, and the Consolidated Statement of Profit or Loss and the Consolidated Statement of Cash Flows are translated using average monthly exchange rates for the period. The resulting translation gains and losses are recorded as foreign currency translation differences in expenses and income directly recognized in equity. In 2022, UMG did not have any significant foreign operations in hyper-inflationary economies. 2.4.2. Earnings per share UMG presents basic and diluted earnings per share (EPS) data for its shares. Basic EPS is calculated by dividing the net profit or loss attributable to shareholders of UMG by the weighted average number of shares outstanding during the year, adjusted for the weighted average number of own shares held in the year. Diluted EPS is determined by dividing the profit or loss attributable to shareholders by the weighted average number of shares outstanding, adjusted for the weighted average number of own shares held in the year and for the effects of all dilutive potential shares which comprise share rights granted to employees. 2.4.3. Consolidated Statement of Cash Flows The Consolidated Statement of Cash Flows is prepared using the indirect method starting from Operating profit. Dividends received from equity affiliates and investments are included in the investing cash flow. It also includes any cash flows arising from the gain or loss of control of subsidiaries. Interest paid, including interest paid on lease liability, is included in the financing activities. 2.4.4. Accounting for associates and joint ventures Associates are entities in which UMG has significant influence, but not control or joint control. Significant influence is generally obtained by ownership of more than 20% but less than 50% of the voting rights. Joint ventures are the arrangements in which UMG has joint control. UMG\u2019s investments in associates and joint ventures are accounted for using the equity method of accounting, meaning they are initially recognised at cost. The Consolidated financial statements include UMG\u2019s share of the net profit or loss of the associates and joint ventures whereby the result is determined using the accounting policies of UMG. When UMG\u2019s share of losses exceeds the carrying amount of the associate or joint venture, the carrying amount is reduced to nil and recognition of further losses is discontinued except to the extent that UMG has an obligation or has made a payment on behalf of the associate or joint venture. 2.4.5. Revenues and associated costs Revenues from contracts with customers are recorded when performance obligations promised in the contract are satisfied, and for an amount for which it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur. Revenues are reported net of discounts. Intellectual property licensing (musical works) These licenses transfer to a customer either a right to use an entity's intellectual property as it exists at the point in time at which the license is granted (static license), or a right to access an entity's intellectual property as it exists throughout the license period (dynamic license). Revenues are accounted for when the performance obligation promised in the contract is satisfied (static license) or over time upon satisfaction (dynamic license), i.e., when the seller transfers the control over the right to use/access the intellectual property and the customer obtains control of the use/access of that license. Consequently, revenues from static licenses are recognized at the point in time when the license is transferred and the customer is able to use and benefit from the license. Revenues from dynamic licenses are accounted for over time, over the license period from the date the customer is able to use and benefit from the license and in line with the sale or usage. Consideration received in the current year, which represents income from ordinary activities related to the prior years, is recorded within revenue, unless it was accrued before. Court settlements in relation to the unauthorized usage of UMG's intellectual property in previous years are recorded in revenue as they relate to activities carried out within the ordinary course of business. Analysis of the Agent/Principal relationship in sales transactions involving a third party If the nature of the entity's undertaking is a performance obligation to provide the specified goods or services itself, then the entity acts on its own behalf and it is \u201cprincipal\u201d in the sale transaction: it accounts for revenue the gross amount of consideration to which it expects to be entitled in exchange for the goods or services provided, and the commission due to the third-party as cost of revenues. If the entity arranges for a third-party to provide the goods or services specified in the contract, then it recognizes as revenues the net amount of consideration to which it expects to be entitled in exchange for the goods or services provided. Financing Component UMG does not adjust the transaction price for the effects of significant financing component if, at contract inception, it is expected that the period between customer payment and the transfer of goods or services is one year or less. This applies to the majority of sales transactions. The transaction price may be variable due to discounts, rebates, or similar arrangements. In determining the transaction price UMG considers the fair value of any non-cash consideration. Revenue is only recognized for the part of the consideration for which it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur. Judgement is required in determining the probability and level of discounts and rebates that will be granted. The estimate is updated throughout the term of the contract. Revenue recognition by business segment Recorded Music The sales of recorded music (physical, digital downloading or streaming) are intellectual property licenses granted by UMG to distributors or digital platforms and which give them certain rights over UMG's musical works. Physical sales of recorded music (CDs, DVDs and Vinyls) These intellectual property licenses are static licenses transferring to the customer a right to use UMG\u2018s recordings as they exist at the point in time at which the license is granted, i.e., on the physical device sold. Revenues from the physical sales of recorded music, net of a provision for estimated returns and rebates, if any, are accounted for, either: (i) upon the sale to the distributor, at the shipping point for products sold free on board (FOB) or on delivery for products sold free on destination; or (ii) upon the sale to the final customer for consignment sales. Digital sales of recorded music, via downloading or streaming by subscription or free of charge These intellectual property licenses are generally dynamic licenses providing a right to access the entire catalogue of recorded music as it exists throughout the license period considering potential add-ons to, or withdrawals from, the catalogue during that period. The consideration paid by the digital platform is variable in the form of a sales-based or a usage-based royalty. Revenues are then accounted for when these subsequent sales or usages occur. Revenues from digital sales of recorded music, for which UMG has sufficient, accurate, and reliable data from digital platforms, are recognized at the end of the month in which the sale or usage is made by the end customer. For digital sales of recorded music streaming by subscription or free of charge, certain contracts may include a non- refundable minimum guarantee which is generally recoupable and is in substance an advance payment. In the case of a dynamic license, the minimum guarantee is spread over the period to which it relates and takes into account the amount of royalties that are actually recoupable. The minimum guarantee are apportioned in accordance with the accounting for these royalties. Music Publishing Music Publishing relates to the use by a third party of the copyrights on musical works owned or administered by UMG, which are intellectual property licenses that UMG grants to the third party and which provides a right to access a catalogue of recorded music, as these intellectual property licenses are dynamic licenses. For these contracts, revenues are recognised on the basis of sales and usage royalties, using the best available estimate on the timing of the consequent usage and the amounts that are probable to be collected. Merchandising Revenues from merchandising are recognized when control has been passed either upon sale to the end customer, from direct sales during touring, concessions and over the internet; on delivery for sales by a third-party distributor; or for sales of rights attached to merchandising products when a contract is signed and collectability is probable and on a sales and usage basis. Provisions for estimated returns and price guarantees are deducted from sales of products to customers through distributors. The provisions are estimated based on past sales statistics and take into account the economic environment and product sales forecast to final customers. Associated costs of revenues Cost of revenues primarily includes product costs and artists costs. Selling, general and administrative expenses primarily include salaries and employee benefits, consulting and service fees, insurance costs, travel and entertainment expenses, depreciation of capital expenditure and right of use assets, administrative department costs, value allowances for receivables, restructuring expenses and other operating expenses and are expensed when incurred. Advertising costs are expensed when incurred. Slotting fees and cooperative advertising expenses are recorded as a reduction in revenues. However, cooperative advertising is not treated as a reduction of transaction price but marketing expense and expensed when it is distinct and can be estimated. 2.4.6. Operating segments The operating segments are Recorded Music, Music Publishing and Merchandising. The segments are organized based on the nature of the business. \u2018Corporate Centre\u2019 represents amounts not allocated to the operating segments and includes certain costs related to central activities as well as group enabling functions. The operating segment reporting follows the internal reporting used by Management of UMG, to manage the business, assess the performance based on the available financial information and to allocate the resources. The most important performance measure are EBITDA and Adjusted EBITDA (see definitions in the Appendix to the Annual Report) as management believes this is key in evaluating the results of the segments relative to other companies that operate within the same industry. However, Management also receives information about the segment's revenue and assets. Inter-segment pricing is determined on an arm's length basis. Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. 2.4.7. Business combinations UMG accounts for business combinations using the acquisition method when the acquired set of activities and assets meets the definition of a business and control is transferred to the Group. In determining whether a particular set of activities and assets is a business, UMG assesses whether the set of assets and activities acquired includes, at a minimum, an input and substantive process and whether the acquired set has the ability to produce outputs. Business combinations are recorded using the acquisition method. Under this method, upon the initial consolidation of an entity over which UMG has acquired exclusive control: \u2022 the identifiable assets acquired, and the liabilities assumed are recognized at their fair value on the acquisition date; and \u2022 non-controlling interests are measured either at fair value or at the non-controlling interest's proportionate share of the acquiree\u2019s net identifiable assets. This option is available on a transaction-by-transaction basis. Contingent consideration in a business combination is recorded at fair value on the acquisition date, and any subsequent adjustment occurring after the purchase price allocation period is recognized in the Statement of Profit or Loss. Acquisition-related costs are recognized as expenses when incurred. 2.4.8. Goodwill Goodwill represents the difference between the fair value of the net assets acquired and the transaction price of the acquisition. Goodwill arising on the acquisition of associates and joint ventures is included in the carrying amount of the associates and joint ventures. Subsequently goodwill is measured at its initial amount less accumulated impairment losses. On the acquisition date, to the extent possible, goodwill is allocated to each cash-generating unit likely to benefit from the business combination. 2.4.9. Intangible assets, other than goodwill Content assets include royalty advances to artists, songwriters and co-publishers as well as recorded music and music publishing catalogues, artists\u2019 contracts and rights. Music catalogues, trade names, subscribers\u2019 bases and market shares generated internally are not recognized as intangible assets. Intangible assets separately acquired are recorded at cost, and intangible assets acquired in a business combination are recorded at their fair value at the acquisition date. Amortisation is charged to profit or loss on a straight-line basis over the estimated useful life. UMG believes that straight-line depreciation most accurately reflects the expected pattern of consumption of the future economic benefits embodied in these intangible assets. Management needs to estimate the (remaining) useful lives of such intangible assets. Useful lives are determined based on the expected pattern of the future earnings and the period of the contractual arrangements. Useful life is reviewed at the end of each reporting period. Music catalogues and publishing rights The majority of the music catalogues are amortised over 20 years on a straight-line basis. Some significant catalogues can be amortized over longer period of time. Advances to artists and repertoire owners Royalty advances to artists, songwriters, and co-publishers are capitalized as an asset when their current popularity and past performances provide a reasonable basis to conclude that the probable future recoupment of such royalty advances against earnings otherwise payable to them is reasonably assured. Royalty advances are recognized as an expense as subsequent royalties are earned by the artist, songwriter or co-publisher. Any portion of capitalized royalty advances not deemed to be recoverable against future royalties is expensed during the period in which the loss becomes evident. These expenses are recorded in cost of revenues. Other intangible assets Other intangibles mainly includes software for internal use. Direct internal and external costs incurred for the development of software for internal use, are capitalized during the development stage if the resulting product or process is technically and commercially feasible, cost can be reliably measured, UMG has sufficient resources and the intention to complete its development. Research costs are expensed when incurred. Costs of significant upgrades and enhancements resulting in additional functionality are also capitalized. The software for internal use is generally amortized over 3 years and included within amortisation expense . 2.4.10. Property, plant and equipment Property, plant and equipment are carried at historical cost less any accumulated depreciation and impairment losses. Land and assets under construction are not depreciated. Depreciation is calculated using the straight-line method based on the estimated useful life of the assets. Leasehold improvements are depreciated over a period not longer than the lease term. Useful lives of the main components are reviewed at the end of each reporting period and are as follows: \u2022 buildings: 5 to 40 years; \u2022 equipment and machinery: 3 to 8 years; and \u2022 other: 2 to 10 years. 2.4.11. Leases The main lease contracts for UMG correspond to real estate leases for which UMG is the lessee. Real estate leases for which UMG is the lessee are recorded at the commencement date and result in the recognition of a lease liability equal to the present value of future lease payments against a right-of-use asset relating to leases. Right-of-use assets Right-of-use assets are initially measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognized, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. The recognized right-of-use assets are depreciated on a straight-line basis over the shorter of its estimated useful life and the lease term. Right-of-use assets are subject to impairment. Lease liabilities UMG recognizes lease liabilities initially measured at the present value of future lease payments over the lease term. The lease payments include in-substance fixed payments (less any lease incentives), variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include payments of penalties for terminating a lease, if UMG has the option to terminate and it is reasonably certain that this option will be exercised. In calculating the present value of lease payments, UMG uses the incremental borrowing rate at the lease commencement date if the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. The carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the in-substance fixed lease payments. Short-term leases and leases of low-value assets UMG applies the short-term lease recognition exemption to the real-estate leases with a lease term of 12 months or less from the commencement date and do not contain a purchase option. It also applies the lease of low-value assets recognition exemption to leases of office chattels and other equipment that are considered of low value. Lease payments on short-term leases and leases of low-value assets are recognized as expense on a straight-line basis over the lease term. Estimates in accounting for leases UMG determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised. When determining the lease term, UMG considers all relevant facts and circumstances that create an economic incentive to exercise an extension option, or not to exercise a termination option. These circumstances include UMG\u2019s real estate planning. In estimating the lessee\u2019s incremental borrowing rate, UMG takes into account the residual lease term and its duration to reflect the interest rate of a loan with a similar payment profile to the lease payments . 2.4.12. Impairment of non-financial assets Each time events or changes in the economic environment indicate a risk of impairment of goodwill, content assets and other intangible assets, property, plant and equipment, investments in associates and joint ventures, rights-of-use assets, UMG re-examines the value of these assets. In addition, in accordance with applicable accounting standards, goodwill and intangible assets in progress are all subject to an annual impairment test undertaken in the fourth quarter of each fiscal year. This impairment test is performed to compare the recoverable amount of each Cash Generating Unit (CGU) to the carrying value of the corresponding assets (including goodwill). A CGU is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. UMG operates through different content businesses. Each business offers different products and services that are marketed through various channels. CGUs for goodwill correspond to the UMG's operating segments. The recoverable amount is determined for each individual asset as the higher of: (i) its value in use; and (ii) its fair value (less costs to sell) as described hereafter. If the asset does not generate cash inflows that are largely independent of other assets or groups of assets, the recoverable amount is determined for the group of assets. In particular, in the case of goodwill, an impairment test is performed by UMG for each CGU. The value in use of each asset or group of assets is determined, subject to exceptions, as the discounted value of future cash flows Discounted Cash Flow method (DCF) by using cash flow projections consistent with the budget of the following year and the most recent forecasts prepared by the operating segments. Applied discount rates are determined by reference to available external sources of information, usually based on financial institutions\u2019 benchmarks, and reflect the current assessment by UMG of the time value of money and risks specific to each asset or group of assets. Perpetual growth rates used for the evaluation are those used to prepare budgets for each CGU, and beyond the period covered, are consistent with growth rates estimated by the business by extrapolating growth rates used in the budgets, without exceeding the long-term average growth rate for the markets in which UMG operates. The fair value (less costs to sell) is the price that would be received from the sale of an asset or group of assets in an orderly transaction between market participants at the measurement date, less costs to sell. These values are generally determined based on market data (stock market prices or comparison with similar listed companies, with the value attributed to similar assets or companies in recent transactions) or, in the absence of such data, based on discontinued cash flows. If the recoverable amount is lower than the carrying value of an asset or group of assets, an impairment loss equal to the difference is recognized in Operating profit. In the case of operating segments, this impairment loss is first recorded against goodwill. The impairment losses recognized in respect of property, plant and equipment, and intangible assets (other than goodwill) may be reversed in a later period if the recoverable amount becomes greater than the carrying value, within the limit of impairment losses previously recognized. Impairment losses recognized in respect of goodwill cannot be reversed at a later date. 2.4.13. Financial assets Financial assets are initially recognized at fair value corresponding, in general, to the consideration paid, which is best evidenced by the acquisition cost (including transaction costs, if any). Thereafter, financial assets are measured at fair value or at amortized cost depending on which financial asset category they belong to. Financial assets are classified into the accounting categories \u201cfinancial assets at amortized cost\u201d, \u201cfinancial assets at fair value through other comprehensive income\u201d and \u201cfinancial assets at fair value through profit or loss\u201d. This classification depends on UMG\u2018s business model for managing the financial assets and on contractual terms enabling to determine whether the cash flows are solely payments of principal and interest (SPPI). The financial assets that contain an embedded derivative are considered in full to determine whether their cash flows are SPPI. Financial assets are derecognized when the rights to receive cash flows from the financial assets have expired or have been transferred and UMG has transferred substantially all the risks and rewards of ownership. Financial assets at fair value These include financial assets at fair value through other comprehensive income, derivative financial instruments with a positive value and other financial assets measured at fair value through profit or loss. Most of these financial assets are actively traded in organized financial markets, as their fair value is calculated by reference to the published market price at the period end. Fair value is estimated for financial assets which do not have a published market price on an active market. As a last resort, when a reliable estimate of fair value cannot be made using valuation techniques in the absence of an active market, UMG values financial assets at historical cost, less any impairment losses. These financial assets are recognized initially on trade date when UMG becomes a party to the contractual provisions of the instrument. Dividend income is recognised when the UMG's right to receive payment is established. Financial assets at amortized cost Financial assets at amortised cost include trade receivables, other receivables, loans issued and bank deposits which are not cash equivalents. Loans, receivables and deposits are recognized on the date they are originated. Financial assets at amortized cost consist of debt instruments as described above held within a business model whose objective is to hold financial assets to collect contractual cash flows that are solely payments of principal and interest on the principal amount outstanding. At the end of each period, these assets are measured at amortized cost using the effective interest method. 2.4.14. Impairment of financial assets UMG assesses the expected credit loss associated with its financial assets recognized at amortized cost on a prospective basis. A loss allowance for expected credit loss based on probability of default is recognized at initial recognition. The loss allowance is updated for changes in these expected credit losses at each reporting date to reflect changes in credit risk since initial recognition. To assess whether there has been a significant increase in credit risk, UMG compares the credit risk at the reporting date with the credit risk at the date of initial recognition based on reasonable forward-looking information and events, including credit ratings if available, significant adverse economic changes (actual or expected), financial or business environment that are expected to result in a material change in the borrower's ability to meet its obligations. Trade accounts receivable are initially recognised at their transaction price. Expected loss rates on trade receivables and contract assets are calculated by the relevant operating entities over their lifetime from initial recognition and are based on historical data that also incorporates forward-looking information. In addition, account receivables from customers subject to insolvency proceedings or customers with whom UMG is involved in litigation or a dispute are generally impaired in full. 2.4.15. Cash and cash equivalents Cash and cash equivalents include all cash balances and short-term highly liquid investments with an original maturity of three months or less that are readily convertible into known amounts of cash. Bank overdrafts form an integral part of UMG\u2019s cash management and often fluctuate from being positive to overdrawn and are included as a component of cash and cash equivalents for the purpose of the statement of cash flows. Investments in securities, investments with initial maturities of more than three months without an early termination option and bank accounts subject to restrictions (blocked accounts), other than restrictions due to regulations specific to a country or activity sector (e.g., exchange controls), are not classified as cash equivalents but as financial assets. 2.4.16. Financial liabilities A liability is recognized when UMG becomes party to a contract. Regular way purchases and sales of financial instruments are accounted for at the trade date. Initial measurement of financial liabilities is at fair value, including any attributable transaction costs. Financial liabilities are all classified and subsequently measured at amortized cost, except for financial liabilities at fair value via profit and loss, for example derivatives or contingent consideration in a business acquisition. Such contingent consideration shall subsequently be measured at fair value with changes recognized in profit or loss. For the financial liabilities subsequently measured at amortised cost the effective interest method is applied. The effective interest rate is the internal yield rate that discounts future cash flows over the term of the financial instrument. In addition, where the financial liability comprises an embedded derivative or an equity instrument, the amortized cost is calculated for the debt component only, after separation of the embedded derivative or equity instrument, if the embedded derivative is not closely related to the host contract and therefore needs to be separated. 2.4.17. Derivative financial instruments Derivative financial instruments are recognised initially at fair value. Subsequent accounting for derivatives depends on whether or not the derivatives are designated as hedging instrument in a cash flow, fair value or net investment hedge. Derivatives with positive fair values are recorded as assets and negative fair values as liabilities. UMG did not apply hedge accounting to the derivatives in 2021 and 2022. UMG measures all derivative financial instruments at fair value derived from market prices of the instruments or calculated as the present value of the estimated future cash flows based on observable interest yield curves, basis spread and foreign exchange rates. These calculations are tested for reasonableness by comparing the outcome of the internal valuation with the valuation received from the counterparty. 2.4.18. Inventories Inventories are valued at the lower of cost or net realizable value. Cost comprises purchase costs, production costs and other supply and packaging costs. These are usually calculated using the weighted average cost method. Net realizable value is the estimated selling price in the normal course of business, less estimated completion costs and selling costs. Inventories at UMG mostly comprise of finished goods. 2.4.19. Provisions Provisions are recognized when, at the end of the reporting period, UMG has a legal obligation (statutory, regulatory or contractual) or a constructive obligation, as a result of past events, and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and the obligation can be reliably estimated. Where the effect of the time value of money is material, provisions are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money. If the amount of the obligation cannot be reliably estimated, no provision is recorded and a disclosure is made in the Notes to the Consolidated Financial Statements. Significant judgment is required in determining the amount and probability of resources outflow and discount rates used to calculate the present value of this outflow. Provisions for royalty audit claims Up to the completion of the royalty claim audit, the timing and the amount of the potential pay-outs is uncertain. UMG makes its best possible estimate of the outcome using any available data, including history of claims with rights owners. When the estimate is performed for large homogeneous claims and contract terms, the statistical valuation method is used. Litigation provisions In the ordinary course of business, UMG may be involved in a number of legal and arbitration proceedings and administrative actions. The costs which may result from these proceedings are accrued at the reporting date if UMG has a present obligation toward a third party resulting from a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and the amount of that liability can be quantified or estimated within a reasonable range. The amount of provision recorded is based on a case-by-case assessment of the risk level, and events arising during the course of legal proceedings may require a reassessment of this risk at any time. 2.4.20. Employee benefit plans Defined contribution plans Contributions to defined contribution and multi-employer plans are expensed during the year when related services are provided. Defined benefit plans Defined benefit plans may be funded by investments in various instruments such as insurance contracts or equity and debt investment securities, excluding shares in any UMG entity or debt instruments. Pension expenses and defined benefit obligations are calculated by independent actuaries using the projected unit credit method. This method is based on annually updated assumptions, which include the probability of employees remaining with UMG until retirement, expected changes in future compensation and an appropriate discount rate for each country in which UMG maintains a pension plan. The discount rate is determined for each country by reference to yields on notes issued by investment grade companies having a credit rating of AA and maturities identical to that of the valued plans, generally based on relevant rate indices. The expected return on plan assets is estimated by using the selected discount rate to value the obligations of the previous year. The calculation is performed separately for each plan. A provision is recorded in the Statement of Financial Position equal to the difference between the actuarial value of the related benefits (actuarial liability) and the fair value of any associated plan assets, and this includes past service costs and actuarial gains and losses. The cost of defined benefit plans consists of three components recognized as follows: \u2022 the service cost is included in selling, general and administrative expenses. It comprises current service cost, past service cost resulting from a plan amendment or a curtailment, immediately recognized in profit and loss, and gains and losses on settlement; \u2022 the financial component, recorded in other financial expenses and income, consists of the unwinding of the interest component of the discount, less the expected return on plan assets determined using the discount rate retained for the valuation of the benefit obligation; and \u2022 the remeasurements of the net defined benefit liability (asset), recognized in items of other comprehensive income not reclassified as profit and loss, mainly consist of actuarial gains and losses, i.e., changes in the present value of the defined benefit obligation and plan assets resulting from changes in actuarial assumptions and experience adjustments (representing the differences between the expected effect of some actuarial assumptions applied to previous valuations and the effective impact). Where the value of plan assets exceeds benefit obligations, a financial asset is recognized up to the present value of future refunds and the expected reduction in future contributions. Some other post-employment benefits, such as life insurance and medical coverage (mainly in the United States) are subject to provisions which are assessed through an actuarial calculation comparable to the method used for pension provisions. 2.4.21. Income taxes Differences existing at closing between the tax base value of assets and liabilities and their carrying value in the Consolidated Statement of Financial Position give rise to temporary differences. Pursuant to the liability method, these temporary differences result in the accounting of: \u2022 deferred tax assets, when the tax base value is greater than the carrying value (expected future tax saving); and \u2022 deferred tax liabilities, when the tax base value is lower than the carrying value (expected future tax expense). Deferred tax assets and liabilities are measured at the expected tax rates for the year during which the asset will be realized or the liability settled, based on tax rates (and tax regulations) enacted or substantially enacted by the closing date. They are reviewed at the end of each year, in line with any changes in applicable tax rates. Deferred tax assets are recognized for all deductible temporary differences, tax loss carry-forwards and unused tax credits, insofar as it is probable that a taxable profit will be available, or when a current tax liability exists to make use of those deductible temporary differences, tax loss carry-forwards and unused tax credits, except where the deferred tax asset associated with the deductible temporary difference is generated by initial recognition of an asset or liability in a transaction which is not a business combination, and that, at the transaction date, does not impact net profit, nor tax income or loss. For deductible temporary differences resulting from investments in subsidiaries, joint ventures and other associated entities, deferred tax assets are recorded to the extent that it is probable that the temporary difference will reverse in the foreseeable future and that a taxable profit will be available against which the temporary difference can be utilized. The carrying value of deferred tax assets is reviewed at each closing date, and revalued or reduced to the extent that it is more or less probable that a taxable profit will be available to allow the deferred tax asset to be utilized. When assessing the probability of a taxable profit being available, account is taken, primarily, of prior years\u2019 results, forecasted future results, non-recurring items unlikely to occur in the future and the tax strategy. As such, the assessment of UMG's ability to utilize tax losses carried forward is to a large extent judgement-based. If the future taxable results of UMG proved to differ significantly from those expected, UMG would be required to increase or decrease the carrying value of deferred tax assets with a potentially material impact on UMG's Statement of Financial Position and Statement of Profit or Loss. Deferred tax liabilities are recognized for all taxable temporary differences, except where the deferred tax liability results from goodwill or initial recognition of an asset or liability in a transaction which is not a business combination, and that, at the transaction date, does not impact net profit, tax income or loss. For taxable temporary differences resulting from investments in subsidiaries, joint ventures and other associated entities, deferred tax liabilities are recorded except to the extent that both of the following conditions are satisfied: the parent, investor or venturer is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not be reversed in the foreseeable future. Current tax and deferred tax shall be charged or credited directly to equity, and not profit if the tax relates to items that are credited or charged directly to equity. Current tax liabilities not expected to be paid within the next 12 months are recorded as long term current tax liability. 2.4.22. Share-based payments Equity-settled share-based compensation expense is recognized as a personnel cost over the vesting period of the award at the fair value of the equity instruments granted at the grant date with a corresponding increase in equity. In cases when grant date occurs after the employees to whom the equity instruments were granted have begun rendering services (for example, if a grant of equity instruments is subject to shareholder approval), UMG estimates the grant date fair value of the equity instruments by estimating the fair value of the equity instruments at the end of the reporting period, for the purposes of recognising the services received during the period between service commencement date and grant date. Once the date of grant has been established, UMG revises the earlier estimate so that the amounts recognised for services received in respect of the grant are ultimately based on the grant date fair value of the equity instruments. Fair value of the shares granted is fixed at the grant date and is equal to the share price at the grant date with a deduction for the aggregate discounted value of the dividends that will not be received over the vesting period, unless the conditions of the plan prescribe compensation for the vesting period dividends, and after taking into account the discount for non-transferability during the retention period. The cumulative expense recognized for equity-settled transactions at each reporting date reflects the extent to which the vesting period has expired and UMG\u2019s best estimate of the number of equity instruments that will ultimately vest. The expense or credit in the Statement of Profit or Loss for a period represents the movement in cumulative expense recognized as at the beginning and end of that period. Service and non-market performance conditions are not considered when determining the grant date fair value of awards, but the likelihood of the conditions being met is assessed as part of UMG\u2019s best estimate of the number of equity instruments that will ultimately vest. Market performance conditions are reflected within the grant date fair value. 2.4.23. Related parties A related party is a person or an entity that is related to UMG. These include both people and entities that have, or are subject to, the influence or control of UMG (e.g. key management personnel). Transactions with related parties are accounted for in accordance with the requirements of relevant IFRSs and take into account the substance as well as the legal form. 2.4.24. Contingent liabilities Non-financial guarantees are accounted for as a contingent liability until such time it becomes probable that UMG will be required to make a payment under the guarantee. Contingent liabilities are possible or present obligations of sufficient uncertainty that it does not quality for recognition as a provision, unless it is assumed in a business combination. Contingent liabilities are reviewed continuously to assess whether an outflow of resources has become probable. 2.4.25. Financial guarantees Financial guarantee is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payments when due in accordance with the terms of a debt instrument. Financial guarantees are initially recognised at fair value and are subject to the expected credit loss model, and a credit loss is recognized for expected cash shortfalls. 2.5. Accounting policy changes 2.5.1. Accounting policy changes originating from the IFRS amendments The following accounting policy changes originating from the IFRS amendments became effective as at 1 January 2022, however, the impact from their adoption on the Consolidated financial statements of UMG is not material: \u2022 Reference to the Conceptual Framework \u2013 Amendments to IFRS 3 \u2022 Property, Plant and Equipment: Proceeds before Intended Use \u2013 Amendments to IAS 16 \u2022 Onerous Contracts \u2013 Costs of Fulfilling a Contract \u2013 Amendments to IAS 37 \u2022 Annual Improvements to IFRS Standards 2018-2020, including; \u25e6 IFRS 1 First-time Adoption of International Financial Reporting Standards \u2013 Subsidiary as a first-time adopter \u25e6 IFRS 9 Financial Instruments \u2013 Fees in the \u201910 per cent\u2019 test for derecognition of financial liabilities UMG applied IFRS Practice Statement 2 - Disclosure of Accounting Policies in its Consolidated financial statements.
The Practice Statement provides an overview of the general characteristics of materiality, presents a four-step process
companies may follow in making materiality judgements when preparing their financial statements and provides
guidance on how to make materiality judgements in specific circumstances, namely, how to make materiality
judgements about prior-period information, errors and covenants, and in the context of interim reporting.
UMG used the guidance of the Practice Statement 2 to optimise its material accounting policy information disclosure
to include only material accounting policy information. Accounting policy information is material if, when considered
together with other information included in an entity's financial statements, it can reasonably be expected to
influence decisions that the primary users of general purpose financial statements make on the basis of those
financial statements.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-396": {
"value": "The Consolidated financial statements are: \u2022 prepared on the basis that UMG will continue to operate as a going concern ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfGoingConcernExplanatory",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-344": {
"value": "Separation from Vivendi Until February 26, 2021, the arrangement that constituted the combined UMG Group was not a legal entity in its own right and was made up of entities under the common control of Vivendi. Until this date, UMG\u2019s scope of combination principally comprised the entities held directly and indirectly by UMG Inc. and UIM B.V. On February 26, 2021, in UMG B.V.\u2019s Consolidated financial statements, the contribution of \u20ac33,000 million was directly recorded as an increase in equity attributable to UMG B.V. shareowners (\u20ac18,500 million in share capital and \u20ac14,500 million in additional paid-in capital), and the contribution of \u20ac33,000 million was fully neutralized in UMG B.V.\u2019s retained earnings. The reorganization of its shareholding structure, which is a common control business combination, has no impact on UMG\u2019s scope of combination or consolidation. On September 21, 2021, the shares of Universal Music Group N.V. (UMG N.V.) started trading on the regulated market of Euronext Amsterdam. Vivendi completed the distribution in kind of UMG shares to Vivendi shareholders on the basis of one UMG N.V. share for every eligible Vivendi share. The detachment date (ex-date) of the distribution in kind was September 21, 2021. Settlement occurred on September 23, 2021. UMG B.V. was converted to UMG N.V. on this date accordingly. Following this transaction and as at December 31, 2022, Vivendi held 10.13% of the share capital of UMG N.V. Transactions with Vivendi are still qualified as transactions with related parties under IAS 24 and are disclosed as such in these Consolidated financial statements. Commercial relationships among UMG and Vivendi subsidiaries prior and upon the separation, are conducted on an arm's length basis on terms and conditions similar to those which would be offered by third parties. Subsidiaries Subsidiaries are all companies over which UMG has control. Control over an entity exists when UMG is exposed to, or has right to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control commences until the date on which control ceases Intra-group balances and transactions, any unrealized gains and losses or income and expenses arising from intra- group transactions are eliminated in preparing the Consolidated financial statements. Unrealized gains arising from transactions with associates and joint ventures are eliminated against the investment to the extent of UMG\u2019s interest in the investee. Unrealized losses are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment . ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfBasisOfConsolidationExplanatory",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-398": {
"value": "Subsidiaries are all companies over which UMG has control. Control over an entity exists when UMG is exposed to, or has right to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control commences until the date on which control ceases . Intra-group balances and transactions, any unrealized gains and losses or income and expenses arising from intra- group transactions are eliminated in preparing the Consolidated financial statements. Unrealized gains arising from transactions with associates and joint ventures are eliminated against the investment to the extent of UMG\u2019s interest in the investee. Unrealized losses are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment . ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForSubsidiariesExplanatory",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-477": {
"value": "Significant events in the period and accounting estimates and judgements Impact of global events The Russia-Ukraine dispute created and magnified multiple threats to the global economic recovery from COVID\u201219 in 2022. Surging inflation and unemployment rates, economic sanctions, supply-chain disruptions causing rise of commodities prices, and, as a result, volatile financial markets created an adverse change to the business environment for UMG. However, in 2022 UMG has demonstrated resilience of its activities to continue to best serve and entertain its customers. UMG continuously monitors the current and potential consequences of the crisis and continues to make every effort to ensure the continuity of its activities. During its financial reporting process, UMG assessed the influence of the global events on the application of its accounting policies. Climate change UMG does not expect that climate change-related risks will have significant impact on the Group and would qualitatively influence management's decisions. Accounting estimates and judgements Application of the accounting policies requires judgements that impact the amounts recognised. All significant judgements and estimates are disclosed in the notes to the Consolidated financial statements. Information and considerations regarding areas of significant judgements and estimates have been included in the table below. It is reasonably possible, that outcomes of these judgements and estimates within the next financial year are different from the assumptions, which could require a material adjustment to the carrying amount of the asset or liability affected. Area Significant judgement Note Revenue Significant judgement is required to identify performance obligations under contracts with customers, whether these performance obligations are satisfied at a point of time or overtime, and probability that collectability is assured and significant reversal will not occur. 2.4.5. Revenues and associated costs Uncertain tax positions and deferred taxes Judgement in assessing the uncertainty of whether it is probable that a taxation authority will accept or revise the uncertain tax treatment and, future results enabling realisation of deferred taxes. 2.4.21. Income taxes Lease liabilities and right-of-use assets Judgement in determining the lease term of contracts with renewal and termination options at the commencement date of each lease contract. 2.4.11. Leases Area Significant estimate Note Revenue Estimation on the timing of the consequent usage and the amounts that are probable to be collected. 2.4.5. Revenues and associated costs Intangible assets, including goodwill and content assets Assumptions relating to impairment tests performed on each of the Group\u2019s cash-generating units (CGUs) or intangible assets, future cash flows and discount rates are updated annually. Estimation of (remaining) useful life for intangible assets, other than goodwill. 2.4.8. Goodwill and 2.4.9. Intangible assets, other than goodwill Provisions Estimating the likelihood and timing of potential cash flows relating to royalty claims and litigation. 2.4.19. Provisions Artist royalty advances Estimates of the future performance of artists and repertoire owners who are paid advances that are recognized in the Consolidated Statement of Financial Position. 2.4.9. Intangible assets, other than goodwill Share-based payments - PSUs Estimation of the grant date fair value and number of equity instruments. 2.4.22. Share- based payments Pension liability Assumptions for discount rates, future pension increases and life expectancy to calculate the defined benefit obligation. 2.4.20. Employee benefit plans For more details on these significant judgement areas and resulting estimates refer to the accounting policies below. 2.4.5. Revenues and associated costs Revenues from contracts with customers are recorded when performance obligations promised in the contract are satisfied, and for an amount for which it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur. Revenues are reported net of discounts. Intellectual property licensing (musical works) These licenses transfer to a customer either a right to use an entity's intellectual property as it exists at the point in time at which the license is granted (static license), or a right to access an entity's intellectual property as it exists throughout the license period (dynamic license). Revenues are accounted for when the performance obligation promised in the contract is satisfied (static license) or over time upon satisfaction (dynamic license), i.e., when the seller transfers the control over the right to use/access the intellectual property and the customer obtains control of the use/access of that license. Consequently, revenues from static licenses are recognized at the point in time when the license is transferred and the customer is able to use and benefit from the license. Revenues from dynamic licenses are accounted for over time, over the license period from the date the customer is able to use and benefit from the license and in line with the sale or usage. Consideration received in the current year, which represents income from ordinary activities related to the prior years, is recorded within revenue, unless it was accrued before. Court settlements in relation to the unauthorized usage of UMG's intellectual property in previous years are recorded in revenue as they relate to activities carried out within the ordinary course of business. Analysis of the Agent/Principal relationship in sales transactions involving a third party If the nature of the entity's undertaking is a performance obligation to provide the specified goods or services itself, then the entity acts on its own behalf and it is \u201cprincipal\u201d in the sale transaction: it accounts for revenue the gross amount of consideration to which it expects to be entitled in exchange for the goods or services provided, and the commission due to the third-party as cost of revenues. If the entity arranges for a third-party to provide the goods or services specified in the contract, then it recognizes as revenues the net amount of consideration to which it expects to be entitled in exchange for the goods or services provided. Financing Component UMG does not adjust the transaction price for the effects of significant financing component if, at contract inception, it is expected that the period between customer payment and the transfer of goods or services is one year or less. This applies to the majority of sales transactions. The transaction price may be variable due to discounts, rebates, or similar arrangements. In determining the transaction price UMG considers the fair value of any non-cash consideration. Revenue is only recognized for the part of the consideration for which it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur. Judgement is required in determining the probability and level of discounts and rebates that will be granted. The estimate is updated throughout the term of the contract. Revenue recognition by business segment Recorded Music The sales of recorded music (physical, digital downloading or streaming) are intellectual property licenses granted by UMG to distributors or digital platforms and which give them certain rights over UMG's musical works. Physical sales of recorded music (CDs, DVDs and Vinyls) These intellectual property licenses are static licenses transferring to the customer a right to use UMG\u2018s recordings as they exist at the point in time at which the license is granted, i.e., on the physical device sold. Revenues from the physical sales of recorded music, net of a provision for estimated returns and rebates, if any, are accounted for, either: (i) upon the sale to the distributor, at the shipping point for products sold free on board (FOB) or on delivery for products sold free on destination; or (ii) upon the sale to the final customer for consignment sales. Digital sales of recorded music, via downloading or streaming by subscription or free of charge These intellectual property licenses are generally dynamic licenses providing a right to access the entire catalogue of recorded music as it exists throughout the license period considering potential add-ons to, or withdrawals from, the catalogue during that period. The consideration paid by the digital platform is variable in the form of a sales-based or a usage-based royalty. Revenues are then accounted for when these subsequent sales or usages occur. Revenues from digital sales of recorded music, for which UMG has sufficient, accurate, and reliable data from digital platforms, are recognized at the end of the month in which the sale or usage is made by the end customer. For digital sales of recorded music streaming by subscription or free of charge, certain contracts may include a non- refundable minimum guarantee which is generally recoupable and is in substance an advance payment. In the case of a dynamic license, the minimum guarantee is spread over the period to which it relates and takes into account the amount of royalties that are actually recoupable. The minimum guarantee are apportioned in accordance with the accounting for these royalties. Music Publishing Music Publishing relates to the use by a third party of the copyrights on musical works owned or administered by UMG, which are intellectual property licenses that UMG grants to the third party and which provides a right to access a catalogue of recorded music, as these intellectual property licenses are dynamic licenses. For these contracts, revenues are recognised on the basis of sales and usage royalties, using the best available estimate on the timing of the consequent usage and the amounts that are probable to be collected. Merchandising Revenues from merchandising are recognized when control has been passed either upon sale to the end customer, from direct sales during touring, concessions and over the internet; on delivery for sales by a third-party distributor; or for sales of rights attached to merchandising products when a contract is signed and collectability is probable and on a sales and usage basis. Provisions for estimated returns and price guarantees are deducted from sales of products to customers through distributors. The provisions are estimated based on past sales statistics and take into account the economic environment and product sales forecast to final customers. Associated costs of revenues Cost of revenues primarily includes product costs and artists costs. Selling, general and administrative expenses primarily include salaries and employee benefits, consulting and service fees, insurance costs, travel and entertainment expenses, depreciation of capital expenditure and right of use assets, administrative department costs, value allowances for receivables, restructuring expenses and other operating expenses and are expensed when incurred. Advertising costs are expensed when incurred. Slotting fees and cooperative advertising expenses are recorded as a reduction in revenues. However, cooperative advertising is not treated as a reduction of transaction price but marketing expense and expensed when it is distinct and can be estimated. 2.4.8. Goodwill Goodwill represents the difference between the fair value of the net assets acquired and the transaction price of the acquisition. Goodwill arising on the acquisition of associates and joint ventures is included in the carrying amount of the associates and joint ventures. Subsequently goodwill is measured at its initial amount less accumulated impairment losses. On the acquisition date, to the extent possible, goodwill is allocated to each cash-generating unit likely to benefit from the business combination. 2.4.9. Intangible assets, other than goodwill Content assets include royalty advances to artists, songwriters and co-publishers as well as recorded music and music publishing catalogues, artists\u2019 contracts and rights. Music catalogues, trade names, subscribers\u2019 bases and market shares generated internally are not recognized as intangible assets. Intangible assets separately acquired are recorded at cost, and intangible assets acquired in a business combination are recorded at their fair value at the acquisition date. Amortisation is charged to profit or loss on a straight-line basis over the estimated useful life. UMG believes that straight-line depreciation most accurately reflects the expected pattern of consumption of the future economic benefits embodied in these intangible assets. Management needs to estimate the (remaining) useful lives of such intangible assets. Useful lives are determined based on the expected pattern of the future earnings and the period of the contractual arrangements. Useful life is reviewed at the end of each reporting period. Music catalogues and publishing rights The majority of the music catalogues are amortised over 20 years on a straight-line basis. Some significant catalogues can be amortized over longer period of time. Advances to artists and repertoire owners Royalty advances to artists, songwriters, and co-publishers are capitalized as an asset when their current popularity and past performances provide a reasonable basis to conclude that the probable future recoupment of such royalty advances against earnings otherwise payable to them is reasonably assured. Royalty advances are recognized as an expense as subsequent royalties are earned by the artist, songwriter or co-publisher. Any portion of capitalized royalty advances not deemed to be recoverable against future royalties is expensed during the period in which the loss becomes evident. These expenses are recorded in cost of revenues. Other intangible assets Other intangibles mainly includes software for internal use. Direct internal and external costs incurred for the development of software for internal use, are capitalized during the development stage if the resulting product or process is technically and commercially feasible, cost can be reliably measured, UMG has sufficient resources and the intention to complete its development. Research costs are expensed when incurred. Costs of significant upgrades and enhancements resulting in additional functionality are also capitalized. The software for internal use is generally amortized over 3 years and included within amortisation expense . 2.4.19. Provisions Provisions are recognized when, at the end of the reporting period, UMG has a legal obligation (statutory, regulatory or contractual) or a constructive obligation, as a result of past events, and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and the obligation can be reliably estimated. Where the effect of the time value of money is material, provisions are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money. If the amount of the obligation cannot be reliably estimated, no provision is recorded and a disclosure is made in the Notes to the Consolidated Financial Statements. Significant judgment is required in determining the amount and probability of resources outflow and discount rates used to calculate the present value of this outflow. Provisions for royalty audit claims Up to the completion of the royalty claim audit, the timing and the amount of the potential pay-outs is uncertain. UMG makes its best possible estimate of the outcome using any available data, including history of claims with rights owners. When the estimate is performed for large homogeneous claims and contract terms, the statistical valuation method is used. Litigation provisions In the ordinary course of business, UMG may be involved in a number of legal and arbitration proceedings and administrative actions. The costs which may result from these proceedings are accrued at the reporting date if UMG has a present obligation toward a third party resulting from a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and the amount of that liability can be quantified or estimated within a reasonable range. The amount of provision recorded is based on a case-by-case assessment of the risk level, and events arising during the course of legal proceedings may require a reassessment of this risk at any time. 2.4.20. Employee benefit plans Defined contribution plans Contributions to defined contribution and multi-employer plans are expensed during the year when related services are provided. Defined benefit plans Defined benefit plans may be funded by investments in various instruments such as insurance contracts or equity and debt investment securities, excluding shares in any UMG entity or debt instruments. Pension expenses and defined benefit obligations are calculated by independent actuaries using the projected unit credit method. This method is based on annually updated assumptions, which include the probability of employees remaining with UMG until retirement, expected changes in future compensation and an appropriate discount rate for each country in which UMG maintains a pension plan. The discount rate is determined for each country by reference to yields on notes issued by investment grade companies having a credit rating of AA and maturities identical to that of the valued plans, generally based on relevant rate indices. The expected return on plan assets is estimated by using the selected discount rate to value the obligations of the previous year. The calculation is performed separately for each plan. A provision is recorded in the Statement of Financial Position equal to the difference between the actuarial value of the related benefits (actuarial liability) and the fair value of any associated plan assets, and this includes past service costs and actuarial gains and losses. The cost of defined benefit plans consists of three components recognized as follows: \u2022 the service cost is included in selling, general and administrative expenses. It comprises current service cost, past service cost resulting from a plan amendment or a curtailment, immediately recognized in profit and loss, and gains and losses on settlement; \u2022 the financial component, recorded in other financial expenses and income, consists of the unwinding of the interest component of the discount, less the expected return on plan assets determined using the discount rate retained for the valuation of the benefit obligation; and \u2022 the remeasurements of the net defined benefit liability (asset), recognized in items of other comprehensive income not reclassified as profit and loss, mainly consist of actuarial gains and losses, i.e., changes in the present value of the defined benefit obligation and plan assets resulting from changes in actuarial assumptions and experience adjustments (representing the differences between the expected effect of some actuarial assumptions applied to previous valuations and the effective impact). Where the value of plan assets exceeds benefit obligations, a financial asset is recognized up to the present value of future refunds and the expected reduction in future contributions. Some other post-employment benefits, such as life insurance and medical coverage (mainly in the United States) are subject to provisions which are assessed through an actuarial calculation comparable to the method used for pension provisions. 2.4.22. Share-based payments Equity-settled share-based compensation expense is recognized as a personnel cost over the vesting period of the award at the fair value of the equity instruments granted at the grant date with a corresponding increase in equity. In cases when grant date occurs after the employees to whom the equity instruments were granted have begun rendering services (for example, if a grant of equity instruments is subject to shareholder approval), UMG estimates the grant date fair value of the equity instruments by estimating the fair value of the equity instruments at the end of the reporting period, for the purposes of recognising the services received during the period between service commencement date and grant date. Once the date of grant has been established, UMG revises the earlier estimate so that the amounts recognised for services received in respect of the grant are ultimately based on the grant date fair value of the equity instruments. Fair value of the shares granted is fixed at the grant date and is equal to the share price at the grant date with a deduction for the aggregate discounted value of the dividends that will not be received over the vesting period, unless the conditions of the plan prescribe compensation for the vesting period dividends, and after taking into account the discount for non-transferability during the retention period. The cumulative expense recognized for equity-settled transactions at each reporting date reflects the extent to which the vesting period has expired and UMG\u2019s best estimate of the number of equity instruments that will ultimately vest. The expense or credit in the Statement of Profit or Loss for a period represents the movement in cumulative expense recognized as at the beginning and end of that period. Service and non-market performance conditions are not considered when determining the grant date fair value of awards, but the likelihood of the conditions being met is assessed as part of UMG\u2019s best estimate of the number of equity instruments that will ultimately vest. Market performance conditions are reflected within the grant date fair value",
"dimensions": {
"concept": "ifrs-full:ExplanationOfAssumptionAboutFutureWithSignificantRiskOfResultingInMaterialAdjustments",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-475": {
"value": "Significant events in the period and accounting estimates and judgements Impact of global events The Russia-Ukraine dispute created and magnified multiple threats to the global economic recovery from COVID\u201219 in 2022. Surging inflation and unemployment rates, economic sanctions, supply-chain disruptions causing rise of commodities prices, and, as a result, volatile financial markets created an adverse change to the business environment for UMG. However, in 2022 UMG has demonstrated resilience of its activities to continue to best serve and entertain its customers. UMG continuously monitors the current and potential consequences of the crisis and continues to make every effort to ensure the continuity of its activities. During its financial reporting process, UMG assessed the influence of the global events on the application of its accounting policies. Climate change UMG does not expect that climate change-related risks will have significant impact on the Group and would qualitatively influence management's decisions. Accounting estimates and judgements Application of the accounting policies requires judgements that impact the amounts recognised. All significant judgements and estimates are disclosed in the notes to the Consolidated financial statements. Information and considerations regarding areas of significant judgements and estimates have been included in the table below. It is reasonably possible, that outcomes of these judgements and estimates within the next financial year are different from the assumptions, which could require a material adjustment to the carrying amount of the asset or liability affected. Area Significant judgement Note Revenue Significant judgement is required to identify performance obligations under contracts with customers, whether these performance obligations are satisfied at a point of time or overtime, and probability that collectability is assured and significant reversal will not occur. 2.4.5. Revenues and associated costs Uncertain tax positions and deferred taxes Judgement in assessing the uncertainty of whether it is probable that a taxation authority will accept or revise the uncertain tax treatment and, future results enabling realisation of deferred taxes. 2.4.21. Income taxes Lease liabilities and right-of-use assets Judgement in determining the lease term of contracts with renewal and termination options at the commencement date of each lease contract. 2.4.11. Leases Area Significant estimate Note Revenue Estimation on the timing of the consequent usage and the amounts that are probable to be collected. 2.4.5. Revenues and associated costs Intangible assets, including goodwill and content assets Assumptions relating to impairment tests performed on each of the Group\u2019s cash-generating units (CGUs) or intangible assets, future cash flows and discount rates are updated annually. Estimation of (remaining) useful life for intangible assets, other than goodwill. 2.4.8. Goodwill and 2.4.9. Intangible assets, other than goodwill Provisions Estimating the likelihood and timing of potential cash flows relating to royalty claims and litigation. 2.4.19. Provisions Artist royalty advances Estimates of the future performance of artists and repertoire owners who are paid advances that are recognized in the Consolidated Statement of Financial Position. 2.4.9. Intangible assets, other than goodwill Share-based payments - PSUs Estimation of the grant date fair value and number of equity instruments. 2.4.22. Share- based payments Pension liability Assumptions for discount rates, future pension increases and life expectancy to calculate the defined benefit obligation. 2.4.20. Employee benefit plans For more details on these significant judgement areas and resulting estimates refer to the accounting policies below. 2.4.5. Revenues and associated costs Revenues from contracts with customers are recorded when performance obligations promised in the contract are satisfied, and for an amount for which it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur. Revenues are reported net of discounts. Intellectual property licensing (musical works) These licenses transfer to a customer either a right to use an entity's intellectual property as it exists at the point in time at which the license is granted (static license), or a right to access an entity's intellectual property as it exists throughout the license period (dynamic license). Revenues are accounted for when the performance obligation promised in the contract is satisfied (static license) or over time upon satisfaction (dynamic license), i.e., when the seller transfers the control over the right to use/access the intellectual property and the customer obtains control of the use/access of that license. Consequently, revenues from static licenses are recognized at the point in time when the license is transferred and the customer is able to use and benefit from the license. Revenues from dynamic licenses are accounted for over time, over the license period from the date the customer is able to use and benefit from the license and in line with the sale or usage. Consideration received in the current year, which represents income from ordinary activities related to the prior years, is recorded within revenue, unless it was accrued before. Court settlements in relation to the unauthorized usage of UMG's intellectual property in previous years are recorded in revenue as they relate to activities carried out within the ordinary course of business. Analysis of the Agent/Principal relationship in sales transactions involving a third party If the nature of the entity's undertaking is a performance obligation to provide the specified goods or services itself, then the entity acts on its own behalf and it is \u201cprincipal\u201d in the sale transaction: it accounts for revenue the gross amount of consideration to which it expects to be entitled in exchange for the goods or services provided, and the commission due to the third-party as cost of revenues. If the entity arranges for a third-party to provide the goods or services specified in the contract, then it recognizes as revenues the net amount of consideration to which it expects to be entitled in exchange for the goods or services provided. Financing Component UMG does not adjust the transaction price for the effects of significant financing component if, at contract inception, it is expected that the period between customer payment and the transfer of goods or services is one year or less. This applies to the majority of sales transactions. The transaction price may be variable due to discounts, rebates, or similar arrangements. In determining the transaction price UMG considers the fair value of any non-cash consideration. Revenue is only recognized for the part of the consideration for which it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur. Judgement is required in determining the probability and level of discounts and rebates that will be granted. The estimate is updated throughout the term of the contract. Revenue recognition by business segment Recorded Music The sales of recorded music (physical, digital downloading or streaming) are intellectual property licenses granted by UMG to distributors or digital platforms and which give them certain rights over UMG's musical works. Physical sales of recorded music (CDs, DVDs and Vinyls) These intellectual property licenses are static licenses transferring to the customer a right to use UMG\u2018s recordings as they exist at the point in time at which the license is granted, i.e., on the physical device sold. Revenues from the physical sales of recorded music, net of a provision for estimated returns and rebates, if any, are accounted for, either: (i) upon the sale to the distributor, at the shipping point for products sold free on board (FOB) or on delivery for products sold free on destination; or (ii) upon the sale to the final customer for consignment sales. Digital sales of recorded music, via downloading or streaming by subscription or free of charge These intellectual property licenses are generally dynamic licenses providing a right to access the entire catalogue of recorded music as it exists throughout the license period considering potential add-ons to, or withdrawals from, the catalogue during that period. The consideration paid by the digital platform is variable in the form of a sales-based or a usage-based royalty. Revenues are then accounted for when these subsequent sales or usages occur. Revenues from digital sales of recorded music, for which UMG has sufficient, accurate, and reliable data from digital platforms, are recognized at the end of the month in which the sale or usage is made by the end customer. For digital sales of recorded music streaming by subscription or free of charge, certain contracts may include a non- refundable minimum guarantee which is generally recoupable and is in substance an advance payment. In the case of a dynamic license, the minimum guarantee is spread over the period to which it relates and takes into account the amount of royalties that are actually recoupable. The minimum guarantee are apportioned in accordance with the accounting for these royalties. Music Publishing Music Publishing relates to the use by a third party of the copyrights on musical works owned or administered by UMG, which are intellectual property licenses that UMG grants to the third party and which provides a right to access a catalogue of recorded music, as these intellectual property licenses are dynamic licenses. For these contracts, revenues are recognised on the basis of sales and usage royalties, using the best available estimate on the timing of the consequent usage and the amounts that are probable to be collected. Merchandising Revenues from merchandising are recognized when control has been passed either upon sale to the end customer, from direct sales during touring, concessions and over the internet; on delivery for sales by a third-party distributor; or for sales of rights attached to merchandising products when a contract is signed and collectability is probable and on a sales and usage basis. Provisions for estimated returns and price guarantees are deducted from sales of products to customers through distributors. The provisions are estimated based on past sales statistics and take into account the economic environment and product sales forecast to final customers. Associated costs of revenues Cost of revenues primarily includes product costs and artists costs. Selling, general and administrative expenses primarily include salaries and employee benefits, consulting and service fees, insurance costs, travel and entertainment expenses, depreciation of capital expenditure and right of use assets, administrative department costs, value allowances for receivables, restructuring expenses and other operating expenses and are expensed when incurred. Advertising costs are expensed when incurred. Slotting fees and cooperative advertising expenses are recorded as a reduction in revenues. However, cooperative advertising is not treated as a reduction of transaction price but marketing expense and expensed when it is distinct and can be estimated. 2.4.8. Goodwill Goodwill represents the difference between the fair value of the net assets acquired and the transaction price of the acquisition. Goodwill arising on the acquisition of associates and joint ventures is included in the carrying amount of the associates and joint ventures. Subsequently goodwill is measured at its initial amount less accumulated impairment losses. On the acquisition date, to the extent possible, goodwill is allocated to each cash-generating unit likely to benefit from the business combination. 2.4.9. Intangible assets, other than goodwill Content assets include royalty advances to artists, songwriters and co-publishers as well as recorded music and music publishing catalogues, artists\u2019 contracts and rights. Music catalogues, trade names, subscribers\u2019 bases and market shares generated internally are not recognized as intangible assets. Intangible assets separately acquired are recorded at cost, and intangible assets acquired in a business combination are recorded at their fair value at the acquisition date. Amortisation is charged to profit or loss on a straight-line basis over the estimated useful life. UMG believes that straight-line depreciation most accurately reflects the expected pattern of consumption of the future economic benefits embodied in these intangible assets. Management needs to estimate the (remaining) useful lives of such intangible assets. Useful lives are determined based on the expected pattern of the future earnings and the period of the contractual arrangements. Useful life is reviewed at the end of each reporting period. Music catalogues and publishing rights The majority of the music catalogues are amortised over 20 years on a straight-line basis. Some significant catalogues can be amortized over longer period of time. Advances to artists and repertoire owners Royalty advances to artists, songwriters, and co-publishers are capitalized as an asset when their current popularity and past performances provide a reasonable basis to conclude that the probable future recoupment of such royalty advances against earnings otherwise payable to them is reasonably assured. Royalty advances are recognized as an expense as subsequent royalties are earned by the artist, songwriter or co-publisher. Any portion of capitalized royalty advances not deemed to be recoverable against future royalties is expensed during the period in which the loss becomes evident. These expenses are recorded in cost of revenues. Other intangible assets Other intangibles mainly includes software for internal use. Direct internal and external costs incurred for the development of software for internal use, are capitalized during the development stage if the resulting product or process is technically and commercially feasible, cost can be reliably measured, UMG has sufficient resources and the intention to complete its development. Research costs are expensed when incurred. Costs of significant upgrades and enhancements resulting in additional functionality are also capitalized. The software for internal use is generally amortized over 3 years and included within amortisation expense . 2.4.11. Leases The main lease contracts for UMG correspond to real estate leases for which UMG is the lessee. Real estate leases for which UMG is the lessee are recorded at the commencement date and result in the recognition of a lease liability equal to the present value of future lease payments against a right-of-use asset relating to leases. Right-of-use assets Right-of-use assets are initially measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognized, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. The recognized right-of-use assets are depreciated on a straight-line basis over the shorter of its estimated useful life and the lease term. Right-of-use assets are subject to impairment. Lease liabilities UMG recognizes lease liabilities initially measured at the present value of future lease payments over the lease term. The lease payments include in-substance fixed payments (less any lease incentives), variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include payments of penalties for terminating a lease, if UMG has the option to terminate and it is reasonably certain that this option will be exercised. In calculating the present value of lease payments, UMG uses the incremental borrowing rate at the lease commencement date if the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. The carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the in-substance fixed lease payments. Short-term leases and leases of low-value assets UMG applies the short-term lease recognition exemption to the real-estate leases with a lease term of 12 months or less from the commencement date and do not contain a purchase option. It also applies the lease of low-value assets recognition exemption to leases of office chattels and other equipment that are considered of low value. Lease payments on short-term leases and leases of low-value assets are recognized as expense on a straight-line basis over the lease term. Estimates in accounting for leases UMG determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised. When determining the lease term, UMG considers all relevant facts and circumstances that create an economic incentive to exercise an extension option, or not to exercise a termination option. These circumstances include UMG\u2019s real estate planning. In estimating the lessee\u2019s incremental borrowing rate, UMG takes into account the residual lease term and its duration to reflect the interest rate of a loan with a similar payment profile to the lease payments 2.4.19. Provisions Provisions are recognized when, at the end of the reporting period, UMG has a legal obligation (statutory, regulatory or contractual) or a constructive obligation, as a result of past events, and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and the obligation can be reliably estimated. Where the effect of the time value of money is material, provisions are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money. If the amount of the obligation cannot be reliably estimated, no provision is recorded and a disclosure is made in the Notes to the Consolidated Financial Statements. Significant judgment is required in determining the amount and probability of resources outflow and discount rates used to calculate the present value of this outflow. Provisions for royalty audit claims Up to the completion of the royalty claim audit, the timing and the amount of the potential pay-outs is uncertain. UMG makes its best possible estimate of the outcome using any available data, including history of claims with rights owners. When the estimate is performed for large homogeneous claims and contract terms, the statistical valuation method is used. Litigation provisions In the ordinary course of business, UMG may be involved in a number of legal and arbitration proceedings and administrative actions. The costs which may result from these proceedings are accrued at the reporting date if UMG has a present obligation toward a third party resulting from a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and the amount of that liability can be quantified or estimated within a reasonable range. The amount of provision recorded is based on a case-by-case assessment of the risk level, and events arising during the course of legal proceedings may require a reassessment of this risk at any time. 2.4.20. Employee benefit plans Defined contribution plans Contributions to defined contribution and multi-employer plans are expensed during the year when related services are provided. Defined benefit plans Defined benefit plans may be funded by investments in various instruments such as insurance contracts or equity and debt investment securities, excluding shares in any UMG entity or debt instruments. Pension expenses and defined benefit obligations are calculated by independent actuaries using the projected unit credit method. This method is based on annually updated assumptions, which include the probability of employees remaining with UMG until retirement, expected changes in future compensation and an appropriate discount rate for each country in which UMG maintains a pension plan. The discount rate is determined for each country by reference to yields on notes issued by investment grade companies having a credit rating of AA and maturities identical to that of the valued plans, generally based on relevant rate indices. The expected return on plan assets is estimated by using the selected discount rate to value the obligations of the previous year. The calculation is performed separately for each plan. A provision is recorded in the Statement of Financial Position equal to the difference between the actuarial value of the related benefits (actuarial liability) and the fair value of any associated plan assets, and this includes past service costs and actuarial gains and losses. The cost of defined benefit plans consists of three components recognized as follows: \u2022 the service cost is included in selling, general and administrative expenses. It comprises current service cost, past service cost resulting from a plan amendment or a curtailment, immediately recognized in profit and loss, and gains and losses on settlement; \u2022 the financial component, recorded in other financial expenses and income, consists of the unwinding of the interest component of the discount, less the expected return on plan assets determined using the discount rate retained for the valuation of the benefit obligation; and \u2022 the remeasurements of the net defined benefit liability (asset), recognized in items of other comprehensive income not reclassified as profit and loss, mainly consist of actuarial gains and losses, i.e., changes in the present value of the defined benefit obligation and plan assets resulting from changes in actuarial assumptions and experience adjustments (representing the differences between the expected effect of some actuarial assumptions applied to previous valuations and the effective impact). Where the value of plan assets exceeds benefit obligations, a financial asset is recognized up to the present value of future refunds and the expected reduction in future contributions. Some other post-employment benefits, such as life insurance and medical coverage (mainly in the United States) are subject to provisions which are assessed through an actuarial calculation comparable to the method used for pension provisions. 2.4.21. Income taxes Differences existing at closing between the tax base value of assets and liabilities and their carrying value in the Consolidated Statement of Financial Position give rise to temporary differences. Pursuant to the liability method, these temporary differences result in the accounting of: \u2022 deferred tax assets, when the tax base value is greater than the carrying value (expected future tax saving); and \u2022 deferred tax liabilities, when the tax base value is lower than the carrying value (expected future tax expense). Deferred tax assets and liabilities are measured at the expected tax rates for the year during which the asset will be realized or the liability settled, based on tax rates (and tax regulations) enacted or substantially enacted by the closing date. They are reviewed at the end of each year, in line with any changes in applicable tax rates. Deferred tax assets are recognized for all deductible temporary differences, tax loss carry-forwards and unused tax credits, insofar as it is probable that a taxable profit will be available, or when a current tax liability exists to make use of those deductible temporary differences, tax loss carry-forwards and unused tax credits, except where the deferred tax asset associated with the deductible temporary difference is generated by initial recognition of an asset or liability in a transaction which is not a business combination, and that, at the transaction date, does not impact net profit, nor tax income or loss. For deductible temporary differences resulting from investments in subsidiaries, joint ventures and other associated entities, deferred tax assets are recorded to the extent that it is probable that the temporary difference will reverse in the foreseeable future and that a taxable profit will be available against which the temporary difference can be utilized. The carrying value of deferred tax assets is reviewed at each closing date, and revalued or reduced to the extent that it is more or less probable that a taxable profit will be available to allow the deferred tax asset to be utilized. When assessing the probability of a taxable profit being available, account is taken, primarily, of prior years\u2019 results, forecasted future results, non-recurring items unlikely to occur in the future and the tax strategy. As such, the assessment of UMG's ability to utilize tax losses carried forward is to a large extent judgement-based. If the future taxable results of UMG proved to differ significantly from those expected, UMG would be required to increase or decrease the carrying value of deferred tax assets with a potentially material impact on UMG's Statement of Financial Position and Statement of Profit or Loss. Deferred tax liabilities are recognized for all taxable temporary differences, except where the deferred tax liability results from goodwill or initial recognition of an asset or liability in a transaction which is not a business combination, and that, at the transaction date, does not impact net profit, tax income or loss. For taxable temporary differences resulting from investments in subsidiaries, joint ventures and other associated entities, deferred tax liabilities are recorded except to the extent that both of the following conditions are satisfied: the parent, investor or venturer is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not be reversed in the foreseeable future. Current tax and deferred tax shall be charged or credited directly to equity, and not profit if the tax relates to items that are credited or charged directly to equity. Current tax liabilities not expected to be paid within the next 12 months are recorded as long term current tax liability. ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfAssetsAndLiabilitiesWithSignificantRiskOfMaterialAdjustmentExplanatory",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
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"fact-479": {
"value": "Significant events in the period and accounting estimates and judgements Accounting estimates and judgements Application of the accounting policies requires judgements that impact the amounts recognised. All significant judgements and estimates are disclosed in the notes to the Consolidated financial statements. Information and considerations regarding areas of significant judgements and estimates have been included in the table below. It is reasonably possible, that outcomes of these judgements and estimates within the next financial year are different from the assumptions, which could require a material adjustment to the carrying amount of the asset or liability affected. Area Significant judgement Note Revenue Significant judgement is required to identify performance obligations under contracts with customers, whether these performance obligations are satisfied at a point of time or overtime, and probability that collectability is assured and significant reversal will not occur. 2.4.5. Revenues and associated costs Uncertain tax positions and deferred taxes Judgement in assessing the uncertainty of whether it is probable that a taxation authority will accept or revise the uncertain tax treatment and, future results enabling realisation of deferred taxes. 2.4.21. Income taxes Lease liabilities and right-of-use assets Judgement in determining the lease term of contracts with renewal and termination options at the commencement date of each lease contract. 2.4.11. Leases Area Significant estimate Note Revenue Estimation on the timing of the consequent usage and the amounts that are probable to be collected. 2.4.5. Revenues and associated costs Intangible assets, including goodwill and content assets Assumptions relating to impairment tests performed on each of the Group\u2019s cash-generating units (CGUs) or intangible assets, future cash flows and discount rates are updated annually. Estimation of (remaining) useful life for intangible assets, other than goodwill. 2.4.8. Goodwill and 2.4.9. Intangible assets, other than goodwill Provisions Estimating the likelihood and timing of potential cash flows relating to royalty claims and litigation. 2.4.19. Provisions Artist royalty advances Estimates of the future performance of artists and repertoire owners who are paid advances that are recognized in the Consolidated Statement of Financial Position. 2.4.9. Intangible assets, other than goodwill Share-based payments - PSUs Estimation of the grant date fair value and number of equity instruments. 2.4.22. Share- based payments Pension liability Assumptions for discount rates, future pension increases and life expectancy to calculate the defined benefit obligation. 2.4.20. Employee benefit plans For more details on these significant judgement areas and resulting estimates refer to the accounting policies below. 2.4.5. Revenues and associated costs Revenues from contracts with customers are recorded when performance obligations promised in the contract are satisfied, and for an amount for which it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur. Revenues are reported net of discounts. Intellectual property licensing (musical works) These licenses transfer to a customer either a right to use an entity's intellectual property as it exists at the point in time at which the license is granted (static license), or a right to access an entity's intellectual property as it exists throughout the license period (dynamic license). Revenues are accounted for when the performance obligation promised in the contract is satisfied (static license) or over time upon satisfaction (dynamic license), i.e., when the seller transfers the control over the right to use/access the intellectual property and the customer obtains control of the use/access of that license. Consequently, revenues from static licenses are recognized at the point in time when the license is transferred and the customer is able to use and benefit from the license. Revenues from dynamic licenses are accounted for over time, over the license period from the date the customer is able to use and benefit from the license and in line with the sale or usage. Consideration received in the current year, which represents income from ordinary activities related to the prior years, is recorded within revenue, unless it was accrued before. Court settlements in relation to the unauthorized usage of UMG's intellectual property in previous years are recorded in revenue as they relate to activities carried out within the ordinary course of business. Analysis of the Agent/Principal relationship in sales transactions involving a third party If the nature of the entity's undertaking is a performance obligation to provide the specified goods or services itself, then the entity acts on its own behalf and it is \u201cprincipal\u201d in the sale transaction: it accounts for revenue the gross amount of consideration to which it expects to be entitled in exchange for the goods or services provided, and the commission due to the third-party as cost of revenues. If the entity arranges for a third-party to provide the goods or services specified in the contract, then it recognizes as revenues the net amount of consideration to which it expects to be entitled in exchange for the goods or services provided. Financing Component UMG does not adjust the transaction price for the effects of significant financing component if, at contract inception, it is expected that the period between customer payment and the transfer of goods or services is one year or less. This applies to the majority of sales transactions. The transaction price may be variable due to discounts, rebates, or similar arrangements. In determining the transaction price UMG considers the fair value of any non-cash consideration. Revenue is only recognized for the part of the consideration for which it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur. Judgement is required in determining the probability and level of discounts and rebates that will be granted. The estimate is updated throughout the term of the contract. Revenue recognition by business segment Recorded Music The sales of recorded music (physical, digital downloading or streaming) are intellectual property licenses granted by UMG to distributors or digital platforms and which give them certain rights over UMG's musical works. Physical sales of recorded music (CDs, DVDs and Vinyls) These intellectual property licenses are static licenses transferring to the customer a right to use UMG\u2018s recordings as they exist at the point in time at which the license is granted, i.e., on the physical device sold. Revenues from the physical sales of recorded music, net of a provision for estimated returns and rebates, if any, are accounted for, either: (i) upon the sale to the distributor, at the shipping point for products sold free on board (FOB) or on delivery for products sold free on destination; or (ii) upon the sale to the final customer for consignment sales. Digital sales of recorded music, via downloading or streaming by subscription or free of charge These intellectual property licenses are generally dynamic licenses providing a right to access the entire catalogue of recorded music as it exists throughout the license period considering potential add-ons to, or withdrawals from, the catalogue during that period. The consideration paid by the digital platform is variable in the form of a sales-based or a usage-based royalty. Revenues are then accounted for when these subsequent sales or usages occur. Revenues from digital sales of recorded music, for which UMG has sufficient, accurate, and reliable data from digital platforms, are recognized at the end of the month in which the sale or usage is made by the end customer. For digital sales of recorded music streaming by subscription or free of charge, certain contracts may include a non- refundable minimum guarantee which is generally recoupable and is in substance an advance payment. In the case of a dynamic license, the minimum guarantee is spread over the period to which it relates and takes into account the amount of royalties that are actually recoupable. The minimum guarantee are apportioned in accordance with the accounting for these royalties. Music Publishing Music Publishing relates to the use by a third party of the copyrights on musical works owned or administered by UMG, which are intellectual property licenses that UMG grants to the third party and which provides a right to access a catalogue of recorded music, as these intellectual property licenses are dynamic licenses. For these contracts, revenues are recognised on the basis of sales and usage royalties, using the best available estimate on the timing of the consequent usage and the amounts that are probable to be collected. Merchandising Revenues from merchandising are recognized when control has been passed either upon sale to the end customer, from direct sales during touring, concessions and over the internet; on delivery for sales by a third-party distributor; or for sales of rights attached to merchandising products when a contract is signed and collectability is probable and on a sales and usage basis. Provisions for estimated returns and price guarantees are deducted from sales of products to customers through distributors. The provisions are estimated based on past sales statistics and take into account the economic environment and product sales forecast to final customers. Associated costs of revenues Cost of revenues primarily includes product costs and artists costs. Selling, general and administrative expenses primarily include salaries and employee benefits, consulting and service fees, insurance costs, travel and entertainment expenses, depreciation of capital expenditure and right of use assets, administrative department costs, value allowances for receivables, restructuring expenses and other operating expenses and are expensed when incurred. Advertising costs are expensed when incurred. Slotting fees and cooperative advertising expenses are recorded as a reduction in revenues. However, cooperative advertising is not treated as a reduction of transaction price but marketing expense and expensed when it is distinct and can be estimated. 2.4.8. Goodwill Goodwill represents the difference between the fair value of the net assets acquired and the transaction price of the acquisition. Goodwill arising on the acquisition of associates and joint ventures is included in the carrying amount of the associates and joint ventures. Subsequently goodwill is measured at its initial amount less accumulated impairment losses. On the acquisition date, to the extent possible, goodwill is allocated to each cash-generating unit likely to benefit from the business combination. 2.4.9. Intangible assets, other than goodwill Content assets include royalty advances to artists, songwriters and co-publishers as well as recorded music and music publishing catalogues, artists\u2019 contracts and rights. Music catalogues, trade names, subscribers\u2019 bases and market shares generated internally are not recognized as intangible assets. Intangible assets separately acquired are recorded at cost, and intangible assets acquired in a business combination are recorded at their fair value at the acquisition date. Amortisation is charged to profit or loss on a straight-line basis over the estimated useful life. UMG believes that straight-line depreciation most accurately reflects the expected pattern of consumption of the future economic benefits embodied in these intangible assets. Management needs to estimate the (remaining) useful lives of such intangible assets. Useful lives are determined based on the expected pattern of the future earnings and the period of the contractual arrangements. Useful life is reviewed at the end of each reporting period. Music catalogues and publishing rights The majority of the music catalogues are amortised over 20 years on a straight-line basis. Some significant catalogues can be amortized over longer period of time. Advances to artists and repertoire owners Royalty advances to artists, songwriters, and co-publishers are capitalized as an asset when their current popularity and past performances provide a reasonable basis to conclude that the probable future recoupment of such royalty advances against earnings otherwise payable to them is reasonably assured. Royalty advances are recognized as an expense as subsequent royalties are earned by the artist, songwriter or co-publisher. Any portion of capitalized royalty advances not deemed to be recoverable against future royalties is expensed during the period in which the loss becomes evident. These expenses are recorded in cost of revenues. Other intangible assets Other intangibles mainly includes software for internal use. Direct internal and external costs incurred for the development of software for internal use, are capitalized during the development stage if the resulting product or process is technically and commercially feasible, cost can be reliably measured, UMG has sufficient resources and the intention to complete its development. Research costs are expensed when incurred. Costs of significant upgrades and enhancements resulting in additional functionality are also capitalized. The software for internal use is generally amortized over 3 years and included within amortisation expense 2.4.11. Leases The main lease contracts for UMG correspond to real estate leases for which UMG is the lessee. Real estate leases for which UMG is the lessee are recorded at the commencement date and result in the recognition of a lease liability equal to the present value of future lease payments against a right-of-use asset relating to leases. Right-of-use assets Right-of-use assets are initially measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognized, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. The recognized right-of-use assets are depreciated on a straight-line basis over the shorter of its estimated useful life and the lease term. Right-of-use assets are subject to impairment. Lease liabilities UMG recognizes lease liabilities initially measured at the present value of future lease payments over the lease term. The lease payments include in-substance fixed payments (less any lease incentives), variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include payments of penalties for terminating a lease, if UMG has the option to terminate and it is reasonably certain that this option will be exercised. In calculating the present value of lease payments, UMG uses the incremental borrowing rate at the lease commencement date if the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. The carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the in-substance fixed lease payments. Short-term leases and leases of low-value assets UMG applies the short-term lease recognition exemption to the real-estate leases with a lease term of 12 months or less from the commencement date and do not contain a purchase option. It also applies the lease of low-value assets recognition exemption to leases of office chattels and other equipment that are considered of low value. Lease payments on short-term leases and leases of low-value assets are recognized as expense on a straight-line basis over the lease term. Estimates in accounting for leases UMG determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised. When determining the lease term, UMG considers all relevant facts and
circumstances that create an economic incentive to exercise an extension option, or not to exercise a termination option.
These circumstances include UMG\u2019s real estate planning.
In estimating the lessee\u2019s incremental borrowing rate, UMG takes into account the residual lease term and its duration to
reflect the interest rate of a loan with a similar payment profile to the lease payments .
2.4.19. Provisions Provisions are recognized when, at the end of the reporting period, UMG has a legal obligation (statutory, regulatory or contractual) or a constructive obligation, as a result of past events, and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and the obligation can be reliably estimated. Where the effect of the time value of money is material, provisions are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money. If the amount of the obligation cannot be reliably estimated, no provision is recorded and a disclosure is made in the Notes to the Consolidated Financial Statements. Significant judgment is required in determining the amount and probability of resources outflow and discount rates used to calculate the present value of this outflow. Provisions for royalty audit claims Up to the completion of the royalty claim audit, the timing and the amount of the potential pay-outs is uncertain. UMG makes its best possible estimate of the outcome using any available data, including history of claims with rights owners. When the estimate is performed for large homogeneous claims and contract terms, the statistical valuation method is used. Litigation provisions In the ordinary course of business, UMG may be involved in a number of legal and arbitration proceedings and administrative actions. The costs which may result from these proceedings are accrued at the reporting date if UMG has a present obligation toward a third party resulting from a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and the amount of that liability can be quantified or estimated within a reasonable range. The amount of provision recorded is based on a case-by-case assessment of the risk level, and events arising during the course of legal proceedings may require a reassessment of this risk at any time. 2.4.20. Employee benefit plans Defined contribution plans Contributions to defined contribution and multi-employer plans are expensed during the year when related services are provided. Defined benefit plans Defined benefit plans may be funded by investments in various instruments such as insurance contracts or equity and debt investment securities, excluding shares in any UMG entity or debt instruments. Pension expenses and defined benefit obligations are calculated by independent actuaries using the projected unit credit method. This method is based on annually updated assumptions, which include the probability of employees remaining with UMG until retirement, expected changes in future compensation and an appropriate discount rate for each country in which UMG maintains a pension plan. The discount rate is determined for each country by reference to yields on notes issued by investment grade companies having a credit rating of AA and maturities identical to that of the valued plans, generally based on relevant rate indices. The expected return on plan assets is estimated by using the selected discount rate to value the obligations of the previous year. The calculation is performed separately for each plan. A provision is recorded in the Statement of Financial Position equal to the difference between the actuarial value of the related benefits (actuarial liability) and the fair value of any associated plan assets, and this includes past service costs and actuarial gains and losses. The cost of defined benefit plans consists of three components recognized as follows: \u2022 the service cost is included in selling, general and administrative expenses. It comprises current service cost, past service cost resulting from a plan amendment or a curtailment, immediately recognized in profit and loss, and gains and losses on settlement; \u2022 the financial component, recorded in other financial expenses and income, consists of the unwinding of the interest component of the discount, less the expected return on plan assets determined using the discount rate retained for the valuation of the benefit obligation; and \u2022 the remeasurements of the net defined benefit liability (asset), recognized in items of other comprehensive income not reclassified as profit and loss, mainly consist of actuarial gains and losses, i.e., changes in the present value of the defined benefit obligation and plan assets resulting from changes in actuarial assumptions and experience adjustments (representing the differences between the expected effect of some actuarial assumptions applied to previous valuations and the effective impact). Where the value of plan assets exceeds benefit obligations, a financial asset is recognized up to the present value of future refunds and the expected reduction in future contributions. Some other post-employment benefits, such as life insurance and medical coverage (mainly in the United States) are subject to provisions which are assessed through an actuarial calculation comparable to the method used for pension provisions. 2.4.21. Income taxes Differences existing at closing between the tax base value of assets and liabilities and their carrying value in the Consolidated Statement of Financial Position give rise to temporary differences. Pursuant to the liability method, these temporary differences result in the accounting of: \u2022 deferred tax assets, when the tax base value is greater than the carrying value (expected future tax saving); and \u2022 deferred tax liabilities, when the tax base value is lower than the carrying value (expected future tax expense). Deferred tax assets and liabilities are measured at the expected tax rates for the year during which the asset will be realized or the liability settled, based on tax rates (and tax regulations) enacted or substantially enacted by the closing date. They are reviewed at the end of each year, in line with any changes in applicable tax rates. Deferred tax assets are recognized for all deductible temporary differences, tax loss carry-forwards and unused tax credits, insofar as it is probable that a taxable profit will be available, or when a current tax liability exists to make use of those deductible temporary differences, tax loss carry-forwards and unused tax credits, except where the deferred tax asset associated with the deductible temporary difference is generated by initial recognition of an asset or liability in a transaction which is not a business combination, and that, at the transaction date, does not impact net profit, nor tax income or loss. For deductible temporary differences resulting from investments in subsidiaries, joint ventures and other associated entities, deferred tax assets are recorded to the extent that it is probable that the temporary difference will reverse in the foreseeable future and that a taxable profit will be available against which the temporary difference can be utilized. The carrying value of deferred tax assets is reviewed at each closing date, and revalued or reduced to the extent that it is more or less probable that a taxable profit will be available to allow the deferred tax asset to be utilized. When assessing the probability of a taxable profit being available, account is taken, primarily, of prior years\u2019 results, forecasted future results, non-recurring items unlikely to occur in the future and the tax strategy. As such, the assessment of UMG's ability to utilize tax losses carried forward is to a large extent judgement-based. If the future taxable results of UMG proved to differ significantly from those expected, UMG would be required to increase or decrease the carrying value of deferred tax assets with a potentially material impact on UMG's Statement of Financial Position and Statement of Profit or Loss. Deferred tax liabilities are recognized for all taxable temporary differences, except where the deferred tax liability results from goodwill or initial recognition of an asset or liability in a transaction which is not a business combination, and that, at the transaction date, does not impact net profit, tax income or loss. For taxable temporary differences resulting from investments in subsidiaries, joint ventures and other associated entities, deferred tax liabilities are recorded except to the extent that both of the following conditions are satisfied: the parent, investor or venturer is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not be reversed in the foreseeable future. Current tax and deferred tax shall be charged or credited directly to equity, and not profit if the tax relates to items that are credited or charged directly to equity. Current tax liabilities not expected to be paid within the next 12 months are recorded as long term current tax liability. 2.4.22. Share-based payments Equity-settled share-based compensation expense is recognized as a personnel cost over the vesting period of the award at the fair value of the equity instruments granted at the grant date with a corresponding increase in equity. In cases when grant date occurs after the employees to whom the equity instruments were granted have begun rendering services (for example, if a grant of equity instruments is subject to shareholder approval), UMG estimates the grant date fair value of the equity instruments by estimating the fair value of the equity instruments at the end of the reporting period, for the purposes of recognising the services received during the period between service commencement date and
grant date. Once the date of grant has been established, UMG revises the earlier estimate so that the amounts recognised
for services received in respect of the grant are ultimately based on the grant date fair value of the equity instruments.
Fair value of the shares granted is fixed at the grant date and is equal to the share price at the grant date with a
deduction for the aggregate discounted value of the dividends that will not be received over the vesting period, unless
the conditions of the plan prescribe compensation for the vesting period dividends, and after taking into account the
discount for non-transferability during the retention period.
The cumulative expense recognized for equity-settled transactions at each reporting date reflects the extent to which
the vesting period has expired and UMG\u2019s best estimate of the number of equity instruments that will ultimately
vest. The expense or credit in the Statement of Profit or Loss for a period represents the movement in cumulative
expense recognized as at the beginning and end of that period. Service and non-market performance conditions are
not considered when determining the grant date fair value of awards, but the likelihood of the conditions being met
is assessed as part of UMG\u2019s best estimate of the number of equity instruments that will ultimately vest. Market
performance conditions are reflected within the grant date fair value.
",
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},
"fact-399": {
"value": "2.3. Financial statement presentation changes and prior years restatements During 2022 UMG made prior year restatements and updated, compared to the 2021 Consolidated financial statements, the presentation of the Consolidated Statement of Profit or Loss, the Consolidated Statement of Cash Flows and the Consolidated Statement of Changes in Equity for and as at December 31, 2021 to further improve transparency and readability of these statements in line with market practice. Updates in the Consolidated Statement of Profit or Loss relate to a restatement of amortisation expense from selling, general and administrative expenses into its own line item and the reclassification of Income and losses from equity affiliates from within Operating profit to be reported outside of Operating profit to reflect that they do not constitute operating activities of UMG. Details on the impact on 2021 comparatives for the year ended December 31, 2021 is presented in the table below. December 31, 2021 Before Changes Presentation Changes After Changes Revenues 8,504 - 8,504 Cost of revenues (4,608) - (4,608) Selling, general and administrative expenses (2,502) 175 (2,327) Amortisation and impairment losses on intangible assets - (175) (175) Income/(loss) from equity affiliates 5 (5) - Operating profit 1,399 (5) 1,394 Financial income 143 - 143 Financial expenses (377) - (377) (234) - (234) Income/(loss) from equity affiliates - 5 5 Profit before income taxes 1,165 - 1,165 Income taxes (277) - (277) Net profit 888 - 888 Of which: Net profit attributable to equity holders of the parent 886 - 886 Net profit attributable to non-controlling interests 2 - 2 The Consolidated Statement of Cash Flows includes the same reclassification of income and losses from equity affiliates from Operating profit and adjustments as well as a retrospective adjustment to the comparative period in relation to the cash flows resulting from bank overdrafts which are repayable on demand. In prior years, cash flows related to bank overdrafts repayable on demand were reported together with borrowings movements as cash flows from financing activities. Bank overdrafts are now presented in cash and cash equivalents at the beginning and end of the period. Repayments of the principal and interest of lease liabilities were previously reporting together under repayment of lease liabilities. These cash flows are now presented separately as part of cash flows from financing activities. December 31, 2021 Before Changes Restatement After Changes Operating activities Operating profit 1,399 (5) 1,394 Adjustments 275 5 280 Royalty advances payments, net of recoupments (364) - (364) Gross cash provided by/(used for) operating activities before income tax paid 1,310 - 1,310 Other changes in net working capital 85 - 85 Net cash provided by/(used for) operating activities before income tax paid 1,395 - 1,395 Income tax paid (255) - (255) Net cash provided by/(used for) operating activities 1,140 - 1,140 Net cash provided by/(used for) investing activities (391) - (391) Financing activities Transactions with shareowners (787) - (787) Proceeds from borrowings 3,185 (9) 3,176 Repayments of borrowings (3,624) - (3,624) Interest, net (17) - (17) Other cash items related to financing activities (8) - (8) Transactions on borrowings and other financial liabilities (464) (9) (473) Repayment of lease liabilities (86) 16 (70) Payment of interest of lease liabilities - (16) (16) Net cash provided by/(used for) financing activities (1,337) (9) (1,346) Net change in cash and cash equivalents (588) (9) (597) Foreign currency translation adjustments 32 - 32 Change in cash and cash equivalents (556) (9) (565) Cash and cash equivalents At beginning of the period 1,141 (4) 1,137 At end of the period 585 (13) 572 Updates to the Consolidated Statement of Changes in Equity relate to moving the presentation to a columnar format to improve the readability of the statement. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfOtherAccountingPoliciesRelevantToUnderstandingOfFinancialStatements",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-345": {
"value": "2.3. Financial statement presentation changes and prior years restatements During 2022 UMG made prior year restatements and updated, compared to the 2021 Consolidated financial statements, the presentation of the Consolidated Statement of Profit or Loss, the Consolidated Statement of Cash Flows and the Consolidated Statement of Changes in Equity for and as at December 31, 2021 to further improve transparency and readability of these statements in line with market practice. Updates in the Consolidated Statement of Profit or Loss relate to a restatement of amortisation expense from selling, general and administrative expenses into its own line item and the reclassification of Income and losses from equity affiliates from within Operating profit to be reported outside of Operating profit to reflect that they do not constitute operating activities of UMG. Details on the impact on 2021 comparatives for the year ended December 31, 2021 is presented in the table below. December 31, 2021 Before Changes Presentation Changes After Changes Revenues 8,504 - 8,504 Cost of revenues (4,608) - (4,608) Selling, general and administrative expenses (2,502) 175 (2,327) Amortisation and impairment losses on intangible assets - (175) (175) Income/(loss) from equity affiliates 5 (5) - Operating profit 1,399 (5) 1,394 Financial income 143 - 143 Financial expenses (377) - (377) (234) - (234) Income/(loss) from equity affiliates - 5 5 Profit before income taxes 1,165 - 1,165 Income taxes (277) - (277) Net profit 888 - 888 Of which: Net profit attributable to equity holders of the parent 886 - 886 Net profit attributable to non-controlling interests 2 - 2 The Consolidated Statement of Cash Flows includes the same reclassification of income and losses from equity affiliates from Operating profit and adjustments as well as a retrospective adjustment to the comparative period in relation to the cash flows resulting from bank overdrafts which are repayable on demand. In prior years, cash flows related to bank overdrafts repayable on demand were reported together with borrowings movements as cash flows from financing activities. Bank overdrafts are now presented in cash and cash equivalents at the beginning and end of the period. Repayments of the principal and interest of lease liabilities were previously reporting together under repayment of lease liabilities. These cash flows are now presented separately as part of cash flows from financing activities. December 31, 2021 Before Changes Restatement After Changes Operating activities Operating profit 1,399 (5) 1,394 Adjustments 275 5 280 Royalty advances payments, net of recoupments (364) - (364) Gross cash provided by/(used for) operating activities before income tax paid 1,310 - 1,310 Other changes in net working capital 85 - 85 Net cash provided by/(used for) operating activities before income tax paid 1,395 - 1,395 Income tax paid (255) - (255) Net cash provided by/(used for) operating activities 1,140 - 1,140 Net cash provided by/(used for) investing activities (391) - (391) Financing activities Transactions with shareowners (787) - (787) Proceeds from borrowings 3,185 (9) 3,176 Repayments of borrowings (3,624) - (3,624) Interest, net (17) - (17) Other cash items related to financing activities (8) - (8) Transactions on borrowings and other financial liabilities (464) (9) (473) Repayment of lease liabilities (86) 16 (70) Payment of interest of lease liabilities - (16) (16) Net cash provided by/(used for) financing activities (1,337) (9) (1,346) Net change in cash and cash equivalents (588) (9) (597) Foreign currency translation adjustments 32 - 32 Change in cash and cash equivalents (556) (9) (565) Cash and cash equivalents At beginning of the period 1,141 (4) 1,137 At end of the period 585 (13) 572 Updates to the Consolidated Statement of Changes in Equity relate to moving the presentation to a columnar format to improve the readability of the statement. ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfReclassificationsOrChangesInPresentationExplanatory",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-346": {
"value": "2.4.1. Foreign currency Foreign currency transactions Foreign currency transactions are initially recorded in the functional currency of the entity at the exchange rate prevailing at the date of the transaction. At the closing date, foreign currency monetary assets and liabilities are translated into the entity's functional currency at the exchange rate prevailing on that date with foreign currency differences recorded to profit and loss. Financial statements denominated in a foreign currency Except in cases of significant exchange rate fluctuation, financial statements of subsidiaries, joint ventures or other associated entities for which the functional currency is not the euro are translated into euros as follows: the Consolidated Statement of Financial Position is translated at the exchange rate at the end of the period, and the Consolidated Statement of Profit or Loss and the Consolidated Statement of Cash Flows are translated using average monthly exchange rates for the period. The resulting translation gains and losses are recorded as foreign currency translation differences in expenses and income directly recognized in equity. In 2022, UMG did not have any significant foreign operations in hyper-inflationary economies. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForForeignCurrencyTranslationExplanatory",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-401": {
"value": "Foreign currency transactions Foreign currency transactions are initially recorded in the functional currency of the entity at the exchange rate prevailing at the date of the transaction. At the closing date, foreign currency monetary assets and liabilities are translated into the entity's functional currency at the exchange rate prevailing on that date with foreign currency differences recorded to profit and loss. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForFunctionalCurrencyExplanatory",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-347": {
"value": "2.4.2. Earnings per share UMG presents basic and diluted earnings per share (EPS) data for its shares. Basic EPS is calculated by dividing the net profit or loss attributable to shareholders of UMG by the weighted average number of shares outstanding during the year, adjusted for the weighted average number of own shares held in the year. Diluted EPS is determined by dividing the profit or loss attributable to shareholders by the weighted average number of shares outstanding, adjusted for the weighted average number of own shares held in the year and for the effects of all dilutive potential shares which comprise share rights granted to employees. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForEarningsPerShareExplanatory",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-348": {
"value": "2.4.3. Consolidated Statement of Cash Flows The Consolidated Statement of Cash Flows is prepared using the indirect method starting from Operating profit. Dividends received from equity affiliates and investments are included in the investing cash flow. It also includes any cash flows arising from the gain or loss of control of subsidiaries. Interest paid, including interest paid on lease liability, is included in the financing activities. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForCashFlowsExplanatory",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-433": {
"value": "2.4.4. Accounting for associates and joint ventures Associates are entities in which UMG has significant influence, but not control or joint control. Significant influence is generally obtained by ownership of more than 20% but less than 50% of the voting rights. Joint ventures are the arrangements in which UMG has joint control. UMG\u2019s investments in associates and joint ventures are accounted for using the equity method of accounting, meaning they are initially recognised at cost. The Consolidated financial statements include UMG\u2019s share of the net profit or loss of the associates and joint ventures whereby the result is determined using the accounting policies of UMG. When UMG\u2019s share of losses exceeds the carrying amount of the associate or joint venture, the carrying amount is reduced to nil and recognition of further losses is discontinued except to the extent that UMG has an obligation or has made a payment on behalf of the associate or joint venture. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentsInJointVentures",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-400": {
"value": "2.4.4. Accounting for associates and joint ventures Associates are entities in which UMG has significant influence, but not control or joint control. Significant influence is generally obtained by ownership of more than 20% but less than 50% of the voting rights. Joint ventures are the arrangements in which UMG has joint control. UMG\u2019s investments in associates and joint ventures are accounted for using the equity method of accounting, meaning they are initially recognised at cost. The Consolidated financial statements include UMG\u2019s share of the net profit or loss of the associates and joint ventures whereby the result is determined using the accounting policies of UMG. When UMG\u2019s share of losses exceeds the carrying amount of the associate or joint venture, the carrying amount is reduced to nil and recognition of further losses is discontinued except to the extent that UMG has an obligation or has made a payment on behalf of the associate or joint venture. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentInAssociates",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-349": {
"value": "2.4.4. Accounting for associates and joint ventures Associates are entities in which UMG has significant influence, but not control or joint control. Significant influence is generally obtained by ownership of more than 20% but less than 50% of the voting rights. Joint ventures are the arrangements in which UMG has joint control. UMG\u2019s investments in associates and joint ventures are accounted for using the equity method of accounting, meaning they are initially recognised at cost. The Consolidated financial statements include UMG\u2019s share of the net profit or loss of the associates and joint ventures whereby the result is determined using the accounting policies of UMG. When UMG\u2019s share of losses exceeds the carrying amount of the associate or joint venture, the carrying amount is reduced to nil and recognition of further losses is discontinued except to the extent that UMG has an obligation or has made a payment on behalf of the associate or joint venture. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentInAssociatesAndJointVenturesExplanatory",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-350": {
"value": "2.4.5. Revenues and associated costs Revenues from contracts with customers are recorded when performance obligations promised in the contract are satisfied, and for an amount for which it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur. Revenues are reported net of discounts. Intellectual property licensing (musical works) These licenses transfer to a customer either a right to use an entity's intellectual property as it exists at the point in time at which the license is granted (static license), or a right to access an entity's intellectual property as it exists throughout the license period (dynamic license). Revenues are accounted for when the performance obligation promised in the contract is satisfied (static license) or over time upon satisfaction (dynamic license), i.e., when the seller transfers the control over the right to use/access the intellectual property and the customer obtains control of the use/access of that license. Consequently, revenues from static licenses are recognized at the point in time when the license is transferred and the customer is able to use and benefit from the license. Revenues from dynamic licenses are accounted for over time, over the license period from the date the customer is able to use and benefit from the license and in line with the sale or usage. Consideration received in the current year, which represents income from ordinary activities related to the prior years, is recorded within revenue, unless it was accrued before. Court settlements in relation to the unauthorized usage of UMG's intellectual property in previous years are recorded in revenue as they relate to activities carried out within the ordinary course of business. Analysis of the Agent/Principal relationship in sales transactions involving a third party If the nature of the entity's undertaking is a performance obligation to provide the specified goods or services itself, then the entity acts on its own behalf and it is \u201cprincipal\u201d in the sale transaction: it accounts for revenue the gross amount of consideration to which it expects to be entitled in exchange for the goods or services provided, and the commission due to the third-party as cost of revenues. If the entity arranges for a third-party to provide the goods or services specified in the contract, then it recognizes as revenues the net amount of consideration to which it expects to be entitled in exchange for the goods or services provided. Financing Component UMG does not adjust the transaction price for the effects of significant financing component if, at contract inception, it is expected that the period between customer payment and the transfer of goods or services is one year or less. This applies to the majority of sales transactions. The transaction price may be variable due to discounts, rebates, or similar arrangements. In determining the transaction price UMG considers the fair value of any non-cash consideration. Revenue is only recognized for the part of the consideration for which it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur. Judgement is required in determining the probability and level of discounts and rebates that will be granted. The estimate is updated throughout the term of the contract. Revenue recognition by business segment Recorded Music The sales of recorded music (physical, digital downloading or streaming) are intellectual property licenses granted by UMG to distributors or digital platforms and which give them certain rights over UMG's musical works. Physical sales of recorded music (CDs, DVDs and Vinyls) These intellectual property licenses are static licenses transferring to the customer a right to use UMG\u2018s recordings as they exist at the point in time at which the license is granted, i.e., on the physical device sold. Revenues from the physical sales of recorded music, net of a provision for estimated returns and rebates, if any, are accounted for, either: (i) upon the sale to the distributor, at the shipping point for products sold free on board (FOB) or on delivery for products sold free on destination; or (ii) upon the sale to the final customer for consignment sales. Digital sales of recorded music, via downloading or streaming by subscription or free of charge These intellectual property licenses are generally dynamic licenses providing a right to access the entire catalogue of recorded music as it exists throughout the license period considering potential add-ons to, or withdrawals from, the catalogue during that period. The consideration paid by the digital platform is variable in the form of a sales-based or a usage-based royalty. Revenues are then accounted for when these subsequent sales or usages occur. Revenues from digital sales of recorded music, for which UMG has sufficient, accurate, and reliable data from digital platforms, are recognized at the end of the month in
which the sale or usage is made by the end customer.
For digital sales of recorded music streaming by subscription or free of charge, certain contracts may include a non-
refundable minimum guarantee which is generally recoupable and is in substance an advance payment. In the case
of a dynamic license, the minimum guarantee is spread over the period to which it relates and takes into account
the amount of royalties that are actually recoupable. The minimum guarantee are apportioned in accordance with the
accounting for these royalties.
Music Publishing
Music Publishing relates to the use by a third party of the copyrights on musical works owned or administered by
UMG, which are intellectual property licenses that UMG grants to the third party and which provides a right to access a
catalogue of recorded music, as these intellectual property licenses are dynamic licenses. For these contracts, revenues
are recognised on the basis of sales and usage royalties, using the best available estimate on the timing of the
consequent usage and the amounts that are probable to be collected.
Merchandising
Revenues from merchandising are recognized when control has been passed either upon sale to the end customer, from
direct sales during touring, concessions and over the internet; on delivery for sales by a third-party distributor; or for
sales of rights attached to merchandising products when a contract is signed and collectability is probable and on a
sales and usage basis.
Provisions for estimated returns and price guarantees are deducted from sales of products to customers through
distributors. The provisions are estimated based on past sales statistics and take into account the economic
environment and product sales forecast to final customers.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForRecognitionOfRevenue",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-351": {
"value": "Associated costs of revenues
Cost of revenues primarily includes product costs and artists costs.
Selling, general and administrative expenses primarily include salaries and employee benefits, consulting and service
fees, insurance costs, travel and entertainment expenses, depreciation of capital expenditure and right of use assets,
administrative department costs, value allowances for receivables, restructuring expenses and other operating expenses
and are expensed when incurred.
Advertising costs are expensed when incurred.
Slotting fees and cooperative advertising expenses are recorded as a reduction in revenues. However, cooperative
advertising is not treated as a reduction of transaction price but marketing expense and expensed when it is distinct
and can be estimated.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForExpensesExplanatory",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-352": {
"value": "2.4.6.
Operating segments
The operating segments are Recorded Music, Music Publishing and Merchandising. The segments are organized based on
the nature of the business. \u2018Corporate Centre\u2019 represents amounts not allocated to the operating segments and includes
certain costs related to central activities as well as group enabling functions.
The operating segment reporting follows the internal reporting used by Management of UMG, to manage the business,
assess the performance based on the available financial information and to allocate the resources. The most important
performance measure are EBITDA and Adjusted EBITDA (see definitions in the Appendix to the Annual Report) as
management believes this is key in evaluating the results of the segments relative to other companies that operate
within the same industry. However, Management also receives information about the segment's revenue and assets.
Inter-segment pricing is determined on an arm's length basis. Segment results, assets and liabilities include items
directly attributable to a segment as well as those that can be allocated on a reasonable basis.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForSegmentReportingExplanatory",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-353": {
"value": "2.4.7. Business combinations
UMG accounts for business combinations using the acquisition method when the acquired set of activities and assets
meets the definition of a business and control is transferred to the Group. In determining whether a particular set
of activities and assets is a business, UMG assesses whether the set of assets and activities acquired includes, at a
minimum, an input and substantive process and whether the acquired set has the ability to produce outputs.
Business combinations are recorded using the acquisition method. Under this method, upon the initial consolidation of
an entity over which UMG has acquired exclusive control:
\u2022 the identifiable assets acquired, and the liabilities assumed are recognized at their fair value on the acquisition
date; and
\u2022 non-controlling interests are measured either at fair value or at the non-controlling interest's proportionate share of
the acquiree\u2019s net identifiable assets. This option is available on a transaction-by-transaction basis.
Contingent consideration in a business combination is recorded at fair value on the acquisition date, and any
subsequent adjustment occurring after the purchase price allocation period is recognized in the Statement of Profit
or Loss. Acquisition-related costs are recognized as expenses when incurred.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsExplanatory",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-434": {
"value": "2.4.7. Business combinations UMG accounts for business combinations using the acquisition method when the acquired set of activities and assets meets the definition of a business and control is transferred to the Group. In determining whether a particular set of activities and assets is a business, UMG assesses whether the set of assets and activities acquired includes, at a minimum, an input and substantive process and whether the acquired set has the ability to produce outputs. Business combinations are recorded using the acquisition method. Under this method, upon the initial consolidation of an entity over which UMG has acquired exclusive control: \u2022 the identifiable assets acquired, and the liabilities assumed are recognized at their fair value on the acquisition date; and \u2022 non-controlling interests are measured either at fair value or at the non-controlling interest's proportionate share of the acquiree\u2019s net identifiable assets. This option is available on a transaction-by-transaction basis. Contingent consideration in a business combination is recorded at fair value on the acquisition date, and any subsequent adjustment occurring after the purchase price allocation period is recognized in the Statement of Profit or Loss. Acquisition-related costs are recognized as expenses when incurred. 2.4.8. Goodwill Goodwill represents the difference between the fair value of the net assets acquired and the transaction price of the acquisition. Goodwill arising on the acquisition of associates and joint ventures is included in the carrying amount of the associates and joint ventures. Subsequently goodwill is measured at its initial amount less accumulated impairment losses. On the acquisition date, to the extent possible, goodwill is allocated to each cash-generating unit likely to benefit from the business combination. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsAndGoodwillExplanatory",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-402": {
"value": "2.4.8. Goodwill
Goodwill represents the difference between the fair value of the net assets acquired and the transaction price of the
acquisition. Goodwill arising on the acquisition of associates and joint ventures is included in the carrying amount of the
associates and joint ventures.
Subsequently goodwill is measured at its initial amount less accumulated impairment losses. On the acquisition date, to
the extent possible, goodwill is allocated to each cash-generating unit likely to benefit from the business combination.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForGoodwillExplanatory",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-354": {
"value": "2.4.8. Goodwill Goodwill represents the difference between the fair value of the net assets acquired and the transaction price of the acquisition. Goodwill arising on the acquisition of associates and joint ventures is included in the carrying amount of the associates and joint ventures. Subsequently goodwill is measured at its initial amount less accumulated impairment losses. On the acquisition date, to the extent possible, goodwill is allocated to each cash-generating unit likely to benefit from the business combination. 2.4.9. Intangible assets, other than goodwill Content assets include royalty advances to artists, songwriters and co-publishers as well as recorded music and music publishing catalogues, artists\u2019 contracts and rights. Music catalogues, trade names, subscribers\u2019 bases and market shares generated internally are not recognized as intangible assets. Intangible assets separately acquired are recorded at cost, and intangible assets acquired in a business combination are recorded at their fair value at the acquisition date. Amortisation is charged to profit or loss on a straight-line basis over the estimated useful life. UMG believes that straight-line depreciation most accurately reflects the expected pattern of consumption of the future economic benefits embodied in these intangible assets. Management needs to estimate the (remaining) useful lives of such intangible assets. Useful lives are determined based on the expected pattern of the future earnings and the period of the contractual arrangements. Useful life is reviewed at the end of each reporting period. Music catalogues and publishing rights The majority of the music catalogues are amortised over 20 years on a straight-line basis. Some significant catalogues can be amortized over longer period of time. Advances to artists and repertoire owners Royalty advances to artists, songwriters, and co-publishers are capitalized as an asset when their current popularity and past performances provide a reasonable basis to conclude that the probable future recoupment of such royalty advances against earnings otherwise payable to them is reasonably assured. Royalty advances are recognized as an expense as subsequent royalties are earned by the artist, songwriter or co-publisher. Any portion of capitalized royalty advances not deemed to be recoverable against future royalties is expensed during the period in which the loss becomes evident. These expenses are recorded in cost of revenues. Other intangible assets
Other intangibles mainly includes software for internal use. Direct internal and external costs incurred for the
development of software for internal use, are capitalized during the development stage if the resulting product or
process is technically and commercially feasible, cost can be reliably measured, UMG has sufficient resources and the
intention to complete its development. Research costs are expensed when incurred. Costs of significant upgrades and
enhancements resulting in additional functionality are also capitalized.
The software for internal use is generally amortized over 3 years and included within amortisation expense .
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsAndGoodwillExplanatory",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-403": {
"value": "2.4.9.
Intangible assets, other than goodwill
Content assets include royalty advances to artists, songwriters and co-publishers as well as recorded music and music
publishing catalogues, artists\u2019 contracts and rights. Music catalogues, trade names, subscribers\u2019 bases and market
shares generated internally are not recognized as intangible assets.
Intangible assets separately acquired are recorded at cost, and intangible assets acquired in a business combination are
recorded at their fair value at the acquisition date. Amortisation is charged to profit or loss on a straight-line basis over
the estimated useful life. UMG believes that straight-line depreciation most accurately reflects the expected pattern of
consumption of the future economic benefits embodied in these intangible assets.
Management needs to estimate the (remaining) useful lives of such intangible assets. Useful lives are determined based
on the expected pattern of the future earnings and the period of the contractual arrangements. Useful life is reviewed at
the end of each reporting period.
Music catalogues and publishing rights
The majority of the music catalogues are amortised over 20 years on a straight-line basis. Some significant catalogues
can be amortized over longer period of time.
Advances to artists and repertoire owners
Royalty advances to artists, songwriters, and co-publishers are capitalized as an asset when their current popularity and
past performances provide a reasonable basis to conclude that the probable future recoupment of such royalty advances
against earnings otherwise payable to them is reasonably assured. Royalty advances are recognized as an expense as
subsequent royalties are earned by the artist, songwriter or co-publisher. Any portion of capitalized royalty advances
not deemed to be recoverable against future royalties is expensed during the period in which the loss becomes evident.
These expenses are recorded in cost of revenues.
Other intangible assets Other intangibles mainly includes software for internal use. Direct internal and external costs incurred for the development of software for internal use, are capitalized during the development stage if the resulting product or process is technically and commercially feasible, cost can be reliably measured, UMG has sufficient resources and the intention to complete its development. Research costs are expensed when incurred. Costs of significant upgrades and enhancements resulting in additional functionality are also capitalized. The software for internal use is generally amortized over 3 years and included within amortisation expense . ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsOtherThanGoodwillExplanatory",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-436": {
"value": "Other intangible assets Other intangibles mainly includes software for internal use. Direct internal and external costs incurred for the development of software for internal use, are capitalized during the development stage if the resulting product or process is technically and commercially feasible, cost can be reliably measured, UMG has sufficient resources and the intention to complete its development. Research costs are expensed when incurred. Costs of significant upgrades and enhancements resulting in additional functionality are also capitalized. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForResearchAndDevelopmentExpenseExplanatory",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-435": {
"value": "2.4.10. Property, plant and equipment
Property, plant and equipment are carried at historical cost less any accumulated depreciation and impairment losses.
Land and assets under construction are not depreciated. Depreciation is calculated using the straight-line method based
on the estimated useful life of the assets. Leasehold improvements are depreciated over a period not longer than the
lease term. Useful lives of the main components are reviewed at the end of each reporting period and are as follows:
\u2022 buildings: 5 to 40 years;
\u2022 equipment and machinery: 3 to 8 years; and
\u2022 other: 2 to 10 years.
Right-of-use assets
Right-of-use assets are initially measured at cost, less any accumulated depreciation and impairment losses, and
adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease
liabilities recognized, initial direct costs incurred, and lease payments made at or before the commencement date
less any lease incentives received. The recognized right-of-use assets are depreciated on a straight-line basis over the
shorter of its estimated useful life and the lease term. Right-of-use assets are subject to impairment.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForDepreciationExpenseExplanatory",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-355": {
"value": "2.4.10. Property, plant and equipment Property, plant and equipment are carried at historical cost less any accumulated depreciation and impairment losses. Land and assets under construction are not depreciated. Depreciation is calculated using the straight-line method based on the estimated useful life of the assets. Leasehold improvements are depreciated over a period not longer than the lease term. Useful lives of the main components are reviewed at the end of each reporting period and are as follows: \u2022 buildings: 5 to 40 years; \u2022 equipment and machinery: 3 to 8 years; and \u2022 other: 2 to 10 years. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForPropertyPlantAndEquipmentExplanatory",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-356": {
"value": "2.4.11. Leases The main lease contracts for UMG correspond to real estate leases for which UMG is the lessee. Real estate leases for which UMG is the lessee are recorded at the commencement date and result in the recognition of a lease liability equal to the present value of future lease payments against a right-of-use asset relating to leases. Right-of-use assets Right-of-use assets are initially measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognized, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. The recognized right-of-use assets are depreciated on a straight-line basis over the shorter of its estimated useful life and the lease term. Right-of-use assets are subject to impairment. Lease liabilities UMG recognizes lease liabilities initially measured at the present value of future lease payments over the lease term. The lease payments include in-substance fixed payments (less any lease incentives), variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include payments of penalties for terminating a lease, if UMG has the option to terminate and it is reasonably certain that this option will be exercised. In calculating the present value of lease payments, UMG uses the incremental borrowing rate at the lease commencement date if the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. The carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the in-substance fixed lease payments. Short-term leases and leases of low-value assets UMG applies the short-term lease recognition exemption to the real-estate leases with a lease term of 12 months or less from the commencement date and do not contain a purchase option. It also applies the lease of low-value assets recognition exemption to leases of office chattels and other equipment that are considered of low value. Lease payments on short-term leases and leases of low-value assets are recognized as expense on a straight-line basis over the lease term. Estimates in accounting for leases UMG determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised. When determining the lease term, UMG considers all relevant facts and circumstances that create an economic incentive to exercise an extension option, or not to exercise a termination option. These circumstances include UMG\u2019s real estate planning. In estimating the lessee\u2019s incremental borrowing rate, UMG takes into account the residual lease term and its duration to reflect the interest rate of a loan with a similar payment profile to the lease payments . ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForLeasesExplanatory",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-357": {
"value": "2.4.12. Impairment of non-financial assets
Each time events or changes in the economic environment indicate a risk of impairment of goodwill, content assets
and other intangible assets, property, plant and equipment, investments in associates and joint ventures, rights-of-use
assets, UMG re-examines the value of these assets. In addition, in accordance with applicable accounting standards,
goodwill and intangible assets in progress are all subject to an annual impairment test undertaken in the fourth quarter
of each fiscal year. This impairment test is performed to compare the recoverable amount of each Cash Generating Unit
(CGU) to the carrying value of the corresponding assets (including goodwill). A CGU is the smallest identifiable group
of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of
assets. UMG operates through different content businesses. Each business offers different products and services that are
marketed through various channels. CGUs for goodwill correspond to the UMG's operating segments.
The recoverable amount is determined for each individual asset as the higher of: (i) its value in use; and (ii) its fair value
(less costs to sell) as described hereafter. If the asset does not generate cash inflows that are largely independent of other
assets or groups of assets, the recoverable amount is determined for the group of assets. In particular, in the case of
goodwill, an impairment test is performed by UMG for each CGU.
The value in use of each asset or group of assets is determined, subject to exceptions, as the discounted value of future
cash flows Discounted Cash Flow method (DCF) by using cash flow projections consistent with the budget of the following
year and the most recent forecasts prepared by the operating segments.
Applied discount rates are determined by reference to available external sources of information, usually based on
financial institutions\u2019 benchmarks, and reflect the current assessment by UMG of the time value of money and risks
specific to each asset or group of assets.
Perpetual growth rates used for the evaluation are those used to prepare budgets for each CGU, and beyond the period
covered, are consistent with growth rates estimated by the business by extrapolating growth rates used in the budgets,
without exceeding the long-term average growth rate for the markets in which UMG operates.
The fair value (less costs to sell) is the price that would be received from the sale of an asset or group of assets in an
orderly transaction between market participants at the measurement date, less costs to sell. These values are generally
determined based on market data (stock market prices or comparison with similar listed companies, with the value
attributed to similar assets or companies in recent transactions) or, in the absence of such data, based on discontinued
cash flows.
If the recoverable amount is lower than the carrying value of an asset or group of assets, an impairment loss equal to
the difference is recognized in Operating profit. In the case of operating segments, this impairment loss is first recorded
against goodwill.
The impairment losses recognized in respect of property, plant and equipment, and intangible assets (other than
goodwill) may be reversed in a later period if the recoverable amount becomes greater than the carrying value, within
the limit of impairment losses previously recognized. Impairment losses recognized in respect of goodwill cannot be
reversed at a later date.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfNonfinancialAssetsExplanatory",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-437": {
"value": "2.4.12. Impairment of non-financial assets Each time events or changes in the economic environment indicate a risk of impairment of goodwill, content assets and other intangible assets, property, plant and equipment, investments in associates and joint ventures, rights-of-use assets, UMG re-examines the value of these assets. In addition, in accordance with applicable accounting standards, goodwill and intangible assets in progress are all subject to an annual impairment test undertaken in the fourth quarter of each fiscal year. This impairment test is performed to compare the recoverable amount of each Cash Generating Unit (CGU) to the carrying value of the corresponding assets (including goodwill). A CGU is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. UMG operates through different content businesses. Each business offers different products and services that are marketed through various channels. CGUs for goodwill correspond to the UMG's operating segments. The recoverable amount is determined for each individual asset as the higher of: (i) its value in use; and (ii) its fair value (less costs to sell) as described hereafter. If the asset does not generate cash inflows that are largely independent of other assets or groups of assets, the recoverable amount is determined for the group of assets. In particular, in the case of goodwill, an impairment test is performed by UMG for each CGU. The value in use of each asset or group of assets is determined, subject to exceptions, as the discounted value of future cash flows Discounted Cash Flow method (DCF) by using cash flow projections consistent with the budget of the following year and the most recent forecasts prepared by the operating segments. Applied discount rates are determined by reference to available external sources of information, usually based on financial institutions\u2019 benchmarks, and reflect the current assessment by UMG of the time value of money and risks specific to each asset or group of assets. Perpetual growth rates used for the evaluation are those used to prepare budgets for each CGU, and beyond the period covered, are consistent with growth rates estimated by the business by extrapolating growth rates used in the budgets, without exceeding the long-term average growth rate for the markets in which UMG operates. The fair value (less costs to sell) is the price that would be received from the sale of an asset or group of assets in an orderly transaction between market participants at the measurement date, less costs to sell. These values are generally determined based on market data (stock market prices or comparison with similar listed companies, with the value attributed to similar assets or companies in recent transactions) or, in the absence of such data, based on discontinued cash flows. If the recoverable amount is lower than the carrying value of an asset or group of assets, an impairment loss equal to the difference is recognized in Operating profit. In the case of operating segments, this impairment loss is first recorded against goodwill. The impairment losses recognized in respect of property, plant and equipment, and intangible assets (other than goodwill) may be reversed in a later period if the recoverable amount becomes greater than the carrying value, within the limit of impairment losses previously recognized. Impairment losses recognized in respect of goodwill cannot be reversed at a later date. 2.4.14. Impairment of financial assets UMG assesses the expected credit loss associated with its financial assets recognized at amortized cost on a prospective basis. A loss allowance for expected credit loss based on probability of default is recognized at initial recognition. The loss allowance is updated for changes in these expected credit losses at each reporting date to reflect changes in credit risk since initial recognition. To assess whether there has been a significant increase in credit risk, UMG compares the credit risk at the reporting date with the credit risk at the date of initial recognition based on reasonable forward-looking information and events, including credit ratings if available, significant adverse economic changes (actual or expected), financial or business environment that are expected to result in a material change in the borrower's ability to meet its obligations. Trade accounts receivable are initially recognised at their transaction price. Expected loss rates on trade receivables and contract assets are calculated by the relevant operating entities over their lifetime from initial recognition and are based on historical data that also incorporates forward-looking information. In addition, account receivables from customers subject to insolvency proceedings or customers with whom UMG is involved in litigation or a dispute are generally impaired in full. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfAssetsExplanatory",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-476": {
"value": "2.4.13. Financial assets
Financial assets are initially recognized at fair value corresponding, in general, to the consideration paid, which is best
evidenced by the acquisition cost (including transaction costs, if any). Thereafter, financial assets are measured at fair
value or at amortized cost depending on which financial asset category they belong to.
Financial assets are classified into the accounting categories \u201cfinancial assets at amortized cost\u201d, \u201cfinancial assets at fair
value through other comprehensive income\u201d and \u201cfinancial assets at fair value through profit or loss\u201d.
This classification depends on UMG\u2018s business model for managing the financial assets and on contractual terms
enabling to determine whether the cash flows are solely payments of principal and interest (SPPI). The financial assets
that contain an embedded derivative are considered in full to determine whether their cash flows are SPPI.
Financial assets are derecognized when the rights to receive cash flows from the financial assets have expired or have
been transferred and UMG has transferred substantially all the risks and rewards of ownership.
Financial assets at amortized cost Financial assets at amortised cost include trade receivables, other receivables, loans issued and bank deposits which are not cash equivalents. Loans, receivables and deposits are recognized on the date they are originated. Financial assets at amortized cost consist of debt instruments as described above held within a business model whose objective is to hold financial assets to collect contractual cash flows that are solely payments of principal and interest on the principal amount outstanding. At the end of each period, these assets are measured at amortized cost using the effective interest method",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForTradeAndOtherReceivablesExplanatory",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-471": {
"value": "2.4.13. Financial assets Financial assets are initially recognized at fair value corresponding, in general, to the consideration paid, which is best evidenced by the acquisition cost (including transaction costs, if any). Thereafter, financial assets are measured at fair value or at amortized cost depending on which financial asset category they belong to. Financial assets are classified into the accounting categories \u201cfinancial assets at amortized cost\u201d, \u201cfinancial assets at fair value through other comprehensive income\u201d and \u201cfinancial assets at fair value through profit or loss\u201d. This classification depends on UMG\u2018s business model for managing the financial assets and on contractual terms enabling to determine whether the cash flows are solely payments of principal and interest (SPPI). The financial assets that contain an embedded derivative are considered in full to determine whether their cash flows are SPPI. Financial assets are derecognized when the rights to receive cash flows from the financial assets have expired or have been transferred and UMG has transferred substantially all the risks and rewards of ownership. Financial assets at fair value These include financial assets at fair value through other comprehensive income, derivative financial instruments with a positive value and other financial assets measured at fair value through profit or loss. Most of these financial assets are actively traded in organized financial markets, as their fair value is calculated by reference to the published market price at the period end. Fair value is estimated for financial assets which do not have a published market price on an active market. As a last resort, when a reliable estimate of fair value cannot be made using valuation techniques in the absence of an active market, UMG values financial assets at historical cost, less any impairment losses. These financial assets are recognized initially on trade date when UMG becomes a party to the contractual provisions of the instrument. Dividend income is recognised when the UMG's right to receive payment is established. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentsOtherThanInvestmentsAccountedForUsingEquityMethodExplanatory",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-468": {
"value": "2.4.13. Financial assets Financial assets are initially recognized at fair value corresponding, in general, to the consideration paid, which is best evidenced by the acquisition cost (including transaction costs, if any). Thereafter, financial assets are measured at fair value or at amortized cost depending on which financial asset category they belong to. Financial assets are classified into the accounting categories \u201cfinancial assets at amortized cost\u201d, \u201cfinancial assets at fair value through other comprehensive income\u201d and \u201cfinancial assets at fair value through profit or loss\u201d. This classification depends on UMG\u2018s business model for managing the financial assets and on contractual terms enabling to determine whether the cash flows are solely payments of principal and interest (SPPI). The financial assets that contain an embedded derivative are considered in full to determine whether their cash flows are SPPI. Financial assets are derecognized when the rights to receive cash flows from the financial assets have expired or have been transferred and UMG has transferred substantially all the risks and rewards of ownership. Financial assets at fair value These include financial assets at fair value through other comprehensive income, derivative financial instruments with a positive value and other financial assets measured at fair value through profit or loss. Most of these financial assets are actively traded in organized financial markets, as their fair value is calculated by reference to the published market price at the period end. Fair value is estimated for financial assets which do not have a published market price on an active market. As a last resort, when a reliable estimate of fair value cannot be made using valuation techniques in the absence of an active market, UMG values financial assets at historical cost, less any impairment losses. These financial assets are recognized initially on trade date when UMG becomes a party to the contractual provisions of the instrument. Dividend income is recognised when the UMG's right to receive payment is established. Financial assets at amortized cost Financial assets at amortised cost include trade receivables, other receivables, loans issued and bank deposits which are not cash equivalents. Loans, receivables and deposits are recognized on the date they are originated. Financial assets at amortized cost consist of debt instruments as described above held within a business model whose objective is to hold financial assets to collect contractual cash flows that are solely payments of principal and interest on the principal amount outstanding. At the end of each period, these assets are measured at amortized cost using the effective interest method. 2.4.16. Financial liabilities A liability is recognized when UMG becomes party to a contract. Regular way purchases and sales of financial instruments are accounted for at the trade date. Initial measurement of financial liabilities is at fair value, including any attributable transaction costs. Financial liabilities are all classified and subsequently measured at amortized cost, except for financial liabilities at fair value via profit and loss, for example derivatives or contingent consideration in a business acquisition. Such contingent consideration shall subsequently be measured at fair value with changes recognized in profit or loss. For the financial liabilities subsequently measured at amortised cost the effective interest method is applied. The effective interest rate is the internal yield rate that discounts future cash flows over the term of the financial instrument. In addition, where the financial liability comprises an embedded derivative or an equity instrument, the amortized cost is calculated for the debt component only, after separation of the embedded derivative or equity instrument, if the embedded derivative is not closely related to the host contract and therefore needs to be separated. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForInterestIncomeAndExpenseExplanatory",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-465": {
"value": "2.4.13. Financial assets Financial assets are initially recognized at fair value corresponding, in general, to the consideration paid, which is best evidenced by the acquisition cost (including transaction costs, if any). Thereafter, financial assets are measured at fair value or at amortized cost depending on which financial asset category they belong to. Financial assets are classified into the accounting categories \u201cfinancial assets at amortized cost\u201d, \u201cfinancial assets at fair value through other comprehensive income\u201d and \u201cfinancial assets at fair value through profit or loss\u201d. This classification depends on UMG\u2018s business model for managing the financial assets and on contractual terms enabling to determine whether the cash flows are solely payments of principal and interest (SPPI). The financial assets that contain an embedded derivative are considered in full to determine whether their cash flows are SPPI. Financial assets are derecognized when the rights to receive cash flows from the financial assets have expired or have been transferred and UMG has transferred substantially all the risks and rewards of ownership. Financial assets at fair value These include financial assets at fair value through other comprehensive income, derivative financial instruments with a positive value and other financial assets measured at fair value through profit or loss. Most of these financial assets are actively traded in organized financial markets, as their fair value is calculated by reference to the published market price at the period end. Fair value is estimated for financial assets which do not have a published market price on an active market. As a last resort, when a reliable estimate of fair value cannot be made using valuation techniques in the absence of an active market, UMG values financial assets at historical cost, less any impairment losses. These financial assets are recognized initially on trade date when UMG becomes a party to the contractual provisions of the instrument. Dividend income is recognised when the UMG's right to receive payment is established. Financial assets at amortized cost Financial assets at amortised cost include trade receivables, other receivables, loans issued and bank deposits which are not cash equivalents. Loans, receivables and deposits are recognized on the date they are originated. Financial assets at amortized cost consist of debt instruments as described above held within a business model whose objective is to hold financial assets to collect contractual cash flows that are solely payments of principal and interest on the principal amount outstanding. At the end of each period, these assets are measured at amortized cost using the effective interest method. 2.4.14. Impairment of financial assets UMG assesses the expected credit loss associated with its financial assets recognized at amortized cost on a prospective basis. A loss allowance for expected credit loss based on probability of default is recognized at initial recognition. The loss allowance is updated for changes in these expected credit losses at each reporting date to reflect changes in credit risk since initial recognition. To assess whether there has been a significant increase in credit risk, UMG compares the credit risk at the reporting date with the credit risk at the date of initial recognition based on reasonable forward-looking information and events, including credit ratings if available, significant adverse economic changes (actual or expected), financial or business environment that are expected to result in a material change in the borrower's ability to meet its obligations. Trade accounts receivable are initially recognised at their transaction price. Expected loss rates on trade receivables and contract assets are calculated by the relevant operating entities over their lifetime from initial recognition and are based on historical data that also incorporates forward-looking information. In addition, account receivables from customers subject to insolvency proceedings or customers with whom UMG is involved in litigation or a dispute are generally impaired in full. 2.4.15. Cash and cash equivalents Cash and cash equivalents include all cash balances and short-term highly liquid investments with an original maturity of three months or less that are readily convertible into known amounts of cash. Bank overdrafts form an integral part of UMG\u2019s cash management and often fluctuate from being positive to overdrawn and are included as a component of cash and cash equivalents for the purpose of the statement of cash flows. Investments in securities, investments with initial maturities of more than three months without an early termination option and bank accounts subject to restrictions (blocked accounts), other than restrictions due to regulations specific to a country or activity sector (e.g., exchange controls), are not classified as cash equivalents but as financial assets. 2.4.16. Financial liabilities A liability is recognized when UMG becomes party to a contract. Regular way purchases and sales of financial instruments are accounted for at the trade date. Initial measurement of financial liabilities is at fair value, including any attributable transaction costs. Financial liabilities are all classified and subsequently measured at amortized cost, except for financial liabilities at fair value via profit and loss, for example derivatives or contingent consideration in a business acquisition. Such contingent consideration shall subsequently be measured at fair value with changes recognized in profit or loss. For the financial liabilities subsequently measured at amortised cost the effective interest method is applied. The effective interest rate is the internal yield rate that discounts future cash flows over the term of the financial instrument. In addition, where the financial liability comprises an embedded derivative or an equity instrument, the amortized cost is calculated for the debt component only, after separation of the embedded derivative or equity instrument, if the embedded derivative is not closely related to the host contract and therefore needs to be separated. 2.4.17. Derivative financial instruments Derivative financial instruments are recognised initially at fair value. Subsequent accounting for derivatives depends on whether or not the derivatives are designated as hedging instrument in a cash flow, fair value or net investment hedge. Derivatives with positive fair values are recorded as assets and negative fair values as liabilities. UMG did not apply hedge accounting to the derivatives in 2021 and 2022. UMG measures all derivative financial instruments at fair value derived from market prices of the instruments or calculated as the present value of the estimated future cash flows based on observable interest yield curves, basis spread and foreign exchange rates. These calculations are tested for reasonableness by comparing the outcome of the internal valuation with the valuation received from the counterparty. 2.4.25. Financial guarantees Financial guarantee is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payments when due in accordance with the terms of a debt instrument. Financial guarantees are initially recognised at fair value and are subject to the expected credit loss model, and a credit loss is recognized for expected cash shortfalls. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-462": {
"value": "2.4.13. Financial assets Financial assets are initially recognized at fair value corresponding, in general, to the consideration paid, which is best evidenced by the acquisition cost (including transaction costs, if any). Thereafter, financial assets are measured at fair value or at amortized cost depending on which financial asset category they belong to. Financial assets are classified into the accounting categories \u201cfinancial assets at amortized cost\u201d, \u201cfinancial assets at fair value through other comprehensive income\u201d and \u201cfinancial assets at fair value through profit or loss\u201d. This classification depends on UMG\u2018s business model for managing the financial assets and on contractual terms enabling to determine whether the cash flows are solely payments of principal and interest (SPPI). The financial assets that contain an embedded derivative are considered in full to determine whether their cash flows are SPPI. Financial assets are derecognized when the rights to receive cash flows from the financial assets have expired or have been transferred and UMG has transferred substantially all the risks and rewards of ownership. Financial assets at fair value These include financial assets at fair value through other comprehensive income, derivative financial instruments with a positive value and other financial assets measured at fair value through profit or loss. Most of these financial assets are actively traded in organized financial markets, as their fair value is calculated by reference to the published market price at the period end. Fair value is estimated for financial assets which do not have a published market price on an active market. As a last resort, when a reliable estimate of fair value cannot be made using valuation techniques in the absence of an active market, UMG values financial assets at historical cost, less any impairment losses. These financial assets are recognized initially on trade date when UMG becomes a party to the contractual provisions of the instrument. Dividend income is recognised when the UMG's right to receive payment is established. 2.4.16. Financial liabilities A liability is recognized when UMG becomes party to a contract. Regular way purchases and sales of financial instruments are accounted for at the trade date. Initial measurement of financial liabilities is at fair value, including any attributable transaction costs. Financial liabilities are all classified and subsequently measured at amortized cost, except for financial liabilities at fair value via profit and loss, for example derivatives or contingent consideration in a business acquisition. Such contingent consideration shall subsequently be measured at fair value with changes recognized in profit or loss. For the financial liabilities subsequently measured at amortised cost the effective interest method is applied. The effective interest rate is the internal yield rate that discounts future cash flows over the term of the financial instrument. In addition, where the financial liability comprises an embedded derivative or an equity instrument, the amortized cost is calculated for the debt component only, after separation of the embedded derivative or equity instrument, if the embedded derivative is not closely related to the host contract and therefore needs to be separated. 2.4.17. Derivative financial instruments Derivative financial instruments are recognised initially at fair value. Subsequent accounting for derivatives depends on whether or not the derivatives are designated as hedging instrument in a cash flow, fair value or net investment hedge. Derivatives with positive fair values are recorded as assets and negative fair values as liabilities. UMG did not apply hedge accounting to the derivatives in 2021 and 2022. UMG measures all derivative financial instruments at fair value derived from market prices of the instruments or calculated as the present value of the estimated future cash flows based on observable interest yield curves, basis spread and foreign exchange rates. These calculations are tested for reasonableness by comparing the outcome of the internal valuation with the valuation received from the counterparty. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialInstrumentsAtFairValueThroughProfitOrLossExplanatory",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-455": {
"value": "2.4.13. Financial assets Financial assets are initially recognized at fair value corresponding, in general, to the consideration paid, which is best evidenced by the acquisition cost (including transaction costs, if any). Thereafter, financial assets are measured at fair value or at amortized cost depending on which financial asset category they belong to. Financial assets are classified into the accounting categories \u201cfinancial assets at amortized cost\u201d, \u201cfinancial assets at fair value through other comprehensive income\u201d and \u201cfinancial assets at fair value through profit or loss\u201d. This classification depends on UMG\u2018s business model for managing the financial assets and on contractual terms enabling to determine whether the cash flows are solely payments of principal and interest (SPPI). The financial assets that contain an embedded derivative are considered in full to determine whether their cash flows are SPPI. Financial assets are derecognized when the rights to receive cash flows from the financial assets have expired or have been transferred and UMG has transferred substantially all the risks and rewards of ownership. Financial assets at fair value These include financial assets at fair value through other comprehensive income, derivative financial instruments with a positive value and other financial assets measured at fair value through profit or loss. Most of these financial assets are actively traded in organized financial markets, as their fair value is calculated by reference to the published market price at the period end. Fair value is estimated for financial assets which do not have a published market price on an active market. As a last resort, when a reliable estimate of fair value cannot be made using valuation techniques in the absence of an active market, UMG values financial assets at historical cost, less any impairment losses. These financial assets are recognized initially on trade date when UMG becomes a party to the contractual provisions of the instrument. Dividend income is recognised when the UMG's right to receive payment is established. Financial assets at amortized cost Financial assets at amortised cost include trade receivables, other receivables, loans issued and bank deposits which are not cash equivalents. Loans, receivables and deposits are recognized on the date they are originated. Financial assets at amortized cost consist of debt instruments as described above held within a business model whose objective is to hold financial assets to collect contractual cash flows that are solely payments of principal and interest on the principal amount outstanding. At the end of each period, these assets are measured at amortized cost using the effective interest method. 2.4.16. Financial liabilities A liability is recognized when UMG becomes party to a contract. Regular way purchases and sales of financial instruments are accounted for at the trade date. Initial measurement of financial liabilities is at fair value, including any attributable transaction costs. Financial liabilities are all classified and subsequently measured at amortized cost, except for financial liabilities at fair value via profit and loss, for example derivatives or contingent consideration in a business acquisition. Such contingent consideration shall subsequently be measured at fair value with changes recognized in profit or loss. For the financial liabilities subsequently measured at amortised cost the effective interest method is applied. The effective interest rate is the internal yield rate that discounts future cash flows over the term of the financial instrument. In addition, where the financial liability comprises an embedded derivative or an equity instrument, the amortized cost is calculated for the debt component only, after separation of the embedded derivative or equity instrument, if the embedded derivative is not closely related to the host contract and therefore needs to be separated. 2.4.17. Derivative financial instruments Derivative financial instruments are recognised initially at fair value. Subsequent accounting for derivatives depends on whether or not the derivatives are designated as hedging instrument in a cash flow, fair value or net investment hedge. Derivatives with positive fair values are recorded as assets and negative fair values as liabilities. UMG did not apply hedge accounting to the derivatives in 2021 and 2022. UMG measures all derivative financial instruments at fair value derived from market prices of the instruments or calculated as the present value of the estimated future cash flows based on observable interest yield curves, basis spread and foreign exchange rates. These calculations are tested for reasonableness by comparing the outcome of the internal valuation with the valuation received from the counterparty",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForFinanceIncomeAndCostsExplanatory",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-450": {
"value": "2.4.13. Financial assets Financial assets are initially recognized at fair value corresponding, in general, to the consideration paid, which is best evidenced by the acquisition cost (including transaction costs, if any). Thereafter, financial assets are measured at fair value or at amortized cost depending on which financial asset category they belong to. Financial assets are classified into the accounting categories \u201cfinancial assets at amortized cost\u201d, \u201cfinancial assets at fair value through other comprehensive income\u201d and \u201cfinancial assets at fair value through profit or loss\u201d. This classification depends on UMG\u2018s business model for managing the financial assets and on contractual terms enabling to determine whether the cash flows are solely payments of principal and interest (SPPI). The financial assets that contain an embedded derivative are considered in full to determine whether their cash flows are SPPI. Financial assets are derecognized when the rights to receive cash flows from the financial assets have expired or have been transferred and UMG has transferred substantially all the risks and rewards of ownership. Financial assets at fair value These include financial assets at fair value through other comprehensive income, derivative financial instruments with a positive value and other financial assets measured at fair value through profit or loss. Most of these financial assets are actively traded in organized financial markets, as their fair value is calculated by reference to the published market price at the period end. Fair value is estimated for financial assets which do not have a published market price on an active market. As a last resort, when a reliable estimate of fair value cannot be made using valuation techniques in the absence of an active market, UMG values financial assets at historical cost, less any impairment losses. These financial assets are recognized initially on trade date when UMG becomes a party to the contractual provisions of the instrument. Dividend income is recognised when the UMG's right to receive payment is established. Financial assets at amortized cost Financial assets at amortised cost include trade receivables, other receivables, loans issued and bank deposits which are not cash equivalents. Loans, receivables and deposits are recognized on the date they are originated. Financial assets at amortized cost consist of debt instruments as described above held within a business model whose objective is to hold financial assets to collect contractual cash flows that are solely payments of principal and interest on the principal amount outstanding. At the end of each period, these assets are measured at amortized cost using the effective interest method. 2.4.16. Financial liabilities A liability is recognized when UMG becomes party to a contract. Regular way purchases and sales of financial instruments are accounted for at the trade date. Initial measurement of financial liabilities is at fair value, including any attributable transaction costs. Financial liabilities are all classified and subsequently measured at amortized cost, except for financial liabilities at fair value via profit and loss, for example derivatives or contingent consideration in a business acquisition. Such contingent consideration shall subsequently be measured at fair value with changes recognized in profit or loss. For the financial liabilities subsequently measured at amortised cost the effective interest method is applied. The effective interest rate is the internal yield rate that discounts future cash flows over the term of the financial instrument. In addition, where the financial liability comprises an embedded derivative or an equity instrument, the amortized cost is calculated for the debt component only, after separation of the embedded derivative or equity instrument, if the embedded derivative is not closely related to the host contract and therefore needs to be separated. 2.4.17. Derivative financial instruments Derivative financial instruments are recognised initially at fair value. Subsequent accounting for derivatives depends on whether or not the derivatives are designated as hedging instrument in a cash flow, fair value or net investment hedge. Derivatives with positive fair values are recorded as assets and negative fair values as liabilities. UMG did not apply hedge accounting to the derivatives in 2021 and 2022. UMG measures all derivative financial instruments at fair value derived from market prices of the instruments or calculated as the present value of the estimated future cash flows based on observable interest yield curves, basis spread and foreign exchange rates. These calculations are tested for reasonableness by comparing the outcome of the internal valuation with the valuation received from the counterparty. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForFinanceCostsExplanatory",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-438": {
"value": "2.4.13. Financial assets Financial assets are initially recognized at fair value corresponding, in general, to the consideration paid, which is best evidenced by the acquisition cost (including transaction costs, if any). Thereafter, financial assets are measured at fair value or at amortized cost depending on which financial asset category they belong to. Financial assets are classified into the accounting categories \u201cfinancial assets at amortized cost\u201d, \u201cfinancial assets at fair value through other comprehensive income\u201d and \u201cfinancial assets at fair value through profit or loss\u201d. This classification depends on UMG\u2018s business model for managing the financial assets and on contractual terms enabling to determine whether the cash flows are solely payments of principal and interest (SPPI). The financial assets that contain an embedded derivative are considered in full to determine whether their cash flows are SPPI. Financial assets are derecognized when the rights to receive cash flows from the financial assets have expired or have been transferred and UMG has transferred substantially all the risks and rewards of ownership. Financial assets at fair value These include financial assets at fair value through other comprehensive income, derivative financial instruments with a positive value and other financial assets measured at fair value through profit or loss. Most of these financial assets are actively traded in organized financial markets, as their fair value is calculated by reference to the published market price at the period end. Fair value is estimated for financial assets which do not have a published market price on an active market. As a last resort, when a reliable estimate of fair value cannot be made using valuation techniques in the absence of an active market, UMG values financial assets at historical cost, less any impairment losses. These financial assets are recognized initially on trade date when UMG becomes a party to the contractual provisions of the instrument. Dividend income is recognised when the UMG's right to receive payment is established. Financial assets at amortized cost Financial assets at amortised cost include trade receivables, other receivables, loans issued and bank deposits which are not cash equivalents. Loans, receivables and deposits are recognized on the date they are originated. Financial assets at amortized cost consist of debt instruments as described above held within a business model whose objective is to hold financial assets to collect contractual cash flows that are solely payments of principal and interest on the principal amount outstanding. At the end of each period, these assets are measured at amortized cost using the effective interest method. 2.4.16. Financial liabilities A liability is recognized when UMG becomes party to a contract. Regular way purchases and sales of financial instruments are accounted for at the trade date. Initial measurement of financial liabilities is at fair value, including any attributable transaction costs. Financial liabilities are all classified and subsequently measured at amortized cost, except for financial liabilities at fair value via profit and loss, for example derivatives or contingent consideration in a business acquisition. Such contingent consideration shall subsequently be measured at fair value with changes recognized in profit or loss. For the financial liabilities subsequently measured at amortised cost the effective interest method is applied. The effective interest rate is the internal yield rate that discounts future cash flows over the term of the financial instrument. In addition, where the financial liability comprises an embedded derivative or an equity instrument, the amortized cost is calculated for the debt component only, after separation of the embedded derivative or equity instrument, if the embedded derivative is not closely related to the host contract and therefore needs to be separated. 2.4.17. Derivative financial instruments Derivative financial instruments are recognised initially at fair value. Subsequent accounting for derivatives depends on whether or not the derivatives are designated as hedging instrument in a cash flow, fair value or net investment hedge. Derivatives with positive fair values are recorded as assets and negative fair values as liabilities. UMG did not apply hedge accounting to the derivatives in 2021 and 2022. UMG measures all derivative financial instruments at fair value derived from market prices of the instruments or calculated as the present value of the estimated future cash flows based on observable interest yield curves, basis spread and foreign exchange rates. These calculations are tested for reasonableness by comparing the outcome of the internal valuation with the valuation received from the counterparty. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForFairValueMeasurementExplanatory",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-405": {
"value": "2.4.13. Financial assets Financial assets are initially recognized at fair value corresponding, in general, to the consideration paid, which is best evidenced by the acquisition cost (including transaction costs, if any). Thereafter, financial assets are measured at fair value or at amortized cost depending on which financial asset category they belong to. Financial assets are classified into the accounting categories \u201cfinancial assets at amortized cost\u201d, \u201cfinancial assets at fair value through other comprehensive income\u201d and \u201cfinancial assets at fair value through profit or loss\u201d. This classification depends on UMG\u2018s business model for managing the financial assets and on contractual terms enabling to determine whether the cash flows are solely payments of principal and interest (SPPI). The financial assets that contain an embedded derivative are considered in full to determine whether their cash flows are SPPI. Financial assets are derecognized when the rights to receive cash flows from the financial assets have expired or have been transferred and UMG has transferred substantially all the risks and rewards of ownership. Financial assets at fair value These include financial assets at fair value through other comprehensive income, derivative financial instruments with a positive value and other financial assets measured at fair value through profit or loss. Most of these financial assets are actively traded in organized financial markets, as their fair value is calculated by reference to the published market price at the period end. Fair value is estimated for financial assets which do not have a published market price on an active market. As a last resort, when a reliable estimate of fair value cannot be made using valuation techniques in the absence of an active market, UMG values financial assets at historical cost, less any impairment losses. These financial assets are recognized initially on trade date when UMG becomes a party to the contractual provisions of the instrument. Dividend income is recognised when the UMG's right to receive payment is established. Financial assets at amortized cost Financial assets at amortised cost include trade receivables, other receivables, loans issued and bank deposits which are not cash equivalents. Loans, receivables and deposits are recognized on the date they are originated. Financial assets at amortized cost consist of debt instruments as described above held within a business model whose objective is to hold financial assets to collect contractual cash flows that are solely payments of principal and interest on the principal amount outstanding. At the end of each period, these assets are measured at amortized cost using the effective interest method. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForDerecognitionOfFinancialInstrumentsExplanatory",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-358": {
"value": "2.4.13. Financial assets Financial assets are initially recognized at fair value corresponding, in general, to the consideration paid, which is best evidenced by the acquisition cost (including transaction costs, if any). Thereafter, financial assets are measured at fair value or at amortized cost depending on which financial asset category they belong to. Financial assets are classified into the accounting categories \u201cfinancial assets at amortized cost\u201d, \u201cfinancial assets at fair value through other comprehensive income\u201d and \u201cfinancial assets at fair value through profit or loss\u201d. This classification depends on UMG\u2018s business model for managing the financial assets and on contractual terms enabling to determine whether the cash flows are solely payments of principal and interest (SPPI). The financial assets that contain an embedded derivative are considered in full to determine whether their cash flows are SPPI. Financial assets are derecognized when the rights to receive cash flows from the financial assets have expired or have been transferred and UMG has transferred substantially all the risks and rewards of ownership. Financial assets at fair value These include financial assets at fair value through other comprehensive income, derivative financial instruments with a positive value and other financial assets measured at fair value through profit or loss. Most of these financial assets are actively traded in organized financial markets, as their fair value is calculated by reference to the published market price at the period end. Fair value is estimated for financial assets which do not have a published market price on an active market. As a last resort, when a reliable estimate of fair value cannot be made using valuation techniques in the absence of an active market, UMG values financial assets at historical cost, less any impairment losses. These financial assets are recognized initially on trade date when UMG becomes a party to the contractual provisions of the instrument. Dividend income is recognised when the UMG's right to receive payment is established. Financial assets at amortized cost Financial assets at amortised cost include trade receivables, other receivables, loans issued and bank deposits which are not cash equivalents. Loans, receivables and deposits are recognized on the date they are originated. Financial assets at amortized cost consist of debt instruments as described above held within a business model whose objective is to hold financial assets to collect contractual cash flows that are solely payments of principal and interest on the principal amount outstanding. At the end of each period, these assets are measured at amortized cost using the effective interest method. 2.4.14. Impairment of financial assets UMG assesses the expected credit loss associated with its financial assets recognized at amortized cost on a prospective basis. A loss allowance for expected credit loss based on probability of default is recognized at initial recognition. The loss allowance is updated for changes in these expected credit losses at each reporting date to reflect changes in credit risk since initial recognition. To assess whether there has been a significant increase in credit risk, UMG compares the credit risk at the reporting date with the credit risk at the date of initial recognition based on reasonable forward-looking information and events, including credit ratings if available, significant adverse economic changes (actual or expected), financial or business environment that are expected to result in a material change in the borrower's ability to meet its obligations. Trade accounts receivable are initially recognised at their transaction price. Expected loss rates on trade receivables and contract assets are calculated by the relevant operating entities over their lifetime from initial recognition and are based on historical data that also incorporates forward-looking information. In addition, account receivables from customers subject to insolvency proceedings or customers with whom UMG is involved in litigation or a dispute are generally impaired in full. 2.4.15. Cash and cash equivalents
Cash and cash equivalents include all cash balances and short-term highly liquid investments with an original maturity
of three months or less that are readily convertible into known amounts of cash.
Bank overdrafts form an integral part of UMG\u2019s cash management and often fluctuate from being positive to overdrawn
and are included as a component of cash and cash equivalents for the purpose of the statement of cash flows.
Investments in securities, investments with initial maturities of more than three months without an early termination
option and bank accounts subject to restrictions (blocked accounts), other than restrictions due to regulations specific to
a country or activity sector (e.g., exchange controls), are not classified as cash equivalents but as financial assets.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialAssetsExplanatory",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-478": {
"value": "Financial assets at fair value
These include financial assets at fair value through other comprehensive income, derivative financial instruments with a
positive value and other financial assets measured at fair value through profit or loss. Most of these financial assets are
actively traded in organized financial markets, as their fair value is calculated by reference to the published market price
at the period end. Fair value is estimated for financial assets which do not have a published market price on an active
market. As a last resort, when a reliable estimate of fair value cannot be made using valuation techniques in the absence
of an active market, UMG values financial assets at historical cost, less any impairment losses.
These financial assets are recognized initially on trade date when UMG becomes a party to the contractual provisions of
the instrument. Dividend income is recognised when the UMG's right to receive payment is established.
2.4.16. Financial liabilities A liability is recognized when UMG becomes party to a contract. Regular way purchases and sales of financial instruments are accounted for at the trade date. Initial measurement of financial liabilities is at fair value, including any attributable transaction costs. Financial liabilities are all classified and subsequently measured at amortized cost, except for financial liabilities at fair value via profit and loss, for example derivatives or contingent consideration in a business acquisition. Such contingent consideration shall subsequently be measured at fair value with changes recognized in profit or loss. For the financial liabilities subsequently measured at amortised cost the effective interest method is applied. The effective interest rate is the internal yield rate that discounts future cash flows over the term of the financial instrument. In addition, where the financial liability comprises an embedded derivative or an equity instrument, the amortized cost is calculated for the debt component only, after separation of the embedded derivative or equity instrument, if the embedded derivative is not closely related to the host contract and therefore needs to be separated. 2.4.17. Derivative financial instruments Derivative financial instruments are recognised initially at fair value. Subsequent accounting for derivatives depends on whether or not the derivatives are designated as hedging instrument in a cash flow, fair value or net investment hedge. Derivatives with positive fair values are recorded as assets and negative fair values as liabilities. UMG did not apply hedge accounting to the derivatives in 2021 and 2022. UMG measures all derivative financial instruments at fair value derived from market prices of the instruments or calculated as the present value of the estimated future cash flows based on observable interest yield curves, basis spread and foreign exchange rates. These calculations are tested for reasonableness by comparing the outcome of the internal valuation with the valuation received from the counterparty. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForDerivativeFinancialInstrumentsAndHedgingExplanatory",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-474": {
"value": "Financial assets at amortized cost
Financial assets at amortised cost include trade receivables, other receivables, loans issued and bank deposits which are
not cash equivalents. Loans, receivables and deposits are recognized on the date they are originated.
Financial assets at amortized cost consist of debt instruments as described above held within a business model whose
objective is to hold financial assets to collect contractual cash flows that are solely payments of principal and interest
on the principal amount outstanding. At the end of each period, these assets are measured at amortized cost using the
effective interest method.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForLoansAndReceivablesExplanatory",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-404": {
"value": "2.4.14.
Impairment of financial assets
UMG assesses the expected credit loss associated with its financial assets recognized at amortized cost on a prospective
basis. A loss allowance for expected credit loss based on probability of default is recognized at initial recognition. The loss
allowance is updated for changes in these expected credit losses at each reporting date to reflect changes in credit risk
since initial recognition.
To assess whether there has been a significant increase in credit risk, UMG compares the credit risk at the reporting
date with the credit risk at the date of initial recognition based on reasonable forward-looking information and events,
including credit ratings if available, significant adverse economic changes (actual or expected), financial or business
environment that are expected to result in a material change in the borrower's ability to meet its obligations.
Trade accounts receivable are initially recognised at their transaction price. Expected loss rates on trade receivables and
contract assets are calculated by the relevant operating entities over their lifetime from initial recognition and are based
on historical data that also incorporates forward-looking information. In addition, account receivables from customers
subject to insolvency proceedings or customers with whom UMG is involved in litigation or a dispute are generally
impaired in full.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfFinancialAssetsExplanatory",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-456": {
"value": "2.4.15. Cash and cash equivalents Cash and cash equivalents include all cash balances and short-term highly liquid investments with an original maturity of three months or less that are readily convertible into known amounts of cash. Bank overdrafts form an integral part of UMG\u2019s cash management and often fluctuate from being positive to overdrawn and are included as a component of cash and cash equivalents for the purpose of the statement of cash flows. Investments in securities, investments with initial maturities of more than three months without an early termination option and bank accounts subject to restrictions (blocked accounts), other than restrictions due to regulations specific to a country or activity sector (e.g., exchange controls), are not classified as cash equivalents but as financial assets. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForRestrictedCashAndCashEquivalentsExplanatory",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-407": {
"value": "2.4.15. Cash and cash equivalents Cash and cash equivalents include all cash balances and short-term highly liquid investments with an original maturity of three months or less that are readily convertible into known amounts of cash. Bank overdrafts form an integral part of UMG\u2019s cash management and often fluctuate from being positive to overdrawn and are included as a component of cash and cash equivalents for the purpose of the statement of cash flows. Investments in securities, investments with initial maturities of more than three months without an early termination option and bank accounts subject to restrictions (blocked accounts), other than restrictions due to regulations specific to a country or activity sector (e.g., exchange controls), are not classified as cash equivalents but as financial assets. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyToDetermineComponentsOfCashAndCashEquivalents",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-359": {
"value": "2.4.16. Financial liabilities
A liability is recognized when UMG becomes party to a contract. Regular way purchases and sales of financial
instruments are accounted for at the trade date. Initial measurement of financial liabilities is at fair value, including
any attributable transaction costs. Financial liabilities are all classified and subsequently measured at amortized cost,
except for financial liabilities at fair value via profit and loss, for example derivatives or contingent consideration in
a business acquisition. Such contingent consideration shall subsequently be measured at fair value with changes
recognized in profit or loss. For the financial liabilities subsequently measured at amortised cost the effective interest
method is applied. The effective interest rate is the internal yield rate that discounts future cash flows over the term
of the financial instrument. In addition, where the financial liability comprises an embedded derivative or an equity
instrument, the amortized cost is calculated for the debt component only, after separation of the embedded derivative
or equity instrument, if the embedded derivative is not closely related to the host contract and therefore needs to
be separated.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialLiabilitiesExplanatory",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-472": {
"value": "2.4.16. Financial liabilities A liability is recognized when UMG becomes party to a contract. Regular way purchases and sales of financial instruments are accounted for at the trade date. Initial measurement of financial liabilities is at fair value, including any attributable transaction costs. Financial liabilities are all classified and subsequently measured at amortized cost, except for financial liabilities at fair value via profit and loss, for example derivatives or contingent consideration in a business acquisition. Such contingent consideration shall subsequently be measured at fair value with changes recognized in profit or loss. For the financial liabilities subsequently measured at amortised cost the effective interest method is applied. The effective interest rate is the internal yield rate that discounts future cash flows over the term of the financial instrument. In addition, where the financial liability comprises an embedded derivative or an equity instrument, the amortized cost is calculated for the debt component only, after separation of the embedded derivative or equity instrument, if the embedded derivative is not closely related to the host contract and therefore needs to be separated. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForTradeAndOtherPayablesExplanatory",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-406": {
"value": "2.4.16. Financial liabilities A liability is recognized when UMG becomes party to a contract. Regular way purchases and sales of financial instruments are accounted for at the trade date. Initial measurement of financial liabilities is at fair value, including any attributable transaction costs. Financial liabilities are all classified and subsequently measured at amortized cost, except for financial liabilities at fair value via profit and loss, for example derivatives or contingent consideration in a business acquisition. Such contingent consideration shall subsequently be measured at fair value with changes recognized in profit or loss. For the financial liabilities subsequently measured at amortised cost the effective interest method is applied. The effective interest rate is the internal yield rate that discounts future cash flows over the term of the financial instrument. In addition, where the financial liability comprises an embedded derivative or an equity instrument, the amortized cost is calculated for the debt component only, after separation of the embedded derivative or equity instrument, if the embedded derivative is not closely related to the host contract and therefore needs to be separated. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForBorrowingsExplanatory",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-360": {
"value": "2.4.17.
Derivative financial instruments
Derivative financial instruments are recognised initially at fair value. Subsequent accounting for derivatives depends on
whether or not the derivatives are designated as hedging instrument in a cash flow, fair value or net investment hedge.
Derivatives with positive fair values are recorded as assets and negative fair values as liabilities. UMG did not apply
hedge accounting to the derivatives in 2021 and 2022.
UMG measures all derivative financial instruments at fair value derived from market prices of the instruments or
calculated as the present value of the estimated future cash flows based on observable interest yield curves, basis
spread and foreign exchange rates. These calculations are tested for reasonableness by comparing the outcome of the
internal valuation with the valuation received from the counterparty.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForDerivativeFinancialInstrumentsExplanatory",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-469": {
"value": "2.4.17. Derivative financial instruments Derivative financial instruments are recognised initially at fair value. Subsequent accounting for derivatives depends on whether or not the derivatives are designated as hedging instrument in a cash flow, fair value or net investment hedge. Derivatives with positive fair values are recorded as assets and negative fair values as liabilities. UMG did not apply hedge accounting to the derivatives in 2021 and 2022. UMG measures all derivative financial instruments at fair value derived from market prices of the instruments or calculated as the present value of the estimated future cash flows based on observable interest yield curves, basis spread and foreign exchange rates. These calculations are tested for reasonableness by comparing the outcome of the internal valuation with the valuation received from the counterparty. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForHedgingExplanatory",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-361": {
"value": "2.4.18.
Inventories
Inventories are valued at the lower of cost or net realizable value. Cost comprises purchase costs, production costs and
other supply and packaging costs. These are usually calculated using the weighted average cost method. Net realizable
value is the estimated selling price in the normal course of business, less estimated completion costs and selling costs.
Inventories at UMG mostly comprise of finished goods.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForMeasuringInventories",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-362": {
"value": "2.4.19.
Provisions
Provisions are recognized when, at the end of the reporting period, UMG has a legal obligation (statutory, regulatory
or contractual) or a constructive obligation, as a result of past events, and it is probable that an outflow of resources
embodying economic benefits will be required to settle the obligation and the obligation can be reliably estimated. Where
the effect of the time value of money is material, provisions are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money. If the amount of the obligation
cannot be reliably estimated, no provision is recorded and a disclosure is made in the Notes to the Consolidated
Financial Statements. Significant judgment is required in determining the amount and probability of resources outflow
and discount rates used to calculate the present value of this outflow.
Provisions for royalty audit claims
Up to the completion of the royalty claim audit, the timing and the amount of the potential pay-outs is uncertain. UMG
makes its best possible estimate of the outcome using any available data, including history of claims with rights owners.
When the estimate is performed for large homogeneous claims and contract terms, the statistical valuation method
is used.
Litigation provisions
In the ordinary course of business, UMG may be involved in a number of legal and arbitration proceedings and
administrative actions. The costs which may result from these proceedings are accrued at the reporting date if UMG
has a present obligation toward a third party resulting from a past event and it is probable that an outflow of resources
embodying economic benefits will be required to settle the obligation and the amount of that liability can be quantified
or estimated within a reasonable range. The amount of provision recorded is based on a case-by-case assessment of the
risk level, and events arising during the course of legal proceedings may require a reassessment of this risk at any time.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForProvisionsExplanatory",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-363": {
"value": "2.4.20. Employee benefit plans
Defined contribution plans
Contributions to defined contribution and multi-employer plans are expensed during the year when related services
are provided.
Defined benefit plans
Defined benefit plans may be funded by investments in various instruments such as insurance contracts or equity and
debt investment securities, excluding shares in any UMG entity or debt instruments.
Pension expenses and defined benefit obligations are calculated by independent actuaries using the projected unit credit
method. This method is based on annually updated assumptions, which include the probability of employees remaining
with UMG until retirement, expected changes in future compensation and an appropriate discount rate for each country
in which UMG maintains a pension plan. The discount rate is determined for each country by reference to yields on notes
issued by investment grade companies having a credit rating of AA and maturities identical to that of the valued plans,
generally based on relevant rate indices. The expected return on plan assets is estimated by using the selected discount
rate to value the obligations of the previous year.
The calculation is performed separately for each plan. A provision is recorded in the Statement of Financial Position
equal to the difference between the actuarial value of the related benefits (actuarial liability) and the fair value of any
associated plan assets, and this includes past service costs and actuarial gains and losses.
The cost of defined benefit plans consists of three components recognized as follows:
\u2022 the service cost is included in selling, general and administrative expenses. It comprises current service cost, past
service cost resulting from a plan amendment or a curtailment, immediately recognized in profit and loss, and gains
and losses on settlement;
\u2022 the financial component, recorded in other financial expenses and income, consists of the unwinding of the interest
component of the discount, less the expected return on plan assets determined using the discount rate retained for
the valuation of the benefit obligation; and
\u2022 the remeasurements of the net defined benefit liability (asset), recognized in items of other comprehensive income
not reclassified as profit and loss, mainly consist of actuarial gains and losses, i.e., changes in the present value
of the defined benefit obligation and plan assets resulting from changes in actuarial assumptions and experience
adjustments (representing the differences between the expected effect of some actuarial assumptions applied to
previous valuations and the effective impact).
Where the value of plan assets exceeds benefit obligations, a financial asset is recognized up to the present value of
future refunds and the expected reduction in future contributions.
Some other post-employment benefits, such as life insurance and medical coverage (mainly in the United States)
are subject to provisions which are assessed through an actuarial calculation comparable to the method used for
pension provisions.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForEmployeeBenefitsExplanatory",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-365": {
"value": "2.4.21. Income taxes
Differences existing at closing between the tax base value of assets and liabilities and their carrying value in the
Consolidated Statement of Financial Position give rise to temporary differences. Pursuant to the liability method, these
temporary differences result in the accounting of:
\u2022 deferred tax assets, when the tax base value is greater than the carrying value (expected future tax saving); and
\u2022 deferred tax liabilities, when the tax base value is lower than the carrying value (expected future tax expense).
Deferred tax assets and liabilities are measured at the expected tax rates for the year during which the asset will be
realized or the liability settled, based on tax rates (and tax regulations) enacted or substantially enacted by the closing
date. They are reviewed at the end of each year, in line with any changes in applicable tax rates.
Deferred tax assets are recognized for all deductible temporary differences, tax loss carry-forwards and unused tax
credits, insofar as it is probable that a taxable profit will be available, or when a current tax liability exists to make use
of those deductible temporary differences, tax loss carry-forwards and unused tax credits, except where the deferred tax
asset associated with the deductible temporary difference is generated by initial recognition of an asset or liability in a
transaction which is not a business combination, and that, at the transaction date, does not impact net profit, nor tax
income or loss.
For deductible temporary differences resulting from investments in subsidiaries, joint ventures and other associated
entities, deferred tax assets are recorded to the extent that it is probable that the temporary difference will reverse in the
foreseeable future and that a taxable profit will be available against which the temporary difference can be utilized.
The carrying value of deferred tax assets is reviewed at each closing date, and revalued or reduced to the extent that it is
more or less probable that a taxable profit will be available to allow the deferred tax asset to be utilized. When assessing
the probability of a taxable profit being available, account is taken, primarily, of prior years\u2019 results, forecasted future
results, non-recurring items unlikely to occur in the future and the tax strategy. As such, the assessment of UMG's ability
to utilize tax losses carried forward is to a large extent judgement-based. If the future taxable results of UMG proved to
differ significantly from those expected, UMG would be required to increase or decrease the carrying value of deferred tax
assets with a potentially material impact on UMG's Statement of Financial Position and Statement of Profit or Loss.
Deferred tax liabilities are recognized for all taxable temporary differences, except where the deferred tax liability results
from goodwill or initial recognition of an asset or liability in a transaction which is not a business combination, and that,
at the transaction date, does not impact net profit, tax income or loss.
For taxable temporary differences resulting from investments in subsidiaries, joint ventures and other associated
entities, deferred tax liabilities are recorded except to the extent that both of the following conditions are satisfied: the
parent, investor or venturer is able to control the timing of the reversal of the temporary difference and it is probable that
the temporary difference will not be reversed in the foreseeable future.
Current tax and deferred tax shall be charged or credited directly to equity, and not profit if the tax relates to items that
are credited or charged directly to equity. Current tax liabilities not expected to be paid within the next 12 months are
recorded as long term current tax liability.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForIncomeTaxExplanatory",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-408": {
"value": "2.4.21. Income taxes Differences existing at closing between the tax base value of assets and liabilities and their carrying value in the Consolidated Statement of Financial Position give rise to temporary differences. Pursuant to the liability method, these temporary differences result in the accounting of: \u2022 deferred tax assets, when the tax base value is greater than the carrying value (expected future tax saving); and \u2022 deferred tax liabilities, when the tax base value is lower than the carrying value (expected future tax expense). Deferred tax assets and liabilities are measured at the expected tax rates for the year during which the asset will be realized or the liability settled, based on tax rates (and tax regulations) enacted or substantially enacted by the closing date. They are reviewed at the end of each year, in line with any changes in applicable tax rates. Deferred tax assets are recognized for all deductible temporary differences, tax loss carry-forwards and unused tax credits, insofar as it is probable that a taxable profit will be available, or when a current tax liability exists to make use of those deductible temporary differences, tax loss carry-forwards and unused tax credits, except where the deferred tax asset associated with the deductible temporary difference is generated by initial recognition of an asset or liability in a transaction which is not a business combination, and that, at the transaction date, does not impact net profit, nor tax income or loss. For deductible temporary differences resulting from investments in subsidiaries, joint ventures and other associated entities, deferred tax assets are recorded to the extent that it is probable that the temporary difference will reverse in the foreseeable future and that a taxable profit will be available against which the temporary difference can be utilized. The carrying value of deferred tax assets is reviewed at each closing date, and revalued or reduced to the extent that it is more or less probable that a taxable profit will be available to allow the deferred tax asset to be utilized. When assessing the probability of a taxable profit being available, account is taken, primarily, of prior years\u2019 results, forecasted future results, non-recurring items unlikely to occur in the future and the tax strategy. As such, the assessment of UMG's ability to utilize tax losses carried forward is to a large extent judgement-based. If the future taxable results of UMG proved to differ significantly from those expected, UMG would be required to increase or decrease the carrying value of deferred tax assets with a potentially material impact on UMG's Statement of Financial Position and Statement of Profit or Loss. Deferred tax liabilities are recognized for all taxable temporary differences, except where the deferred tax liability results from goodwill or initial recognition of an asset or liability in a transaction which is not a business combination, and that, at the transaction date, does not impact net profit, tax income or loss. For taxable temporary differences resulting from investments in subsidiaries, joint ventures and other associated entities, deferred tax liabilities are recorded except to the extent that both of the following conditions are satisfied: the parent, investor or venturer is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not be reversed in the foreseeable future. Current tax and deferred tax shall be charged or credited directly to equity, and not profit if the tax relates to items that are credited or charged directly to equity. Current tax liabilities not expected to be paid within the next 12 months are recorded as long term current tax liability. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForDeferredIncomeTaxExplanatory",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-364": {
"value": "2.4.22.
Share-based payments
Equity-settled share-based compensation expense is recognized as a personnel cost over the vesting period of the
award at the fair value of the equity instruments granted at the grant date with a corresponding increase in equity. In
cases when grant date occurs after the employees to whom the equity instruments were granted have begun rendering
services (for example, if a grant of equity instruments is subject to shareholder approval), UMG estimates the grant date
fair value of the equity instruments by estimating the fair value of the equity instruments at the end of the reporting
period, for the purposes of recognising the services received during the period between service commencement date and grant date. Once the date of grant has been established, UMG revises the earlier estimate so that the amounts recognised for services received in respect of the grant are ultimately based on the grant date fair value of the equity instruments. Fair value of the shares granted is fixed at the grant date and is equal to the share price at the grant date with a deduction for the aggregate discounted value of the dividends that will not be received over the vesting period, unless the conditions of the plan prescribe compensation for the vesting period dividends, and after taking into account the discount for non-transferability during the retention period. The cumulative expense recognized for equity-settled transactions at each reporting date reflects the extent to which the vesting period has expired and UMG\u2019s best estimate of the number of equity instruments that will ultimately vest. The expense or credit in the Statement of Profit or Loss for a period represents the movement in cumulative expense recognized as at the beginning and end of that period. Service and non-market performance conditions are not considered when determining the grant date fair value of awards, but the likelihood of the conditions being met is assessed as part of UMG\u2019s best estimate of the number of equity instruments that will ultimately vest. Market performance conditions are reflected within the grant date fair value. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForSharebasedPaymentTransactionsExplanatory",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-366": {
"value": "2.4.23. Related parties
A related party is a person or an entity that is related to UMG. These include both people and entities that have, or
are subject to, the influence or control of UMG (e.g. key management personnel). Transactions with related parties are
accounted for in accordance with the requirements of relevant IFRSs and take into account the substance as well as the
legal form.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForTransactionsWithRelatedPartiesExplanatory",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-367": {
"value": "2.4.24.
Contingent liabilities
Non-financial guarantees are accounted for as a contingent liability until such time it becomes probable that UMG will be
required to make a payment under the guarantee.
Contingent liabilities are possible or present obligations of sufficient uncertainty that it does not quality for recognition
as a provision, unless it is assumed in a business combination. Contingent liabilities are reviewed continuously to
assess whether an outflow of resources has become probable.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForContingentLiabilitiesAndContingentAssetsExplanatory",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-368": {
"value": "2.4.25.
Financial guarantees
Financial guarantee is a contract that requires the issuer to make specified payments to reimburse the holder for a loss
it incurs because a specified debtor fails to make payments when due in accordance with the terms of a debt instrument.
Financial guarantees are initially recognised at fair value and are subject to the expected credit loss model, and a credit
loss is recognized for expected cash shortfalls.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialGuaranteesExplanatory",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-369": {
"value": "2.5.
Accounting policy changes
2.5.1. Accounting policy changes originating from the IFRS amendments
The following accounting policy changes originating from the IFRS amendments became effective as at 1 January 2022,
however, the impact from their adoption on the Consolidated financial statements of UMG is not material:
\u2022 Reference to the Conceptual Framework \u2013 Amendments to IFRS 3
\u2022 Property, Plant and Equipment: Proceeds before Intended Use \u2013 Amendments to IAS 16
\u2022 Onerous Contracts \u2013 Costs of Fulfilling a Contract \u2013 Amendments to IAS 37
\u2022 Annual Improvements to IFRS Standards 2018-2020, including;
\u25e6 IFRS 1 First-time Adoption of International Financial Reporting Standards \u2013 Subsidiary as a first-time adopter
\u25e6 IFRS 9 Financial Instruments \u2013 Fees in the \u201910 per cent\u2019 test for derecognition of financial liabilities
UMG applied IFRS Practice Statement 2 - Disclosure of Accounting Policies in its Consolidated financial statements. The Practice Statement provides an overview of the general characteristics of materiality, presents a four-step process companies may follow in making materiality judgements when preparing their financial statements and provides guidance on how to make materiality judgements in specific circumstances, namely, how to make materiality judgements about prior-period information, errors and covenants, and in the context of interim reporting. UMG used the guidance of the Practice Statement 2 to optimise its material accounting policy information disclosure to include only material accounting policy information. Accounting policy information is material if, when considered together with other information included in an entity's financial statements, it can reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements. 2.5.2. Impact of standards issued but not yet effective The new and amended standards and interpretations that are issued up to the date of issuance of UMG's financial statements which are effective for the periods starting January 1, 2023 are disclosed below. UMG intends to adopt these new and amended standards and interpretations, if applicable, when they become effective. \u2022 IFRS 17 (including the June 2020 amendments to IFRS 17) Insurance Contracts \u2022 Amendments to IAS 8 Definition of Accounting Estimates \u2022 Amendments to IAS 12 Deferred Tax related to Assets and Liabilities arising from a Single Transaction The amendment to IAS 12 \u2018Deferred Tax related to Assets and Liabilities arising from a Single Transaction\u2019 related to the recognition of deferred tax when UMG accounts for transactions, such as leases or decommissioning obligations, by recognizing both an asset and a liability. UMG is still investigating the impact of the adoption of IAS 12 amendments on its Consolidated financial statements. UMG do not expect that the adoption of all other the standards and amendments listed above will have a material impact on the financial statements of the Group in future periods. ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfChangesInAccountingPoliciesExplanatory",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-439": {
"value": "2.5.1. Accounting policy changes originating from the IFRS amendments The following accounting policy changes originating from the IFRS amendments became effective as at 1 January 2022, however, the impact from their adoption on the Consolidated financial statements of UMG is not material: \u2022 Reference to the Conceptual Framework \u2013 Amendments to IFRS 3 \u2022 Property, Plant and Equipment: Proceeds before Intended Use \u2013 Amendments to IAS 16 \u2022 Onerous Contracts \u2013 Costs of Fulfilling a Contract \u2013 Amendments to IAS 37 \u2022 Annual Improvements to IFRS Standards 2018-2020, including; \u25e6 IFRS 1 First-time Adoption of International Financial Reporting Standards \u2013 Subsidiary as a first-time adopter \u25e6 IFRS 9 Financial Instruments \u2013 Fees in the \u201910 per cent\u2019 test for derecognition of financial liabilities UMG applied IFRS Practice Statement 2 - Disclosure of Accounting Policies in its Consolidated financial statements. The Practice Statement provides an overview of the general characteristics of materiality, presents a four-step process companies may follow in making materiality judgements when preparing their financial statements and provides guidance on how to make materiality judgements in specific circumstances, namely, how to make materiality judgements about prior-period information, errors and covenants, and in the context of interim reporting. UMG used the guidance of the Practice Statement 2 to optimise its material accounting policy information disclosure to include only material accounting policy information. Accounting policy information is material if, when considered together with other information included in an entity's financial statements, it can reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements. 2.5.2. Impact of standards issued but not yet effective The new and amended standards and interpretations that are issued up to the date of issuance of UMG's financial statements which are effective for the periods starting January 1, 2023 are disclosed below. UMG intends to adopt these new and amended standards and interpretations, if applicable, when they become effective. \u2022 IFRS 17 (including the June 2020 amendments to IFRS 17) Insurance Contracts \u2022 Amendments to IAS 8 Definition of Accounting Estimates \u2022 Amendments to IAS 12 Deferred Tax related to Assets and Liabilities arising from a Single Transaction The amendment to IAS 12 \u2018Deferred Tax related to Assets and Liabilities arising from a Single Transaction\u2019 related to the recognition of deferred tax when UMG accounts for transactions, such as leases or decommissioning obligations, by recognizing both an asset and a liability. UMG is still investigating the impact of the adoption of IAS 12 amendments on its Consolidated financial statements. UMG do not expect that the adoption of all other the standards and amendments listed above will have a material impact on the financial statements of the Group in future periods. ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfChangesInAccountingPoliciesAccountingEstimatesAndErrorsExplanatory",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-409": {
"value": "2.5.1. Accounting policy changes originating from the IFRS amendments The following accounting policy changes originating from the IFRS amendments became effective as at 1 January 2022, however, the impact from their adoption on the Consolidated financial statements of UMG is not material: \u2022 Reference to the Conceptual Framework \u2013 Amendments to IFRS 3 \u2022 Property, Plant and Equipment: Proceeds before Intended Use \u2013 Amendments to IAS 16 \u2022 Onerous Contracts \u2013 Costs of Fulfilling a Contract \u2013 Amendments to IAS 37 \u2022 Annual Improvements to IFRS Standards 2018-2020, including; \u25e6 IFRS 1 First-time Adoption of International Financial Reporting Standards \u2013 Subsidiary as a first-time adopter \u25e6 IFRS 9 Financial Instruments \u2013 Fees in the \u201910 per cent\u2019 test for derecognition of financial liabilities UMG applied IFRS Practice Statement 2 - Disclosure of Accounting Policies in its Consolidated financial statements. The Practice Statement provides an overview of the general characteristics of materiality, presents a four-step process companies may follow in making materiality judgements when preparing their financial statements and provides guidance on how to make materiality judgements in specific circumstances, namely, how to make materiality judgements about prior-period information, errors and covenants, and in the context of interim reporting. UMG used the guidance of the Practice Statement 2 to optimise its material accounting policy information disclosure to include only material accounting policy information. Accounting policy information is material if, when considered together with other information included in an entity's financial statements, it can reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfInitialApplicationOfStandardsOrInterpretations",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-410": {
"value": "2.5.2. Impact of standards issued but not yet effective
The new and amended standards and interpretations that are issued up to the date of issuance of UMG's financial
statements which are effective for the periods starting January 1, 2023 are disclosed below. UMG intends to adopt these
new and amended standards and interpretations, if applicable, when they become effective.
\u2022 IFRS 17 (including the June 2020 amendments to IFRS 17) Insurance Contracts
\u2022 Amendments to IAS 8 Definition of Accounting Estimates
\u2022 Amendments to IAS 12 Deferred Tax related to Assets and Liabilities arising from a Single Transaction
The amendment to IAS 12 \u2018Deferred Tax related to Assets and Liabilities arising from a Single Transaction\u2019 related to
the recognition of deferred tax when UMG accounts for transactions, such as leases or decommissioning obligations, by
recognizing both an asset and a liability. UMG is still investigating the impact of the adoption of IAS 12 amendments on
its Consolidated financial statements.
UMG do not expect that the adoption of all other the standards and amendments listed above will have a material impact
on the financial statements of the Group in future periods.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfExpectedImpactOfInitialApplicationOfNewStandardsOrInterpretations",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-370": {
"value": "Note 3. Segment data Operating segment data The operating segment reporting follows the internal reporting used by Management of UMG, to manage the business, assess the performance based on the available financial information and to allocate the resources. The most important performance measure are EBITDA and Adjusted EBITDA, non-IFRS measures as management believes this is key in evaluating the results of the segments relative to other companies that operate within the same industry. EBITDA and Adjusted EBITDA are defined in the Appendix of the annual report. Main aggregates of the Statement of profit or loss (in millions of euros) Note Recorded Music Music Publishing Merchandising and other Corporate centre Elimination of intersegment transactions Total Year ended December 31, 2022 External revenue 7,937 1,787 616 - - 10,340 Intercompany revenue - 12 2 - (14) - Revenues 1 7,937 1,799 618 - (14) 10,340 Adjusted EBITDA 1,900 410 36 (211) - 2,135 Non-cash share-based compensation expense 23 (73) (15) - (19) - (107) One time direct-listing related expenses - - - - - - EBITDA 1,827 395 36 (230) - 2,028 Amortisation and depreciation expense (204) (162) (2) (9) - (377) Restructuring expenses (29) - (2) (1) - (32) Gain/(loss) on sale of assets (1) (1) - - - (2) Impairment on intangible assets - (17) - - - (17) Other non-recurring items - - - - - - Operating profit 1,593 215 32 (240) - 1,600 Financial income 37 Financial expenses (735) Income/(loss) from equity affiliates (2) Profit before income taxes 900 1 2022 External revenues includes a \u20ac71 million benefit in Recorded Music from the settlement of a copyright infringement lawsuit with an internet service provider that represents revenue other than revenue from contracts with customers. (in millions of euros) Note Recorded Music Music Publishing Merchandising and other Corporate centre Elimination of intersegment transactions Total Year ended December 31, 2021 External revenue 6,821 1,322 361 - - 8,504 Intercompany revenue 1 13 2 - (16) - Revenues 6,822 1,335 363 - (16) 8,504 Adjusted EBITDA 1,614 307 16 (149) - 1,788 Non-cash share-based compensation expense 23 - - - (79) - (79) One time direct-listing related expenses - - - (23) - (23) EBITDA 1,614 307 16 (251) - 1,686 Amortisation and depreciation expense (148) (95) (2) (32) - (277) Restructuring expenses (18) (2) - - - (20) Gain/(loss) on sale of assets 2 - - - - 2 Impairment on intangible assets - - - - - - Other non-recurring items 3 - - - - 3 Operating profit 1,453 210 14 (283) - 1,394 Financial income 143 Financial expenses (377) Income/(loss) from equity affiliates 5 Profit before income taxes1 1,165 1 Restated amounts are presented in Note 2.3. Revenues by geographic area UMG has a global network and operates in local countries, which enables it to maintain the relationships with clients and to understand the local market, legal and other conditions. As a result, the geographic basis of the operating companies is the basis in determining the split of revenues from external customers per geographical areas. Year ended December 31, Year ended December 31, (in millions of euros) 2022 2021 U.S. 5,163 50% 4,082 48% UK 936 9% 785 9% Japan 699 7% 628 7% Germany 499 5% 465 6% France 399 4% 388 5% Rest of the world1 2,644 25% 2,156 25% Total revenues 10,340 100% 8,504 100% 1 Revenues for the Netherlands was \u20ac229 million in 2022 and \u20ac183 million in 2021 . Disaggregated revenue information Recorded Music Year ended December 31, (in millions of euros) 2022 2021 Streaming revenue 1,420 1,186 Subscription revenue 3,901 3,295 Downloads and other digital revenue1 337 324 Physical revenue 1,207 1,121 License and other revenue 1,072 896 Recorded Music revenue 7,937 6,822 1 2022 Downloads and other digital revenue includes a \u20ac71 million benefit from the settlement of a copyright infringement lawsuit with an internet service provider that represents revenue other than revenue from contracts with customers. Music Publishing Year ended December 31, (in millions of euros) 2022 2021 Performance revenue 371 297 Synchronisation revenue 236 199 Digital revenue 1,040 698 Mechanical revenue 97 95 Other revenue 55 46 Music Publishing revenue 1,799 1,335 Subscriptions and streaming represents the largest type of recorded music revenue and is recognised over time and is 51% (53% in 2021) of total UMG revenues. Physical recorded music revenues are recognised at a point in time and represent 12% (13% in 2021) of total UMG revenues. Other Recorded Music revenues mostly include neighbouring rights income which are recognized over time. Merchandising revenue is recognised at a point in time. Music Publishing revenue is mostly recognised over time. In 2022, UMG had 3 customers that each individually represented over 10% of total revenues (2 customers in 2021) and which represented total revenues of 18%, 12% and 10% respectively (18%, 12% and 9% in 2021). Each customer reports revenues in both Recorded Music and Music Publishing segments. The amount of revenue recognized for the year ended December 31, 2022 from performance obligations satisfied (or partially satisfied) in previous periods amounts to \u20ac197 million. Segment assets Segment assets by Segment Segment assets that are reported to the executive board include items that are directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated assets mainly comprise of cash and deferred tax assets which are managed at the Group level. (in millions of euros) Note Recorded Music Music Publishing Merchandising and other Corporate centre Total Year ended December 31, 2022 Goodwill 8 709 769 100 - 1,578 Royalty advances, non- current 9 938 441 214 - 1,593 Catalogues 9 1,247 1,811 - - 3,058 Property, plant & equipment 10 152 5 - 10 167 Other intangible assets 9 23 23 - 73 119 Right of use relating to leases 11 311 4 1 2 318 Royalty advances, current 9 464 476 44 - 984 Other assets 2,140 616 48 227 3,031 Total segment assets 1 5,984 4,145 407 312 10,848 Unallocated assets 791 Total assets 11,639 Year ended December 31, 2021 Goodwill 8 653 727 100 - 1,480 Royalty advances, non- current 9 877 559 100 - 1,536 Catalogues 9 1,165 1,817 - - 2,982 Property, plant & equipment 10 111 6 - 50 167 Other intangible assets 9 24 21 - 51 96 Right of use relating to leases 11 235 27 - 126 388 Royalty advances, current 9 421 362 61 - 844 Other assets 2,913 469 36 191 3,609 Total segment assets 1 6,399 3,988 297 418 11,102 Unallocated assets 992 Total assets 12,094 1 Total segment assets in the Netherlands was \u20ac931 million in 2022 (\u20ac1,769 million in 2021). Content assets by segment December 31, 2022 (in millions of euros) Note Recorded Music Music Publishing Merchandising and other Total Catalogues (of music and publishing rights) 1,247 1,811 - 3,058 Royalty advances (to artists and repertoire owners) 1,402 917 258 2,577 Of which: Non-current 938 441 214 1,593 Current 464 476 44 984 Content assets, net 9 2,649 2,728 258 5,635 Current content assets 464 476 44 984 Non-current content assets 2,185 2,252 214 4,651 December 31, 2021 (in millions of euros) Note Recorded Music Music Publishing Merchandising and other Total Catalogues (of music and publishing rights) 1,165 1,817 - 2,982 Royalty advances (to artists and repertoire owners) 1,298 921 161 2,380 Of which: Non-current 877 559 100 1,536 Current 421 362 61 844 Content assets, net 9 2,463 2,738 161 5,362 Current content assets 421 362 61 844 Non-current content assets 2,042 2,376 100 4,518 ",
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"fact-457": {
"value": "Revenues by geographic area UMG has a global network and operates in local countries, which enables it to maintain the relationships with clients and to understand the local market, legal and other conditions. As a result, the geographic basis of the operating companies is the basis in determining the split of revenues from external customers per geographical areas. Year ended December 31, Year ended December 31, (in millions of euros) 2022 2021 U.S. 5,163 50% 4,082 48% UK 936 9% 785 9% Japan 699 7% 628 7% Germany 499 5% 465 6% France 399 4% 388 5% Rest of the world1 2,644 25% 2,156 25% Total revenues 10,340 100% 8,504 100% 1 Revenues for the Netherlands was \u20ac229 million in 2022 and \u20ac183 million in 2021 Disaggregated revenue information Recorded Music Year ended December 31, (in millions of euros) 2022 2021 Streaming revenue 1,420 1,186 Subscription revenue 3,901 3,295 Downloads and other digital revenue1 337 324 Physical revenue 1,207 1,121 License and other revenue 1,072 896 Recorded Music revenue 7,937 6,822 1 2022 Downloads and other digital revenue includes a \u20ac71 million benefit from the settlement of a copyright infringement lawsuit with an internet service provider that represents revenue other than revenue from contracts with customers. Music Publishing Year ended December 31, (in millions of euros) 2022 2021 Performance revenue 371 297 Synchronisation revenue 236 199 Digital revenue 1,040 698 Mechanical revenue 97 95 Other revenue 55 46 Music Publishing revenue 1,799 1,335 Subscriptions and streaming represents the largest type of recorded music revenue and is recognised over time and is 51% (53% in 2021) of total UMG revenues. Physical recorded music revenues are recognised at a point in time and represent 12% (13% in 2021) of total UMG revenues. Other Recorded Music revenues mostly include neighbouring rights income which are recognized over time. Merchandising revenue is recognised at a point in time. Music Publishing revenue is mostly recognised over time. In 2022, UMG had 3 customers that each individually represented over 10% of total revenues (2 customers in 2021) and which represented total revenues of 18%, 12% and 10% respectively (18%, 12% and 9% in 2021). Each customer reports revenues in both Recorded Music and Music Publishing segments. The amount of revenue recognized for the year ended December 31, 2022 from performance obligations satisfied (or partially satisfied) in previous periods amounts to \u20ac197 million. Note 15. Trade and other accounts payable Year ended December 31, (in millions of euros) 2022 2021 Trade accounts payable 138 146 Music royalties to artists and repertoire owners 3,523 3,020 Accrued expenses 401 385 Other payables 711 936 Trade and other accounts payable 4,773 4,487 Contract liabilities 377 388 Trade accounts payable and other 5,150 4,875 Out of the total amount of \u20ac388 million recognized in contract liabilities at the beginning of 2022, \u20ac320 million has been recognized as revenue for the year ended December 31, 2022. ",
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"fact-440": {
"value": "Revenues by geographic area UMG has a global network and operates in local countries, which enables it to maintain the relationships with clients and to understand the local market, legal and other conditions. As a result, the geographic basis of the operating companies is the basis in determining the split of revenues from external customers per geographical areas. Year ended December 31, Year ended December 31, (in millions of euros) 2022 2021 U.S. 5,163 50% 4,082 48% UK 936 9% 785 9% Japan 699 7% 628 7% Germany 499 5% 465 6% France 399 4% 388 5% Rest of the world1 2,644 25% 2,156 25% Total revenues 10,340 100% 8,504 100% 1 Revenues for the Netherlands was \u20ac229 million in 2022 and \u20ac183 million in 2021 Disaggregated revenue information Recorded Music Year ended December 31, (in millions of euros) 2022 2021 Streaming revenue 1,420 1,186 Subscription revenue 3,901 3,295 Downloads and other digital revenue1 337 324 Physical revenue 1,207 1,121 License and other revenue 1,072 896 Recorded Music revenue 7,937 6,822 1 2022 Downloads and other digital revenue includes a \u20ac71 million benefit from the settlement of a copyright infringement lawsuit with an internet service provider that represents revenue other than revenue from contracts with customers. Music Publishing Year ended December 31, (in millions of euros) 2022 2021 Performance revenue 371 297 Synchronisation revenue 236 199 Digital revenue 1,040 698 Mechanical revenue 97 95 Other revenue 55 46 Music Publishing revenue 1,799 1,335 Subscriptions and streaming represents the largest type of recorded music revenue and is recognised over time and is 51% (53% in 2021) of total UMG revenues. Physical recorded music revenues are recognised at a point in time and represent 12% (13% in 2021) of total UMG revenues. Other Recorded Music revenues mostly include neighbouring rights income which are recognized over time. Merchandising revenue is recognised at a point in time. Music Publishing revenue is mostly recognised over time. In 2022, UMG had 3 customers that each individually represented over 10% of total revenues (2 customers in 2021) and which represented total revenues of 18%, 12% and 10% respectively (18%, 12% and 9% in 2021). Each customer reports revenues in both Recorded Music and Music Publishing segments. The amount of revenue recognized for the year ended December 31, 2022 from performance obligations satisfied (or partially satisfied) in previous periods amounts to \u20ac197 million",
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"fact-411": {
"value": "Revenues by geographic area UMG has a global network and operates in local countries, which enables it to maintain the relationships with clients and to understand the local market, legal and other conditions. As a result, the geographic basis of the operating companies is the basis in determining the split of revenues from external customers per geographical areas. Year ended December 31, Year ended December 31, (in millions of euros) 2022 2021 U.S. 5,163 50% 4,082 48% UK 936 9% 785 9% Japan 699 7% 628 7% Germany 499 5% 465 6% France 399 4% 388 5% Rest of the world1 2,644 25% 2,156 25% Total revenues 10,340 100% 8,504 100% 1 Revenues for the Netherlands was \u20ac229 million in 2022 and \u20ac183 million in 2021 . ",
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"fact-458": {
"value": "Note 4. Cost of revenues and selling, general and administrative expenses Year ended December 31, (in millions of euros) Note 2022 2021 Included in cost of revenues: Artist costs 4,704 3,800 Product costs 1,049 808 Of which: Personnel costs 30 27 Included in selling, general and administrative expenses: Depreciation of tangible assets 10 35 34 Depreciation of right of use assets 11 74 68 Personnel costs 1,537 1,380 Personnel costs and average employee numbers Year ended December 31, (in millions of euros) Note 2022 2021 Salaries 1,202 1,117 Social security and other employment expenses 167 148 Wages and expenses 1,369 1,265 Share-based compensation plans 23 128 79 Employee defined contribution plans 48 41 Employee defined benefit plans 22 6 5 Other 16 17 Personnel costs 1,567 1,407 Annual average number of full-time equivalent employees (in thousands) 9.5 9.1 ",
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"fact-451": {
"value": "Note 4. Cost of revenues and selling, general and administrative expenses Year ended December 31, (in millions of euros) Note 2022 2021 Included in cost of revenues: Artist costs 4,704 3,800 Product costs 1,049 808 Of which: Personnel costs 30 27 Included in selling, general and administrative expenses: Depreciation of tangible assets 10 35 34 Depreciation of right of use assets 11 74 68 Personnel costs 1,537 1,380 Personnel costs and average employee numbers Year ended December 31, (in millions of euros) Note 2022 2021 Salaries 1,202 1,117 Social security and other employment expenses 167 148 Wages and expenses 1,369 1,265 Share-based compensation plans 23 128 79 Employee defined contribution plans 48 41 Employee defined benefit plans 22 6 5 Other 16 17 Personnel costs 1,567 1,407 Annual average number of full-time equivalent employees (in thousands) 9.5 9.1 ",
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"fact-441": {
"value": "Note 4. Cost of revenues and selling, general and administrative expenses Year ended December 31, (in millions of euros) Note 2022 2021 Included in cost of revenues: Artist costs 4,704 3,800 Product costs 1,049 808 Of which: Personnel costs 30 27 Included in selling, general and administrative expenses: Depreciation of tangible assets 10 35 34 Depreciation of right of use assets 11 74 68 Personnel costs 1,537 1,380 ",
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"fact-412": {
"value": "Note 4. Cost of revenues and selling, general and administrative expenses Year ended December 31, (in millions of euros) Note 2022 2021 Included in cost of revenues: Artist costs 4,704 3,800 Product costs 1,049 808 Of which: Personnel costs 30 27 Included in selling, general and administrative expenses: Depreciation of tangible assets 10 35 34 Depreciation of right of use assets 11 74 68 Personnel costs 1,537 1,380 ",
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"fact-371": {
"value": "Note 4. Cost of revenues and selling, general and administrative expenses Year ended December 31, (in millions of euros) Note 2022 2021 Included in cost of revenues: Artist costs 4,704 3,800 Product costs 1,049 808 Of which: Personnel costs 30 27 Included in selling, general and administrative expenses: Depreciation of tangible assets 10 35 34 Depreciation of right of use assets 11 74 68 Personnel costs 1,537 1,380 ",
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"language": "en",
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"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
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"fact-442": {
"value": "Personnel costs and average employee numbers Year ended December 31, (in millions of euros) Note 2022 2021 Salaries 1,202 1,117 Social security and other employment expenses 167 148 Wages and expenses 1,369 1,265 Share-based compensation plans 23 128 79 Employee defined contribution plans 48 41 Employee defined benefit plans 22 6 5 Other 16 17 Personnel costs 1,567 1,407 Annual average number of full-time equivalent employees (in thousands) 9.5 9.1 Note 22. Post-retirement employee benefits In accordance with the laws and practices of each country in which it operates, UMG participates in, or maintains, employee benefit plans providing retirement pensions, post-retirement health care, life insurance and other post- employment benefits to eligible (former) employees and such of their beneficiaries who meet the required conditions. Post-retirement benefits are provided for substantially all employees through defined contribution plans, which are integrated with local social security, or defined benefit plans, which are generally managed via group pension plans. The plan funding policy implemented by UMG is consistent with applicable government funding requirements and regulations. Refer to Note 4 for the contribution to defined contribution plans. Post-employment benefits covered in this note relate to defined-benefit pension and other post-retirement defined benefit plans, including medical plans and life insurance. The benefits provided by these plans are based on employees\u2019 years of service and compensation levels. Refer to the table below for the present value of the net defined benefit obligations and plan assets per country as at 31 December. 2022 2021 (in millions of euros) Obligation Fair value of plan assets Net obligation/ (asset) Obligation Fair value of plan assets Net obligation/ (asset) Germany 134 (2) 132 183 (1) 182 United Kingdom 1 - 1 171 (169) 2 United States 19 - 19 20 - 20 Other 40 (39) 1 53 (49) 4 Total 194 (41) 153 427 (219) 208 Germany The post-retirement benefit plans in Germany aim to provide pension benefits to eligible (former) employees and such of their beneficiaries who meet certain conditions. The total obligation as presented above includes multiple plans, from which three are material. These plans are closed to new entrants since 2003 and earlier. In accordance with current regulations, these plans are not funded and are not covered by the plan assets. The main risks for UMG relate to changes in discount rates. United Kingdom In 2021, the largest post-retirement benefit plan related to pension benefits in the United Kingdom for the eligible participants. In December 2017, the fund purchased a buy-in insurance policy, covering pension benefits. This insurance policy is an asset to the plan. In late 2021, UMG paid the true-up premium to the insurance company to complete the plan buyout. Following the completion of the final administrative actions, the final settlement of the scheme has been reflected in 2022. United States The defined benefit liability in the United States mainly relates to the post-retirement medical care benefits. Post- retirement medical benefit plans in the United States are not covered by plan assets in accordance with local laws and practices. Cash flow impact for 2023 In 2023 UMG expects a cash outflow of \u20ac14 million in relation to all defined benefit plans. Net defined benefit liability Movements of the net defined benefit obligation for the year ended on December 31, are presented in the table below. 2022 2021 (in millions of euros) Note Obligation Fair value of plan assets Net obligation/ (asset) Obligation Fair value of plan assets Net obligation/ (asset) Opening balance 427 (219) 208 423 (207) 216 Current service cost 3 - 3 2 - 2 (Gain)/loss on settlements - - - (1) 1 - Other - - - 1 - 1 Impact on selling & administrative 3 - 3 2 1 3 Interest cost 5 6 - 6 5 - 5 Expected return on plan assets 5 - (3) (3) - (3) (3) Impact on other financial income 6 (3) 3 5 (3) 2 Included in the statement of profit or loss 4 9 (3) 6 7 (2) 5 Actuarial losses/(gains) related to: Experience adjustments 10 51 61 4 (1) 3 Financial assumptions (111) - (111) 3 - 3 Demographic assumptions 1 - 1 - - - Included in other comprehensive income 20 (100) 51 (49) 7 (1) 6 Contributions by employers - (12) (12) - (19) (19) Benefits paid by the fund (121) 121 - (2) 2 - Benefits paid by the employer (12) 12 - (17) 17 - Foreign currency and other (9) 9 - 9 (9) - Closing balance 194 (41) 153 427 (219) 208 of which wholly or partly funded benefits 38 219 wholly unfunded benefits1 156 208 assets related to employee benefit plans (13) (12) provisions for employee benefit plans 166 220 1 Included a current liability of \u20ac14 million as of December 31, 2022 and \u20ac15 million as of December 31, 2021 Assumptions used in the valuation of the net defined benefit liability
The mortality tables used for UMG\u2019s major defined benefit schemes in Germany are Richttafeln 2018 G K. Heubeck.
Other key assumptions used in the valuation of the net defined benefit plans liability are: rate of compensation increase,
discount rate, and expected return on plan assets. The assumptions used to calculate the defined-benefit obligation as of
December 31 were as follows:
Germany United Kingdom United States
Weighted average of
all plans
2022 2021 2022 2021 2022 2021 2022 2021
Discount rate 3.75% 0.75% 4.25% 2.00% 5.00% 3.00% 3.58% 1.30%
Rate of compensation increase
(weighted average)
2.50% 1.75% na na na na 1.93% 0.90%
Duration of the benefit obligation
(in years)
10.4 16.6
na: not applicable.
During 2022, worldwide interest rates increased significantly and this has been reflected in higher discount rates. As
such, most defined benefit plans experienced large gains on the financial assumptions.
A 50 basis point increase (or a 50 basis point decrease, respectively) to the 2022 discount rate would have led to
a decrease of \u20ac0.7 million in pre-tax expense (or an increase of \u20ac0.8 million, respectively) and would have led to a
decrease in the defined benefit obligation of \u20ac9.3 million (or an increase of \u20ac10.1 million, respectively), assuming all other
assumptions remain unchanged.
Pension plan assets allocation
Year ended December 31,
(in millions of euros) 2022 2021
Insurance contracts 55% 89%
Equity securities 20% 4%
Debt securities 14% 3%
Diversified funds 0% 1%
Cash and other 11% 3%
Total 100% 100%
",
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"value": "Personnel costs and average employee numbers Year ended December 31, (in millions of euros) Note 2022 2021 Salaries 1,202 1,117 Social security and other employment expenses 167 148 Wages and expenses 1,369 1,265 Share-based compensation plans 23 128 79 Employee defined contribution plans 48 41 Employee defined benefit plans 22 6 5 Other 16 17 Personnel costs 1,567 1,407 Annual average number of full-time equivalent employees (in thousands) 9.5 9.1 ",
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"fact-470": {
"value": "Note 5. Financial income and expenses Year ended December 31, (in millions of euros) Note 2022 2021 Interest income from cash, cash equivalents and other 20 6 Change in fair value of financial instruments through profit or loss - 23 Gain on disposal of consolidated companies - 98 Expected return on plan assets related to employee benefit plans 22 3 3 Gain on derivative instruments at fair value through profit or loss 1 13 - Foreign exchange gain - 11 Other 1 2 Financial income 37 143 Interest expense on borrowings (47) (21) Change in fair value of financial instruments through profit or loss (654) (320) Unwinding of interest component (1) (1) Interest cost related to employee benefit plans 22 (6) (5) Interest expenses on lease liabilities 11 (14) (16) Foreign exchange loss (1) - Cost of finance (9) (11) Other (3) (3) Financial expenses (735) (377) Net total financial income and (expenses) (698) (234) 1 The net gain on derivative instruments at fair value through profit or loss relates to foreign exchange forward contracts that did not qualify for hedge accounting. Foreign currency risk As any multinational group, UMG faces various types of foreign exchange transactional exposures on committed and expected cash in and outflows, denominated in a currency other than the respective functional currencies of UMG entities. Subsequently, UMG also faces translational risk, which is the risk resulting from the translation of foreign operations into the euro. The main currencies that drive the foreign currency risk of UMG are U.S. Dollar, British Pound and Japanese Yen. UMG\u2019s exposure to FX transactional risk is greatly limited due to the offsetting of inflows/outflows in the different currencies to the extent possible as a natural hedge. UMG Treasury mainly manages foreign exchange rate risk exposure on balance sheet positions, primarily cash concentration in various currencies at the top cash pooling entity. Treasury's foreign exchange risk management policy is to hedge recognized assets and liabilities nominated in foreign currencies above a predefined threshold. UMG uses forward exchange rate contracts and foreign exchange swaps to manage this exposure. All material foreign currency balance sheet exposures are offset by derivatives, so potential foreign currency rate fluctuations as of December 31, 2022 would have no significant impacts on UMG\u2019s financial results. In 2022, UMG did not apply hedge accounting to these derivatives. Currency derivatives are not used for speculative purposes. The average maturity of these contracts is one month. The table below summarises the net nominal value of the foreign currency balance sheet exposure and foreign exchange rate derivatives used to offset it as of December 31, 2022. (in millions of euros) USD GBP JPY Other Total Nominal value of Balance sheet exposure 294 366 271 392 1,323 Foreign exchange rate derivatives (294) (366) (271) (392) (1,323) Net exposure - - - - - ",
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"value": "Note 5. Financial income and expenses Year ended December 31, (in millions of euros) Note 2022 2021 Interest income from cash, cash equivalents and other 20 6 Change in fair value of financial instruments through profit or loss - 23 Gain on disposal of consolidated companies - 98 Expected return on plan assets related to employee benefit plans 22 3 3 Gain on derivative instruments at fair value through profit or loss 1 13 - Foreign exchange gain - 11 Other 1 2 Financial income 37 143 Interest expense on borrowings (47) (21) Change in fair value of financial instruments through profit or loss (654) (320) Unwinding of interest component (1) (1) Interest cost related to employee benefit plans 22 (6) (5) Interest expenses on lease liabilities 11 (14) (16) Foreign exchange loss (1) - Cost of finance (9) (11) Other (3) (3) Financial expenses (735) (377) Net total financial income and (expenses) (698) (234) 1 The net gain on derivative instruments at fair value through profit or loss relates to foreign exchange forward contracts that did not qualify for hedge accounting. ",
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"value": "Note 5. Financial income and expenses Year ended December 31, (in millions of euros) Note 2022 2021 Interest income from cash, cash equivalents and other 20 6 Change in fair value of financial instruments through profit or loss - 23 Gain on disposal of consolidated companies - 98 Expected return on plan assets related to employee benefit plans 22 3 3 Gain on derivative instruments at fair value through profit or loss 1 13 - Foreign exchange gain - 11 Other 1 2 Financial income 37 143 Interest expense on borrowings (47) (21) Change in fair value of financial instruments through profit or loss (654) (320) Unwinding of interest component (1) (1) Interest cost related to employee benefit plans 22 (6) (5) Interest expenses on lease liabilities 11 (14) (16) Foreign exchange loss (1) - Cost of finance (9) (11) Other (3) (3) Financial expenses (735) (377) Net total financial income and (expenses) (698) (234) 1 The net gain on derivative instruments at fair value through profit or loss relates to foreign exchange forward contracts that did not qualify for hedge accounting. ",
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"fact-459": {
"value": "Note 5. Financial income and expenses Year ended December 31, (in millions of euros) Note 2022 2021 Interest income from cash, cash equivalents and other 20 6 Change in fair value of financial instruments through profit or loss - 23 Gain on disposal of consolidated companies - 98 Expected return on plan assets related to employee benefit plans 22 3 3 Gain on derivative instruments at fair value through profit or loss 1 13 - Foreign exchange gain - 11 Other 1 2 Financial income 37 143 Interest expense on borrowings (47) (21) Change in fair value of financial instruments through profit or loss (654) (320) Unwinding of interest component (1) (1) Interest cost related to employee benefit plans 22 (6) (5) Interest expenses on lease liabilities 11 (14) (16) Foreign exchange loss (1) - Cost of finance (9) (11) Other (3) (3) Financial expenses (735) (377) Net total financial income and (expenses) (698) (234) 1 The net gain on derivative instruments at fair value through profit or loss relates to foreign exchange forward contracts that did not qualify for hedge accounting. ",
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"fact-452": {
"value": "Note 5. Financial income and expenses Year ended December 31, (in millions of euros) Note 2022 2021 Interest income from cash, cash equivalents and other 20 6 Change in fair value of financial instruments through profit or loss - 23 Gain on disposal of consolidated companies - 98 Expected return on plan assets related to employee benefit plans 22 3 3 Gain on derivative instruments at fair value through profit or loss 1 13 - Foreign exchange gain - 11 Other 1 2 Financial income 37 143 Interest expense on borrowings (47) (21) Change in fair value of financial instruments through profit or loss (654) (320) Unwinding of interest component (1) (1) Interest cost related to employee benefit plans 22 (6) (5) Interest expenses on lease liabilities 11 (14) (16) Foreign exchange loss (1) - Cost of finance (9) (11) Other (3) (3) Financial expenses (735) (377) Net total financial income and (expenses) (698) (234) 1 The net gain on derivative instruments at fair value through profit or loss relates to foreign exchange forward contracts that did not qualify for hedge accounting. Note 13. Capital and financial risk management Capital risk management UMG objectives when managing capital are to safeguard UMG\u2019s ability to continue to create value for shareholders, support the sustainable growth of the Group, and to maintain an optimal capital structure that optimizes its cost of capital. As a result, UMG endeavours to maintain a satisfactory economic return for its shareholders and guarantee economic access to external sources of funds. On 31 May 2022, UMG NV announced Baa1/BBB Long Term Credit Ratings from Moody\u2019s and S&P. These investment grade ratings are the financial covenants UMG committed to sustaining. In relation to the EUR RCF, if UMG does not have these ratings by Moody\u2019s and S&P or a comparable rating from an internationally recognized credit rating agency, its Leverage Ratio shall be equal to or below 4.0x. UMG and its subsidiaries are not subject to external capital requirements, other than the financial covenants as disclosed above. To support this strategic goal, UMG management remains focused on the robust performance of the Free Cash Flow, a non-IFRS measure as defined in the definitions in the Appendix to the Annual Report, and effective Working Capital management, details on both are presented below. Free cash flow Year ended December 31, (in millions of euros) 2022 2021 Operating profit 1 1,600 1,394 Amortisation and depreciation expense 377 277 Impairment expense 17 - Changes in provision, net 65 8 (Gain)/loss on sale of assets 2 (2) Other non-recurring items - (3) Adjustments 1 461 280 Royalty advance payments, net of recoupments (148) (364) Other changes in net working capital 74 85 Net cash provided by/(used for) operating activities before income tax paid 1,987 1,395 Income tax paid (255) (255) Net cash provided by/(used for) operating activities 1,732 1,140 Net cash provided by/(used for) investing activities (520) (391) Repayment of lease liabilities and related interest expenses (100) (86) Interest, net (30) (17) Other cash items related to financing activities 4 (8) Free cash flow 1,086 638 1 Restated as described in Note 2.3 . Changes in working capital (in millions of euros) December 31, 2021 Changes in operating working capital1 Business combinations Changes in foreign currency translation adjustments Other2 December 31, 2022 Inventories3 99 62 - 2 - 163 Trade accounts receivable and other 1,803 203 1 11 (4) 2,014 Of which: Trade accounts receivable 550 22 1 4 3 580 Expected credit losses (46) (14) - - (2) (62) Working capital assets 1,902 265 1 13 (4) 2,177 Trade accounts payable and other (4,875) (333) (2) (113) 173 (5,150) Other non- current liabilities (769) (6) (3) (14) 355 (437) Working capital liabilities (5,644) (339) (5) (127) 528 (5,587) Net working capital (3,742) (74) (4) (114) 524 (3,410) 1 Excludes content investments. 2 Mainly includes the change in net working capital relating to content investments, capital expenditures and other investments. 3 Total inventory obsolescence expense for the period was \u20ac69 million. (in millions of euros) December 31, 2020 Changes in operating working capital1 Business combinations Changes in foreign currency translation adjustments Other2 December 31, 2021 Inventories3 79 17 - 3 - 99 Trade accounts receivable and other 1,641 126 - 40 (4) 1,803 Of which: Trade accounts receivable 538 17 - 12 (17) 550 Expected credit losses (62) 9 - (1) 8 (46) Working capital assets 1,720 143 - 43 (4) 1,902 Trade accounts payable and other (4,126) (226) - (201) (322) (4,875) Other non- current liabilities (851) (2) - (19) 103 (769) Working capital liabilities (4,977) (228) - (220) (219) (5,644) Net working capital (3,257) (85) - (177) (223) (3,742) 1 Excludes content investments. 2 Mainly includes the change in net working capital relating to content investments, capital expenditures and other investments. 3 Total inventory obsolescence expense for the period was \u20ac40 million. Financial risk management UMG business activities expose the Group to a variety of risks associated with financial instruments, including credit risk, liquidity risk, interest rate risk, foreign currency risk and market risks. These risks are inherent to how UMG operates as a multinational with locally operating subsidiaries. To manage these risks, UMG has developed specific policies. The essence of measuring the performance of these policies is to strike a balance between managing risks and contributing to the financial results of UMG. UMG policies are risk-adverse in that regard. Enforcement of procedures related to financial risk management is carried out by UMG Group Treasury in line with the guiding principles of the Group Treasury Policies. Credit risk Credit risk can be defined as the risk of loss arising from the failure of a counterparty to perform its obligations under a contract. Credit risk maximum exposure is equal to the carrying amounts of Trade and other receivables, refer to Note 14, and Cash position and borrowings, refer to Note 16, as presented in the Statement of Financial Position. Also, for the derivatives and assets at fair value via profit and loss, the maximum exposure to credit risk at the end of the reporting period is equal to the carrying amount, refer to Note 18 Financial assets and liabilities. The maximum credit risk exposure on guarantees issued corresponds to their nominal amounts, as presented in Note 17 Contractual obligations and other commitments. UMG aims to centralize its cash management with its Tier 1 banks, of which all the banks have credit ratings of minimum of A-. UMG performs ongoing evaluations of the financial and non-financial condition of UMG customers and adjusts credit limits when appropriate. In instances where a customer's creditworthiness is determined not to be sufficient to grant the required credit limit, there are several mitigation tools that can be utilized to close the gap, including reducing payment terms, cash on delivery, prepayments and pledges on assets. UMG\u2019s operational subsidiaries have set up procedures and systems to track their trade accounts receivable and recover outstanding amounts. In addition, some subsidiaries have insured their main client credit risks worldwide with a leading credit insurer . Liquidity risk Liquidity risk is the risk that UMG will not be able to meet its financial obligations as they fall due. The primary objective of liquidity management is providing sufficient cash to enable UMG to meet its liabilities when due, under normal and stressed conditions, without incurring losses. Neither the aged receivables of individual customers, nor the profile of the accounts receivable portfolio per segment, impose a significant threat to UMG\u2019s liquidity planning. UMG Treasury provides for the short-term day-to-day cash management needs of the Group by organizing sweeps between international cash poolings. For medium term financing requirements, UMG Group Treasury determines the Group's overall debt position and its planned evolution based on the Group\u2019s 13-month rolling cash forecast. A liquidity analysis is performed to ensure the proper funding is in place to face medium-term needs. Cash is extracted from countries outside the cash pooling through dividends or thanks to upstream loans. Cash is pooled up to UMG NV from all territories participating in the international cash pooling. The objectives of liquidity management are to repay the external debt at the level of UMG NV (\u20ac debt) and to pay the UMG NV dividend to the Group's shareholders. The list of permitted banks for liquidity management includes eight banks with minimum rating of A-. The liquidity analysis includes a buffer of \u20ac400 million to provide for intra-month treasury swings and the incompressible treasury float. Adequate bank facilities are available as backup for Commercial paper. The maturity schedule for long- term external debt is maintained above 3 years. UMG Treasury ensures central compliance with financial covenants, pari-passu, and negative pledge clauses. Total cash and cash equivalents position as at December 31, 2022, is disclosed in Note 16 Cash positions and borrowings. Contractual obligations and their timing are disclosed in Note 17 Contractual obligations and other commitments. In addition, as at December 31, 2022, UMG has undrawn Revolving Credit Facilities (RCF) of \u20ac1,266 million. Market risk Market risk is the possibility that an entity will experience losses due to factors that affect the financial markets. Market risk includes currency risk and interest rate risk as addressed below, but also risk of change in fair value of the financial instruments, including those traded on the active markets. As at December 31, 2022, UMG held financial instruments measured at fair value as disclosed in Note 18, where the exposure of the risk and sensitivity are presented. UMG risk management policies cover refinancing risk to ensure that under any market circumstances, UMG can refinance its debt on time and a reasonable cost. The objectives of refinancing risk management are to benefit from sufficient flexibility granted by the access to various capital markets (EUR CPs and Bonds) and the ability to sell assets to not rely solely on bank borrowings or commercial paper. Interest rate risk Interest rate risk is the risk of the fair value or future cash flows of a financial instrument fluctuating because of changes in the market interest rates. Financial instruments included in the borrowings create an inherent interest rate risk. UMG seeks to limit the period over which interest rates on debt are exposed. The preferred method of hedging interest rate risk is issuing long term fixed-rate bonds. The use of interest-rate plain vanilla derivatives is also authorized. The list of authorized instruments includes interest rate swaps, FRAs, caps, and floors. As for currency risk management, interest rate hedging operations are handled solely by UMG Treasury according to the Group\u2019s strategic goals set by the Group Chief Financial Officer. The speculative use of interest rate derivatives is strictly prohibited. As of December 31, 2022, UMG had a ratio of fixed-rate debt to total outstanding debt of approximately 79%, including lease liabilities. A sensitivity analysis conducted in January 2023 on the gross debt portfolio shows that if short term EURIBOR were to increase instantaneously by 0.5% from their level of December 31, 2022, with all other variables held constant, the total change in annualized interest expense result would be \u20ac5 million. Foreign currency risk As any multinational group, UMG faces various types of foreign exchange transactional exposures on committed and expected cash in and outflows, denominated in a currency other than the respective functional currencies of UMG entities. Subsequently, UMG also faces translational risk, which is the risk resulting from the translation of foreign operations into the euro. The main currencies that drive the foreign currency risk of UMG are U.S. Dollar, British Pound and Japanese Yen. UMG\u2019s exposure to FX transactional risk is greatly limited due to the offsetting of inflows/outflows in the different currencies to the extent possible as a natural hedge. UMG Treasury mainly manages foreign exchange rate risk exposure on balance sheet positions, primarily cash concentration in various currencies at the top cash pooling entity. Treasury's foreign exchange risk management policy is to hedge recognized assets and liabilities nominated in foreign currencies above a predefined threshold. UMG uses forward exchange rate contracts and foreign exchange swaps to manage this exposure. All material foreign currency balance sheet exposures are offset by derivatives, so potential foreign currency rate fluctuations as of December 31, 2022 would have no significant impacts on UMG\u2019s financial results. In 2022, UMG did not apply hedge accounting to these derivatives. Currency derivatives are not used for speculative purposes. The average maturity of these contracts is one month. The table below summarises the net nominal value of the foreign currency balance sheet exposure and foreign exchange rate derivatives used to offset it as of December 31, 2022. (in millions of euros) USD GBP JPY Other Total Nominal value of Balance sheet exposure 294 366 271 392 1,323 Foreign exchange rate derivatives (294) (366) (271) (392) (1,323) Net exposure - - - - - Note 14. Trade and other receivables Year ended December 31, (in millions of euros) 2022 2021 Trade receivables 1,765 1,598 Other receivables 249 205 Trade receivables, net of value allowance 2,014 1,803 Out of the total amount of trade receivables, \u20ac1,247 million (2021: \u20ac1,094 million) was recognized as accrued revenue as at 31 December, 2022. Year ended December 31, (in millions of euros) 2022 2021 Current 1,698 1,543 Overdue 0-30 days 46 44 Overdue 31-150 days 21 11 Overdue >150 days - - Trade receivables, net of value allowance 1,765 1,598 For the movements of the expected credit loss allowance and the credit risk management policies and procedures of UMG please refer to Note 13 Capital and financial risk management. Note 15. Trade and other accounts payable Year ended December 31, (in millions of euros) 2022 2021 Trade accounts payable 138 146 Music royalties to artists and repertoire owners 3,523 3,020 Accrued expenses 401 385 Other payables 711 936 Trade and other accounts payable 4,773 4,487 Contract liabilities 377 388 Trade accounts payable and other 5,150 4,875 Out of the total amount of \u20ac388 million recognized in contract liabilities at the beginning of 2022, \u20ac320 million has been recognized as revenue for the year ended December 31, 2022. Note 16. Cash position and borrowings Cash position Year ended December 31, (in millions of euros) 2022 2021 Cash and cash equivalents 439 585 Bank overdrafts (1) (13) Cash and cash equivalents in the statement of cash flows1 438 572 1 Restated as described in Note 2.3. UMG operates in a number of territories where regulations do not authorise participation of local entities to the UMG global cash pooling. Only dividends and intra-group invoices are available to extract cash from these territories. The amount of cash held by UMG entities in these countries amounted to \u20ac373 million as of December 31, 2022. Borrowings and other financial liabilities December 31, 2022 December 31, 2021 (in millions of euros) Total Long-term Short-term Total Long-term Short-term Bonds 1,004 987 17 - - - Term facility - - - 998 798 200 Drawn revolving credit facilities 125 125 - 1,447 1,447 - Commercial papers 929 - 929 - - - Bank overdrafts 1 - 1 13 - 13 Other 191 1 190 137 32 105 Borrowings at amortized cost 2,250 1,113 1,137 2,595 2,277 318 Cash and cash equivalents (439) - (439) (585) - (585) Derivative financial assets (1) - (1) - - - Net debt 1,810 2,010 New borrowings In February 2022, UMG entered into a short-term floating rate USD 500 million revolving credit facility. At maturity on November 14, 2022, the facility was extended to November 14, 2023. The facility was renewed for USD 500 million and is stepping down to USD 350 million by December 30, 2022. By December 31, 2022, no drawing was made from the facility. On June 30, 2022, UMG issued \u20ac500 million of senior unsecured notes due on June 30, 2027 with a coupon of 3.00% and \u20ac500 million of senior unsecured notes due on June 30, 2032 with a coupon of 3.75%. On July 1, 2022, the net proceeds from the issuance of the unsecured senior notes of \u20ac1 billion were used to fully repay the Term loan. See Note 13 for information on covenants associated with new borrowings. On July 8, 2022, UMG established a EUR commercial paper program. Under the Program, UMG may issue, from time to time, commercial paper notes up to a maximum aggregate amount of \u20ac1 billion. The proceeds from the issuance will be used firstly to pay down UMG\u2019s revolving credit facility and manage short-term liquidity needs from the Group. Movements of borrowings (in millions of euros) Term facility Drawn revolving credit facilities Bonds Vivendi SE borrowings Vivendi SE credit lines drawn UMG own credit lines drawn Bank overdrafts Commercial papers Other debt Total Balance December 31, 2020 - - - 2,368 422 213 5 - 1 3,009 New borrowings 998 1,981 - - 40 20 9 - 137 3,185 Repayments - (556) - (2,368) (465) (235) - - - (3,624) Translation differences and other movements - 22 - - 3 2 (1) - (1) 25 Balance December 31, 2021 998 1,447 - - - - 13 - 137 2,595 New borrowings 8 1,722 1,004 - - - 1 3,117 87 5,939 Repayments (1,006) (3,126) - - - - (13) (2,188) (34) (6,367) Translation differences and other movements - 82 - - - - - - 1 83 Balance December 31, 2022 - 125 1,004 - - - 1 929 191 2,250 Note 18. Financial assets and liabilities The following table shows the carrying amounts and fair values of financial assets and liabilities according to their fair value hierarchy. Based on the nature, maturity or the magnitude of the amounts, UMG considers that the fair value of trade and other receivables, short-term deposits, loans receivable, borrowings, trade and other payables are not materially different from their carrying value. Fair value hierarchy is based on the transparency of the inputs used and is as follows: \u2022 Level 1: fair value measurement based on quoted prices in active markets for identical assets or liabilities; \u2022 Level 2: fair value measurement based on observable market data (other than quoted prices included under Level 1), being for example, price on the last transactions on over-the-counter (OTC) markets; and \u2022 Level 3: fair value measurement based on valuation techniques using inputs for the asset or liability that are not based on observable market data . December 31, 2022 Fair value (in millions of euros) Carrying amount Level 1 1 Level 2 Level 3 Financial assets at fair value through profit and loss Listed equity securities 597 597 - - Unlisted equity securities - - - - Warrants - - - - Other financial assets 51 - 36 15 Trade and other receivables 1 - 1 - Financial assets at fair value through other comprehensive income Listed equity securities through OCI 1 1 - - Unlisted equity securities 19 - - 19 Financial assets at amortised cost Trade and other receivables 2,013 - - - Other financial assets 22 - - - Total financial assets 2,704 598 37 34 Financial liabilities at amortised cost Trade and other payables (5,150) - - - Bonds (1,004) (987) - - Borrowings, excluding bank overdrafts and bonds (1,262) - - - Other non-current liabilities (437) - - - Total financial liabilities (7,853) (987) - - 1 Includes transfer of \u20ac31 million of equity securities from level 2 to level 1 . December 31, 2021 Fair value (in millions of euros) Carrying amount Level 1 Level 2 Level 3 Financial assets at fair value through profit and loss Listed equity securities 1,413 1,413 - - Unlisted equity securities 44 - 44 - Warrants 19 - 19 - Other financial assets 68 - 57 11 Trade and other receivables - - - - Financial assets at fair value through other comprehensive income Listed equity securities through OCI - - - - Unlisted equity securities 16 - - 16 Financial assets at amortised cost Trade and other receivables 1,803 - - - Other financial assets 32 - - - Total financial assets 3,395 1,413 120 27 Financial liabilities at amortised cost Trade and other payables (4,875) - - - Borrowings, excluding bank overdrafts and bonds (2,582) - - - Other non-current liabilities (769) - - - Total financial liabilities (8,226) - - - Listed equity portfolio December 31, 2022 Number of shares held Ownership interest Average purchase price1,2 Stock market price Carrying value Change in value over the period Cumulative unrealized captial gain/(loss) 3 Sensitivity at +/- 10 pts (in thousands) (\u20ac/share) (in millions of euros) Spotify 6,487 3.30% 6.58 74.41 483 (856) 440 +48/-48 Tencent Music Entertainment 12,246 0.76% na 7.80 96 22 96 +10/-10 Other 18 18 18 Total 597 (816) 554 1 Includes acquisition fees and taxes. 2 na: not applicable. 3 Includes revaluation losses, net of liabilities, of \u20ac617 million in 2022 as recognized in Note 5 . December 31, 2021 Number of shares held Ownership interest Average purchase price 1,2 Stock market price Carrying value Change in value over the period Cumulative unrealized captial gain/(loss) 3 Sensitivity at +/- 10 pts (in thousands) (\u20ac/share) (in millions of euros) Spotify 6,487 3.37% 6.58 206.38 1,339 (330) 1,296 +134/-134 Tencent Music Entertainment 12,246 0.74% na 6.04 74 (119) 74 +7/-7 Total 1,413 (449) 1,370 1 Includes acquisition fees and taxes. 2 na: not applicable. 3 Includes revaluation losses, net of liabilities, of \u20ac315 million in 2021 as recognized in Note 5. ",
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"value": "Note 5. Financial income and expenses Year ended December 31, (in millions of euros) Note 2022 2021 Interest income from cash, cash equivalents and other 20 6 Change in fair value of financial instruments through profit or loss - 23 Gain on disposal of consolidated companies - 98 Expected return on plan assets related to employee benefit plans 22 3 3 Gain on derivative instruments at fair value through profit or loss 1 13 - Foreign exchange gain - 11 Other 1 2 Financial income 37 143 Interest expense on borrowings (47) (21) Change in fair value of financial instruments through profit or loss (654) (320) Unwinding of interest component (1) (1) Interest cost related to employee benefit plans 22 (6) (5) Interest expenses on lease liabilities 11 (14) (16) Foreign exchange loss (1) - Cost of finance (9) (11) Other (3) (3) Financial expenses (735) (377) Net total financial income and (expenses) (698) (234) 1 The net gain on derivative instruments at fair value through profit or loss relates to foreign exchange forward contracts that did not qualify for hedge accounting. ",
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"value": "Note 5. Financial income and expenses Year ended December 31, (in millions of euros) Note 2022 2021 Interest income from cash, cash equivalents and other 20 6 Change in fair value of financial instruments through profit or loss - 23 Gain on disposal of consolidated companies - 98 Expected return on plan assets related to employee benefit plans 22 3 3 Gain on derivative instruments at fair value through profit or loss 1 13 - Foreign exchange gain - 11 Other 1 2 Financial income 37 143 Interest expense on borrowings (47) (21) Change in fair value of financial instruments through profit or loss (654) (320) Unwinding of interest component (1) (1) Interest cost related to employee benefit plans 22 (6) (5) Interest expenses on lease liabilities 11 (14) (16) Foreign exchange loss (1) - Cost of finance (9) (11) Other (3) (3) Financial expenses (735) (377) Net total financial income and (expenses) (698) (234) 1 The net gain on derivative instruments at fair value through profit or loss relates to foreign exchange forward contracts that did not qualify for hedge accounting. ",
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"value": "Note 5. Financial income and expenses Year ended December 31, (in millions of euros) Note 2022 2021 Interest income from cash, cash equivalents and other 20 6 Change in fair value of financial instruments through profit or loss - 23 Gain on disposal of consolidated companies - 98 Expected return on plan assets related to employee benefit plans 22 3 3 Gain on derivative instruments at fair value through profit or loss 1 13 - Foreign exchange gain - 11 Other 1 2 Financial income 37 143 Interest expense on borrowings (47) (21) Change in fair value of financial instruments through profit or loss (654) (320) Unwinding of interest component (1) (1) Interest cost related to employee benefit plans 22 (6) (5) Interest expenses on lease liabilities 11 (14) (16) Foreign exchange loss (1) - Cost of finance (9) (11) Other (3) (3) Financial expenses (735) (377) Net total financial income and (expenses) (698) (234) 1 The net gain on derivative instruments at fair value through profit or loss relates to foreign exchange forward contracts that did not qualify for hedge accounting. ",
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"value": "Note 6. Income taxes Income taxes and income tax paid by geographic area Year ended December 31, (in millions of euros) 2022 2021 (Expense)/income Current United States (185) (141) United Kingdom (24) (14) Rest of Europe (127) (47) Rest of the world (11) (117) (347) (319) Deferred United States 9 (4) United Kingdom (1) 16 Rest of Europe 189 27 Rest of the world1 35 3 232 42 Income taxes (115) (277) 1 Included the deferred tax charge relating to the revaluation gain recorded through profit or loss related to the investments in Spotify, Tencent Music Entertainment and other investments for an aggregate amount of \u20ac166 million in 2022, compared to \u20ac71 million expense in 2021. Income tax paid Year ended December 31, (in millions of euros) 2022 2021 United States (187) (139) United Kingdom (22) (20) Rest of Europe (36) (37) Rest of the world1 (10) (59) Income tax (paid)/collected (255) (255) 1 Includes refunds of \u20ac62 million related to two litigations finalised before tax courts in 2022 (the 2021 amount includes \u20ac3 million payments as assessed for these litigations). Effective tax rate Year ended December 31, (in millions of euros) 2022 2021 Net profit 785 888 (Income)/loss from equity affiliates 2 (5) Income taxes 115 277 Profit before income taxes excluding (income)/loss from equity affiliates 902 1,160 Dutch statutory tax rate 25.8% 25.0% Theoretical provision for income taxes based on Dutch statutory tax rate (233) (290) Reconciliation of the theoretical and effective provision for income taxes Earnings tax rate differences 59 32 Impacts of the changes in tax rates 1 (14) Use or recognition of tax attributes 1,2 19 83 Adjustments to tax expense from previous years 26 8 Settled tax litigations 3 90 (11) Withholding taxes (72) (56) United States tax components Base Erosion and Anti-Abuse tax (BEAT) addback 2 - (48) Foreign Derived Intangible Income (FDII) deduction 31 22 State taxes (net of Federal Income Tax benefit) (29) (25) Other (10) 22 Provision for income taxes (115) (277) Effective tax rate 12.7% 23.9% 1 Tax attributes includes tax losses and tax credits, both for the use of previously unrecognized attributes as for prior years attributes recognised this year for expected utilisation in future years. 2 In 2021 in the United States the benefit of \u20ac80 million on the utilisation of tax attributes is, by virtue of how the tax rules apply, largely offset by the Base Erosion and Anti-Abuse Tax addback. In 2022, there is no addback due to a low amount of tax attributes used. 3 This represents the beneficial impact of two litigations finalised before tax courts in 2022 (the 2021 amount reflects the accrual recorded for these litigations in 2021). Excluding previous years\u2019 adjustments and the impacts of the tax litigations to income tax expense, the effective tax rate would have been 27.8% in 2022 and 24.1% in 2021. Deferred tax assets and liabilities Changes in deferred tax assets/(liabilities), net Year ended December 31, (in millions of euros) 2022 2021 Opening balance of deferred tax assets/(liabilities) (446) (482) Income taxes 231 42 Expenses and income directly recorded in equity (14) 4 Other business combinations - - Changes in foreign currency translation adjustments and other (3) (10) Closing balance of deferred tax assets/(liabilities), net (232) (446) Components of deferred tax assets and liabilities Year ended December 31, (in millions of euros) 2022 2021 Deferred tax assets Recognizable deferred taxes Tax attributes 1 98 111 Of which Universal Music US and its subsidiaries 8 8 Universal Music UK and its subsidiaries 51 61 Universal Music and its subsidiaries in the rest of Europe 19 22 Universal Music and its subsidiaries in the rest of the world 20 20 Other 358 415 Of which non-deductible provisions 61 49 employee benefits 37 21 working capital 149 158 Other 111 187 Total gross deferred tax assets 456 526 Deferred taxes, unrecognized Tax attributes 1 (82) (103) Of which Universal Music US and its subsidiaries (6) (5) Universal Music UK and its subsidiaries (38) (59) Universal Music and its subsidiaries in the rest of Europe (18) (19) Universal Music and its subsidiaries in the rest of the world (20) (20) Other (26) (19) Total deferred tax assets, unrecognized (108) (122) Recorded deferred tax assets 348 404 Deferred tax liabilities Asset revaluations 2 (198) (204) Working capital (163) (226) Financial instruments 3 (124) (351) Other (95) (69) Recorded deferred tax liabilities (580) (850) Deferred tax assets/(liabilities), net (232) (446) 1 As shown in this table, the amounts of gross tax attributes (including tax losses and tax credits) were estimated at the end of the relevant fiscal years. As a result, the amount of tax attributes shown in this table and the amount reported to tax authorities at the time of the filing of the tax returns may differ, and if necessary, may need to be adjusted in this table at the end of the following year. Deferred tax assets have not been recognised in respect of gross tax attributes for \u20ac 1,279 million (2021: \u20ac 1,346 million), as it is not probable that there will be future taxable profits within the entities against which these can be utilised. 2 These tax liabilities, stemming from asset revaluations and resulting from the purchase price allocation of entities acquired by UMG, are cancelled upon amortization or divestiture of the related assets and do not and will not generate any current tax liabilities. 3 Primarily related to the deferred tax liabilities stemming from the revaluation of the investments in Spotify, Tencent Music Entertainment and other investments. Tax litigation
In the normal course of their business, UMG is subject to tax audits by the relevant tax authorities in the countries
in which it conducts or has conducted business. Various tax authorities have proposed ordinary adjustments to the
financial results reported by UMG for fiscal year 2021 and prior years, under statutes of limitation applicable to UMG.
In litigation situations, UMG's policy is to pay the taxes it intends to contest, and to seek a refund through appropriate
legal proceedings. Regarding ongoing tax audits, no provision is recorded where the impact that could result from an
unfavourable outcome cannot be reliably assessed. To date, UMG believes that these tax audits are unlikely to have a
material impact on the Group's financial position or liquidity
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"fact-414": {
"value": "Deferred tax assets and liabilities
Changes in deferred tax assets/(liabilities), net
Year ended December 31,
(in millions of euros) 2022 2021
Opening balance of deferred tax assets/(liabilities) (446) (482)
Income taxes 231 42
Expenses and income directly recorded in equity (14) 4
Other business combinations - -
Changes in foreign currency translation adjustments and other (3) (10)
Closing balance of deferred tax assets/(liabilities), net (232) (446)
Components of deferred tax assets and liabilities
Year ended December 31,
(in millions of euros) 2022 2021
Deferred tax assets
Recognizable deferred taxes
Tax attributes
1
98 111
Of which
Universal Music US and its subsidiaries 8 8
Universal Music UK and its subsidiaries 51 61
Universal Music and its subsidiaries in the rest of Europe 19 22
Universal Music and its subsidiaries in the rest of the world 20 20
Other 358 415
Of which
non-deductible provisions 61 49
employee benefits 37 21
working capital 149 158
Other 111 187
Total gross deferred tax assets 456 526
Deferred taxes, unrecognized
Tax attributes
1
(82) (103)
Of which
Universal Music US and its subsidiaries (6) (5)
Universal Music UK and its subsidiaries (38) (59)
Universal Music and its subsidiaries in the rest of Europe (18) (19)
Universal Music and its subsidiaries in the rest of the world (20) (20)
Other (26) (19)
Total deferred tax assets, unrecognized (108) (122)
Recorded deferred tax assets 348 404
Deferred tax liabilities
Asset revaluations
2
(198) (204)
Working capital (163) (226)
Financial instruments
3
(124) (351)
Other (95) (69)
Recorded deferred tax liabilities (580) (850)
Deferred tax assets/(liabilities), net (232) (446)
1 As shown in this table, the amounts of gross tax attributes (including tax losses and tax credits) were estimated at the end of the relevant fiscal years. As a result, the
amount of tax attributes shown in this table and the amount reported to tax authorities at the time of the filing of the tax returns may differ, and if necessary, may need
to be adjusted in this table at the end of the following year. Deferred tax assets have not been recognised in respect of gross tax attributes for \u20ac 1,279 million (2021:
\u20ac 1,346 million), as it is not probable that there will be future taxable profits within the entities against which these can be utilised.
2 These tax liabilities, stemming from asset revaluations and resulting from the purchase price allocation of entities acquired by UMG, are cancelled upon amortization or
divestiture of the related assets and do not and will not generate any current tax liabilities.
3 Primarily related to the deferred tax liabilities stemming from the revaluation of the investments in Spotify, Tencent Music Entertainment and other investments.
",
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"language": "en",
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"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-376": {
"value": "Note 7. Earnings per share
Year ended December 31,
(in millions of euros and shares) 2022 2021
Net profit attributable to equity holders of the parent 782 886
Weighted average number of shares outstanding (after deduction of treasury shares) during
the year
1,813 1,813
Potential dilutive effects related to share-based compensation 3 1
Diluted weighted average number of shares 1,816 1,814
Earnings per share
(in euros)
Basic earnings per share 0.43 0.49
Diluted earnings per share 0.43 0.49
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfEarningsPerShareExplanatory",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-375": {
"value": "Note 8. Goodwill
Changes in goodwill
Year ended December 31,
(in millions of euros) 2022 2021
Balance as at January 1
Goodwill, gross 1,567 1,451
Accumulated impairment losses (87) (82)
Goodwill, net 1,480 1,369
Changes in book value:
Acquisitions 19 9
Impairment losses (7) -
Foreign currency translation adjustments 86 102
Total changes 98 111
Balance as at December 31
Goodwill, gross 1,678 1,567
Accumulated impairment losses (100) (87)
Goodwill, net 1,578 1,480
Goodwill by cash generating unit Year ended December 31, (in millions of euros) 2022 2021 Recorded Music 709 653 Music Publishing 769 727 Merchandising & Other 100 100 Closing balance 1,578 1,480 Cash generating units For impairment testing, goodwill is allocated to cash-generating units, which represent the lowest level at which the goodwill is monitored internally for management purposes. The cash-generating units correspond to the operating segments. UMG\u2019s financial reporting is managed at the level of operating segments consistent across the music industry (Recorded Music, Music Publishing, and Merchandising). UMG test goodwill at the cash-generating units level which corresponds to the operating segments as disclosed in Note 3 above. Goodwill impairment test UMG conducted the full annual impairment test in the fourth quarter of 2022. The goodwill was tested for impairment by comparing it with a recoverable amount. The recoverable amount is determined as the higher of the value in use determined by the discounted value of future cash flows (Discounted Cash Flow method (DCF)) and the fair value (less costs to sell), determined on the basis of market data (stock market prices, comparable listed companies, comparison with the value attributed to similar assets or companies in recent acquisition transactions). For a description of the methods used for the impairment test, please refer to Note 2. Key assumptions used in the impairment tests for the cash-generating units were sales growth rates and the rates used for discounting the projected cash flows. These cash flow projections were determined using management's internal forecasts that cover an initial period of 2023 to 2027 that matches the period used for our strategic planning process, after which a terminal value was calculated. The sales growth rates used to estimate cash flows are based on: \u2022 past performance, including the label pool revenue forecasts derived from commercial agreements with customers; \u2022 external market growth assumptions among which is the overall population and corresponding growth in streaming penetration rate among the population; \u2022 expected market share developments; \u2022 industry long-term growth averages. Key assumptions 2022 2021 In % per year Compound Annual Revenue Growth 2023-2027 Extrapolation revenue growth rate after 2027 Pre-tax discount rates Compound Annual Revenue Growth 2022-2026 Extrapolation revenue growth rate after 2026 Pre-tax discount rates Recorded Music 5.0% 3.4% 8.2% 7.3% 2.5% 6.9% Music Publishing 3.9% 3.4% 8.2% 5.6% 2.5% 6.9% Merchandising 10.8% 2.0% 8.2% 9.4% 2.5% 6.9% The annual impairment test for Recorded Music, Music Publishing and Merchandising showed significant headroom and management did not identify an impairment for these CGUs. The sensitivity analysis around the key assumptions in the impairment tests have indicated that a reasonably possible change in any of the assumptions would not cause the recoverable amount to be less than the carrying value. Impairment losses presented in the tables above relates to a disposal of a minor operation within Music Publishing. Note 9. Content assets (catalogues and royalty advances) and other intangibles Net book value December 31, 2022 (in millions of euros) Asset value, gross Accumulated amortisation and impairment losses Net book value Catalogues (of music and publishing rights) 5,732 (2,674) 3,058 Royalty advances (to artists and repertoire owners) 2,577 - 2,577 Content assets 8,309 (2,674) 5,635 Other intangible assets 489 (370) 119 December 31, 2021 (in millions of euros) Asset value, gross Accumulated amortisation and impairment losses Net book value Catalogues (of music and publishing rights) 5,284 (2,302) 2,982 Royalty advances (to artists and repertoire owners) 2,380 - 2,380 Content assets 7,664 (2,302) 5,362 Other intangible assets 437 (341) 96 Changes in content assets and other intangibles (in millions of euros) Catalogues (of music and publishing rights) Royalty advances (to artists and repertoire owners) Other intangibles Total Balance December 31, 2020 2,330 1,859 79 4,268 Amortisation (144) - (31) (175) Impairment - - - - Additions 630 1,434 48 2,112 Disposals - - - - Recoupments - (1,046) - (1,046) Business combinations - - - - Changes in foreign currency translation adjustments and other 166 133 - 299 Balance December 31, 2021 2,982 2,380 96 5,458 Amortisation (233) - (35) (268) Impairment (10) - - (10) Additions 137 1,187 54 1,378 Disposals (3) - - (3) Recoupments - (1,122) - (1,122) Business combinations 6 - 1 7 Changes in foreign currency translation adjustments and other 179 132 3 314 Balance December 31, 2022 3,058 2,577 119 5,754 Royalty advance payments, net on the Consolidated Statement of Cash Flows consists of additions and recoupments from the changes in content assets table above. The significant music catalogues and publishing rights were acquired through business combinations of BMG Publishing (BMG) and EMI Recorded Music (EMI). The BMG catalogue was acquired in 2007 with a fair value of \u20ac1,241 million and has carrying amount of \u20ac378 million (2021: \u20ac413 million) with a remaining useful life of 5 and 35 years for the respective catalogue components. The EMI catalogue was acquired in 2012 with a fair value of \u20ac1,046 million, and has a carrying amount of \u20ac548 million (2021: \u20ac553 million) with a remaining useful life of 10 and 40 years for the respective catalogue components. ",
"dimensions": {
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},
"fact-444": {
"value": "Note 8. Goodwill Changes in goodwill Year ended December 31, (in millions of euros) 2022 2021 Balance as at January 1 Goodwill, gross 1,567 1,451 Accumulated impairment losses (87) (82) Goodwill, net 1,480 1,369 Changes in book value: Acquisitions 19 9 Impairment losses (7) - Foreign currency translation adjustments 86 102 Total changes 98 111 Balance as at December 31 Goodwill, gross 1,678 1,567 Accumulated impairment losses (100) (87) Goodwill, net 1,578 1,480 Goodwill by cash generating unit Year ended December 31, (in millions of euros) 2022 2021 Recorded Music 709 653 Music Publishing 769 727 Merchandising & Other 100 100 Closing balance 1,578 1,480 Cash generating units For impairment testing, goodwill is allocated to cash-generating units, which represent the lowest level at which the goodwill is monitored internally for management purposes. The cash-generating units correspond to the operating segments. UMG\u2019s financial reporting is managed at the level of operating segments consistent across the music industry (Recorded Music, Music Publishing, and Merchandising). UMG test goodwill at the cash-generating units level which corresponds to the operating segments as disclosed in Note 3 above. Goodwill impairment test UMG conducted the full annual impairment test in the fourth quarter of 2022. The goodwill was tested for impairment by comparing it with a recoverable amount. The recoverable amount is determined as the higher of the value in use determined by the discounted value of future cash flows (Discounted Cash Flow method (DCF)) and the fair value (less costs to sell), determined on the basis of market data (stock market prices, comparable listed companies, comparison with the value attributed to similar assets or companies in recent acquisition transactions). For a description of the methods used for the impairment test, please refer to Note 2. Key assumptions used in the impairment tests for the cash-generating units were sales growth rates and the rates used for discounting the projected cash flows. These cash flow projections were determined using management's internal forecasts that cover an initial period of 2023 to 2027 that matches the period used for our strategic planning process, after which a terminal value was calculated. The sales growth rates used to estimate cash flows are based on: \u2022 past performance, including the label pool revenue forecasts derived from commercial agreements with customers; \u2022 external market growth assumptions among which is the overall population and corresponding growth in streaming penetration rate among the population; \u2022 expected market share developments; \u2022 industry long-term growth averages. Key assumptions 2022 2021 In % per year Compound Annual Revenue Growth 2023-2027 Extrapolation revenue growth rate after 2027 Pre-tax discount rates Compound Annual Revenue Growth 2022-2026 Extrapolation revenue growth rate after 2026 Pre-tax discount rates Recorded Music 5.0% 3.4% 8.2% 7.3% 2.5% 6.9% Music Publishing 3.9% 3.4% 8.2% 5.6% 2.5% 6.9% Merchandising 10.8% 2.0% 8.2% 9.4% 2.5% 6.9% The annual impairment test for Recorded Music, Music Publishing and Merchandising showed significant headroom and management did not identify an impairment for these CGUs. The sensitivity analysis around the key assumptions in the impairment tests have indicated that a reasonably possible change in any of the assumptions would not cause the recoverable amount to be less than the carrying value. Impairment losses presented in the tables above relates to a disposal of a minor operation within Music Publishing. Note 9. Content assets (catalogues and royalty advances) and other intangibles Net book value December 31, 2022 (in millions of euros) Asset value, gross Accumulated amortisation and impairment losses Net book value Catalogues (of music and publishing rights) 5,732 (2,674) 3,058 Royalty advances (to artists and repertoire owners) 2,577 - 2,577 Content assets 8,309 (2,674) 5,635 Other intangible assets 489 (370) 119 December 31, 2021 (in millions of euros) Asset value, gross Accumulated amortisation and impairment losses Net book value Catalogues (of music and publishing rights) 5,284 (2,302) 2,982 Royalty advances (to artists and repertoire owners) 2,380 - 2,380 Content assets 7,664 (2,302) 5,362 Other intangible assets 437 (341) 96 Changes in content assets and other intangibles (in millions of euros) Catalogues (of music and publishing rights) Royalty advances (to artists and repertoire owners) Other intangibles Total Balance December 31, 2020 2,330 1,859 79 4,268 Amortisation (144) - (31) (175) Impairment - - - - Additions 630 1,434 48 2,112 Disposals - - - - Recoupments - (1,046) - (1,046) Business combinations - - - - Changes in foreign currency translation adjustments and other 166 133 - 299 Balance December 31, 2021 2,982 2,380 96 5,458 Amortisation (233) - (35) (268) Impairment (10) - - (10) Additions 137 1,187 54 1,378 Disposals (3) - - (3) Recoupments - (1,122) - (1,122) Business combinations 6 - 1 7 Changes in foreign currency translation adjustments and other 179 132 3 314 Balance December 31, 2022 3,058 2,577 119 5,754 Royalty advance payments, net on the Consolidated Statement of Cash Flows consists of additions and recoupments from the changes in content assets table above. The significant music catalogues and publishing rights were acquired through business combinations of BMG Publishing (BMG) and EMI Recorded Music (EMI). The BMG catalogue was acquired in 2007 with a fair value of \u20ac1,241 million and has carrying amount of \u20ac378 million (2021: \u20ac413 million) with a remaining useful life of 5 and 35 years for the respective catalogue components. The EMI catalogue was acquired in 2012 with a fair value of \u20ac1,046 million, and has a carrying amount of \u20ac548 million (2021: \u20ac553 million) with a remaining useful life of 10 and 40 years for the respective catalogue components. ",
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"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-415": {
"value": "Note 8. Goodwill Changes in goodwill Year ended December 31, (in millions of euros) 2022 2021 Balance as at January 1 Goodwill, gross 1,567 1,451 Accumulated impairment losses (87) (82) Goodwill, net 1,480 1,369 Changes in book value: Acquisitions 19 9 Impairment losses (7) - Foreign currency translation adjustments 86 102 Total changes 98 111 Balance as at December 31 Goodwill, gross 1,678 1,567 Accumulated impairment losses (100) (87) Goodwill, net 1,578 1,480 Goodwill by cash generating unit Year ended December 31, (in millions of euros) 2022 2021 Recorded Music 709 653 Music Publishing 769 727 Merchandising & Other 100 100 Closing balance 1,578 1,480 Cash generating units For impairment testing, goodwill is allocated to cash-generating units, which represent the lowest level at which the goodwill is monitored internally for management purposes. The cash-generating units correspond to the operating segments. UMG\u2019s financial reporting is managed at the level of operating segments consistent across the music industry (Recorded Music, Music Publishing, and Merchandising). UMG test goodwill at the cash-generating units level which corresponds to the operating segments as disclosed in Note 3 above. Goodwill impairment test UMG conducted the full annual impairment test in the fourth quarter of 2022. The goodwill was tested for impairment by comparing it with a recoverable amount. The recoverable amount is determined as the higher of the value in use determined by the discounted value of future cash flows (Discounted Cash Flow method (DCF)) and the fair value (less costs to sell), determined on the basis of market data (stock market prices, comparable listed companies, comparison with the value attributed to similar assets or companies in recent acquisition transactions). For a description of the methods used for the impairment test, please refer to Note 2. Key assumptions used in the impairment tests for the cash-generating units were sales growth rates and the rates used for discounting the projected cash flows. These cash flow projections were determined using management's internal forecasts that cover an initial period of 2023 to 2027 that matches the period used for our strategic planning process, after which a terminal value was calculated. The sales growth rates used to estimate cash flows are based on: \u2022 past performance, including the label pool revenue forecasts derived from commercial agreements with customers; \u2022 external market growth assumptions among which is the overall population and corresponding growth in streaming penetration rate among the population; \u2022 expected market share developments; \u2022 industry long-term growth averages. Key assumptions 2022 2021 In % per year Compound Annual Revenue Growth 2023-2027 Extrapolation revenue growth rate after 2027 Pre-tax discount rates Compound Annual Revenue Growth 2022-2026 Extrapolation revenue growth rate after 2026 Pre-tax discount rates Recorded Music 5.0% 3.4% 8.2% 7.3% 2.5% 6.9% Music Publishing 3.9% 3.4% 8.2% 5.6% 2.5% 6.9% Merchandising 10.8% 2.0% 8.2% 9.4% 2.5% 6.9% The annual impairment test for Recorded Music, Music Publishing and Merchandising showed significant headroom and management did not identify an impairment for these CGUs. The sensitivity analysis around the key assumptions in the impairment tests have indicated that a reasonably possible change in any of the assumptions would not cause the recoverable amount to be less than the carrying value. Impairment losses presented in the tables above relates to a disposal of a minor operation within Music Publishing. ",
"dimensions": {
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},
"fact-453": {
"value": "Note 9. Content assets (catalogues and royalty advances) and other intangibles Net book value December 31, 2022 (in millions of euros) Asset value, gross Accumulated amortisation and impairment losses Net book value Catalogues (of music and publishing rights) 5,732 (2,674) 3,058 Royalty advances (to artists and repertoire owners) 2,577 - 2,577 Content assets 8,309 (2,674) 5,635 Other intangible assets 489 (370) 119 December 31, 2021 (in millions of euros) Asset value, gross Accumulated amortisation and impairment losses Net book value Catalogues (of music and publishing rights) 5,284 (2,302) 2,982 Royalty advances (to artists and repertoire owners) 2,380 - 2,380 Content assets 7,664 (2,302) 5,362 Other intangible assets 437 (341) 96 Changes in content assets and other intangibles (in millions of euros) Catalogues (of music and publishing rights) Royalty advances (to artists and repertoire owners) Other intangibles Total Balance December 31, 2020 2,330 1,859 79 4,268 Amortisation (144) - (31) (175) Impairment - - - - Additions 630 1,434 48 2,112 Disposals - - - - Recoupments - (1,046) - (1,046) Business combinations - - - - Changes in foreign currency translation adjustments and other 166 133 - 299 Balance December 31, 2021 2,982 2,380 96 5,458 Amortisation (233) - (35) (268) Impairment (10) - - (10) Additions 137 1,187 54 1,378 Disposals (3) - - (3) Recoupments - (1,122) - (1,122) Business combinations 6 - 1 7 Changes in foreign currency translation adjustments and other 179 132 3 314 Balance December 31, 2022 3,058 2,577 119 5,754 Royalty advance payments, net on the Consolidated Statement of Cash Flows consists of additions and recoupments from the changes in content assets table above. The significant music catalogues and publishing rights were acquired through business combinations of BMG Publishing (BMG) and EMI Recorded Music (EMI). The BMG catalogue was acquired in 2007 with a fair value of \u20ac1,241 million and has carrying amount of \u20ac378 million (2021: \u20ac413 million) with a remaining useful life of 5 and 35 years for the respective catalogue components. The EMI catalogue was acquired in 2012 with a fair value of \u20ac1,046 million, and has a carrying amount of \u20ac548 million (2021: \u20ac553 million) with a remaining useful life of 10 and 40 years for the respective catalogue components. ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfOtherAssetsExplanatory",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-416": {
"value": "Note 9. Content assets (catalogues and royalty advances) and other intangibles Net book value December 31, 2022 (in millions of euros) Asset value, gross Accumulated amortisation and impairment losses Net book value Catalogues (of music and publishing rights) 5,732 (2,674) 3,058 Royalty advances (to artists and repertoire owners) 2,577 - 2,577 Content assets 8,309 (2,674) 5,635 Other intangible assets 489 (370) 119 December 31, 2021 (in millions of euros) Asset value, gross Accumulated amortisation and impairment losses Net book value Catalogues (of music and publishing rights) 5,284 (2,302) 2,982 Royalty advances (to artists and repertoire owners) 2,380 - 2,380 Content assets 7,664 (2,302) 5,362 Other intangible assets 437 (341) 96 Changes in content assets and other intangibles (in millions of euros) Catalogues (of music and publishing rights) Royalty advances (to artists and repertoire owners) Other intangibles Total Balance December 31, 2020 2,330 1,859 79 4,268 Amortisation (144) - (31) (175) Impairment - - - - Additions 630 1,434 48 2,112 Disposals - - - - Recoupments - (1,046) - (1,046) Business combinations - - - - Changes in foreign currency translation adjustments and other 166 133 - 299 Balance December 31, 2021 2,982 2,380 96 5,458 Amortisation (233) - (35) (268) Impairment (10) - - (10) Additions 137 1,187 54 1,378 Disposals (3) - - (3) Recoupments - (1,122) - (1,122) Business combinations 6 - 1 7 Changes in foreign currency translation adjustments and other 179 132 3 314 Balance December 31, 2022 3,058 2,577 119 5,754 Royalty advance payments, net on the Consolidated Statement of Cash Flows consists of additions and recoupments from the changes in content assets table above. The significant music catalogues and publishing rights were acquired through business combinations of BMG Publishing (BMG) and EMI Recorded Music (EMI). The BMG catalogue was acquired in 2007 with a fair value of \u20ac1,241 million and has carrying amount of \u20ac378 million (2021: \u20ac413 million) with a remaining useful life of 5 and 35 years for the respective catalogue components. The EMI catalogue was acquired in 2012 with a fair value of \u20ac1,046 million, and has a carrying amount of \u20ac548 million (2021: \u20ac553 million) with a remaining useful life of 10 and 40 years for the respective catalogue components. ",
"dimensions": {
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"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-377": {
"value": "Note 10. Property, plant and equipment (in millions of euros) Land and buildings Equipment and machinery Other fixed assets Assets under construction Total Cost Balance as at January 1, 2022 234 111 74 9 428 Additions 4 4 1 24 33 Transfers and reclassifications 5 5 3 (13) - Disposals (5) (4) (2) (1) (12) Changes in foreign currency translation adjustments and other 3 3 2 1 9 Balance as at December 31, 2022 241 119 78 20 458 Depreciation and impairment losses Balance as at January 1, 2022 (120) (90) (51) - (261) Depreciation during the year (18) (10) (7) - (35) Disposals 5 3 3 - 11 Changes in foreign currency translation adjustments and other (2) (2) (2) - (6) Balance as at December 31, 2022 (135) (99) (57) - (291) Carrying amount As at January 1 114 21 23 9 167 As at December 31 106 20 21 20 167 (in millions of euros) Land and buildings Equipment and machinery Other fixed assets Assets under construction Total Cost Balance as at January 1, 2021 220 77 65 19 381 Additions 3 3 3 4 13 Transfers and reclassifications 4 15 3 (22) - Disposals (4) - - - (4) Changes in foreign currency translation adjustments and other 11 16 3 8 38 Balance as at December 31, 2021 234 111 74 9 428 Depreciation and impairment losses Balance as at January 1, 2021 (103) (59) (43) - (205) Depreciation during the year (18) (10) (6) - (34) Disposals - - - - - Changes in foreign currency translation adjustments and other 1 (21) (2) - (22) Balance as at December 31, 2021 (120) (90) (51) - (261) Carrying amount As at January 1 117 18 22 19 176 As at December 31 114 21 23 9 167 ",
"dimensions": {
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"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-378": {
"value": "Note 11. Leases Changes in the rights-of-use Year ended December 31, (in millions of euros) 2022 2021 Opening balance 388 416 Depreciation (74) (68) Additions 25 32 Disposals (26) (12) Foreign currency translations and other 5 20 Closing balance 318 388 Lease liabilities Year ended December 31, (in millions of euros) Note 2022 2021 Opening balance 501 525 Additions 26 32 Disposals (26) (15) Accretion of interest 5 14 16 Payments (100) (86) Of which interest (14) (16) Of which principal (86) (70) Foreign currency translations and other 8 29 Closing balance 423 501 Maturity of lease liabilities Year ended December 31, (in millions of euros) 2022 2021 Maturity < 1 year 77 80 Between 1 and 5 years 228 256 > 5 years 118 165 Lease liabilities 423 501 Cash outflow for leases and lease-related expenses Total cash outflow and expenses for the leases of real-estate with maturity shorter than 12 months and expense relating to low-value assets recorded in the Statement of Profit or Loss amounted to \u20ac18 million for the year ended December 31, 2022 (compared to \u20ac13 million for the year ended December 31, 2021). ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfLeasesExplanatory",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-417": {
"value": "Changes in the rights-of-use Year ended December 31, (in millions of euros) 2022 2021 Opening balance 388 416 Depreciation (74) (68) Additions 25 32 Disposals (26) (12) Foreign currency translations and other 5 20 Closing balance 318 388 ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfQuantitativeInformationAboutRightofuseAssetsExplanatory",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-418": {
"value": "Note 12. Investments in equity affiliates UMG has certain interests in joint ventures and companies where UMG has significant influence. The main company over which UMG had significant influence at the reporting date was Vevo LLC (Vevo). Vevo is a global music videos and entertainment services platform and its country of incorporation is the United States. UMG owns 49.2% of the voting interest and the carrying amount of this investment was \u20ac74 million on December 31, 2022 (2021: \u20ac70 million). Change in value of investments in equity affiliates Year ended December 31, (in millions of euros) 2022 2021 Opening balance 109 72 Acquisitions 47 28 Business combinations - - Write-downs (2) - Income/(loss) from equity affiliates (2) 5 Change in other comprehensive income 6 5 Dividends (2) (2) Translation difference - 1 Closing balance 156 109 ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfSignificantInvestmentsInAssociatesExplanatory",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-379": {
"value": "Note 12. Investments in equity affiliates UMG has certain interests in joint ventures and companies where UMG has significant influence. The main company over which UMG had significant influence at the reporting date was Vevo LLC (Vevo). Vevo is a global music videos and entertainment services platform and its country of incorporation is the United States. UMG owns 49.2% of the voting interest and the carrying amount of this investment was \u20ac74 million on December 31, 2022 (2021: \u20ac70 million). Change in value of investments in equity affiliates Year ended December 31, (in millions of euros) 2022 2021 Opening balance 109 72 Acquisitions 47 28 Business combinations - - Write-downs (2) - Income/(loss) from equity affiliates (2) 5 Change in other comprehensive income 6 5 Dividends (2) (2) Translation difference - 1 Closing balance 156 109 ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfInvestmentsAccountedForUsingEquityMethodExplanatory",
"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-419": {
"value": "Note 13. Capital and financial risk management
Capital risk management
UMG objectives when managing capital are to safeguard UMG\u2019s ability to continue to create value for shareholders,
support the sustainable growth of the Group, and to maintain an optimal capital structure that optimizes its cost of
capital. As a result, UMG endeavours to maintain a satisfactory economic return for its shareholders and guarantee
economic access to external sources of funds.
On 31 May 2022, UMG NV announced Baa1/BBB Long Term Credit Ratings from Moody\u2019s and S&P. These investment grade
ratings are the financial covenants UMG committed to sustaining. In relation to the EUR RCF, if UMG does not have these
ratings by Moody\u2019s and S&P or a comparable rating from an internationally recognized credit rating agency, its Leverage
Ratio shall be equal to or below 4.0x.
UMG and its subsidiaries are not subject to external capital requirements, other than the financial covenants as
disclosed above.
To support this strategic goal, UMG management remains focused on the robust performance of the Free Cash Flow,
a non-IFRS measure as defined in the definitions in the Appendix to the Annual Report, and effective Working Capital
management, details on both are presented below.
Free cash flow
Year ended December 31,
(in millions of euros) 2022 2021
Operating profit
1
1,600 1,394
Amortisation and depreciation expense 377 277
Impairment expense 17 -
Changes in provision, net 65 8
(Gain)/loss on sale of assets 2 (2)
Other non-recurring items - (3)
Adjustments
1
461 280
Royalty advance payments, net of recoupments (148) (364)
Other changes in net working capital 74 85
Net cash provided by/(used for) operating activities before income tax paid 1,987 1,395
Income tax paid (255) (255)
Net cash provided by/(used for) operating activities 1,732 1,140
Net cash provided by/(used for) investing activities (520) (391)
Repayment of lease liabilities and related interest expenses (100) (86)
Interest, net (30) (17)
Other cash items related to financing activities 4 (8)
Free cash flow 1,086 638
1 Restated as described in Note 2.3 .
Changes in working capital (in millions of euros) December 31, 2021 Changes in operating working capital1 Business combinations Changes in foreign currency translation adjustments Other2 December 31, 2022 Inventories3 99 62 - 2 - 163 Trade accounts receivable and other 1,803 203 1 11 (4) 2,014 Of which: Trade accounts receivable 550 22 1 4 3 580 Expected credit losses (46) (14) - - (2) (62) Working capital assets 1,902 265 1 13 (4) 2,177 Trade accounts payable and other (4,875) (333) (2) (113) 173 (5,150) Other non- current liabilities (769) (6) (3) (14) 355 (437) Working capital liabilities (5,644) (339) (5) (127) 528 (5,587) Net working capital (3,742) (74) (4) (114) 524 (3,410) 1 Excludes content investments. 2 Mainly includes the change in net working capital relating to content investments, capital expenditures and other investments. 3 Total inventory obsolescence expense for the period was \u20ac69 million. (in millions of euros) December 31, 2020 Changes in operating working capital1 Business combinations Changes in foreign currency translation adjustments Other2 December 31, 2021 Inventories3 79 17 - 3 - 99 Trade accounts receivable and other 1,641 126 - 40 (4) 1,803 Of which: Trade accounts receivable 538 17 - 12 (17) 550 Expected credit losses (62) 9 - (1) 8 (46) Working capital assets 1,720 143 - 43 (4) 1,902 Trade accounts payable and other (4,126) (226) - (201) (322) (4,875) Other non- current liabilities (851) (2) - (19) 103 (769) Working capital liabilities (4,977) (228) - (220) (219) (5,644) Net working capital (3,257) (85) - (177) (223) (3,742) 1 Excludes content investments. 2 Mainly includes the change in net working capital relating to content investments, capital expenditures and other investments. 3 Total inventory obsolescence expense for the period was \u20ac40 million. ",
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"fact-380": {
"value": "Financial risk management UMG business activities expose the Group to a variety of risks associated with financial instruments, including credit risk, liquidity risk, interest rate risk, foreign currency risk and market risks. These risks are inherent to how UMG operates as a multinational with locally operating subsidiaries. To manage these risks, UMG has developed specific policies. The essence of measuring the performance of these policies is to strike a balance between managing risks and contributing to the financial results of UMG. UMG policies are risk-adverse in that regard. Enforcement of procedures related to financial risk management is carried out by UMG Group Treasury in line with the guiding principles of the Group Treasury Policies. Credit risk Credit risk can be defined as the risk of loss arising from the failure of a counterparty to perform its obligations under a contract. Credit risk maximum exposure is equal to the carrying amounts of Trade and other receivables, refer to Note 14, and Cash position and borrowings, refer to Note 16, as presented in the Statement of Financial Position. Also, for the derivatives and assets at fair value via profit and loss, the maximum exposure to credit risk at the end of the reporting period is equal to the carrying amount, refer to Note 18 Financial assets and liabilities. The maximum credit risk exposure on guarantees issued corresponds to their nominal amounts, as presented in Note 17 Contractual obligations and other commitments. UMG aims to centralize its cash management with its Tier 1 banks, of which all the banks have credit ratings of minimum of A-. UMG performs ongoing evaluations of the financial and non-financial condition of UMG customers and adjusts credit limits when appropriate. In instances where a customer's creditworthiness is determined not to be sufficient to grant the required credit limit, there are several mitigation tools that can be utilized to close the gap, including reducing payment terms, cash on delivery, prepayments and pledges on assets. UMG\u2019s operational subsidiaries have set up procedures and systems to track their trade accounts receivable and recover outstanding amounts. In addition, some subsidiaries have insured their main client credit risks worldwide with a leading credit insurer . Liquidity risk Liquidity risk is the risk that UMG will not be able to meet its financial obligations as they fall due. The primary objective of liquidity management is providing sufficient cash to enable UMG to meet its liabilities when due, under normal and stressed conditions, without incurring losses. Neither the aged receivables of individual customers, nor the profile of the accounts receivable portfolio per segment, impose a significant threat to UMG\u2019s liquidity planning. UMG Treasury provides for the short-term day-to-day cash management needs of the Group by organizing sweeps between international cash poolings. For medium term financing requirements, UMG Group Treasury determines the Group's overall debt position and its planned evolution based on the Group\u2019s 13-month rolling cash forecast. A liquidity analysis is performed to ensure the proper funding is in place to face medium-term needs. Cash is extracted from countries outside the cash pooling through dividends or thanks to upstream loans. Cash is pooled up to UMG NV from all territories participating in the international cash pooling. The objectives of liquidity management are to repay the external debt at the level of UMG NV (\u20ac debt) and to pay the UMG NV dividend to the Group's shareholders. The list of permitted banks for liquidity management includes eight banks with minimum rating of A-. The liquidity analysis includes a buffer of \u20ac400 million to provide for intra-month treasury swings and the incompressible treasury float. Adequate bank facilities are available as backup for Commercial paper. The maturity schedule for long- term external debt is maintained above 3 years. UMG Treasury ensures central compliance with financial covenants, pari-passu, and negative pledge clauses. Total cash and cash equivalents position as at December 31, 2022, is disclosed in Note 16 Cash positions and borrowings. Contractual obligations and their timing are disclosed in Note 17 Contractual obligations and other commitments. In addition, as at December 31, 2022, UMG has undrawn Revolving Credit Facilities (RCF) of \u20ac1,266 million. Market risk Market risk is the possibility that an entity will experience losses due to factors that affect the financial markets. Market risk includes currency risk and interest rate risk as addressed below, but also risk of change in fair value of the financial instruments, including those traded on the active markets. As at December 31, 2022, UMG held financial instruments measured at fair value as disclosed in Note 18, where the exposure of the risk and sensitivity are presented. UMG risk management policies cover refinancing risk to ensure that under any market circumstances, UMG can refinance its debt on time and a reasonable cost. The objectives of refinancing risk management are to benefit from sufficient flexibility granted by the access to various capital markets (EUR CPs and Bonds) and the ability to sell assets to not rely solely on bank borrowings or commercial paper. Interest rate risk Interest rate risk is the risk of the fair value or future cash flows of a financial instrument fluctuating because of changes in the market interest rates. Financial instruments included in the borrowings create an inherent interest rate risk. UMG seeks to limit the period over which interest rates on debt are exposed. The preferred method of hedging interest rate risk is issuing long term fixed-rate bonds. The use of interest-rate plain vanilla derivatives is also authorized. The list of authorized instruments includes interest rate swaps, FRAs, caps, and floors. As for currency risk management, interest rate hedging operations are handled solely by UMG Treasury according to the Group\u2019s strategic goals set by the Group Chief Financial Officer. The speculative use of interest rate derivatives is strictly prohibited. As of December 31, 2022, UMG had a ratio of fixed-rate debt to total outstanding debt of approximately 79%, including lease liabilities. A sensitivity analysis conducted in January 2023 on the gross debt portfolio shows that if short term EURIBOR were to increase instantaneously by 0.5% from their level of December 31, 2022, with all other variables held constant, the total change in annualized interest expense result would be \u20ac5 million. Foreign currency risk As any multinational group, UMG faces various types of foreign exchange transactional exposures on committed and expected cash in and outflows, denominated in a currency other than the respective functional currencies of UMG entities. Subsequently, UMG also faces translational risk, which is the risk resulting from the translation of foreign operations into the euro. The main currencies that drive the foreign currency risk of UMG are U.S. Dollar, British Pound and Japanese Yen. UMG\u2019s exposure to FX transactional risk is greatly limited due to the offsetting of inflows/outflows in the different currencies to the extent possible as a natural hedge. UMG Treasury mainly manages foreign exchange rate risk exposure on balance sheet positions, primarily cash concentration in various currencies at the top cash pooling entity. Treasury's foreign exchange risk management policy is to hedge recognized assets and liabilities nominated in foreign currencies above a predefined threshold. UMG uses forward exchange rate contracts and foreign exchange swaps to manage this exposure. All material foreign currency balance sheet exposures are offset by derivatives, so potential foreign currency rate fluctuations as of December 31, 2022 would have no significant impacts on UMG\u2019s financial results. In 2022, UMG did not apply hedge accounting to these derivatives. Currency derivatives are not used for speculative purposes. The average maturity of these contracts is one month. The table below summarises the net nominal value of the foreign currency balance sheet exposure and foreign exchange rate derivatives used to offset it as of December 31, 2022. (in millions of euros) USD GBP JPY Other Total Nominal value of Balance sheet exposure 294 366 271 392 1,323 Foreign exchange rate derivatives (294) (366) (271) (392) (1,323) Net exposure - - - - - ",
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"fact-473": {
"value": "Credit risk Credit risk can be defined as the risk of loss arising from the failure of a counterparty to perform its obligations under a contract. Credit risk maximum exposure is equal to the carrying amounts of Trade and other receivables, refer to Note 14, and Cash position and borrowings, refer to Note 16, as presented in the Statement of Financial Position. Also, for the derivatives and assets at fair value via profit and loss, the maximum exposure to credit risk at the end of the reporting period is equal to the carrying amount, refer to Note 18 Financial assets and liabilities. The maximum credit risk exposure on guarantees issued corresponds to their nominal amounts, as presented in Note 17 Contractual obligations and other commitments. UMG aims to centralize its cash management with its Tier 1 banks, of which all the banks have credit ratings of minimum of A-. UMG performs ongoing evaluations of the financial and non-financial condition of UMG customers and adjusts credit limits when appropriate. In instances where a customer's creditworthiness is determined not to be sufficient to grant the required credit limit, there are several mitigation tools that can be utilized to close the gap, including reducing payment terms, cash on delivery, prepayments and pledges on assets. UMG\u2019s operational subsidiaries have set up procedures and systems to track their trade accounts receivable and recover outstanding amounts. In addition, some subsidiaries have insured their main client credit risks worldwide with a leading credit insurer . Interest rate risk Interest rate risk is the risk of the fair value or future cash flows of a financial instrument fluctuating because of changes in the market interest rates. Financial instruments included in the borrowings create an inherent interest rate risk. UMG seeks to limit the period over which interest rates on debt are exposed. The preferred method of hedging interest rate risk is issuing long term fixed-rate bonds. The use of interest-rate plain vanilla derivatives is also authorized. The list of authorized instruments includes interest rate swaps, FRAs, caps, and floors. As for currency risk management, interest rate hedging operations are handled solely by UMG Treasury according to the Group\u2019s strategic goals set by the Group Chief Financial Officer. The speculative use of interest rate derivatives is strictly prohibited. As of December 31, 2022, UMG had a ratio of fixed-rate debt to total outstanding debt of approximately 79%, including lease liabilities. A sensitivity analysis conducted in January 2023 on the gross debt portfolio shows that if short term EURIBOR were to increase instantaneously by 0.5% from their level of December 31, 2022, with all other variables held constant, the total change in annualized interest expense result would be \u20ac5 million. Foreign currency risk As any multinational group, UMG faces various types of foreign exchange transactional exposures on committed and expected cash in and outflows, denominated in a currency other than the respective functional currencies of UMG entities. Subsequently, UMG also faces translational risk, which is the risk resulting from the translation of foreign operations into the euro. The main currencies that drive the foreign currency risk of UMG are U.S. Dollar, British Pound and Japanese Yen. UMG\u2019s exposure to FX transactional risk is greatly limited due to the offsetting of inflows/outflows in the different currencies to the extent possible as a natural hedge. UMG Treasury mainly manages foreign exchange rate risk exposure on balance sheet positions, primarily cash concentration in various currencies at the top cash pooling entity. Treasury's foreign exchange risk management policy is to hedge recognized assets and liabilities nominated in foreign currencies above a predefined threshold. UMG uses forward exchange rate contracts and foreign exchange swaps to manage this exposure. All material foreign currency balance sheet exposures are offset by derivatives, so potential foreign currency rate fluctuations as of December 31, 2022 would have no significant impacts on UMG\u2019s financial results. In 2022, UMG did not apply hedge accounting to these derivatives. Currency derivatives are not used for speculative purposes. The average maturity of these contracts is one month. The table below summarises the net nominal value of the foreign currency balance sheet exposure and foreign exchange rate derivatives used to offset it as of December 31, 2022. (in millions of euros) USD GBP JPY Other Total Nominal value of Balance sheet exposure 294 366 271 392 1,323 Foreign exchange rate derivatives (294) (366) (271) (392) (1,323) Net exposure - - - - - December 31, 2022 December 31, 2021 (in millions of euros) Total Long-term Short-term Total Long-term Short-term Bonds 1,004 987 17 - - - Term facility - - - 998 798 200 Drawn revolving credit facilities 125 125 - 1,447 1,447 - Commercial papers 929 - 929 - - - Bank overdrafts 1 - 1 13 - 13 Other 191 1 190 137 32 105 Borrowings at amortized cost 2,250 1,113 1,137 2,595 2,277 318 Cash and cash equivalents (439) - (439) (585) - (585) Derivative financial assets (1) - (1) - - - Net debt 1,810 2,010 (in millions of euros) Term facility Drawn revolving credit facilities Bonds Vivendi SE borrowings Vivendi SE credit lines drawn UMG own credit lines drawn Bank overdrafts Commercial papers Other debt Total Balance December 31, 2020 - - - 2,368 422 213 5 - 1 3,009 New borrowings 998 1,981 - - 40 20 9 - 137 3,185 Repayments - (556) - (2,368) (465) (235) - - - (3,624) Translation differences and other movements - 22 - - 3 2 (1) - (1) 25 Balance December 31, 2021 998 1,447 - - - - 13 - 137 2,595 New borrowings 8 1,722 1,004 - - - 1 3,117 87 5,939 Repayments (1,006) (3,126) - - - - (13) (2,188) (34) (6,367) Translation differences and other movements - 82 - - - - - - 1 83 Balance December 31, 2022 - 125 1,004 - - - 1 929 191 2,250 December 31, 2022 Fair value (in millions of euros) Carrying amount Level 1 1 Level 2 Level 3 Financial assets at fair value through profit and loss Listed equity securities 597 597 - - Unlisted equity securities - - - - Warrants - - - - Other financial assets 51 - 36 15 Trade and other receivables 1 - 1 - Financial assets at fair value through other comprehensive income Listed equity securities through OCI 1 1 - - Unlisted equity securities 19 - - 19 Financial assets at amortised cost Trade and other receivables 2,013 - - - Other financial assets 22 - - - Total financial assets 2,704 598 37 34 Financial liabilities at amortised cost Trade and other payables (5,150) - - - Bonds (1,004) (987) - - Borrowings, excluding bank overdrafts and bonds (1,262) - - - Other non-current liabilities (437) - - - Total financial liabilities (7,853) (987) - - December 31, 2021 Fair value (in millions of euros) Carrying amount Level 1 Level 2 Level 3 Financial assets at fair value through profit and loss Listed equity securities 1,413 1,413 - - Unlisted equity securities 44 - 44 - Warrants 19 - 19 - Other financial assets 68 - 57 11 Trade and other receivables - - - - Financial assets at fair value through other comprehensive income Listed equity securities through OCI - - - - Unlisted equity securities 16 - - 16 Financial assets at amortised cost Trade and other receivables 1,803 - - - Other financial assets 32 - - - Total financial assets 3,395 1,413 120 27 Financial liabilities at amortised cost Trade and other payables (4,875) - - - Borrowings, excluding bank overdrafts and bonds (2,582) - - - Other non-current liabilities (769) - - - Total financial liabilities (8,226) - - - ",
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"fact-445": {
"value": "Credit risk Credit risk can be defined as the risk of loss arising from the failure of a counterparty to perform its obligations under a contract. Credit risk maximum exposure is equal to the carrying amounts of Trade and other receivables, refer to Note 14, and Cash position and borrowings, refer to Note 16, as presented in the Statement of Financial Position. Also, for the derivatives and assets at fair value via profit and loss, the maximum exposure to credit risk at the end of the reporting period is equal to the carrying amount, refer to Note 18 Financial assets and liabilities. The maximum credit risk exposure on guarantees issued corresponds to their nominal amounts, as presented in Note 17 Contractual obligations and other commitments. UMG aims to centralize its cash management with its Tier 1 banks, of which all the banks have credit ratings of minimum of A-. UMG performs ongoing evaluations of the financial and non-financial condition of UMG customers and adjusts credit limits when appropriate. In instances where a customer's creditworthiness is determined not to be sufficient to grant the required credit limit, there are several mitigation tools that can be utilized to close the gap, including reducing payment terms, cash on delivery, prepayments and pledges on assets. UMG\u2019s operational subsidiaries have set up procedures and systems to track their trade accounts receivable and recover outstanding amounts. In addition, some subsidiaries have insured their main client credit risks worldwide with a leading credit insurer . ",
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"fact-420": {
"value": "Credit risk Credit risk can be defined as the risk of loss arising from the failure of a counterparty to perform its obligations under a contract. Credit risk maximum exposure is equal to the carrying amounts of Trade and other receivables, refer to Note 14, and Cash position and borrowings, refer to Note 16, as presented in the Statement of Financial Position. Also, for the derivatives and assets at fair value via profit and loss, the maximum exposure to credit risk at the end of the reporting period is equal to the carrying amount, refer to Note 18 Financial assets and liabilities. The maximum credit risk exposure on guarantees issued corresponds to their nominal amounts, as presented in Note 17 Contractual obligations and other commitments. UMG aims to centralize its cash management with its Tier 1 banks, of which all the banks have credit ratings of minimum of A-. UMG performs ongoing evaluations of the financial and non-financial condition of UMG customers and adjusts credit limits when appropriate. In instances where a customer's creditworthiness is determined not to be sufficient to grant the required credit limit, there are several mitigation tools that can be utilized to close the gap, including reducing payment terms, cash on delivery, prepayments and pledges on assets. UMG\u2019s operational subsidiaries have set up procedures and systems to track their trade accounts receivable and recover outstanding amounts. In addition, some subsidiaries have insured their main client credit risks worldwide with a leading credit insurer ",
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"fact-421": {
"value": "Liquidity risk Liquidity risk is the risk that UMG will not be able to meet its financial obligations as they fall due. The primary objective of liquidity management is providing sufficient cash to enable UMG to meet its liabilities when due, under normal and stressed conditions, without incurring losses. Neither the aged receivables of individual customers, nor the profile of the accounts receivable portfolio per segment, impose a significant threat to UMG\u2019s liquidity planning. UMG Treasury provides for the short-term day-to-day cash management needs of the Group by organizing sweeps between international cash poolings. For medium term financing requirements, UMG Group Treasury determines the Group's overall debt position and its planned evolution based on the Group\u2019s 13-month rolling cash forecast. A liquidity analysis is performed to ensure the proper funding is in place to face medium-term needs. Cash is extracted from countries outside the cash pooling through dividends or thanks to upstream loans. Cash is pooled up to UMG NV from all territories participating in the international cash pooling. The objectives of liquidity management are to repay the external debt at the level of UMG NV (\u20ac debt) and to pay the UMG NV dividend to the Group's shareholders. The list of permitted banks for liquidity management includes eight banks with minimum rating of A-. The liquidity analysis includes a buffer of \u20ac400 million to provide for intra-month treasury swings and the incompressible treasury float. Adequate bank facilities are available as backup for Commercial paper. The maturity schedule for long- term external debt is maintained above 3 years. UMG Treasury ensures central compliance with financial covenants, pari-passu, and negative pledge clauses. Total cash and cash equivalents position as at December 31, 2022, is disclosed in Note 16 Cash positions and borrowings. Contractual obligations and their timing are disclosed in Note 17 Contractual obligations and other commitments. In addition, as at December 31, 2022, UMG has undrawn Revolving Credit Facilities (RCF) of \u20ac1,266 million. ",
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"fact-422": {
"value": "Market risk Market risk is the possibility that an entity will experience losses due to factors that affect the financial markets. Market risk includes currency risk and interest rate risk as addressed below, but also risk of change in fair value of the financial instruments, including those traded on the active markets. As at December 31, 2022, UMG held financial instruments measured at fair value as disclosed in Note 18, where the exposure of the risk and sensitivity are presented. UMG risk management policies cover refinancing risk to ensure that under any market circumstances, UMG can refinance its debt on time and a reasonable cost. The objectives of refinancing risk management are to benefit from sufficient flexibility granted by the access to various capital markets (EUR CPs and Bonds) and the ability to sell assets to not rely solely on bank borrowings or commercial paper. Interest rate risk Interest rate risk is the risk of the fair value or future cash flows of a financial instrument fluctuating because of changes in the market interest rates. Financial instruments included in the borrowings create an inherent interest rate risk. UMG seeks to limit the period over which interest rates on debt are exposed. The preferred method of hedging interest rate risk is issuing long term fixed-rate bonds. The use of interest-rate plain vanilla derivatives is also authorized. The list of authorized instruments includes interest rate swaps, FRAs, caps, and floors. As for currency risk management, interest rate hedging operations are handled solely by UMG Treasury according to the Group\u2019s strategic goals set by the Group Chief Financial Officer. The speculative use of interest rate derivatives is strictly prohibited. As of December 31, 2022, UMG had a ratio of fixed-rate debt to total outstanding debt of approximately 79%, including lease liabilities. A sensitivity analysis conducted in January 2023 on the gross debt portfolio shows that if short term EURIBOR were to increase instantaneously by 0.5% from their level of December 31, 2022, with all other variables held constant, the total change in annualized interest expense result would be \u20ac5 million. Foreign currency risk As any multinational group, UMG faces various types of foreign exchange transactional exposures on committed and expected cash in and outflows, denominated in a currency other than the respective functional currencies of UMG entities. Subsequently, UMG also faces translational risk, which is the risk resulting from the translation of foreign operations into the euro. The main currencies that drive the foreign currency risk of UMG are U.S. Dollar, British Pound and Japanese Yen. UMG\u2019s exposure to FX transactional risk is greatly limited due to the offsetting of inflows/outflows in the different currencies to the extent possible as a natural hedge. UMG Treasury mainly manages foreign exchange rate risk exposure on balance sheet positions, primarily cash concentration in various currencies at the top cash pooling entity. Treasury's foreign exchange risk management policy is to hedge recognized assets and liabilities nominated in foreign currencies above a predefined threshold. UMG uses forward exchange rate contracts and foreign exchange swaps to manage this exposure. All material foreign currency balance sheet exposures are offset by derivatives, so potential foreign currency rate fluctuations as of December 31, 2022 would have no significant impacts on UMG\u2019s financial results. In 2022, UMG did not apply hedge accounting to these derivatives. Currency derivatives are not used for speculative purposes. The average maturity of these contracts is one month. The table below summarises the net nominal value of the foreign currency balance sheet exposure and foreign exchange rate derivatives used to offset it as of December 31, 2022. (in millions of euros) USD GBP JPY Other Total Nominal value of Balance sheet exposure 294 366 271 392 1,323 Foreign exchange rate derivatives (294) (366) (271) (392) (1,323) Net exposure - - - - - ",
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"fact-381": {
"value": "Note 14. Trade and other receivables Year ended December 31, (in millions of euros) 2022 2021 Trade receivables 1,765 1,598 Other receivables 249 205 Trade receivables, net of value allowance 2,014 1,803 Out of the total amount of trade receivables, \u20ac1,247 million (2021: \u20ac1,094 million) was recognized as accrued revenue as at 31 December, 2022. Year ended December 31, (in millions of euros) 2022 2021 Current 1,698 1,543 Overdue 0-30 days 46 44 Overdue 31-150 days 21 11 Overdue >150 days - - Trade receivables, net of value allowance 1,765 1,598 For the movements of the expected credit loss allowance and the credit risk management policies and procedures of UMG please refer to Note 13 Capital and financial risk management. ",
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"fact-446": {
"value": "Note 15. Trade and other accounts payable Year ended December 31, (in millions of euros) 2022 2021 Trade accounts payable 138 146 Music royalties to artists and repertoire owners 3,523 3,020 Accrued expenses 401 385 Other payables 711 936 Trade and other accounts payable 4,773 4,487 Contract liabilities 377 388 Trade accounts payable and other 5,150 4,875 Out of the total amount of \u20ac388 million recognized in contract liabilities at the beginning of 2022, \u20ac320 million has been recognized as revenue for the year ended December 31, 2022",
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"fact-423": {
"value": "Note 15. Trade and other accounts payable Year ended December 31, (in millions of euros) 2022 2021 Trade accounts payable 138 146 Music royalties to artists and repertoire owners 3,523 3,020 Accrued expenses 401 385 Other payables 711 936 Trade and other accounts payable 4,773 4,487 Contract liabilities 377 388 Trade accounts payable and other 5,150 4,875 Out of the total amount of \u20ac388 million recognized in contract liabilities at the beginning of 2022, \u20ac320 million has been recognized as revenue for the year ended December 31, 2022. ",
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"fact-382": {
"value": "Note 15. Trade and other accounts payable Year ended December 31, (in millions of euros) 2022 2021 Trade accounts payable 138 146 Music royalties to artists and repertoire owners 3,523 3,020 Accrued expenses 401 385 Other payables 711 936 Trade and other accounts payable 4,773 4,487 Contract liabilities 377 388 Trade accounts payable and other 5,150 4,875 Out of the total amount of \u20ac388 million recognized in contract liabilities at the beginning of 2022, \u20ac320 million has been recognized as revenue for the year ended December 31, 2022. ",
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},
"fact-467": {
"value": "Note 16. Cash position and borrowings Cash position Year ended December 31, (in millions of euros) 2022 2021 Cash and cash equivalents 439 585 Bank overdrafts (1) (13) Cash and cash equivalents in the statement of cash flows1 438 572 1 Restated as described in Note 2.3. UMG operates in a number of territories where regulations do not authorise participation of local entities to the UMG global cash pooling. Only dividends and intra-group invoices are available to extract cash from these territories. The amount of cash held by UMG entities in these countries amounted to \u20ac373 million as of December 31, 2022. Borrowings and other financial liabilities December 31, 2022 December 31, 2021 (in millions of euros) Total Long-term Short-term Total Long-term Short-term Bonds 1,004 987 17 - - - Term facility - - - 998 798 200 Drawn revolving credit facilities 125 125 - 1,447 1,447 - Commercial papers 929 - 929 - - - Bank overdrafts 1 - 1 13 - 13 Other 191 1 190 137 32 105 Borrowings at amortized cost 2,250 1,113 1,137 2,595 2,277 318 Cash and cash equivalents (439) - (439) (585) - (585) Derivative financial assets (1) - (1) - - - Net debt 1,810 2,010 New borrowings In February 2022, UMG entered into a short-term floating rate USD 500 million revolving credit facility. At maturity on November 14, 2022, the facility was extended to November 14, 2023. The facility was renewed for USD 500 million and is stepping down to USD 350 million by December 30, 2022. By December 31, 2022, no drawing was made from the facility. On June 30, 2022, UMG issued \u20ac500 million of senior unsecured notes due on June 30, 2027 with a coupon of 3.00% and \u20ac500 million of senior unsecured notes due on June 30, 2032 with a coupon of 3.75%. On July 1, 2022, the net proceeds from the issuance of the unsecured senior notes of \u20ac1 billion were used to fully repay the Term loan. See Note 13 for information on covenants associated with new borrowings. On July 8, 2022, UMG established a EUR commercial paper program. Under the Program, UMG may issue, from time to time, commercial paper notes up to a maximum aggregate amount of \u20ac1 billion. The proceeds from the issuance will be used firstly to pay down UMG\u2019s revolving credit facility and manage short-term liquidity needs from the Group. Movements of borrowings (in millions of euros) Term facility Drawn revolving credit facilities Bonds Vivendi SE borrowings Vivendi SE credit lines drawn UMG own credit lines drawn Bank overdrafts Commercial papers Other debt Total Balance December 31, 2020 - - - 2,368 422 213 5 - 1 3,009 New borrowings 998 1,981 - - 40 20 9 - 137 3,185 Repayments - (556) - (2,368) (465) (235) - - - (3,624) Translation differences and other movements - 22 - - 3 2 (1) - (1) 25 Balance December 31, 2021 998 1,447 - - - - 13 - 137 2,595 New borrowings 8 1,722 1,004 - - - 1 3,117 87 5,939 Repayments (1,006) (3,126) - - - - (13) (2,188) (34) (6,367) Translation differences and other movements - 82 - - - - - - 1 83 Balance December 31, 2022 - 125 1,004 - - - 1 929 191 2,250 ",
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"fact-383": {
"value": "Note 16. Cash position and borrowings Cash position Year ended December 31, (in millions of euros) 2022 2021 Cash and cash equivalents 439 585 Bank overdrafts (1) (13) Cash and cash equivalents in the statement of cash flows1 438 572 1 Restated as described in Note 2.3. UMG operates in a number of territories where regulations do not authorise participation of local entities to the UMG global cash pooling. Only dividends and intra-group invoices are available to extract cash from these territories. The amount of cash held by UMG entities in these countries amounted to \u20ac373 million as of December 31, 2022. Borrowings and other financial liabilities December 31, 2022 December 31, 2021 (in millions of euros) Total Long-term Short-term Total Long-term Short-term Bonds 1,004 987 17 - - - Term facility - - - 998 798 200 Drawn revolving credit facilities 125 125 - 1,447 1,447 - Commercial papers 929 - 929 - - - Bank overdrafts 1 - 1 13 - 13 Other 191 1 190 137 32 105 Borrowings at amortized cost 2,250 1,113 1,137 2,595 2,277 318 Cash and cash equivalents (439) - (439) (585) - (585) Derivative financial assets (1) - (1) - - - Net debt 1,810 2,010 New borrowings In February 2022, UMG entered into a short-term floating rate USD 500 million revolving credit facility. At maturity on November 14, 2022, the facility was extended to November 14, 2023. The facility was renewed for USD 500 million and is stepping down to USD 350 million by December 30, 2022. By December 31, 2022, no drawing was made from the facility. On June 30, 2022, UMG issued \u20ac500 million of senior unsecured notes due on June 30, 2027 with a coupon of 3.00% and \u20ac500 million of senior unsecured notes due on June 30, 2032 with a coupon of 3.75%. On July 1, 2022, the net proceeds from the issuance of the unsecured senior notes of \u20ac1 billion were used to fully repay the Term loan. See Note 13 for information on covenants associated with new borrowings. On July 8, 2022, UMG established a EUR commercial paper program. Under the Program, UMG may issue, from time to time, commercial paper notes up to a maximum aggregate amount of \u20ac1 billion. The proceeds from the issuance will be used firstly to pay down UMG\u2019s revolving credit facility and manage short-term liquidity needs from the Group. Movements of borrowings (in millions of euros) Term facility Drawn revolving credit facilities Bonds Vivendi SE borrowings Vivendi SE credit lines drawn UMG own credit lines drawn Bank overdrafts Commercial papers Other debt Total Balance December 31, 2020 - - - 2,368 422 213 5 - 1 3,009 New borrowings 998 1,981 - - 40 20 9 - 137 3,185 Repayments - (556) - (2,368) (465) (235) - - - (3,624) Translation differences and other movements - 22 - - 3 2 (1) - (1) 25 Balance December 31, 2021 998 1,447 - - - - 13 - 137 2,595 New borrowings 8 1,722 1,004 - - - 1 3,117 87 5,939 Repayments (1,006) (3,126) - - - - (13) (2,188) (34) (6,367) Translation differences and other movements - 82 - - - - - - 1 83 Balance December 31, 2022 - 125 1,004 - - - 1 929 191 2,250 ",
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"value": "Cash position Year ended December 31, (in millions of euros) 2022 2021 Cash and cash equivalents 439 585 Bank overdrafts (1) (13) Cash and cash equivalents in the statement of cash flows1 438 572 1 Restated as described in Note 2.3. UMG operates in a number of territories where regulations do not authorise participation of local entities to the UMG global cash pooling. Only dividends and intra-group invoices are available to extract cash from these territories. The amount of cash held by UMG entities in these countries amounted to \u20ac373 million as of December 31, 2022. ",
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"fact-424": {
"value": "Cash position Year ended December 31, (in millions of euros) 2022 2021 Cash and cash equivalents 439 585 Bank overdrafts (1) (13) Cash and cash equivalents in the statement of cash flows1 438 572 1 Restated as described in Note 2.3. UMG operates in a number of territories where regulations do not authorise participation of local entities to the UMG global cash pooling. Only dividends and intra-group invoices are available to extract cash from these territories. The amount of cash held by UMG entities in these countries amounted to \u20ac373 million as of December 31, 2022. ",
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"fact-460": {
"value": "Note 17. Contractual obligations and other commitments UMG\u2019s material contractual obligations and contingent assets and liabilities include: \u2022 Contractual content commitments. UMG routinely commits to pay agreed amounts to artists and other parties upon delivery of content or other products (\u201cCreative talent and employment agreements\u201d). Until the artist or the other party has delivered his or her content or until the recoupment of an advance, UMG discloses its obligation as an off-balance sheet commitment; \u2022 Certain contractual obligations relating to the UMG\u2019s business operations, including leases and off-balance sheet commercial commitments, such as long-term service contracts and purchase or investment commitments; and \u2022 Commitments related to UMG\u2019s financing: term loan and drawn committed bank credit facilities. Contractual obligations The table below analyses UMG\u2019s financial liabilities into relevant maturity groupings based on their contractual maturities. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant. Interest on long-term debt is based on floating rate adjustments according to market expectations. Minimum future payments as of December 31, 2022 Total minimum future payments as of Payments due in (in millions of euros) Total 1 year 2-5 years After 5 years December 31, 2021 Borrowings and other financial liabilities 2,506 1,272 640 594 2,618 Lease liabilities 472 90 257 125 562 Music royalties to artists and repertoire owners 3,542 3,523 12 7 3,034 Creative talent and employment agreements and others 470 259 197 14 757 Other payables 1,156 950 31 175 1,425 Consolidated statement of financial position items 8,146 6,094 1,137 915 8,396 Contractual content commitments 1,562 836 701 25 1,570 Other commitments 247 74 150 23 71 Total off-balance sheet commitments 1,809 910 851 48 1,641 Total 9,955 7,004 1,988 963 10,037 Note 25. Litigation In the normal course of its business, Universal Music Group is subject to various lawsuits, arbitrations and governmental, administrative or other proceedings (collectively referred to herein as \u201cLegal Proceedings\u201d). However, based on the information currently available, UMG believes that the outcome from these Legal Proceedings will not have a material impact on UMG's consolidated results of operations and financial position. ",
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"fact-384": {
"value": "Note 17. Contractual obligations and other commitments UMG\u2019s material contractual obligations and contingent assets and liabilities include: \u2022 Contractual content commitments. UMG routinely commits to pay agreed amounts to artists and other parties upon delivery of content or other products (\u201cCreative talent and employment agreements\u201d). Until the artist or the other party has delivered his or her content or until the recoupment of an advance, UMG discloses its obligation as an off-balance sheet commitment; \u2022 Certain contractual obligations relating to the UMG\u2019s business operations, including leases and off-balance sheet commercial commitments, such as long-term service contracts and purchase or investment commitments; and \u2022 Commitments related to UMG\u2019s financing: term loan and drawn committed bank credit facilities. Contractual obligations The table below analyses UMG\u2019s financial liabilities into relevant maturity groupings based on their contractual maturities. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant. Interest on long-term debt is based on floating rate adjustments according to market expectations. Minimum future payments as of December 31, 2022 Total minimum future payments as of Payments due in (in millions of euros) Total 1 year 2-5 years After 5 years December 31, 2021 Borrowings and other financial liabilities 2,506 1,272 640 594 2,618 Lease liabilities 472 90 257 125 562 Music royalties to artists and repertoire owners 3,542 3,523 12 7 3,034 Creative talent and employment agreements and others 470 259 197 14 757 Other payables 1,156 950 31 175 1,425 Consolidated statement of financial position items 8,146 6,094 1,137 915 8,396 Contractual content commitments 1,562 836 701 25 1,570 Other commitments 247 74 150 23 71 Total off-balance sheet commitments 1,809 910 851 48 1,641 Total 9,955 7,004 1,988 963 10,037 ",
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"fact-464": {
"value": "Note 18. Financial assets and liabilities The following table shows the carrying amounts and fair values of financial assets and liabilities according to their fair value hierarchy. Based on the nature, maturity or the magnitude of the amounts, UMG considers that the fair value of trade and other receivables, short-term deposits, loans receivable, borrowings, trade and other payables are not materially different from their carrying value. Fair value hierarchy is based on the transparency of the inputs used and is as follows: \u2022 Level 1: fair value measurement based on quoted prices in active markets for identical assets or liabilities; \u2022 Level 2: fair value measurement based on observable market data (other than quoted prices included under Level 1), being for example, price on the last transactions on over-the-counter (OTC) markets; and \u2022 Level 3: fair value measurement based on valuation techniques using inputs for the asset or liability that are not based on observable market data . December 31, 2022 Fair value (in millions of euros) Carrying amount Level 1 1 Level 2 Level 3 Financial assets at fair value through profit and loss Listed equity securities 597 597 - - Unlisted equity securities - - - - Warrants - - - - Other financial assets 51 - 36 15 Trade and other receivables 1 - 1 - Financial assets at fair value through other comprehensive income Listed equity securities through OCI 1 1 - - Unlisted equity securities 19 - - 19 Financial assets at amortised cost Trade and other receivables 2,013 - - - Other financial assets 22 - - - Total financial assets 2,704 598 37 34 Financial liabilities at amortised cost Trade and other payables (5,150) - - - Bonds (1,004) (987) - - Borrowings, excluding bank overdrafts and bonds (1,262) - - - Other non-current liabilities (437) - - - Total financial liabilities (7,853) (987) - - 1 Includes transfer of \u20ac31 million of equity securities from level 2 to level 1 . December 31, 2021 Fair value (in millions of euros) Carrying amount Level 1 Level 2 Level 3 Financial assets at fair value through profit and loss Listed equity securities 1,413 1,413 - - Unlisted equity securities 44 - 44 - Warrants 19 - 19 - Other financial assets 68 - 57 11 Trade and other receivables - - - - Financial assets at fair value through other comprehensive income Listed equity securities through OCI - - - - Unlisted equity securities 16 - - 16 Financial assets at amortised cost Trade and other receivables 1,803 - - - Other financial assets 32 - - - Total financial assets 3,395 1,413 120 27 Financial liabilities at amortised cost Trade and other payables (4,875) - - - Borrowings, excluding bank overdrafts and bonds (2,582) - - - Other non-current liabilities (769) - - - Total financial liabilities (8,226) - - - Listed equity portfolio December 31, 2022 Number of shares held Ownership interest Average purchase price1,2 Stock market price Carrying value Change in value over the period Cumulative unrealized captial gain/(loss) 3 Sensitivity at +/- 10 pts (in thousands) (\u20ac/share) (in millions of euros) Spotify 6,487 3.30% 6.58 74.41 483 (856) 440 +48/-48 Tencent Music Entertainment 12,246 0.76% na 7.80 96 22 96 +10/-10 Other 18 18 18 Total 597 (816) 554 1 Includes acquisition fees and taxes. 2 na: not applicable. 3 Includes revaluation losses, net of liabilities, of \u20ac617 million in 2022 as recognized in Note 5 December 31, 2021
Number
of shares
held
Ownership
interest
Average
purchase
price
1,2
Stock
market
price
Carrying
value
Change
in value
over
the period
Cumulative
unrealized
captial
gain/(loss)
3
Sensitivity
at +/- 10 pts
(in
thousands)
(\u20ac/share) (in millions of euros)
Spotify 6,487 3.37% 6.58 206.38 1,339 (330) 1,296 +134/-134
Tencent
Music Entertainment
12,246 0.74% na 6.04 74 (119) 74 +7/-7
Total 1,413 (449) 1,370
1 Includes acquisition fees and taxes.
2 na: not applicable.
3 Includes revaluation losses, net of liabilities, of \u20ac315 million in 2021 as recognized in Note 5.
",
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"fact-461": {
"value": "Note 18. Financial assets and liabilities The following table shows the carrying amounts and fair values of financial assets and liabilities according to their fair value hierarchy. Based on the nature, maturity or the magnitude of the amounts, UMG considers that the fair value of trade and other receivables, short-term deposits, loans receivable, borrowings, trade and other payables are not materially different from their carrying value. Fair value hierarchy is based on the transparency of the inputs used and is as follows: \u2022 Level 1: fair value measurement based on quoted prices in active markets for identical assets or liabilities; \u2022 Level 2: fair value measurement based on observable market data (other than quoted prices included under Level 1), being for example, price on the last transactions on over-the-counter (OTC) markets; and \u2022 Level 3: fair value measurement based on valuation techniques using inputs for the asset or liability that are not based on observable market data . December 31, 2022 Fair value (in millions of euros) Carrying amount Level 1 1 Level 2 Level 3 Financial assets at fair value through profit and loss Listed equity securities 597 597 - - Unlisted equity securities - - - - Warrants - - - - Other financial assets 51 - 36 15 Trade and other receivables 1 - 1 - Financial assets at fair value through other comprehensive income Listed equity securities through OCI 1 1 - - Unlisted equity securities 19 - - 19 Financial assets at amortised cost Trade and other receivables 2,013 - - - Other financial assets 22 - - - Total financial assets 2,704 598 37 34 Financial liabilities at amortised cost Trade and other payables (5,150) - - - Bonds (1,004) (987) - - Borrowings, excluding bank overdrafts and bonds (1,262) - - - Other non-current liabilities (437) - - - Total financial liabilities (7,853) (987) - - 1 Includes transfer of \u20ac31 million of equity securities from level 2 to level 1 . December 31, 2021 Fair value (in millions of euros) Carrying amount Level 1 Level 2 Level 3 Financial assets at fair value through profit and loss Listed equity securities 1,413 1,413 - - Unlisted equity securities 44 - 44 - Warrants 19 - 19 - Other financial assets 68 - 57 11 Trade and other receivables - - - - Financial assets at fair value through other comprehensive income Listed equity securities through OCI - - - - Unlisted equity securities 16 - - 16 Financial assets at amortised cost Trade and other receivables 1,803 - - - Other financial assets 32 - - - Total financial assets 3,395 1,413 120 27 Financial liabilities at amortised cost Trade and other payables (4,875) - - - Borrowings, excluding bank overdrafts and bonds (2,582) - - - Other non-current liabilities (769) - - - Total financial liabilities (8,226) - - - Listed equity portfolio December 31, 2022 Number of shares held Ownership interest Average purchase price1,2 Stock market price Carrying value Change in value over the period Cumulative unrealized captial gain/(loss) 3 Sensitivity at +/- 10 pts (in thousands) (\u20ac/share) (in millions of euros) Spotify 6,487 3.30% 6.58 74.41 483 (856) 440 +48/-48 Tencent Music Entertainment 12,246 0.76% na 7.80 96 22 96 +10/-10 Other 18 18 18 Total 597 (816) 554 1 Includes acquisition fees and taxes. 2 na: not applicable. 3 Includes revaluation losses, net of liabilities, of \u20ac617 million in 2022 as recognized in Note 5 December 31, 2021 Number of shares held Ownership interest Average purchase price 1,2 Stock market price Carrying value Change in value over the period Cumulative unrealized captial gain/(loss) 3 Sensitivity at +/- 10 pts (in thousands) (\u20ac/share) (in millions of euros) Spotify 6,487 3.37% 6.58 206.38 1,339 (330) 1,296 +134/-134 Tencent Music Entertainment 12,246 0.74% na 6.04 74 (119) 74 +7/-7 Total 1,413 (449) 1,370 1 Includes acquisition fees and taxes. 2 na: not applicable. 3 Includes revaluation losses, net of liabilities, of \u20ac315 million in 2021 as recognized in Note 5. ",
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"fact-448": {
"value": "Note 18. Financial assets and liabilities The following table shows the carrying amounts and fair values of financial assets and liabilities according to their fair value hierarchy. Based on the nature, maturity or the magnitude of the amounts, UMG considers that the fair value of trade and other receivables, short-term deposits, loans receivable, borrowings, trade and other payables are not materially different from their carrying value. Fair value hierarchy is based on the transparency of the inputs used and is as follows: \u2022 Level 1: fair value measurement based on quoted prices in active markets for identical assets or liabilities; \u2022 Level 2: fair value measurement based on observable market data (other than quoted prices included under Level 1), being for example, price on the last transactions on over-the-counter (OTC) markets; and \u2022 Level 3: fair value measurement based on valuation techniques using inputs for the asset or liability that are not based on observable market data December 31, 2022 Fair value (in millions of euros) Carrying amount Level 1 1 Level 2 Level 3 Financial assets at fair value through profit and loss Listed equity securities 597 597 - - Unlisted equity securities - - - - Warrants - - - - Other financial assets 51 - 36 15 Trade and other receivables 1 - 1 - Financial assets at fair value through other comprehensive income Listed equity securities through OCI 1 1 - - Unlisted equity securities 19 - - 19 Financial assets at amortised cost Trade and other receivables 2,013 - - - Other financial assets 22 - - - Total financial assets 2,704 598 37 34 Financial liabilities at amortised cost Trade and other payables (5,150) - - - Bonds (1,004) (987) - - Borrowings, excluding bank overdrafts and bonds (1,262) - - - Other non-current liabilities (437) - - - Total financial liabilities (7,853) (987) - - 1 Includes transfer of \u20ac31 million of equity securities from level 2 to level 1 December 31, 2021 Fair value (in millions of euros) Carrying amount Level 1 Level 2 Level 3 Financial assets at fair value through profit and loss Listed equity securities 1,413 1,413 - - Unlisted equity securities 44 - 44 - Warrants 19 - 19 - Other financial assets 68 - 57 11 Trade and other receivables - - - - Financial assets at fair value through other comprehensive income Listed equity securities through OCI - - - - Unlisted equity securities 16 - - 16 Financial assets at amortised cost Trade and other receivables 1,803 - - - Other financial assets 32 - - - Total financial assets 3,395 1,413 120 27 Financial liabilities at amortised cost Trade and other payables (4,875) - - - Borrowings, excluding bank overdrafts and bonds (2,582) - - - Other non-current liabilities (769) - - - Total financial liabilities (8,226) - - - Listed equity portfolio December 31, 2022 Number of shares held Ownership interest Average purchase price1,2 Stock market price Carrying value Change in value over the period Cumulative unrealized captial gain/(loss) 3 Sensitivity at +/- 10 pts (in thousands) (\u20ac/share) (in millions of euros) Spotify 6,487 3.30% 6.58 74.41 483 (856) 440 +48/-48 Tencent Music Entertainment 12,246 0.76% na 7.80 96 22 96 +10/-10 Other 18 18 18 Total 597 (816) 554 1 Includes acquisition fees and taxes. 2 na: not applicable. 3 Includes revaluation losses, net of liabilities, of \u20ac617 million in 2022 as recognized in Note 5 . December 31, 2021 Number of shares held Ownership interest Average purchase price 1,2 Stock market price Carrying value Change in value over the period Cumulative unrealized captial gain/(loss) 3 Sensitivity at +/- 10 pts (in thousands) (\u20ac/share) (in millions of euros) Spotify 6,487 3.37% 6.58 206.38 1,339 (330) 1,296 +134/-134 Tencent Music Entertainment 12,246 0.74% na 6.04 74 (119) 74 +7/-7 Total 1,413 (449) 1,370 1 Includes acquisition fees and taxes. 2 na: not applicable. 3 Includes revaluation losses, net of liabilities, of \u20ac315 million in 2021 as recognized in Note 5. ",
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"fact-425": {
"value": "Note 18. Financial assets and liabilities The following table shows the carrying amounts and fair values of financial assets and liabilities according to their fair value hierarchy. Based on the nature, maturity or the magnitude of the amounts, UMG considers that the fair value of trade and other receivables, short-term deposits, loans receivable, borrowings, trade and other payables are not materially different from their carrying value. Fair value hierarchy is based on the transparency of the inputs used and is as follows: \u2022 Level 1: fair value measurement based on quoted prices in active markets for identical assets or liabilities; \u2022 Level 2: fair value measurement based on observable market data (other than quoted prices included under Level 1), being for example, price on the last transactions on over-the-counter (OTC) markets; and \u2022 Level 3: fair value measurement based on valuation techniques using inputs for the asset or liability that are not based on observable market data . December 31, 2022 Fair value (in millions of euros) Carrying amount Level 1 1 Level 2 Level 3 Financial assets at fair value through profit and loss Listed equity securities 597 597 - - Unlisted equity securities - - - - Warrants - - - - Other financial assets 51 - 36 15 Trade and other receivables 1 - 1 - Financial assets at fair value through other comprehensive income Listed equity securities through OCI 1 1 - - Unlisted equity securities 19 - - 19 Financial assets at amortised cost Trade and other receivables 2,013 - - - Other financial assets 22 - - - Total financial assets 2,704 598 37 34 Financial liabilities at amortised cost Trade and other payables (5,150) - - - Bonds (1,004) (987) - - Borrowings, excluding bank overdrafts and bonds (1,262) - - - Other non-current liabilities (437) - - - Total financial liabilities (7,853) (987) - - 1 Includes transfer of \u20ac31 million of equity securities from level 2 to level 1 December 31, 2021 Fair value (in millions of euros) Carrying amount Level 1 Level 2 Level 3 Financial assets at fair value through profit and loss Listed equity securities 1,413 1,413 - - Unlisted equity securities 44 - 44 - Warrants 19 - 19 - Other financial assets 68 - 57 11 Trade and other receivables - - - - Financial assets at fair value through other comprehensive income Listed equity securities through OCI - - - - Unlisted equity securities 16 - - 16 Financial assets at amortised cost Trade and other receivables 1,803 - - - Other financial assets 32 - - - Total financial assets 3,395 1,413 120 27 Financial liabilities at amortised cost Trade and other payables (4,875) - - - Borrowings, excluding bank overdrafts and bonds (2,582) - - - Other non-current liabilities (769) - - - Total financial liabilities (8,226) - - - Listed equity portfolio December 31, 2022 Number of shares held Ownership interest Average purchase price1,2 Stock market price Carrying value Change in value over the period Cumulative unrealized captial gain/(loss) 3 Sensitivity at +/- 10 pts (in thousands) (\u20ac/share) (in millions of euros) Spotify 6,487 3.30% 6.58 74.41 483 (856) 440 +48/-48 Tencent Music Entertainment 12,246 0.76% na 7.80 96 22 96 +10/-10 Other 18 18 18 Total 597 (816) 554 1 Includes acquisition fees and taxes. 2 na: not applicable. 3 Includes revaluation losses, net of liabilities, of \u20ac617 million in 2022 as recognized in Note 5 . December 31, 2021 Number of shares held Ownership interest Average purchase price 1,2 Stock market price Carrying value Change in value over the period Cumulative unrealized captial gain/(loss) 3 Sensitivity at +/- 10 pts (in thousands) (\u20ac/share) (in millions of euros) Spotify 6,487 3.37% 6.58 206.38 1,339 (330) 1,296 +134/-134 Tencent Music Entertainment 12,246 0.74% na 6.04 74 (119) 74 +7/-7 Total 1,413 (449) 1,370 1 Includes acquisition fees and taxes. 2 na: not applicable. 3 Includes revaluation losses, net of liabilities, of \u20ac315 million in 2021 as recognized in Note 5. ",
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},
"fact-385": {
"value": "Note 18. Financial assets and liabilities The following table shows the carrying amounts and fair values of financial assets and liabilities according to their fair value hierarchy. Based on the nature, maturity or the magnitude of the amounts, UMG considers that the fair value of trade and other receivables, short-term deposits, loans receivable, borrowings, trade and other payables are not materially different from their carrying value. Fair value hierarchy is based on the transparency of the inputs used and is as follows: \u2022 Level 1: fair value measurement based on quoted prices in active markets for identical assets or liabilities; \u2022 Level 2: fair value measurement based on observable market data (other than quoted prices included under Level 1), being for example, price on the last transactions on over-the-counter (OTC) markets; and \u2022 Level 3: fair value measurement based on valuation techniques using inputs for the asset or liability that are not based on observable market data . December 31, 2022 Fair value (in millions of euros) Carrying amount Level 1 1 Level 2 Level 3 Financial assets at fair value through profit and loss Listed equity securities 597 597 - - Unlisted equity securities - - - - Warrants - - - - Other financial assets 51 - 36 15 Trade and other receivables 1 - 1 - Financial assets at fair value through other comprehensive income Listed equity securities through OCI 1 1 - - Unlisted equity securities 19 - - 19 Financial assets at amortised cost Trade and other receivables 2,013 - - - Other financial assets 22 - - - Total financial assets 2,704 598 37 34 Financial liabilities at amortised cost Trade and other payables (5,150) - - - Bonds (1,004) (987) - - Borrowings, excluding bank overdrafts and bonds (1,262) - - - Other non-current liabilities (437) - - - Total financial liabilities (7,853) (987) - - 1 Includes transfer of \u20ac31 million of equity securities from level 2 to level 1 December 31, 2021 Fair value (in millions of euros) Carrying amount Level 1 Level 2 Level 3 Financial assets at fair value through profit and loss Listed equity securities 1,413 1,413 - - Unlisted equity securities 44 - 44 - Warrants 19 - 19 - Other financial assets 68 - 57 11 Trade and other receivables - - - - Financial assets at fair value through other comprehensive income Listed equity securities through OCI - - - - Unlisted equity securities 16 - - 16 Financial assets at amortised cost Trade and other receivables 1,803 - - - Other financial assets 32 - - - Total financial assets 3,395 1,413 120 27 Financial liabilities at amortised cost Trade and other payables (4,875) - - - Borrowings, excluding bank overdrafts and bonds (2,582) - - - Other non-current liabilities (769) - - - Total financial liabilities (8,226) - - - Listed equity portfolio December 31, 2022 Number of shares held Ownership interest Average purchase price1,2 Stock market price Carrying value Change in value over the period Cumulative unrealized captial gain/(loss) 3 Sensitivity at +/- 10 pts (in thousands) (\u20ac/share) (in millions of euros) Spotify 6,487 3.30% 6.58 74.41 483 (856) 440 +48/-48 Tencent Music Entertainment 12,246 0.76% na 7.80 96 22 96 +10/-10 Other 18 18 18 Total 597 (816) 554 1 Includes acquisition fees and taxes. 2 na: not applicable. 3 Includes revaluation losses, net of liabilities, of \u20ac617 million in 2022 as recognized in Note 5 . December 31, 2021 Number of shares held Ownership interest Average purchase price 1,2 Stock market price Carrying value Change in value over the period Cumulative unrealized captial gain/(loss) 3 Sensitivity at +/- 10 pts (in thousands) (\u20ac/share) (in millions of euros) Spotify 6,487 3.37% 6.58 206.38 1,339 (330) 1,296 +134/-134 Tencent Music Entertainment 12,246 0.74% na 6.04 74 (119) 74 +7/-7 Total 1,413 (449) 1,370 1 Includes acquisition fees and taxes. 2 na: not applicable. 3 Includes revaluation losses, net of liabilities, of \u20ac315 million in 2021 as recognized in Note 5. ",
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"fact-386": {
"value": "Note 19. Equity Share capital UMG has an authorized share capital of \u20ac27,000 million divided into 2,700,000,000 ordinary shares with a nominal value of \u20ac10 per share. On December 31, 2022, the issued and fully paid share capital consisted of 1,813,512,742 ordinary shares with a nominal value of \u20ac10 per share (2021: 1,813,375,796 ordinary shares with a nominal value of \u20ac10 per share). Additional paid-in capital Additional paid-in capital represents the premium paid in excess of the par value of shares at the time of the issuance of new shares. Treasury shares As at December 31, 2022, UMG held 214,235 shares (2021: 466,783 shares) as Treasury shares for the purpose of delivering on a share-based executive incentive plan, refer to Note 23 for more details. ",
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}
},
"fact-426": {
"value": "Share capital
UMG has an authorized share capital of \u20ac27,000 million divided into 2,700,000,000 ordinary shares with a nominal value
of \u20ac10 per share. On December 31, 2022, the issued and fully paid share capital consisted of 1,813,512,742 ordinary shares
with a nominal value of \u20ac10 per share (2021: 1,813,375,796 ordinary shares with a nominal value of \u20ac10 per share).
",
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"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-428": {
"value": "Additional paid-in capital
Additional paid-in capital represents the premium paid in excess of the par value of shares at the time of the issuance of
new shares.
",
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"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-427": {
"value": "Treasury shares
As at December 31, 2022, UMG held 214,235 shares (2021: 466,783 shares) as Treasury shares for the purpose of delivering
on a share-based executive incentive plan, refer to Note 23 for more details.
",
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"language": "en",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-429": {
"value": "Dividend Distribution
On May 12, 2022 the shareholders approved a dividend distribution of \u20ac0.20 per ordinary share, corresponding to a total
distribution of \u20ac363 million, payable in June 2022.
On July 27, 2022 the directors approved an interim dividend distribution of \u20ac0.24 per ordinary share, corresponding to a
total distribution of \u20ac435 million payable in October 2022.
UMG plans to annually declare and pay dividends to all holders of the Shares on a pro-rata basis in two semi-annual
instalments, in the aggregate amount of no less than 50% of UMG's net profits realized during the relevant financial year,
subject to agreed non-cash items. UMG intends to pay an interim dividend in the fourth quarter of each financial year,
after the publication of the half-year figures of the Group, and a final dividend in the second quarter of the following
financial year, to be paid following approval of the UMG's financial statements at its Annual General Meeting.
A proposal will be submitted to the 2022 Annual General Meeting of Shareholders to pay a dividend of \u20ac0.27 per ordinary
share corresponding to a total distribution of \u20ac491 million, in cash, from the 2022 retained earnings, payable in Q2 2023.
",
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}
},
"fact-388": {
"value": "0.27",
"decimals": 2,
"dimensions": {
"concept": "ifrs-full:DividendsProposedOrDeclaredBeforeFinancialStatementsAuthorisedForIssueButNotRecognisedAsDistributionToOwnersPerShare",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00",
"unit": "iso4217:EUR/xbrli:shares"
}
},
"fact-387": {
"value": "491000000",
"decimals": -6,
"dimensions": {
"concept": "ifrs-full:DividendsProposedOrDeclaredBeforeFinancialStatementsAuthorisedForIssueButNotRecognisedAsDistributionToOwners",
"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00",
"unit": "iso4217:EUR"
}
},
"fact-454": {
"value": "Note 21. Provisions Year ended December 31, (in millions of euros) Note 2022 2021 Post-retirement employee benefits 22 166 220 Royalty audit claims 126 116 Deferred employee compensation 31 27 Restructuring costs 16 12 Litigations 5 4 Other 50 56 Provisions 394 435 Deduction of current provisions (103) (80) Non-current provisions 291 355 Based on the historical utilisation rate, UMG expects the royalty audit claims provision will be utilized mainly within the next 5 years. Movements in provisions (in millions of euros) Restructuring Litigation Royalty audit claims Other Total Balance as at January 1, 2022 12 4 116 56 188 Additions 26 - 39 (10) 55 Utilizations (18) - (19) (9) (46) Releases (3) - (15) (8) (26) Changes in foreign currency translation adjustments (1) 1 5 21 26 Balance as at December 31, 2022 16 5 126 50 197 Current 16 - 61 6 83 Non-current - 5 65 44 114 Note 22. Post-retirement employee benefits In accordance with the laws and practices of each country in which it operates, UMG participates in, or maintains, employee benefit plans providing retirement pensions, post-retirement health care, life insurance and other post- employment benefits to eligible (former) employees and such of their beneficiaries who meet the required conditions. Post-retirement benefits are provided for substantially all employees through defined contribution plans, which are integrated with local social security, or defined benefit plans, which are generally managed via group pension plans. The plan funding policy implemented by UMG is consistent with applicable government funding requirements and regulations. Refer to Note 4 for the contribution to defined contribution plans. Post-employment benefits covered in this note relate to defined-benefit pension and other post-retirement defined benefit plans, including medical plans and life insurance. The benefits provided by these plans are based on employees\u2019 years of service and compensation levels. Refer to the table below for the present value of the net defined benefit obligations and plan assets per country as at 31 December. 2022 2021 (in millions of euros) Obligation Fair value of plan assets Net obligation/ (asset) Obligation Fair value of plan assets Net obligation/ (asset) Germany 134 (2) 132 183 (1) 182 United Kingdom 1 - 1 171 (169) 2 United States 19 - 19 20 - 20 Other 40 (39) 1 53 (49) 4 Total 194 (41) 153 427 (219) 208 Germany The post-retirement benefit plans in Germany aim to provide pension benefits to eligible (former) employees and such of their beneficiaries who meet certain conditions. The total obligation as presented above includes multiple plans, from which three are material. These plans are closed to new entrants since 2003 and earlier. In accordance with current regulations, these plans are not funded and are not covered by the plan assets. The main risks for UMG relate to changes in discount rates. United Kingdom In 2021, the largest post-retirement benefit plan related to pension benefits in the United Kingdom for the eligible participants. In December 2017, the fund purchased a buy-in insurance policy, covering pension benefits. This insurance policy is an asset to the plan. In late 2021, UMG paid the true-up premium to the insurance company to complete the plan buyout. Following the completion of the final administrative actions, the final settlement of the scheme has been reflected in 2022. United States The defined benefit liability in the United States mainly relates to the post-retirement medical care benefits. Post- retirement medical benefit plans in the United States are not covered by plan assets in accordance with local laws and practices. Cash flow impact for 2023 In 2023 UMG expects a cash outflow of \u20ac14 million in relation to all defined benefit plans. Net defined benefit liability Movements of the net defined benefit obligation for the year ended on December 31, are presented in the table below. 2022 2021 (in millions of euros) Note Obligation Fair value of plan assets Net obligation/ (asset) Obligation Fair value of plan assets Net obligation/ (asset) Opening balance 427 (219) 208 423 (207) 216 Current service cost 3 - 3 2 - 2 (Gain)/loss on settlements - - - (1) 1 - Other - - - 1 - 1 Impact on selling & administrative 3 - 3 2 1 3 Interest cost 5 6 - 6 5 - 5 Expected return on plan assets 5 - (3) (3) - (3) (3) Impact on other financial income 6 (3) 3 5 (3) 2 Included in the statement of profit or loss 4 9 (3) 6 7 (2) 5 Actuarial losses/(gains) related to: Experience adjustments 10 51 61 4 (1) 3 Financial assumptions (111) - (111) 3 - 3 Demographic assumptions 1 - 1 - - - Included in other comprehensive income 20 (100) 51 (49) 7 (1) 6 Contributions by employers - (12) (12) - (19) (19) Benefits paid by the fund (121) 121 - (2) 2 - Benefits paid by the employer (12) 12 - (17) 17 - Foreign currency and other (9) 9 - 9 (9) - Closing balance 194 (41) 153 427 (219) 208 of which wholly or partly funded benefits 38 219 wholly unfunded benefits1 156 208 assets related to employee benefit plans (13) (12) provisions for employee benefit plans 166 220 1 Included a current liability of \u20ac14 million as of December 31, 2022 and \u20ac15 million as of December 31, 2021 Assumptions used in the valuation of the net defined benefit liability The mortality tables used for UMG\u2019s major defined benefit schemes in Germany are Richttafeln 2018 G K. Heubeck. Other key assumptions used in the valuation of the net defined benefit plans liability are: rate of compensation increase, discount rate, and expected return on plan assets. The assumptions used to calculate the defined-benefit obligation as of December 31 were as follows: Germany United Kingdom United States Weighted average of all plans 2022 2021 2022 2021 2022 2021 2022 2021 Discount rate 3.75% 0.75% 4.25% 2.00% 5.00% 3.00% 3.58% 1.30% Rate of compensation increase (weighted average) 2.50% 1.75% na na na na 1.93% 0.90% Duration of the benefit obligation (in years) 10.4 16.6 na: not applicable. During 2022, worldwide interest rates increased significantly and this has been reflected in higher discount rates. As such, most defined benefit plans experienced large gains on the financial assumptions. A 50 basis point increase (or a 50 basis point decrease, respectively) to the 2022 discount rate would have led to a decrease of \u20ac0.7 million in pre-tax expense (or an increase of \u20ac0.8 million, respectively) and would have led to a decrease in the defined benefit obligation of \u20ac9.3 million (or an increase of \u20ac10.1 million, respectively), assuming all other assumptions remain unchanged. Pension plan assets allocation Year ended December 31, (in millions of euros) 2022 2021 Insurance contracts 55% 89% Equity securities 20% 4% Debt securities 14% 3% Diversified funds 0% 1% Cash and other 11% 3% Total 100% 100% Note 25. Litigation In the normal course of its business, Universal Music Group is subject to various lawsuits, arbitrations and governmental, administrative or other proceedings (collectively referred to herein as \u201cLegal Proceedings\u201d). However, based on the information currently available, UMG believes that the outcome from these Legal Proceedings will not have a material impact on UMG's consolidated results of operations and financial position. ",
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"fact-430": {
"value": "Note 21. Provisions Year ended December 31, (in millions of euros) Note 2022 2021 Post-retirement employee benefits 22 166 220 Royalty audit claims 126 116 Deferred employee compensation 31 27 Restructuring costs 16 12 Litigations 5 4 Other 50 56 Provisions 394 435 Deduction of current provisions (103) (80) Non-current provisions 291 355 Based on the historical utilisation rate, UMG expects the royalty audit claims provision will be utilized mainly within the next 5 years. Movements in provisions
(in millions of euros)
Restructuring Litigation Royalty audit claims Other Total
Balance as at January 1, 2022 12 4 116 56 188
Additions 26 - 39 (10) 55
Utilizations (18) - (19) (9) (46)
Releases (3) - (15) (8) (26)
Changes in foreign currency
translation adjustments
(1) 1 5 21 26
Balance as at December 31, 2022 16 5 126 50 197
Current 16 - 61 6 83
Non-current - 5 65 44 114
Note 25. Litigation In the normal course of its business, Universal Music Group is subject to various lawsuits, arbitrations and governmental, administrative or other proceedings (collectively referred to herein as \u201cLegal Proceedings\u201d). However, based on the information currently available, UMG believes that the outcome from these Legal Proceedings will not have a material impact on UMG's consolidated results of operations and financial position. ",
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"fact-389": {
"value": "Note 23. Share-based compensation plans
In May 2022, UMG received formal approval from its shareholders to implement an equity plan, the UMG Global Equity
Plan. Under the plan, Restricted Stock Units (RSUs) and Performance Stock Units (PSUs) are granted to senior executives
to align the interests of the employees of UMG with its shareholders\u2019 interests by providing them with an additional
incentive to improve UMG's performance and increase its share price on a long-term basis. In addition, the Annual
Incentive Plan (AIP) for these senior executives was modified such that all or a portion of the payment under the plan
may be settled in equity at the discretion of UMG.
UMG Restricted Stock Units (RSUs)
Starting in the last quarter of 2022, and continuing for each year of service under the term of their contracts, senior
executives are granted RSUs being a right to receive shares upon vesting. The awards have vesting periods of 2.5 to 8
years and will vest in 3 equal instalments, if the service condition is fulfilled. The total number of RSUs granted was 7.29 million and the grant date weighted-average UMG N.V. share market price was \u20ac19.44. In addition, a one-off RSU award was granted to senior executives with on average 18 months vesting period in 2 equal instalments. The total number of these RSUs granted was 9.43 million and the grant date weighted-average UMG N.V. share market price was \u20ac19.84. There was a small number of RSUs granted with slightly different service conditions. The grant date weighted-average UMG's share market price was \u20ac19.33 per share corresponding to the total fair value of \u20ac6 million of such awards. The share rights are dividend-bearing during the service period. The total expense for these awards recognised in 2022 was \u20ac74 million and the total equity reserve at year end was \u20ac78 million. UMG Performance Stock Units (PSUs) Starting in the last quarter of 2022, and continuing for each year of service under the term of their contracts, senior executives are granted PSUs being a right to receive shares upon vesting. The vesting of these rights is subject to the performance of UMG or operating units within UMG against specific internal and market performance conditions over a three-calendar year period and continued service over three years by the employee. The share rights are dividend- bearing during the performance period. The total number of shares delivered with respect to these PSU\u2019s can range from 0% to 200% of the number of PSUs granted based on the performance during the performance period. Performance conditions are tailored to each participant. The performance conditions include target compound annual growth rate for revenues (Revenue CAGR), adjusted earnings before interest, taxes, depreciation, and amortization (Adjusted EBITDA CAGR) and relative total shareholder return (TSR). The total number of PSUs granted was 1.72 million and the grant date weighted-average UMG N.V. fair value per share was \u20ac21.37 and incorporates a market performance condition. In addition, a small number of PSU awards with slightly different service and performance conditions were granted during 2022. The estimated grant date UMG's share market price is \u20ac22.51 per share corresponding to the total fair value of \u20ac24 million of such awards. The total expense and equity reserve for the above awards recognised in and as at year end 2022 was \u20ac5 million. Annual Incentive Program (AIP) In the last quarter of 2022, the AIP for senior executives, which was previously settled only in cash and accrued throughout the year, was modified to allow UMG the choice of whether to settle in cash or shares of UMG N.V. or a combination of cash and shares. Such modification did not change the fair value of the award compared to the previously accrued AIP payable. UMG expects to settle 50% of the 2022 AIP in cash and 50% in shares. UMG has a constructive obligation to settle 50% of the award in cash. The total AIP expense for the full calendar year starting January 1, 2022, being the start of the service period for the award, was \u20ac42 million with the cash-settled AIP accrual amounting to 50% of the total expense. The vesting conditions of the AIP awards are a one-year service period and certain internally measured performance conditions including Adjusted EBITDA and cash flow from operations (CFFO). The amount received can vary between 0% and 200% of the on-target amount based on the actual performance against these performance criteria. The estimated grant date value is based on UMG's share market price at \u20ac22.51 per share corresponding to the total fair value of \u20ac21 million for the equity-settled portion of the total AIP. Estimated future tax obligation An estimate of the amount that UMG expects to transfer to the tax authority to settle the employees\u2019 tax obligation in relation to all RSU, PSU and AIP was \u20ac51 million. All Employee Award In October 2022, each eligible employee of UMG was granted 100 shares to be vested at the end of the one year service period. The grant date share price was \u20ac18.85 per share. A total of 0.88 million shares was granted. A total expense and equity reserve of \u20ac4 million was recognised in and as at year end 2022. UMG shares granted upon separation from Vivendi and direct listing on the Euronext Amsterdam In 2021, upon listing of UMG on the Euronext Amsterdam, a number of UMG executives were granted 3,181,754 UMG shares in total pursuant to the award by Vivendi with vesting conditions related, amongst other things, to the UMG\u2019s admission to the Euronext Amsterdam. The grant date fair value of these shares was estimated at \u20ac16.54 per share, primarily based on the enterprise value of \u20ac30,000 million determined in connection with the sale of an additional 10% of the share capital of Universal Music Group (UMG) to a Tencent-led consortium in December 2020. These awards fully vested at the listing date and were settled in UMG\u2019s shares held by Vivendi post-separation. UMG recognised an expense of \u20ac45 million in profit and loss for the year ended December 31, 2021. The awards were fully vested in 2021 and hence there was no further cost of this award in 2022. A total of 762,095 UMG shares, constituting a recognition award, were granted and vested to the Executive Vice President, Chief Financial Officer and President of Operations, Boyd Muir immediately after the UMG\u2019s listing date. These shares will settle over three years, from which one third was settled in 2021, a further third was settled in 2022 on the first anniversary of UMG listing and the final third is expected to settle on the second anniversary of the UMG listing. The grant date fair value of these shares was estimated at UMG\u2019 share market price as of that date and was \u20ac25.25 per share. UMG recognised an expense of \u20ac19 million in profit and loss for the year ended December 31, 2021. The awards were fully vested in 2021 and hence there was no further cost of this award in 2022. There is a total equity reserve of \u20ac11 million as at year end 2022 (2021: \u20ac15 million). Vivendi Share Awards Prior to the separation, Vivendi annually granted performance awards to certain UMG executives. These awards are settled with Vivendi\u2019s own shares or cash. Subject to certain performance conditions, these performance awards vest at the end of a three-year service period and are settled after an additional two-year retention period. Vivendi continued to maintain performance share plans for UMG participants in 2021 and 2022. The total expense recognised by UMG in 2022 in relation to these plans was \u20ac1 million (2021: \u20ac1 million). UMG-Vivendi Performance Awards In 2021, to compensate for any effect of the distribution on the Vivendi share price, UMG announced that it will issue its own shares for every Vivendi share earned by the UMG participants of the Vivendi\u2019s performance share plans, which were granted in 2017 \u2013 2020, while UMG was part of Vivendi. The amount of Vivendi shares (and accordingly UMG shares in 1-to-1 ratio) estimated to be vested for the 2020 ongoing plan will be further adjusted at the end of the original performance period of Vivendi\u2019s performance share plans. In relation to this award a total expense of \u20ac2 million was recognised in 2022 (2021: \u20ac14 million) and total equity reserve of \u20ac15 million (2021: \u20ac14 million) as at year end 2022. ",
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"fact-431": {
"value": "Note 24. Related parties UMG\u2019s related parties include the Corporate Executives and non-executive board members Corporate Executive compensation As of December 31, 2022 and 2021, UMG's Corporate Executives are comprised of 9 (2021: 9) members, of which 2 (2021: 2) were Executive Directors on the UMG N.V. board. The Corporate executives are as defined in the Appendix of the Annual Report. The Executive directors are also members of the UMG N.V. board. Their aggregate compensation is presented in the table below. Year ended December 31, 2022 (in millions of euros) Other Corporate Executives Executive Directors Corporate Executives Short-term employee benefits 18 50 68 Post-employment benefits - - - Other long-term benefits - - - Termination benefits - - - Share-based payments 33 - 33 Corporate Executives 51 50 101 Year ended December 31, 2021 (in millions of euros) Other Corporate Executives Executive Directors Corporate Executives Short-term employee benefits 30 43 73 Post-employment benefits - - - Other long-term benefits - - - Termination benefits - - - Share-based payments 45 2 47 Corporate Executives 75 45 120 Refer to the Remuneration Report section in the Annual Report for more detail. Non-executive board compensation As of December 31, 2022 UMG's non-executive board received director fees of \u20ac1 million (2021: \u20ac0.2 million) ",
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},
"fact-390": {
"value": "Note 24. Related parties UMG\u2019s related parties include the Corporate Executives and non-executive board members Corporate Executive compensation As of December 31, 2022 and 2021, UMG's Corporate Executives are comprised of 9 (2021: 9) members, of which 2 (2021: 2) were Executive Directors on the UMG N.V. board. The Corporate executives are as defined in the Appendix of the Annual Report. The Executive directors are also members of the UMG N.V. board. Their aggregate compensation is presented in the table below. Year ended December 31, 2022 (in millions of euros) Other Corporate Executives Executive Directors Corporate Executives Short-term employee benefits 18 50 68 Post-employment benefits - - - Other long-term benefits - - - Termination benefits - - - Share-based payments 33 - 33 Corporate Executives 51 50 101 Year ended December 31, 2021 (in millions of euros) Other Corporate Executives Executive Directors Corporate Executives Short-term employee benefits 30 43 73 Post-employment benefits - - - Other long-term benefits - - - Termination benefits - - - Share-based payments 45 2 47 Corporate Executives 75 45 120 Refer to the Remuneration Report section in the Annual Report for more detail. Non-executive board compensation As of December 31, 2022 UMG's non-executive board received director fees of \u20ac1 million (2021: \u20ac0.2 million) . Other related-party transactions Other related parties include: \u2022 companies fully consolidated by UMG. The transactions between these companies have been eliminated for the preparation of UMG\u2019s Annual Financial Statements; \u2022 companies over which UMG exercises a significant influence or has joint control; \u2022 all companies that are controlled or jointly controlled by Corporate Executives or their close relatives; \u2022 minority shareholders exercising a significant influence over UMG\u2019s subsidiaries; and \u2022 all companies that have a significant influence over UMG. As of December 31, 2022, transactions with Vivendi are still qualified as transactions with related parties under IAS 24. Commercial relationships among UMG and Vivendi subsidiaries prior and upon the separation, are conducted on an arm\u2019s length basis on terms and conditions similar to those which would be offered by third parties. During 2021, a portion of the management fees, share-based compensation plans and other costs of Vivendi SE\u2019s headquarters is allocated to UMG. UMG distributes its cash surpluses to shareowners through dividends and share capital reductions (please refer to Note 19 Equity). Vivendi and UMG entered into a transition and services agreement in connection with the separation, the terms of which Vivendi and its subsidiaries will provide to UMG, and UMG will provide to Vivendi and its subsidiaries, on an interim, transitional basis various services as applicable, including but not limited to: (i) a limited selection of treasury related services and applications; (ii) a limited selection of accounting services and accounting software related services and applications; (iii) taxation related services; and (iv) certain employee related principles in connection with the direct listing on the Euronext Amsterdam. The balances and transactions with the parties described above are summarised in the table below: December 31, 2022 (in millions of euros) Associates Shareholders Other Total Statement of Financial Position Assets Cash and cash equivalents - - - - Trade accounts receivable 49 6 - 55 Loans receivable 17 - - 17 Royalty advances - - 25 25 Liabilities - Long-term borrowings and other financial liabilities - - - - Trade accounts payable - 1 - 1 Statement of Profit or Loss Revenue 275 13 - 288 Cost of revenues - (4) - (4) Selling, general and administrative expenses (2) (3) (5) Financial income - - - - Financial expenses - - - - Services billed by Shareholders included in profit and loss Management fees - - - - Share-based compensation plans - (1) - (1) December 31, 2021 (in millions of euros) Associates Shareholders Other Total Statement of Financial Position Assets Cash and cash equivalents - - - - Trade accounts receivable 31 4 - 35 Loans receivable - - - - Royalty advances - - 21 21 Liabilities Long-term borrowings and other financial liabilities - - - - Trade accounts payable - (2) (12) (14) Statement of Profit or Loss Revenue 252 10 - 262 Cost of revenues - (12) (9) (21) Selling, general and administrative expenses (4) (10) - (14) Financial income - 2 - 2 Financial expenses - (10) - (10) Services billed by Shareholders included in profit and loss Management fees - - - - Share-based compensation plans - (1) - (1) ",
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"fact-449": {
"value": "Note 25. Litigation In the normal course of its business, Universal Music Group is subject to various lawsuits, arbitrations and governmental, administrative or other proceedings (collectively referred to herein as \u201cLegal Proceedings\u201d). However, based on the information currently available, UMG believes that the outcome from these Legal Proceedings will not have a material impact on UMG's consolidated results of operations and financial position. ",
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"fact-391": {
"value": "Note 25. Litigation In the normal course of its business, Universal Music Group is subject to various lawsuits, arbitrations and governmental, administrative or other proceedings (collectively referred to herein as \u201cLegal Proceedings\u201d). However, based on the information currently available, UMG believes that the outcome from these Legal Proceedings will not have a material impact on UMG's consolidated results of operations and financial position. ",
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"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
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"fact-392": {
"value": "Note 26. List of consolidated entities The Consolidated financial statements comprise the assets and liabilities of approximately 365 legal entities. Set out below is a list of material subsidiaries, representing more than 75% of UMG's consolidated sales. All the entities are 100% owned. Legal entity name Principal country of business Universal Music Group N.V. Netherlands Universal Music Group, Inc. United States Universal Music Group Holdings, Inc. United States UMG Recordings, Inc. United States Universal International Music B.V. Netherlands Universal Music Entertainment GmbH Germany Universal Music LLC Japan Universal Music Holdings Ltd. United Kingdom Universal Music Group Treasury S.A.S. France UMG does not have subsidiaries that have non-controlling interests that are material for its Consolidated financial statements. ",
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"entity": "scheme:724500GJBUL3D9TW9Y18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
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"fact-393": {
"value": "Note 27. Statutory auditors fees Fees for audit services include the audit of the financial statements of the UMG and its subsidiaries. Fees for other audit services include review of interim financial statements, sustainability, and other audits. Fees for tax services include tax compliance and tax advice. Fees for other non-audit services include agreed-upon procedures and advisory services. Fees for tax and other non-audit services are related to the network outside the Netherlands and are in accordance with local independence regulation. Year ended December 31, (in millions of euros) 2022 2021 Deloitte Accountants B.V. Ernst & Young Accountants LLP Deloitte Accountants B.V. Ernst & Young Accountants LLP Audit of UMG and its subsidiaries 4 6 4 4 Other statutory services - - - - Tax services - - - - Other non-audit services - - - - Total 1 4 6 4 4 1 Total fees charged by the Dutch organization of Deloitte and Ernst & Young were \u20ac2 million (2021: \u20ac1 million) and \u20ac2 million (2021: \u20ac2 million) respectively. ",
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"fact-394": {
"value": "Note 28. Audit exemptions UMG has provided guarantees to the following subsidiaries, incorporated in the Netherlands, under the registered number indicated, under section 403 of Book 2 of the Dutch Civil Code. As these companies\u2019 financial data is consolidated within these financial statements, the Dutch entities are allowed to prepare abridged financial statements which are exempt from publication and audit. Name Company Number Universal International Music B.V. 31018439 Universal Music Publishing International B.V. 31037866 Universal Music Publishing B.V. 32101966 CMHL B.V. 32140273 Universal Production Music B.V. 85798479 ",
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"fact-395": {
"value": "Note 29. Subsequent events In January 2023, UMG entered into an agreement with the owners of the Capitol Records building (the Property). As part of the agreement UMG contributed \u20ac37 million as a capital contribution and lent \u20ac60 million to the venture while the Property owners contributed the Property into the venture. In February 2023, the Revolving Credit Facility agreement was amended with a new maturity date being April 26, 2028. Around the date when these financial statements were authorised for issue, UMG was in the process of signing a new short-term floating rate \u20ac500 million revolving credit facility.",
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"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
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}