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"value": "Note 1 \u2013 General and Basis of Preparation GENERAL Reporting entity Wolters Kluwer N.V. (the company) with its subsidiaries (together referred to as \u2018the group\u2019 and individually as \u2018group entities\u2019) is a global leader in professional information, software solutions, and services for the health, tax and accounting, \ufb01nance, risk and compliance, and legal and regulatory sectors. The group helps its customers make critical decisions every day by providing expert solutions that combine deep domain knowledge with technology and services. The group maintains operations across the U.S. & Canada, Europe, Asia Paci\ufb01c, and other regions (referred to as \u2018Rest of World\u2019). The company\u2019s ordinary shares are quoted on Euronext Amsterdam (WKL) and are included in the AEX and Euronext 100 indices, amongst others. The registered of\ufb01ce of Wolters Kluwer N.V. is located at Zuidpoolsingel 2, Alphen aan den Rijn, the Netherlands, with its statutory seat in Amsterdam and a registration with the Dutch Commercial Register under number 33.202.517. Statement of compliance The consolidated \ufb01nancial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and its interpretations, prevailing as of December 31, 2022, as endorsed for use in the European Union by the European Commission. These \ufb01nancial statements were authorized for issuance by the Executive Board and the Supervisory Board on February 21, 2023. The adoption of the \ufb01nancial statements and the adoption of the dividend are reserved for the shareholders in the Annual General Meeting of Shareholders on May 10, 2023. Consolidated financial statements The consolidated \ufb01nancial statements of the company at and for the year ended December 31, 2022, comprise the group and the group\u2019s interest in associates. The signi\ufb01cant accounting policies applied in the preparation of these consolidated \ufb01nancial statements are set out in Note 2 \u2013 Significant Accounting Policies and the relevant respective notes to the consolidated \ufb01nancial statements. A list of subsidiaries has been \ufb01led with the Chamber of Commerce in The Hague, the Netherlands, and is available from the company upon request. An overview of the signi\ufb01cant subsidiaries is included in Note 39 \u2013 Overview of Significant Subsidiaries. BASIS OF PREPARATION Basis of measurement The consolidated \ufb01nancial statements have been prepared under the historical cost basis except for the following material items in the consolidated statement of \ufb01nancial position: \u2022 Financial assets and \ufb01nancial liabilities (including derivative \ufb01nancial instruments) measured at fair value; \u2022 Assets and liabilities held for sale; \u2022 Contingent considerations; \u2022 Share-based payments; and \u2022 Net de\ufb01ned employee bene\ufb01t assets/liabilities. Presentation currency The consolidated \ufb01nancial statements are presented in euros and rounded to the nearest million, unless otherwise indicated. Use of estimates and judgments The preparation of \ufb01nancial statements in conformity with IFRS requires management to make estimates, judgments, and assumptions that affect the application of policies and reported amounts of assets and liabilities, the disclosed amounts of contingent assets and liabilities, and the reported amounts of income and expense. Refer to Note 3 \u2013 Accounting Estimates and Judgments. \u2190 \u2192 Wolters Kluwer 2022 Annual Report 119 Note 1 \u2013 General and Basis of Preparation continued Going concern The Executive Board has assessed the going concern assumption as part of the preparation of the consolidated \ufb01nancial statements. The Executive Board believes that no events or conditions give rise to doubt about the ability of the group to continue in operation for at least 12 months from the end of the reporting period. This conclusion is drawn based on knowledge of the group, the estimated economic outlook, and related identi\ufb01ed risks and uncertainties. Furthermore, the conclusion is based on a review of the three-year strategic plan and next year\u2019s budget, including expected developments in liquidity and capital, which includes the evaluation of current credit facilities available, contractual and expected maturities of \ufb01nancial liabilities, and covenants. Consequently, it was concluded that it is reasonable to apply the going concern assumption for the preparation of the consolidated \ufb01nancial statements. Effect of new accounting standards Except for the EU-endorsed amendments below, the group has consistently applied the accounting policies set out in Note 2 \u2013 Significant Accounting Policies and the relevant respective notes to the consolidated \ufb01nancial statements to all periods presented in these \ufb01nancial statements. The group has applied the following amendments for the \ufb01rst time for the annual reporting period commencing January 1, 2022: \u2022 References to the Conceptual Framework (Amendments to IFRS 3); \u2022 Proceeds before intended use (Amendments to IAS 16); \u2022 Onerous Contracts \u2013 Cost of Ful\ufb01lling a Contract (Amendments to IAS 37); and \u2022 Annual improvements to IFRS Standards 2018-2020 (Amendments to IFRS 9 and IFRS 16). The application of the abovementioned amendments has not had any material impact on the amounts reported or disclosed in these \ufb01nancial statements. Effect of forthcoming accounting standards The following forthcoming amendments and new standards are not yet effective for the year ended December 31, 2022, and have not been early adopted in preparing these \ufb01nancial statements: \u2022 IFRS 17 Insurance Contracts; \u2022 Sale or contribution of assets between an investor and its associate or joint venture (Amendments to IFRS 10 and IAS 28); \u2022 Classi\ufb01cation of liabilities as current or non-current (Amendments to IAS 1); \u2022 Disclosure of accounting policies (Amendments to IAS 1 and IFRS Practice Statement 2); \u2022 De\ufb01nition of accounting estimates (Amendments to IAS 8); and \u2022 Deferred tax related to assets and liabilities arising from a single transaction (Amendments to IAS 12). The group expects no signi\ufb01cant impact from these amendments and new standards. Comparatives Certain immaterial reclassi\ufb01cations have been made to certain notes to conform to the current year presentation and to improve insights. These reclassi\ufb01cations have had no impact on the comparative shareholders\u2019 equity or comparative pro\ufb01t for the year. Note 2 \u2013 Signi\ufb01cant Accounting Policies Except for the changes explained in Note 1 \u2013 General and Basis of Presentation, the group has consistently applied the signi\ufb01cant accounting policies to all periods presented in these consolidated \ufb01nancial statements. The main principles for the determination and presentation of results and the valuation and presentation of assets and liabilities are described in the relevant respective notes to the consolidated \ufb01nancial statements. 120 Wolters Kluwer 2022 Annual Report Strategic Report | Governance | Financial Statements \u2190 \u2192 Note 2 \u2013 Signi\ufb01cant Accounting Policies continued BASIS OF CONSOLIDATION Subsidiaries Subsidiaries are all entities controlled by the group. The group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and can affect those returns through its power over the entity. The principle of control is the basis for determining which entities are consolidated in the consolidated \ufb01nancial statements. Loss of control Upon loss of control, the group derecognizes the assets and liabilities of the subsidiary, any non-controlling interests, and the other components of equity related to the subsidiary. Any surplus or de\ufb01cit arising from the loss of control is recognized in pro\ufb01t or loss. If the group retains any equity interest in the former subsidiary, such interest is measured at fair value at the date that control is lost. Subsequently, the remaining interest is accounted for as an equity-accounted investee or as a \ufb01nancial asset at fair value through pro\ufb01t or loss or other comprehensive income, depending on the level of influence retained. Transactions eliminated on consolidation Intragroup balances, intragroup transactions, and any unrealized gains and losses arising from transactions between group companies are eliminated in preparing the consolidated \ufb01nancial statements. Unrealized gains arising from transactions between the group and its equity-accounted investees are eliminated to the extent of the group\u2019s interest in the equity-accounted investees. Foreign currency Functional and presentation currency Items included in the \ufb01nancial statements of each of the group entities are measured using the currency of the primary economic environment in which the group entities operate (the functional currency). The consolidated \ufb01nancial statements are presented in euros, which is the group\u2019s presentation currency. Foreign currency transactions and balances Foreign currency transactions are translated into the functional currency of the group entities using the exchange rates prevailing at the transaction dates. Foreign exchange gains and losses resulting from the settlement of such transactions during the year and from the translation of monetary assets and liabilities denominated in foreign currencies at year-end exchange rates are recognized in pro\ufb01t or loss. Foreign currency differences arising from the following items are recognized in other comprehensive income: \u2022 Qualifying cash flow hedges to the extent that the hedge is effective; and \u2022 Qualifying net investment hedges on foreign operations to the extent that the hedge is effective. Non-monetary assets and liabilities in a foreign currency that are measured in terms of historical cost are translated using the exchange rates at the transaction dates. Non-monetary assets and liabilities denominated in foreign currencies, that are stated at fair value, are translated to the functional currency at the foreign exchange rates prevailing on the dates the fair value was determined. Foreign operations The assets and liabilities of group companies are translated to euros at foreign exchange rates prevailing at the end of the reporting period. Income and expenses of group companies are translated to euros at exchange rates on the transaction dates. All resulting exchange differences are recognized as a component of other comprehensive income in the translation reserve. When a foreign currency-denominated subsidiary or equity-accounted investee is disposed of, exchange differences that were recognized in other comprehensive income prior to the sale are reclassi\ufb01ed to pro\ufb01t or loss as part of the gain or loss on divestments . \u2190 \u2192 Wolters Kluwer 2022 Annual Report 121 Note 2 \u2013 Signi\ufb01cant Accounting Policies continued Net investment in foreign operations Net investment in foreign operations includes equity \ufb01nancing and long-term intercompany loans for which settlement is neither planned nor likely to occur in the foreseeable future. Exchange differences arising from the translation of the net investment in foreign operations, and of related hedges, are taken to the translation reserve of foreign operations in other comprehensive income. MAIN CURRENCY EXCHANGE RATES rates to the euro 2022 2021 U.S. dollar (average) 1.05 1.18 U.S. dollar (at December 31) 1.07 1.13 PRINCIPLES UNDERLYING THE STATEMENT OF CASH FLOWS General Bank overdrafts repayable on demand are included as cash and cash equivalents in the consolidated statement of cash flows to the extent that they form an integral part of the group\u2019s cash management. However, in the consolidated statement of \ufb01nancial position, the bank overdrafts are presented separately as the offsetting criteria are not met. Cash flows from operating activities Cash flows from operating activities are calculated using the indirect method by adjusting the consolidated pro\ufb01t for the year for items that are not cash flows and for autonomous movements in working capital (excluding the impact of acquisitions/divestments, foreign exchanges differences, and reclassi\ufb01cations to assets/liabilities classi\ufb01ed as held for sale). Cash flows from operating activities include receipts from customers, cash payments to employees and suppliers, paid \ufb01nancing costs of operating activities (including interest paid and received, the interest portion of lease payments, paid \ufb01nancing fees, and cash flows resulting from derivatives not qualifying for hedge accounting), acquisition and divestment-related costs, spending on restructuring provisions, and income taxes paid. Cash flows from investing activities Cash flows from investing activities are those arising from capital expenditure on and disposal of other intangible assets and property, plant, and equipment, acquisitions and sale of subsidiaries and equity-accounted investees, dividends received, and cash flows from the settlement of net investment hedges. Dividends received are from equity-accounted investees and \ufb01nancial assets measured at fair value through pro\ufb01t or loss or other comprehensive income. Cash receipts and payments from the settlement of derivative \ufb01nancial instruments are classi\ufb01ed in the same manner as the cash flows of the hedged items. The group primarily uses derivatives for hedging its net investments in U.S. dollar-denominated subsidiaries. As a result, cash receipts and payments from the settlement of derivatives are classi\ufb01ed under cash flows from investing activities. Cash flows from financing activities The cash flows from \ufb01nancing activities comprise the cash receipts and payments from issued and repurchased shares, long-term debt instruments, short-term \ufb01nancing, repayments of the principal portion of lease liabilities, and dividends paid. Dividends paid are to the owners of the company and the non-controlling interests. 122 Wolters Kluwer 2022 Annual Report Strategic Report | Governance | Financial Statements \u2190 \u2192 Note 2 \u2013 Signi\ufb01cant Accounting Policies continued FINANCIAL INSTRUMENTS Financial instruments comprise the following: \u2022 Non-derivative \ufb01nancial assets and liabilities: \ufb01nancial assets at fair value through pro\ufb01t or loss, trade and miscellaneous receivables, cash and cash equivalents, borrowings and bank overdrafts, trade payables, and short- and long-term debt; and \u2022 Derivative \ufb01nancial assets and liabilities: cross-currency interest rate swaps, net investment hedges, and currency forwards. Financial assets and liabilities are offset and presented as net in the consolidated statement of \ufb01nancial position when the group has a legal right to offset the amounts and intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously. The group recognizes non-derivative \ufb01nancial assets and liabilities on the trade date. Note 3 \u2013 Accounting Estimates and Judgments General The preparation of the \ufb01nancial statements in conformity with IFRS requires management to make estimates, judgments, and assumptions that affect the application of policies and reported amounts of assets and liabilities, the disclosed amounts of contingent assets and liabilities, and the reported amounts of income and expense, that are not clear from other sources. The estimates, judgments, and underlying assumptions are based on historical experience and other factors that are believed to be reasonable under the circumstances. Actual results may differ from those estimates and may result in material adjustments in the next \ufb01nancial year(s). The impact of climate-related matters on estimates and judgments, including those related to the impairment of non-\ufb01nancial assets, has been assessed by management based on the emission reduction targets and associated abatement plans developed by the group. Management concluded that the impact of climate-related matters on estimates and judgments is not material. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period, or the period of the revision and future periods if the revision affects both current and future periods. Judgments made by management in the application of IFRS that could have an effect on the \ufb01nancial statements and estimates with the risk of a material adjustment in future years are further discussed in the corresponding notes to the consolidated statements of pro\ufb01t or loss and \ufb01nancial position: \u2022 Revenue recognition (see Note 6); \u2022 Accounting for income taxes (see Note 16); and \u2022 Valuation, measurement, and impairment testing of goodwill and intangible assets other than goodwill (see Note 8 and Note 18). Management believes that these risks are adequately covered in its estimates and judgments. Impact of Russian-Ukrainian war Revenues generated in Russia, Belarus, and Ukraine represented less than 0.5% of group revenues in 2022 and in 2021. Per company policy, there shall be no new business conducted in Russia, Belarus, or the embargoed regions of Ukraine unless an exception applies. Such exceptions generally apply only to certain Health products provided for humanitarian reasons and in all cases must comply with applicable sanctions and export restrictions. The Russian-Ukrainian war did not result in an impairment trigger on the group\u2019s non-current assets. The group has one subsidiary in Russia as of December 31, 2022. The activities of the subsidiary were ceased and the group is in the process of bringing the subsidiary into liquidation. \u2190 \u2192 Wolters Kluwer 2022 Annual Report 123 Note 4 \u2013 Benchmark Figures Benchmark \ufb01gures refer to \ufb01gures adjusted for non-benchmark items and, where applicable, amortization and (reversal of) impairment of goodwill and acquired identi\ufb01able intangible assets. Adjusted \ufb01gures are non-IFRS compliant \ufb01nancial \ufb01gures but are internally regarded as key performance indicators to measure the underlying performance of the business. These \ufb01gures are presented as additional information and do not replace the information in the consolidated \ufb01nancial statements. BENCHMARK FIGURES in millions of euros, unless otherwise stated 2021 2022 2021 Change in actual currencies (%) Change in constant currencies (%) * Revenues 5,453 4,771 14 5 Organic revenue growth (%) 6 6 Adjusted operating pro\ufb01t 1,424 1,205 18 7 Adjusted operating pro\ufb01t margin (%) 26.1 25.3 Adjusted net pro\ufb01t 1,059 885 20 6 Adjusted net \ufb01nancing costs Note 15 (56) (78) (28) (20) Adjusted free cash flow 1,220 1,010 21 7 Cash conversion ratio (%) 107 112 Return on invested capital (ROIC) (%) 15.5 13.7 Net debt Note 29 2,253 2,131 6 Net-debt-to-EBITDA ratio 1.3 1.4 Diluted adjusted EPS (\u20ac) 4.14 3.38 22 Diluted adjusted EPS in constant currencies (\u20ac) * 3.73 3.45 8 Diluted adjusted free cash flow per share (\u20ac) 4.77 3.87 24 10 * Constant currencies at \u20ac/$ 1.18. REVENUE BRIDGE \u20ac million % Revenues 2021 4,771 Organic change 292 6 Acquisitions 15 0 Divestments (44) (1) Currency impact 419 9 Revenues 2022 5,453 14 124 Wolters Kluwer 2022 Annual Report Strategic Report | Governance | Financial Statements \u2190 \u2192 Note 4 \u2013 Benchmark Figures continued RECONCILIATION BETWEEN OPERATING PROFIT AND ADJUSTED OPERATING PROFIT 2022 2021 Operating pro\ufb01t 1,333 1,012 Amortization and (reversal of) impairment of acquired identifiable intangible assets Note 14 160 164 Non-benchmark items in operating pro\ufb01t Note 12 (69) 29 Adjusted operating pro\ufb01t 1,424 1,205 RECONCILIATION BETWEEN TOTAL FINANCING RESULTS AND ADJUSTED NET FINANCING COSTS 2022 2021 Total financing results Note 15 (57) (84) Non-benchmark items in total financing results Note 15 1 6 Adjusted net financing costs (56) (78) RECONCILIATION BETWEEN PROFIT FOR THE YEAR AND ADJUSTED NET PROFIT 2022 2021 Pro\ufb01t for the year attributable to the owners of the company (A) 1,027 728 Amortization and (reversal of) impairment of acquired identifiable intangible assets 160 164 Tax benefits on amortization and impairment of acquired identifiable intangible assets (41) (44) Non-benchmark items, net of tax (87) 37 Adjusted net pro\ufb01t (B) 1,059 885 SUMMARY OF NON-BENCHMARK ITEMS 2022 2021 Included in operating profit: Other gains and (losses) Note 12 69 (29) Included in total financing results: Other \ufb01nance income and (costs) Note 15 (1) (6) Total non-benchmark items before tax 68 (35) Tax bene\ufb01ts/(charges) on non-benchmark items 19 (1) Impact of changes in tax rates Note 16 0 (1) Non-benchmark items, net of tax 87 (37) \u2190 \u2192 Wolters Kluwer 2022 Annual Report 125 Note 4 \u2013 Benchmark Figures continued RECONCILIATION BETWEEN NET CASH FROM OPERATING ACTIVITIES AND ADJUSTED FREE CASH FLOW 2022 2021 Net cash from operating activities 1,582 1,292 Net capital expenditure (295) (239) Repayment of principal portion of lease liabilities (72) (68) Paid acquisition-related costs Note 8 3 5 Paid divestment expenses Note 8 3 8 Dividends received Note 21 0 0 Income tax paid/(received) on divested assets and consolidation of platform technology (1) 12 Adjusted free cash flow (C) 1,220 1,010 RETURN ON INVESTED CAPITAL (ROIC) in millions of euros, unless otherwise stated 2022 2021 Adjusted operating pro\ufb01t 1,424 1,205 Allocated tax (322) (259) Net operating pro\ufb01t after allocated tax (NOPAT) 1,102 946 Average invested capital 7,120 6,915 ROIC (NOPAT/Average invested capital) (%) 15.5 13.7 Allocated tax is the adjusted operating pro\ufb01t multiplied by the benchmark tax rate. Invested capital is de\ufb01ned as the summation of total assets excluding investments in equity-accounted investees, deferred tax assets, non-operating working capital, and cash and cash equivalents, minus current liabilities and non-current deferred income. This total summation is adjusted for accumulated amortization on acquired identi\ufb01able intangible assets, goodwill amortized pre- IFRS 2004, and goodwill written off to equity prior to 1996 (excluding acquired identi\ufb01able intangible assets/goodwill that have been impaired and/or fully amortized), less any related deferred tax liabilities. The average invested capital is based on \ufb01ve measurement points during the year. 126 Wolters Kluwer 2022 Annual Report Strategic Report | Governance | Financial Statements \u2190 \u2192 Note 4 \u2013 Benchmark Figures continued PER SHARE INFORMATION in euro, unless otherwise stated 2022 2021 Total number of ordinary shares outstanding at December 31 (in millions of shares) Note 33 248.7 258.2 Weighted-average number of ordinary shares (D) (in millions of shares) Note 7 254.7 260.4 Diluted weighted-average number of ordinary shares (E) (in millions of shares) Note 7 255.8 261.8 Adjusted EPS (B/D) 4.16 3.40 Diluted adjusted EPS (B/E) 4.14 3.38 Diluted adjusted EPS in constant currencies 3.73 3.45 Basic EPS (A/D) Note 7 4.03 2.79 Diluted EPS (A/E) Note 7 4.01 2.78 Adjusted free cash flow per share (C/D) 4.79 3.89 Diluted adjusted free cash flow per share (C/E) 4.77 3.87 BENCHMARK TAX RATE in millions of euros, unless otherwise stated 2022 2021 Income tax expense Note 16 249 201 Tax bene\ufb01ts on amortization and impairment of acquired identifiable intangible assets 41 44 Tax bene\ufb01ts/(charges) on non-benchmark items 19 (1) Impact of changes in tax rates 0 (1) Tax on adjusted pro\ufb01t (F) 309 243 Adjusted net pro\ufb01t (B) 1,059 885 Adjustment for non-controlling interests 0 0 Adjusted pro\ufb01t before tax (G) 1,368 1,128 Benchmark tax rate (F/G) (%) 22.6 21.5 \u2190 \u2192 Wolters Kluwer 2022 Annual Report 127 Note 4 \u2013 Benchmark Figures continued CASH CONVERSION RATIO in millions of euros, unless otherwise stated 2022 2021 Operating pro\ufb01t 1,333 1,012 Amortization, impairment, and depreciation Note 14 466 473 EBITDA 1,799 1,485 Non-benchmark items in operating pro\ufb01t Note 12 (69) 29 Adjusted EBITDA 1,730 1,514 Autonomous movements in working capital 178 150 Net capital expenditure (295) (239) Book (profit)/loss on sale of non-current assets (4) 0 Repayment of principal portion of lease liabilities Note 20 (72) (68) Interest portion of lease payments Note 20 (9) (9) Adjusted operating cash flow (H) 1,528 1,348 Adjusted operating pro\ufb01t (I) 1,424 1,205 Cash conversion ratio (H/I) (%) 107 112 NON-BENCHMARK ITEMS IN OPERATING PROFIT Non-benchmark items relate to income and expenses arising from circumstances or transactions that, given their size and/or nature, are clearly distinct from the ordinary activities of the group and are excluded from the benchmark \ufb01gures. Apart from amortization and (reversal of) impairment of acquired identi\ufb01able intangible assets and impairment of goodwill, non-benchmark items in operating pro\ufb01t include the items below. Refer also to Note 12 \u2013 Other Gains and (Losses). Acquisition-related costs Acquisition-related costs are non-recurring costs incurred by the group resulting from acquisition activities. The acquisition-related costs are directly attributable to acquisitions, such as legal fees, broker/bank costs, and commercial and \ufb01nancial due diligence fees, and are included in other gains and losses in the consolidated statement of pro\ufb01t or loss. Additions to acquisition integration provisions Additions to acquisition integration provisions are those non-recurring costs incurred by the group to integrate activities acquired through business combinations, and have been included in other gains and losses in the consolidated statement of pro\ufb01t or loss. Fair value changes of contingent considerations Results from changes in the fair value of contingent considerations are not considered to be part of the ordinary activities of the group, and are included in other gains and losses in the consolidated statement of pro\ufb01t or loss. Divestment-related results Divestment-related results are event-driven gains and losses incurred by the group from the sale of subsidiaries and/or businesses. These results also include divestment expenses and restructuring of stranded costs, and are included in other gains and losses in the consolidated statement of pro\ufb01t or loss. Loss on remeasurement of disposal groups Loss on remeasurement of disposal groups includes losses for any initial or subsequent write-down of disposal groups to fair value less costs of disposal, and are included in other gains and losses in the consolidated statement of pro\ufb01t or loss. 128 Wolters Kluwer 2022 Annual Report Strategic Report | Governance | Financial Statements \u2190 \u2192 Note 4 \u2013 Benchmark Figures continued Other non-benchmark items Non-benchmark items, which cannot be classi\ufb01ed in the categories above, relate to income and expenses arising from circumstances or transactions that, given their size or nature, are clearly distinct from the ordinary activities of the group, and are excluded from the benchmark \ufb01gures. NON-BENCHMARK ITEMS IN FINANCING RESULTS Non-benchmark items in \ufb01nancing results (total other \ufb01nance income/(costs)) include the below items. Refer also to Note 15 \u2013 Financing Results. Book results and fair value changes of financial assets measured at fair value through profit or loss This includes fair value changes of \ufb01nancial assets measured at fair value through pro\ufb01t or loss and any gain or loss on the sale of \ufb01nancial assets measured at fair value through pro\ufb01t or loss. Financing component employee benefits Financing component employee bene\ufb01ts relates to net interest results on the net de\ufb01ned bene\ufb01t liability or asset of the group\u2019s de\ufb01ned bene\ufb01t pension plans and other long-term employee bene\ufb01t plans. NON-BENCHMARK TAX ITEMS IN INCOME TAX EXPENSE This includes the income tax effect on non-benchmark items as de\ufb01ned above, and on the amortization and impairment of acquired identi\ufb01able intangible assets, as well as the income tax expense relating to any material changes in income tax laws and income tax rates in the jurisdictions where Wolters Kluwer operates. \u2190 \u2192 Wolters Kluwer 2022 Annual Report 129 Note 5 \u2013 Segment Reporting Health Tax & Accounting Governance, Risk & Compliance Legal & Regulatory Corporate * Total reporting by segment 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 Revenues from contracts with third parties 1,448 1,234 1,758 1,510 1,333 1,139 914 888 \u2013 \u2013 5,453 4,771 Cost of revenues (444) (379) (500) (418) (370) (307) (264) (270) \u2013 \u2013 (1,578) (1,374) Gross pro\ufb01t 1,004 855 1,258 1,092 963 832 650 618 0 0 3,875 3,397 Sales costs (231) (193) (315) (280) (188) (162) (180) (171) \u2013 \u2013 (914) (806) General and administrative costs (396) (360) (463) (413) (396) (365) (378) (355) (64) (57) (1,697) (1,550) Total operating expenses (627) (553) (778) (693) (584) (527) (558) (526) (64) (57) (2,611) (2,356) Other gains and (losses) (1) 0 (3) (47) (5) (4) 78 22 0 \u2013 69 (29) Operating pro\ufb01t 376 302 477 352 374 301 170 114 (64) (57) 1,333 1,012 Amortization of acquired identifiable intangible assets 37 31 33 36 39 35 31 29 \u2013 \u2013 140 131 Impairment/(reversal of impairment) of acquired identifiable intangible assets 20 27 \u2013 (5) \u2013 11 \u2013 \u2013 \u2013 \u2013 20 33 Non-benchmark items in operating pro\ufb01t 1 0 3 47 5 4 (78) (22) 0 \u2013 (69) 29 Adjusted operating pro\ufb01t 434 360 513 430 418 351 123 121 (64) (57) 1,424 1,205 Amortization of other intangible assets and depreciation of PPE and right-of-use assets (46) (50) (103) (101) (84) (73) (59) (63) 0 (3) (292) (290) Impairment of other intangible assets, PPE, and right-of-use assets (6) (5) (5) (7) (3) (5) 0 (2) \u2013 \u2013 (14) (19) Goodwill and acquired identifiable intangible assets at December 31 1,300 1,262 1,783 1,761 1,487 1,374 824 828 \u2013 \u2013 5,394 5,225 Net capital expenditure 42 33 98 72 101 82 54 52 0 0 295 239 Assets classified as held for sale at December 31 \u2013 \u2013 \u2013 \u2013 \u2013 \u2013 \u2013 101 \u2013 \u2013 0 101 Liabilities classified as held for sale at December 31 \u2013 \u2013 \u2013 \u2013 \u2013 \u2013 \u2013 74 \u2013 \u2013 0 74 Number of FTEs at December 31 3,116 2,913 8,040 7,416 4,982 4,736 3,786 4,262 132 127 20,056 19,454 * The corporate function does not represent an operating segment. 130 Wolters Kluwer 2022 Annual Report Strategic Report | Governance | Financial Statements \u2190 \u2192 Note 5 \u2013 Segment Reporting continued ACCOUNTING POLICIES An operating segment is a component of the group that engages in business activities from which it may earn revenues and incur expenses. The four global operating divisions are based on strategic customer segments: Health; Tax & Accounting; Governance, Risk & Compliance; and Legal & Regulatory. This segment information is based on the group\u2019s management and internal reporting structure. All operating segments are regularly reviewed by the Executive Board, within Wolters Kluwer de\ufb01ned as the group\u2019s chief operating decision-maker, to make decisions about resources to be allocated to the segments and to assess their performance to the extent whereby discrete \ufb01nancial information is available. The Executive Board reviews the \ufb01nancial performance of the segments and the allocation of resources based on revenues and adjusted operating pro\ufb01t. Revenues from internal transactions between the operating segments are conducted at arm\u2019s length with terms equivalent to comparable transactions with third parties. These internal revenues are limited and therefore excluded from the segment reporting table. Segment results reported to the Executive Board include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Costs (and associated FTEs) and net capital expenditure incurred on behalf of the segments by Global Business Services and Digital eXperience Group are allocated to the operating segments. Non-current interest-bearing liabilities and deferred tax liabilities are not considered to be segment liabilities as these are primarily managed by the corporate treasury and tax functions. Operating working capital is not managed at the operating segment level, but at a country or regional level. GEOGRAPHIC INFORMATION total non-current assets per region* 2022 % 2021 % The Netherlands 676 11 677 11 Europe (excluding the Netherlands) 1,336 21 1,342 22 U.S. and Canada 4,338 67 4,117 66 Asia Paci\ufb01c 85 1 75 1 Rest of World 19 0 17 0 Total 6,454 100 6,228 100 * Non-current assets per region exclude deferred tax assets and derivative \ufb01nancial instruments. OTHER DISCLOSURES There are no customers with revenues that exceed 10% of the group\u2019s total revenues. For the revenues per geographic region, refer to Note 6 \u2013 Revenues. \u2190 \u2192 Wolters Kluwer 2022 Annual Report 131 Note 6 \u2013 Revenues 2022 2021 Revenues from contracts with third parties 5,453 4,771 ACCOUNTING POLICIES Revenues represent the amount of consideration the group expects to be entitled to, arising from contracts with customers in the ordinary course of business, in exchange for transferring promised goods and/or services to customers, excluding amounts collected on behalf of third parties. Revenues are recognized once the performance obligations are ful\ufb01lled (i.e., when the customer obtains control over those goods and/or services). Subscriptions Revenues related to subscriptions are recognized over the period in which the goods are transferred and/or content is made available online and when the goods and/or content involved are similar in value to the customer over time. Subscription income received or receivable in advance of the delivery of goods and/or content is presented as deferred income (a contract liability) in the consolidated statement of \ufb01nancial position. Licenses License fees for the use of the group\u2019s software products and/or services are recognized in accordance with the substance of the agreement. Revenues from licenses representing a right to access are recognized over time on a straight-line basis. In case a right-to-access license is invoiced to a customer as a one-time upfront fee, revenue is recognized over a period of between 12 and 60 months depending on the nature of the license. In case of a transfer of rights (i.e., right-to-use license), which permits the licensee to exploit those rights freely and the group as a licensor has no remaining obligations to perform after delivery, revenues are recognized at the time the control of the license is transferred to a customer, considering any signi\ufb01cant customer acceptance clauses. Goods Revenues from the sale of goods are recognized at a point in time upon shipment or upon delivery when control is transferred to a customer, provided that ultimate collectability and \ufb01nal acceptance by the customer are reasonably assured. When goods are sold with a right to return, the group recognizes the revenues of the transferred goods for the amount the group expects to be entitled to, a refund contract liability, and an asset for the group\u2019s right to recover goods on settling the refund contract liability. Services Revenues from providing services are recognized in the period in which the related performance obligations are satis\ufb01ed. For \ufb01xed- price contracts, revenues are recognized based on the actual service provided as a proportion of the total services to be provided because the customer receives and uses the bene\ufb01ts simultaneously. In case of \ufb01xed-price contracts, the customer pays the \ufb01xed amount based on a payment schedule. If the contract includes an hourly fee, revenues are recognized in the amount to which the group has a right to invoice. Implementation services Revenues from providing implementation services are based on input or output methods, subject to contractual arrangements, and are recognized over the implementation period, or upon full completion of the implementation, depending on when the customer can bene\ufb01t from the service. 132 Wolters Kluwer 2022 Annual Report Strategic Report | Governance | Financial Statements \u2190 \u2192 Note 6 \u2013 Revenues continued Multi-element contracts There are arrangements that include various combinations of performance obligations, such as software licenses, services, training, hosting, and implementation. A performance obligation is only distinct if the customer can bene\ufb01t from goods and/or services on their own or together with other resources that are readily available to the customer, and the promise to transfer goods and/or services is separately identi\ufb01able from other promises in the contract. Goods and/or services that are not distinct are bundled with other goods and/or services in the contract, until a bundle of goods and/or services is created that is distinct, resulting in a single performance obligation. Where performance obligations are satis\ufb01ed over different periods of time, revenues are allocated to the respective performance obligations based on relative stand-alone selling prices at contract inception, and revenues are recognized as each performance obligation is satis\ufb01ed. Agent/principal arrangements If the group acts as an agent, whereby the group sells goods and/or services on behalf of a principal, the group recognizes the amount of the net consideration as revenues. If the group acts as a principal, the group recognizes the gross consideration for the speci\ufb01c goods and/or services transferred. Variable consideration Discounts, return of goods and/or services, usage-based prices, and index-based pricing are the most common forms of variable considerations within the group. Discounts are often contractually agreed and allocated to all distinct performance obligations, unless there is a speci\ufb01c discount policy for a performance obligation. Volume-related discounts, return of goods and/or services, and usage-based prices are estimated at contract inception and periodically reassessed during the contract term. The group considers normal price increases based on local inflation rates or customary business practices as compensation for cost price increases and not as variable consideration. Considerations are recognized pro rata over the term of the contract in case the group estimates at contract inception that price increases are beyond compensation for cost price increases. Contract modifications A contract modi\ufb01cation is a change in the scope and/or price of a contract that is approved by both the customer and the group. The group accounts for a contract modi\ufb01cation retrospectively, if: \u2022 The modi\ufb01cation only affected the transaction price and the remaining goods and/or services are not distinct; or \u2022 The modi\ufb01cation affected the scope, but no distinct goods and/or services were added. The group accounts for a contract modi\ufb01cation prospectively, if: \u2022 The modi\ufb01cation only affected the transaction price and the remaining goods and/or services are distinct; or \u2022 The modi\ufb01cation affected the scope and distinct goods and/or services were added, but the additional consideration did not reflect the stand-alone selling price. The group accounts for a contract modi\ufb01cation as a separate contract if the modi\ufb01cation affected the scope, distinct goods and/or services were added, and the additional consideration reflected the stand-alone selling price. Financing components As a practical expedient, the group does not adjust the consideration for the effects of a signi\ufb01cant \ufb01nancing component if the group expects that the period between the transfer of the promised goods and/or services to the customer and payment by the customer is one year or less. The group has no signi\ufb01cant contracts with a period of one year or more between the transfer of goods and/ or services and the payment of the consideration. Consequently, the group does not adjust transaction prices for the time value of money . \u2190 \u2192 Wolters Kluwer 2022 Annual Report 133 Note 6 \u2013 Revenues continued Cost of revenues Cost of revenues comprises directly attributable costs of goods and/or services sold. For digital products and services, cost of revenues may include data maintenance, hosting, license fees, royalties, product support, personnel expenses, subcontracted work, training, and other costs incurred to support and maintain the products, applications, and/ or services. For print products, cost of revenues may include cost for paper, printing and binding, royalties, personnel expenses, subcontracted work, shipping costs, and other incurred costs. ESTIMATES AND JUDGMENTS IFRS 15 Revenue from Contracts with Customers requires management to make estimates and judgments on the characteristics of a performance obligation, (un)bundling of multi-element arrangements, and whether revenues should be recognized over time or at a point in time. In addition, management makes estimates of the stand-alone selling prices of performance obligations, variable considerations, and product and contract lives. When another party is involved in providing goods and/or services to a customer, management makes a judgment whether the promise to the customer is a performance obligation by the group (i.e., acting as a principal), or by another party (i.e., acting as an agent). The group acts mostly as the principal in its customer contracts. For the judgments applied to the incremental cost to obtain a contract, refer to Note 25 \u2013 Contract Assets and Liabilities. DISAGGREGATION OF REVENUES Health Tax & Accounting Governance, Risk & Compliance Legal & Regulatory Total reporting per segment 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 Revenue recognition At a point in time recognition 253 223 242 214 465 411 180 209 1,140 1,057 Over time recognition 1,195 1,011 1,516 1,296 868 728 734 679 4,313 3,714 Revenues from contracts with third parties 1,448 1,234 1,758 1,510 1,333 1,139 914 888 5,453 4,771 Revenue per contract Contracts one year or less 953 821 1,482 1,292 977 851 677 684 4,089 3,648 Multi-year contracts 495 413 276 218 356 288 237 204 1,364 1,123 Revenues from contracts with third parties 1,448 1,234 1,758 1,510 1,333 1,139 914 888 5,453 4,771 REVENUES BY MEDIA FORMAT Health Tax & Accounting Governance, Risk & Compliance Legal & Regulatory Total reporting per segment 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 Digital 1,281 1,089 1,686 1,434 843 723 745 684 4,555 3,930 Services 1 1 34 35 485 410 13 14 533 460 Print 166 144 38 41 5 6 156 190 365 381 Revenues from contracts with third parties 1,448 1,234 1,758 1,510 1,333 1,139 914 888 5,453 4,771 134 Wolters Kluwer 2022 Annual Report Strategic Report | Governance | Financial Statements \u2190 \u2192 Note 6 \u2013 Revenues continued REVENUES BY TYPE 2022 2021 Digital and service subscription 3,950 3,397 Print subscription 157 157 Other recurring 281 256 Total recurring revenues 4,388 3,810 Print books 129 146 Legal Services transactional 299 266 Financial Services transactional 134 109 Other non-recurring * 503 440 Total non-recurring revenues 1,065 961 Revenues from contracts with third parties 5,453 4,771 * Other non-recurring revenues include software licenses, software implementation fees, professional services, and other non-subscription offerings. RECURRING/NON-RECURRING REVENUES Health Tax & Accounting Governance, Risk & Compliance Legal & Regulatory Total reporting per segment 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 Recurring revenues 1,307 1,112 1,524 1,313 793 669 764 716 4,388 3,810 Non-recurring revenues 141 122 234 197 540 470 150 172 1,065 961 Revenues from contracts with third parties 1,448 1,234 1,758 1,510 1,333 1,139 914 888 5,453 4,771 GEOGRAPHIC INFORMATION revenues generated per region 2022 % 2021 % The Netherlands 204 4 196 4 Europe (excluding the Netherlands) 1,356 25 1,274 27 U.S. and Canada 3,476 64 2,946 62 Asia Paci\ufb01c 333 6 277 5 Rest of World 84 1 78 2 Revenues from contracts with third parties 5,453 100 4,771 100 \u2190 \u2192 Wolters Kluwer 2022 Annual Report 135 Note 7 \u2013 Earnings per Share The group presents basic and diluted earnings per share data for its ordinary shares. BASIC EARNINGS PER SHARE Basic earnings per share is calculated by dividing the pro\ufb01t for the year attributable to the ordinary equity holders of the company by the weighted-average number of ordinary shares outstanding during the year after adjusting for treasury shares. Profit for the year 2022 2021 Pro\ufb01t for the year attributable to the owners of the company (A) 1,027 728 Weighted-average number of ordinary shares for the year in millions of shares, unless otherwise stated 2022 2021 Outstanding ordinary shares at January 1 Note 33 262.5 267.5 Effect of cancelation of shares (1.9) (1.5) Effect of repurchased shares (5.9) (5.6) Weighted-average number of ordinary shares (B) 254.7 260.4 Basic EPS (A/B) (\u20ac) 4.03 2.79 DILUTED EARNINGS PER SHARE Diluted earnings per share is calculated by dividing the pro\ufb01t for the year attributable to ordinary equity holders of the company by the diluted weighted-average number of ordinary shares outstanding during the year after adjusting for treasury shares and for the effects of all dilutive potential ordinary shares, which consist of LTIP shares granted. Diluted weighted-average number of ordinary shares for the year in millions of shares, unless otherwise stated 2022 2021 Weighted-average number of ordinary shares (B) 254.7 260.4 Effect of Long-Term Incentive Plan (LTIP) 1.1 1.4 Diluted weighted-average number of ordinary shares (C) 255.8 261.8 Diluted EPS (A/C) (\u20ac) 4.01 2.78 136 Wolters Kluwer 2022 Annual Report Strategic Report | Governance | Financial Statements \u2190 \u2192 Note 8 \u2013 Acquisitions and Divestments ACQUISITIONS ACCOUNTING POLICIES Business combinations are accounted for using the acquisition method as at the acquisition date, which is the date on which control is transferred to the group. Changes in the group\u2019s interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions . ESTIMATES AND JUDGMENTS The fair value of the assets, liabilities, and contingent liabilities of a business combination should be measured within 12 months from the acquisition date. For some acquisitions, provisional fair values have been included in the consolidated statement of \ufb01nancial position. If the \ufb01nal valuation of the acquired assets and liabilities assumed is still pending at year-end, it will be completed within the 12-month timeframe. Actual valuation of these assets, liabilities, and contingent liabilities may differ from the provisional valuation. When a business combination agreement provides for an adjustment to the cost of the transaction, contingent on future events (such as earnout arrangements), the group includes an initial fair value of that adjustment in the cost of the transaction at the acquisition date if the adjustment is probable and can be measured reliably. The initial and subsequent measurement will usually be based on estimates of future results of the business combination. Actual results may differ from those estimates and may result in material adjustments in the next \ufb01nancial year(s). Subsequent changes to the fair value are recognized in pro\ufb01t or loss, based on a periodic reassessment of the contingent consideration. General On April 8, 2022, Wolters Kluwer Governance, Risk & Compliance completed the acquisition of 100% of the shares of International Document Services, Inc. (IDS), a leading U.S. provider of compliance and document generation software solutions for the mortgage and real estate industry, for \u20ac64 million in cash. The transaction had no deferred and contingent considerations. IDS serves over 450 clients, including U.S. mortgage lenders, banks, and law \ufb01rms. IDS\u2019s services include initial disclosures, electronic signatures, closing documents, and document ful\ufb01llment. The IDS flagship document preparation solution, idsDoc, is a cloud-based platform that is recognized across the industry for its superior capabilities, customer service, and integrations with many of the leading loan origination systems and eClosing platforms. Revenues are based on transactional pricing linked to mortgage volumes. IDS is headquartered in Draper, Utah, and employs approximately 75 employees. On June 28, 2022, Wolters Kluwer Legal & Regulatory completed the acquisition of 100% of the shares of Level Programs S.L. (Level Programs), a provider of legal practice management software in Spain, for \u20ac5 million in cash and deferred consideration of \u20ac1 million. Level Program\u2019s principal product is Kmaleon, which is a platform used by mid-sized law \ufb01rms in Spain to ef\ufb01ciently manage their cases and documents, billing, accounting, and time control. Level Programs is headquartered in Terrassa and employs approximately 25 employees. On September 30, 2022, Wolters Kluwer Health completed the acquisition of 100% of the shares of IJS Publishing Group (IJSPG), a UK-based provider of peer-reviewed medical journals supporting scientists and authors, for \u20ac13 million in cash. The IJSPG portfolio consists of ten journal titles, including the International Journal of Surgery, IJS Case Reports, and Annals of Medicine and Surgery. IJSPG is headquartered in London, United Kingdom. No employees were acquired. On December 30, 2022, Wolters Kluwer Legal & Regulatory completed the acquisition of 100% of the shares of Della AI Ltd (Della AI), a UK-based provider of leading arti\ufb01cial intelligence technology based on advanced natural language processing, for \u20ac10 million in cash and deferred consideration of \u20ac1 million. Della AI will become part of the legal software unit of Wolters Kluwer Legal & Regulatory. Della AI is headquartered in London, United Kingdom, and employs 16 employees. In addition, other smaller acquisitions were completed, with a combined total consideration of \u20ac1 million (2021: \u20ac9 million), including deferred and contingent considerations. The fair values of the identi\ufb01able assets and liabilities of the abovementioned acquisitions, as reported at December 31, 2022, are provisional, but no material deviations from these fair values are expected. \u2190 \u2192 Wolters Kluwer 2022 Annual Report 137 Note 8 \u2013 Acquisitions and Divestments continued Acquisition spending In 2022, total acquisition spending, net of cash acquired, was \u20ac92 million (2021: \u20ac108 million), including deferred and contingent consideration payments of \u20ac1 million (2021: \u20ac0 million). In 2021, the group acquired Vanguard Software, LicenseLogix, and a few smaller businesses. In 2022, acquisition-related costs amounted to \u20ac3 million (2021: \u20ac5 million). The goodwill relating to the 2022 acquisitions represents future economic bene\ufb01ts speci\ufb01c to the group arising from assets that do not qualify for separate recognition as intangible assets. These bene\ufb01ts include revenues from expected new customers and from new capabilities of the acquired product platforms, as well as expected synergies that will arise following the acquisitions. Of the goodwill recognized in 2022, none was deductible for income tax purposes (2021: \u20ac68 million). Acquisitions 2022 2021 Carrying amount Fair value adjustments Recognized values Recognized values Consideration payable in cash 92 111 Deferred and contingent considerations at fair value: Non-current 2 1 Current 1 1 Total consideration 95 113 Intangible assets other than goodwill Note 18 0 77 77 47 Other non-current assets Note 20 2 2 2 Current assets 4 4 8 Current liabilities (2) (2) (9) Non-current liabilities Note 29 (2) (2) (2) Deferred tax assets/(liabilities) 0 (19) (19) (1) Fair value of net identi\ufb01able assets 2 58 60 45 Goodwill on acquisitions Note 18 35 68 Cash effect of acquisitions: Consideration payable in cash 92 111 Cash acquired (1) (3) Deferred and contingent considerations paid Note 30 1 0 Acquisition spending, net of cash acquired 92 108 Of the 2022 fair value adjustments of \u20ac58 million, \u20ac29 million related to IDS, \u20ac6 million related to Level Programs, \u20ac12 million related to IJSPG, \u20ac10 million related to Della AI, and \u20ac1 million related to the other acquisitions. 138 Wolters Kluwer 2022 Annual Report Strategic Report | Governance | Financial Statements \u2190 \u2192 Note 8 \u2013 Acquisitions and Divestments continued Contribution of 2022 acquisitions in millions of euros, unless otherwise stated Revenues Adjusted operating profit Profit for the year FTEs at December 31, 2022 Totals excluding the impact of 2022 acquisitions 5,443 1,423 1,029 19,965 Contribution of 2022 acquisitions 10 1 (2) 91 Totals for the year 2022 5,453 1,424 1,027 20,056 Pro forma contribution of 2022 acquisitions for the period January 1, 2022, up to acquisition date (unaudited) 6 0 (5) Pro forma totals for the year 2022 5,459 1,424 1,022 The above information does not purport to represent what the actual results would have been, had the acquisitions been concluded on January 1, 2022, nor is the information necessarily indicative for future results of the acquired operations. In determining the contribution of the acquisitions, management has assumed that the fair value adjustments that arose on the date of the acquisition would have been the same if the acquisition had occurred on January 1, 2022. Deferred and contingent considerations The acquisitions completed in 2022 resulted in a maximum achievable undiscounted deferred and contingent consideration of \u20ac3 million. The fair value of this deferred and contingent consideration amounted to \u20ac3 million at acquisition date and at December 31, 2022. For further disclosure on deferred and contingent considerations, refer to Note 30 \u2013 Financial Risk Management. Provisional fair value accounting The fair values of the identi\ufb01able assets and liabilities will be revised if new information, obtained within one year from the acquisition date about facts and circumstances that existed at the acquisition date, causes adjustments to the above amounts, or for any additional provisions that existed at the acquisition date. Subsequent changes in purchase price accounting for 2021 acquisitions resulted in a reduction of goodwill of \u20ac0 million. Reference is made to Note 18 \u2013 Goodwill and Intangible Assets other than Goodwill. DIVESTMENTS ACCOUNTING POLICIES The amount of goodwill allocated to a divested business is based on its relative value compared to the value of the group of cash- generating units to which the goodwill belongs. General On November 30, 2022, Wolters Kluwer Legal & Regulatory completed the divestment of its legal information units in France and Spain to Karnov Group AB for \u20ac114 million in cash, which is subject to a working capital settlement. This divestment was originally announced on December 9, 2021. The units employed 624 FTEs at divestment date. In addition, other smaller divestments were completed. In 2022, net divestment proceeds amounted to \u20ac106 million. In 2021, net divestment proceeds amounted to \u20ac76 million and mainly included the divestment of the U.S. legal education business. \u2190 \u2192 Wolters Kluwer 2022 Annual Report 139 Note 8 \u2013 Acquisitions and Divestments continued Divestment-related results on operations 2022 2021 Divestment of operations: Consideration receivable in cash 114 75 Financial assets at fair value through profit or loss Note 22 \u2013 6 Consideration receivable 114 81 Intangible assets Note 18 0 47 Other non-current assets Note 19 0 2 Current assets (including assets held for sale) 110 17 Current liabilities (including liabilities held for sale) (77) (8) Deferred tax assets/(liabilities) 0 (7) Net identi\ufb01able assets/(liabilities) 33 51 Reclassi\ufb01cation of foreign exchange differences on loss of control to profit or loss, previously recognized in other comprehensive income (1) (40) Book pro\ufb01t/(loss) on divestments of operations 80 (10) Divestment-related costs (3) (8) Restructuring of stranded costs following divestments Note 32 (2) (2) Divestment-related results included in other gains and (losses) Note 12 75 (20) Cash effect of divestments: Consideration receivable in cash 114 75 Cash included in divested operations (8) 0 Deferred divestment consideration receivable \u2013 1 Receipts from divestments, net of cash disposed 106 76 In the consolidated statement of cash flows, the book pro\ufb01t/(loss) on divestment of operations is reported under book (pro\ufb01t)/loss on divestment of operations and non-current assets. Effect of 2022 divestments Revenues Adjusted operating profit Totals for the year 2022 5,453 1,424 Minus: Contribution of 2022 divested operations (84) (8) Pro forma totals for the year 2022 5,369 1,416 At their divestment dates, the 2022 divested operations jointly had 632 FTEs. 140 Wolters Kluwer 2022 Annual Report Strategic Report | Governance | Financial Statements \u2190 \u2192 Note 9 \u2013 Assets/Liabilities Classi\ufb01ed as Held for Sale 2022 2021 Assets of disposal groups classified as held for sale \u2013 101 Liabilities of disposal groups classified as held for sale \u2013 (74) Net assets of disposal groups classified as held for sale 0 27 ACCOUNTING POLICIES Non-current assets and disposal groups are classi\ufb01ed as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is met only when the sale is highly probable and the asset or disposal group is available for immediate sale in its present condition. Management must be committed to the sale plan, which should be expected to qualify for recognition as a completed sale within 12 months from the date of classi\ufb01cation. When the group is committed to a sale plan involving a loss of control of a subsidiary, all assets and liabilities of that subsidiary are classi\ufb01ed as held for sale when the criteria described above are met, regardless of whether the group will retain a non-controlling interest in its former subsidiary after the sale. The amount of goodwill allocated to a disposal group is based on its relative value compared to the value of the group of cash- generating units to which the goodwill belongs. Non-current assets and disposal groups classi\ufb01ed as held for sale are measured at the lower of the carrying amount and fair value less costs of disposal. DISPOSAL GROUPS \u2013 GENERAL 2022 2021 Legal & Regulatory \u2013 French and Spanish legal information businesses \u2013 27 Net assets of disposal groups classified as held for sale 0 27 In 2022, the disposal groups were all divested. Refer to Note 8 \u2013 Acquisitions and Divestments. ASSETS AND LIABILITIES OF DISPOSAL GROUPS The assets and liabilities of the disposal groups can be speci\ufb01ed as follows at December 31: 2022 2021 Non-current assets \u2013 73 Cash and cash equivalents \u2013 2 Other current assets \u2013 26 Non-current liabilities \u2013 (14) Deferred income \u2013 (27) Other current liabilities \u2013 (33) Net assets of disposal groups classified as held for sale 0 27 \u2190 \u2192 Wolters Kluwer 2022 Annual Report 141 Note 10 \u2013 Sales Costs 2022 2021 Marketing and promotion costs 263 228 Sales-related costs \u2013 sales commissions directly expensed 162 155 Sales-related costs \u2013 amortization of capitalized sales commissions Note 25 29 23 Other sales-related costs 359 304 Customer support costs 80 76 Additions to and releases from loss allowance on trade receivables and unbilled revenues Note 25 21 20 Total 914 806 ACCOUNTING POLICIES Sales costs relate to direct internal personnel expenses and direct external costs, incurred for marketing and sales activities. Sales costs include sales commissions directly expensed as incurred and the amortization of capitalized sales commissions that qualify as cost to obtain a contract. As a practical expedient, the group recognizes the incremental cost of obtaining a contract as an expense if the amortization period of the asset that the group otherwise would have recognized is one year or less. If sales commissions are granted for bundled and/or multi-element contracts in which the predominant consideration element is recognized for performance obligations satis\ufb01ed at a point in time (e.g., the sale of a book, training, or the sale of a right-to-use license), the sales commissions are expensed when incurred. In addition, sales commissions that are commensurate or based on generic performance indicators and/or net targets are expensed when incurred. For all other commission plans on new sales targets, the amortization period ranges between one and \ufb01ve years, depending on the nature of the underlying promise in the contract with the customer, unless the underlying non-cancellable contract period for a right-to-access license is longer than \ufb01ve years. In those situations, the longer non-cancellable contract period of the license contract prevails as the amortization period. Sales costs also include the additions to and releases from loss allowance on trade receivables and unbilled revenues. The loss allowance is determined as an amount equal to the lifetime expected credit losses . ESTIMATES AND JUDGMENTS The group determines the additions to and releases from loss allowance on trade receivables and unbilled revenues by making assumptions and estimating the risk of default and expected loss rates at contract inception over the expected life of the \ufb01nancial instrument, using the group\u2019s historically incurred losses and existing market conditions, as well as forward-looking information at the end of each reporting period. Please refer to Note 25 \u2013 Contract Assets and Liabilities for more information. 142 Wolters Kluwer 2022 Annual Report Strategic Report | Governance | Financial Statements \u2190 \u2192 Note 11 \u2013 General and Administrative Costs 2022 2021 Research, development, and editorial costs 541 466 General and administrative operating expenses 996 920 Amortization and (reversal of) impairment of acquired identifiable intangible assets Note 14 160 164 Total 1,697 1,550 ACCOUNTING POLICIES General and administrative costs include costs that are neither directly attributable to cost of revenues nor to sales costs. These costs include product research and development costs, editorial costs, information technology costs, general overhead costs, amortization of acquired identi\ufb01able intangible assets, amortization of other intangible assets (if not part of cost of revenues), depreciation of property, plant, and equipment, depreciation of right-of-use assets, and impairment of goodwill, intangible assets other than goodwill, property, plant, and equipment, and right-of-use assets. Note 12 \u2013 Other Gains and (Losses) 2022 2021 Acquisition-related costs Note 8 (3) (5) Additions to acquisition integration provisions Note 32 (3) (4) Fair value changes of contingent considerations Note 30 0 0 Divestment-related results Note 8 75 (20) Total 69 (29) ACCOUNTING POLICIES Other gains and losses relate to items which are different in their nature or frequency from operating items. These include divestment-related results (including directly attributable divestment costs), additions to provisions for restructuring of stranded costs following divestments, acquisition-related costs, additions to acquisition integration provisions, and subsequent fair value changes of contingent considerations. See also Note 4 \u2013 Benchmark Figures. \u2190 \u2192 Wolters Kluwer 2022 Annual Report 143 Note 13 \u2013 Personnel Expenses 2022 2021 Salaries and wages and other benefits 1,855 1,641 Social security charges 159 148 Medical cost benefits 94 74 Expenses related to de\ufb01ned contribution plans 89 80 Expenses related to de\ufb01ned bene\ufb01t plans Note 31 29 11 Equity-settled share-based payments Note 34 28 24 Total 2,254 1,978 Employees Headcount at December 31 20,451 19,827 In full-time equivalents at December 31 20,056 19,454 Thereof employed in the Netherlands 1,214 1,155 In full-time equivalents average per annum * 20,616 19,741 * Average full-time equivalents per annum include temporary staff and contractors, whereas headcount and its full-time equivalent only relate to staff on the payroll of the group. Note 14 \u2013 Amortization, Impairment, and Depreciation 2022 2021 Amortization of acquired identifiable intangible assets Note 18 140 131 Impairment of acquired identifiable intangible assets Note 18 20 38 Reversal of impairment of acquired identifiable intangible assets Note 18 \u2013 (5) Amortization of other intangible assets Note 18 195 194 Impairment of other intangible assets Note 18 13 18 Depreciation of property, plant, and equipment Note 19 26 25 Impairment of property, plant, and equipment Note 19 1 0 Depreciation of right-of-use assets Note 20 71 71 Impairment of right-of-use assets Note 20 \u2013 1 Total 466 473 For further disclosure on estimates and judgments, refer to Note 18 \u2013 Goodwill and Intangible Assets other than Goodwill and Note 20 - Leasing. 144 Wolters Kluwer 2022 Annual Report Strategic Report | Governance | Financial Statements \u2190 \u2192 Note 15 \u2013 Financing Results 2022 2021 Financing income Interest income for financial assets measured at amortized cost: Interest income on short-term bank deposits 20 2 Interest income on bank balances and other 1 2 Other financing income: Derivatives \u2013 foreign exchange contracts, not qualifying as hedge 0 0 Total \ufb01nancing income 21 4 Financing costs Interest expense for financial liabilities measured at amortized cost: Interest expense on bonds and private placements (54) (50) Amortization of fee expense for debt instruments Note 29 (3) (1) Interest expense on bank overdrafts and other (3) (5) Other financing expense: Unwinding of discount of lease liabilities Note 29 (9) (9) Net foreign exchange gains/(losses) (5) (15) Items in hedge relationships: Interest rate swaps (3) (2) Foreign exchange gains/(losses) on loans subject to cash flow hedge 11 4 Net change in fair value of cash flow hedges reclassi\ufb01ed from other comprehensive income (11) (4) Total \ufb01nancing costs (77) (82) Net \ufb01nancing results (56) (78) Other finance income and (costs) Fair value changes of financial assets Note 22 0 (5) Financing component employee bene\ufb01ts Note 31 (1) (1) Total other \ufb01nance income and (costs) (1) (6) Total \ufb01nancing results (57) (84) \u2190 \u2192 Wolters Kluwer 2022 Annual Report 145 Note 16 \u2013 Income Tax Expense 2022 2021 Current income tax expense 286 209 Adjustments previous years (13) 6 Deferred tax expense: Changes in tax rates 0 1 Origination and reversal of temporary differences (24) (15) Movements in deferred tax assets and liabilities Note 23 (24) (14) Total Note 23 249 201 ACCOUNTING POLICIES Income tax on the result for the year is made up of current and deferred tax. Income tax is recognized in pro\ufb01t or loss except to the extent that it relates to business combinations and/or items directly recognized in equity or other comprehensive income. Current income tax is the expected tax payable or tax receivable on the taxable income for the year, using the tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period, and any adjustment to tax payable or tax receivable in respect of previous years. The group recognizes deferred tax assets and liabilities for all taxable temporary differences between the carrying amounts of assets or liabilities in the consolidated statement of \ufb01nancial position for \ufb01nancial reporting purposes and their tax base for taxation purposes. Deferred tax assets and liabilities are not recognized for temporary differences arising from: \u2022 Initial recognition of goodwill; \u2022 Investments in subsidiaries to the extent that the parent can control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and \u2022 Initial recognition of an asset or liability in a transaction, which is not a business combination and that, at the time of the transaction affects neither accounting pro\ufb01t nor taxable pro\ufb01t. A deferred tax asset is recognized for deductible temporary differences and for the carry-forward of unused tax losses and unused tax credits, to the extent that it is probable that future taxable pro\ufb01ts will be available against which these can be utilized. Deferred tax assets are reviewed at the end of each reporting period and are remeasured to the extent that it is no longer probable that the related tax bene\ufb01ts will be realized. Deferred tax assets and liabilities are not discounted and are measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the end of the reporting period. The effect of changes in income tax rates on the deferred tax position is recognized in pro\ufb01t or loss if, and to the extent that, the deferred tax position was originally formed through pro\ufb01t or loss. Deferred tax assets and liabilities, including those associated with right-of-use assets and lease liabilities, are offset if there is a legally enforceable right to offset current income tax assets and liabilities, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current income tax assets and liabilities on a net basis or their tax assets and liabilities will be realized simultaneously. Uncertain tax positions are assessed at a \ufb01scal unity level. If it is probable that a tax authority will accept an uncertain tax position in the income tax \ufb01ling, the group determines its accounting tax position consistent with the tax treatment used or planned to be used in its income tax \ufb01ling. If this is not probable, the group reflects the effect of uncertainty in determining its accounting tax position using either the most likely amount or the expected value method, depending on which method better predicts the resolution of the uncertainty. 146 Wolters Kluwer 2022 Annual Report Strategic Report | Governance | Financial Statements \u2190 \u2192 Note 16 \u2013 Income Tax Expense continued ESTIMATES AND JUDGMENTS Income tax is calculated based on income before tax, considering the local tax rates and regulations. For each operating entity, the current income tax expense is calculated and differences between the accounting and tax base are determined, resulting in deferred tax assets or liabilities. These calculations may deviate from the \ufb01nal tax assessments. A deferred tax asset is recognized for deductible temporary differences and the carry-forward of unused tax losses and unused tax credits to the extent that it is probable that future taxable pro\ufb01t will be available. Management assesses the probability that taxable pro\ufb01t will be available against which the unused tax losses or unused tax credits can be utilized. In determining the amount of current and deferred tax, the group considers the impact of uncertain tax positions and whether additional taxes, penalties, and interest may be due. The group believes that its current income tax liabilities are adequate for all open tax years based on its assessment of many factors, including interpretations of tax laws and rules, and prior experience. The group operates in several countries with different tax laws and rules. Considering this complex multinational environment in which the group operates, global transfer pricing policies are implemented for transactions between members of the group. These transactions are documented as required by international standards. However, local tax authorities might challenge these transactions. The group considers potential challenges and accounts for potential uncertain tax positions. The assessment for uncertain tax positions relies on estimates and assumptions, based on the judgments of tax professionals within the group, supplemented by external tax advisors, and may involve a series of estimates about future events. New information may become available that causes the group to change its estimate regarding the adequacy of existing income tax liabilities. Such changes to income tax liabilities will impact the income tax expense, positively or negatively, in the consolidated statement of pro\ufb01t or loss in the period that such a determination is made. Changes in tax rates are considered if these tax rate changes are substantially enacted before year end. Governments are expected to introduce changes in tax law following Organisation for Economic Co-operation and Development (OECD), EU, and other international guidelines. Reported income tax amounts will therefore be subject to continued judgment, estimation uncertainty, and measurement adjustments. Refer also to Note 23 \u2013 Tax Assets and Liabilities. RECONCILIATION OF THE EFFECTIVE TAX RATE The group\u2019s effective tax rate in the consolidated statement of pro\ufb01t or loss differs from the Dutch statutory income tax rate of 25.8%. The table below reconciles the statutory income tax rate with the effective income tax rate in the consolidated statement of pro\ufb01t or loss: 2022 2021 in millions of euros, unless otherwise stated % % Pro\ufb01t before tax 1,276 929 Income tax expense at the Dutch statutory income tax rate 25.8 329 25.0 232 Tax effect of: Rate differential (2.7) (35) (2.5) (23) Tax incentives, exempt income, and divestments (2.4) (31) 0.1 1 Recognized and unrecognized tax losses (0.1) (1) (0.3) (3) Adjustments previous years (1.0) (13) 0.7 6 Changes in income tax rates 0.0 0 0.1 1 Other taxes 0.9 11 1.0 9 Non-deductible costs and other items (1.0) (11) (2.5) (22) Total 19.5 249 21.6 201 \u2190 \u2192 Wolters Kluwer 2022 Annual Report 147 Note 16 \u2013 Income Tax Expense continued Rate differential indicates the effect of the group\u2019s taxable income generated and taxed in jurisdictions where tax rates differ from the Dutch statutory income tax rate. The effective tax rate decreased to 19.5% (2021: 21.6%), resulting from closure of old tax years and tax neutral gains on the divestment of the legal information units in Spain and France. For income tax recognized directly in the consolidated statements of changes in total equity and other comprehensive income, reference is made to Note 23 \u2013 Tax Assets and Liabilities. Note 17 \u2013 Non-controlling Interests The group\u2019s share in consolidated subsidiaries not fully owned at December 31 is: ownership in % 2022 2021 Akad\u00e9miai Kiad\u00f3 Kft. (Budapest, Hungary) 74 74 ACCOUNTING POLICIES Non-controlling interests reflect the portion of the pro\ufb01t or loss and net assets of a subsidiary attributable to equity interests that are not owned, directly or indirectly through subsidiaries, by the group. Losses applicable to the non-controlling interest in a subsidiary are allocated to the non-controlling interest even if these losses cause the non-controlling interest to have a debit balance. Remeasurements of non-controlling interests are based on a proportionate amount of the net assets of the subsidiary. The movements in non-controlling interests are as follows: 2022 2021 Position at January 1 0 0 Dividends paid 0 (1) Share of pro\ufb01t of non-controlling interests, net of tax 0 0 Foreign exchange differences 0 1 Position at December 31 0 0 Non-controlling interests in the equity of consolidated participations, totaling \u20ac0 million (2021: \u20ac0 million), are based on third-party shareholdings in the underlying shareholders\u2019 equity of the subsidiaries. Financial information of non-controlling interests based on 100% ownership, is as follows: 2022 2021 Revenues 5 5 Adjusted operating pro\ufb01t 2 2 Net pro\ufb01t 2 1 Total assets 1 1 Total liabilities 1 1 Total equity 0 0 Total cash and cash equivalents 0 0 148 Wolters Kluwer 2022 Annual Report Strategic Report | Governance | Financial Statements \u2190 \u2192 Note 18 \u2013 Goodwill and Intangible Assets other than Goodwill Goodwill Customer relationships Technology Brand names Other Acquired identifiable intangible assets Other intangible assets 2022 2021 Position at January 1 Cost value 4,189 1,036 812 471 48 2,367 1,942 8,498 8,123 Accumulated amortization and impairment (9) (475) (407) (395) (45) (1,322) (1,367) (2,698) (2,485) Book value at January 1 4,180 561 405 76 3 1,045 575 5,800 5,638 Movements Investments * \u2013 \u2013 \u2013 \u2013 \u2013 0 264 264 223 Acquired through business combinations Note 8 35 39 35 3 0 77 0 112 115 Divestment of operations Note 8 \u2013 \u2013 \u2013 \u2013 \u2013 0 0 0 (47) Disposal of assets \u2013 \u2013 \u2013 \u2013 \u2013 0 \u2013 0 (1) Net expenditures 35 39 35 3 0 77 264 376 290 Amortization Note 14 \u2013 (62) (65) (10) (3) (140) (195) (335) (325) Impairment Note 14 \u2013 (5) (13) (2) \u2013 (20) (13) (33) (56) Reversal of impairment Note 8/14 \u2013 \u2013 \u2013 \u2013 \u2013 0 \u2013 0 5 Reclassi\ufb01cations Note 8 0 2 \u2013 \u2013 \u2013 2 \u2013 2 (2) Transfer to assets classified as held for sale Note 9 \u2013 \u2013 \u2013 \u2013 \u2013 0 \u2013 0 (59) Foreign exchange differences 179 20 14 2 0 36 17 232 309 Total movements 214 (6) (29) (7) (3) (45) 73 242 162 Position at December 31 Cost value 4,394 1,134 808 494 3 2,439 2,011 8,844 8,498 Accumulated amortization and impairment \u2013 (579) (432) (425) (3) (1,439) (1,363) (2,802) (2,698) Book value at December 31 4,394 555 376 69 0 1,000 648 6,042 5,800 * Investments in 2022 exclude capital expenditure by the disposal groups classi\ufb01ed as held for sale of \u20ac3 million. At both December 31, 2022, and December 31, 2021, the vast majority of the book value of other intangible assets relates to development of software. In both 2022 and 2021, the amortization and impairment of intangible assets are for the vast majority reported under general and administrative costs in the consolidated statement of pro\ufb01t or loss. \u2190 \u2192 Wolters Kluwer 2022 Annual Report 149 Note 18 \u2013 Goodwill and Intangible Assets other than Goodwill continued ACCOUNTING POLICIES Goodwill The group measures goodwill at the acquisition date as the sum of the fair value of the consideration (including deferred and contingent consideration) and the recognized amount of any non-controlling interests in the acquiree, less the net recognized fair value amount of the identi\ufb01able assets acquired and liabilities assumed. Any deferred and contingent consideration payable (such as earnout arrangements) is recognized at fair value at the acquisition date. Costs related to acquisitions which the group incurs in a business combination are expensed as incurred. Goodwill associated with divested operations is allocated and measured on the basis of the relative value of the divested operation and the portion of the cash-generating unit (CGU) retained. Acquired identifiable intangible assets Identi\ufb01able intangible assets acquired through business combinations mainly consist of customer relationships (subscriber accounts), technology (databases, software, and product technology), and brand names. Other intangible assets Other intangible assets mainly relate to purchased and internally developed information systems and software. Development costs are capitalized if the group can demonstrate the technical feasibility of completing the asset so that it will be available for use or sale, the intention to complete the asset, the ability to sell or use the asset, how the asset will yield probable future economic bene\ufb01ts, the availability of adequate technical, \ufb01nancial, and other resources to complete the asset, and the ability to reliably measure the expenditure attributable to the asset. Capitalization of software depends on several judgments. While management has procedures in place to control the software development process, there is uncertainty regarding the outcome of the development process (timing of technological developments, technological obsolescence, and/or competitive pressures). Useful lives of assets The useful lives of assets are estimated in line with common market practice. The group reviews the remaining useful lives and the amortization methods of its assets annually. If the expected remaining useful lives of assets are different from previous estimates, the amortization period shall be changed accordingly, which will impact the amortization in pro\ufb01t or loss prospectively. Apart from goodwill (which has an inde\ufb01nite useful life), intangible assets are amortized on a straight-line basis over their estimated useful lives from the day they are available for use. The estimated useful lives are as follows: \u2022 Customer relationships: \ufb01ve to 29 years; \u2022 Technology: \ufb01ve to 29 years; \u2022 Brand names: \ufb01ve to 20 years; \u2022 Other acquired identi\ufb01able intangible assets: \ufb01ve to ten years; and \u2022 Other intangible assets: three to \ufb01ve years. Impairment At the end of each reporting period, it is assessed whether there is an indication that an intangible asset may be impaired. If any such indication exists, the group estimates the recoverable amount of the asset. If the recoverable amount is below the carrying value, the asset is impaired. Goodwill is tested for impairment annually, at July 1, and when an impairment trigger has been identi\ufb01ed. 150 Wolters Kluwer 2022 Annual Report Strategic Report | Governance | Financial Statements \u2190 \u2192 Note 18 \u2013 Goodwill and Intangible Assets other than Goodwill continued ESTIMATES AND JUDGMENTS Measurement Upon acquisition, the values of intangible assets acquired are estimated, usually applying one of the methodologies below: \u2022 Relief from royalty approach: this approach assumes that if the identi\ufb01able intangible asset was not owned, it would be acquired through a royalty agreement. The value of owning the asset equals the bene\ufb01ts from not having to pay royalty fees; \u2022 Multi-period excess earnings method: under this approach, cash flows associated with the speci\ufb01c acquired identi\ufb01able intangible assets are determined. Contributory charges of other assets that are being used to generate the cash flows are deducted from these cash flows. The net cash flows are discounted to arrive at the value of the asset; or \u2022 Cost method: the cost method reflects the cost that would currently be required to replace the asset. These valuations are usually performed by management of the acquiring CGU in close cooperation with an external consulting \ufb01rm, requiring estimates such as future cash flows, royalty rates, discount rates, useful lives, churn rates, and rates of return. The methodologies applied in this respect are in line with common market practice. Impairment test Impairment tests require estimates of discount rates, future cash flows, and perpetual growth rates. These estimates are made by management of the business to which the assets belong. The future cash flows cover a \ufb01ve-year period and are based on Vision & Strategy Plans (VSPs), prepared by management, and approved by the Executive Board. The annual goodwill impairment test did not result in the recognition of an impairment. The outcome of the group\u2019s sensitivity analysis was that no reasonably possible change in any of the key assumptions would cause the carrying amount to exceed the recoverable amount. The allowed change in growth, discount rate, and adjusted operating pro\ufb01t margin was at least 300 basis points for each of the groups of cash generating units. On top of the annual goodwill impairment test, the group performed an in-depth impairment triggering event analysis on its other non-current assets, consisting mainly of acquired identi\ufb01able intangible assets. In this analysis, the development of new sales, attrition rates of existing customers, growth rates, and cost measures were the main drivers. The group concluded that there were no impairment triggers for the majority of the other non-current assets. For the continuing medical education solutions for physicians (Learner\u2019s Digest), the group identi\ufb01ed a triggering event in 2022 as expectations of market growth deteriorated. The group recognized an impairment on the acquired identi\ufb01able intangible assets of \u20ac20 million and on other intangible assets of \u20ac3 million and shortened the remaining useful lives. CARRYING AMOUNTS OF GOODWILL AND ACQUIRED IDENTIFIABLE INTANGIBLE ASSETS PER OPERATING SEGMENT Goodwill Acquired identifiable intangible assets 2022 2021 Health 1,124 176 1,300 1,262 Tax & Accounting 1,542 241 1,783 1,761 Governance, Risk & Compliance 1,122 365 1,487 1,374 Legal & Regulatory 606 218 824 828 Total 4,394 1,000 5,394 5,225 \u2190 \u2192 Wolters Kluwer 2022 Annual Report 151 Note 18 \u2013 Goodwill and Intangible Assets other than Goodwill continued IMPAIRMENT TESTING OF GOODWILL The group performs an annual impairment test by comparing the carrying amount of the groups of CGUs to which the goodwill belongs, net of related deferred taxes, to the recoverable amount of the groups of CGUs. The groups of CGUs for goodwill impairment testing represent the lowest level at which goodwill is monitored by management, whereby management considers the integration of the group\u2019s business operations and the global leverage of assets, capital, and staff. Acquisitions are integrated into existing business operations and the goodwill arising from a business combination is allocated to the groups of CGUs that are expected to bene\ufb01t from the synergies of the acquisition. The total number of groups of CGUs for goodwill impairment testing purposes was six in 2022 (2021: six groups of CGUs). The recoverable amount is determined based on the higher of the value-in-use and the fair value less costs of disposal. If there is suf\ufb01cient headroom, the group only determines the value-in-use. The recoverable amount is determined by discounting the future cash flows to be generated from the continuing use of the groups of CGUs. These valuations are based on non-observable market data. The recoverable amount calculations in 2022 were determined in a consistent manner with prior years. The cash flow projections are based on actual operating results and the long-term VSPs, as approved by the Executive Board. The 2022 annual impairment test showed that the recoverable amount exceeded the carrying amount for all identi\ufb01ed groups of CGUs for goodwill impairment testing. Key assumptions The group\u2019s key assumptions include assumptions that are based on non-observable market data (level 3 input). The period over which the group estimates its cash flow projections is \ufb01ve years. After \ufb01ve years, cash flow projections are extrapolated using an appropriate perpetual growth rate that is consistent with the long-term average market growth rate. The 2022 weighted-average long- term growth rate is 3.6% for the U.S. and 2.1% for Europe (2021: 2.2% for the U.S. and 0.3% for Europe). In addition, the following key assumptions were used in the projections: \u2022 Revenue growth: based on actual experience, an analysis of market growth, and the expected development of market share; and \u2022 Adjusted operating pro\ufb01t margin development: based on actual experience and management\u2019s long-term projections. Adjusted operating pro\ufb01t is deemed the best approximation for future cash flows. The estimated pre-tax cash flows are discounted to their present value using a pre-tax weighted-average discount rate for the individual groups of CGUs between 9.6% and 10.2% (2021: between 7.7% and 8.7%) with a weighted average of 9.9% (2021: 8.5%). In determining the discount rate, the group used a risk-free rate based on the long-term yield on Dutch government bonds with a maturity of 20 years, adjusted for country risk premiums and country-speci\ufb01c inflation differentials. In determining the discount rate, the group applied the following assumptions: 2022 2021 Risk-free rate United States (in %) 3.6 2.2 Risk-free rate Europe (in %) 2.1 0.3 Market risk premium United States (in %) 6.0 7.0 Market risk premium Europe (in %) 6.8 7.0 Tax rate (in %) 25.8 25.0 Re-levered beta 0.79 0.77 152 Wolters Kluwer 2022 Annual Report Strategic Report | Governance | Financial Statements \u2190 \u2192 Note 18 \u2013 Goodwill and Intangible Assets other than Goodwill continued Sensitivity analysis The impairment testing includes an assessment if a reasonably possible change in a key assumption would cause the carrying amount of goodwill to exceed the recoverable amount. The sensitivity per group of CGUs for the 2022 and 2021 goodwill impairment tests, respectively, is as follows: Applied weighted- average growth rate Allowed change (in basis points) Allocated goodwill at December 31, 20222022 sensitivity per group of CGUs Decline in growth rate Increase in discount rate Decrease in adjusted operating profit margin Health Learning, Research & Practice 2.1% >300 >300 >300 567 Clinical Solutions 2.2% >300 >300 >300 557 Tax & Accounting Americas and Asia Paci\ufb01c 2.1% >300 >300 >300 1,131 Tax & Accounting Europe 2.0% >300 >300 >300 411 Governance, Risk & Compliance 2.2% >300 >300 >300 1,122 Legal & Regulatory 2.2% >300 >300 >300 606 Total 2.2% 4,394 Applied weighted- average growth rate Allowed change (in basis points) Allocated goodwill at December 31, 20212021 sensitivity per group of CGUs Decline in growth rate Increase in discount rate Decrease in adjusted operating profit margin Health Learning, Research & Practice 1.4% >300 >300 >300 534 Clinical Solutions 2.3% >300 >300 >300 524 Tax & Accounting Americas and Asia Paci\ufb01c 1.9% >300 >300 >300 1,076 Tax & Accounting Europe 0.3% >300 >300 >300 416 Governance, Risk & Compliance 2.1% >300 >300 >300 1,029 Legal & Regulatory 1.6% >300 >300 >300 601 Total 1.9% 4,180 IMPAIRMENT TESTING OF ACQUIRED IDENTIFIABLE INTANGIBLE ASSETS AND OTHER INTANGIBLE ASSETS The following impairments were recognized on the acquired identi\ufb01able intangible assets and other intangible assets: 2022 2021 Acquired identifiable intangible assets \u2013 Learner\u2019s Digest and certain assets within Health 20 27 Acquired identifiable intangible assets \u2013 certain assets within GRC \u2013 11 Other intangible assets \u2013 Learner\u2019s Digest and certain assets within Health 3 4 Other intangible assets \u2013 other CGUs 10 14 Total 33 56 \u2190 \u2192 Wolters Kluwer 2022 Annual Report 153 Note 19 \u2013 Property, Plant, and Equipment Land and buildings Other PPE 2022 2021 Position at January 1 Cost value 125 255 380 375 Accumulated depreciation and impairment (88) (217) (305) (291) Book value at January 1 37 38 75 84 Movements Investments 3 25 28 17 Divestment of operations Note 8 0 0 0 (2) Disposal of assets 0 0 0 0 Net expenditures 3 25 28 15 Depreciation Note 14 (6) (20) (26) (25) Impairment Note 14 (1) 0 (1) 0 Transfer to assets classified as held for sale Note 9 \u2013 \u2013 0 (3) Foreign exchange differences 1 2 3 4 Total movements (3) 7 4 (9) Position at December 31 Cost value 121 196 317 380 Accumulated depreciation and impairment (87) (151) (238) (305) Book value at December 31 34 45 79 75 ACCOUNTING POLICIES Property, plant, and equipment, consisting of land, buildings, and other assets such as of\ufb01ce and IT equipment, are valued at cost less accumulated depreciation and impairment. Leasehold improvements are presented as part of land and buildings. Depreciation is recognized in the consolidated statement of pro\ufb01t or loss on a straight-line basis over the estimated useful life of each component of property, plant, and equipment. Land is not depreciated. The estimated useful lives for property, plant, and equipment are as follows: \u2022 Buildings: 20 to 40 years; \u2022 Leasehold improvements: equal to the lease term, unless the economic life of the leasehold improvement is shorter; and \u2022 Other PPE: three to ten years. 154 Wolters Kluwer 2022 Annual Report Strategic Report | Governance | Financial Statements \u2190 \u2192 Note 20 \u2013 Leasing ACCOUNTING POLICIES The group primarily leases real estate and, to a lesser extent, IT equipment and cars. The \ufb01xed rental periods mostly vary from one year to 15 years and may have renewal and/or termination options. For real estate and IT equipment, lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. Leases are recognized as a right-of-use asset and a corresponding liability on the same date at which the leased asset is available for use by the group. The right-of-use asset is depreciated over the shorter of the asset\u2019s useful life and the lease term on a straight- line basis. The lease liability is discounted based on the incremental borrowing rate because the rate implicit in the lease cannot be readily determined. The \ufb01nance cost is charged to pro\ufb01t or loss over the lease term to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The group elected to exclude all short-term leases and all leases for which the underlying asset is of low value, and not to apply IFRS 16 to leases of intangible assets (such as software). For IT equipment and car leases, the group elected to apply the practical expedient to not separate non-lease components from lease components, and instead to account for these components as a single lease component. Payments associated with short-term leases and low-value leases are recognized on a straight-line basis as an expense in pro\ufb01t or loss. Short-term leases have a term of 12 months or less, considering any reasonably certain optional lease periods. Low-value leases comprise small items of of\ufb01ce furniture and IT equipment. The total expenses arising from short-term leases and low-value leases are insigni\ufb01cant. The group is to a very limited extent a lessor. ESTIMATES AND JUDGMENTS IFRS 16 requires management to make estimates for setting the discount rate and to apply judgments in the assessment of renewal and termination options (i.e., optional lease periods) in the lease contracts. Discount rate The discount rate applied is based on the incremental borrowing rate for the respective leases considering the primary economic environment of the lease, the currency, the credit risk premium, the lease term, and the nature of the leased asset. At December 31, 2022, the weighted-average discount rate is 2.8% (2021: 2.4% ). Renewal and termination options Renewal and termination options are included in several real estate and other lease contracts. These terms are used to maximize operational flexibility in terms of managing contracts. Most contract-speci\ufb01c renewal and termination options are exercisable only by the group and not by the respective lessor. In determining the lease term, the group considers all facts and circumstances that create an economic incentive to use the optional lease period. Optional lease periods are only included in the lease term if it is reasonably certain that the optional lease periods will be used. The assessment is reviewed if a signi\ufb01cant change in circumstances occurs which affects this assessment and that is within the control of the group. Real estate leases that are annually renewed or that have an inde\ufb01nite contract term are on average leased for \ufb01ve years. Usually, optional periods arising from renewal options of other real estate leases are not considered to be reasonably certain, since the rent is often reset at the market price on the renewal option date. Optional periods after termination option dates are often included in the lease term due to termination penalties included in the contract. \u2190 \u2192 Wolters Kluwer 2022 Annual Report 155 Note 20 \u2013 Leasing continued Impairment of right-of-use assets The group determined whether there were impairment triggers regarding the right-of-use asset and accounts for any impairment loss identi\ufb01ed. This primarily applies to real estate leases. The impairment of a real estate right-of-use asset becomes relevant in case of vacated of\ufb01ce space. If vacated of\ufb01ce space is identi\ufb01ed, this space is considered a CGU on its own when that space can practically be sublet. An impairment is recognized when the recoverable amount is lower than the carrying value. Mostly, the recoverable amount will be based on expected future sublease receipts estimated by an external real estate broker. The carrying value may include not only the right-of-use asset, but also any directly related associated assets such as leasehold improvements. MOVEMENT SCHEDULE OF RIGHT-OF-USE ASSETS Real estate Other leases 2022 2021 Position at January 1 Cost value 578 80 658 663 Accumulated depreciation and impairment (309) (48) (357) (344) Book value at January 1 269 32 301 319 Movements Additions from new leases 21 6 27 24 Acquired through business combinations Note 8 2 \u2013 2 2 Contract modifications and reassessment of options 6 7 13 20 Net additions 29 13 42 46 Depreciation Note 14 (51) (20) (71) (71) Impairment Note 14 \u2013 \u2013 0 (1) Transfer to assets classified as held for sale Note 9 \u2013 \u2013 0 (10) Foreign exchange differences 11 0 11 18 Total movements (11) (7) (18) (18) Position at December 31 Cost value 596 89 685 658 Accumulated depreciation and impairment (338) (64) (402) (357) Book value at December 31 258 25 283 301 156 Wolters Kluwer 2022 Annual Report Strategic Report | Governance | Financial Statements \u2190 \u2192 Note 20 \u2013 Leasing continued CONTRACTUAL MATURITIES OF LEASE LIABILITIES 2022 2021 Within one year 69 70 Between one and two years 59 61 Between two and three years 50 51 Between three and four years 40 42 Between four and five years 34 33 Between five and ten years 86 91 Ten years and more 10 17 Effect of discounting (35) (34) Total lease liabilities at December 31 Note 29 313 331 CASH OUTFLOW FOR LEASES 2022 2021 Interest portion of lease payments 9 9 Repayment of principal portion of lease liabilities 72 68 Total 81 77 OTHER DISCLOSURES At December 31, 2022, the future undiscounted cash outflows arising from leases not yet commenced and to which the group is committed amounted to \u20ac9 million (2021: \u20ac0 million). The group\u2019s lease agreements do not impact any covenants. \u2190 \u2192 Wolters Kluwer 2022 Annual Report 157 Note 21 \u2013 Investments in Equity-accounted Investees The group\u2019s share in equity-accounted investees at December 31 is: ownership in % 2022 2021 HaoYisheng (Beijing, China) 22 22 ACCOUNTING POLICIES Interests in equity-accounted investees (associates) are accounted for using the equity method and are initially recognized at cost, which includes goodwill identi\ufb01ed upon acquisition and transaction costs. Associates are recognized from the date the group has signi\ufb01cant influence and recognition ceases on the date the group has lost its signi\ufb01cant influence over the equity investment. When an interest in an associate is increased to a controlling interest, the equity interest previously held is treated as if it was disposed of and reacquired at fair value on the acquisition date. Any resulting gain or loss compared to the carrying amount is recognized in pro\ufb01t or loss. Any amount that has previously been recognized in other comprehensive income, and that would be reclassi\ufb01ed to pro\ufb01t or loss following a divestment, is similarly reclassi\ufb01ed to pro\ufb01t or loss. MOVEMENT SCHEDULE OF EQUITY-ACCOUNTED INVESTEES 2022 2021 Position at January 1 10 8 Dividends received \u2013 \u2013 Share of pro\ufb01t of equity-accounted investees, net of tax 0 1 Foreign exchange differences 1 1 Position at December 31 11 10 For the equity-accounted investees at December 31, 2022, and December 31, 2021, the \ufb01nancial information (at 100%) and the group\u2019s weighted proportionate share is as follows: Total equity-accounted investees Group\u2019s share 2022 2021 2022 2021 Total assets 34 28 8 6 Total liabilities 17 16 4 3 Total equity 17 12 4 3 Revenues 31 24 7 5 Net pro\ufb01t for the year 1 5 0 1 158 Wolters Kluwer 2022 Annual Report Strategic Report | Governance | Financial Statements \u2190 \u2192 Note 22 \u2013 Financial Assets 2022 2021 Financial assets at fair value through profit or loss 0 0 Finance lease receivables 1 0 Derivative financial instruments Note 30 17 \u2013 Other non-current financial assets 5 5 Total 23 5 The credit risk exposure of the \ufb01nancial assets is considered immaterial. Refer to Note 30 \u2013 Financial Risk Management. ACCOUNTING POLICIES Financial assets at fair value through pro\ufb01t or loss comprise equity investments. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS 2022 2021 Position at January 1 0 0 Financial assets arising from divestment of operations Note 8 \u2013 6 Fair value changes of financial assets Note 15 0 (5) Foreign exchange differences 0 (1) Position at December 31 0 0 Note 23 \u2013 Tax Assets and Liabilities DEFERRED TAX ASSETS AND LIABILITIES temporary differences arising from: Assets Liabilities 2022 2021 Intangible assets 7 (402) (395) (390) Property, plant, and equipment, right-of-use assets, and lease liabilities 20 (3) 17 1 Employee bene\ufb01ts 38 0 38 37 Tax value of loss carry-forwards recognized 31 \u2013 31 38 Other items 103 (31) 72 82 Total before set-off of tax 199 (436) (237) (232) Set-off of tax (137) 137 0 0 Position at December 31 62 (299) (237) (232) The actual recognition of deferred tax assets depends on the generation of future taxable income during the periods in which the temporary differences become deductible. Based on projected future taxable income and available strategies, the group considers the future realization of these deferred tax assets as probable. Other items mainly include recognition of deferred tax assets and liabilities for temporary differences on working capital items. \u2190 \u2192 Wolters Kluwer 2022 Annual Report 159 Note 23 \u2013 Tax Assets and Liabilities continued MOVEMENTS IN TEMPORARY DIFFERENCES, 2022 Balance at January 1, 2022 Acquisitions/ divestments Transfer to assets and liabilities classified as held for sale (Note 9) Recognized in profit or loss (Note 16) Recognized in equity and other comprehensive income Foreign exchange differences Balance at December 31, 2022 Intangible assets (390) (19) \u2013 31 \u2013 (17) (395) PPE, right-of-use assets, and lease liabilities 1 \u2013 \u2013 16 \u2013 0 17 Employee bene\ufb01ts 37 \u2013 \u2013 4 (5) 2 38 Tax value of loss carry-forwards recognized 38 \u2013 \u2013 (9) \u2013 2 31 Other items 82 0 \u2013 (18) 4 4 72 Total (232) (19) 0 24 (1) (9) (237) MOVEMENTS IN TEMPORARY DIFFERENCES, 2021 Balance at January 1, 2021 Acquisitions/ divestments Transfer to assets and liabilities classified as held for sale (Note 9) Recognized in profit or loss (Note 16) Recognized in equity and other comprehensive income Foreign exchange differences Balance at December 31, 2021 Intangible assets (403) 4 0 34 \u2013 (25) (390) PPE, right-of-use assets, and lease liabilities 5 \u2013 0 (4) \u2013 0 1 Employee bene\ufb01ts 42 0 0 (4) (4) 3 37 Tax value of loss carry-forwards recognized 43 \u2013 \u2013 (8) \u2013 3 38 Other items 80 4 (1) (4) 0 3 82 Total (233) 8 (1) 14 (4) (16) (232) 160 Wolters Kluwer 2022 Annual Report Strategic Report | Governance | Financial Statements \u2190 \u2192 Note 23 \u2013 Tax Assets and Liabilities continued MOVEMENTS IN OVERALL TAX POSITION 2022 2021 Position at January 1 Current income tax assets 59 23 Current income tax liabilities (142) (169) Deferred tax assets 62 72 Deferred tax liabilities (294) (305) Overall tax position (315) (379) Movements Total income tax expense Note 16 (249) (201) Deferred tax from acquisitions and divestments (19) 8 Current income tax from acquisitions and divestments (1) 0 Deferred tax on items recognized directly in other comprehensive income (1) (4) Paid income tax 289 277 Transfer to assets and liabilities classified as held for sale Note 9 \u2013 1 Foreign exchange differences (9) (17) Total movements 10 64 Position at December 31 Current income tax assets 61 59 Current income tax liabilities (129) (142) Deferred tax assets 62 62 Deferred tax liabilities (299) (294) Overall tax position (305) (315) The current income tax liabilities include, to a large extent, uncertain tax positions. For most of these uncertain tax positions, it is expected that the audit by tax authorities will \ufb01nalize beyond one year. For the estimates and judgments applied to uncertain tax positions, refer to Note 16 \u2013 Income Tax Expense. The group paid income taxes for the amounts of \u20ac162 million (2021: \u20ac166 million) in North America, \u20ac119 million (2021: \u20ac104 million) in Europe, and \u20ac8 million (2021: \u20ac7 million) in Asia Paci\ufb01c and Rest of World. The amount of deferred tax assets arising from recognized tax loss carry-forwards, which relate to tax jurisdictions where the group continued to incur tax losses in the current and/or preceding year, was \u20ac0 million at December 31, 2022 (2021: \u20ac11 million). It is considered probable based on forecasts that future taxable pro\ufb01ts will be available. UNRECOGNIZED TAX LOSSES AND TEMPORARY DIFFERENCES The group has not recognized deferred tax assets that relate to unused tax losses and temporary differences amounting to \u20ac293 million (2021: \u20ac253 million), as it is not probable that future taxable pro\ufb01t will be available against which the group can use the bene\ufb01ts. Of these unused tax losses and temporary differences, 14% expire within the next \ufb01ve years (2021: 11%), 10% expire after \ufb01ve years (2021: 13%), and 76% carry forward inde\ufb01nitely (2021: 76%). In addition, the group has not recognized net deferred tax assets of \u20ac21 million (2021: \u20ac20 million), relating to unused state tax losses in the U.S. Of these unused state tax losses, 23% expire within the next \ufb01ve years (2021: 21%) and 77% expire after \ufb01ve years (2021: 79%). \u2190 \u2192 Wolters Kluwer 2022 Annual Report 161 Note 23 \u2013 Tax Assets and Liabilities continued DEFERRED TAX ON ITEMS RECOGNIZED IMMEDIATELY IN OTHER COMPREHENSIVE INCOME AND EQUITY 2022 2021 Amount before tax Tax Amount net of tax Amount before tax Tax Amount net of tax Exchange differences on translation of foreign operations, recycling of foreign exchange differences on loss of control, and net investment hedges 216 4 220 339 0 339 Gains/(losses) on cash flow hedges 29 \u2013 29 10 \u2013 10 Remeasurement gains/(losses) on de\ufb01ned bene\ufb01t plans 18 (5) 13 16 (4) 12 Recognized in other comprehensive income 263 (1) 262 365 (4) 361 Share-based payments 28 \u2013 28 24 \u2013 24 Recognized in equity 28 0 28 24 0 24 Note 24 \u2013 Inventories 2022 2021 Work in progress 27 21 Finished products and trade goods 52 44 Total 79 65 ACCOUNTING POLICIES Inventories are valued at the lower of cost and net realizable value. The cost of inventories includes all costs incurred in bringing the inventories to their present location and condition. Net realizable value is the estimated selling price in the ordinary course of business less the estimated cost of completion and the estimated cost necessary to complete the sale. Inventories also include internally developed commercial software products. The cost of internally produced goods includes the development, manufacturing, content-creation, and publishing costs. Trade goods purchased from third parties are valued at the purchase price. At December 31, 2022, the provision for obsolescence deducted from the inventory carrying values amounted to \u20ac18 million (2021: \u20ac18 million). In 2022, an amount of \u20ac5 million was recognized as an expense for the change in the provision for obsolescence (2021: \u20ac2 million) and is presented as part of cost of revenues in the consolidated statement of pro\ufb01t or loss. 162 Wolters Kluwer 2022 Annual Report Strategic Report | Governance | Financial Statements \u2190 \u2192 Note 25 \u2013 Contract Assets and Liabilities 2022 2021 Trade receivables 1,088 1,008 Non-current contract assets 17 19 Current contract assets 153 138 Non-current deferred income 112 113 Current deferred income 1,858 1,709 Other current contract liabilities 88 80 ACCOUNTING POLICIES Trade receivables Trade receivables are recognized at transaction price and subsequently measured at amortized cost minus loss allowance. A receivable is recognized when the group\u2019s right to consideration is unconditional except for the passage of time. Contract assets and contract liabilities The group recognizes the following contract-related assets: unbilled revenues, cost to obtain a contract, and cost to ful\ufb01ll a contract. The group recognizes the following contract-related liabilities: deferred income and the provisions for returns, refunds, and other liabilities. Unbilled revenues and deferred income When either party to a customer contract has performed, the group recognizes unbilled revenues or deferred income, depending on the relationship between the group\u2019s performance and the timing of the customer's payment. If the value of the services rendered by the group exceeds the invoiced amounts, unbilled revenues are recognized. If the invoiced amounts exceed the value of services rendered, deferred income is recognized. Unbilled revenues are recognized when the group\u2019s right to consideration is conditional on something other than the passage of time, for example future performance of the entity. Deferred income represents the part of the amount invoiced to customers that has not yet met the criteria for revenue recognition and thus still must be earned as revenues by means of the delivery of goods and/or services in the future. Deferred income is recognized at its nominal value. For contracts whereby neither party has performed, trade receivables and deferred income balances are presented on a net basis. Cost to obtain a contract Incremental costs for obtaining a contract (primarily sales commissions) will be capitalized and amortized if the contract term is expected to be longer than 12 months, as the practical expedient of IFRS 15 is applied. The amortization period will usually be one to \ufb01ve years, or the underlying contract life if longer, subject to the nature of the underlying performance obligations. Cost to fulfill a contract If the group incurs costs to ful\ufb01ll a revenue contract with a customer (e.g., costs that are explicitly chargeable to the customer under the contract, set-up costs, or pre-contract costs), an asset is recognized if these costs directly relate to a contract, generate or enhance resources that will be used in satisfying performance obligations in the future, and are expected to be recovered. The amortization of set- up and pre-contract costs is recognized as an expense over the term of the associated contract. \u2190 \u2192 Wolters Kluwer 2022 Annual Report 163 Note 25 \u2013 Contract Assets and Liabilities continued Impairment Any impairment of assets relating to contracts with customers is measured, presented, and disclosed in accordance with IFRS 9. The determination of the provision for impairment is based on the group\u2019s historical average of three years of credit losses, which is used as a proxy for expected losses on trade receivables with similar characteristics and credit pro\ufb01le, adjusted as appropriate to reflect the current conditions and estimates of future economic conditions. Trade receivables longer than one year overdue and trade receivables with speci\ufb01c risk with no reasonable expectation of recovery, are impaired and provided for in full, unless reliable supporting information is available to conclude otherwise. The group presents its impairment losses in the notes to the consolidated \ufb01nancial statements. Provisions for returns, refunds, and other liabilities The group recognizes a contract liability if the group receives consideration from a customer and expects to refund some or all of that consideration to the customer or for transferred goods and/or services with a right of return. The contract liability is measured as the amount of the consideration for which the group does not expect to be entitled to. ESTIMATES AND JUDGMENTS The assessment of the nature of sales commission plans for meeting the capitalization criteria requires judgment. The applicable amortization period of the incremental cost to obtain a contract is estimated by the group by matching the useful life of the capitalized sales commissions with the expected bene\ufb01ts of the underlying contract. GENERAL In general, the group applies payment terms in line with common industry practice. There are no signi\ufb01cant contracts with a material \ufb01nancing component. There are contracts with variable consideration, but the related estimates are almost never constrained. To a very limited extent, the group acts as an agent in its contracts with customers. Most of the contracts with customers require prepayment of the consideration. Trade receivables and unbilled revenues are shown net of impairment losses amounting to \u20ac85 million (2021: \u20ac83 million). The fair value of the receivables approximates the carrying amount. Impairment losses on trade receivables and unbilled revenues are presented as part of sales costs in the consolidated statement of pro\ufb01t or loss. LOSS ALLOWANCE 2022 2021 Position at January 1 83 84 Divestment of operations Note 8 0 (1) Transfer to assets classified as held for sale Note 9 \u2013 (1) Additions to loss allowances Note 10 33 28 Releases from loss allowances Note 10 (12) (8) Usage of loss allowances (22) (25) Foreign exchange differences 3 6 Position at December 31 85 83 For further information on credit risk, refer to Note 30 \u2013 Financial Risk Management. 164 Wolters Kluwer 2022 Annual Report Strategic Report | Governance | Financial Statements \u2190 \u2192 Note 25 \u2013 Contract Assets and Liabilities continued CONTRACT ASSETS current and non-current Unbilled revenues Cost to obtain a contract Cost to fulfill a contract 2022 2021 Position at January 1 95 40 22 157 132 Recognized as revenues in the year 465 \u2013 \u2013 465 331 Newly recognized cost to fulfill a contract \u2013 \u2013 473 473 391 Transferred to trade receivables (463) \u2013 (469) (932) (712) Newly recognized cost to obtain a contract \u2013 28 \u2013 28 29 Amortization of capitalized sales commissions Note 10 \u2013 (29) \u2013 (29) (23) Autonomous movements in contract assets 2 (1) 4 5 16 Acquired through business combinations Note 8 1 \u2013 \u2013 1 1 Transfer to assets classified as held for sale Note 9 \u2013 \u2013 \u2013 0 (1) Foreign exchange differences 3 2 2 7 9 Position at December 31 101 41 28 170 157 The group did not recognize an impairment on the unbilled revenues during the year (2021: nil). DEFERRED INCOME current and non-current 2022 2021 Position at January 1 1,822 1,630 New and existing contracts with customers 3,944 3,683 Recognized as revenues from opening balance (1,709) (1,518) Recognized as revenues in the year on new and existing contracts (2,137) (2,007) Change in netting against trade receivables (25) (45) Autonomous movements in deferred income 73 113 Acquired through business combinations Note 8 0 6 Divestment of operations Note 8 0 (2) Transfer to liabilities classified as held for sale Note 9 \u2013 (27) Foreign exchange differences 75 102 Position at December 31 1,970 1,822 No material amount of revenues was recognized in 2022 from performance obligations satis\ufb01ed or partially satis\ufb01ed in previous years because of events such as changes in transaction price. Furthermore, the group did not have material changes in deferred income because of contract modi\ufb01cations or changes in estimates. The aggregate amount of the transaction price allocated to the remaining performance obligations that are unsatis\ufb01ed at year-end 2022 was \u20ac4,055 million (2021: \u20ac3,727 million), of which \u20ac1,970 million was included in deferred income (2021: \u20ac1,822 million). The unful\ufb01lled performance obligations not recognized in deferred income relate to multi-year contracts agreed with customers, whereby the group expects to satisfy these performance obligations for a large part within one year and for the remainder between one to \ufb01ve years. \u2190 \u2192 Wolters Kluwer 2022 Annual Report 165 Note 25 \u2013 Contract Assets and Liabilities continued OTHER CONTRACT LIABILITIES 2022 2021 Position at January 1 80 66 Additions to provision for returns, refunds, and other 140 90 Usage of provision for returns, refunds, and other (136) (76) Autonomous movements in other contract liabilities 4 14 Acquired through business combinations Note 8 1 \u2013 Transfer to liabilities classified as held for sale Note 9 \u2013 (4) Foreign exchange differences 3 4 Position at December 31 88 80 Note 26 \u2013 Other Receivables 2022 2021 Prepaid royalties 16 18 Non-current other receivables 16 18 Prepaid royalties 55 81 Other prepayments 157 251 Miscellaneous receivables 32 34 Interest receivable 5 0 Derivative financial instruments 1 \u2013 Current other receivables 250 366 166 Wolters Kluwer 2022 Annual Report Strategic Report | Governance | Financial Statements \u2190 \u2192 Note 27 \u2013 Cash and Cash Equivalents 2022 2021 Deposits 909 610 Cash and bank balances 437 391 Total cash and cash equivalents in the consolidated statement of financial position 1,346 1,001 Minus: Bank overdrafts used for cash management purposes Note 29 (16) (9) Plus: Cash included in assets held for sale Note 9 \u2013 2 Total cash and cash equivalents minus bank overdrafts, including cash included in assets held for sale in the consolidated statement of cash flows 1,330 994 ACCOUNTING POLICIES Cash and cash equivalents comprise cash and bank balances and deposits. Bank overdrafts predominantly result from cash pool arrangements and are presented within borrowings and bank overdrafts in current liabilities. The group discloses the \ufb01nancial assets and \ufb01nancial liabilities within these arrangements on a gross basis. An amount of \u20ac0 million (2021: \u20ac0 million) relates to cash and cash equivalent balances of entities that the group does not fully own (see Note 17 \u2013 Non-controlling Interests). Cash equivalents include bank deposits that are held as part of the group\u2019s cash management for the purpose of meeting short-term cash commitments. At December 31, 2022, bank balances include an amount of \u20ac38 million (2021: \u20ac45 million) of restricted cash, primarily due to local exchange control regulations that restrict exporting cash and/or capital from the relevant country. Note 28 \u2013 Trade and Other Payables 2022 2021 Trade payables 147 123 Salaries, holiday allowances, and other benefits 276 284 VAT, sales tax, social security premiums, and other taxation 95 88 Pension-related payables 28 24 Royalty payables 88 90 Other accruals and payables 315 300 Interest payable 39 34 Deferred and contingent acquisition payables Note 30 2 1 Total 990 944 \u2190 \u2192 Wolters Kluwer 2022 Annual Report 167 Note 29 \u2013 Net Debt Nominal value Effective interest rate in % Nominal interest rate in % Repayment commitments 1-5 years Repayment commitments >5 years 2022 2021 Bonds 2008-2028 (100.00 * ) \u20ac36 6.812 6.748 \u2013 36 36 36 Bonds 2013-2023 (99.709 * ) ** \u20ac700 2.950 2.875 \u2013 \u2013 0 699 Bonds 2014-2024 (99.164 * ) \u20ac400 2.640 2.500 399 \u2013 399 399 Bonds 2017-2027 (99.659 * ) \u20ac500 1.575 1.500 499 \u2013 499 498 Bonds 2020-2030 (99.292 * ) \u20ac500 0.862 0.750 \u2013 496 496 495 Bonds 2021-2028 (99.958 * ) \u20ac500 0.307 0.250 \u2013 498 498 498 Bonds 2022-2026 (99.922 * ) \u20ac500 3.096 3.000 498 \u2013 498 \u2013 Bonds, measured at amortized cost 1,396 1,030 2,426 2,625 Private placement 2008-2038, measured at amortized cost \u00a520,000 3.330 3.330 \u2013 142 142 153 Deferred and contingent acquisition payables, measured at fair value 2 \u2013 2 1 Other debt, measured at amortized cost 16 \u2013 16 10 Derivative \ufb01nancial instruments, measured at fair value *** \u2013 \u2013 0 2 Other long-term debt 18 0 18 13 Total long-term debt (excluding lease liabilities) 1,414 1,172 2,586 2,791 Lease liabilities **** 244 260 Total long-term debt 2,830 3,051 * Issue price of the \ufb01nancial instrument. ** These bonds are classi\ufb01ed as short-term bonds. Refer also to the table on the following page. *** For further details on these debt-related derivative \ufb01nancial instruments, refer to Note 30 \u2013 Financial Risk Management. **** For the repayment commitments of lease liabilities, refer to Note 20 \u2013 Leasing . 168 Wolters Kluwer 2022 Annual Report Strategic Report | Governance | Financial Statements \u2190 \u2192 Note 29 \u2013 Net Debt continued RECONCILIATION LONG-TERM DEBT TO NET DEBT 2022 2021 Total long-term debt 2,830 3,051 Borrowings and bank overdrafts: Bank overdrafts, measured at amortized cost Note 27 16 9 Total borrowings and bank overdrafts 16 9 Bonds 2013-2023 700 \u2013 Short-term lease liabilities 69 71 Deferred and contingent acquisition payables measured at fair value Note 30 2 1 Total short-term debt 787 81 Gross debt 3,617 3,132 Minus: Cash and cash equivalents Note 27 (1,346) (1,001) Derivative financial instruments: Non-current assets Note 22 (17) \u2013 Current assets Note 26 (1) \u2013 Net debt 2,253 2,131 ACCOUNTING POLICIES Non-derivative financial liabilities measured at amortized cost Financial liabilities measured at amortized cost are bonds, the Euro Commercial Paper program, private placements, other long-term and short-term debt, and trade payables. The group initially recognizes non-derivative \ufb01nancial liabilities at fair value less any directly attributable transaction costs. Subsequently, these \ufb01nancial liabilities are measured at amortized cost using the effective interest method with any difference between cost and redemption value recognized in pro\ufb01t or loss over the period of the borrowings. \u2190 \u2192 Wolters Kluwer 2022 Annual Report 169 Note 29 \u2013 Net Debt continued RECONCILIATION OF LIABILITIES ARISING FROM FINANCING ACTIVITIES Gross debt, excluding lease liabilities, derivative financial instruments, and bank overdrafts Balance at January 1, 2022 Net cash flows Acquisitions/ Divestments Unwinding of discount Foreign exchange differences Other non-cash movements Balance at December 31, 2022 Bonds 2,625 500 \u2013 3 \u2013 (2) 3,126 Private placements 153 \u2013 \u2013 0 (11) \u2013 142 Other gross debt 12 5 2 \u2013 1 \u2013 20 Total 2,790 505 2 3 (10) (2) 3,288 Balance at January 1, 2021 Net cash flows Acquisitions/ Divestments Unwinding of discount Foreign exchange differences Other non-cash movements Balance at December 31, 2021 Bonds 2,126 500 \u2013 1 \u2013 (2) 2,625 Private placements 157 \u2013 \u2013 0 (4) \u2013 153 Other gross debt 109 (100) 2 \u2013 1 \u2013 12 Total 2,392 400 2 1 (3) (2) 2,790 Lease liabilities current and non current 2022 2021 Position at January 1 331 348 Additions from new leases 27 24 Acquired through business combinations Note 8 2 2 Contract modifications and reassessments of options 10 19 Repayment of lease liabilities (interest and principal portion) * (80) (77) Unwinding of discount of lease liabilities Note 15 9 9 Transfer to liabilities classified as held for sale Note 9 \u2013 (11) Foreign exchange differences 14 17 Position at December 31 313 331 * Repayment of lease liabilities in 2022 excludes payments by the disposal groups classi\ufb01ed as held for sale, amounting to \u20ac1 million. For accounting policies, estimates, and judgments on lease liabilities, refer to Note 20 \u2013 Leasing. 170 Wolters Kluwer 2022 Annual Report Strategic Report | Governance | Financial Statements \u2190 \u2192 Note 29 \u2013 Net Debt continued LOAN MATURITY The following amounts of gross debt (excluding lease liabilities) at December 31, 2022, are due within and after \ufb01ve years: 2022 2024 409 2025 8 2026 498 2027 499 Due after 2027 1,172 Long-term debt 2,586 Short-term debt (2023) 718 Total (excluding lease liabilities) 3,304 At December 31, 2021, \u20ac10 million was short-term debt, \u20ac1,109 million was due in 2023 and 2024, and \u20ac1,682 million was due after 2026. FINANCIAL LIABILITIES MEASURED AT AMORTIZED COST Bonds The group has senior bonds outstanding for an amount of \u20ac3,126 million at December 31, 2022 (2021: \u20ac2,625 million). The nominal interest rates on the bonds are \ufb01xed until redemption. On September 23, 2022, the group issued a \u20ac500 million four-year senior unsecured Eurobond. The bonds were sold at an issue price of 99.922 percent and carry an annual coupon of 3.000 percent. The senior unsecured bonds will mature on September 23, 2026. The net proceeds of the offering are used for general corporate purposes. Private placements The group holds private placements in Japanese yen. These private placements (\u00a520,000 million) are converted to and hedged against euro via cross-currency interest rate swaps. These swaps have been collateralized for credit risk in line with the treasury risk management policies. There is no collateral outstanding at December 31, 2022 (2021: no collateral outstanding). Multi-currency revolving credit facility Effective July 2022, the group agreed to the \ufb01nal one-year extension of the \u20ac600 million multi-currency revolving credit facility, such that the facility will now mature in 2025. This facility has multi-year environmental, social, and governance (ESG) KPIs, which are linked to the interest rates in the facility. The interest rates in the facility are variable. The facility is used for general corporate purposes. At December 31, 2022, no amounts were drawn under the facility (December 31, 2021: no amounts drawn). The facility is subject to customary conditions, including a \ufb01nancial credit covenant. The facility covenant requires that the consolidated net senior borrowings (excluding fully subordinated debt) to adjusted EBITDA shall not exceed 3.5. In 2022 and 2021, the group was comfortably within the thresholds stipulated in the \ufb01nancial covenant of the facility. Euro Commercial Paper program The group has a Euro Commercial Paper (ECP) program in place, under which it may issue unsecured, short-term debt (ECP notes) for a maximum of \u20ac1.0 billion. The program provides flexible funding for short-term cash needs at attractive rates. At December 31, 2022, no ECP notes were outstanding (2021: no ECP notes outstanding). DEFAULTS AND/OR BREACHES There were no defaults or breaches on the loans and borrowings during 2022 or 2021. \u2190 \u2192 Wolters Kluwer 2022 Annual Report 171 Note 30 \u2013 Financial Risk Management RISK MANAGEMENT FRAMEWORK The group\u2019s activities are exposed to a variety of \ufb01nancial risks, including market, liquidity, and credit risk. Identi\ufb01cation and management of \ufb01nancial risks are carried out by the central treasury department (Corporate Treasury), whereby the treasury operations are conducted within a framework of policies and guidelines (Treasury Policy), which are approved by the Executive Board and the Supervisory Board. The Treasury Policy is reviewed at least annually, considering market circumstances and market volatility, and is based on assumptions concerning future events, subject to uncertainties and risks that are outside of the group\u2019s control. The Treasury Committee, comprising the Vice President Group Accounting & Reporting, Controller Corporate Of\ufb01ce, Executive Vice President Treasury & Risk, and representatives of Corporate Treasury and Treasury Back-Of\ufb01ce, meets quarterly to review treasury activities and compliance with the Treasury Policy and reports directly to the Executive Board and the Audit Committee. The Treasury Back-Of\ufb01ce reports deviations directly to the CFO and the Executive Vice President Treasury & Risk. Under the group\u2019s Internal Control Framework, the \ufb01nancial reporting controls, including policies and procedures, of the Corporate Treasury Department are periodically reviewed. Corporate Treasury reports quarterly to the Audit Committee on its compliance with the Treasury Policy. The group\u2019s funding activities are carried out by Corporate Treasury using long-term capital market instruments and committed credit facilities to ensure optimal \ufb01nancial flexibility and capital ef\ufb01ciency. The borrowings, together with cash generated from operations, are lent or contributed as equity to the operating companies. The group targets a net-debt-to-EBITDA ratio of approximately 2.5. However, the group could temporarily deviate from this relative indebtedness ratio. At December 31, 2022, the net-debt-to-EBITDA ratio was 1.3 (2021: 1.4). All treasury activities, in particular the use of derivative \ufb01nancial instruments, are subject to the principle of risk minimization and are executed by specialized treasury personnel. For this reason, \ufb01nancial transactions and risk positions are managed in a central treasury management and payment system. It is the group\u2019s policy that material currency translation exposures and variable interest exposures are partially hedged by Corporate Treasury in accordance with the annual treasury plan approved by the Audit Committee. The group does not purchase or hold derivative \ufb01nancial instruments for speculative purposes. The group\u2019s risk pro\ufb01le is de\ufb01ned and reviewed regularly. Although the economic environment has become more challenging because of the volatility in \ufb01nancial markets, the exposure to \ufb01nancial risks for the group's activities has not signi\ufb01cantly changed, nor has the approach to these risks. MARKET RISK Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates, will affect the group\u2019s pro\ufb01t or loss or the value of its \ufb01nancial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return. CURRENCY RISK The group has identi\ufb01ed transaction and translation risks as currency risks. The transaction risk exposure within individual group entities is relatively immaterial. The transaction prices invoiced to customers for goods and/or services are mainly denominated in the customers\u2019 local currencies. Given the nature of the business, almost all related costs are also incurred in those local currencies. Derivative \ufb01nancial instruments to hedge transaction risks are therefore not frequently used. Translation risk is the risk that exchange rate gains or losses arise from translating the statement of pro\ufb01t or loss, statement of \ufb01nancial position, and statement of cash flows of foreign subsidiaries to the group\u2019s presentation currency (euro) for consolidation purposes. The group\u2019s risk management strategy practice is that material currency translation exposures (including U.S. dollar net investments) are partially hedged by Corporate Treasury. Currency translation exposures which impact the consolidated statements of \ufb01nancial position and/or pro\ufb01t or loss by 10% or more are considered material. The currency translation exposure on the consolidated statement of cash flows is partly mitigated by matching cash inflows and outflows in the same currency. The group\u2019s main translation risk is its exposure to the U.S. dollar. In line with its risk management strategy, the group manages the translation risk using three types of risk mitigating actions, of which two types of transactions are designated as a hedge and for which the group applies hedge accounting. 172 Wolters Kluwer 2022 Annual Report Strategic Report | Governance | Financial Statements \u2190 \u2192 Note 30 \u2013 Financial Risk Management continued HEDGE ACCOUNTING ACCOUNTING POLICIES Derivative financial instruments and hedging activities The group holds derivative \ufb01nancial instruments to hedge risk exposures. Derivative \ufb01nancial instruments are initially recognized at fair value on the date a derivative contract is concluded and are subsequently remeasured at fair value. The method of recognizing gains or losses depends on whether the derivative is designated as a hedging instrument and if so, the nature of the item being hedged. The group designates derivatives as either: \u2022 Hedges of a risk associated with a recognized asset or liability or a highly probable forecast transaction (cash flow hedge); \u2022 Hedges of a net investment in a foreign operation (net investment hedge); or \u2022 Currency forward instruments to protect the group\u2019s net pro\ufb01t (not qualifying for hedge accounting). With respect to foreign currency forwards used in the cash flow hedges and the net investment hedges, the group designates as a hedging instrument only the change in the value of the spot component of a forward contract (and not the forward element). The differential between the contracted forward rate and the market spot rate, de\ufb01ned as forward points, is recognized in other comprehensive income and accumulated in the hedge reserve within total equity. Cash flow hedge The effective part of changes in the fair value of derivatives that are designated and qualify as cash flow hedges are recognized in other comprehensive income, and accumulated in the hedge reserve within total equity. Amounts accumulated in the hedge reserve are reclassi\ufb01ed to pro\ufb01t or loss within the line where the result from the hedged transaction is recognized, in the same period the hedged item affects the pro\ufb01t or loss. The gain or loss relating to the ineffective part of the hedging relationship is recognized in pro\ufb01t or loss within \ufb01nancing results. Reclassification of hedge reserve to profit or loss When a hedging instrument matures or is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in the hedge reserve at that time remains in the hedge reserve and is only reclassi\ufb01ed when the hedged transaction is ultimately recognized in pro\ufb01t or loss. When a hedged transaction is no longer expected to occur, the cumulative gain or loss in the hedge reserve is reclassi\ufb01ed to pro\ufb01t or loss. Net investment hedge Fair value changes of derivative \ufb01nancial instruments used to hedge the net investment in foreign operations, which are determined to be an effective hedge, are recognized directly in other comprehensive income in the translation reserve. Gains and losses accumulated in the translation reserve are reclassi\ufb01ed to pro\ufb01t or loss when the foreign operation is disposed. If a hedging relationship is terminated and the derivative \ufb01nancial instrument is not sold, future changes in the fair value of the derivative \ufb01nancial instrument are recognized in pro\ufb01t or loss. The gain or loss relating to the ineffective part of the hedging relationship is recognized in pro\ufb01t or loss within \ufb01nancing results. Derivatives that do not qualify for hedge accounting Changes in the fair value of any derivative \ufb01nancial instruments that do not qualify for hedge accounting are recognized in pro\ufb01t or loss within \ufb01nancing results. \u2190 \u2192 Wolters Kluwer 2022 Annual Report 173 Note 30 \u2013 Financial Risk Management continued Net investment hedge The group partially protects total equity from foreign exchange differences using U.S. dollar currency forward contracts qualifying as net investment hedges, which partially offset the translation risk on U.S. dollar-denominated subsidiaries and long-term receivables of the U.S. operations, being the hedged items. The fair value changes of the net investment hedge partially offset the currency differences on translation of U.S. dollar-denominated subsidiaries and long-term receivables from U.S. operations, both recognized in other comprehensive income. The group had U.S. dollar forward contracts outstanding for a total notional amount of \u20ac258 million ($275 million) at December 31, 2022 (2021: \u20ac177 million or $200 million). These hedges created a U.S. dollar balance sheet cover with a future settlement date, recognized as a \ufb01nancial asset with a fair value of \u20ac1 million at December 31, 2022. The group had U.S. dollar liabilities outstanding for a total notional amount of \u20ac473 million ($505 million) at December 31, 2022 (2021: \u20ac406 million or $460 million). The U.S. dollar liabilities include net investment hedges and other U.S. dollar-denominated liabilities. The U.S. dollar balance sheet cover of 11% (2021: 10%) is de\ufb01ned as the sum of U.S. dollar net investment hedges and other U.S. dollar liabilities outstanding divided by the group\u2019s net investment in U.S. dollar-denominated assets. Cash flow hedge The group protects against the translation differences on the Japanese yen private placement (2022 and 2021: \u00a520,000 million) and the related interest payments, using cash flow hedges by means of four cross-currency interest rate swaps. The fair value changes of the cash flow hedges are recognized in equity until the hedging relationship with the corresponding hedged instrument is terminated. At that moment, the translation differences are reclassi\ufb01ed to pro\ufb01t or loss. Currency forwards The group partially protects net pro\ufb01t from foreign exchange differences using U.S. dollar and other currency forwards not qualifying for hedge accounting. The fair value changes of these currency forwards are recognized in \ufb01nancing results and partially offset any translation risk on pro\ufb01t or loss elements. In 2022, the group swapped 74% (2021: 50%) of the net \ufb01nancing results of \u20ac56 million (2021: \u20ac78 million) into U.S. dollars using foreign exchange derivatives of $40 million (2021: $40 million). Sensitivity Based on the percentage of 74% for net \ufb01nancing results payable in U.S. dollars, an instantaneous 1% decline of the U.S. dollar against the euro at December 31, 2022, with all other variables held constant, would result in a decrease of approximately \u20ac0.4 million in net \ufb01nancing results (2021: \u20ac0.4 million). Hedge effectiveness Before applying hedge accounting, the group assesses, in accordance with the group\u2019s risk management policies and the parameters of the hedge, whether the designated hedge is highly effective. In 2022, the group did not record ineffectiveness because of hedging activities (2021: no ineffectiveness). The group measures hedge effectiveness on a forward-looking basis at the inception of the hedging relationship and on an ongoing basis at reporting dates through a qualitative assessment of the critical terms of the hedging instrument and the hedged item. The hedge values will generally move in the opposite direction because of the same risk and hence an economic relationship exists. The results of these effectiveness tests all satis\ufb01ed the effectiveness criterion during the year. 174 Wolters Kluwer 2022 Annual Report Strategic Report | Governance | Financial Statements \u2190 \u2192 Note 30 \u2013 Financial Risk Management continued CURRENCY RISK SENSITIVITY The following table details the group\u2019s sensitivity to a 1% weakening of the U.S. dollar against the euro: 2022 2021 Revenues (37) (31) Adjusted operating pro\ufb01t (12) (10) Operating pro\ufb01t (11) (10) Adjusted net pro\ufb01t (8) (6) Pro\ufb01t for the year (7) (6) Shareholders\u2019 equity at December 31 (38) (35) Adjusted free cash flow (12) (9) SENSITIVITY ANALYSIS A sensitivity analysis on the derivative \ufb01nancial instruments portfolio yields the following results, assuming an instantaneous 1% decrease of the U.S. dollar and Japanese yen against the euro from their levels at December 31, 2022, and an instantaneous 1% increase of the U.S. dollar, Japanese yen, and euro interest rates: in millions Hedged risk Amount Type of instrument Exchange rate movement \u20ac Interest rate movement \u20ac Cash flow hedge Changes in \u00a5 floating interest payments and \u00a5 exchange rates \u00a520,000 Cross-currency interest rate swaps (1) (4) Net investment hedge Changes of the U.S. dollar net investments due to fluctuations of U.S. dollar exchange rates $275 Forward contracts 2 0 INTEREST RATE RISK The group is exposed to interest rate risk. The group aims to mitigate the impact on its results and cash flows of interest rate movements, both by arranging \ufb01xed or variable rate funding and by use of derivative \ufb01nancial instruments. At December 31, 2022, the group\u2019s interest rate position (excluding cash and cash equivalents and lease liabilities) was 100% (2021: 100%) carried at a \ufb01xed rate. The credit facility and the Euro Commercial Paper program have a variable interest rate. Assuming the same mix of variable and \ufb01xed interest rate instruments, an instantaneous increase of interest rates of 1% compared to the rates on December 31, 2022, with all other variables held constant, would hardly result, on an annual basis, in an increase of net \ufb01nancing results (2021: identical at December 31, 2021). Interest rate benchmark transition for non-derivative financial instruments For non-derivative third-party contracts and internal contracts, IBOR references were primarily used in internal \ufb01nancing-related contracts. At December 31, 2022, all U.K., Swiss and Japanese IBOR references in these internal contracts were replaced by alternative benchmark rates. Other IBOR references will only be replaced once such IBORs are discontinued. During 2022, the group has transitioned its \u20ac600 million credit facility agreement from LIBOR to risk-free rates. \u2190 \u2192 Wolters Kluwer 2022 Annual Report 175 Note 30 \u2013 Financial Risk Management continued Interest rate benchmark transition for derivative financial instruments The \ufb01xed interest payments on the Japanese Yen private placements are converted to and hedged against euro via cross-currency interest rate swaps. The Interest Rate Benchmark Reform did not impact these \ufb01xed interest payments. However, both the Japanese Libor and Euribor were inputs in the fair value determination. During 2022, the input in the fair value determination was changed to the Tokia Overnight Rate (TONA) curve and the Euro Short-Term Rate (\u20acSTR). In addition, the Euro Overnight Index Average (EONIA) reference in the Credit Support Annex was amended to the Euro Short-Term Rate (\u20acSTR). The IBOR-reform did not result in changes to the group\u2019s risk management strategy. LIQUIDITY RISK Liquidity risk is the risk that the group will encounter dif\ufb01culty in meeting the obligations associated with its \ufb01nancial liabilities that are settled by delivering cash or another \ufb01nancial asset. The group\u2019s approach to manage liquidity is to ensure, as far as possible, that it will have enough liquidity to meet its liabilities when they are due. The group actively manages liquidity risk by maintaining enough cash and cash equivalents, and by the availability of committed borrowing capacity. To reduce liquidity risk, the group has established the following minimum requirements: \u2022 No more than 25% of outstanding gross debt minus available cash should be repayable within a 12-month period; \u2022 Acquiring of funding to start at least one year in advance of all maturing debt or alternative committed funding should be in place; and \u2022 Minimum headroom of \u20ac500 million (sum of unused committed credit facilities, cash and cash equivalents, and derivative \ufb01nancial assets, minus other short-term debt, current deferred acquisition payables, current derivative \ufb01nancial liabilities, and bank overdrafts). Per December 31, 2022, the group has access to the unused part of the committed credit facilities of \u20ac600 million in total (2021: \u20ac600 million), cash and cash equivalents of \u20ac1,346 million (2021: \u20ac1,001 million), and has derivative \ufb01nancial assets totaling \u20ac18 million (2021: none), minus other short-term debt, current deferred and contingent acquisition payables, bank overdrafts, Euro Commercial Paper, and current derivative \ufb01nancial liabilities totaling \u20ac18 million (2021: \u20ac10 million). The headroom was \u20ac1,946 million at year-end 2022 (2021: \u20ac1,591 million). No assets have been collateralized or in any other way secured under debt contracts. Exposure to liquidity risk The following tables relate to the remaining contractual cash flows of \ufb01nancial liabilities at the reporting date. These tables show net cash flow amounts for derivative \ufb01nancial instruments that have simultaneous cash settlements. The amounts for the non-derivative \ufb01nancial instruments are gross and undiscounted and include estimated interest payments and exclude the impact of netting agreements. For the remaining contractual cash flows of lease liabilities, refer to Note 20 \u2013 Leasing. 176 Wolters Kluwer 2022 Annual Report Strategic Report | Governance | Financial Statements \u2190 \u2192 Note 30 \u2013 Financial Risk Management continued CONTRACTUAL CASH FLOWS 2022 Carrying amount Contractual undiscounted cash flows Less than 1 year 1-2 years 2-5 years More than 5 years Non-derivative financial liabilities (excl. lease liabilities) Bonds: Bonds 2008-2028 36 49 2 2 7 38 Bonds 2013-2023 700 720 720 \u2013 \u2013 \u2013 Bonds 2014-2024 399 420 10 410 \u2013 \u2013 Bonds 2017-2027 499 539 8 8 523 \u2013 Bonds 2020-2030 496 530 4 4 11 511 Bonds 2021-2028 498 507 1 1 4 501 Bonds 2022-2026 498 560 15 15 530 \u2013 Private placements: Private placement 2008-2038 142 216 5 5 14 192 Long- and short-term deferred and contingent acquisition payables 4 4 2 2 \u2013 \u2013 Other debt 16 16 \u2013 8 8 \u2013 Borrowings and bank overdrafts 16 16 16 \u2013 \u2013 \u2013 Trade payables 147 147 147 \u2013 \u2013 \u2013 Total 3,451 3,724 930 455 1,097 1,242 Derivative financial instruments (Receipts) (260) (260) Payments 258 258 Foreign exchange derivatives (1) (2) (2) 0 0 0 (Receipts) (216) (5) (5) (14) (192) Payments 245 8 8 23 206 Cross-currency interest rate swaps (17) 29 3 3 9 14 Total derivative financial liabilities/(assets) (18) 27 1 3 9 14 \u2190 \u2192 Wolters Kluwer 2022 Annual Report 177 Note 30 \u2013 Financial Risk Management continued CONTRACTUAL CASH FLOWS 2021 Carrying amount Contractual undiscounted cash flows Less than 1 year 1-2 years 2-5 years More than 5 years Non-derivative financial liabilities (excl. lease liabilities) Bonds: Bonds 2008-2028 36 52 2 2 7 41 Bonds 2013-2023 699 740 20 720 \u2013 \u2013 Bonds 2014-2024 399 430 10 10 410 \u2013 Bonds 2017-2027 498 547 8 8 23 508 Bonds 2020-2030 495 534 4 4 11 515 Bonds 2021-2028 498 509 1 1 4 503 Private placements: Private placement 2008-2038 153 237 5 5 15 212 Long- and short-term deferred and contingent acquisition payables 2 2 1 1 \u2013 \u2013 Other debt 10 10 \u2013 5 5 \u2013 Borrowings and bank overdrafts 9 9 9 \u2013 \u2013 \u2013 Trade payables 123 123 123 \u2013 \u2013 \u2013 Total 2,922 3,193 183 756 475 1,779 Derivative financial instruments (Receipts) (175) (175) \u2013 \u2013 \u2013 Payments 177 177 \u2013 \u2013 \u2013 Foreign exchange derivatives 0 2 2 0 0 0 (Receipts) (237) (5) (5) (15) (212) Payments 253 8 8 23 214 Cross-currency interest rate swaps 2 16 3 3 8 2 Total derivative financial liabilities/(assets) 2 18 5 3 8 2 178 Wolters Kluwer 2022 Annual Report Strategic Report | Governance | Financial Statements \u2190 \u2192 Note 30 \u2013 Financial Risk Management continued CREDIT RISK Credit risk represents the loss that would be recognized if a customer or counterparty to a \ufb01nancial instrument fails to meet its contractual obligations, and arises principally from the group\u2019s receivables from customers, unbilled revenues, and investments in debt securities. The carrying amount of non-derivative \ufb01nancial assets represents the maximum credit exposure and amounted to \u20ac2,572 million at December 31, 2022 (2021: \u20ac2,138 million). Financial instruments and excess cash at financial institutions The group is exposed to credit risks due to its use of derivatives and because of excess cash deposited at banks. It is the group\u2019s policy to conclude \ufb01nancial transactions under ISDA (International Swap Dealers Association) master agreements. Cash invested and \ufb01nancial transactions are only concluded with \ufb01nancial institutions with strong credit ratings (at least a credit rating of A-/A3). Furthermore, credit limits per counterparty are in place and are monitored periodically. At December 31, 2022, there were no material credit risk concentrations outstanding while the average weighted credit rating of counterparties was A (2021: A). The aim is to spread transactions among counterparties. No credit limits were materially exceeded during the reporting period and management does not expect any losses from non-performance by these counterparties on current outstanding contracts. Trade receivables and unbilled revenues The group has a natural exposure to credit risk in its operational business. This exposure of the group\u2019s operating companies to credit risk is inherently limited, considering the diversi\ufb01ed customer portfolio of the group, and since a substantial part of the transactions is prepaid by customers. The group\u2019s operating companies actively monitor the solvency of their key accounts and assess creditworthiness of customers before concluding a contract. The group determines the impairment on trade receivables and unbilled revenues using the lifetime expected credit loss model, whereby the historical credit losses on trade receivables (a credit event) are used as a base for the future expected credit losses. The accounting policy and the assumptions are periodically evaluated by the group using macroeconomic data and historical back- testing of the assumptions. At December 31, 2022, the loss allowance on trade receivables and unbilled revenues amounted to \u20ac85 million. The majority of this loss allowance relates to trade receivables that are overdue for more than one year, as legislation in various countries do not allow a write-off until a certain number of years is passed. The trade receivables and unbilled revenues that are not overdue for more than one year or have no speci\ufb01c impairment risk have sound creditworthiness and meet the credit rating grades as de\ufb01ned in the internal policy for assessing the impairment of \ufb01nancial assets. For each trade receivable less than one year overdue, there is a loss allowance of at least 0.5% of the outstanding balance. For accounting policies, estimates, and judgments applied in determining the loss allowance on trade receivables and unbilled revenues, refer to Note 10 \u2013 Sales Costs and Note 25 \u2013 Contract Assets and Liabilities. \u2190 \u2192 Wolters Kluwer 2022 Annual Report 179 Note 30 \u2013 Financial Risk Management continued FAIR VALUE OF FINANCIAL INSTRUMENTS The following table shows the carrying amounts and fair values of \ufb01nancial assets and liabilities (excluding lease liabilities), including their levels in the fair value hierarchy. 2022 2021 Carrying value Fair value Level 1 Level 2 Level 3 Carrying value Fair value Non-derivative financial instruments: Financial assets at fair value through profit or loss 0 0 0 0 0 Unbilled revenues * 101 101 95 95 Trade receivables * 1,088 1,088 1,008 1,008 Miscellaneous receivables * 32 32 34 34 Interest receivable * 5 5 0 0 Cash and cash equivalents * 1,346 1,346 1,001 1,001 Total non-derivative \ufb01nancial assets 2,572 2,572 2,138 2,138 Bonds 2008-2028 36 41 41 36 50 Bonds 2013-2023 700 701 701 699 727 Bonds 2014-2024 399 396 396 399 422 Bonds 2017-2027 499 459 459 498 529 Bonds 2020-2030 496 399 399 495 503 Bonds 2021-2028 498 417 417 498 493 Bonds 2022-2026 498 489 489 \u2013 \u2013 Private placement 2008-2038 142 172 172 153 206 Long- and short-term deferred and contingent acquisition payables 4 4 4 2 2 Other debt * 16 16 10 10 Borrowings and bank overdrafts * 16 16 9 9 Trade payables * 147 147 123 123 Interest payable * 39 39 34 34 Total non-derivative \ufb01nancial liabilities 3,490 3,296 2,902 172 4 2,956 3,108 Derivative financial instruments: Non-current assets 17 17 17 \u2013 \u2013 Current assets 1 1 1 \u2013 \u2013 Total derivative \ufb01nancial assets 18 18 18 0 0 Non-current liabilities \u2013 \u2013 \u2013 2 2 Total derivative \ufb01nancial liabilities 0 0 0 2 2 * Fair value approximates the carrying amount. 180 Wolters Kluwer 2022 Annual Report Strategic Report | Governance | Financial Statements \u2190 \u2192 Note 30 \u2013 Financial Risk Management continued FAIR VALUE HIERARCHY The fair values have been determined by the group based on market data and appropriate valuation methods/quotes. Valuation methods include: \u2022 Level 1: reference to quoted prices (unadjusted) in active markets for similar assets and liabilities; \u2022 Level 2: inputs other than quoted prices that are observable for the asset or liability and that may have a signi\ufb01cant impact on the fair value, either directly (i.e., as prices) or indirectly (i.e., derived from prices) based on discounted cash flow analyses, using data input of observable \ufb01nancial markets and \ufb01nancial institutions; and \u2022 Level 3: inputs that are not based on observable market data. The valuation method can be based on discounted cash flow analyses, or other models that are substantially identical. There has been no change in the fair value hierarchy compared to 2021. The Level 3 fair value movements in non-derivative \ufb01nancial liabilities are as follows: 2022 2021 Balance at January 1 2 0 Acquired through business combinations Note 8 3 2 Settlements Note 8 (1) 0 Fair value changes of contingent considerations Note 12 0 0 Foreign exchange differences 0 0 Balance at December 31 4 2 DEFERRED AND CONTINGENT ACQUISITION PAYABLES ACCOUNTING POLICIES Non-derivative \ufb01nancial liabilities at fair value through pro\ufb01t or loss comprise deferred and contingent considerations and are measured at fair value. Changes therein are recognized in pro\ufb01t or loss. The contingent considerations are based on a discounted cash flow model, which considers the present value of expected payments, using a risk-adjusted discount rate. The expected payment is determined by considering possible scenarios, the amount to be paid under each scenario, and the probability of each scenario. The estimated fair value could increase (or decrease) if assumptions change. The fair value of the deferred and contingent acquisition payables balance amounted to \u20ac4 million (2021: \u20ac2 million) and can be presented as follows: Fair value December 31, 2022 Of which: short term Of which: long term Maximum exposure (undiscounted) Fair value December 31, 2021 Total 4 2 2 4 2 \u2190 \u2192 Wolters Kluwer 2022 Annual Report 181 Note 31 \u2013 Employee Bene\ufb01ts 2022 2021 Retirement plans 34 28 Other post-employment bene\ufb01t plans 44 52 Other long-term employment bene\ufb01ts 7 10 Total 85 90 ACCOUNTING POLICIES Defined contribution plans Obligations for contributions to de\ufb01ned contribution plans are recognized as personnel expenses in pro\ufb01t or loss in the period during which services are rendered by employees. Prepaid contributions are recognized as an asset to the extent that a cash refund or reduction in future payments is available. Defined benefit plans The group\u2019s net obligation in respect of de\ufb01ned employee bene\ufb01t plans is calculated separately for each plan by estimating the amount of future bene\ufb01ts that employees have earned in the current and prior periods, discounting that amount, and deducting the fair value of any plan assets. The calculation of de\ufb01ned bene\ufb01t obligations is performed annually by a quali\ufb01ed actuary using the projected unit credit method. When the calculation results in a potential asset for the group, the recognized asset is limited to the present value of economic bene\ufb01ts available in the form of any future refunds from the plan, or reductions in future contributions to the plan. To calculate the present value of economic bene\ufb01ts, consideration is given to any applicable minimum funding requirements. All remeasurement gains and losses of the net de\ufb01ned bene\ufb01t liabilities or assets, which consist of actuarial gains and losses, return on plan assets (excluding interest), and the effect of the asset ceiling (if any, excluding interest), are recognized immediately in other comprehensive income, in the period in which they occur. The group determines the net interest expense or income on the net de\ufb01ned bene\ufb01t liability or asset for the period by applying the discount rate used to measure the de\ufb01ned bene\ufb01t obligation at the beginning of the annual period to the net de\ufb01ned bene\ufb01t liability or asset, considering any changes in the net de\ufb01ned bene\ufb01t liability or asset during the period resulting from contributions and bene\ufb01t payments. Net interest expense and other expenses related to de\ufb01ned bene\ufb01t plans, such as fund administration costs, are recognized in pro\ufb01t or loss, when incurred. When the bene\ufb01ts of a plan are changed or when a plan is curtailed, the resulting change in the de\ufb01ned bene\ufb01ts that relates to past service or the gain or loss on curtailment is recognized directly in pro\ufb01t or loss. The group recognizes gains and losses on the settlement of a de\ufb01ned bene\ufb01t plan when the settlement occurs. A curtailment occurs when an entity signi\ufb01cantly reduces the number of employees covered by a plan. Amendments to the terms of a de\ufb01ned bene\ufb01t plan will be considered plan amendments and will be fully accounted for as past service costs. If a plan amendment, curtailment, or settlement occurs, the current service cost and the net interest for the period after the remeasurement are determined using the assumptions applied for the remeasurement. Long-term service benefits The group\u2019s net obligation in respect of long-term service bene\ufb01ts, such as jubilee bene\ufb01ts, is the amount of future bene\ufb01ts that employees have earned in return for their service in the current and prior periods. The obligation is calculated using the projected unit credit method and is discounted to its present value, with the fair value of any related assets deducted. 182 Wolters Kluwer 2022 Annual Report Strategic Report | Governance | Financial Statements \u2190 \u2192 Note 31 \u2013 Employee Bene\ufb01ts continued ESTIMATES AND JUDGMENTS The net plan assets or liabilities of the de\ufb01ned employee bene\ufb01t plans and the costs related to the pension and post-retirement medical plans are based on actuarial and economic assumptions. The main economic assumptions are: \u2022 Discount rate; \u2022 Rate of pension increase; \u2022 Inflation; and \u2022 Medical trend rate. For actuarial assumptions, the group uses generally accepted mortality rates (longevity risk). The withdrawal rates and retirement rates are based on statistics provided by the relevant entities based on past experiences. RETIREMENT PLANS AND OTHER POST-EMPLOYMENT BENEFIT PLANS The provisions for retirement and other post-employment plans relate to de\ufb01ned employee bene\ufb01t plans. The group has arranged pension schemes in various countries for most of its employees in accordance with the legal requirements, customs, and local situation of the countries involved. These retirement schemes are partly managed by the group itself and partly entrusted to external entities, such as company pension funds and insurance companies. In addition, the group provides certain employees with other bene\ufb01ts upon retirement. These bene\ufb01ts include contributions towards medical health plans in the U.S., where the employer refunds part of the insurance premiums for retirees, or, in the case of uninsured schemes, bears the medical expenses while deducting the participants\u2019 contributions. CHARACTERISTICS OF MATERIAL PLANS The Netherlands United States United Kingdom Retirement plans Type of benefits Pensions Pensions Pensions Type of plan Career average Final salary Final salary Status of plan Open Frozen Frozen Service costs Yes No No Status of plan funding Funded Funded Funded Other post-employment plans Type of benefits Post-retirement medical plan Type of plan Annual insurance premium coverage Status of plan Closed Service costs Yes Status of plan funding Unfunded There are open retirement plans for new entrants in the Netherlands and Belgium. The group has closed plans in Belgium, Canada, and Australia. A closed plan means that no new members can join the pension plans. However, current participants in the plan can still accrue for future service bene\ufb01ts, and therefore the plan incurs service costs for the active participants. If a plan is frozen, the plan is closed to new entrants and existing participants do not build up future service bene\ufb01t accruals. The group has frozen plans in the U.S., the U.K., and Canada (wound up in 2022). These plans have no more annual service costs. \u2190 \u2192 Wolters Kluwer 2022 Annual Report 183 Note 31 \u2013 Employee Bene\ufb01ts continued In addition to the retirement plans and other post-employment plans, the group has other long-term employment bene\ufb01t plans in Australia, Belgium, France, Germany, India, Japan, Mexico, the Netherlands, New Zealand, Poland, and the U.S. RETIREMENT PLANS The group has its largest de\ufb01ned bene\ufb01t retirement plan in the Netherlands with de\ufb01ned bene\ufb01t obligations of \u20ac1.0 billion as of December 31, 2022, followed by the United Kingdom and the United States with de\ufb01ned bene\ufb01t obligations of \u20ac83 million and \u20ac70 million respectively. There are also retirement plans in Belgium, Canada (wound up in 2022), and Australia. All plans are funded schemes. The de\ufb01ned bene\ufb01t plans in the Netherlands, the U.S., and the U.K. are insured with the company\u2019s self-administrated pension funds, which are separate legal entities with plan assets being held independently of the group. The Netherlands In the Netherlands, the scheme is a career average salary-based scheme. Members accrue a portion of their current salary at a rate calculated to enable them to reach a pension level based on their average salary. The Dutch pension plan is subject to the supervision of the Dutch Central Bank (DNB). The scheme funding level is determined by the new Financial Assessment Framework (nFTK), whereby funding liabilities are determined based on a 120-month moving average of the 20-year forward rate. Bene\ufb01t reductions, if necessary, will be smoothed over time when recovery to full funding within eight years is not expected. Reductions will amount to one-eighth of the de\ufb01cit at the measurement date. Indexation of pension entitlements will not be allowed at funding ratios below 110%, while full indexation will be allowed only at funding ratios higher than approximately 125% (these are year- and plan-speci\ufb01c). The Dutch pension scheme has an unaudited 12-month rolling average coverage ratio of 129.4% at December 31, 2022 (2021: 120.2%). If this ratio is below 104%, a rolling eight-year recovery plan should be submitted to the DNB, on an annual basis. The pension premiums are in general based on contributions by the employer (two-thirds) and employees (one-third). The total annual pension contribution has been determined at 28.0% of base salary for 2022, of which the employer contributed the excess above the 24.0% basic premium. The pension base is capped but will be corrected for inflation annually. United States The U.S. retirement scheme has an annual statutory valuation which forms the basis for establishing the employer contribution each year (subject to ERISA and IRS minimums). The U.S. scheme was a \ufb01nal salary-based scheme, based on years of credited service, but is now a frozen plan. The pay and bene\ufb01t accruals are frozen. The plan \ufb01duciaries of the U.S. scheme are required by law to act in the interests of the fund\u2019s bene\ufb01ciaries. The \ufb01duciary duties for the scheme are allocated between committees which are staffed by senior employees of the group. The investment committee has the primary responsibility for the investment and management of plan assets. United Kingdom The U.K. retirement scheme is a \ufb01nal salary-based scheme, but it is a frozen plan. The trustees of the pension fund are required by law to act in the interests of the fund\u2019s bene\ufb01ciaries and are responsible for the investment policy regarding the assets of the fund. The board of trustees consists of an equal number of company-appointed and member-nominated directors. The level of funding is determined by statutory triennial actuarial valuations in accordance with pension legislation. Where the scheme falls below 100% funded status, the group and the scheme trustees must agree on how the de\ufb01cit is to be remedied. A pension rate increase is usually a \ufb01xed promise and is built into the funding requirement. The U.K. Pensions Regulator has signi\ufb01cant powers and sets out in codes and guidance the parameters for scheme funding. At December 31, 2022, the future de\ufb01cit contribution commitments were not larger than the surplus in the U.K. plan and therefore there was no additional balance sheet liability recognized in respect of these contributions (2021: no additional balance sheet liability). 184 Wolters Kluwer 2022 Annual Report Strategic Report | Governance | Financial Statements \u2190 \u2192 Note 31 \u2013 Employee Bene\ufb01ts continued OTHER POST-EMPLOYMENT PLANS Other post-employment plans exist in the U.S., Canada, and Italy. These plans have no plan assets and are unfunded. The main plan is the post-employment medical plan in the U.S., which was closed to new entrants in 2021. The group funds the U.S. post- employment medical plan obligations on a pay-as-you-go basis. If healthcare costs in the future increase more than anticipated, the actuarially determined liability, and as a result the related other post-employment bene\ufb01t plan expense, could increase along with future cash outflows. FUNDING REQUIREMENTS Funding requirements of the plans are based on local legislation and separate actuarial valuations for which the assumptions differ from the assumptions used under IAS 19 \u2013 Employee Bene\ufb01ts. The funding requirements are based on each pension fund\u2019s actuarial measurement framework set out in the funding policies of the individual plans. In the Netherlands, there is no formal requirement to fund de\ufb01cits of the plan by the employer. In the United States, there are minimum contribution requirements. In case the statutory funded status falls below certain thresholds, the U.S. Pension Protection Act requires the de\ufb01cit to be recti\ufb01ed with additional minimum employer contributions, spread over a seven-year period, to avoid restrictions on the ability to pay some accelerated bene\ufb01t forms, such as lump sums. These funding levels are reassessed annually. The trustees of the U.K. plan and the group \ufb01nalized the latest triennial valuation in 2020 for funding purposes in 2021. The U.K. Pensions Regulator has the power to demand more funding and support where a pension scheme has been exposed to an unacceptable level of risk. As part of the 2017 actuarial funding valuation, the parent company issued a guarantee of \u00a318 million (or \u20ac20 million at December 31, 2022), with a negative pledge issued by a Wolters Kluwer U.K. group company. Both guarantees remain effective under the new valuation. In addition, it has been agreed that there will be no planned de\ufb01cit contribution until 2024, unless the coverage ratio will fall under 97%. The funding will be reassessed based on a new triennial valuation to be \ufb01nalized in 2024. RISK MANAGEMENT OF MAIN PLANS IN THE GROUP The retirement and other post-employment plans expose the group to actuarial risks, such as longevity risks, interest rate risks, investment and market risks, and currency risks. The group has restructured employee bene\ufb01t plans in the past by moving existing and newly hired employees to de\ufb01ned contribution plans or by freezing the plans (either with no future service bene\ufb01t accruals and/or no new participants entering the plan). These redesigns reduce or cancel future bene\ufb01t accruals in the plans and consequently reduce the pace of liability growth. The group also reviews periodically its \ufb01nancing and investment policies (liability-driven investments) and its liability management (lump-sum offerings). The various plans manage their balance sheet to meet their pension promise. By using asset liability management (ALM) studies, major risk sources are identi\ufb01ed, and the impact of decisions is assessed by quantifying the potential impact on elements like future pensions, contributions, and funded ratio. These ALM studies also determine risk and return measures that consider the interests of all stakeholders. The outcome of these studies results in a risk-return trade-off, taking the duration of pension liabilities into account, which will be an integral part of the investment strategy. The investment strategy covers the allocation of asset classes and hedging strategies, and also decisions on new and alternative asset classes, passive versus active investments, leverage, and the use of derivatives. ACTUARIAL ASSUMPTIONS FOR RETIREMENT AND OTHER POST-EMPLOYMENT BENEFIT PLANS The discount rate is the yield rate at the end of the reporting period on high-quality corporate bonds that have maturity dates approximating the terms of the group\u2019s obligations and that are denominated in the same currency in which the bene\ufb01ts are expected to be paid. The calculation is performed annually by quali\ufb01ed actuaries. \u2190 \u2192 Wolters Kluwer 2022 Annual Report 185 Note 31 \u2013 Employee Bene\ufb01ts continued The following weighted-average principal actuarial assumptions were used to determine the pension expense and other post- employment plans\u2019 expense for the year under review, and de\ufb01ned bene\ufb01t obligations at the end of the reporting period: in % 2022 2021 Retirement plans Discount rate to discount the obligations at year end 3.9 1.3 Discount rate for pension expense 1.3 0.8 Expected rate of pension increases (in payment) at year end 3.1 2.2 Expected rate of pension increases (in deferral) at year end 3.1 2.2 Expected rate of inflation increase for pension expense 2.3 2.2 Other post-employment benefit plans Discount rate to discount the obligations at year end 4.6 2.1 Discount rate for pension expense 2.1 1.6 Medical cost trend rate 3.0 3.0 For most of the retirement and other post-employment schemes, the discount rate is determined or validated using a general accepted methodology in selecting corporate bonds by the group advisory actuary. For the U.S. plans, the discount rate is based on the yield curve/cash flow matching approach which uses spot yields from the standard FTSE and the timing of the cash flows of the plan. Mortality assumptions for the most important plans are based on the following retirement mortality tables: \u2022 The Netherlands: AG projection table 2022, including fund speci\ufb01c 2022 experience loading (2021: AG projection table 2020, including fund-speci\ufb01c 2019 experience loading); \u2022 U.S.: Pri-2012 Mortality Table with MP 2021 projections, being the current standard mortality table (2021: Pri-2012 Mortality Table with MP 2021 projections); and \u2022 U.K.: SAPS S3 (Year of Birth) CMI 2019 projections with 1.25% long-term improvement rate (2021: SAPS S3 (Year of Birth) \u2013 CMI 2019 projections with 1.25% long-term improvement rate). Assumptions regarding future mortality experience are set based on actuarial advice and best estimate mortality tables in the applicable countries. The current life expectancies underlying the value of the de\ufb01ned bene\ufb01t retirement obligations at December 31, 2022, are as follows: in years The Netherlands United States United Kingdom Life expectancy at age of 65 now \u2013 Male 21.8 20.6 22.2 Life expectancy at age of 65 now \u2013 Female 24.2 22.6 24.0 Life expectancy aged 65 in 20 years \u2013 Male 23.8 22.7 23.3 Life expectancy aged 65 in 20 years \u2013 Female 26.2 25.0 25.3 Given the nature of the de\ufb01ned bene\ufb01t obligations in Belgium, Italy, and Australia, with lump-sum bene\ufb01t payments at retirement date instead of annuity payments, the impact of changing life expectancy after the retirement age on the plan liabilities is limited in these countries. 186 Wolters Kluwer 2022 Annual Report Strategic Report | Governance | Financial Statements \u2190 \u2192 Note 31 \u2013 Employee Bene\ufb01ts continued SENSITIVITY RETIREMENT PLANS in millions of euros Gross service cost Defined benefit obligations 2022 Baseline 16 1,263 Change compared to baseline Decrease of assumption Increase of assumption Decrease of assumption Increase of assumption Discount rate (change by 1%) 5 (4) 226 (176) Pension increase rate (change by 0.5%) (2) 2 (85) 95 Inflation increase rate (change by 0.5%) (3) 3 (116) 136 Mortality table (change by one year) \u2013 0 (72) 49 Gross service cost represents the annual accrual of liability due to another year of service, excluding any interest or offsetting employee contributions, and therefore differs from the current service cost included in the calculation of the pension expense. SENSITIVITY OF THE DEFINED BENEFIT OBLIGATIONS (DBO) OF RETIREMENT PLANS IN THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION AND THE DEFINED BENEFIT EXPENSE OF THE RETIREMENT PLANS IN THE CONSOLIDATED STATEMENT OF PROFIT OR LOSS (P&L) The Netherlands United States United Kingdom DBO P&L DBO P&L DBO P&L Discount rate sensitivity \u2013 \u2013 Pension increase sensitivity \u2013 \u2013 \u2013 Inflation rate sensitivity \u2013 \u2013 \u2013 Mortality sensitivity \u2013 \u2013 Pension rate increases are only applicable for the plans in the Netherlands and the United Kingdom. Pension increases in the Netherlands are related to price inflation. However, these increases are conditional and depend on the funding position of the Dutch pension fund. Pension increases are therefore capped. The pension increase assumption is based on the liability ceiling approach and determined as the rate of increase such that the present value of vested bene\ufb01ts, including the assumed rate of pension increases, is not greater than the fair value of plan assets. For 2022, this resulted in a Dutch pension increase assumption of 3.11% compared to 2.11% at year-end 2021. Since the retirement plans in the United States and the United Kingdom are frozen, the service cost is zero and not sensitive for changes in discount rate, pension increases, inflation, or longevity. SENSITIVITY OF OTHER POST-EMPLOYMENT PLANS in millions of euros Gross service costs Defined benefit obligations 2022 Baseline 1 44 Change compared to baseline Discount rate (by -1%) 0 4 Discount rate (by +1%) 0 (3) \u2190 \u2192 Wolters Kluwer 2022 Annual Report 187 Note 31 \u2013 Employee Bene\ufb01ts continued The actual medical cost trend rate in the United States exceeds the applied medical cost trend rate for its main medical plan, which is capped at 3% (2021: 3%) according to the plan rules. The main U.S. medical plan is therefore hardly sensitive to medical cost increases. PLAN LIABILITIES AND PLAN ASSETS Defined benefit retirement plans Other post- employment plans 2022 2021 2022 2021 Plan liabilities Fair value at January 1 1,645 1,652 52 58 Settlements (2) (23) \u2013 (4) Employer service cost 19 19 1 1 Interest expense on de\ufb01ned bene\ufb01t obligations 24 14 1 1 Administration costs and taxes 2 2 \u2013 \u2013 Bene\ufb01ts paid by fund (50) (52) \u2013 \u2013 Benefits paid by employer \u2013 \u2013 (4) (3) Remeasurement (gains)/losses (386) 24 (8) (4) Contributions by plan participants 3 3 \u2013 \u2013 Plan amendments and curtailments 7 (11) \u2013 0 Foreign exchange differences 1 17 2 3 Fair value at December 31 1,263 1,645 44 52 Plan assets Fair value at January 1 1,641 1,621 0 0 Settlements (2) (23) \u2013 (4) Interest income on plan assets 24 14 \u2013 \u2013 Return on plan assets greater than discount rate (390) 45 0 \u2013 Bene\ufb01ts paid by fund (50) (52) (4) (3) Contributions by employer 13 14 4 7 Contributions by plan participants 3 3 \u2013 \u2013 Foreign exchange differences 1 19 \u2013 \u2013 Fair value at December 31 1,240 1,641 0 0 Funded status De\ufb01cit/(surplus) at December 31 23 4 44 52 Irrecoverable surplus 11 24 \u2013 \u2013 Net liability at December 31 34 28 44 52 188 Wolters Kluwer 2022 Annual Report Strategic Report | Governance | Financial Statements \u2190 \u2192 Note 31 \u2013 Employee Bene\ufb01ts continued Defined benefit retirement plans Other post- employment plans 2022 2021 2022 2021 Pension expenses Employer service cost 19 19 1 1 Settlement gain 0 0 \u2013 0 Past service costs \u2013 plan amendment 7 (11) \u2013 0 Past service costs \u2013 curtailment \u2013 0 \u2013 \u2013 Interest expense on irrecoverable surplus 0 0 \u2013 \u2013 Interest expense on de\ufb01ned bene\ufb01t obligations 24 14 1 1 Interest income on plan assets (24) (14) \u2013 \u2013 Administration costs and taxes 2 2 \u2013 \u2013 Total pension expense 28 10 2 2 Of which is included in: Personnel expenses Note 13 28 10 1 1 Other \ufb01nance (income)/costs Note 15 0 0 1 1 In 2022, there was an asset ceiling in the U.K. pension plan of \u20ac10 million (2021: \u20ac24 million). The surplus is not recognized as a pension asset as there is no unconditional right to a refund of this surplus from the U.K. scheme. The U.K. pension fund has no liability in respect of minimum funding requirements (2021: no liability). Plan amendments/curtailments/settlements In 2022, the Dutch pension fund decided to increase the accrual rate as of January 1, 2023, from 1.58% to 1.875%. The 2022 decision on the higher accrual rate resulted in a plan amendment loss of \u20ac 7 million on the de\ufb01ned bene\ufb01t obligations. In 2021, a decrease in the accrual rate in the Dutch pension fund resulted in a plan amendment gain of \u20ac 11 million. In May 2021, there was a retiree life insurance buyout of the U.S. other post-retirement bene\ufb01t plan. As a result, there was a small gain following the settlement of the de\ufb01ned bene\ufb01t obligations and the associated payments of \u20ac4 million each. In November 2021, the group announced the annuity buyout of the de\ufb01ned bene\ufb01t obligations in the Canadian pension fund, as of April 30, 2022. As a result, a small curtailment gain was realized from the earnings freeze upon the wind-up of the plan in 2022. The annuity buyout resulted in 2021 settlement reductions of the de\ufb01ned bene\ufb01t obligations and plan assets by \u20ac23 million. Employer contributions The group\u2019s employer contributions to be paid to the de\ufb01ned bene\ufb01t retirement plans in 2023 are estimated at \u20ac11 million (2022: actual employer contributions of \u20ac13 million). \u2190 \u2192 Wolters Kluwer 2022 Annual Report 189 Note 31 \u2013 Employee Bene\ufb01ts continued REMEASUREMENTS The pre-tax cumulative amount of remeasurement gains/losses recognized in the consolidated statement of comprehensive income is as follows: 2022 2021 Position at January 1 (138) (154) Recognized in other comprehensive income 18 16 Cumulative amount at December 31 (120) (138) REMEASUREMENT GAINS/(LOSSES) FOR THE YEAR 2022 2021 Remeasurement gains/(losses) due to experience adjustments (17) 24 Remeasurement gains/(losses) due to changes in demographic assumptions (11) (2) Remeasurement gains/(losses) due to changes in \ufb01nancial assumptions 422 (42) Remeasurement gains/(losses) on de\ufb01ned bene\ufb01t obligations 394 (20) Return on plan assets greater/(lower) than discount rate (390) 45 Change in irrecoverable surplus, other than interest and foreign exchange differences 14 (9) Recognized remeasurement gains on defined benefit plans in other comprehensive income 18 16 Experience adjustments result from changes, such as changes in plan populations, data corrections, and differences in cash flows. Changes in demographic assumptions relate to differences between the current and previous actuarial assumptions in mortality tables, rate of employee turnover, disability, and early retirement. Changes in \ufb01nancial assumptions relate to differences between the current and previous actuarial assumptions, such as discount rate, pension rate increase, price increases, and future salary and bene\ufb01t levels. The actual consolidated return on plan assets for the year ended December 31, 2022, was a loss of \u20ac366 million (2021: gain of \u20ac59 million). DURATION Duration is an indicator of the plan liabilities\u2019 sensitivity for changes in interest rates. The liability-weighted duration for the de\ufb01ned bene\ufb01t plan liabilities at year end is as follows: number of years 2022 2021 Retirement plans The Netherlands 16.9 19.0 United Kingdom 11.4 15.2 United States 9.8 12.0 Other post-employment plans United States 7.1 9.2 190 Wolters Kluwer 2022 Annual Report Strategic Report | Governance | Financial Statements \u2190 \u2192 Note 31 \u2013 Employee Bene\ufb01ts continued INVESTMENT MIX The breakdown of plan assets as of December 31 is as follows: 2022 Quoted Unquoted 2021 Quoted Unquoted Equity Equity 333 333 \u2013 494 494 \u2013 Private equity 2 \u2013 2 3 \u2013 3 Bonds Government bonds 406 406 \u2013 435 435 \u2013 Corporate bonds 194 194 \u2013 348 348 \u2013 Asset-backed securities 90 90 \u2013 108 108 \u2013 Other Insurance contracts 124 \u2013 124 67 \u2013 67 Real estate 95 39 56 108 56 52 Derivatives and other securities (32) (32) \u2013 28 28 \u2013 Cash 28 28 \u2013 50 50 \u2013 Total 1,240 1,058 182 1,641 1,519 122 At December 31, 2022, 85% of the plan assets relate to quoted \ufb01nancial instruments (2021: 93%). Plan assets do not include any direct investments in the group or \ufb01nancial instruments issued by the group, nor do they include any property or other assets used by the group. However, pension plans invest in index funds and as a result these plans may indirectly hold \ufb01nancial instruments issued by the group. PROPORTION OF PLAN ASSETS in % 2022 2021 Equity 27 30 Bonds 56 55 Other 17 15 Total 100 100 \u2190 \u2192 Wolters Kluwer 2022 Annual Report 191 Note 32 \u2013 Provisions 2022 2021 Provision for restructuring commitments 5 12 Provision for acquisition integration 0 0 Restructuring provisions 5 12 Legal provisions 13 16 Other provisions 6 6 Total 24 34 Of which short term 19 27 ACCOUNTING POLICIES A provision is recognized when the group has a present legal or constructive obligation because of a past event, it is probable that an outflow of resources in the form of economic bene\ufb01ts will be required to settle the obligation, and the amount of the obligation can be reliably estimated. Restructuring provisions The restructuring provisions include liabilities arising from changes in the organizational structure, integration of activities, expected redundancy payments, and onerous contracts. A provision for restructuring is recognized only when the general recognition criteria are met. Redundancy payments are recognized as an expense when the group is demonstrably committed, without realistic possibility of withdrawal, to a formal detailed plan to either terminate employment before the normal retirement date, or to provide termination bene\ufb01ts as a result of an offer made to encourage voluntary redundancy. Acquisition integration provisions The acquisition integration provisions relate to non-recurring expenses to be incurred for the integration of activities acquired through business combinations, and mainly consist of expected redundancy payments, IT migration costs, and onerous contracts. Legal provisions For legal and judicial proceedings against the group, a legal provision is recognized only if both an adverse outcome is probable and the amount of the loss can be reliably estimated. If one of these conditions is not met, the proceeding or claim is disclosed as a contingent liability if material. Other provisions Other provisions primarily include provisions for -dilapidation commitments on real estate leases. 192 Wolters Kluwer 2022 Annual Report Strategic Report | Governance | Financial Statements \u2190 \u2192 Note 32 \u2013 Provisions continued ESTIMATES AND JUDGMENTS Legal provisions The group is involved in legal and judicial proceedings in the ordinary course of business. Provisions and contingencies related to these matters are periodically assessed based on the latest information available, usually after consultation with and the assistance of lawyers and other specialists. The prediction of the outcome and the assessment of a possible loss by management are based on management\u2019s judgments and estimates. The actual outcome of a proceeding or claim may differ from the estimated liability. Refer to Note 37 \u2013 Commitments, Contingent Assets, and Contingent Liabilities. MOVEMENTS IN PROVISIONS Restructuring provisions Legal provisions Other provisions 2022 2021 Long-term provisions at January 1 1 2 4 7 4 Add: short-term provisions 11 14 2 27 48 Total provisions at January 1 12 16 6 34 52 Movements Additions for restructuring of stranded costs Note 8 2 \u2013 \u2013 2 2 Additions for acquisition integration Note 12 3 \u2013 \u2013 3 4 Other additions 4 4 1 9 12 Total additions 9 4 1 14 18 Appropriation of provisions (14) (1) 0 (15) (36) Release of provisions (2) (6) (1) (9) (3) Transfer to liabilities classified as held for sale Note 9 \u2013 \u2013 \u2013 0 (1) Exchange differences 0 0 0 0 4 Total movements (7) (3) 0 (10) (18) Total provisions at December 31 5 13 6 24 34 Less: short-term provisions (4) (13) (2) (19) (27) Long-term provisions at December 31 1 0 4 5 7 Other additions to restructuring provisions of \u20ac4 million mainly relate to restructuring programs in Legal & Regulatory. \u2190 \u2192 Wolters Kluwer 2022 Annual Report 193 Note 33 \u2013 Capital and Reserves SHARE CAPITAL AND NUMBER OF SHARES The authorized share capital amounts to \u20ac143.04 million, consisting of \u20ac71.52 million in ordinary shares (596 million of ordinary shares with a nominal value of \u20ac0.12 per ordinary share) and \u20ac71.52 million in preference shares (596 million of preference shares with a nominal value of \u20ac0.12 per preference share). ORDINARY SHARES The issued share capital consists of ordinary shares. On August 31, 2022, the company completed the reduction in ordinary share capital approved by shareholders at the Annual General Meeting of Shareholders held on April 21, 2022. In 2022, the company canceled 5,000,000 ordinary shares to the amount of \u20ac451 million previously held as treasury shares (2021: 5,000,000 ordinary shares were canceled to the amount of \u20ac336 million). Consequently, in 2022, the total number of issued ordinary shares is reduced to 257,516,153 with a nominal value of \u20ac31 million (2021: 262,516,153 shares with a nominal value of \u20ac32 million). Incremental costs directly attributable to the issuance of ordinary shares are recognized as a deduction from equity, net of any tax effects. PREFERENCE SHARES Preference share capital is classi\ufb01ed as equity if it is non-redeemable or redeemable only at the company\u2019s option, and any dividends are discretionary. There are no preference shares issued. REPURCHASE AND REISSUE OF SHARE CAPITAL (TREASURY SHARES) When share capital recognized as equity is repurchased (treasury shares), the amount of the consideration paid, including directly attributable costs, is recognized as a change in equity. For a reconciliation of the weighted-average number of shares and earnings per share, see Note 7 \u2013 Earnings per Share. NUMBER OF SHARES Number of ordinary shares Minus: number of treasury shares Total number of ordinary shares outstanding in thousands of shares, unless otherwise stated 2022 2021 2022 2021 2022 2021 At January 1 262,516 267,516 (4,324) (5,072) 258,192 262,444 Cancelation of shares (5,000) (5,000) 5,000 5,000 0 0 Repurchased shares \u2013 \u2013 (10,128) (4,957) (10,128) (4,957) Long-Term Incentive Plan \u2013 \u2013 650 705 650 705 At December 31 257,516 262,516 (8,802) (4,324) 248,714 258,192 Issued share capital at \u20ac0.12 (\u20ac\u2019000) 30,902 31,502 Proposed dividend per share (\u20ac) 1.81 1.57 Proposed dividend distribution (\u20ac\u2019000) 450,172 405,362 194 Wolters Kluwer 2022 Annual Report Strategic Report | Governance | Financial Statements \u2190 \u2192 Note 33 \u2013 Capital and Reserves continued TREASURY SHARES Shares repurchased by the company are added to and held as treasury shares. Treasury shares are measured at cost, representing the market price on the acquisition date. The treasury share reserve is not available for distribution. Treasury shares are deducted from retained earnings. The group offsets the dilution of its performance share issuance annually via share repurchases. A part of the treasury shares is retained and used to meet future obligations under share-based incentive schemes. In 2022, the group executed a share buyback of \u20ac1,000 million (2021: \u20ac410 million), originally consisting of a share buyback of \u20ac600 million and subsequently expanded to \u20ac1,000 million. The group repurchased 10.1 million (2021: 5.0 million) of ordinary shares under this program at an average stock price of \u20ac98.75 (2021: \u20ac82.62). In 2022, the group used 0.7 million shares held in treasury for the vesting of the LTIP grant 2019-21. In November 2022, the company signed a mandate to execute up to \u20ac100 million in share buybacks for the period starting January 2, 2023, up to and including February 20, 2023. LEGAL RESERVE PARTICIPATIONS Legal reserve participations contain appropriations of pro\ufb01ts of group companies, which are allocated to a legal reserve based on statutory and/or legal requirements. The legal reserve is not available for distribution. HEDGE RESERVE Hedge reserve relates to the effective portion of the changes in fair value of the hedging instruments used for cash flow hedging and net investment hedging purposes. The hedge reserve is a legal reserve and not available for distribution. TRANSLATION RESERVE Translation reserve contains foreign exchange differences arising from the translation of the net investments in foreign operations. When a foreign operation is sold, accumulated exchange differences that were recognized in equity prior to the sale are reclassi\ufb01ed from equity to pro\ufb01t or loss as part of the gain or loss on divestment. The translation reserve is a legal reserve and is not available for distribution. DIVIDENDS Dividends are recognized as a liability upon declaration. Pursuant to Article 29 of the Articles of Association, and with the approval of the Supervisory Board, a proposal will be submitted to the Annual General Meeting of Shareholders to make a total distribution of \u20ac1.81 per share over \ufb01nancial year 2022 (dividend over \ufb01nancial year 2021: \u20ac1.57 per share). The group applies a semi-annual dividend policy. On February 21, 2022, the Supervisory Board and the Executive Board resolved to distribute an interim dividend of \u20ac0.63 per share, equal to 40% of prior year\u2019s dividend (2021 interim dividend: 40% of prior year\u2019s dividend). The interim dividend of \u20ac160 million was paid on September 22, 2022. Subject to the approval of the Annual General Meeting of Shareholders, a \ufb01nal dividend of \u20ac290 million, or \u20ac1. 18 per ordinary share, will be paid in cash on June 6, 2023. Refer also to Note 50 \u2013 Profit Appropriation. Dividend distributions over financial year 2022 2021 2020 Originally proposed 450 405 357 Actual payments: Interim dividend (paid in the financial year) 160 140 124 Final dividend (paid in the subsequent financial year) 264 232 Total dividend distribution 404 356 \u2190 \u2192 Wolters Kluwer 2022 Annual Report 195 Note 33 \u2013 Capital and Reserves continued In 2022, dividends paid to the shareholders of the company amounted to \u20ac424 million, or \u20ac1 .66 per ordinary share, consisting of \u20ac160 million interim dividend 2022, or \u20ac0.63 per ordinary share, and \u20ac264 million \ufb01nal dividend 2021, or \u20ac1.03 per ordinary share. In 2021, dividends paid to the shareholders of the company amounted to \u20ac372 million, or \u20ac1.43 per ordinary share, consisting of \u20ac140 million interim dividend 2021, or \u20ac0.54 per ordinary share, and \u20ac232 million \ufb01nal dividend 2020, or \u20ac0.89 per ordinary share. FREE DISTRIBUTABLE RESERVES The share premium reserve, retained earnings, and undistributed pro\ufb01t for the year are available for dividend distribution. OPTION PREFERENCE SHARES The company has granted an option to purchase preference shares to the Wolters Kluwer Preference Shares Foundation (Stichting Preferente Aandelen Wolters Kluwer). The dividend on these shares would equal a normal market rate of return based on a weighted- average interest rate applied by the European Central Bank. Therefore, the fair value of the option is deemed to be zero. SHAREHOLDER\u2019S EQUITY MOVEMENT SCHEDULE For the equity movement schedule, refer to Note 47 \u2013 Shareholders\u2019 Equity. Note 34 \u2013 Share-based Payments ACCOUNTING POLICIES The Long-Term Incentive Plan (LTIP) quali\ufb01es as an equity-settled share-based payments transaction. Executive Board members and senior management are awarded shares under the LTIP with performance conditions based on Diluted Earnings per Share (EPS) at constant currencies and Total Shareholder Return (TSR) for the LTIP awards 2019-21 and 2020-22. For the LTIP 2021-23 and 2022-24 awards, the diluted EPS performance measure has been replaced by diluted adjusted EPS and a new performance measure of Return on Invested Capital (ROIC) has been introduced. The fair value of shares awarded is recognized as an expense with a corresponding increase in equity. The fair value is measured at the grant date and recognized over the period during which the employees become unconditionally entitled to the shares. The amount recognized as an expense is adjusted for actual forfeitures due to participants\u2019 resignations before the vesting date. TSR-condition The fair value of the shares based on the TSR performance condition, a market condition under IFRS 2 \u2013 Share-based Payment, is measured using a Monte Carlo simulation model considering the terms and conditions upon which the shares were awarded. Diluted (adjusted) EPS-condition and ROIC-condition The fair values of the shares based on the non-market performance conditions of diluted (adjusted) EPS and ROIC are equal to the opening share price of the Wolters Kluwer shares of the year of the grant, adjusted by the present value of the future dividend payments during the three-year performance period. The amount recognized as an expense in each year is adjusted to reflect the number of share awards for which the related service and non-market performance conditions are expected to be met, such that the amount ultimately recognized as an expense is based on the number of awards that meet the related service and non-market conditions at the vesting date. LONG-TERM INCENTIVE PLAN General For the Executive Board, the LTIP 2019-21 and 2020-22 awards depend partially on TSR performance (50% of the value of the conditionally awarded rights on shares) and partially on EPS performance (50% of the value of the conditionally awarded rights on shares). For senior management, the LTIP 2019-21 and 2020-22 awards depend partially on TSR performance (50% of the conditionally awarded rights on shares) and partially on EPS performance (50% of the conditionally awarded rights on shares). 196 Wolters Kluwer 2022 Annual Report Strategic Report | Governance | Financial Statements \u2190 \u2192 Note 34 \u2013 Share-based Payments continued The LTIP 2021-23 and 2022-24 awards are based on TSR performance (weighting of 50%), diluted adjusted EPS performance (weighting of 30%), and ROIC performance (weighting of 20%). The TSR-related LTIP awards for the Executive Board and senior management are based on the same payout schedules. In 2022, \u20ac28 million has been recognized within personnel expenses in pro\ufb01t or loss (2021: \u20ac24 million) related to the total cost of the LTIP grants for 2020-22, and 2021-23, and 2022-24. Refer to Note 13 \u2013 Personnel Expenses. Conditionally awarded TSR-related LTIP shares For the conditional TSR awards up to and including 2022, the payout of shares after three years fully depends on the group\u2019s TSR relative to a pre-de\ufb01ned group of 15 peer companies. Vesting of these conditional grants is subject to the condition that the participant stays with the group until the plan\u2019s maturity. The performance period of the LTIP is three years, at the beginning of which a base number of shares (norm payout) is conditionally awarded to each bene\ufb01ciary. The expense of TSR-related LTIP is recognized ratably in pro\ufb01t or loss over the performance period. Actual awards at the end of the performance period range from 0% to 150% of the norm payout. There are no payouts for the Executive Board and senior management if the group ends below the eighth position in the TSR ranking, while other payouts will be made as follows: 150% for \ufb01rst or second position, 125% for third or fourth position, 100% for \ufb01fth or sixth position, and 75% for seventh or eighth position. Conditionally awarded diluted (adjusted) EPS- and ROIC-related LTIP shares The amount recognized as an expense in a year is adjusted to reflect the number of share awards for which the related service and non-market performance conditions are expected to be met, such that the amount ultimately recognized as an expense is based on the number of awards that meet the related service and non-market conditions at the vesting date. For the diluted (adjusted) EPS- and ROIC-related shares, there are no payouts if the performance over three years is less than 50% of the targets. In case of overachievement of the targets, the Executive Board and senior management can earn up to a maximum of 150% of the conditionally awarded shares. KEY ASSUMPTIONS TO THE TSR SHARES The fair value of TSR shares is calculated at the grant date using a Monte Carlo simulation model. For the TSR shares granted in the LTIP 2022-24, the fair value is estimated to be \u20ac71.71 as of January 1, 2022. The inputs to the valuation were the Wolters Kluwer share price of \u20ac103.60 on the grant date (January 1, 2022) and an expected volatility of 21.2% based on historical daily prices over the three years prior to January 1, 2022. Dividends are assumed to increase annually (from the 2021 dividend) based on historical trends and management plans. The model assumes a contractual life of three years and uses the risk-free rate on Dutch three-year government bonds. Fair value summary of conditionally awarded LTIP shares The fair value of each conditionally awarded share under the running LTIP grants for the Executive Board and senior management of the group, as determined by an external consulting \ufb01rm, is as follows: in euros Fair value of Adjusted EPS and ROIC shares at grant date Fair value EPS shares at grant date Fair value TSR shares at grant date LTIP 2022-24 97.82 \u2013 71.71 LTIP 2021-23 64.06 \u2013 47.03 LTIP 2020-22 \u2013 60.68 40.85 The fair values of the conditionally awarded shares under the LTIP 2022-24 grants increased compared to the prior year plan, mainly because of the higher share price of Wolters Kluwer at January 1, 2022, compared to January 1, 2021. \u2190 \u2192 Wolters Kluwer 2022 Annual Report 197 Note 34 \u2013 Share-based Payments continued LTIP 2019-21 The LTIP 2019-21 vested on December 31, 2021. On TSR, Wolters Kluwer ranked fourth relative to the peer group of 15 companies, resulting in a payout of 125% of the conditional base number of shares awarded to the Executive Board and senior management. The EPS-related shares resulted in a payout of 150%. A total of 649,774 shares were released on February 24, 2022. At that date, the volume-weighted-average share price of Wolters Kluwer N.V. was \u20ac88.0883. LTIP 2019-21: NUMBER OF SHARES VESTED AND THE CASH EQUIVALENT THEREOF number of shares, unless otherwise stated Outstanding at December 31, 2021 Increase in conditional number of TSR shares (25%) Increase in conditional number of EPS shares (50%) Payout/ vested shares February 24, 2022 Cash value vested shares * Executive Board 120,792 17,466 25,464 163,722 14,422 Senior management 353,908 43,956 88,188 486,052 42,815 Total 474,700 61,422 113,652 649,774 57,237 * Cash value in thousands of euros, calculated as the number of shares vested multiplied by the volume-weighted-average price on February 24, 2022. LTIP 2020-22 The LTIP 2020-22 vested on December 31, 2022. On TSR, Wolters Kluwer ranked third relative to its peer group of 15 companies, resulting in a payout of 125% of the conditional base number of shares awarded to the Executive Board and senior management. The EPS-related shares resulted in a payout of 150%. The shares will be released on February 23, 2023. The volume-weighted-average price for the shares released will be based on the average exchange prices traded on the Euronext Amsterdam N.V. on February 23, 2023, the \ufb01rst day following the publication of the company\u2019s annual results. NUMBER OF PERFORMANCE SHARES OUTSTANDING LTIP 2020-22 number of shares Total EPS-condition TSR-condition Conditionally awarded grant 2020 448,223 213,365 234,858 Forfeited in previous years (48,613) (24,308) (24,305) Shares outstanding at January 1, 2022 399,610 189,057 210,553 Forfeited during the year (8,582) (4,286) (4,296) Effect of 125% vesting based on TSR-ranking 51,584 \u2013 51,584 Effect of 150% vesting based on EPS-ranking 92,451 92,451 \u2013 Vested at December 31, 2022 535,063 277,222 257,841 198 Wolters Kluwer 2022 Annual Report Strategic Report | Governance | Financial Statements \u2190 \u2192 Note 34 \u2013 Share-based Payments continued LTIP 2021-23 base number of shares at 100% payout Total Adjusted EPS- condition ROIC-condition TSR-condition Conditionally awarded grant 2021 456,649 132,695 88,463 235,491 Forfeited in previous years (26,245) (7,874) (5,249) (13,122) Shares outstanding at January 1, 2022 430,404 124,821 83,214 222,369 Forfeited during the year (11,664) (3,485) (2,327) (5,852) Shares outstanding at December 31, 2022 418,740 121,336 80,887 216,517 LTIP 2022-24 base number of shares at 100% payout Total Adjusted EPS- condition ROIC-condition TSR-condition Conditionally awarded grant 2022 303,253 88,324 58,886 156,043 Forfeited during the year (562) (169) (112) (281) Shares outstanding at December 31, 2022 302,691 88,155 58,774 155,762 Overview of outstanding performance shares: LTIP 2021-23 and LTIP 2022-24 base numbers of shares at 100% payout LTIP 2021-23 LTIP 2022-24 Total Conditionally awarded grant 2021 456,649 \u2013 456,649 Forfeited in previous years (26,245) \u2013 (26,245) Shares outstanding at January 1, 2022 430,404 0 430,404 Conditionally awarded grant 2022 303,253 303,253 Forfeited during the year (11,664) (562) (12,226) Shares outstanding at December 31, 2022 418,740 302,691 721,431 Note 35 \u2013 Related Party Transactions The company has related party relationships with its subsidiaries, equity-accounted investees, pension funds, and members of the Supervisory Board and the Executive Board. Related party transactions are conducted at arm\u2019s length with terms comparable to transactions with third parties. The group has no signi\ufb01cant transactions with, receivables from, or payables to its equity-accounted investees. For transactions with key management, refer to Note 38 \u2013 Remuneration of the Executive Board and the Supervisory Board and the Remuneration Report. Wolters Kluwer N.V. has \ufb01led a list of subsidiaries and af\ufb01liated companies at the of\ufb01ces of the Chamber of Commerce of The Hague, the Netherlands. \u2190 \u2192 Wolters Kluwer 2022 Annual Report 199 Note 36 \u2013 Audit Fees With reference to Section 2:382a (1) and (2) of the Dutch Civil Code, the following fees for the \ufb01nancial year have been charged by Deloitte Accountants B.V. to the group . Deloitte is not involved in most of the statutory audits of entities that are outside the scope of the group audit. AUDIT FEES 2022 Deloitte Accountants B.V. Other Deloitte member firms and affiliates Total Deloitte Statutory audit of annual accounts 1.0 2.0 3.0 Other assurance services 0.1 0.1 0.2 Tax advisory services \u2013 0.0 0.0 Other non-audit services \u2013 0.0 0.0 Total 1.1 2.1 3.2 AUDIT FEES 2021 Deloitte Accountants B.V. Other Deloitte member firms and affiliates Total Deloitte Statutory audit of annual accounts 1.0 2.0 3.0 Other assurance services 0.1 0.0 0.1 Tax advisory services \u2013 0.0 0.0 Other non-audit services 0.0 0.2 0.2 Total 1.1 2.2 3.3 The audit fees for 2022 and 2021 include \ufb01nal invoicing with respect to the statutory audits of 2021 and 2020, respectively. 200 Wolters Kluwer 2022 Annual Report Strategic Report | Governance | Financial Statements \u2190 \u2192 Note 37 \u2013 Commitments, Contingent Assets, and Contingent Liabilities GUARANTEES The group has the following outstanding guarantees at December 31: 2022 2021 Parental performance guarantees to third parties 5 12 Guarantee to the trustees of the U.K. retirement plan Note 31 20 21 Real estate and other guarantees 11 12 Drawn bank credit facilities 1 1 Total 37 46 At December 31, 2022, the total guarantees issued for bank credit facilities on behalf of several subsidiaries amounted to \u20ac114 million (2021: \u20ac113 million), of which \u20ac113 million was not utilized (2021: \u20ac112 million). LEGAL AND JUDICIAL PROCEEDINGS The group is involved in legal and judicial proceedings in the ordinary course of business. Provisions and contingencies relating to these matters are periodically assessed based upon the latest information available, usually with the assistance of lawyers and other specialists. While it is not practically possible to estimate the success rate of proceedings or claims against the group, the group has a policy to insure the group entities against such claims. The group did not have material contingent liabilities arising from legal and judicial proceedings at December 31, 2022, and December 31, 2021. OTHER COMMITMENTS For any commitments with respect to the group\u2019s share buybacks, refer to Note 33 \u2013 Capital and Reserves. \u2190 \u2192 Wolters Kluwer 2022 Annual Report 201 Note 38 \u2013 Remuneration of the Executive Board and the Supervisory Board REMUNERATION EXECUTIVE BOARD The table below provides the total compensation of the Executive Board recognized in the consolidated statement of pro\ufb01t or loss: in thousands of euros 2022 2021 Fixed compensation: Salary 2,260 2,042 Social security 123 44 Defined contribution plan 176 157 Other benefits * 385 775 Total fixed compensation 2,944 3,018 Variable compensation: STIP 2,818 2,853 LTIP ** 6,405 6,345 Total variable compensation 9,223 9,198 Sub-total fixed and variable compensation 12,167 12,216 Tax-related costs *** (525) 565 Total remuneration Executive Board 11,642 12,781 Salary, social security, other bene\ufb01ts, STIP, and tax-related costs are short-term employee bene\ufb01ts, de\ufb01ned contribution plan is a post-employment bene\ufb01t, and LTIP is a share-based payment scheme. * Executive Board members are eligible for bene\ufb01ts such as health insurance, life insurance, a car, and to participate in whatever all-employee plans may be offered at any given point. ** LTIP share-based payments are based on IFRS accounting policies and therefore do not reflect the actual payout or value of performance shares released upon vesting. *** Tax-related costs are costs to the company pertaining to the Executive Board members ex-patriate assignments. The 2022 tax-related costs decreased compared to 2021 mainly due to the cumulative tax impact of spending less time in the Netherlands from 2020 through 2022, lowering Ms. McKinstry\u2019s effective global tax rate. SHARES OWNED BY EXECUTIVE BOARD MEMBERS At December 31, 2022, the Executive Board jointly held 412,167 shares of the company (2021: 412,167 shares). REMUNERATION SUPERVISORY BOARD The total remuneration of the Supervisory Board members was \u20ac766 thousand in 2022 (2021: \u20ac678 thousand). SHARES OWNED BY SUPERVISORY BOARD MEMBERS At December 31, 2022, Mrs. A.E. Ziegler held 1,894 American Depositary Receipts of shares of the company (2021: 1,894 ADRs). For further details, refer to the Remuneration Report. 202 Wolters Kluwer 2022 Annual Report Strategic Report | Governance | Financial Statements \u2190 \u2192 Note 39 \u2013 Overview of Signi\ufb01cant Subsidiaries Below is a list of signi\ufb01cant subsidiaries at December 31, 2022, in alphabetical order (legal entity name and the unit of the organizational structure it belongs to). The group has a 100% interest in all these subsidiaries. AUSTRALIA \u2022 Wolters Kluwer Australia Pty Limited (Tax & Accounting) BELGIUM \u2022 Wolters Kluwer Belgium NV (Tax & Accounting and Legal & Regulatory) \u2022 Wolters Kluwer Financial Services Belgium NV (Governance, Risk & Compliance) CANADA \u2022 Wolters Kluwer Canada Limited (Tax & Accounting) FRANCE \u2022 Enablon S.A.S. (Legal & Regulatory) GERMANY \u2022 Akademische Arbeitsgemeinschaft Verlagsgesellschaft GmbH (Tax & Accounting) \u2022 Wolters Kluwer Deutschland GmbH (Legal & Regulatory) \u2022 Wolters Kluwer Software und Service GmbH (Tax & Accounting) IRELAND \u2022 Wolters Kluwer Finance Ireland DAC (Corporate Of\ufb01ce) \u2022 Wolters Kluwer Ireland Holding Limited (Corporate Of\ufb01ce) ITALY \u2022 Tagetik Software S.r.l. (Tax & Accounting) \u2022 Wolters Kluwer Italia S.r.l. (Tax & Accounting and Legal & Regulatory) LUXEMBOURG \u2022 Wolters Kluwer Financial Services Luxembourg S.A. (Governance, Risk & Compliance) POLAND \u2022 Wolters Kluwer Polska SP. z o.o. (Legal & Regulatory) SPAIN \u2022 Wolters Kluwer Tax and Accounting Espa\u00f1a, S.L. (Tax & Accounting) THE NETHERLANDS \u2022 eVision Industry Software B.V. (Legal & Regulatory) \u2022 Wolters Kluwer Global Business Services B.V. (Global Business Services) \u2022 Wolters Kluwer Holding Nederland B.V. (Legal & Regulatory) \u2022 Wolters Kluwer International Holding B.V. (Corporate Of\ufb01ce) \u2022 Wolters Kluwer Nederland B.V. (Legal & Regulatory) \u2022 Wolters Kluwer Technology B.V. (Digital eXperience Group) \u2022 Wolters Kluwer USA Holding B.V. (Corporate Of\ufb01ce) UNITED KINGDOM \u2022 Wolters Kluwer Holdings (UK) PLC (Tax & Accounting) \u2022 Wolters Kluwer (UK) Limited (Tax & Accounting) UNITED STATES \u2022 CCH Incorporated (Tax & Accounting and Legal & Regulatory) \u2022 C T Corporation System (Governance, Risk & Compliance) \u2022 Emmi Solutions, LLC (Health) \u2022 eOriginal, Inc. (Governance, Risk & Compliance) \u2022 Health Language, Inc. (Health) \u2022 International Document Services, Inc. (Governance, Risk & Compliance) \u2022 National Registered Agents, Inc. (Governance, Risk & Compliance) \u2022 Ovid Technologies, Inc. (Health) \u2022 Paperless Transaction Management, Inc. (Governance, Risk & Compliance) \u2022 Universal Tax Systems, Inc. (Tax & Accounting) \u2022 UpToDate, Inc. (Health) \u2022 Wolters Kluwer DXG U.S., Inc. (Digital eXperience Group) \u2022 Wolters Kluwer ELM Solutions, Inc. (Governance, Risk & Compliance) \u2022 Wolters Kluwer Financial Services, Inc. (Tax & Accounting and Governance, Risk & Compliance) \u2022 Wolters Kluwer Health, Inc. (Health) \u2022 Wolters Kluwer North America, Inc. (Corporate Of\ufb01ce) \u2022 Wolters Kluwer R&D U.S. LP (Digital eXperience Group) \u2022 Wolters Kluwer United States Inc. (Global Business Services and Corporate Of\ufb01ce) \u2022 Wolters Kluwer U.S. Corporation (Corporate Of\ufb01ce) \u2190 \u2192 Wolters Kluwer 2022 Annual Report 203 Note 39 \u2013 Overview of Signi\ufb01cant Subsidiaries continued A subsidiary is categorized as signi\ufb01cant depending on its revenues, operating pro\ufb01t, net pro\ufb01t, and/or total assets. In addition to these signi\ufb01cant subsidiaries, the group has other consolidated entities in the countries listed, and also in the following countries: Austria, Brazil, China, the Czech Republic, Denmark, Hong Kong, Hungary, India, Indonesia, Japan, Malaysia, Mexico, New Zealand, Norway, the Philippines, Portugal, Qatar, Romania, Russia, Singapore, Slovakia, South Africa, South Korea, Sweden, Switzerland, and Ukraine. The group also has branches in Finland, Saudi Arabia, Taiwan, Thailand, and the United Arab Emirates. Apart from certain cash restrictions (refer to Note 27 \u2013 Cash and Cash Equivalents), there are no signi\ufb01cant restrictions on the group\u2019s ability to access or use assets, or to settle liabilities. There are no interests in consolidated structured entities. Refer to Note 8 \u2013 Acquisitions and Divestments for the consequences of losing control of subsidiaries during 2022 and 2021. The \ufb01nancial statements of the parent and the subsidiaries used in the preparation of the consolidated \ufb01nancial statements have the same reporting date, except for the group's Indian subsidiaries that have a March \ufb01nancial year end. Note 40 \u2013 Events after the Reporting Period Subsequent events were evaluated up to February 21, 2023, which is the date the consolidated \ufb01nancial statements were authorized for issuance by the Executive Board and the Supervisory Board. On January 9, 2023, Wolters Kluwer Health completed the acquisition of 100% of the shares of NurseTim, Inc. (NurseTim), a U.S.- based provider of nursing education solutions for \u20ac24 million, which is subject to a working capital settlement. There is no other deferred and contingent consideration. NurseTim will become part of Wolters Kluwer\u2019s Health Learning, Research & Practice business, which will create a comprehensive suite of solutions that generates greater value for customers. NurseTim is based in Minneapolis, Minnesota, U.S., and has 48 employees. The group expects the investment to deliver a return on invested capital (ROIC) above its weighted-average cost of capital (8%) within three to \ufb01ve years and expects the transaction to have an immaterial impact on adjusted earnings. The group did not yet complete the purchase price allocation calculation due to the recent timing of the acquisition.",
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"fact-398": {
"value": "GENERAL
Reporting entity
Wolters Kluwer N.V. (the company) with its subsidiaries (together referred to as \u2018the group\u2019 and individually as \u2018group entities\u2019)
is a global leader in professional information, software solutions, and services for the health, tax and accounting, \ufb01nance, risk
and compliance, and legal and regulatory sectors. The group helps its customers make critical decisions every day by providing expert
solutions that combine deep domain knowledge with technology and services.
The group maintains operations across the U.S. & Canada, Europe, Asia Paci\ufb01c, and other regions (referred to as \u2018Rest of World\u2019).
The company\u2019s ordinary shares are quoted on Euronext Amsterdam (WKL) and are included in the AEX and Euronext 100 indices,
amongst others.
The registered of\ufb01ce of Wolters Kluwer N.V. is located at Zuidpoolsingel 2, Alphen aan den Rijn, the Netherlands, with its statutory
seat in Amsterdam and a registration with the Dutch Commercial Register under number 33.202.517.
Statement of compliance
The consolidated \ufb01nancial statements have been prepared in accordance with International Financial Reporting Standards (IFRS)
and its interpretations, prevailing as of December 31, 2022, as endorsed for use in the European Union by the European Commission.
These \ufb01nancial statements were authorized for issuance by the Executive Board and the Supervisory Board on February 21, 2023.
The adoption of the \ufb01nancial statements and the adoption of the dividend are reserved for the shareholders in the Annual General
Meeting of Shareholders on May 10, 2023.
Consolidated financial statements
The consolidated \ufb01nancial statements of the company at and for the year ended December 31, 2022, comprise the group and
the group\u2019s interest in associates. The signi\ufb01cant accounting policies applied in the preparation of these consolidated \ufb01nancial
statements are set out in Note 2 \u2013 Significant Accounting Policies and the relevant respective notes to the consolidated \ufb01nancial
statements.
A list of subsidiaries has been \ufb01led with the Chamber of Commerce in The Hague, the Netherlands, and is available from the company
upon request. An overview of the signi\ufb01cant subsidiaries is included in Note 39 \u2013 Overview of Significant Subsidiaries.
",
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"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
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"value": "Wolters Kluwer N.V.",
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"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-400": {
"value": "global leader in professional information, software solutions, and services for the health, tax and accounting, \ufb01nance, risk and compliance, and legal and regulatory sectors. The group helps its customers make critical decisions every day by providing expert solutions that combine deep domain knowledge with technology and services. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfNatureOfEntitysOperationsAndPrincipalActivities",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-401": {
"value": "U.S. & Canada, Europe, Asia Paci\ufb01c, and other regions (referred to as \u2018Rest of World\u2019)",
"dimensions": {
"concept": "ifrs-full:PrincipalPlaceOfBusiness",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-402": {
"value": "Wolters Kluwer N.V.",
"dimensions": {
"concept": "ifrs-full:NameOfUltimateParentOfGroup",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-403": {
"value": "Zuidpoolsingel 2, Alphen aan den Rijn, the Netherlands",
"dimensions": {
"concept": "ifrs-full:AddressOfRegisteredOfficeOfEntity",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-404": {
"value": "Statement of compliance The consolidated \ufb01nancial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and its interpretations, prevailing as of December 31, 2022, as endorsed for use in the European Union by the European Commission. These \ufb01nancial statements were authorized for issuance by the Executive Board and the Supervisory Board on February 21, 2023. The adoption of the \ufb01nancial statements and the adoption of the dividend are reserved for the shareholders in the Annual General Meeting of Shareholders on May 10, 2023. ",
"dimensions": {
"concept": "ifrs-full:StatementOfIFRSCompliance",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-405": {
"value": "the Netherlands",
"dimensions": {
"concept": "ifrs-full:DomicileOfEntity",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-406": {
"value": "BASIS OF PREPARATION Basis of measurement The consolidated \ufb01nancial statements have been prepared under the historical cost basis except for the following material items in the consolidated statement of \ufb01nancial position: \u2022 Financial assets and \ufb01nancial liabilities (including derivative \ufb01nancial instruments) measured at fair value; \u2022 Assets and liabilities held for sale; \u2022 Contingent considerations; \u2022 Share-based payments; and \u2022 Net de\ufb01ned employee bene\ufb01t assets/liabilities. Presentation currency The consolidated \ufb01nancial statements are presented in euros and rounded to the nearest million, unless otherwise indicated. Use of estimates and judgments The preparation of \ufb01nancial statements in conformity with IFRS requires management to make estimates, judgments, and assumptions that affect the application of policies and reported amounts of assets and liabilities, the disclosed amounts of contingent assets and liabilities, and the reported amounts of income and expense. Refer to Note 3 \u2013 Accounting Estimates and Judgments. Going concern The Executive Board has assessed the going concern assumption as part of the preparation of the consolidated \ufb01nancial statements. The Executive Board believes that no events or conditions give rise to doubt about the ability of the group to continue in operation for at least 12 months from the end of the reporting period. This conclusion is drawn based on knowledge of the group, the estimated economic outlook, and related identi\ufb01ed risks and uncertainties. Furthermore, the conclusion is based on a review of the three-year strategic plan and next year\u2019s budget, including expected developments in liquidity and capital, which includes the evaluation of current credit facilities available, contractual and expected maturities of \ufb01nancial liabilities, and covenants. Consequently, it was concluded that it is reasonable to apply the going concern assumption for the preparation of the consolidated \ufb01nancial statements. Effect of new accounting standards Except for the EU-endorsed amendments below, the group has consistently applied the accounting policies set out in Note 2 \u2013 Significant Accounting Policies and the relevant respective notes to the consolidated \ufb01nancial statements to all periods presented in these \ufb01nancial statements. The group has applied the following amendments for the \ufb01rst time for the annual reporting period commencing January 1, 2022: \u2022 References to the Conceptual Framework (Amendments to IFRS 3); \u2022 Proceeds before intended use (Amendments to IAS 16); \u2022 Onerous Contracts \u2013 Cost of Ful\ufb01lling a Contract (Amendments to IAS 37); and \u2022 Annual improvements to IFRS Standards 2018-2020 (Amendments to IFRS 9 and IFRS 16). The application of the abovementioned amendments has not had any material impact on the amounts reported or disclosed in these \ufb01nancial statements. Effect of forthcoming accounting standards The following forthcoming amendments and new standards are not yet effective for the year ended December 31, 2022, and have not been early adopted in preparing these \ufb01nancial statements: \u2022 IFRS 17 Insurance Contracts; \u2022 Sale or contribution of assets between an investor and its associate or joint venture (Amendments to IFRS 10 and IAS 28); \u2022 Classi\ufb01cation of liabilities as current or non-current (Amendments to IAS 1); \u2022 Disclosure of accounting policies (Amendments to IAS 1 and IFRS Practice Statement 2); \u2022 De\ufb01nition of accounting estimates (Amendments to IAS 8); and \u2022 Deferred tax related to assets and liabilities arising from a single transaction (Amendments to IAS 12). The group expects no signi\ufb01cant impact from these amendments and new standards. Comparatives Certain immaterial reclassi\ufb01cations have been made to certain notes to conform to the current year presentation and to improve insights. These reclassi\ufb01cations have had no impact on the comparative shareholders\u2019 equity or comparative pro\ufb01t for the year. ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfBasisOfPreparationOfFinancialStatementsExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-407": {
"value": "Going concern The Executive Board has assessed the going concern assumption as part of the preparation of the consolidated \ufb01nancial statements. The Executive Board believes that no events or conditions give rise to doubt about the ability of the group to continue in operation for at least 12 months from the end of the reporting period. This conclusion is drawn based on knowledge of the group, the estimated economic outlook, and related identi\ufb01ed risks and uncertainties. Furthermore, the conclusion is based on a review of the three-year strategic plan and next year\u2019s budget, including expected developments in liquidity and capital, which includes the evaluation of current credit facilities available, contractual and expected maturities of \ufb01nancial liabilities, and covenants. Consequently, it was concluded that it is reasonable to apply the going concern assumption for the preparation of the consolidated \ufb01nancial statements. ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfGoingConcernExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-408": {
"value": "Comparatives Certain immaterial reclassi\ufb01cations have been made to certain notes to conform to the current year presentation and to improve insights. These reclassi\ufb01cations have had no impact on the comparative shareholders\u2019 equity or comparative pro\ufb01t for the year. ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfReclassificationsOrChangesInPresentationExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-409": {
"value": "Note 2 \u2013 Signi\ufb01cant Accounting Policies Except for the changes explained in Note 1 \u2013 General and Basis of Presentation, the group has consistently applied the signi\ufb01cant accounting policies to all periods presented in these consolidated \ufb01nancial statements. The main principles for the determination and presentation of results and the valuation and presentation of assets and liabilities are described in the relevant respective notes to the consolidated \ufb01nancial statements. BASIS OF CONSOLIDATION Subsidiaries Subsidiaries are all entities controlled by the group. The group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and can affect those returns through its power over the entity. The principle of control is the basis for determining which entities are consolidated in the consolidated \ufb01nancial statements. Loss of control Upon loss of control, the group derecognizes the assets and liabilities of the subsidiary, any non-controlling interests, and the other components of equity related to the subsidiary. Any surplus or de\ufb01cit arising from the loss of control is recognized in pro\ufb01t or loss. If the group retains any equity interest in the former subsidiary, such interest is measured at fair value at the date that control is lost. Subsequently, the remaining interest is accounted for as an equity-accounted investee or as a \ufb01nancial asset at fair value through pro\ufb01t or loss or other comprehensive income, depending on the level of influence retained. Transactions eliminated on consolidation Intragroup balances, intragroup transactions, and any unrealized gains and losses arising from transactions between group companies are eliminated in preparing the consolidated \ufb01nancial statements. Unrealized gains arising from transactions between the group and its equity-accounted investees are eliminated to the extent of the group\u2019s interest in the equity-accounted investees. Foreign currency Functional and presentation currency Items included in the \ufb01nancial statements of each of the group entities are measured using the currency of the primary economic environment in which the group entities operate (the functional currency). The consolidated \ufb01nancial statements are presented in euros, which is the group\u2019s presentation currency. Foreign currency transactions and balances Foreign currency transactions are translated into the functional currency of the group entities using the exchange rates prevailing at the transaction dates. Foreign exchange gains and losses resulting from the settlement of such transactions during the year and from the translation of monetary assets and liabilities denominated in foreign currencies at year-end exchange rates are recognized in pro\ufb01t or loss. Foreign currency differences arising from the following items are recognized in other comprehensive income: \u2022 Qualifying cash flow hedges to the extent that the hedge is effective; and \u2022 Qualifying net investment hedges on foreign operations to the extent that the hedge is effective. Non-monetary assets and liabilities in a foreign currency that are measured in terms of historical cost are translated using the exchange rates at the transaction dates. Non-monetary assets and liabilities denominated in foreign currencies, that are stated at fair value, are translated to the functional currency at the foreign exchange rates prevailing on the dates the fair value was determined. Foreign operations The assets and liabilities of group companies are translated to euros at foreign exchange rates prevailing at the end of the reporting period. Income and expenses of group companies are translated to euros at exchange rates on the transaction dates. All resulting exchange differences are recognized as a component of other comprehensive income in the translation reserve. When a foreign currency-denominated subsidiary or equity-accounted investee is disposed of, exchange differences that were recognized in other comprehensive income prior to the sale are reclassi\ufb01ed to pro\ufb01t or loss as part of the gain or loss on divestments . Net investment in foreign operations Net investment in foreign operations includes equity \ufb01nancing and long-term intercompany loans for which settlement is neither planned nor likely to occur in the foreseeable future. Exchange differences arising from the translation of the net investment in foreign operations, and of related hedges, are taken to the translation reserve of foreign operations in other comprehensive income. MAIN CURRENCY EXCHANGE RATES rates to the euro 2022 2021 U.S. dollar (average) 1.05 1.18 U.S. dollar (at December 31) 1.07 1.13 PRINCIPLES UNDERLYING THE STATEMENT OF CASH FLOWS General Bank overdrafts repayable on demand are included as cash and cash equivalents in the consolidated statement of cash flows to the extent that they form an integral part of the group\u2019s cash management. However, in the consolidated statement of \ufb01nancial position, the bank overdrafts are presented separately as the offsetting criteria are not met. Cash flows from operating activities Cash flows from operating activities are calculated using the indirect method by adjusting the consolidated pro\ufb01t for the year for items that are not cash flows and for autonomous movements in working capital (excluding the impact of acquisitions/divestments, foreign exchanges differences, and reclassi\ufb01cations to assets/liabilities classi\ufb01ed as held for sale). Cash flows from operating activities include receipts from customers, cash payments to employees and suppliers, paid \ufb01nancing costs of operating activities (including interest paid and received, the interest portion of lease payments, paid \ufb01nancing fees, and cash flows resulting from derivatives not qualifying for hedge accounting), acquisition and divestment-related costs, spending on restructuring provisions, and income taxes paid. Cash flows from investing activities Cash flows from investing activities are those arising from capital expenditure on and disposal of other intangible assets and property, plant, and equipment, acquisitions and sale of subsidiaries and equity-accounted investees, dividends received, and cash flows from the settlement of net investment hedges. Dividends received are from equity-accounted investees and \ufb01nancial assets measured at fair value through pro\ufb01t or loss or other comprehensive income. Cash receipts and payments from the settlement of derivative \ufb01nancial instruments are classi\ufb01ed in the same manner as the cash flows of the hedged items. The group primarily uses derivatives for hedging its net investments in U.S. dollar-denominated subsidiaries. As a result, cash receipts and payments from the settlement of derivatives are classi\ufb01ed under cash flows from investing activities. Cash flows from financing activities The cash flows from \ufb01nancing activities comprise the cash receipts and payments from issued and repurchased shares, long-term debt instruments, short-term \ufb01nancing, repayments of the principal portion of lease liabilities, and dividends paid. Dividends paid are to the owners of the company and the non-controlling interests. FINANCIAL INSTRUMENTS Financial instruments comprise the following: \u2022 Non-derivative \ufb01nancial assets and liabilities: \ufb01nancial assets at fair value through pro\ufb01t or loss, trade and miscellaneous receivables, cash and cash equivalents, borrowings and bank overdrafts, trade payables, and short- and long-term debt; and \u2022 Derivative \ufb01nancial assets and liabilities: cross-currency interest rate swaps, net investment hedges, and currency forwards. Financial assets and liabilities are offset and presented as net in the consolidated statement of \ufb01nancial position when the group has a legal right to offset the amounts and intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously. The group recognizes non-derivative \ufb01nancial assets and liabilities on the trade date. ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-410": {
"value": "BASIS OF CONSOLIDATION Subsidiaries Subsidiaries are all entities controlled by the group. The group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and can affect those returns through its power over the entity. The principle of control is the basis for determining which entities are consolidated in the consolidated \ufb01nancial statements. Loss of control Upon loss of control, the group derecognizes the assets and liabilities of the subsidiary, any non-controlling interests, and the other components of equity related to the subsidiary. Any surplus or de\ufb01cit arising from the loss of control is recognized in pro\ufb01t or loss. If the group retains any equity interest in the former subsidiary, such interest is measured at fair value at the date that control is lost. Subsequently, the remaining interest is accounted for as an equity-accounted investee or as a \ufb01nancial asset at fair value through pro\ufb01t or loss or other comprehensive income, depending on the level of influence retained. Transactions eliminated on consolidation Intragroup balances, intragroup transactions, and any unrealized gains and losses arising from transactions between group companies are eliminated in preparing the consolidated \ufb01nancial statements. Unrealized gains arising from transactions between the group and its equity-accounted investees are eliminated to the extent of the group\u2019s interest in the equity-accounted investees. Foreign currency Functional and presentation currency Items included in the \ufb01nancial statements of each of the group entities are measured using the currency of the primary economic environment in which the group entities operate (the functional currency). The consolidated \ufb01nancial statements are presented in euros, which is the group\u2019s presentation currency. Foreign currency transactions and balances Foreign currency transactions are translated into the functional currency of the group entities using the exchange rates prevailing at the transaction dates. Foreign exchange gains and losses resulting from the settlement of such transactions during the year and from the translation of monetary assets and liabilities denominated in foreign currencies at year-end exchange rates are recognized in pro\ufb01t or loss. Foreign currency differences arising from the following items are recognized in other comprehensive income: \u2022 Qualifying cash flow hedges to the extent that the hedge is effective; and \u2022 Qualifying net investment hedges on foreign operations to the extent that the hedge is effective. Non-monetary assets and liabilities in a foreign currency that are measured in terms of historical cost are translated using the exchange rates at the transaction dates. Non-monetary assets and liabilities denominated in foreign currencies, that are stated at fair value, are translated to the functional currency at the foreign exchange rates prevailing on the dates the fair value was determined. Foreign operations The assets and liabilities of group companies are translated to euros at foreign exchange rates prevailing at the end of the reporting period. Income and expenses of group companies are translated to euros at exchange rates on the transaction dates. All resulting exchange differences are recognized as a component of other comprehensive income in the translation reserve. When a foreign currency-denominated subsidiary or equity-accounted investee is disposed of, exchange differences that were recognized in other comprehensive income prior to the sale are reclassi\ufb01ed to pro\ufb01t or loss as part of the gain or loss on divestments . Net investment in foreign operations Net investment in foreign operations includes equity \ufb01nancing and long-term intercompany loans for which settlement is neither planned nor likely to occur in the foreseeable future. Exchange differences arising from the translation of the net investment in foreign operations, and of related hedges, are taken to the translation reserve of foreign operations in other comprehensive income. MAIN CURRENCY EXCHANGE RATES rates to the euro 2022 2021 U.S. dollar (average) 1.05 1.18 U.S. dollar (at December 31) 1.07 1.13 ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfBasisOfConsolidationExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-411": {
"value": "Foreign currency Functional and presentation currency Items included in the \ufb01nancial statements of each of the group entities are measured using the currency of the primary economic environment in which the group entities operate (the functional currency). The consolidated \ufb01nancial statements are presented in euros, which is the group\u2019s presentation currency. Foreign currency transactions and balances Foreign currency transactions are translated into the functional currency of the group entities using the exchange rates prevailing at the transaction dates. Foreign exchange gains and losses resulting from the settlement of such transactions during the year and from the translation of monetary assets and liabilities denominated in foreign currencies at year-end exchange rates are recognized in pro\ufb01t or loss. Foreign currency differences arising from the following items are recognized in other comprehensive income: \u2022 Qualifying cash flow hedges to the extent that the hedge is effective; and \u2022 Qualifying net investment hedges on foreign operations to the extent that the hedge is effective. Non-monetary assets and liabilities in a foreign currency that are measured in terms of historical cost are translated using the exchange rates at the transaction dates. Non-monetary assets and liabilities denominated in foreign currencies, that are stated at fair value, are translated to the functional currency at the foreign exchange rates prevailing on the dates the fair value was determined. Foreign operations The assets and liabilities of group companies are translated to euros at foreign exchange rates prevailing at the end of the reporting period. Income and expenses of group companies are translated to euros at exchange rates on the transaction dates. All resulting exchange differences are recognized as a component of other comprehensive income in the translation reserve. When a foreign currency-denominated subsidiary or equity-accounted investee is disposed of, exchange differences that were recognized in other comprehensive income prior to the sale are reclassi\ufb01ed to pro\ufb01t or loss as part of the gain or loss on divestments . Net investment in foreign operations Net investment in foreign operations includes equity \ufb01nancing and long-term intercompany loans for which settlement is neither planned nor likely to occur in the foreseeable future. Exchange differences arising from the translation of the net investment in foreign operations, and of related hedges, are taken to the translation reserve of foreign operations in other comprehensive income. ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfEffectOfChangesInForeignExchangeRatesExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-412": {
"value": "Functional and presentation currency Items included in the \ufb01nancial statements of each of the group entities are measured using the currency of the primary economic environment in which the group entities operate (the functional currency). The consolidated \ufb01nancial statements are presented in euros, which is the group\u2019s presentation currency. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForFunctionalCurrencyExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-413": {
"value": "Foreign currency transactions and balances Foreign currency transactions are translated into the functional currency of the group entities using the exchange rates prevailing at the transaction dates. Foreign exchange gains and losses resulting from the settlement of such transactions during the year and from the translation of monetary assets and liabilities denominated in foreign currencies at year-end exchange rates are recognized in pro\ufb01t or loss. Foreign currency differences arising from the following items are recognized in other comprehensive income: \u2022 Qualifying cash flow hedges to the extent that the hedge is effective; and \u2022 Qualifying net investment hedges on foreign operations to the extent that the hedge is effective. Non-monetary assets and liabilities in a foreign currency that are measured in terms of historical cost are translated using the exchange rates at the transaction dates. Non-monetary assets and liabilities denominated in foreign currencies, that are stated at fair value, are translated to the functional currency at the foreign exchange rates prevailing on the dates the fair value was determined. Foreign operations The assets and liabilities of group companies are translated to euros at foreign exchange rates prevailing at the end of the reporting period. Income and expenses of group companies are translated to euros at exchange rates on the transaction dates. All resulting exchange differences are recognized as a component of other comprehensive income in the translation reserve. When a foreign currency-denominated subsidiary or equity-accounted investee is disposed of, exchange differences that were recognized in other comprehensive income prior to the sale are reclassi\ufb01ed to pro\ufb01t or loss as part of the gain or loss on divestments Net investment in foreign operations Net investment in foreign operations includes equity \ufb01nancing and long-term intercompany loans for which settlement is neither planned nor likely to occur in the foreseeable future. Exchange differences arising from the translation of the net investment in foreign operations, and of related hedges, are taken to the translation reserve of foreign operations in other comprehensive income. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForForeignCurrencyTranslationExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-414": {
"value": "PRINCIPLES UNDERLYING THE STATEMENT OF CASH FLOWS General Bank overdrafts repayable on demand are included as cash and cash equivalents in the consolidated statement of cash flows to the extent that they form an integral part of the group\u2019s cash management. However, in the consolidated statement of \ufb01nancial position, the bank overdrafts are presented separately as the offsetting criteria are not met. Cash flows from operating activities Cash flows from operating activities are calculated using the indirect method by adjusting the consolidated pro\ufb01t for the year for items that are not cash flows and for autonomous movements in working capital (excluding the impact of acquisitions/divestments, foreign exchanges differences, and reclassi\ufb01cations to assets/liabilities classi\ufb01ed as held for sale). Cash flows from operating activities include receipts from customers, cash payments to employees and suppliers, paid \ufb01nancing costs of operating activities (including interest paid and received, the interest portion of lease payments, paid \ufb01nancing fees, and cash flows resulting from derivatives not qualifying for hedge accounting), acquisition and divestment-related costs, spending on restructuring provisions, and income taxes paid. Cash flows from investing activities Cash flows from investing activities are those arising from capital expenditure on and disposal of other intangible assets and property, plant, and equipment, acquisitions and sale of subsidiaries and equity-accounted investees, dividends received, and cash flows from the settlement of net investment hedges. Dividends received are from equity-accounted investees and \ufb01nancial assets measured at fair value through pro\ufb01t or loss or other comprehensive income. Cash receipts and payments from the settlement of derivative \ufb01nancial instruments are classi\ufb01ed in the same manner as the cash flows of the hedged items. The group primarily uses derivatives for hedging its net investments in U.S. dollar-denominated subsidiaries. As a result, cash receipts and payments from the settlement of derivatives are classi\ufb01ed under cash flows from investing activities. Cash flows from financing activities The cash flows from \ufb01nancing activities comprise the cash receipts and payments from issued and repurchased shares, long-term debt instruments, short-term \ufb01nancing, repayments of the principal portion of lease liabilities, and dividends paid. Dividends paid are to the owners of the company and the non-controlling interests. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForCashFlowsExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-415": {
"value": "FINANCIAL INSTRUMENTS Financial instruments comprise the following: \u2022 Non-derivative \ufb01nancial assets and liabilities: \ufb01nancial assets at fair value through pro\ufb01t or loss, trade and miscellaneous receivables, cash and cash equivalents, borrowings and bank overdrafts, trade payables, and short- and long-term debt; and \u2022 Derivative \ufb01nancial assets and liabilities: cross-currency interest rate swaps, net investment hedges, and currency forwards. Financial assets and liabilities are offset and presented as net in the consolidated statement of \ufb01nancial position when the group has a legal right to offset the amounts and intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously. The group recognizes non-derivative \ufb01nancial assets and liabilities on the trade date. ACCOUNTING POLICIES Non-derivative financial liabilities measured at amortized cost Financial liabilities measured at amortized cost are bonds, the Euro Commercial Paper program, private placements, other long-term and short-term debt, and trade payables. The group initially recognizes non-derivative \ufb01nancial liabilities at fair value less any directly attributable transaction costs. Subsequently, these \ufb01nancial liabilities are measured at amortized cost using the effective interest method with any difference between cost and redemption value recognized in pro\ufb01t or loss over the period of the borrowings. ACCOUNTING POLICIES Non-derivative \ufb01nancial liabilities at fair value through pro\ufb01t or loss comprise deferred and contingent considerations and are measured at fair value. Changes therein are recognized in pro\ufb01t or loss. The contingent considerations are based on a discounted cash flow model, which considers the present value of expected payments, using a risk-adjusted discount rate. The expected payment is determined by considering possible scenarios, the amount to be paid under each scenario, and the probability of each scenario. The estimated fair value could increase (or decrease) if assumptions change. ACCOUNTING POLICIES Derivative financial instruments and hedging activities The group holds derivative \ufb01nancial instruments to hedge risk exposures. Derivative \ufb01nancial instruments are initially recognized at fair value on the date a derivative contract is concluded and are subsequently remeasured at fair value. The method of recognizing gains or losses depends on whether the derivative is designated as a hedging instrument and if so, the nature of the item being hedged. The group designates derivatives as either: \u2022 Hedges of a risk associated with a recognized asset or liability or a highly probable forecast transaction (cash flow hedge); \u2022 Hedges of a net investment in a foreign operation (net investment hedge); or \u2022 Currency forward instruments to protect the group\u2019s net pro\ufb01t (not qualifying for hedge accounting). With respect to foreign currency forwards used in the cash flow hedges and the net investment hedges, the group designates as a hedging instrument only the change in the value of the spot component of a forward contract (and not the forward element). The differential between the contracted forward rate and the market spot rate, de\ufb01ned as forward points, is recognized in other comprehensive income and accumulated in the hedge reserve within total equity. Cash flow hedge The effective part of changes in the fair value of derivatives that are designated and qualify as cash flow hedges are recognized in other comprehensive income, and accumulated in the hedge reserve within total equity. Amounts accumulated in the hedge reserve are reclassi\ufb01ed to pro\ufb01t or loss within the line where the result from the hedged transaction is recognized, in the same period the hedged item affects the pro\ufb01t or loss. The gain or loss relating to the ineffective part of the hedging relationship is recognized in pro\ufb01t or loss within \ufb01nancing results. Reclassification of hedge reserve to profit or loss When a hedging instrument matures or is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in the hedge reserve at that time remains in the hedge reserve and is only reclassi\ufb01ed when the hedged transaction is ultimately recognized in pro\ufb01t or loss. When a hedged transaction is no longer expected to occur, the cumulative gain or loss in the hedge reserve is reclassi\ufb01ed to pro\ufb01t or loss. Net investment hedge Fair value changes of derivative \ufb01nancial instruments used to hedge the net investment in foreign operations, which are determined to be an effective hedge, are recognized directly in other comprehensive income in the translation reserve. Gains and losses accumulated in the translation reserve are reclassi\ufb01ed to pro\ufb01t or loss when the foreign operation is disposed. If a hedging relationship is terminated and the derivative \ufb01nancial instrument is not sold, future changes in the fair value of the derivative \ufb01nancial instrument are recognized in pro\ufb01t or loss. The gain or loss relating to the ineffective part of the hedging relationship is recognized in pro\ufb01t or loss within \ufb01nancing results. Derivatives that do not qualify for hedge accounting Changes in the fair value of any derivative \ufb01nancial instruments that do not qualify for hedge accounting are recognized in pro\ufb01t or loss within \ufb01nancing results. ACCOUNTING POLICIES Financial assets at fair value through pro\ufb01t or loss comprise equity investments. ",
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"fact-416": {
"value": "Financial assets and liabilities are offset and presented as net in the consolidated statement of \ufb01nancial position when the group has a legal right to offset the amounts and intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously. ",
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"fact-417": {
"value": "Note 3 \u2013 Accounting Estimates and Judgments
General
The preparation of the \ufb01nancial statements in conformity with IFRS requires management to make estimates, judgments, and
assumptions that affect the application of policies and reported amounts of assets and liabilities, the disclosed amounts of
contingent assets and liabilities, and the reported amounts of income and expense, that are not clear from other sources. The
estimates, judgments, and underlying assumptions are based on historical experience and other factors that are believed to be
reasonable under the circumstances. Actual results may differ from those estimates and may result in material adjustments in the
next \ufb01nancial year(s).
The impact of climate-related matters on estimates and judgments, including those related to the impairment of non-\ufb01nancial
assets, has been assessed by management based on the emission reduction targets and associated abatement plans developed by
the group. Management concluded that the impact of climate-related matters on estimates and judgments is not material.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in
the period in which the estimate is revised if the revision affects only that period, or the period of the revision and future periods if
the revision affects both current and future periods. Judgments made by management in the application of IFRS that could have an
effect on the \ufb01nancial statements and estimates with the risk of a material adjustment in future years are further discussed in the
corresponding notes to the consolidated statements of pro\ufb01t or loss and \ufb01nancial position:
\u2022 Revenue recognition (see Note 6);
\u2022 Accounting for income taxes (see Note 16); and
\u2022 Valuation, measurement, and impairment testing of goodwill and intangible assets other than goodwill (see Note 8 and Note 18).
Management believes that these risks are adequately covered in its estimates and judgments.
Impact of Russian-Ukrainian war
Revenues generated in Russia, Belarus, and Ukraine represented less than 0.5% of group revenues in 2022 and in 2021. Per company
policy, there shall be no new business conducted in Russia, Belarus, or the embargoed regions of Ukraine unless an exception
applies. Such exceptions generally apply only to certain Health products provided for humanitarian reasons and in all cases must
comply with applicable sanctions and export restrictions.
The Russian-Ukrainian war did not result in an impairment trigger on the group\u2019s non-current assets.
The group has one subsidiary in Russia as of December 31, 2022. The activities of the subsidiary were ceased and the group is in the
process of bringing the subsidiary into liquidation.
ESTIMATES AND JUDGMENTS
IFRS 15 Revenue from Contracts with Customers requires management to make estimates and judgments on the characteristics of
a performance obligation, (un)bundling of multi-element arrangements, and whether revenues should be recognized over time or
at a point in time. In addition, management makes estimates of the stand-alone selling prices of performance obligations, variable
considerations, and product and contract lives.
When another party is involved in providing goods and/or services to a customer, management makes a judgment whether the
promise to the customer is a performance obligation by the group (i.e., acting as a principal), or by another party (i.e., acting as an
agent). The group acts mostly as the principal in its customer contracts.
For the judgments applied to the incremental cost to obtain a contract, refer to Note 25 \u2013 Contract Assets and Liabilities.
ESTIMATES AND JUDGMENTS The fair value of the assets, liabilities, and contingent liabilities of a business combination should be measured within 12 months from the acquisition date. For some acquisitions, provisional fair values have been included in the consolidated statement of \ufb01nancial position. If the \ufb01nal valuation of the acquired assets and liabilities assumed is still pending at year-end, it will be completed within the 12-month timeframe. Actual valuation of these assets, liabilities, and contingent liabilities may differ from the provisional valuation. When a business combination agreement provides for an adjustment to the cost of the transaction, contingent on future events (such as earnout arrangements), the group includes an initial fair value of that adjustment in the cost of the transaction at the acquisition date if the adjustment is probable and can be measured reliably. The initial and subsequent measurement will usually be based on estimates of future results of the business combination. Actual results may differ from those estimates and may result in material adjustments in the next \ufb01nancial year(s). Subsequent changes to the fair value are recognized in pro\ufb01t or loss, based on a periodic reassessment of the contingent consideration. ESTIMATES AND JUDGMENTS
The group determines the additions to and releases from loss allowance on trade receivables and unbilled revenues by making
assumptions and estimating the risk of default and expected loss rates at contract inception over the expected life of the \ufb01nancial
instrument, using the group\u2019s historically incurred losses and existing market conditions, as well as forward-looking information at
the end of each reporting period. Please refer to Note 25 \u2013 Contract Assets and Liabilities for more information.
ESTIMATES AND JUDGMENTS
Income tax is calculated based on income before tax, considering the local tax rates and regulations. For each operating entity, the
current income tax expense is calculated and differences between the accounting and tax base are determined, resulting in deferred
tax assets or liabilities. These calculations may deviate from the \ufb01nal tax assessments.
A deferred tax asset is recognized for deductible temporary differences and the carry-forward of unused tax losses and unused tax
credits to the extent that it is probable that future taxable pro\ufb01t will be available. Management assesses the probability that taxable
pro\ufb01t will be available against which the unused tax losses or unused tax credits can be utilized.
In determining the amount of current and deferred tax, the group considers the impact of uncertain tax positions and whether
additional taxes, penalties, and interest may be due. The group believes that its current income tax liabilities are adequate for
all open tax years based on its assessment of many factors, including interpretations of tax laws and rules, and prior experience.
The group operates in several countries with different tax laws and rules. Considering this complex multinational environment
in which the group operates, global transfer pricing policies are implemented for transactions between members of the group.
These transactions are documented as required by international standards. However, local tax authorities might challenge these
transactions. The group considers potential challenges and accounts for potential uncertain tax positions.
The assessment for uncertain tax positions relies on estimates and assumptions, based on the judgments of tax professionals
within the group, supplemented by external tax advisors, and may involve a series of estimates about future events. New information
may become available that causes the group to change its estimate regarding the adequacy of existing income tax liabilities. Such
changes to income tax liabilities will impact the income tax expense, positively or negatively, in the consolidated statement of pro\ufb01t
or loss in the period that such a determination is made.
Changes in tax rates are considered if these tax rate changes are substantially enacted before year end.
Governments are expected to introduce changes in tax law following Organisation for Economic Co-operation and Development
(OECD), EU, and other international guidelines. Reported income tax amounts will therefore be subject to continued judgment,
estimation uncertainty, and measurement adjustments.
Refer also to Note 23 \u2013 Tax Assets and Liabilities.
ESTIMATES AND JUDGMENTS
Measurement
Upon acquisition, the values of intangible assets acquired are estimated, usually applying one of the methodologies below:
\u2022 Relief from royalty approach: this approach assumes that if the identi\ufb01able intangible asset was not owned, it would be acquired
through a royalty agreement. The value of owning the asset equals the bene\ufb01ts from not having to pay royalty fees;
\u2022 Multi-period excess earnings method: under this approach, cash flows associated with the speci\ufb01c acquired identi\ufb01able intangible
assets are determined. Contributory charges of other assets that are being used to generate the cash flows are deducted from these
cash flows. The net cash flows are discounted to arrive at the value of the asset; or
\u2022 Cost method: the cost method reflects the cost that would currently be required to replace the asset.
These valuations are usually performed by management of the acquiring CGU in close cooperation with an external consulting
\ufb01rm, requiring estimates such as future cash flows, royalty rates, discount rates, useful lives, churn rates, and rates of return.
The methodologies applied in this respect are in line with common market practice.
Impairment test
Impairment tests require estimates of discount rates, future cash flows, and perpetual growth rates. These estimates are made by
management of the business to which the assets belong. The future cash flows cover a \ufb01ve-year period and are based on Vision &
Strategy Plans (VSPs), prepared by management, and approved by the Executive Board.
The annual goodwill impairment test did not result in the recognition of an impairment. The outcome of the group\u2019s sensitivity
analysis was that no reasonably possible change in any of the key assumptions would cause the carrying amount to exceed the
recoverable amount. The allowed change in growth, discount rate, and adjusted operating pro\ufb01t margin was at least 300 basis
points for each of the groups of cash generating units.
On top of the annual goodwill impairment test, the group performed an in-depth impairment triggering event analysis on its other
non-current assets, consisting mainly of acquired identi\ufb01able intangible assets. In this analysis, the development of new sales,
attrition rates of existing customers, growth rates, and cost measures were the main drivers. The group concluded that there were no
impairment triggers for the majority of the other non-current assets. For the continuing medical education solutions for physicians
(Learner\u2019s Digest), the group identi\ufb01ed a triggering event in 2022 as expectations of market growth deteriorated. The group recognized
an impairment on the acquired identi\ufb01able intangible assets of \u20ac20 million and on other intangible assets of \u20ac3 million and
shortened the remaining useful lives.
ESTIMATES AND JUDGMENTS
IFRS 16 requires management to make estimates for setting the discount rate and to apply judgments in the assessment of renewal
and termination options (i.e., optional lease periods) in the lease contracts.
Discount rate
The discount rate applied is based on the incremental borrowing rate for the respective leases considering the primary economic
environment of the lease, the currency, the credit risk premium, the lease term, and the nature of the leased asset.
At December 31, 2022, the weighted-average discount rate is 2.8% (2021: 2.4%
).
Renewal and termination options
Renewal and termination options are included in several real estate and other lease contracts. These terms are used to maximize
operational flexibility in terms of managing contracts. Most contract-speci\ufb01c renewal and termination options are exercisable only by
the group and not by the respective lessor.
In determining the lease term, the group considers all facts and circumstances that create an economic incentive to use the optional
lease period. Optional lease periods are only included in the lease term if it is reasonably certain that the optional lease periods will
be used. The assessment is reviewed if a signi\ufb01cant change in circumstances occurs which affects this assessment and that is within
the control of the group.
Real estate leases that are annually renewed or that have an inde\ufb01nite contract term are on average leased for \ufb01ve years. Usually,
optional periods arising from renewal options of other real estate leases are not considered to be reasonably certain, since the rent
is often reset at the market price on the renewal option date. Optional periods after termination option dates are often included in
the lease term due to termination penalties included in the contract.
Impairment of right-of-use assets The group determined whether there were impairment triggers regarding the right-of-use asset and accounts for any impairment loss identi\ufb01ed. This primarily applies to real estate leases. The impairment of a real estate right-of-use asset becomes relevant in case of vacated of\ufb01ce space. If vacated of\ufb01ce space is identi\ufb01ed, this space is considered a CGU on its own when that space can practically be sublet. An impairment is recognized when the recoverable amount is lower than the carrying value. Mostly, the recoverable amount will be based on expected future sublease receipts estimated by an external real estate broker. The carrying value may include not only the right-of-use asset, but also any directly related associated assets such as leasehold improvements. ESTIMATES AND JUDGMENTS
The net plan assets or liabilities of the de\ufb01ned employee bene\ufb01t plans and the costs related to the pension and post-retirement
medical plans are based on actuarial and economic assumptions. The main economic assumptions are:
\u2022 Discount rate;
\u2022 Rate of pension increase;
\u2022 Inflation; and
\u2022 Medical trend rate.
For actuarial assumptions, the group uses generally accepted mortality rates (longevity risk). The withdrawal rates and retirement
rates are based on statistics provided by the relevant entities based on past experiences.
ESTIMATES AND JUDGMENTS
Legal provisions
The group is involved in legal and judicial proceedings in the ordinary course of business. Provisions and contingencies related to
these matters are periodically assessed based on the latest information available, usually after consultation with and the assistance
of lawyers and other specialists.
The prediction of the outcome and the assessment of a possible loss by management are based on management\u2019s judgments
and estimates. The actual outcome of a proceeding or claim may differ from the estimated liability.
Refer to Note 37 \u2013 Commitments, Contingent Assets, and Contingent Liabilities.
",
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"fact-418": {
"value": "Note 5 \u2013 Segment Reporting
Health
Tax &
Accounting
Governance,
Risk &
Compliance
Legal &
Regulatory Corporate
*
Total
reporting by segment 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021
Revenues from contracts with third parties 1,448 1,234 1,758 1,510 1,333 1,139 914 888 \u2013 \u2013 5,453 4,771
Cost of revenues (444) (379) (500) (418) (370) (307) (264) (270) \u2013 \u2013 (1,578) (1,374)
Gross pro\ufb01t 1,004 855 1,258 1,092 963 832 650 618 0 0 3,875 3,397
Sales costs (231) (193) (315) (280) (188) (162) (180) (171) \u2013 \u2013 (914) (806)
General and administrative costs (396) (360) (463) (413) (396) (365) (378) (355) (64) (57) (1,697) (1,550)
Total operating expenses (627) (553) (778) (693) (584) (527) (558) (526) (64) (57) (2,611) (2,356)
Other gains and (losses) (1) 0 (3) (47) (5) (4) 78 22 0 \u2013 69 (29)
Operating pro\ufb01t 376 302 477 352 374 301 170 114 (64) (57) 1,333 1,012
Amortization of acquired identifiable
intangible assets 37 31 33 36 39 35 31 29 \u2013 \u2013 140 131
Impairment/(reversal of impairment) of
acquired identifiable intangible assets 20 27 \u2013 (5) \u2013 11 \u2013 \u2013 \u2013 \u2013 20 33
Non-benchmark items in operating pro\ufb01t 1 0 3 47 5 4 (78) (22) 0 \u2013 (69) 29
Adjusted operating pro\ufb01t 434 360 513 430 418 351 123 121 (64) (57) 1,424 1,205
Amortization of other intangible assets and
depreciation of PPE and right-of-use assets (46) (50) (103) (101) (84) (73) (59) (63) 0 (3) (292) (290)
Impairment of other intangible assets, PPE,
and right-of-use assets (6) (5) (5) (7) (3) (5) 0 (2) \u2013 \u2013 (14) (19)
Goodwill and acquired identifiable intangible
assets at December 31 1,300 1,262 1,783 1,761 1,487 1,374 824 828 \u2013 \u2013 5,394 5,225
Net capital expenditure 42 33 98 72 101 82 54 52 0 0 295 239
Assets classified as held for sale at December 31 \u2013 \u2013 \u2013 \u2013 \u2013 \u2013 \u2013 101 \u2013 \u2013 0 101
Liabilities classified as held for sale at December 31 \u2013 \u2013 \u2013 \u2013 \u2013 \u2013 \u2013 74 \u2013 \u2013 0 74
Number of FTEs at December 31 3,116 2,913 8,040 7,416 4,982 4,736 3,786 4,262 132 127 20,056 19,454
*
The corporate function does not represent an operating segment.
ACCOUNTING POLICIES An operating segment is a component of the group that engages in business activities from which it may earn revenues and incur expenses. The four global operating divisions are based on strategic customer segments: Health; Tax & Accounting; Governance, Risk & Compliance; and Legal & Regulatory. This segment information is based on the group\u2019s management and internal reporting structure. All operating segments are regularly reviewed by the Executive Board, within Wolters Kluwer de\ufb01ned as the group\u2019s chief operating decision-maker, to make decisions about resources to be allocated to the segments and to assess their performance to the extent whereby discrete \ufb01nancial information is available. The Executive Board reviews the \ufb01nancial performance of the segments and the allocation of resources based on revenues and adjusted operating pro\ufb01t. Revenues from internal transactions between the operating segments are conducted at arm\u2019s length with terms equivalent to comparable transactions with third parties. These internal revenues are limited and therefore excluded from the segment reporting table. Segment results reported to the Executive Board include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Costs (and associated FTEs) and net capital expenditure incurred on behalf of the segments by Global Business Services and Digital eXperience Group are allocated to the operating segments. Non-current interest-bearing liabilities and deferred tax liabilities are not considered to be segment liabilities as these are primarily managed by the corporate treasury and tax functions. Operating working capital is not managed at the operating segment level, but at a country or regional level. GEOGRAPHIC INFORMATION total non-current assets per region* 2022 % 2021 % The Netherlands 676 11 677 11 Europe (excluding the Netherlands) 1,336 21 1,342 22 U.S. and Canada 4,338 67 4,117 66 Asia Paci\ufb01c 85 1 75 1 Rest of World 19 0 17 0 Total 6,454 100 6,228 100 * Non-current assets per region exclude deferred tax assets and derivative \ufb01nancial instruments. OTHER DISCLOSURES There are no customers with revenues that exceed 10% of the group\u2019s total revenues. For the revenues per geographic region, refer to Note 6 \u2013 Revenues. ",
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"fact-419": {
"value": "ACCOUNTING POLICIES An operating segment is a component of the group that engages in business activities from which it may earn revenues and incur expenses. The four global operating divisions are based on strategic customer segments: Health; Tax & Accounting; Governance, Risk & Compliance; and Legal & Regulatory. This segment information is based on the group\u2019s management and internal reporting structure. All operating segments are regularly reviewed by the Executive Board, within Wolters Kluwer de\ufb01ned as the group\u2019s chief operating decision-maker, to make decisions about resources to be allocated to the segments and to assess their performance to the extent whereby discrete \ufb01nancial information is available. The Executive Board reviews the \ufb01nancial performance of the segments and the allocation of resources based on revenues and adjusted operating pro\ufb01t. Revenues from internal transactions between the operating segments are conducted at arm\u2019s length with terms equivalent to comparable transactions with third parties. These internal revenues are limited and therefore excluded from the segment reporting table. Segment results reported to the Executive Board include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Costs (and associated FTEs) and net capital expenditure incurred on behalf of the segments by Global Business Services and Digital eXperience Group are allocated to the operating segments. Non-current interest-bearing liabilities and deferred tax liabilities are not considered to be segment liabilities as these are primarily managed by the corporate treasury and tax functions. Operating working capital is not managed at the operating segment level, but at a country or regional level",
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"fact-420": {
"value": "The Netherlands ",
"dimensions": {
"concept": "ifrs-full:CountryOfIncorporation",
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"fact-421": {
"value": "Note 6 \u2013 Revenues 2022 2021 Revenues from contracts with third parties 5,453 4,771 ACCOUNTING POLICIES Revenues represent the amount of consideration the group expects to be entitled to, arising from contracts with customers in the ordinary course of business, in exchange for transferring promised goods and/or services to customers, excluding amounts collected on behalf of third parties. Revenues are recognized once the performance obligations are ful\ufb01lled (i.e., when the customer obtains control over those goods and/or services). Subscriptions Revenues related to subscriptions are recognized over the period in which the goods are transferred and/or content is made available online and when the goods and/or content involved are similar in value to the customer over time. Subscription income received or receivable in advance of the delivery of goods and/or content is presented as deferred income (a contract liability) in the consolidated statement of \ufb01nancial position. Licenses License fees for the use of the group\u2019s software products and/or services are recognized in accordance with the substance of the agreement. Revenues from licenses representing a right to access are recognized over time on a straight-line basis. In case a right-to-access license is invoiced to a customer as a one-time upfront fee, revenue is recognized over a period of between 12 and 60 months depending on the nature of the license. In case of a transfer of rights (i.e., right-to-use license), which permits the licensee to exploit those rights freely and the group as a licensor has no remaining obligations to perform after delivery, revenues are recognized at the time the control of the license is transferred to a customer, considering any signi\ufb01cant customer acceptance clauses. Goods Revenues from the sale of goods are recognized at a point in time upon shipment or upon delivery when control is transferred to a customer, provided that ultimate collectability and \ufb01nal acceptance by the customer are reasonably assured. When goods are sold with a right to return, the group recognizes the revenues of the transferred goods for the amount the group expects to be entitled to, a refund contract liability, and an asset for the group\u2019s right to recover goods on settling the refund contract liability. Services Revenues from providing services are recognized in the period in which the related performance obligations are satis\ufb01ed. For \ufb01xed- price contracts, revenues are recognized based on the actual service provided as a proportion of the total services to be provided because the customer receives and uses the bene\ufb01ts simultaneously. In case of \ufb01xed-price contracts, the customer pays the \ufb01xed amount based on a payment schedule. If the contract includes an hourly fee, revenues are recognized in the amount to which the group has a right to invoice. Implementation services Revenues from providing implementation services are based on input or output methods, subject to contractual arrangements, and are recognized over the implementation period, or upon full completion of the implementation, depending on when the customer can bene\ufb01t from the service. Multi-element contracts There are arrangements that include various combinations of performance obligations, such as software licenses, services, training, hosting, and implementation. A performance obligation is only distinct if the customer can bene\ufb01t from goods and/or services on their own or together with other resources that are readily available to the customer, and the promise to transfer goods and/or services is separately identi\ufb01able from other promises in the contract. Goods and/or services that are not distinct are bundled with other goods and/or services in the contract, until a bundle of goods and/or services is created that is distinct, resulting in a single performance obligation. Where performance obligations are satis\ufb01ed over different periods of time, revenues are allocated to the respective performance obligations based on relative stand-alone selling prices at contract inception, and revenues are recognized as each performance obligation is satis\ufb01ed. Agent/principal arrangements If the group acts as an agent, whereby the group sells goods and/or services on behalf of a principal, the group recognizes the amount of the net consideration as revenues. If the group acts as a principal, the group recognizes the gross consideration for the speci\ufb01c goods and/or services transferred. Variable consideration Discounts, return of goods and/or services, usage-based prices, and index-based pricing are the most common forms of variable considerations within the group. Discounts are often contractually agreed and allocated to all distinct performance obligations, unless there is a speci\ufb01c discount policy for a performance obligation. Volume-related discounts, return of goods and/or services, and usage-based prices are estimated at contract inception and periodically reassessed during the contract term. The group considers normal price increases based on local inflation rates or customary business practices as compensation for cost price increases and not as variable consideration. Considerations are recognized pro rata over the term of the contract in case the group estimates at contract inception that price increases are beyond compensation for cost price increases. Contract modifications A contract modi\ufb01cation is a change in the scope and/or price of a contract that is approved by both the customer and the group. The group accounts for a contract modi\ufb01cation retrospectively, if: \u2022 The modi\ufb01cation only affected the transaction price and the remaining goods and/or services are not distinct; or \u2022 The modi\ufb01cation affected the scope, but no distinct goods and/or services were added. The group accounts for a contract modi\ufb01cation prospectively, if: \u2022 The modi\ufb01cation only affected the transaction price and the remaining goods and/or services are distinct; or \u2022 The modi\ufb01cation affected the scope and distinct goods and/or services were added, but the additional consideration did not reflect the stand-alone selling price. The group accounts for a contract modi\ufb01cation as a separate contract if the modi\ufb01cation affected the scope, distinct goods and/or services were added, and the additional consideration reflected the stand-alone selling price. Financing components As a practical expedient, the group does not adjust the consideration for the effects of a signi\ufb01cant \ufb01nancing component if the group expects that the period between the transfer of the promised goods and/or services to the customer and payment by the customer is one year or less. The group has no signi\ufb01cant contracts with a period of one year or more between the transfer of goods and/ or services and the payment of the consideration. Consequently, the group does not adjust transaction prices for the time value of money . Cost of revenues Cost of revenues comprises directly attributable costs of goods and/or services sold. For digital products and services, cost of revenues may include data maintenance, hosting, license fees, royalties, product support, personnel expenses, subcontracted work, training, and other costs incurred to support and maintain the products, applications, and/ or services. For print products, cost of revenues may include cost for paper, printing and binding, royalties, personnel expenses, subcontracted work, shipping costs, and other incurred costs. ESTIMATES AND JUDGMENTS IFRS 15 Revenue from Contracts with Customers requires management to make estimates and judgments on the characteristics of a performance obligation, (un)bundling of multi-element arrangements, and whether revenues should be recognized over time or at a point in time. In addition, management makes estimates of the stand-alone selling prices of performance obligations, variable considerations, and product and contract lives. When another party is involved in providing goods and/or services to a customer, management makes a judgment whether the promise to the customer is a performance obligation by the group (i.e., acting as a principal), or by another party (i.e., acting as an agent). The group acts mostly as the principal in its customer contracts. For the judgments applied to the incremental cost to obtain a contract, refer to Note 25 \u2013 Contract Assets and Liabilities. DISAGGREGATION OF REVENUES Health Tax & Accounting Governance, Risk & Compliance Legal & Regulatory Total reporting per segment 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 Revenue recognition At a point in time recognition 253 223 242 214 465 411 180 209 1,140 1,057 Over time recognition 1,195 1,011 1,516 1,296 868 728 734 679 4,313 3,714 Revenues from contracts with third parties 1,448 1,234 1,758 1,510 1,333 1,139 914 888 5,453 4,771 Revenue per contract Contracts one year or less 953 821 1,482 1,292 977 851 677 684 4,089 3,648 Multi-year contracts 495 413 276 218 356 288 237 204 1,364 1,123 Revenues from contracts with third parties 1,448 1,234 1,758 1,510 1,333 1,139 914 888 5,453 4,771 REVENUES BY MEDIA FORMAT Health Tax & Accounting Governance, Risk & Compliance Legal & Regulatory Total reporting per segment 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 Digital 1,281 1,089 1,686 1,434 843 723 745 684 4,555 3,930 Services 1 1 34 35 485 410 13 14 533 460 Print 166 144 38 41 5 6 156 190 365 381 Revenues from contracts with third parties 1,448 1,234 1,758 1,510 1,333 1,139 914 888 5,453 4,771 REVENUES BY TYPE 2022 2021 Digital and service subscription 3,950 3,397 Print subscription 157 157 Other recurring 281 256 Total recurring revenues 4,388 3,810 Print books 129 146 Legal Services transactional 299 266 Financial Services transactional 134 109 Other non-recurring * 503 440 Total non-recurring revenues 1,065 961 Revenues from contracts with third parties 5,453 4,771 * Other non-recurring revenues include software licenses, software implementation fees, professional services, and other non-subscription offerings. RECURRING/NON-RECURRING REVENUES Health Tax & Accounting Governance, Risk & Compliance Legal & Regulatory Total reporting per segment 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 Recurring revenues 1,307 1,112 1,524 1,313 793 669 764 716 4,388 3,810 Non-recurring revenues 141 122 234 197 540 470 150 172 1,065 961 Revenues from contracts with third parties 1,448 1,234 1,758 1,510 1,333 1,139 914 888 5,453 4,771 GEOGRAPHIC INFORMATION revenues generated per region 2022 % 2021 % The Netherlands 204 4 196 4 Europe (excluding the Netherlands) 1,356 25 1,274 27 U.S. and Canada 3,476 64 2,946 62 Asia Paci\ufb01c 333 6 277 5 Rest of World 84 1 78 2 Revenues from contracts with third parties 5,453 100 4,771 100 ",
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"fact-422": {
"value": "Note 6 \u2013 Revenues 2022 2021 Revenues from contracts with third parties 5,453 4,771 ACCOUNTING POLICIES Revenues represent the amount of consideration the group expects to be entitled to, arising from contracts with customers in the ordinary course of business, in exchange for transferring promised goods and/or services to customers, excluding amounts collected on behalf of third parties. Revenues are recognized once the performance obligations are ful\ufb01lled (i.e., when the customer obtains control over those goods and/or services). Subscriptions Revenues related to subscriptions are recognized over the period in which the goods are transferred and/or content is made available online and when the goods and/or content involved are similar in value to the customer over time. Subscription income received or receivable in advance of the delivery of goods and/or content is presented as deferred income (a contract liability) in the consolidated statement of \ufb01nancial position. Licenses License fees for the use of the group\u2019s software products and/or services are recognized in accordance with the substance of the agreement. Revenues from licenses representing a right to access are recognized over time on a straight-line basis. In case a right-to-access license is invoiced to a customer as a one-time upfront fee, revenue is recognized over a period of between 12 and 60 months depending on the nature of the license. In case of a transfer of rights (i.e., right-to-use license), which permits the licensee to exploit those rights freely and the group as a licensor has no remaining obligations to perform after delivery, revenues are recognized at the time the control of the license is transferred to a customer, considering any signi\ufb01cant customer acceptance clauses. Goods Revenues from the sale of goods are recognized at a point in time upon shipment or upon delivery when control is transferred to a customer, provided that ultimate collectability and \ufb01nal acceptance by the customer are reasonably assured. When goods are sold with a right to return, the group recognizes the revenues of the transferred goods for the amount the group expects to be entitled to, a refund contract liability, and an asset for the group\u2019s right to recover goods on settling the refund contract liability. Services Revenues from providing services are recognized in the period in which the related performance obligations are satis\ufb01ed. For \ufb01xed- price contracts, revenues are recognized based on the actual service provided as a proportion of the total services to be provided because the customer receives and uses the bene\ufb01ts simultaneously. In case of \ufb01xed-price contracts, the customer pays the \ufb01xed amount based on a payment schedule. If the contract includes an hourly fee, revenues are recognized in the amount to which the group has a right to invoice. Implementation services Revenues from providing implementation services are based on input or output methods, subject to contractual arrangements, and are recognized over the implementation period, or upon full completion of the implementation, depending on when the customer can bene\ufb01t from the service. Multi-element contracts There are arrangements that include various combinations of performance obligations, such as software licenses, services, training, hosting, and implementation. A performance obligation is only distinct if the customer can bene\ufb01t from goods and/or services on their own or together with other resources that are readily available to the customer, and the promise to transfer goods and/or services is separately identi\ufb01able from other promises in the contract. Goods and/or services that are not distinct are bundled with other goods and/or services in the contract, until a bundle of goods and/or services is created that is distinct, resulting in a single performance obligation. Where performance obligations are satis\ufb01ed over different periods of time, revenues are allocated to the respective performance obligations based on relative stand-alone selling prices at contract inception, and revenues are recognized as each performance obligation is satis\ufb01ed. Agent/principal arrangements If the group acts as an agent, whereby the group sells goods and/or services on behalf of a principal, the group recognizes the amount of the net consideration as revenues. If the group acts as a principal, the group recognizes the gross consideration for the speci\ufb01c goods and/or services transferred. Variable consideration Discounts, return of goods and/or services, usage-based prices, and index-based pricing are the most common forms of variable considerations within the group. Discounts are often contractually agreed and allocated to all distinct performance obligations, unless there is a speci\ufb01c discount policy for a performance obligation. Volume-related discounts, return of goods and/or services, and usage-based prices are estimated at contract inception and periodically reassessed during the contract term. The group considers normal price increases based on local inflation rates or customary business practices as compensation for cost price increases and not as variable consideration. Considerations are recognized pro rata over the term of the contract in case the group estimates at contract inception that price increases are beyond compensation for cost price increases. Contract modifications A contract modi\ufb01cation is a change in the scope and/or price of a contract that is approved by both the customer and the group. The group accounts for a contract modi\ufb01cation retrospectively, if: \u2022 The modi\ufb01cation only affected the transaction price and the remaining goods and/or services are not distinct; or \u2022 The modi\ufb01cation affected the scope, but no distinct goods and/or services were added. The group accounts for a contract modi\ufb01cation prospectively, if: \u2022 The modi\ufb01cation only affected the transaction price and the remaining goods and/or services are distinct; or \u2022 The modi\ufb01cation affected the scope and distinct goods and/or services were added, but the additional consideration did not reflect the stand-alone selling price. The group accounts for a contract modi\ufb01cation as a separate contract if the modi\ufb01cation affected the scope, distinct goods and/or services were added, and the additional consideration reflected the stand-alone selling price. Financing components As a practical expedient, the group does not adjust the consideration for the effects of a signi\ufb01cant \ufb01nancing component if the group expects that the period between the transfer of the promised goods and/or services to the customer and payment by the customer is one year or less. The group has no signi\ufb01cant contracts with a period of one year or more between the transfer of goods and/ or services and the payment of the consideration. Consequently, the group does not adjust transaction prices for the time value of money . Cost of revenues Cost of revenues comprises directly attributable costs of goods and/or services sold. For digital products and services, cost of revenues may include data maintenance, hosting, license fees, royalties, product support, personnel expenses, subcontracted work, training, and other costs incurred to support and maintain the products, applications, and/ or services. For print products, cost of revenues may include cost for paper, printing and binding, royalties, personnel expenses, subcontracted work, shipping costs, and other incurred costs. ESTIMATES AND JUDGMENTS IFRS 15 Revenue from Contracts with Customers requires management to make estimates and judgments on the characteristics of a performance obligation, (un)bundling of multi-element arrangements, and whether revenues should be recognized over time or at a point in time. In addition, management makes estimates of the stand-alone selling prices of performance obligations, variable considerations, and product and contract lives. When another party is involved in providing goods and/or services to a customer, management makes a judgment whether the promise to the customer is a performance obligation by the group (i.e., acting as a principal), or by another party (i.e., acting as an agent). The group acts mostly as the principal in its customer contracts. For the judgments applied to the incremental cost to obtain a contract, refer to Note 25 \u2013 Contract Assets and Liabilities. DISAGGREGATION OF REVENUES Health Tax & Accounting Governance, Risk & Compliance Legal & Regulatory Total reporting per segment 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 Revenue recognition At a point in time recognition 253 223 242 214 465 411 180 209 1,140 1,057 Over time recognition 1,195 1,011 1,516 1,296 868 728 734 679 4,313 3,714 Revenues from contracts with third parties 1,448 1,234 1,758 1,510 1,333 1,139 914 888 5,453 4,771 Revenue per contract Contracts one year or less 953 821 1,482 1,292 977 851 677 684 4,089 3,648 Multi-year contracts 495 413 276 218 356 288 237 204 1,364 1,123 Revenues from contracts with third parties 1,448 1,234 1,758 1,510 1,333 1,139 914 888 5,453 4,771 REVENUES BY MEDIA FORMAT Health Tax & Accounting Governance, Risk & Compliance Legal & Regulatory Total reporting per segment 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 Digital 1,281 1,089 1,686 1,434 843 723 745 684 4,555 3,930 Services 1 1 34 35 485 410 13 14 533 460 Print 166 144 38 41 5 6 156 190 365 381 Revenues from contracts with third parties 1,448 1,234 1,758 1,510 1,333 1,139 914 888 5,453 4,771 REVENUES BY TYPE
2022 2021
Digital and service subscription 3,950 3,397
Print subscription 157 157
Other recurring 281 256
Total recurring revenues 4,388 3,810
Print books 129 146
Legal Services transactional 299 266
Financial Services transactional 134 109
Other non-recurring
*
503 440
Total non-recurring revenues 1,065 961
Revenues from contracts with third parties 5,453 4,771
*
Other non-recurring revenues include software licenses, software implementation fees, professional services, and other non-subscription offerings.
RECURRING/NON-RECURRING REVENUES
Health
Tax &
Accounting
Governance,
Risk &
Compliance
Legal &
Regulatory Total
reporting per segment 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021
Recurring revenues 1,307 1,112 1,524 1,313 793 669 764 716 4,388 3,810
Non-recurring revenues 141 122 234 197 540 470 150 172 1,065 961
Revenues from contracts with third parties 1,448 1,234 1,758 1,510 1,333 1,139 914 888 5,453 4,771
GEOGRAPHIC INFORMATION
revenues generated per region
2022
%
2021
%
The Netherlands 204 4 196 4
Europe (excluding the Netherlands) 1,356 25 1,274 27
U.S. and Canada 3,476 64 2,946 62
Asia Paci\ufb01c 333 6 277 5
Rest of World 84 1 78 2
Revenues from contracts with third parties 5,453 100 4,771 100
",
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"fact-423": {
"value": "ACCOUNTING POLICIES Revenues represent the amount of consideration the group expects to be entitled to, arising from contracts with customers in the ordinary course of business, in exchange for transferring promised goods and/or services to customers, excluding amounts collected on behalf of third parties. Revenues are recognized once the performance obligations are ful\ufb01lled (i.e., when the customer obtains control over those goods and/or services). Subscriptions Revenues related to subscriptions are recognized over the period in which the goods are transferred and/or content is made available online and when the goods and/or content involved are similar in value to the customer over time. Subscription income received or receivable in advance of the delivery of goods and/or content is presented as deferred income (a contract liability) in the consolidated statement of \ufb01nancial position. Licenses License fees for the use of the group\u2019s software products and/or services are recognized in accordance with the substance of the agreement. Revenues from licenses representing a right to access are recognized over time on a straight-line basis. In case a right-to-access license is invoiced to a customer as a one-time upfront fee, revenue is recognized over a period of between 12 and 60 months depending on the nature of the license. In case of a transfer of rights (i.e., right-to-use license), which permits the licensee to exploit those rights freely and the group as a licensor has no remaining obligations to perform after delivery, revenues are recognized at the time the control of the license is transferred to a customer, considering any signi\ufb01cant customer acceptance clauses. Goods Revenues from the sale of goods are recognized at a point in time upon shipment or upon delivery when control is transferred to a customer, provided that ultimate collectability and \ufb01nal acceptance by the customer are reasonably assured. When goods are sold with a right to return, the group recognizes the revenues of the transferred goods for the amount the group expects to be entitled to, a refund contract liability, and an asset for the group\u2019s right to recover goods on settling the refund contract liability. Services Revenues from providing services are recognized in the period in which the related performance obligations are satis\ufb01ed. For \ufb01xed- price contracts, revenues are recognized based on the actual service provided as a proportion of the total services to be provided because the customer receives and uses the bene\ufb01ts simultaneously. In case of \ufb01xed-price contracts, the customer pays the \ufb01xed amount based on a payment schedule. If the contract includes an hourly fee, revenues are recognized in the amount to which the group has a right to invoice. Implementation services Revenues from providing implementation services are based on input or output methods, subject to contractual arrangements, and are recognized over the implementation period, or upon full completion of the implementation, depending on when the customer can bene\ufb01t from the service. Multi-element contracts There are arrangements that include various combinations of performance obligations, such as software licenses, services, training, hosting, and implementation. A performance obligation is only distinct if the customer can bene\ufb01t from goods and/or services on their own or together with other resources that are readily available to the customer, and the promise to transfer goods and/or services is separately identi\ufb01able from other promises in the contract. Goods and/or services that are not distinct are bundled with other goods and/or services in the contract, until a bundle of goods and/or services is created that is distinct, resulting in a single performance obligation. Where performance obligations are satis\ufb01ed over different periods of time, revenues are allocated to the respective performance obligations based on relative stand-alone selling prices at contract inception, and revenues are recognized as each performance obligation is satis\ufb01ed. Agent/principal arrangements If the group acts as an agent, whereby the group sells goods and/or services on behalf of a principal, the group recognizes the amount of the net consideration as revenues. If the group acts as a principal, the group recognizes the gross consideration for the speci\ufb01c goods and/or services transferred. Variable consideration Discounts, return of goods and/or services, usage-based prices, and index-based pricing are the most common forms of variable considerations within the group. Discounts are often contractually agreed and allocated to all distinct performance obligations, unless there is a speci\ufb01c discount policy for a performance obligation. Volume-related discounts, return of goods and/or services, and usage-based prices are estimated at contract inception and periodically reassessed during the contract term. The group considers normal price increases based on local inflation rates or customary business practices as compensation for cost price increases and not as variable consideration. Considerations are recognized pro rata over the term of the contract in case the group estimates at contract inception that price increases are beyond compensation for cost price increases. Contract modifications A contract modi\ufb01cation is a change in the scope and/or price of a contract that is approved by both the customer and the group. The group accounts for a contract modi\ufb01cation retrospectively, if: \u2022 The modi\ufb01cation only affected the transaction price and the remaining goods and/or services are not distinct; or \u2022 The modi\ufb01cation affected the scope, but no distinct goods and/or services were added. The group accounts for a contract modi\ufb01cation prospectively, if: \u2022 The modi\ufb01cation only affected the transaction price and the remaining goods and/or services are distinct; or \u2022 The modi\ufb01cation affected the scope and distinct goods and/or services were added, but the additional consideration did not reflect the stand-alone selling price. The group accounts for a contract modi\ufb01cation as a separate contract if the modi\ufb01cation affected the scope, distinct goods and/or services were added, and the additional consideration reflected the stand-alone selling price. Financing components As a practical expedient, the group does not adjust the consideration for the effects of a signi\ufb01cant \ufb01nancing component if the group expects that the period between the transfer of the promised goods and/or services to the customer and payment by the customer is one year or less. The group has no signi\ufb01cant contracts with a period of one year or more between the transfer of goods and/ or services and the payment of the consideration. Consequently, the group does not adjust transaction prices for the time value of money Cost of revenues Cost of revenues comprises directly attributable costs of goods and/or services sold. For digital products and services, cost of revenues may include data maintenance, hosting, license fees, royalties, product support, personnel expenses, subcontracted work, training, and other costs incurred to support and maintain the products, applications, and/ or services. For print products, cost of revenues may include cost for paper, printing and binding, royalties, personnel expenses, subcontracted work, shipping costs, and other incurred costs",
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"value": "Variable consideration Discounts, return of goods and/or services, usage-based prices, and index-based pricing are the most common forms of variable considerations within the group. Discounts are often contractually agreed and allocated to all distinct performance obligations, unless there is a speci\ufb01c discount policy for a performance obligation. Volume-related discounts, return of goods and/or services, and usage-based prices are estimated at contract inception and periodically reassessed during the contract term. The group considers normal price increases based on local inflation rates or customary business practices as compensation for cost price increases and not as variable consideration. Considerations are recognized pro rata over the term of the contract in case the group estimates at contract inception that price increases are beyond compensation for cost price increases. ",
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"fact-425": {
"value": "Note 7 \u2013 Earnings per Share The group presents basic and diluted earnings per share data for its ordinary shares. BASIC EARNINGS PER SHARE Basic earnings per share is calculated by dividing the pro\ufb01t for the year attributable to the ordinary equity holders of the company by the weighted-average number of ordinary shares outstanding during the year after adjusting for treasury shares. Profit for the year 2022 2021 Pro\ufb01t for the year attributable to the owners of the company (A) 1,027 728 Weighted-average number of ordinary shares for the year in millions of shares, unless otherwise stated 2022 2021 Outstanding ordinary shares at January 1 Note 33 262.5 267.5 Effect of cancelation of shares (1.9) (1.5) Effect of repurchased shares (5.9) (5.6) Weighted-average number of ordinary shares (B) 254.7 260.4 Basic EPS (A/B) (\u20ac) 4.03 2.79 DILUTED EARNINGS PER SHARE Diluted earnings per share is calculated by dividing the pro\ufb01t for the year attributable to ordinary equity holders of the company by the diluted weighted-average number of ordinary shares outstanding during the year after adjusting for treasury shares and for the effects of all dilutive potential ordinary shares, which consist of LTIP shares granted. Diluted weighted-average number of ordinary shares for the year in millions of shares, unless otherwise stated 2022 2021 Weighted-average number of ordinary shares (B) 254.7 260.4 Effect of Long-Term Incentive Plan (LTIP) 1.1 1.4 Diluted weighted-average number of ordinary shares (C) 255.8 261.8 Diluted EPS (A/C) (\u20ac) 4.01 2.78 ",
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"fact-426": {
"value": "Note 8 \u2013 Acquisitions and Divestments
ACQUISITIONS
ACCOUNTING POLICIES
Business combinations are accounted for using the acquisition method as at the acquisition date, which is the date on which control
is transferred to the group.
Changes in the group\u2019s interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions .
ESTIMATES AND JUDGMENTS
The fair value of the assets, liabilities, and contingent liabilities of a business combination should be measured within 12 months
from the acquisition date. For some acquisitions, provisional fair values have been included in the consolidated statement of
\ufb01nancial position. If the \ufb01nal valuation of the acquired assets and liabilities assumed is still pending at year-end, it will be completed
within the 12-month timeframe. Actual valuation of these assets, liabilities, and contingent liabilities may differ from the provisional
valuation.
When a business combination agreement provides for an adjustment to the cost of the transaction, contingent on future events
(such as earnout arrangements), the group includes an initial fair value of that adjustment in the cost of the transaction at the
acquisition date if the adjustment is probable and can be measured reliably. The initial and subsequent measurement will usually be
based on estimates of future results of the business combination. Actual results may differ from those estimates and may result in
material adjustments in the next \ufb01nancial year(s). Subsequent changes to the fair value are recognized in pro\ufb01t or loss, based on a
periodic reassessment of the contingent consideration.
General
On April 8, 2022, Wolters Kluwer Governance, Risk & Compliance completed the acquisition of 100% of the shares of International
Document Services, Inc. (IDS), a leading U.S. provider of compliance and document generation software solutions for the mortgage
and real estate industry, for \u20ac64 million in cash. The transaction had no deferred and contingent considerations. IDS serves over
450 clients, including U.S. mortgage lenders, banks, and law \ufb01rms. IDS\u2019s services include initial disclosures, electronic signatures,
closing documents, and document ful\ufb01llment. The IDS flagship document preparation solution, idsDoc, is a cloud-based platform
that is recognized across the industry for its superior capabilities, customer service, and integrations with many of the leading
loan origination systems and eClosing platforms. Revenues are based on transactional pricing linked to mortgage volumes. IDS is
headquartered in Draper, Utah, and employs approximately 75 employees.
On June 28, 2022, Wolters Kluwer Legal & Regulatory completed the acquisition of 100% of the shares of Level Programs S.L.
(Level Programs), a provider of legal practice management software in Spain, for \u20ac5 million in cash and deferred consideration of
\u20ac1 million. Level Program\u2019s principal product is Kmaleon, which is a platform used by mid-sized law \ufb01rms in Spain to ef\ufb01ciently
manage their cases and documents, billing, accounting, and time control. Level Programs is headquartered in Terrassa and employs
approximately 25 employees.
On September 30, 2022, Wolters Kluwer Health completed the acquisition of 100% of the shares of IJS Publishing Group (IJSPG), a
UK-based provider of peer-reviewed medical journals supporting scientists and authors, for \u20ac13 million in cash. The IJSPG portfolio
consists of ten journal titles, including the International Journal of Surgery, IJS Case Reports, and Annals of Medicine and Surgery.
IJSPG is headquartered in London, United Kingdom. No employees were acquired.
On December 30, 2022, Wolters Kluwer Legal & Regulatory completed the acquisition of 100% of the shares of Della AI Ltd (Della AI),
a UK-based provider of leading arti\ufb01cial intelligence technology based on advanced natural language processing, for \u20ac10 million
in cash and deferred consideration of \u20ac1 million. Della AI will become part of the legal software unit of Wolters Kluwer Legal &
Regulatory. Della AI is headquartered in London, United Kingdom, and employs 16 employees.
In addition, other smaller acquisitions were completed, with a combined total consideration of \u20ac1 million (2021: \u20ac9 million), including
deferred and contingent considerations.
The fair values of the identi\ufb01able assets and liabilities of the abovementioned acquisitions, as reported at December 31, 2022, are
provisional, but no material deviations from these fair values are expected.
\u2190 \u2192
Wolters Kluwer 2022 Annual Report 137
Note 8 \u2013 Acquisitions and Divestments continued
Acquisition spending
In 2022, total acquisition spending, net of cash acquired, was \u20ac92 million (2021: \u20ac108 million), including deferred and contingent
consideration payments of \u20ac1 million (2021: \u20ac0 million). In 2021, the group acquired Vanguard Software, LicenseLogix, and a few
smaller businesses.
In 2022, acquisition-related costs amounted to \u20ac3 million (2021: \u20ac5 million).
The goodwill relating to the 2022 acquisitions represents future economic bene\ufb01ts speci\ufb01c to the group arising from assets that do
not qualify for separate recognition as intangible assets. These bene\ufb01ts include revenues from expected new customers and from
new capabilities of the acquired product platforms, as well as expected synergies that will arise following the acquisitions.
Of the goodwill recognized in 2022, none was deductible for income tax purposes (2021: \u20ac68 million).
Acquisitions
2022 2021
Carrying
amount
Fair value
adjustments
Recognized
values
Recognized
values
Consideration payable in cash 92 111
Deferred and contingent considerations at fair value:
Non-current 2 1
Current 1 1
Total consideration 95 113
Intangible assets other than goodwill Note 18 0 77 77 47
Other non-current assets Note 20 2 2 2
Current assets 4 4 8
Current liabilities (2) (2) (9)
Non-current liabilities Note 29 (2) (2) (2)
Deferred tax assets/(liabilities) 0 (19) (19) (1)
Fair value of net identi\ufb01able assets 2 58 60 45
Goodwill on acquisitions Note 18 35 68
Cash effect of acquisitions:
Consideration payable in cash 92 111
Cash acquired (1) (3)
Deferred and contingent considerations paid Note 30 1 0
Acquisition spending, net of cash acquired 92 108
Of the 2022 fair value adjustments of \u20ac58 million, \u20ac29 million related to IDS, \u20ac6 million related to Level Programs, \u20ac12 million related
to IJSPG, \u20ac10 million related to Della AI, and \u20ac1 million related to the other acquisitions.
138 Wolters Kluwer 2022 Annual Report
Strategic Report |
Governance |
Financial Statements
\u2190 \u2192
Note 8 \u2013 Acquisitions and Divestments continued
Contribution of 2022 acquisitions
in millions of euros, unless otherwise stated Revenues
Adjusted
operating
profit
Profit for
the year
FTEs at
December 31,
2022
Totals excluding the impact of 2022 acquisitions 5,443 1,423 1,029 19,965
Contribution of 2022 acquisitions 10 1 (2) 91
Totals for the year 2022 5,453 1,424 1,027 20,056
Pro forma contribution of 2022 acquisitions for the period January 1, 2022, up to
acquisition date (unaudited) 6 0 (5)
Pro forma totals for the year 2022 5,459 1,424 1,022
The above information does not purport to represent what the actual results would have been, had the acquisitions been concluded
on January 1, 2022, nor is the information necessarily indicative for future results of the acquired operations. In determining the
contribution of the acquisitions, management has assumed that the fair value adjustments that arose on the date of the acquisition
would have been the same if the acquisition had occurred on January 1, 2022.
Deferred and contingent considerations
The acquisitions completed in 2022 resulted in a maximum achievable undiscounted deferred and contingent consideration of
\u20ac3 million. The fair value of this deferred and contingent consideration amounted to \u20ac3 million at acquisition date and at
December 31, 2022.
For further disclosure on deferred and contingent considerations, refer to Note 30 \u2013 Financial Risk Management.
Provisional fair value accounting
The fair values of the identi\ufb01able assets and liabilities will be revised if new information, obtained within one year from the
acquisition date about facts and circumstances that existed at the acquisition date, causes adjustments to the above amounts, or for
any additional provisions that existed at the acquisition date. Subsequent changes in purchase price accounting for 2021 acquisitions
resulted in a reduction of goodwill of \u20ac0 million. Reference is made to Note 18 \u2013 Goodwill and Intangible Assets other than Goodwill.
DIVESTMENTS
ACCOUNTING POLICIES
The amount of goodwill allocated to a divested business is based on its relative value compared to the value of the group of cash-
generating units to which the goodwill belongs.
General
On November 30, 2022, Wolters Kluwer Legal & Regulatory completed the divestment of its legal information units in France and
Spain to Karnov Group AB for \u20ac114 million in cash, which is subject to a working capital settlement. This divestment was originally
announced on December 9, 2021. The units employed 624 FTEs at divestment date.
In addition, other smaller divestments were completed.
In 2022, net divestment proceeds amounted to \u20ac106 million.
In 2021, net divestment proceeds amounted to \u20ac76 million and mainly included the divestment of the U.S. legal education business.
Note 8 \u2013 Acquisitions and Divestments continued
Divestment-related results on operations
2022 2021
Divestment of operations:
Consideration receivable in cash 114 75
Financial assets at fair value through profit or loss Note 22 \u2013 6
Consideration receivable 114 81
Intangible assets Note 18 0 47
Other non-current assets Note 19 0 2
Current assets (including assets held for sale) 110 17
Current liabilities (including liabilities held for sale) (77) (8)
Deferred tax assets/(liabilities) 0 (7)
Net identi\ufb01able assets/(liabilities) 33 51
Reclassi\ufb01cation of foreign exchange differences on loss of control to profit or loss, previously
recognized in other comprehensive income (1) (40)
Book pro\ufb01t/(loss) on divestments of operations 80 (10)
Divestment-related costs (3) (8)
Restructuring of stranded costs following divestments Note 32 (2) (2)
Divestment-related results included in other gains and (losses) Note 12 75 (20)
Cash effect of divestments:
Consideration receivable in cash 114 75
Cash included in divested operations (8) 0
Deferred divestment consideration receivable \u2013 1
Receipts from divestments, net of cash disposed 106 76
In the consolidated statement of cash flows, the book pro\ufb01t/(loss) on divestment of operations is reported under book (pro\ufb01t)/loss
on divestment of operations and non-current assets.
Effect of 2022 divestments
Revenues
Adjusted operating
profit
Totals for the year 2022 5,453 1,424
Minus: Contribution of 2022 divested operations (84) (8)
Pro forma totals for the year 2022 5,369 1,416
At their divestment dates, the 2022 divested operations jointly had 632 FTEs.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfBusinessCombinationsExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-427": {
"value": "ACCOUNTING POLICIES Business combinations are accounted for using the acquisition method as at the acquisition date, which is the date on which control is transferred to the group. Changes in the group\u2019s interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-428": {
"value": "ACCOUNTING POLICIES Business combinations are accounted for using the acquisition method as at the acquisition date, which is the date on which control is transferred to the group. Changes in the group\u2019s interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions ACCOUNTING POLICIES The amount of goodwill allocated to a divested business is based on its relative value compared to the value of the group of cash- generating units to which the goodwill belongsGoodwill The group measures goodwill at the acquisition date as the sum of the fair value of the consideration (including deferred and contingent consideration) and the recognized amount of any non-controlling interests in the acquiree, less the net recognized fair value amount of the identi\ufb01able assets acquired and liabilities assumed. Any deferred and contingent consideration payable (such as earnout arrangements) is recognized at fair value at the acquisition date. Costs related to acquisitions which the group incurs in a business combination are expensed as incurred. Goodwill associated with divested operations is allocated and measured on the basis of the relative value of the divested operation and the portion of the cash-generating unit (CGU) retained. Impairment At the end of each reporting period, it is assessed whether there is an indication that an intangible asset may be impaired. If any such indication exists, the group estimates the recoverable amount of the asset. If the recoverable amount is below the carrying value, the asset is impaired. Goodwill is tested for impairment annually, at July 1, and when an impairment trigger has been identi\ufb01ed. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForGoodwillExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-429": {
"value": "ACCOUNTING POLICIES Business combinations are accounted for using the acquisition method as at the acquisition date, which is the date on which control is transferred to the group. Changes in the group\u2019s interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions DIVESTMENTS ACCOUNTING POLICIES The amount of goodwill allocated to a divested business is based on its relative value compared to the value of the group of cash- generating units to which the goodwill belongs",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsAndGoodwillExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-430": {
"value": "Note 9 \u2013 Assets/Liabilities Classi\ufb01ed as Held for Sale 2022 2021 Assets of disposal groups classified as held for sale \u2013 101 Liabilities of disposal groups classified as held for sale \u2013 (74) Net assets of disposal groups classified as held for sale 0 27 ACCOUNTING POLICIES Non-current assets and disposal groups are classi\ufb01ed as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is met only when the sale is highly probable and the asset or disposal group is available for immediate sale in its present condition. Management must be committed to the sale plan, which should be expected to qualify for recognition as a completed sale within 12 months from the date of classi\ufb01cation. When the group is committed to a sale plan involving a loss of control of a subsidiary, all assets and liabilities of that subsidiary are classi\ufb01ed as held for sale when the criteria described above are met, regardless of whether the group will retain a non-controlling interest in its former subsidiary after the sale. The amount of goodwill allocated to a disposal group is based on its relative value compared to the value of the group of cash- generating units to which the goodwill belongs. Non-current assets and disposal groups classi\ufb01ed as held for sale are measured at the lower of the carrying amount and fair value less costs of disposal. DISPOSAL GROUPS \u2013 GENERAL 2022 2021 Legal & Regulatory \u2013 French and Spanish legal information businesses \u2013 27 Net assets of disposal groups classified as held for sale 0 27 In 2022, the disposal groups were all divested. Refer to Note 8 \u2013 Acquisitions and Divestments. ASSETS AND LIABILITIES OF DISPOSAL GROUPS The assets and liabilities of the disposal groups can be speci\ufb01ed as follows at December 31: 2022 2021 Non-current assets \u2013 73 Cash and cash equivalents \u2013 2 Other current assets \u2013 26 Non-current liabilities \u2013 (14) Deferred income \u2013 (27) Other current liabilities \u2013 (33) Net assets of disposal groups classified as held for sale 0 27 ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfNoncurrentAssetsOrDisposalGroupsClassifiedAsHeldForSaleExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-431": {
"value": "Note 9 \u2013 Assets/Liabilities Classi\ufb01ed as Held for Sale 2022 2021 Assets of disposal groups classified as held for sale \u2013 101 Liabilities of disposal groups classified as held for sale \u2013 (74) Net assets of disposal groups classified as held for sale 0 27 ACCOUNTING POLICIES Non-current assets and disposal groups are classi\ufb01ed as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is met only when the sale is highly probable and the asset or disposal group is available for immediate sale in its present condition. Management must be committed to the sale plan, which should be expected to qualify for recognition as a completed sale within 12 months from the date of classi\ufb01cation. When the group is committed to a sale plan involving a loss of control of a subsidiary, all assets and liabilities of that subsidiary are classi\ufb01ed as held for sale when the criteria described above are met, regardless of whether the group will retain a non-controlling interest in its former subsidiary after the sale. The amount of goodwill allocated to a disposal group is based on its relative value compared to the value of the group of cash- generating units to which the goodwill belongs. Non-current assets and disposal groups classi\ufb01ed as held for sale are measured at the lower of the carrying amount and fair value less costs of disposal. DISPOSAL GROUPS \u2013 GENERAL 2022 2021 Legal & Regulatory \u2013 French and Spanish legal information businesses \u2013 27 Net assets of disposal groups classified as held for sale 0 27 In 2022, the disposal groups were all divested. Refer to Note 8 \u2013 Acquisitions and Divestments. ASSETS AND LIABILITIES OF DISPOSAL GROUPS The assets and liabilities of the disposal groups can be speci\ufb01ed as follows at December 31: 2022 2021 Non-current assets \u2013 73 Cash and cash equivalents \u2013 2 Other current assets \u2013 26 Non-current liabilities \u2013 (14) Deferred income \u2013 (27) Other current liabilities \u2013 (33) Net assets of disposal groups classified as held for sale 0 27 ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfNoncurrentAssetsHeldForSaleAndDiscontinuedOperationsExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-432": {
"value": "ACCOUNTING POLICIES Non-current assets and disposal groups are classi\ufb01ed as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is met only when the sale is highly probable and the asset or disposal group is available for immediate sale in its present condition. Management must be committed to the sale plan, which should be expected to qualify for recognition as a completed sale within 12 months from the date of classi\ufb01cation. When the group is committed to a sale plan involving a loss of control of a subsidiary, all assets and liabilities of that subsidiary are classi\ufb01ed as held for sale when the criteria described above are met, regardless of whether the group will retain a non-controlling interest in its former subsidiary after the sale. The amount of goodwill allocated to a disposal group is based on its relative value compared to the value of the group of cash- generating units to which the goodwill belongs. Non-current assets and disposal groups classi\ufb01ed as held for sale are measured at the lower of the carrying amount and fair value less costs of disposal. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForNoncurrentAssetsOrDisposalGroupsClassifiedAsHeldForSaleExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-433": {
"value": "ACCOUNTING POLICIES Non-current assets and disposal groups are classi\ufb01ed as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is met only when the sale is highly probable and the asset or disposal group is available for immediate sale in its present condition. Management must be committed to the sale plan, which should be expected to qualify for recognition as a completed sale within 12 months from the date of classi\ufb01cation. When the group is committed to a sale plan involving a loss of control of a subsidiary, all assets and liabilities of that subsidiary are classi\ufb01ed as held for sale when the criteria described above are met, regardless of whether the group will retain a non-controlling interest in its former subsidiary after the sale. The amount of goodwill allocated to a disposal group is based on its relative value compared to the value of the group of cash- generating units to which the goodwill belongs. Non-current assets and disposal groups classi\ufb01ed as held for sale are measured at the lower of the carrying amount and fair value less costs of disposal",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForNoncurrentAssetsOrDisposalGroupsClassifiedAsHeldForSaleAndDiscontinuedOperationsExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-434": {
"value": "Note 10 \u2013 Sales Costs 2022 2021 Marketing and promotion costs 263 228 Sales-related costs \u2013 sales commissions directly expensed 162 155 Sales-related costs \u2013 amortization of capitalized sales commissions Note 25 29 23 Other sales-related costs 359 304 Customer support costs 80 76 Additions to and releases from loss allowance on trade receivables and unbilled revenues Note 25 21 20 Total 914 806 ACCOUNTING POLICIES Sales costs relate to direct internal personnel expenses and direct external costs, incurred for marketing and sales activities. Sales costs include sales commissions directly expensed as incurred and the amortization of capitalized sales commissions that qualify as cost to obtain a contract. As a practical expedient, the group recognizes the incremental cost of obtaining a contract as an expense if the amortization period of the asset that the group otherwise would have recognized is one year or less. If sales commissions are granted for bundled and/or multi-element contracts in which the predominant consideration element is recognized for performance obligations satis\ufb01ed at a point in time (e.g., the sale of a book, training, or the sale of a right-to-use license), the sales commissions are expensed when incurred. In addition, sales commissions that are commensurate or based on generic performance indicators and/or net targets are expensed when incurred. For all other commission plans on new sales targets, the amortization period ranges between one and \ufb01ve years, depending on the nature of the underlying promise in the contract with the customer, unless the underlying non-cancellable contract period for a right-to-access license is longer than \ufb01ve years. In those situations, the longer non-cancellable contract period of the license contract prevails as the amortization period. Sales costs also include the additions to and releases from loss allowance on trade receivables and unbilled revenues. The loss allowance is determined as an amount equal to the lifetime expected credit losses . ESTIMATES AND JUDGMENTS The group determines the additions to and releases from loss allowance on trade receivables and unbilled revenues by making assumptions and estimating the risk of default and expected loss rates at contract inception over the expected life of the \ufb01nancial instrument, using the group\u2019s historically incurred losses and existing market conditions, as well as forward-looking information at the end of each reporting period. Please refer to Note 25 \u2013 Contract Assets and Liabilities for more information. 142 Wolters Kluwer 2022 Annual Report Strategic Report | Governance | Financial Statements \u2190 \u2192 Note 11 \u2013 General and Administrative Costs 2022 2021 Research, development, and editorial costs 541 466 General and administrative operating expenses 996 920 Amortization and (reversal of) impairment of acquired identifiable intangible assets Note 14 160 164 Total 1,697 1,550 ACCOUNTING POLICIES General and administrative costs include costs that are neither directly attributable to cost of revenues nor to sales costs. These costs include product research and development costs, editorial costs, information technology costs, general overhead costs, amortization of acquired identi\ufb01able intangible assets, amortization of other intangible assets (if not part of cost of revenues), depreciation of property, plant, and equipment, depreciation of right-of-use assets, and impairment of goodwill, intangible assets other than goodwill, property, plant, and equipment, and right-of-use assets. Note 12 \u2013 Other Gains and (Losses) 2022 2021 Acquisition-related costs Note 8 (3) (5) Additions to acquisition integration provisions Note 32 (3) (4) Fair value changes of contingent considerations Note 30 0 0 Divestment-related results Note 8 75 (20) Total 69 (29) ACCOUNTING POLICIES Other gains and losses relate to items which are different in their nature or frequency from operating items. These include divestment-related results (including directly attributable divestment costs), additions to provisions for restructuring of stranded costs following divestments, acquisition-related costs, additions to acquisition integration provisions, and subsequent fair value changes of contingent considerations. See also Note 4 \u2013 Benchmark Figures. Note 13 \u2013 Personnel Expenses 2022 2021 Salaries and wages and other benefits 1,855 1,641 Social security charges 159 148 Medical cost benefits 94 74 Expenses related to de\ufb01ned contribution plans 89 80 Expenses related to de\ufb01ned bene\ufb01t plans Note 31 29 11 Equity-settled share-based payments Note 34 28 24 Total 2,254 1,978 Employees Headcount at December 31 20,451 19,827 In full-time equivalents at December 31 20,056 19,454 Thereof employed in the Netherlands 1,214 1,155 In full-time equivalents average per annum * 20,616 19,741 * Average full-time equivalents per annum include temporary staff and contractors, whereas headcount and its full-time equivalent only relate to staff on the payroll of the group. Note 14 \u2013 Amortization, Impairment, and Depreciation 2022 2021 Amortization of acquired identifiable intangible assets Note 18 140 131 Impairment of acquired identifiable intangible assets Note 18 20 38 Reversal of impairment of acquired identifiable intangible assets Note 18 \u2013 (5) Amortization of other intangible assets Note 18 195 194 Impairment of other intangible assets Note 18 13 18 Depreciation of property, plant, and equipment Note 19 26 25 Impairment of property, plant, and equipment Note 19 1 0 Depreciation of right-of-use assets Note 20 71 71 Impairment of right-of-use assets Note 20 \u2013 1 Total 466 473 For further disclosure on estimates and judgments, refer to Note 18 \u2013 Goodwill and Intangible Assets other than Goodwill and Note 20 - Leasing. ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfExpensesExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-435": {
"value": "ACCOUNTING POLICIES Sales costs relate to direct internal personnel expenses and direct external costs, incurred for marketing and sales activities. Sales costs include sales commissions directly expensed as incurred and the amortization of capitalized sales commissions that qualify as cost to obtain a contract. As a practical expedient, the group recognizes the incremental cost of obtaining a contract as an expense if the amortization period of the asset that the group otherwise would have recognized is one year or less. If sales commissions are granted for bundled and/or multi-element contracts in which the predominant consideration element is recognized for performance obligations satis\ufb01ed at a point in time (e.g., the sale of a book, training, or the sale of a right-to-use license), the sales commissions are expensed when incurred. In addition, sales commissions that are commensurate or based on generic performance indicators and/or net targets are expensed when incurred. For all other commission plans on new sales targets, the amortization period ranges between one and \ufb01ve years, depending on the nature of the underlying promise in the contract with the customer, unless the underlying non-cancellable contract period for a right-to-access license is longer than \ufb01ve years. In those situations, the longer non-cancellable contract period of the license contract prevails as the amortization period. Sales costs also include the additions to and releases from loss allowance on trade receivables and unbilled revenues. The loss allowance is determined as an amount equal to the lifetime expected credit losses ACCOUNTING POLICIES General and administrative costs include costs that are neither directly attributable to cost of revenues nor to sales costs. These costs include product research and development costs, editorial costs, information technology costs, general overhead costs, amortization of acquired identi\ufb01able intangible assets, amortization of other intangible assets (if not part of cost of revenues), depreciation of property, plant, and equipment, depreciation of right-of-use assets, and impairment of goodwill, intangible assets other than goodwill, property, plant, and equipment, and right-of-use assets. ACCOUNTING POLICIES Other gains and losses relate to items which are different in their nature or frequency from operating items. These include divestment-related results (including directly attributable divestment costs), additions to provisions for restructuring of stranded costs following divestments, acquisition-related costs, additions to acquisition integration provisions, and subsequent fair value changes of contingent considerations. See also Note 4 \u2013 Benchmark Figures. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForExpensesExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-436": {
"value": "Note 11 \u2013 General and Administrative Costs 2022 2021 Research, development, and editorial costs 541 466 General and administrative operating expenses 996 920 Amortization and (reversal of) impairment of acquired identifiable intangible assets Note 14 160 164 Total 1,697 1,550 ACCOUNTING POLICIES General and administrative costs include costs that are neither directly attributable to cost of revenues nor to sales costs. These costs include product research and development costs, editorial costs, information technology costs, general overhead costs, amortization of acquired identi\ufb01able intangible assets, amortization of other intangible assets (if not part of cost of revenues), depreciation of property, plant, and equipment, depreciation of right-of-use assets, and impairment of goodwill, intangible assets other than goodwill, property, plant, and equipment, and right-of-use assets. ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfGeneralAndAdministrativeExpenseExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-437": {
"value": "Note 13 \u2013 Personnel Expenses 2022 2021 Salaries and wages and other benefits 1,855 1,641 Social security charges 159 148 Medical cost benefits 94 74 Expenses related to de\ufb01ned contribution plans 89 80 Expenses related to de\ufb01ned bene\ufb01t plans Note 31 29 11 Equity-settled share-based payments Note 34 28 24 Total 2,254 1,978 Employees Headcount at December 31 20,451 19,827 In full-time equivalents at December 31 20,056 19,454 Thereof employed in the Netherlands 1,214 1,155 In full-time equivalents average per annum * 20,616 19,741 * Average full-time equivalents per annum include temporary staff and contractors, whereas headcount and its full-time equivalent only relate to staff on the payroll of the group. Note 31 \u2013 Employee Bene\ufb01ts 2022 2021 Retirement plans 34 28 Other post-employment bene\ufb01t plans 44 52 Other long-term employment bene\ufb01ts 7 10 Total 85 90 ACCOUNTING POLICIES Defined contribution plans Obligations for contributions to de\ufb01ned contribution plans are recognized as personnel expenses in pro\ufb01t or loss in the period during which services are rendered by employees. Prepaid contributions are recognized as an asset to the extent that a cash refund or reduction in future payments is available. Defined benefit plans The group\u2019s net obligation in respect of de\ufb01ned employee bene\ufb01t plans is calculated separately for each plan by estimating the amount of future bene\ufb01ts that employees have earned in the current and prior periods, discounting that amount, and deducting the fair value of any plan assets. The calculation of de\ufb01ned bene\ufb01t obligations is performed annually by a quali\ufb01ed actuary using the projected unit credit method. When the calculation results in a potential asset for the group, the recognized asset is limited to the present value of economic bene\ufb01ts available in the form of any future refunds from the plan, or reductions in future contributions to the plan. To calculate the present value of economic bene\ufb01ts, consideration is given to any applicable minimum funding requirements. All remeasurement gains and losses of the net de\ufb01ned bene\ufb01t liabilities or assets, which consist of actuarial gains and losses, return on plan assets (excluding interest), and the effect of the asset ceiling (if any, excluding interest), are recognized immediately in other comprehensive income, in the period in which they occur. The group determines the net interest expense or income on the net de\ufb01ned bene\ufb01t liability or asset for the period by applying the discount rate used to measure the de\ufb01ned bene\ufb01t obligation at the beginning of the annual period to the net de\ufb01ned bene\ufb01t liability or asset, considering any changes in the net de\ufb01ned bene\ufb01t liability or asset during the period resulting from contributions and bene\ufb01t payments. Net interest expense and other expenses related to de\ufb01ned bene\ufb01t plans, such as fund administration costs, are recognized in pro\ufb01t or loss, when incurred. When the bene\ufb01ts of a plan are changed or when a plan is curtailed, the resulting change in the de\ufb01ned bene\ufb01ts that relates to past service or the gain or loss on curtailment is recognized directly in pro\ufb01t or loss. The group recognizes gains and losses on the settlement of a de\ufb01ned bene\ufb01t plan when the settlement occurs. A curtailment occurs when an entity signi\ufb01cantly reduces the number of employees covered by a plan. Amendments to the terms of a de\ufb01ned bene\ufb01t plan will be considered plan amendments and will be fully accounted for as past service costs. If a plan amendment, curtailment, or settlement occurs, the current service cost and the net interest for the period after the remeasurement are determined using the assumptions applied for the remeasurement. Long-term service benefits The group\u2019s net obligation in respect of long-term service bene\ufb01ts, such as jubilee bene\ufb01ts, is the amount of future bene\ufb01ts that employees have earned in return for their service in the current and prior periods. The obligation is calculated using the projected unit credit method and is discounted to its present value, with the fair value of any related assets deducted. In addition to the retirement plans and other post-employment plans, the group has other long-term employment bene\ufb01t plans
in Australia, Belgium, France, Germany, India, Japan, Mexico, the Netherlands, New Zealand, Poland, and the U.S.
RETIREMENT PLANS
The group has its largest de\ufb01ned bene\ufb01t retirement plan in the Netherlands with de\ufb01ned bene\ufb01t obligations of \u20ac1.0 billion as
of December 31, 2022, followed by the United Kingdom and the United States with de\ufb01ned bene\ufb01t obligations of \u20ac83 million and
\u20ac70 million respectively. There are also retirement plans in Belgium, Canada (wound up in 2022), and Australia. All plans are funded
schemes. The de\ufb01ned bene\ufb01t plans in the Netherlands, the U.S., and the U.K. are insured with the company\u2019s self-administrated
pension funds, which are separate legal entities with plan assets being held independently of the group.
The Netherlands
In the Netherlands, the scheme is a career average salary-based scheme. Members accrue a portion of their current salary at
a rate calculated to enable them to reach a pension level based on their average salary. The Dutch pension plan is subject to the
supervision of the Dutch Central Bank (DNB). The scheme funding level is determined by the new Financial Assessment Framework
(nFTK), whereby funding liabilities are determined based on a 120-month moving average of the 20-year forward rate. Bene\ufb01t
reductions, if necessary, will be smoothed over time when recovery to full funding within eight years is not expected. Reductions will
amount to one-eighth of the de\ufb01cit at the measurement date. Indexation of pension entitlements will not be allowed at funding
ratios below 110%, while full indexation will be allowed only at funding ratios higher than approximately 125% (these are year- and
plan-speci\ufb01c).
The Dutch pension scheme has an unaudited 12-month rolling average coverage ratio of 129.4% at December 31, 2022 (2021: 120.2%).
If this ratio is below 104%, a rolling eight-year recovery plan should be submitted to the DNB, on an annual basis. The pension
premiums are in general based on contributions by the employer (two-thirds) and employees (one-third). The total annual pension
contribution has been determined at 28.0% of base salary for 2022, of which the employer contributed the excess above the 24.0%
basic premium. The pension base is capped but will be corrected for inflation annually.
United States
The U.S. retirement scheme has an annual statutory valuation which forms the basis for establishing the employer contribution each
year (subject to ERISA and IRS minimums). The U.S. scheme was a \ufb01nal salary-based scheme, based on years of credited service, but
is now a frozen plan. The pay and bene\ufb01t accruals are frozen.
The plan \ufb01duciaries of the U.S. scheme are required by law to act in the interests of the fund\u2019s bene\ufb01ciaries. The \ufb01duciary duties for
the scheme are allocated between committees which are staffed by senior employees of the group. The investment committee has
the primary responsibility for the investment and management of plan assets.
United Kingdom
The U.K. retirement scheme is a \ufb01nal salary-based scheme, but it is a frozen plan. The trustees of the pension fund are required by
law to act in the interests of the fund\u2019s bene\ufb01ciaries and are responsible for the investment policy regarding the assets of the fund.
The board of trustees consists of an equal number of company-appointed and member-nominated directors.
The level of funding is determined by statutory triennial actuarial valuations in accordance with pension legislation. Where the
scheme falls below 100% funded status, the group and the scheme trustees must agree on how the de\ufb01cit is to be remedied. A
pension rate increase is usually a \ufb01xed promise and is built into the funding requirement. The U.K. Pensions Regulator has signi\ufb01cant
powers and sets out in codes and guidance the parameters for scheme funding. At December 31, 2022, the future de\ufb01cit contribution
commitments were not larger than the surplus in the U.K. plan and therefore there was no additional balance sheet liability
recognized in respect of these contributions (2021: no additional balance sheet liability).
OTHER POST-EMPLOYMENT PLANS
Other post-employment plans exist in the U.S., Canada, and Italy. These plans have no plan assets and are unfunded. The main
plan is the post-employment medical plan in the U.S., which was closed to new entrants in 2021. The group funds the U.S. post-
employment medical plan obligations on a pay-as-you-go basis. If healthcare costs in the future increase more than anticipated, the
actuarially determined liability, and as a result the related other post-employment bene\ufb01t plan expense, could increase along with
future cash outflows.
FUNDING REQUIREMENTS
Funding requirements of the plans are based on local legislation and separate actuarial valuations for which the assumptions differ
from the assumptions used under IAS 19 \u2013 Employee Bene\ufb01ts. The funding requirements are based on each pension fund\u2019s actuarial
measurement framework set out in the funding policies of the individual plans.
In the Netherlands, there is no formal requirement to fund de\ufb01cits of the plan by the employer.
In the United States, there are minimum contribution requirements. In case the statutory funded status falls below certain
thresholds, the U.S. Pension Protection Act requires the de\ufb01cit to be recti\ufb01ed with additional minimum employer contributions,
spread over a seven-year period, to avoid restrictions on the ability to pay some accelerated bene\ufb01t forms, such as lump sums. These
funding levels are reassessed annually.
The trustees of the U.K. plan and the group \ufb01nalized the latest triennial valuation in 2020 for funding purposes in 2021. The
U.K. Pensions Regulator has the power to demand more funding and support where a pension scheme has been exposed to an
unacceptable level of risk. As part of the 2017 actuarial funding valuation, the parent company issued a guarantee of \u00a318 million
(or \u20ac20 million at December 31, 2022), with a negative pledge issued by a Wolters Kluwer U.K. group company. Both guarantees remain
effective under the new valuation. In addition, it has been agreed that there will be no planned de\ufb01cit contribution until 2024, unless
the coverage ratio will fall under 97%. The funding will be reassessed based on a new triennial valuation to be \ufb01nalized in 2024.
RISK MANAGEMENT OF MAIN PLANS IN THE GROUP
The retirement and other post-employment plans expose the group to actuarial risks, such as longevity risks, interest rate
risks, investment and market risks, and currency risks.
The group has restructured employee bene\ufb01t plans in the past by moving existing and newly hired employees to de\ufb01ned contribution
plans or by freezing the plans (either with no future service bene\ufb01t accruals and/or no new participants entering the plan). These
redesigns reduce or cancel future bene\ufb01t accruals in the plans and consequently reduce the pace of liability growth. The group also
reviews periodically its \ufb01nancing and investment policies (liability-driven investments) and its liability management (lump-sum
offerings).
The various plans manage their balance sheet to meet their pension promise. By using asset liability management (ALM) studies,
major risk sources are identi\ufb01ed, and the impact of decisions is assessed by quantifying the potential impact on elements like future
pensions, contributions, and funded ratio. These ALM studies also determine risk and return measures that consider the interests
of all stakeholders. The outcome of these studies results in a risk-return trade-off, taking the duration of pension liabilities into
account, which will be an integral part of the investment strategy. The investment strategy covers the allocation of asset classes and
hedging strategies, and also decisions on new and alternative asset classes, passive versus active investments, leverage, and the use
of derivatives.
ACTUARIAL ASSUMPTIONS FOR RETIREMENT AND OTHER POST-EMPLOYMENT BENEFIT PLANS
The discount rate is the yield rate at the end of the reporting period on high-quality corporate bonds that have maturity dates
approximating the terms of the group\u2019s obligations and that are denominated in the same currency in which the bene\ufb01ts are
expected to be paid. The calculation is performed annually by quali\ufb01ed actuaries.
RETIREMENT PLANS AND OTHER POST-EMPLOYMENT BENEFIT PLANS
The provisions for retirement and other post-employment plans relate to de\ufb01ned employee bene\ufb01t plans. The group has arranged
pension schemes in various countries for most of its employees in accordance with the legal requirements, customs, and local
situation of the countries involved. These retirement schemes are partly managed by the group itself and partly entrusted to external
entities, such as company pension funds and insurance companies. In addition, the group provides certain employees with other
bene\ufb01ts upon retirement. These bene\ufb01ts include contributions towards medical health plans in the U.S., where the employer refunds
part of the insurance premiums for retirees, or, in the case of uninsured schemes, bears the medical expenses while deducting the
participants\u2019 contributions.
CHARACTERISTICS OF MATERIAL PLANS
The Netherlands United States United Kingdom
Retirement plans
Type of benefits Pensions Pensions Pensions
Type of plan Career average Final salary Final salary
Status of plan Open Frozen Frozen
Service costs Yes No No
Status of plan funding Funded Funded Funded
Other post-employment plans
Type of benefits Post-retirement medical plan
Type of plan Annual insurance premium
coverage
Status of plan Closed
Service costs Yes
Status of plan funding Unfunded
There are open retirement plans for new entrants in the Netherlands and Belgium. The group has closed plans in Belgium, Canada,
and Australia. A closed plan means that no new members can join the pension plans. However, current participants in the plan can
still accrue for future service bene\ufb01ts, and therefore the plan incurs service costs for the active participants.
If a plan is frozen, the plan is closed to new entrants and existing participants do not build up future service bene\ufb01t accruals.
The group has frozen plans in the U.S., the U.K., and Canada (wound up in 2022). These plans have no more annual service costs.
The following weighted-average principal actuarial assumptions were used to determine the pension expense and other post-
employment plans\u2019 expense for the year under review, and de\ufb01ned bene\ufb01t obligations at the end of the reporting period:
in % 2022 2021
Retirement plans
Discount rate to discount the obligations at year end 3.9 1.3
Discount rate for pension expense 1.3 0.8
Expected rate of pension increases (in payment) at year end 3.1 2.2
Expected rate of pension increases (in deferral) at year end 3.1 2.2
Expected rate of inflation increase for pension expense 2.3 2.2
Other post-employment benefit plans
Discount rate to discount the obligations at year end 4.6 2.1
Discount rate for pension expense 2.1 1.6
Medical cost trend rate 3.0 3.0
For most of the retirement and other post-employment schemes, the discount rate is determined or validated using a general
accepted methodology in selecting corporate bonds by the group advisory actuary. For the U.S. plans, the discount rate is based
on the yield curve/cash flow matching approach which uses spot yields from the standard FTSE and the timing of the cash flows
of the plan.
Mortality assumptions for the most important plans are based on the following retirement mortality tables:
\u2022 The Netherlands: AG projection table 2022, including fund speci\ufb01c 2022 experience loading (2021: AG projection table 2020, including
fund-speci\ufb01c 2019 experience loading);
\u2022 U.S.: Pri-2012 Mortality Table with MP 2021 projections, being the current standard mortality table (2021: Pri-2012 Mortality Table with
MP 2021 projections); and
\u2022 U.K.: SAPS S3 (Year of Birth) CMI 2019 projections with 1.25% long-term improvement rate (2021: SAPS S3 (Year of Birth) \u2013 CMI 2019
projections with 1.25% long-term improvement rate).
Assumptions regarding future mortality experience are set based on actuarial advice and best estimate mortality tables in the
applicable countries.
The current life expectancies underlying the value of the de\ufb01ned bene\ufb01t retirement obligations at December 31, 2022, are as follows:
in years The Netherlands United States United Kingdom
Life expectancy at age of 65 now \u2013 Male 21.8 20.6 22.2
Life expectancy at age of 65 now \u2013 Female 24.2 22.6 24.0
Life expectancy aged 65 in 20 years \u2013 Male 23.8 22.7 23.3
Life expectancy aged 65 in 20 years \u2013 Female 26.2 25.0 25.3
Given the nature of the de\ufb01ned bene\ufb01t obligations in Belgium, Italy, and Australia, with lump-sum bene\ufb01t payments at retirement
date instead of annuity payments, the impact of changing life expectancy after the retirement age on the plan liabilities is limited in
these countries.
SENSITIVITY RETIREMENT PLANS
in millions of euros Gross service cost Defined benefit obligations
2022 Baseline 16 1,263
Change compared to baseline
Decrease of
assumption
Increase of
assumption
Decrease of
assumption
Increase of
assumption
Discount rate (change by 1%) 5 (4) 226 (176)
Pension increase rate (change by 0.5%) (2) 2 (85) 95
Inflation increase rate (change by 0.5%) (3) 3 (116) 136
Mortality table (change by one year) \u2013 0 (72) 49
Gross service cost represents the annual accrual of liability due to another year of service, excluding any interest or offsetting
employee contributions, and therefore differs from the current service cost included in the calculation of the pension expense.
SENSITIVITY OF THE DEFINED BENEFIT OBLIGATIONS (DBO) OF RETIREMENT PLANS IN THE CONSOLIDATED STATEMENT
OF FINANCIAL POSITION AND THE DEFINED BENEFIT EXPENSE OF THE RETIREMENT PLANS IN THE CONSOLIDATED
STATEMENT OF PROFIT OR LOSS (P&L)
The Netherlands United States United Kingdom
DBO P&L DBO P&L DBO P&L
Discount rate sensitivity
\u2013 \u2013
Pension increase sensitivity
\u2013 \u2013 \u2013
Inflation rate sensitivity
\u2013 \u2013 \u2013
Mortality sensitivity
\u2013 \u2013
Pension rate increases are only applicable for the plans in the Netherlands and the United Kingdom. Pension increases in the
Netherlands are related to price inflation. However, these increases are conditional and depend on the funding position of the Dutch
pension fund. Pension increases are therefore capped. The pension increase assumption is based on the liability ceiling approach
and determined as the rate of increase such that the present value of vested bene\ufb01ts, including the assumed rate of pension
increases, is not greater than the fair value of plan assets. For 2022, this resulted in a Dutch pension increase assumption of 3.11%
compared to 2.11% at year-end 2021.
Since the retirement plans in the United States and the United Kingdom are frozen, the service cost is zero and not sensitive
for changes in discount rate, pension increases, inflation, or longevity.
SENSITIVITY OF OTHER POST-EMPLOYMENT PLANS
in millions of euros Gross service costs Defined benefit obligations
2022 Baseline 1 44
Change compared to baseline
Discount rate (by -1%) 0 4
Discount rate (by +1%) 0 (3)
The actual medical cost trend rate in the United States exceeds the applied medical cost trend rate for its main medical plan,
which is capped at 3% (2021: 3%) according to the plan rules. The main U.S. medical plan is therefore hardly sensitive to medical
cost increases.
PLAN LIABILITIES AND PLAN ASSETS
Defined benefit
retirement plans
Other post-
employment plans
2022 2021 2022 2021
Plan liabilities
Fair value at January 1 1,645 1,652 52 58
Settlements (2) (23) \u2013 (4)
Employer service cost 19 19 1 1
Interest expense on de\ufb01ned bene\ufb01t obligations 24 14 1 1
Administration costs and taxes 2 2 \u2013 \u2013
Bene\ufb01ts paid by fund (50) (52) \u2013 \u2013
Benefits paid by employer \u2013 \u2013 (4) (3)
Remeasurement (gains)/losses (386) 24 (8) (4)
Contributions by plan participants 3 3 \u2013 \u2013
Plan amendments and curtailments 7 (11) \u2013 0
Foreign exchange differences 1 17 2 3
Fair value at December 31 1,263 1,645 44 52
Plan assets
Fair value at January 1 1,641 1,621 0 0
Settlements (2) (23) \u2013 (4)
Interest income on plan assets 24 14 \u2013 \u2013
Return on plan assets greater than discount rate (390) 45 0 \u2013
Bene\ufb01ts paid by fund (50) (52) (4) (3)
Contributions by employer 13 14 4 7
Contributions by plan participants 3 3 \u2013 \u2013
Foreign exchange differences 1 19 \u2013 \u2013
Fair value at December 31 1,240 1,641 0 0
Funded status
De\ufb01cit/(surplus) at December 31 23 4 44 52
Irrecoverable surplus 11 24 \u2013 \u2013
Net liability at December 31 34 28 44 52
Defined benefit
retirement plans
Other post-
employment plans
2022 2021 2022 2021
Pension expenses
Employer service cost 19 19 1 1
Settlement gain 0 0 \u2013 0
Past service costs \u2013 plan amendment 7 (11) \u2013 0
Past service costs \u2013 curtailment \u2013 0 \u2013 \u2013
Interest expense on irrecoverable surplus 0 0 \u2013 \u2013
Interest expense on de\ufb01ned bene\ufb01t obligations 24 14 1 1
Interest income on plan assets (24) (14) \u2013 \u2013
Administration costs and taxes 2 2 \u2013 \u2013
Total pension expense 28 10 2 2
Of which is included in:
Personnel expenses Note 13 28 10 1 1
Other \ufb01nance (income)/costs Note 15 0 0 1 1
In 2022, there was an asset ceiling in the U.K. pension plan of \u20ac10 million (2021: \u20ac24 million). The surplus is not recognized as a
pension asset as there is no unconditional right to a refund of this surplus from the U.K. scheme. The U.K. pension fund has no
liability in respect of minimum funding requirements (2021: no liability).
Plan amendments/curtailments/settlements
In 2022, the Dutch pension fund decided to increase the accrual rate as of January 1, 2023, from 1.58% to 1.875%. The 2022 decision on
the higher accrual rate resulted in a plan amendment loss of
\u20ac
7 million on the de\ufb01ned bene\ufb01t obligations. In 2021, a decrease in the
accrual rate in the Dutch pension fund resulted in a plan amendment gain of
\u20ac
11 million.
In May 2021, there was a retiree life insurance buyout of the U.S. other post-retirement bene\ufb01t plan. As a result, there was a small
gain following the settlement of the de\ufb01ned bene\ufb01t obligations and the associated payments of \u20ac4 million each.
In November 2021, the group announced the annuity buyout of the de\ufb01ned bene\ufb01t obligations in the Canadian pension fund, as
of April 30, 2022. As a result, a small curtailment gain was realized from the earnings freeze upon the wind-up of the plan in 2022.
The annuity buyout resulted in 2021 settlement reductions of the de\ufb01ned bene\ufb01t obligations and plan assets by \u20ac23 million.
Employer contributions
The group\u2019s employer contributions to be paid to the de\ufb01ned bene\ufb01t retirement plans in 2023 are estimated at \u20ac11 million (2022:
actual employer contributions of \u20ac13 million).
REMEASUREMENTS
The pre-tax cumulative amount of remeasurement gains/losses recognized in the consolidated statement of comprehensive income
is as follows:
2022 2021
Position at January 1 (138) (154)
Recognized in other comprehensive income 18 16
Cumulative amount at December 31 (120) (138)
REMEASUREMENT GAINS/(LOSSES) FOR THE YEAR
2022 2021
Remeasurement gains/(losses) due to experience adjustments (17) 24
Remeasurement gains/(losses) due to changes in demographic assumptions (11) (2)
Remeasurement gains/(losses) due to changes in \ufb01nancial assumptions 422 (42)
Remeasurement gains/(losses) on de\ufb01ned bene\ufb01t obligations 394 (20)
Return on plan assets greater/(lower) than discount rate (390) 45
Change in irrecoverable surplus, other than interest and foreign exchange differences 14 (9)
Recognized remeasurement gains on defined benefit plans in other comprehensive income 18 16
Experience adjustments result from changes, such as changes in plan populations, data corrections, and differences in cash flows.
Changes in demographic assumptions relate to differences between the current and previous actuarial assumptions in mortality
tables, rate of employee turnover, disability, and early retirement.
Changes in \ufb01nancial assumptions relate to differences between the current and previous actuarial assumptions, such as discount
rate, pension rate increase, price increases, and future salary and bene\ufb01t levels.
The actual consolidated return on plan assets for the year ended December 31, 2022, was a loss of \u20ac366 million (2021: gain of
\u20ac59 million).
DURATION
Duration is an indicator of the plan liabilities\u2019 sensitivity for changes in interest rates. The liability-weighted duration for the de\ufb01ned
bene\ufb01t plan liabilities at year end is as follows:
number of years 2022 2021
Retirement plans
The Netherlands 16.9 19.0
United Kingdom 11.4 15.2
United States 9.8 12.0
Other post-employment plans
United States 7.1 9.2
INVESTMENT MIX
The breakdown of plan assets as of December 31 is as follows:
2022 Quoted Unquoted 2021 Quoted Unquoted
Equity
Equity 333 333 \u2013 494 494 \u2013
Private equity 2 \u2013 2 3 \u2013 3
Bonds
Government bonds 406 406 \u2013 435 435 \u2013
Corporate bonds 194 194 \u2013 348 348 \u2013
Asset-backed securities 90 90 \u2013 108 108 \u2013
Other
Insurance contracts 124 \u2013 124 67 \u2013 67
Real estate 95 39 56 108 56 52
Derivatives and other securities (32) (32) \u2013 28 28 \u2013
Cash 28 28 \u2013 50 50 \u2013
Total 1,240 1,058 182 1,641 1,519 122
At December 31, 2022, 85% of the plan assets relate to quoted \ufb01nancial instruments (2021: 93%). Plan assets do not include any direct
investments in the group or \ufb01nancial instruments issued by the group, nor do they include any property or other assets used by the
group. However, pension plans invest in index funds and as a result these plans may indirectly hold \ufb01nancial instruments issued by
the group.
PROPORTION OF PLAN ASSETS
in % 2022 2021
Equity 27 30
Bonds 56 55
Other 17 15
Total 100 100
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"value": "Note 13 \u2013 Personnel Expenses 2022 2021 Salaries and wages and other benefits 1,855 1,641 Social security charges 159 148 Medical cost benefits 94 74 Expenses related to de\ufb01ned contribution plans 89 80 Expenses related to de\ufb01ned bene\ufb01t plans Note 31 29 11 Equity-settled share-based payments Note 34 28 24 Total 2,254 1,978 Employees Headcount at December 31 20,451 19,827 In full-time equivalents at December 31 20,056 19,454 Thereof employed in the Netherlands 1,214 1,155 In full-time equivalents average per annum * 20,616 19,741 * Average full-time equivalents per annum include temporary staff and contractors, whereas headcount and its full-time equivalent only relate to staff on the payroll of the group. Note 14 \u2013 Amortization, Impairment, and Depreciation 2022 2021 Amortization of acquired identifiable intangible assets Note 18 140 131 Impairment of acquired identifiable intangible assets Note 18 20 38 Reversal of impairment of acquired identifiable intangible assets Note 18 \u2013 (5) Amortization of other intangible assets Note 18 195 194 Impairment of other intangible assets Note 18 13 18 Depreciation of property, plant, and equipment Note 19 26 25 Impairment of property, plant, and equipment Note 19 1 0 Depreciation of right-of-use assets Note 20 71 71 Impairment of right-of-use assets Note 20 \u2013 1 Total 466 473 For further disclosure on estimates and judgments, refer to Note 18 \u2013 Goodwill and Intangible Assets other than Goodwill and Note 20 - Leasing. ",
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"value": "Employees Headcount at December 31 20,451 19,827 In full-time equivalents at December 31 20,056 19,454 Thereof employed in the Netherlands 1,214 1,155 In full-time equivalents average per annum * 20,616 19,741 * Average full-time equivalents per annum include temporary staff and contractors, whereas headcount and its full-time equivalent only relate to staff on the payroll of the group. ",
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"fact-440": {
"value": "Note 14 \u2013 Amortization, Impairment, and Depreciation 2022 2021 Amortization of acquired identifiable intangible assets Note 18 140 131 Impairment of acquired identifiable intangible assets Note 18 20 38 Reversal of impairment of acquired identifiable intangible assets Note 18 \u2013 (5) Amortization of other intangible assets Note 18 195 194 Impairment of other intangible assets Note 18 13 18 Depreciation of property, plant, and equipment Note 19 26 25 Impairment of property, plant, and equipment Note 19 1 0 Depreciation of right-of-use assets Note 20 71 71 Impairment of right-of-use assets Note 20 \u2013 1 Total 466 473 For further disclosure on estimates and judgments, refer to Note 18 \u2013 Goodwill and Intangible Assets other than Goodwill and Note 20 - Leasing. ",
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"fact-441": {
"value": "Note 15 \u2013 Financing Results 2022 2021 Financing income Interest income for financial assets measured at amortized cost: Interest income on short-term bank deposits 20 2 Interest income on bank balances and other 1 2 Other financing income: Derivatives \u2013 foreign exchange contracts, not qualifying as hedge 0 0 Total \ufb01nancing income 21 4 Financing costs Interest expense for financial liabilities measured at amortized cost: Interest expense on bonds and private placements (54) (50) Amortization of fee expense for debt instruments Note 29 (3) (1) Interest expense on bank overdrafts and other (3) (5) Other financing expense: Unwinding of discount of lease liabilities Note 29 (9) (9) Net foreign exchange gains/(losses) (5) (15) Items in hedge relationships: Interest rate swaps (3) (2) Foreign exchange gains/(losses) on loans subject to cash flow hedge 11 4 Net change in fair value of cash flow hedges reclassi\ufb01ed from other comprehensive income (11) (4) Total \ufb01nancing costs (77) (82) Net \ufb01nancing results (56) (78) Other finance income and (costs) Fair value changes of financial assets Note 22 0 (5) Financing component employee bene\ufb01ts Note 31 (1) (1) Total other \ufb01nance income and (costs) (1) (6) Total \ufb01nancing results (57) (84) ",
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"value": "Note 15 \u2013 Financing Results 2022 2021 Financing income Interest income for financial assets measured at amortized cost: Interest income on short-term bank deposits 20 2 Interest income on bank balances and other 1 2 Other financing income: Derivatives \u2013 foreign exchange contracts, not qualifying as hedge 0 0 Total \ufb01nancing income 21 4 Financing costs Interest expense for financial liabilities measured at amortized cost: Interest expense on bonds and private placements (54) (50) Amortization of fee expense for debt instruments Note 29 (3) (1) Interest expense on bank overdrafts and other (3) (5) Other financing expense: Unwinding of discount of lease liabilities Note 29 (9) (9) Net foreign exchange gains/(losses) (5) (15) Items in hedge relationships: Interest rate swaps (3) (2) Foreign exchange gains/(losses) on loans subject to cash flow hedge 11 4 Net change in fair value of cash flow hedges reclassi\ufb01ed from other comprehensive income (11) (4) Total \ufb01nancing costs (77) (82) Net \ufb01nancing results (56) (78) Other finance income and (costs) Fair value changes of financial assets Note 22 0 (5) Financing component employee bene\ufb01ts Note 31 (1) (1) Total other \ufb01nance income and (costs) (1) (6) Total \ufb01nancing results (57) (84) ",
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"value": "Note 15 \u2013 Financing Results 2022 2021 Financing income Interest income for financial assets measured at amortized cost: Interest income on short-term bank deposits 20 2 Interest income on bank balances and other 1 2 Other financing income: Derivatives \u2013 foreign exchange contracts, not qualifying as hedge 0 0 Total \ufb01nancing income 21 4 Financing costs Interest expense for financial liabilities measured at amortized cost: Interest expense on bonds and private placements (54) (50) Amortization of fee expense for debt instruments Note 29 (3) (1) Interest expense on bank overdrafts and other (3) (5) Other financing expense: Unwinding of discount of lease liabilities Note 29 (9) (9) Net foreign exchange gains/(losses) (5) (15) Items in hedge relationships: Interest rate swaps (3) (2) Foreign exchange gains/(losses) on loans subject to cash flow hedge 11 4 Net change in fair value of cash flow hedges reclassi\ufb01ed from other comprehensive income (11) (4) Total \ufb01nancing costs (77) (82) Net \ufb01nancing results (56) (78) Other finance income and (costs) Fair value changes of financial assets Note 22 0 (5) Financing component employee bene\ufb01ts Note 31 (1) (1) Total other \ufb01nance income and (costs) (1) (6) Total \ufb01nancing results (57) (84) ",
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"fact-445": {
"value": "Note 15 \u2013 Financing Results 2022 2021 Financing income Interest income for financial assets measured at amortized cost: Interest income on short-term bank deposits 20 2 Interest income on bank balances and other 1 2 Other financing income: Derivatives \u2013 foreign exchange contracts, not qualifying as hedge 0 0 Total \ufb01nancing income 21 4 Financing costs Interest expense for financial liabilities measured at amortized cost: Interest expense on bonds and private placements (54) (50) Amortization of fee expense for debt instruments Note 29 (3) (1) Interest expense on bank overdrafts and other (3) (5) Other financing expense: Unwinding of discount of lease liabilities Note 29 (9) (9) Net foreign exchange gains/(losses) (5) (15) Items in hedge relationships: Interest rate swaps (3) (2) Foreign exchange gains/(losses) on loans subject to cash flow hedge 11 4 Net change in fair value of cash flow hedges reclassi\ufb01ed from other comprehensive income (11) (4) Total \ufb01nancing costs (77) (82) Net \ufb01nancing results (56) (78) Other finance income and (costs) Fair value changes of financial assets Note 22 0 (5) Financing component employee bene\ufb01ts Note 31 (1) (1) Total other \ufb01nance income and (costs) (1) (6) Total \ufb01nancing results (57) (84) ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfFinanceIncomeExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-446": {
"value": "Note 15 \u2013 Financing Results 2022 2021 Financing income Interest income for financial assets measured at amortized cost: Interest income on short-term bank deposits 20 2 Interest income on bank balances and other 1 2 Other financing income: Derivatives \u2013 foreign exchange contracts, not qualifying as hedge 0 0 Total \ufb01nancing income 21 4 Financing costs Interest expense for financial liabilities measured at amortized cost: Interest expense on bonds and private placements (54) (50) Amortization of fee expense for debt instruments Note 29 (3) (1) Interest expense on bank overdrafts and other (3) (5) Other financing expense: Unwinding of discount of lease liabilities Note 29 (9) (9) Net foreign exchange gains/(losses) (5) (15) Items in hedge relationships: Interest rate swaps (3) (2) Foreign exchange gains/(losses) on loans subject to cash flow hedge 11 4 Net change in fair value of cash flow hedges reclassi\ufb01ed from other comprehensive income (11) (4) Total \ufb01nancing costs (77) (82) Net \ufb01nancing results (56) (78) Other finance income and (costs) Fair value changes of financial assets Note 22 0 (5) Financing component employee bene\ufb01ts Note 31 (1) (1) Total other \ufb01nance income and (costs) (1) (6) Total \ufb01nancing results (57) (84) ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfFinanceIncomeExpenseExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
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},
"fact-447": {
"value": "Note 16 \u2013 Income Tax Expense 2022 2021 Current income tax expense 286 209 Adjustments previous years (13) 6 Deferred tax expense: Changes in tax rates 0 1 Origination and reversal of temporary differences (24) (15) Movements in deferred tax assets and liabilities Note 23 (24) (14) Total Note 23 249 201 ACCOUNTING POLICIES Income tax on the result for the year is made up of current and deferred tax. Income tax is recognized in pro\ufb01t or loss except to the extent that it relates to business combinations and/or items directly recognized in equity or other comprehensive income. Current income tax is the expected tax payable or tax receivable on the taxable income for the year, using the tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period, and any adjustment to tax payable or tax receivable in respect of previous years. The group recognizes deferred tax assets and liabilities for all taxable temporary differences between the carrying amounts of assets or liabilities in the consolidated statement of \ufb01nancial position for \ufb01nancial reporting purposes and their tax base for taxation purposes. Deferred tax assets and liabilities are not recognized for temporary differences arising from: \u2022 Initial recognition of goodwill; \u2022 Investments in subsidiaries to the extent that the parent can control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and \u2022 Initial recognition of an asset or liability in a transaction, which is not a business combination and that, at the time of the transaction affects neither accounting pro\ufb01t nor taxable pro\ufb01t. A deferred tax asset is recognized for deductible temporary differences and for the carry-forward of unused tax losses and unused tax credits, to the extent that it is probable that future taxable pro\ufb01ts will be available against which these can be utilized. Deferred tax assets are reviewed at the end of each reporting period and are remeasured to the extent that it is no longer probable that the related tax bene\ufb01ts will be realized. Deferred tax assets and liabilities are not discounted and are measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the end of the reporting period. The effect of changes in income tax rates on the deferred tax position is recognized in pro\ufb01t or loss if, and to the extent that, the deferred tax position was originally formed through pro\ufb01t or loss. Deferred tax assets and liabilities, including those associated with right-of-use assets and lease liabilities, are offset if there is a legally enforceable right to offset current income tax assets and liabilities, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current income tax assets and liabilities on a net basis or their tax assets and liabilities will be realized simultaneously. Uncertain tax positions are assessed at a \ufb01scal unity level. If it is probable that a tax authority will accept an uncertain tax position in the income tax \ufb01ling, the group determines its accounting tax position consistent with the tax treatment used or planned to be used in its income tax \ufb01ling. If this is not probable, the group reflects the effect of uncertainty in determining its accounting tax position using either the most likely amount or the expected value method, depending on which method better predicts the resolution of the uncertainty. \u2192 Note 16 \u2013 Income Tax Expense continued ESTIMATES AND JUDGMENTS Income tax is calculated based on income before tax, considering the local tax rates and regulations. For each operating entity, the current income tax expense is calculated and differences between the accounting and tax base are determined, resulting in deferred tax assets or liabilities. These calculations may deviate from the \ufb01nal tax assessments. A deferred tax asset is recognized for deductible temporary differences and the carry-forward of unused tax losses and unused tax credits to the extent that it is probable that future taxable pro\ufb01t will be available. Management assesses the probability that taxable pro\ufb01t will be available against which the unused tax losses or unused tax credits can be utilized. In determining the amount of current and deferred tax, the group considers the impact of uncertain tax positions and whether additional taxes, penalties, and interest may be due. The group believes that its current income tax liabilities are adequate for all open tax years based on its assessment of many factors, including interpretations of tax laws and rules, and prior experience. The group operates in several countries with different tax laws and rules. Considering this complex multinational environment in which the group operates, global transfer pricing policies are implemented for transactions between members of the group. These transactions are documented as required by international standards. However, local tax authorities might challenge these transactions. The group considers potential challenges and accounts for potential uncertain tax positions. The assessment for uncertain tax positions relies on estimates and assumptions, based on the judgments of tax professionals within the group, supplemented by external tax advisors, and may involve a series of estimates about future events. New information may become available that causes the group to change its estimate regarding the adequacy of existing income tax liabilities. Such changes to income tax liabilities will impact the income tax expense, positively or negatively, in the consolidated statement of pro\ufb01t or loss in the period that such a determination is made. Changes in tax rates are considered if these tax rate changes are substantially enacted before year end. Governments are expected to introduce changes in tax law following Organisation for Economic Co-operation and Development (OECD), EU, and other international guidelines. Reported income tax amounts will therefore be subject to continued judgment, estimation uncertainty, and measurement adjustments. Refer also to Note 23 \u2013 Tax Assets and Liabilities. RECONCILIATION OF THE EFFECTIVE TAX RATE The group\u2019s effective tax rate in the consolidated statement of pro\ufb01t or loss differs from the Dutch statutory income tax rate of 25.8%. The table below reconciles the statutory income tax rate with the effective income tax rate in the consolidated statement of pro\ufb01t or loss: 2022 2021 in millions of euros, unless otherwise stated % % Pro\ufb01t before tax 1,276 929 Income tax expense at the Dutch statutory income tax rate 25.8 329 25.0 232 Tax effect of: Rate differential (2.7) (35) (2.5) (23) Tax incentives, exempt income, and divestments (2.4) (31) 0.1 1 Recognized and unrecognized tax losses (0.1) (1) (0.3) (3) Adjustments previous years (1.0) (13) 0.7 6 Changes in income tax rates 0.0 0 0.1 1 Other taxes 0.9 11 1.0 9 Non-deductible costs and other items (1.0) (11) (2.5) (22) Total 19.5 249 21.6 201 Rate differential indicates the effect of the group\u2019s taxable income generated and taxed in jurisdictions where tax rates differ from the Dutch statutory income tax rate. The effective tax rate decreased to 19.5% (2021: 21.6%), resulting from closure of old tax years and tax neutral gains on the divestment of the legal information units in Spain and France. For income tax recognized directly in the consolidated statements of changes in total equity and other comprehensive income, reference is made to Note 23 \u2013 Tax Assets and Liabilities. Note 23 \u2013 Tax Assets and Liabilities DEFERRED TAX ASSETS AND LIABILITIES temporary differences arising from: Assets Liabilities 2022 2021 Intangible assets 7 (402) (395) (390) Property, plant, and equipment, right-of-use assets, and lease liabilities 20 (3) 17 1 Employee bene\ufb01ts 38 0 38 37 Tax value of loss carry-forwards recognized 31 \u2013 31 38 Other items 103 (31) 72 82 Total before set-off of tax 199 (436) (237) (232) Set-off of tax (137) 137 0 0 Position at December 31 62 (299) (237) (232) The actual recognition of deferred tax assets depends on the generation of future taxable income during the periods in which the temporary differences become deductible. Based on projected future taxable income and available strategies, the group considers the future realization of these deferred tax assets as probable. Other items mainly include recognition of deferred tax assets and liabilities for temporary differences on working capital items. MOVEMENTS IN TEMPORARY DIFFERENCES, 2022 Balance at January 1, 2022 Acquisitions/ divestments Transfer to assets and liabilities classified as held for sale (Note 9) Recognized in profit or loss (Note 16) Recognized in equity and other comprehensive income Foreign exchange differences Balance at December 31, 2022 Intangible assets (390) (19) \u2013 31 \u2013 (17) (395) PPE, right-of-use assets, and lease liabilities 1 \u2013 \u2013 16 \u2013 0 17 Employee bene\ufb01ts 37 \u2013 \u2013 4 (5) 2 38 Tax value of loss carry-forwards recognized 38 \u2013 \u2013 (9) \u2013 2 31 Other items 82 0 \u2013 (18) 4 4 72 Total (232) (19) 0 24 (1) (9) (237) MOVEMENTS IN TEMPORARY DIFFERENCES, 2021 Balance at January 1, 2021 Acquisitions/ divestments Transfer to assets and liabilities classified as held for sale (Note 9) Recognized in profit or loss (Note 16) Recognized in equity and other comprehensive income Foreign exchange differences Balance at December 31, 2021 Intangible assets (403) 4 0 34 \u2013 (25) (390) PPE, right-of-use assets, and lease liabilities 5 \u2013 0 (4) \u2013 0 1 Employee bene\ufb01ts 42 0 0 (4) (4) 3 37 Tax value of loss carry-forwards recognized 43 \u2013 \u2013 (8) \u2013 3 38 Other items 80 4 (1) (4) 0 3 82 Total (233) 8 (1) 14 (4) (16) (232) MOVEMENTS IN OVERALL TAX POSITION 2022 2021 Position at January 1 Current income tax assets 59 23 Current income tax liabilities (142) (169) Deferred tax assets 62 72 Deferred tax liabilities (294) (305) Overall tax position (315) (379) Movements Total income tax expense Note 16 (249) (201) Deferred tax from acquisitions and divestments (19) 8 Current income tax from acquisitions and divestments (1) 0 Deferred tax on items recognized directly in other comprehensive income (1) (4) Paid income tax 289 277 Transfer to assets and liabilities classified as held for sale Note 9 \u2013 1 Foreign exchange differences (9) (17) Total movements 10 64 Position at December 31 Current income tax assets 61 59 Current income tax liabilities (129) (142) Deferred tax assets 62 62 Deferred tax liabilities (299) (294) Overall tax position (305) (315) The current income tax liabilities include, to a large extent, uncertain tax positions. For most of these uncertain tax positions, it is expected that the audit by tax authorities will \ufb01nalize beyond one year. For the estimates and judgments applied to uncertain tax positions, refer to Note 16 \u2013 Income Tax Expense. The group paid income taxes for the amounts of \u20ac162 million (2021: \u20ac166 million) in North America, \u20ac119 million (2021: \u20ac104 million) in Europe, and \u20ac8 million (2021: \u20ac7 million) in Asia Paci\ufb01c and Rest of World. The amount of deferred tax assets arising from recognized tax loss carry-forwards, which relate to tax jurisdictions where the group continued to incur tax losses in the current and/or preceding year, was \u20ac0 million at December 31, 2022 (2021: \u20ac11 million). It is considered probable based on forecasts that future taxable pro\ufb01ts will be available. UNRECOGNIZED TAX LOSSES AND TEMPORARY DIFFERENCES The group has not recognized deferred tax assets that relate to unused tax losses and temporary differences amounting to \u20ac293 million (2021: \u20ac253 million), as it is not probable that future taxable pro\ufb01t will be available against which the group can use the bene\ufb01ts. Of these unused tax losses and temporary differences, 14% expire within the next \ufb01ve years (2021: 11%), 10% expire after \ufb01ve years (2021: 13%), and 76% carry forward inde\ufb01nitely (2021: 76%). In addition, the group has not recognized net deferred tax assets of \u20ac21 million (2021: \u20ac20 million), relating to unused state tax losses in the U.S. Of these unused state tax losses, 23% expire within the next \ufb01ve years (2021: 21%) and 77% expire after \ufb01ve years (2021: 79%). DEFERRED TAX ON ITEMS RECOGNIZED IMMEDIATELY IN OTHER COMPREHENSIVE INCOME AND EQUITY 2022 2021 Amount before tax Tax Amount net of tax Amount before tax Tax Amount net of tax Exchange differences on translation of foreign operations, recycling of foreign exchange differences on loss of control, and net investment hedges 216 4 220 339 0 339 Gains/(losses) on cash flow hedges 29 \u2013 29 10 \u2013 10 Remeasurement gains/(losses) on de\ufb01ned bene\ufb01t plans 18 (5) 13 16 (4) 12 Recognized in other comprehensive income 263 (1) 262 365 (4) 361 Share-based payments 28 \u2013 28 24 \u2013 24 Recognized in equity 28 0 28 24 0 24 ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfIncomeTaxExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-448": {
"value": "ACCOUNTING POLICIES Income tax on the result for the year is made up of current and deferred tax. Income tax is recognized in pro\ufb01t or loss except to the extent that it relates to business combinations and/or items directly recognized in equity or other comprehensive income. Current income tax is the expected tax payable or tax receivable on the taxable income for the year, using the tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period, and any adjustment to tax payable or tax receivable in respect of previous years. The group recognizes deferred tax assets and liabilities for all taxable temporary differences between the carrying amounts of assets or liabilities in the consolidated statement of \ufb01nancial position for \ufb01nancial reporting purposes and their tax base for taxation purposes. Deferred tax assets and liabilities are not recognized for temporary differences arising from: \u2022 Initial recognition of goodwill; \u2022 Investments in subsidiaries to the extent that the parent can control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and \u2022 Initial recognition of an asset or liability in a transaction, which is not a business combination and that, at the time of the transaction affects neither accounting pro\ufb01t nor taxable pro\ufb01t. A deferred tax asset is recognized for deductible temporary differences and for the carry-forward of unused tax losses and unused tax credits, to the extent that it is probable that future taxable pro\ufb01ts will be available against which these can be utilized. Deferred tax assets are reviewed at the end of each reporting period and are remeasured to the extent that it is no longer probable that the related tax bene\ufb01ts will be realized. Deferred tax assets and liabilities are not discounted and are measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the end of the reporting period. The effect of changes in income tax rates on the deferred tax position is recognized in pro\ufb01t or loss if, and to the extent that, the deferred tax position was originally formed through pro\ufb01t or loss. Deferred tax assets and liabilities, including those associated with right-of-use assets and lease liabilities, are offset if there is a legally enforceable right to offset current income tax assets and liabilities, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current income tax assets and liabilities on a net basis or their tax assets and liabilities will be realized simultaneously. Uncertain tax positions are assessed at a \ufb01scal unity level. If it is probable that a tax authority will accept an uncertain tax position in the income tax \ufb01ling, the group determines its accounting tax position consistent with the tax treatment used or planned to be used in its income tax \ufb01ling. If this is not probable, the group reflects the effect of uncertainty in determining its accounting tax position using either the most likely amount or the expected value method, depending on which method better predicts the resolution of the uncertainty. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForIncomeTaxExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
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"fact-449": {
"value": "The group recognizes deferred tax assets and liabilities for all taxable temporary differences between the carrying amounts of assets or liabilities in the consolidated statement of \ufb01nancial position for \ufb01nancial reporting purposes and their tax base for taxation purposes. Deferred tax assets and liabilities are not recognized for temporary differences arising from: \u2022 Initial recognition of goodwill; \u2022 Investments in subsidiaries to the extent that the parent can control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and \u2022 Initial recognition of an asset or liability in a transaction, which is not a business combination and that, at the time of the transaction affects neither accounting pro\ufb01t nor taxable pro\ufb01t. A deferred tax asset is recognized for deductible temporary differences and for the carry-forward of unused tax losses and unused tax credits, to the extent that it is probable that future taxable pro\ufb01ts will be available against which these can be utilized. Deferred tax assets are reviewed at the end of each reporting period and are remeasured to the extent that it is no longer probable that the related tax bene\ufb01ts will be realized. Deferred tax assets and liabilities are not discounted and are measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the end of the reporting period. The effect of changes in income tax rates on the deferred tax position is recognized in pro\ufb01t or loss if, and to the extent that, the deferred tax position was originally formed through pro\ufb01t or loss. Deferred tax assets and liabilities, including those associated with right-of-use assets and lease liabilities, are offset if there is a legally enforceable right to offset current income tax assets and liabilities, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current income tax assets and liabilities on a net basis or their tax assets and liabilities will be realized simultaneously. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForDeferredIncomeTaxExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
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"fact-450": {
"value": "Note 17 \u2013 Non-controlling Interests The group\u2019s share in consolidated subsidiaries not fully owned at December 31 is: ownership in % 2022 2021 Akad\u00e9miai Kiad\u00f3 Kft. (Budapest, Hungary) 74 74 ACCOUNTING POLICIES Non-controlling interests reflect the portion of the pro\ufb01t or loss and net assets of a subsidiary attributable to equity interests that are not owned, directly or indirectly through subsidiaries, by the group. Losses applicable to the non-controlling interest in a subsidiary are allocated to the non-controlling interest even if these losses cause the non-controlling interest to have a debit balance. Remeasurements of non-controlling interests are based on a proportionate amount of the net assets of the subsidiary. The movements in non-controlling interests are as follows: 2022 2021 Position at January 1 0 0 Dividends paid 0 (1) Share of pro\ufb01t of non-controlling interests, net of tax 0 0 Foreign exchange differences 0 1 Position at December 31 0 0 Non-controlling interests in the equity of consolidated participations, totaling \u20ac0 million (2021: \u20ac0 million), are based on third-party shareholdings in the underlying shareholders\u2019 equity of the subsidiaries. Financial information of non-controlling interests based on 100% ownership, is as follows: 2022 2021 Revenues 5 5 Adjusted operating pro\ufb01t 2 2 Net pro\ufb01t 2 1 Total assets 1 1 Total liabilities 1 1 Total equity 0 0 Total cash and cash equivalents 0 0 ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfNoncontrollingInterestsExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-451": {
"value": "ACCOUNTING POLICIES Non-controlling interests reflect the portion of the pro\ufb01t or loss and net assets of a subsidiary attributable to equity interests that are not owned, directly or indirectly through subsidiaries, by the group. Losses applicable to the non-controlling interest in a subsidiary are allocated to the non-controlling interest even if these losses cause the non-controlling interest to have a debit balance. Remeasurements of non-controlling interests are based on a proportionate amount of the net assets of the subsidiary. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForTransactionsWithNoncontrollingInterestsExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
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},
"fact-452": {
"value": "Note 18 \u2013 Goodwill and Intangible Assets
other than Goodwill
Goodwill
Customer
relationships Technology
Brand
names Other
Acquired
identifiable
intangible
assets
Other
intangible
assets 2022 2021
Position at January 1
Cost value 4,189 1,036 812 471 48 2,367 1,942 8,498 8,123
Accumulated amortization
and impairment (9) (475) (407) (395) (45) (1,322) (1,367) (2,698) (2,485)
Book value at January 1 4,180 561 405 76 3 1,045 575 5,800 5,638
Movements
Investments
*
\u2013 \u2013 \u2013 \u2013 \u2013 0 264 264 223
Acquired through business
combinations Note 8 35 39 35 3 0 77 0 112 115
Divestment of operations Note 8 \u2013 \u2013 \u2013 \u2013 \u2013 0 0 0 (47)
Disposal of assets \u2013 \u2013 \u2013 \u2013 \u2013 0 \u2013 0 (1)
Net expenditures 35 39 35 3 0 77 264 376 290
Amortization Note 14 \u2013 (62) (65) (10) (3) (140) (195) (335) (325)
Impairment Note 14 \u2013 (5) (13) (2) \u2013 (20) (13) (33) (56)
Reversal of impairment Note 8/14 \u2013 \u2013 \u2013 \u2013 \u2013 0 \u2013 0 5
Reclassi\ufb01cations Note 8 0 2 \u2013 \u2013 \u2013 2 \u2013 2 (2)
Transfer to assets
classified as held for sale Note 9 \u2013 \u2013 \u2013 \u2013 \u2013 0 \u2013 0 (59)
Foreign exchange
differences 179 20 14 2 0 36 17 232 309
Total movements 214 (6) (29) (7) (3) (45) 73 242 162
Position at December 31
Cost value 4,394 1,134 808 494 3 2,439 2,011 8,844 8,498
Accumulated amortization
and impairment \u2013 (579) (432) (425) (3) (1,439) (1,363) (2,802) (2,698)
Book value at December 31 4,394 555 376 69 0 1,000 648 6,042 5,800
*
Investments in 2022 exclude capital expenditure by the disposal groups classi\ufb01ed as held for sale of \u20ac3 million.
At both December 31, 2022, and December 31, 2021, the vast majority of the book value of other intangible assets relates to
development of software.
In both 2022 and 2021, the amortization and impairment of intangible assets are for the vast majority reported under general and
administrative costs in the consolidated statement of pro\ufb01t or loss.
ACCOUNTING POLICIES Goodwill The group measures goodwill at the acquisition date as the sum of the fair value of the consideration (including deferred and contingent consideration) and the recognized amount of any non-controlling interests in the acquiree, less the net recognized fair value amount of the identi\ufb01able assets acquired and liabilities assumed. Any deferred and contingent consideration payable (such as earnout arrangements) is recognized at fair value at the acquisition date. Costs related to acquisitions which the group incurs in a business combination are expensed as incurred. Goodwill associated with divested operations is allocated and measured on the basis of the relative value of the divested operation and the portion of the cash-generating unit (CGU) retained. Acquired identifiable intangible assets Identi\ufb01able intangible assets acquired through business combinations mainly consist of customer relationships (subscriber accounts), technology (databases, software, and product technology), and brand names. Other intangible assets Other intangible assets mainly relate to purchased and internally developed information systems and software. Development costs are capitalized if the group can demonstrate the technical feasibility of completing the asset so that it will be available for use or sale, the intention to complete the asset, the ability to sell or use the asset, how the asset will yield probable future economic bene\ufb01ts, the availability of adequate technical, \ufb01nancial, and other resources to complete the asset, and the ability to reliably measure the expenditure attributable to the asset. Capitalization of software depends on several judgments. While management has procedures in place to control the software development process, there is uncertainty regarding the outcome of the development process (timing of technological developments, technological obsolescence, and/or competitive pressures). Useful lives of assets The useful lives of assets are estimated in line with common market practice. The group reviews the remaining useful lives and the amortization methods of its assets annually. If the expected remaining useful lives of assets are different from previous estimates, the amortization period shall be changed accordingly, which will impact the amortization in pro\ufb01t or loss prospectively. Apart from goodwill (which has an inde\ufb01nite useful life), intangible assets are amortized on a straight-line basis over their estimated useful lives from the day they are available for use. The estimated useful lives are as follows: \u2022 Customer relationships: \ufb01ve to 29 years; \u2022 Technology: \ufb01ve to 29 years; \u2022 Brand names: \ufb01ve to 20 years; \u2022 Other acquired identi\ufb01able intangible assets: \ufb01ve to ten years; and \u2022 Other intangible assets: three to \ufb01ve years. Impairment At the end of each reporting period, it is assessed whether there is an indication that an intangible asset may be impaired. If any such indication exists, the group estimates the recoverable amount of the asset. If the recoverable amount is below the carrying value, the asset is impaired. Goodwill is tested for impairment annually, at July 1, and when an impairment trigger has been identi\ufb01ed. ESTIMATES AND JUDGMENTS Measurement Upon acquisition, the values of intangible assets acquired are estimated, usually applying one of the methodologies below: \u2022 Relief from royalty approach: this approach assumes that if the identi\ufb01able intangible asset was not owned, it would be acquired through a royalty agreement. The value of owning the asset equals the bene\ufb01ts from not having to pay royalty fees; \u2022 Multi-period excess earnings method: under this approach, cash flows associated with the speci\ufb01c acquired identi\ufb01able intangible assets are determined. Contributory charges of other assets that are being used to generate the cash flows are deducted from these cash flows. The net cash flows are discounted to arrive at the value of the asset; or \u2022 Cost method: the cost method reflects the cost that would currently be required to replace the asset. These valuations are usually performed by management of the acquiring CGU in close cooperation with an external consulting \ufb01rm, requiring estimates such as future cash flows, royalty rates, discount rates, useful lives, churn rates, and rates of return. The methodologies applied in this respect are in line with common market practice. Impairment test Impairment tests require estimates of discount rates, future cash flows, and perpetual growth rates. These estimates are made by management of the business to which the assets belong. The future cash flows cover a \ufb01ve-year period and are based on Vision & Strategy Plans (VSPs), prepared by management, and approved by the Executive Board. The annual goodwill impairment test did not result in the recognition of an impairment. The outcome of the group\u2019s sensitivity analysis was that no reasonably possible change in any of the key assumptions would cause the carrying amount to exceed the recoverable amount. The allowed change in growth, discount rate, and adjusted operating pro\ufb01t margin was at least 300 basis points for each of the groups of cash generating units. On top of the annual goodwill impairment test, the group performed an in-depth impairment triggering event analysis on its other non-current assets, consisting mainly of acquired identi\ufb01able intangible assets. In this analysis, the development of new sales, attrition rates of existing customers, growth rates, and cost measures were the main drivers. The group concluded that there were no impairment triggers for the majority of the other non-current assets. For the continuing medical education solutions for physicians (Learner\u2019s Digest), the group identi\ufb01ed a triggering event in 2022 as expectations of market growth deteriorated. The group recognized an impairment on the acquired identi\ufb01able intangible assets of \u20ac20 million and on other intangible assets of \u20ac3 million and shortened the remaining useful lives. CARRYING AMOUNTS OF GOODWILL AND ACQUIRED IDENTIFIABLE INTANGIBLE ASSETS PER OPERATING SEGMENT Goodwill Acquired identifiable intangible assets 2022 2021 Health 1,124 176 1,300 1,262 Tax & Accounting 1,542 241 1,783 1,761 Governance, Risk & Compliance 1,122 365 1,487 1,374 Legal & Regulatory 606 218 824 828 Total 4,394 1,000 5,394 5,225 IMPAIRMENT TESTING OF GOODWILL
The group performs an annual impairment test by comparing the carrying amount of the groups of CGUs to which the goodwill
belongs, net of related deferred taxes, to the recoverable amount of the groups of CGUs. The groups of CGUs for goodwill impairment
testing represent the lowest level at which goodwill is monitored by management, whereby management considers the integration of
the group\u2019s business operations and the global leverage of assets, capital, and staff. Acquisitions are integrated into existing business
operations and the goodwill arising from a business combination is allocated to the groups of CGUs that are expected to bene\ufb01t from
the synergies of the acquisition. The total number of groups of CGUs for goodwill impairment testing purposes was six in 2022 (2021:
six groups of CGUs).
The recoverable amount is determined based on the higher of the value-in-use and the fair value less costs of disposal. If there
is suf\ufb01cient headroom, the group only determines the value-in-use. The recoverable amount is determined by discounting the
future cash flows to be generated from the continuing use of the groups of CGUs. These valuations are based on non-observable
market data. The recoverable amount calculations in 2022 were determined in a consistent manner with prior years. The cash flow
projections are based on actual operating results and the long-term VSPs, as approved by the Executive Board.
The 2022 annual impairment test showed that the recoverable amount exceeded the carrying amount for all identi\ufb01ed groups of CGUs
for goodwill impairment testing.
Key assumptions
The group\u2019s key assumptions include assumptions that are based on non-observable market data (level 3 input). The period over
which the group estimates its cash flow projections is \ufb01ve years. After \ufb01ve years, cash flow projections are extrapolated using an
appropriate perpetual growth rate that is consistent with the long-term average market growth rate. The 2022 weighted-average long-
term growth rate is 3.6% for the U.S. and 2.1% for Europe (2021: 2.2% for the U.S. and 0.3% for Europe). In addition, the following key
assumptions were used in the projections:
\u2022 Revenue growth: based on actual experience, an analysis of market growth, and the expected development of market share; and
\u2022 Adjusted operating pro\ufb01t margin development: based on actual experience and management\u2019s long-term projections. Adjusted
operating pro\ufb01t is deemed the best approximation for future cash flows.
The estimated pre-tax cash flows are discounted to their present value using a pre-tax weighted-average discount rate for the
individual groups of CGUs between 9.6% and 10.2% (2021: between 7.7% and 8.7%) with a weighted average of 9.9% (2021: 8.5%).
In determining the discount rate, the group used a risk-free rate based on the long-term yield on Dutch government bonds with a
maturity of 20 years, adjusted for country risk premiums and country-speci\ufb01c inflation differentials. In determining the discount rate,
the group applied the following assumptions:
2022 2021
Risk-free rate United States (in %) 3.6 2.2
Risk-free rate Europe (in %) 2.1 0.3
Market risk premium United States (in %) 6.0 7.0
Market risk premium Europe (in %) 6.8 7.0
Tax rate (in %) 25.8 25.0
Re-levered beta 0.79 0.77
Sensitivity analysis The impairment testing includes an assessment if a reasonably possible change in a key assumption would cause the carrying amount of goodwill to exceed the recoverable amount. The sensitivity per group of CGUs for the 2022 and 2021 goodwill impairment tests, respectively, is as follows: Applied weighted- average growth rate Allowed change (in basis points) Allocated goodwill at December 31, 20222022 sensitivity per group of CGUs Decline in growth rate Increase in discount rate Decrease in adjusted operating profit margin Health Learning, Research & Practice 2.1% >300 >300 >300 567 Clinical Solutions 2.2% >300 >300 >300 557 Tax & Accounting Americas and Asia Paci\ufb01c 2.1% >300 >300 >300 1,131 Tax & Accounting Europe 2.0% >300 >300 >300 411 Governance, Risk & Compliance 2.2% >300 >300 >300 1,122 Legal & Regulatory 2.2% >300 >300 >300 606 Total 2.2% 4,394 Applied weighted- average growth rate Allowed change (in basis points) Allocated goodwill at December 31, 20212021 sensitivity per group of CGUs Decline in growth rate Increase in discount rate Decrease in adjusted operating profit margin Health Learning, Research & Practice 1.4% >300 >300 >300 534 Clinical Solutions 2.3% >300 >300 >300 524 Tax & Accounting Americas and Asia Paci\ufb01c 1.9% >300 >300 >300 1,076 Tax & Accounting Europe 0.3% >300 >300 >300 416 Governance, Risk & Compliance 2.1% >300 >300 >300 1,029 Legal & Regulatory 1.6% >300 >300 >300 601 Total 1.9% 4,180 IMPAIRMENT TESTING OF ACQUIRED IDENTIFIABLE INTANGIBLE ASSETS AND OTHER INTANGIBLE ASSETS The following impairments were recognized on the acquired identi\ufb01able intangible assets and other intangible assets: 2022 2021 Acquired identifiable intangible assets \u2013 Learner\u2019s Digest and certain assets within Health 20 27 Acquired identifiable intangible assets \u2013 certain assets within GRC \u2013 11 Other intangible assets \u2013 Learner\u2019s Digest and certain assets within Health 3 4 Other intangible assets \u2013 other CGUs 10 14 Total 33 56 ",
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},
"fact-453": {
"value": "Note 18 \u2013 Goodwill and Intangible Assets other than Goodwill Goodwill Customer relationships Technology Brand names Other Acquired identifiable intangible assets Other intangible assets 2022 2021 Position at January 1 Cost value 4,189 1,036 812 471 48 2,367 1,942 8,498 8,123 Accumulated amortization and impairment (9) (475) (407) (395) (45) (1,322) (1,367) (2,698) (2,485) Book value at January 1 4,180 561 405 76 3 1,045 575 5,800 5,638 Movements Investments * \u2013 \u2013 \u2013 \u2013 \u2013 0 264 264 223 Acquired through business combinations Note 8 35 39 35 3 0 77 0 112 115 Divestment of operations Note 8 \u2013 \u2013 \u2013 \u2013 \u2013 0 0 0 (47) Disposal of assets \u2013 \u2013 \u2013 \u2013 \u2013 0 \u2013 0 (1) Net expenditures 35 39 35 3 0 77 264 376 290 Amortization Note 14 \u2013 (62) (65) (10) (3) (140) (195) (335) (325) Impairment Note 14 \u2013 (5) (13) (2) \u2013 (20) (13) (33) (56) Reversal of impairment Note 8/14 \u2013 \u2013 \u2013 \u2013 \u2013 0 \u2013 0 5 Reclassi\ufb01cations Note 8 0 2 \u2013 \u2013 \u2013 2 \u2013 2 (2) Transfer to assets classified as held for sale Note 9 \u2013 \u2013 \u2013 \u2013 \u2013 0 \u2013 0 (59) Foreign exchange differences 179 20 14 2 0 36 17 232 309 Total movements 214 (6) (29) (7) (3) (45) 73 242 162 Position at December 31 Cost value 4,394 1,134 808 494 3 2,439 2,011 8,844 8,498 Accumulated amortization and impairment \u2013 (579) (432) (425) (3) (1,439) (1,363) (2,802) (2,698) Book value at December 31 4,394 555 376 69 0 1,000 648 6,042 5,800 * Investments in 2022 exclude capital expenditure by the disposal groups classi\ufb01ed as held for sale of \u20ac3 million. At both December 31, 2022, and December 31, 2021, the vast majority of the book value of other intangible assets relates to development of software. In both 2022 and 2021, the amortization and impairment of intangible assets are for the vast majority reported under general and administrative costs in the consolidated statement of pro\ufb01t or loss. ACCOUNTING POLICIES Goodwill The group measures goodwill at the acquisition date as the sum of the fair value of the consideration (including deferred and contingent consideration) and the recognized amount of any non-controlling interests in the acquiree, less the net recognized fair value amount of the identi\ufb01able assets acquired and liabilities assumed. Any deferred and contingent consideration payable (such as earnout arrangements) is recognized at fair value at the acquisition date. Costs related to acquisitions which the group incurs in a business combination are expensed as incurred. Goodwill associated with divested operations is allocated and measured on the basis of the relative value of the divested operation and the portion of the cash-generating unit (CGU) retained. Acquired identifiable intangible assets Identi\ufb01able intangible assets acquired through business combinations mainly consist of customer relationships (subscriber accounts), technology (databases, software, and product technology), and brand names. Other intangible assets Other intangible assets mainly relate to purchased and internally developed information systems and software. Development costs are capitalized if the group can demonstrate the technical feasibility of completing the asset so that it will be available for use or sale, the intention to complete the asset, the ability to sell or use the asset, how the asset will yield probable future economic bene\ufb01ts, the availability of adequate technical, \ufb01nancial, and other resources to complete the asset, and the ability to reliably measure the expenditure attributable to the asset. Capitalization of software depends on several judgments. While management has procedures in place to control the software development process, there is uncertainty regarding the outcome of the development process (timing of technological developments, technological obsolescence, and/or competitive pressures). Useful lives of assets The useful lives of assets are estimated in line with common market practice. The group reviews the remaining useful lives and the amortization methods of its assets annually. If the expected remaining useful lives of assets are different from previous estimates, the amortization period shall be changed accordingly, which will impact the amortization in pro\ufb01t or loss prospectively. Apart from goodwill (which has an inde\ufb01nite useful life), intangible assets are amortized on a straight-line basis over their estimated useful lives from the day they are available for use. The estimated useful lives are as follows: \u2022 Customer relationships: \ufb01ve to 29 years; \u2022 Technology: \ufb01ve to 29 years; \u2022 Brand names: \ufb01ve to 20 years; \u2022 Other acquired identi\ufb01able intangible assets: \ufb01ve to ten years; and \u2022 Other intangible assets: three to \ufb01ve years. Impairment At the end of each reporting period, it is assessed whether there is an indication that an intangible asset may be impaired. If any such indication exists, the group estimates the recoverable amount of the asset. If the recoverable amount is below the carrying value, the asset is impaired. Goodwill is tested for impairment annually, at July 1, and when an impairment trigger has been identi\ufb01ed. CARRYING AMOUNTS OF GOODWILL AND ACQUIRED IDENTIFIABLE INTANGIBLE ASSETS PER OPERATING SEGMENT
Goodwill
Acquired
identifiable
intangible assets 2022 2021
Health 1,124 176 1,300 1,262
Tax & Accounting 1,542 241 1,783 1,761
Governance, Risk & Compliance 1,122 365 1,487 1,374
Legal & Regulatory 606 218 824 828
Total 4,394 1,000 5,394 5,225
IMPAIRMENT TESTING OF GOODWILL The group performs an annual impairment test by comparing the carrying amount of the groups of CGUs to which the goodwill belongs, net of related deferred taxes, to the recoverable amount of the groups of CGUs. The groups of CGUs for goodwill impairment testing represent the lowest level at which goodwill is monitored by management, whereby management considers the integration of the group\u2019s business operations and the global leverage of assets, capital, and staff. Acquisitions are integrated into existing business operations and the goodwill arising from a business combination is allocated to the groups of CGUs that are expected to bene\ufb01t from the synergies of the acquisition. The total number of groups of CGUs for goodwill impairment testing purposes was six in 2022 (2021: six groups of CGUs). The recoverable amount is determined based on the higher of the value-in-use and the fair value less costs of disposal. If there is suf\ufb01cient headroom, the group only determines the value-in-use. The recoverable amount is determined by discounting the future cash flows to be generated from the continuing use of the groups of CGUs. These valuations are based on non-observable market data. The recoverable amount calculations in 2022 were determined in a consistent manner with prior years. The cash flow projections are based on actual operating results and the long-term VSPs, as approved by the Executive Board. The 2022 annual impairment test showed that the recoverable amount exceeded the carrying amount for all identi\ufb01ed groups of CGUs for goodwill impairment testing. Key assumptions The group\u2019s key assumptions include assumptions that are based on non-observable market data (level 3 input). The period over which the group estimates its cash flow projections is \ufb01ve years. After \ufb01ve years, cash flow projections are extrapolated using an appropriate perpetual growth rate that is consistent with the long-term average market growth rate. The 2022 weighted-average long- term growth rate is 3.6% for the U.S. and 2.1% for Europe (2021: 2.2% for the U.S. and 0.3% for Europe). In addition, the following key assumptions were used in the projections: \u2022 Revenue growth: based on actual experience, an analysis of market growth, and the expected development of market share; and \u2022 Adjusted operating pro\ufb01t margin development: based on actual experience and management\u2019s long-term projections. Adjusted operating pro\ufb01t is deemed the best approximation for future cash flows. The estimated pre-tax cash flows are discounted to their present value using a pre-tax weighted-average discount rate for the individual groups of CGUs between 9.6% and 10.2% (2021: between 7.7% and 8.7%) with a weighted average of 9.9% (2021: 8.5%). In determining the discount rate, the group used a risk-free rate based on the long-term yield on Dutch government bonds with a maturity of 20 years, adjusted for country risk premiums and country-speci\ufb01c inflation differentials. In determining the discount rate, the group applied the following assumptions: 2022 2021 Risk-free rate United States (in %) 3.6 2.2 Risk-free rate Europe (in %) 2.1 0.3 Market risk premium United States (in %) 6.0 7.0 Market risk premium Europe (in %) 6.8 7.0 Tax rate (in %) 25.8 25.0 Re-levered beta 0.79 0.77 Sensitivity analysis The impairment testing includes an assessment if a reasonably possible change in a key assumption would cause the carrying amount of goodwill to exceed the recoverable amount. The sensitivity per group of CGUs for the 2022 and 2021 goodwill impairment tests, respectively, is as follows: Applied weighted- average growth rate Allowed change (in basis points) Allocated goodwill at December 31, 20222022 sensitivity per group of CGUs Decline in growth rate Increase in discount rate Decrease in adjusted operating profit margin Health Learning, Research & Practice 2.1% >300 >300 >300 567 Clinical Solutions 2.2% >300 >300 >300 557 Tax & Accounting Americas and Asia Paci\ufb01c 2.1% >300 >300 >300 1,131 Tax & Accounting Europe 2.0% >300 >300 >300 411 Governance, Risk & Compliance 2.2% >300 >300 >300 1,122 Legal & Regulatory 2.2% >300 >300 >300 606 Total 2.2% 4,394 Applied weighted- average growth rate Allowed change (in basis points) Allocated goodwill at December 31, 20212021 sensitivity per group of CGUs Decline in growth rate Increase in discount rate Decrease in adjusted operating profit margin Health Learning, Research & Practice 1.4% >300 >300 >300 534 Clinical Solutions 2.3% >300 >300 >300 524 Tax & Accounting Americas and Asia Paci\ufb01c 1.9% >300 >300 >300 1,076 Tax & Accounting Europe 0.3% >300 >300 >300 416 Governance, Risk & Compliance 2.1% >300 >300 >300 1,029 Legal & Regulatory 1.6% >300 >300 >300 601 Total 1.9% 4,180 IMPAIRMENT TESTING OF ACQUIRED IDENTIFIABLE INTANGIBLE ASSETS AND OTHER INTANGIBLE ASSETS The following impairments were recognized on the acquired identi\ufb01able intangible assets and other intangible assets: 2022 2021 Acquired identifiable intangible assets \u2013 Learner\u2019s Digest and certain assets within Health 20 27 Acquired identifiable intangible assets \u2013 certain assets within GRC \u2013 11 Other intangible assets \u2013 Learner\u2019s Digest and certain assets within Health 3 4 Other intangible assets \u2013 other CGUs 10 14 Total 33 56 ",
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"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
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},
"fact-454": {
"value": "Goodwill Customer relationships Technology Brand names Other Acquired identifiable intangible assets Other intangible assets 2022 2021 Position at January 1 Cost value 4,189 1,036 812 471 48 2,367 1,942 8,498 8,123 Accumulated amortization and impairment (9) (475) (407) (395) (45) (1,322) (1,367) (2,698) (2,485) Book value at January 1 4,180 561 405 76 3 1,045 575 5,800 5,638 Movements Investments * \u2013 \u2013 \u2013 \u2013 \u2013 0 264 264 223 Acquired through business combinations Note 8 35 39 35 3 0 77 0 112 115 Divestment of operations Note 8 \u2013 \u2013 \u2013 \u2013 \u2013 0 0 0 (47) Disposal of assets \u2013 \u2013 \u2013 \u2013 \u2013 0 \u2013 0 (1) Net expenditures 35 39 35 3 0 77 264 376 290 Amortization Note 14 \u2013 (62) (65) (10) (3) (140) (195) (335) (325) Impairment Note 14 \u2013 (5) (13) (2) \u2013 (20) (13) (33) (56) Reversal of impairment Note 8/14 \u2013 \u2013 \u2013 \u2013 \u2013 0 \u2013 0 5 Reclassi\ufb01cations Note 8 0 2 \u2013 \u2013 \u2013 2 \u2013 2 (2) Transfer to assets classified as held for sale Note 9 \u2013 \u2013 \u2013 \u2013 \u2013 0 \u2013 0 (59) Foreign exchange differences 179 20 14 2 0 36 17 232 309 Total movements 214 (6) (29) (7) (3) (45) 73 242 162 Position at December 31 Cost value 4,394 1,134 808 494 3 2,439 2,011 8,844 8,498 Accumulated amortization and impairment \u2013 (579) (432) (425) (3) (1,439) (1,363) (2,802) (2,698) Book value at December 31 4,394 555 376 69 0 1,000 648 6,042 5,800 ACCOUNTING POLICIES Goodwill The group measures goodwill at the acquisition date as the sum of the fair value of the consideration (including deferred and contingent consideration) and the recognized amount of any non-controlling interests in the acquiree, less the net recognized fair value amount of the identi\ufb01able assets acquired and liabilities assumed. Any deferred and contingent consideration payable (such as earnout arrangements) is recognized at fair value at the acquisition date. Costs related to acquisitions which the group incurs in a business combination are expensed as incurred. Goodwill associated with divested operations is allocated and measured on the basis of the relative value of the divested operation and the portion of the cash-generating unit (CGU) retained. Goodwill is tested for impairment annually, at July 1, and when an impairment trigger has been identi\ufb01ed.
Impairment test Impairment tests require estimates of discount rates, future cash flows, and perpetual growth rates. These estimates are made by management of the business to which the assets belong. The future cash flows cover a \ufb01ve-year period and are based on Vision & Strategy Plans (VSPs), prepared by management, and approved by the Executive Board. The annual goodwill impairment test did not result in the recognition of an impairment. The outcome of the group\u2019s sensitivity analysis was that no reasonably possible change in any of the key assumptions would cause the carrying amount to exceed the recoverable amount. The allowed change in growth, discount rate, and adjusted operating pro\ufb01t margin was at least 300 basis points for each of the groups of cash generating units. On top of the annual goodwill impairment test, the group performed an in-depth impairment triggering event analysis on its other non-current assets, consisting mainly of acquired identi\ufb01able intangible assets. In this analysis, the development of new sales, attrition rates of existing customers, growth rates, and cost measures were the main drivers. The group concluded that there were no impairment triggers for the majority of the other non-current assets. For the continuing medical education solutions for physicians (Learner\u2019s Digest), the group identi\ufb01ed a triggering event in 2022 as expectations of market growth deteriorated. The group recognized an impairment on the acquired identi\ufb01able intangible assets of \u20ac20 million and on other intangible assets of \u20ac3 million and shortened the remaining useful lives. CARRYING AMOUNTS OF GOODWILL AND ACQUIRED IDENTIFIABLE INTANGIBLE ASSETS PER OPERATING SEGMENT Goodwill Acquired identifiable intangible assets 2022 2021 Health 1,124 176 1,300 1,262 Tax & Accounting 1,542 241 1,783 1,761 Governance, Risk & Compliance 1,122 365 1,487 1,374 Legal & Regulatory 606 218 824 828 Total 4,394 1,000 5,394 5,225 IMPAIRMENT TESTING OF GOODWILL The group performs an annual impairment test by comparing the carrying amount of the groups of CGUs to which the goodwill belongs, net of related deferred taxes, to the recoverable amount of the groups of CGUs. The groups of CGUs for goodwill impairment testing represent the lowest level at which goodwill is monitored by management, whereby management considers the integration of the group\u2019s business operations and the global leverage of assets, capital, and staff. Acquisitions are integrated into existing business operations and the goodwill arising from a business combination is allocated to the groups of CGUs that are expected to bene\ufb01t from the synergies of the acquisition. The total number of groups of CGUs for goodwill impairment testing purposes was six in 2022 (2021: six groups of CGUs). The recoverable amount is determined based on the higher of the value-in-use and the fair value less costs of disposal. If there is suf\ufb01cient headroom, the group only determines the value-in-use. The recoverable amount is determined by discounting the future cash flows to be generated from the continuing use of the groups of CGUs. These valuations are based on non-observable market data. The recoverable amount calculations in 2022 were determined in a consistent manner with prior years. The cash flow projections are based on actual operating results and the long-term VSPs, as approved by the Executive Board. The 2022 annual impairment test showed that the recoverable amount exceeded the carrying amount for all identi\ufb01ed groups of CGUs for goodwill impairment testing. Key assumptions The group\u2019s key assumptions include assumptions that are based on non-observable market data (level 3 input). The period over which the group estimates its cash flow projections is \ufb01ve years. After \ufb01ve years, cash flow projections are extrapolated using an appropriate perpetual growth rate that is consistent with the long-term average market growth rate. The 2022 weighted-average long- term growth rate is 3.6% for the U.S. and 2.1% for Europe (2021: 2.2% for the U.S. and 0.3% for Europe). In addition, the following key assumptions were used in the projections: \u2022 Revenue growth: based on actual experience, an analysis of market growth, and the expected development of market share; and \u2022 Adjusted operating pro\ufb01t margin development: based on actual experience and management\u2019s long-term projections. Adjusted operating pro\ufb01t is deemed the best approximation for future cash flows. The estimated pre-tax cash flows are discounted to their present value using a pre-tax weighted-average discount rate for the individual groups of CGUs between 9.6% and 10.2% (2021: between 7.7% and 8.7%) with a weighted average of 9.9% (2021: 8.5%). In determining the discount rate, the group used a risk-free rate based on the long-term yield on Dutch government bonds with a maturity of 20 years, adjusted for country risk premiums and country-speci\ufb01c inflation differentials. In determining the discount rate, the group applied the following assumptions: 2022 2021 Risk-free rate United States (in %) 3.6 2.2 Risk-free rate Europe (in %) 2.1 0.3 Market risk premium United States (in %) 6.0 7.0 Market risk premium Europe (in %) 6.8 7.0 Tax rate (in %) 25.8 25.0 Re-levered beta 0.79 0.77 Sensitivity analysis The impairment testing includes an assessment if a reasonably possible change in a key assumption would cause the carrying amount of goodwill to exceed the recoverable amount. The sensitivity per group of CGUs for the 2022 and 2021 goodwill impairment tests, respectively, is as follows: Applied weighted- average growth rate Allowed change (in basis points) Allocated goodwill at December 31, 20222022 sensitivity per group of CGUs Decline in growth rate Increase in discount rate Decrease in adjusted operating profit margin Health Learning, Research & Practice 2.1% >300 >300 >300 567 Clinical Solutions 2.2% >300 >300 >300 557 Tax & Accounting Americas and Asia Paci\ufb01c 2.1% >300 >300 >300 1,131 Tax & Accounting Europe 2.0% >300 >300 >300 411 Governance, Risk & Compliance 2.2% >300 >300 >300 1,122 Legal & Regulatory 2.2% >300 >300 >300 606 Total 2.2% 4,394 Applied weighted- average growth rate Allowed change (in basis points) Allocated goodwill at December 31, 20212021 sensitivity per group of CGUs Decline in growth rate Increase in discount rate Decrease in adjusted operating profit margin Health Learning, Research & Practice 1.4% >300 >300 >300 534 Clinical Solutions 2.3% >300 >300 >300 524 Tax & Accounting Americas and Asia Paci\ufb01c 1.9% >300 >300 >300 1,076 Tax & Accounting Europe 0.3% >300 >300 >300 416 Governance, Risk & Compliance 2.1% >300 >300 >300 1,029 Legal & Regulatory 1.6% >300 >300 >300 601 Total 1.9% 4,180 ",
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"value": "ACCOUNTING POLICIES Goodwill The group measures goodwill at the acquisition date as the sum of the fair value of the consideration (including deferred and contingent consideration) and the recognized amount of any non-controlling interests in the acquiree, less the net recognized fair value amount of the identi\ufb01able assets acquired and liabilities assumed. Any deferred and contingent consideration payable (such as earnout arrangements) is recognized at fair value at the acquisition date. Costs related to acquisitions which the group incurs in a business combination are expensed as incurred. Goodwill associated with divested operations is allocated and measured on the basis of the relative value of the divested operation and the portion of the cash-generating unit (CGU) retained. Acquired identifiable intangible assets Identi\ufb01able intangible assets acquired through business combinations mainly consist of customer relationships (subscriber accounts), technology (databases, software, and product technology), and brand names. Other intangible assets Other intangible assets mainly relate to purchased and internally developed information systems and software. Development costs are capitalized if the group can demonstrate the technical feasibility of completing the asset so that it will be available for use or sale, the intention to complete the asset, the ability to sell or use the asset, how the asset will yield probable future economic bene\ufb01ts, the availability of adequate technical, \ufb01nancial, and other resources to complete the asset, and the ability to reliably measure the expenditure attributable to the asset. Capitalization of software depends on several judgments. While management has procedures in place to control the software development process, there is uncertainty regarding the outcome of the development process (timing of technological developments, technological obsolescence, and/or competitive pressures). Useful lives of assets The useful lives of assets are estimated in line with common market practice. The group reviews the remaining useful lives and the amortization methods of its assets annually. If the expected remaining useful lives of assets are different from previous estimates, the amortization period shall be changed accordingly, which will impact the amortization in pro\ufb01t or loss prospectively. Apart from goodwill (which has an inde\ufb01nite useful life), intangible assets are amortized on a straight-line basis over their estimated useful lives from the day they are available for use. The estimated useful lives are as follows: \u2022 Customer relationships: \ufb01ve to 29 years; \u2022 Technology: \ufb01ve to 29 years; \u2022 Brand names: \ufb01ve to 20 years; \u2022 Other acquired identi\ufb01able intangible assets: \ufb01ve to ten years; and \u2022 Other intangible assets: three to \ufb01ve years. Impairment At the end of each reporting period, it is assessed whether there is an indication that an intangible asset may be impaired. If any such indication exists, the group estimates the recoverable amount of the asset. If the recoverable amount is below the carrying value, the asset is impaired. Goodwill is tested for impairment annually, at July 1, and when an impairment trigger has been identi\ufb01ed. ",
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},
"fact-456": {
"value": "Acquired identifiable intangible assets Identi\ufb01able intangible assets acquired through business combinations mainly consist of customer relationships (subscriber accounts), technology (databases, software, and product technology), and brand names. Other intangible assets Other intangible assets mainly relate to purchased and internally developed information systems and software. Development costs are capitalized if the group can demonstrate the technical feasibility of completing the asset so that it will be available for use or sale, the intention to complete the asset, the ability to sell or use the asset, how the asset will yield probable future economic bene\ufb01ts, the availability of adequate technical, \ufb01nancial, and other resources to complete the asset, and the ability to reliably measure the expenditure attributable to the asset. Capitalization of software depends on several judgments. While management has procedures in place to control the software development process, there is uncertainty regarding the outcome of the development process (timing of technological developments, technological obsolescence, and/or competitive pressures). Useful lives of assets The useful lives of assets are estimated in line with common market practice. The group reviews the remaining useful lives and the amortization methods of its assets annually. If the expected remaining useful lives of assets are different from previous estimates, the amortization period shall be changed accordingly, which will impact the amortization in pro\ufb01t or loss prospectively. Apart from goodwill (which has an inde\ufb01nite useful life), intangible assets are amortized on a straight-line basis over their estimated useful lives from the day they are available for use. The estimated useful lives are as follows: \u2022 Customer relationships: \ufb01ve to 29 years; \u2022 Technology: \ufb01ve to 29 years; \u2022 Brand names: \ufb01ve to 20 years; \u2022 Other acquired identi\ufb01able intangible assets: \ufb01ve to ten years; and \u2022 Other intangible assets: three to \ufb01ve years. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsOtherThanGoodwillExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-457": {
"value": "Useful lives of assets The useful lives of assets are estimated in line with common market practice. The group reviews the remaining useful lives and the amortization methods of its assets annually. If the expected remaining useful lives of assets are different from previous estimates, the amortization period shall be changed accordingly, which will impact the amortization in pro\ufb01t or loss prospectively. Apart from goodwill (which has an inde\ufb01nite useful life), intangible assets are amortized on a straight-line basis over their estimated useful lives from the day they are available for use. The estimated useful lives are as follows: \u2022 Customer relationships: \ufb01ve to 29 years; \u2022 Technology: \ufb01ve to 29 years; \u2022 Brand names: \ufb01ve to 20 years; \u2022 Other acquired identi\ufb01able intangible assets: \ufb01ve to ten years; and \u2022 Other intangible assets: three to \ufb01ve years. Depreciation is recognized in the consolidated statement of pro\ufb01t or loss on a straight-line basis over the estimated useful life of each component of property, plant, and equipment. Land is not depreciated. The estimated useful lives for property, plant, and equipment are as follows: \u2022 Buildings: 20 to 40 years; \u2022 Leasehold improvements: equal to the lease term, unless the economic life of the leasehold improvement is shorter; and \u2022 Other PPE: three to ten years. The right-of-use asset is depreciated over the shorter of the asset\u2019s useful life and the lease term on a straight- line basis.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForDepreciationExpenseExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-458": {
"value": "Impairment At the end of each reporting period, it is assessed whether there is an indication that an intangible asset may be impaired. If any such indication exists, the group estimates the recoverable amount of the asset. If the recoverable amount is below the carrying value, the asset is impaired. Goodwill is tested for impairment annually, at July 1, and when an impairment trigger has been identi\ufb01ed. Impairment test Impairment tests require estimates of discount rates, future cash flows, and perpetual growth rates. These estimates are made by management of the business to which the assets belong. The future cash flows cover a \ufb01ve-year period and are based on Vision & Strategy Plans (VSPs), prepared by management, and approved by the Executive Board. The annual goodwill impairment test did not result in the recognition of an impairment. The outcome of the group\u2019s sensitivity analysis was that no reasonably possible change in any of the key assumptions would cause the carrying amount to exceed the recoverable amount. The allowed change in growth, discount rate, and adjusted operating pro\ufb01t margin was at least 300 basis points for each of the groups of cash generating units. On top of the annual goodwill impairment test, the group performed an in-depth impairment triggering event analysis on its other non-current assets, consisting mainly of acquired identi\ufb01able intangible assets. In this analysis, the development of new sales, attrition rates of existing customers, growth rates, and cost measures were the main drivers. The group concluded that there were no impairment triggers for the majority of the other non-current assets. For the continuing medical education solutions for physicians (Learner\u2019s Digest), the group identi\ufb01ed a triggering event in 2022 as expectations of market growth deteriorated. The group recognized an impairment on the acquired identi\ufb01able intangible assets of \u20ac20 million and on other intangible assets of \u20ac3 million and shortened the remaining useful lives. IMPAIRMENT TESTING OF GOODWILL The group performs an annual impairment test by comparing the carrying amount of the groups of CGUs to which the goodwill belongs, net of related deferred taxes, to the recoverable amount of the groups of CGUs. The groups of CGUs for goodwill impairment testing represent the lowest level at which goodwill is monitored by management, whereby management considers the integration of the group\u2019s business operations and the global leverage of assets, capital, and staff. Acquisitions are integrated into existing business operations and the goodwill arising from a business combination is allocated to the groups of CGUs that are expected to bene\ufb01t from the synergies of the acquisition. The total number of groups of CGUs for goodwill impairment testing purposes was six in 2022 (2021: six groups of CGUs). The recoverable amount is determined based on the higher of the value-in-use and the fair value less costs of disposal. If there is suf\ufb01cient headroom, the group only determines the value-in-use. The recoverable amount is determined by discounting the future cash flows to be generated from the continuing use of the groups of CGUs. These valuations are based on non-observable market data. The recoverable amount calculations in 2022 were determined in a consistent manner with prior years. The cash flow projections are based on actual operating results and the long-term VSPs, as approved by the Executive Board. The 2022 annual impairment test showed that the recoverable amount exceeded the carrying amount for all identi\ufb01ed groups of CGUs for goodwill impairment testing. Key assumptions The group\u2019s key assumptions include assumptions that are based on non-observable market data (level 3 input). The period over which the group estimates its cash flow projections is \ufb01ve years. After \ufb01ve years, cash flow projections are extrapolated using an appropriate perpetual growth rate that is consistent with the long-term average market growth rate. The 2022 weighted-average long- term growth rate is 3.6% for the U.S. and 2.1% for Europe (2021: 2.2% for the U.S. and 0.3% for Europe). In addition, the following key assumptions were used in the projections: \u2022 Revenue growth: based on actual experience, an analysis of market growth, and the expected development of market share; and \u2022 Adjusted operating pro\ufb01t margin development: based on actual experience and management\u2019s long-term projections. Adjusted operating pro\ufb01t is deemed the best approximation for future cash flows. The estimated pre-tax cash flows are discounted to their present value using a pre-tax weighted-average discount rate for the individual groups of CGUs between 9.6% and 10.2% (2021: between 7.7% and 8.7%) with a weighted average of 9.9% (2021: 8.5%). In determining the discount rate, the group used a risk-free rate based on the long-term yield on Dutch government bonds with a maturity of 20 years, adjusted for country risk premiums and country-speci\ufb01c inflation differentials. In determining the discount rate, the group applied the following assumptions: 2022 2021 Risk-free rate United States (in %) 3.6 2.2 Risk-free rate Europe (in %) 2.1 0.3 Market risk premium United States (in %) 6.0 7.0 Market risk premium Europe (in %) 6.8 7.0 Tax rate (in %) 25.8 25.0 Re-levered beta 0.79 0.77 Sensitivity analysis
The impairment testing includes an assessment if a reasonably possible change in a key assumption would cause the carrying
amount of goodwill to exceed the recoverable amount.
The sensitivity per group of CGUs for the 2022 and 2021 goodwill impairment tests, respectively, is as follows:
Applied
weighted-
average
growth
rate
Allowed change (in basis points)
Allocated
goodwill at
December 31,
20222022 sensitivity per group of CGUs
Decline
in growth
rate
Increase
in discount
rate
Decrease
in adjusted
operating
profit margin
Health Learning, Research & Practice 2.1% >300 >300 >300 567
Clinical Solutions 2.2% >300 >300 >300 557
Tax & Accounting Americas and Asia Paci\ufb01c 2.1% >300 >300 >300 1,131
Tax & Accounting Europe 2.0% >300 >300 >300 411
Governance, Risk & Compliance 2.2% >300 >300 >300 1,122
Legal & Regulatory 2.2% >300 >300 >300 606
Total 2.2% 4,394
Applied
weighted-
average
growth
rate
Allowed change (in basis points)
Allocated
goodwill at
December 31,
20212021 sensitivity per group of CGUs
Decline
in growth
rate
Increase
in discount
rate
Decrease
in adjusted
operating
profit margin
Health Learning, Research & Practice 1.4% >300 >300 >300 534
Clinical Solutions 2.3% >300 >300 >300 524
Tax & Accounting Americas and Asia Paci\ufb01c 1.9% >300 >300 >300 1,076
Tax & Accounting Europe 0.3% >300 >300 >300 416
Governance, Risk & Compliance 2.1% >300 >300 >300 1,029
Legal & Regulatory 1.6% >300 >300 >300 601
Total 1.9% 4,180
IMPAIRMENT TESTING OF ACQUIRED IDENTIFIABLE INTANGIBLE ASSETS AND OTHER INTANGIBLE ASSETS
The following impairments were recognized on the acquired identi\ufb01able intangible assets and other intangible assets:
2022 2021
Acquired identifiable intangible assets \u2013 Learner\u2019s Digest and certain assets within Health 20 27
Acquired identifiable intangible assets \u2013 certain assets within GRC \u2013 11
Other intangible assets \u2013 Learner\u2019s Digest and certain assets within Health 3 4
Other intangible assets \u2013 other CGUs 10 14
Total 33 56
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfImpairmentOfAssetsExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-459": {
"value": "Impairment At the end of each reporting period, it is assessed whether there is an indication that an intangible asset may be impaired. If any such indication exists, the group estimates the recoverable amount of the asset. If the recoverable amount is below the carrying value, the asset is impaired. Goodwill is tested for impairment annually, at July 1, and when an impairment trigger has been identi\ufb01ed. Impairment of right-of-use assets The group determined whether there were impairment triggers regarding the right-of-use asset and accounts for any impairment loss identi\ufb01ed. This primarily applies to real estate leases. The impairment of a real estate right-of-use asset becomes relevant in case of vacated of\ufb01ce space. If vacated of\ufb01ce space is identi\ufb01ed, this space is considered a CGU on its own when that space can practically be sublet. An impairment is recognized when the recoverable amount is lower than the carrying value. Mostly, the recoverable amount will be based on expected future sublease receipts estimated by an external real estate broker. The carrying value may include not only the right-of-use asset, but also any directly related associated assets such as leasehold improvements. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfNonfinancialAssetsExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-460": {
"value": "Impairment At the end of each reporting period, it is assessed whether there is an indication that an intangible asset may be impaired. If any such indication exists, the group estimates the recoverable amount of the asset. If the recoverable amount is below the carrying value, the asset is impaired. Goodwill is tested for impairment annually, at July 1, and when an impairment trigger has been identi\ufb01ed. Impairment of right-of-use assets The group determined whether there were impairment triggers regarding the right-of-use asset and accounts for any impairment loss identi\ufb01ed. This primarily applies to real estate leases. The impairment of a real estate right-of-use asset becomes relevant in case of vacated of\ufb01ce space. If vacated of\ufb01ce space is identi\ufb01ed, this space is considered a CGU on its own when that space can practically be sublet. An impairment is recognized when the recoverable amount is lower than the carrying value. Mostly, the recoverable amount will be based on expected future sublease receipts estimated by an external real estate broker. The carrying value may include not only the right-of-use asset, but also any directly related associated assets such as leasehold improvements. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfAssetsExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-461": {
"value": "Note 19 \u2013 Property, Plant, and Equipment Land and buildings Other PPE 2022 2021 Position at January 1 Cost value 125 255 380 375 Accumulated depreciation and impairment (88) (217) (305) (291) Book value at January 1 37 38 75 84 Movements Investments 3 25 28 17 Divestment of operations Note 8 0 0 0 (2) Disposal of assets 0 0 0 0 Net expenditures 3 25 28 15 Depreciation Note 14 (6) (20) (26) (25) Impairment Note 14 (1) 0 (1) 0 Transfer to assets classified as held for sale Note 9 \u2013 \u2013 0 (3) Foreign exchange differences 1 2 3 4 Total movements (3) 7 4 (9) Position at December 31 Cost value 121 196 317 380 Accumulated depreciation and impairment (87) (151) (238) (305) Book value at December 31 34 45 79 75 ACCOUNTING POLICIES Property, plant, and equipment, consisting of land, buildings, and other assets such as of\ufb01ce and IT equipment, are valued at cost less accumulated depreciation and impairment. Leasehold improvements are presented as part of land and buildings. Depreciation is recognized in the consolidated statement of pro\ufb01t or loss on a straight-line basis over the estimated useful life of each component of property, plant, and equipment. Land is not depreciated. The estimated useful lives for property, plant, and equipment are as follows: \u2022 Buildings: 20 to 40 years; \u2022 Leasehold improvements: equal to the lease term, unless the economic life of the leasehold improvement is shorter; and \u2022 Other PPE: three to ten years. ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfPropertyPlantAndEquipmentExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-462": {
"value": "ACCOUNTING POLICIES Property, plant, and equipment, consisting of land, buildings, and other assets such as of\ufb01ce and IT equipment, are valued at cost less accumulated depreciation and impairment. Leasehold improvements are presented as part of land and buildings. Depreciation is recognized in the consolidated statement of pro\ufb01t or loss on a straight-line basis over the estimated useful life of each component of property, plant, and equipment. Land is not depreciated. The estimated useful lives for property, plant, and equipment are as follows: \u2022 Buildings: 20 to 40 years; \u2022 Leasehold improvements: equal to the lease term, unless the economic life of the leasehold improvement is shorter; and \u2022 Other PPE: three to ten years. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForPropertyPlantAndEquipmentExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-463": {
"value": "Note 20 \u2013 Leasing ACCOUNTING POLICIES The group primarily leases real estate and, to a lesser extent, IT equipment and cars. The \ufb01xed rental periods mostly vary from one year to 15 years and may have renewal and/or termination options. For real estate and IT equipment, lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. Leases are recognized as a right-of-use asset and a corresponding liability on the same date at which the leased asset is available for use by the group. The right-of-use asset is depreciated over the shorter of the asset\u2019s useful life and the lease term on a straight- line basis. The lease liability is discounted based on the incremental borrowing rate because the rate implicit in the lease cannot be readily determined. The \ufb01nance cost is charged to pro\ufb01t or loss over the lease term to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The group elected to exclude all short-term leases and all leases for which the underlying asset is of low value, and not to apply IFRS 16 to leases of intangible assets (such as software). For IT equipment and car leases, the group elected to apply the practical expedient to not separate non-lease components from lease components, and instead to account for these components as a single lease component. Payments associated with short-term leases and low-value leases are recognized on a straight-line basis as an expense in pro\ufb01t or loss. Short-term leases have a term of 12 months or less, considering any reasonably certain optional lease periods. Low-value leases comprise small items of of\ufb01ce furniture and IT equipment. The total expenses arising from short-term leases and low-value leases are insigni\ufb01cant. The group is to a very limited extent a lessor. ESTIMATES AND JUDGMENTS IFRS 16 requires management to make estimates for setting the discount rate and to apply judgments in the assessment of renewal and termination options (i.e., optional lease periods) in the lease contracts. Discount rate The discount rate applied is based on the incremental borrowing rate for the respective leases considering the primary economic environment of the lease, the currency, the credit risk premium, the lease term, and the nature of the leased asset. At December 31, 2022, the weighted-average discount rate is 2.8% (2021: 2.4% ). Renewal and termination options Renewal and termination options are included in several real estate and other lease contracts. These terms are used to maximize operational flexibility in terms of managing contracts. Most contract-speci\ufb01c renewal and termination options are exercisable only by the group and not by the respective lessor. In determining the lease term, the group considers all facts and circumstances that create an economic incentive to use the optional lease period. Optional lease periods are only included in the lease term if it is reasonably certain that the optional lease periods will be used. The assessment is reviewed if a signi\ufb01cant change in circumstances occurs which affects this assessment and that is within the control of the group. Real estate leases that are annually renewed or that have an inde\ufb01nite contract term are on average leased for \ufb01ve years. Usually, optional periods arising from renewal options of other real estate leases are not considered to be reasonably certain, since the rent is often reset at the market price on the renewal option date. Optional periods after termination option dates are often included in the lease term due to termination penalties included in the contract. Note 20 \u2013 Leasing continued Impairment of right-of-use assets The group determined whether there were impairment triggers regarding the right-of-use asset and accounts for any impairment loss identi\ufb01ed. This primarily applies to real estate leases. The impairment of a real estate right-of-use asset becomes relevant in case of vacated of\ufb01ce space. If vacated of\ufb01ce space is identi\ufb01ed, this space is considered a CGU on its own when that space can practically be sublet. An impairment is recognized when the recoverable amount is lower than the carrying value. Mostly, the recoverable amount will be based on expected future sublease receipts estimated by an external real estate broker. The carrying value may include not only the right-of-use asset, but also any directly related associated assets such as leasehold improvements. MOVEMENT SCHEDULE OF RIGHT-OF-USE ASSETS Real estate Other leases 2022 2021 Position at January 1 Cost value 578 80 658 663 Accumulated depreciation and impairment (309) (48) (357) (344) Book value at January 1 269 32 301 319 Movements Additions from new leases 21 6 27 24 Acquired through business combinations Note 8 2 \u2013 2 2 Contract modifications and reassessment of options 6 7 13 20 Net additions 29 13 42 46 Depreciation Note 14 (51) (20) (71) (71) Impairment Note 14 \u2013 \u2013 0 (1) Transfer to assets classified as held for sale Note 9 \u2013 \u2013 0 (10) Foreign exchange differences 11 0 11 18 Total movements (11) (7) (18) (18) Position at December 31 Cost value 596 89 685 658 Accumulated depreciation and impairment (338) (64) (402) (357) Book value at December 31 258 25 283 301 CONTRACTUAL MATURITIES OF LEASE LIABILITIES 2022 2021 Within one year 69 70 Between one and two years 59 61 Between two and three years 50 51 Between three and four years 40 42 Between four and five years 34 33 Between five and ten years 86 91 Ten years and more 10 17 Effect of discounting (35) (34) Total lease liabilities at December 31 Note 29 313 331 CASH OUTFLOW FOR LEASES 2022 2021 Interest portion of lease payments 9 9 Repayment of principal portion of lease liabilities 72 68 Total 81 77 OTHER DISCLOSURES At December 31, 2022, the future undiscounted cash outflows arising from leases not yet commenced and to which the group is committed amounted to \u20ac9 million (2021: \u20ac0 million). The group\u2019s lease agreements do not impact any covenants. ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfLeasesExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-464": {
"value": "ACCOUNTING POLICIES The group primarily leases real estate and, to a lesser extent, IT equipment and cars. The \ufb01xed rental periods mostly vary from one year to 15 years and may have renewal and/or termination options. For real estate and IT equipment, lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. Leases are recognized as a right-of-use asset and a corresponding liability on the same date at which the leased asset is available for use by the group. The right-of-use asset is depreciated over the shorter of the asset\u2019s useful life and the lease term on a straight- line basis. The lease liability is discounted based on the incremental borrowing rate because the rate implicit in the lease cannot be readily determined. The \ufb01nance cost is charged to pro\ufb01t or loss over the lease term to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The group elected to exclude all short-term leases and all leases for which the underlying asset is of low value, and not to apply IFRS 16 to leases of intangible assets (such as software). For IT equipment and car leases, the group elected to apply the practical expedient to not separate non-lease components from lease components, and instead to account for these components as a single lease component. Payments associated with short-term leases and low-value leases are recognized on a straight-line basis as an expense in pro\ufb01t or loss. Short-term leases have a term of 12 months or less, considering any reasonably certain optional lease periods. Low-value leases comprise small items of of\ufb01ce furniture and IT equipment. The total expenses arising from short-term leases and low-value leases are insigni\ufb01cant. The group is to a very limited extent a lessor. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForLeasesExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-465": {
"value": "Note 21 \u2013 Investments in Equity-accounted Investees The group\u2019s share in equity-accounted investees at December 31 is: ownership in % 2022 2021 HaoYisheng (Beijing, China) 22 22 ACCOUNTING POLICIES Interests in equity-accounted investees (associates) are accounted for using the equity method and are initially recognized at cost, which includes goodwill identi\ufb01ed upon acquisition and transaction costs. Associates are recognized from the date the group has signi\ufb01cant influence and recognition ceases on the date the group has lost its signi\ufb01cant influence over the equity investment. When an interest in an associate is increased to a controlling interest, the equity interest previously held is treated as if it was disposed of and reacquired at fair value on the acquisition date. Any resulting gain or loss compared to the carrying amount is recognized in pro\ufb01t or loss. Any amount that has previously been recognized in other comprehensive income, and that would be reclassi\ufb01ed to pro\ufb01t or loss following a divestment, is similarly reclassi\ufb01ed to pro\ufb01t or loss. MOVEMENT SCHEDULE OF EQUITY-ACCOUNTED INVESTEES 2022 2021 Position at January 1 10 8 Dividends received \u2013 \u2013 Share of pro\ufb01t of equity-accounted investees, net of tax 0 1 Foreign exchange differences 1 1 Position at December 31 11 10 For the equity-accounted investees at December 31, 2022, and December 31, 2021, the \ufb01nancial information (at 100%) and the group\u2019s weighted proportionate share is as follows: Total equity-accounted investees Group\u2019s share 2022 2021 2022 2021 Total assets 34 28 8 6 Total liabilities 17 16 4 3 Total equity 17 12 4 3 Revenues 31 24 7 5 Net pro\ufb01t for the year 1 5 0 1 ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfSignificantInvestmentsInAssociatesExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-466": {
"value": "Note 21 \u2013 Investments in Equity-accounted Investees The group\u2019s share in equity-accounted investees at December 31 is: ownership in % 2022 2021 HaoYisheng (Beijing, China) 22 22 ACCOUNTING POLICIES Interests in equity-accounted investees (associates) are accounted for using the equity method and are initially recognized at cost, which includes goodwill identi\ufb01ed upon acquisition and transaction costs. Associates are recognized from the date the group has signi\ufb01cant influence and recognition ceases on the date the group has lost its signi\ufb01cant influence over the equity investment. When an interest in an associate is increased to a controlling interest, the equity interest previously held is treated as if it was disposed of and reacquired at fair value on the acquisition date. Any resulting gain or loss compared to the carrying amount is recognized in pro\ufb01t or loss. Any amount that has previously been recognized in other comprehensive income, and that would be reclassi\ufb01ed to pro\ufb01t or loss following a divestment, is similarly reclassi\ufb01ed to pro\ufb01t or loss. MOVEMENT SCHEDULE OF EQUITY-ACCOUNTED INVESTEES 2022 2021 Position at January 1 10 8 Dividends received \u2013 \u2013 Share of pro\ufb01t of equity-accounted investees, net of tax 0 1 Foreign exchange differences 1 1 Position at December 31 11 10 For the equity-accounted investees at December 31, 2022, and December 31, 2021, the \ufb01nancial information (at 100%) and the group\u2019s weighted proportionate share is as follows: Total equity-accounted investees Group\u2019s share 2022 2021 2022 2021 Total assets 34 28 8 6 Total liabilities 17 16 4 3 Total equity 17 12 4 3 Revenues 31 24 7 5 Net pro\ufb01t for the year 1 5 0 1 ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfInvestmentsAccountedForUsingEquityMethodExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-467": {
"value": "ACCOUNTING POLICIES Interests in equity-accounted investees (associates) are accounted for using the equity method and are initially recognized at cost, which includes goodwill identi\ufb01ed upon acquisition and transaction costs. Associates are recognized from the date the group has signi\ufb01cant influence and recognition ceases on the date the group has lost its signi\ufb01cant influence over the equity investment. When an interest in an associate is increased to a controlling interest, the equity interest previously held is treated as if it was disposed of and reacquired at fair value on the acquisition date. Any resulting gain or loss compared to the carrying amount is recognized in pro\ufb01t or loss. Any amount that has previously been recognized in other comprehensive income, and that would be reclassi\ufb01ed to pro\ufb01t or loss following a divestment, is similarly reclassi\ufb01ed to pro\ufb01t or loss. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentInAssociates",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-468": {
"value": "ACCOUNTING POLICIES Interests in equity-accounted investees (associates) are accounted for using the equity method and are initially recognized at cost, which includes goodwill identi\ufb01ed upon acquisition and transaction costs. Associates are recognized from the date the group has signi\ufb01cant influence and recognition ceases on the date the group has lost its signi\ufb01cant influence over the equity investment. When an interest in an associate is increased to a controlling interest, the equity interest previously held is treated as if it was disposed of and reacquired at fair value on the acquisition date. Any resulting gain or loss compared to the carrying amount is recognized in pro\ufb01t or loss. Any amount that has previously been recognized in other comprehensive income, and that would be reclassi\ufb01ed to pro\ufb01t or loss following a divestment, is similarly reclassi\ufb01ed to pro\ufb01t or loss. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentInAssociatesAndJointVenturesExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-469": {
"value": "Note 22 \u2013 Financial Assets
2022 2021
Financial assets at fair value through profit or loss 0 0
Finance lease receivables 1 0
Derivative financial instruments Note 30 17 \u2013
Other non-current financial assets 5 5
Total 23 5
The credit risk exposure of the \ufb01nancial assets is considered immaterial. Refer to Note 30 \u2013 Financial Risk Management.
ACCOUNTING POLICIES
Financial assets at fair value through pro\ufb01t or loss comprise equity investments.
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
2022 2021
Position at January 1 0 0
Financial assets arising from divestment of operations Note 8 \u2013 6
Fair value changes of financial assets Note 15 0 (5)
Foreign exchange differences 0 (1)
Position at December 31 0 0
Note 29 \u2013 Net Debt Nominal value Effective interest rate in % Nominal interest rate in % Repayment commitments 1-5 years Repayment commitments >5 years 2022 2021 Bonds 2008-2028 (100.00 * ) \u20ac36 6.812 6.748 \u2013 36 36 36 Bonds 2013-2023 (99.709 * ) ** \u20ac700 2.950 2.875 \u2013 \u2013 0 699 Bonds 2014-2024 (99.164 * ) \u20ac400 2.640 2.500 399 \u2013 399 399 Bonds 2017-2027 (99.659 * ) \u20ac500 1.575 1.500 499 \u2013 499 498 Bonds 2020-2030 (99.292 * ) \u20ac500 0.862 0.750 \u2013 496 496 495 Bonds 2021-2028 (99.958 * ) \u20ac500 0.307 0.250 \u2013 498 498 498 Bonds 2022-2026 (99.922 * ) \u20ac500 3.096 3.000 498 \u2013 498 \u2013 Bonds, measured at amortized cost 1,396 1,030 2,426 2,625 Private placement 2008-2038, measured at amortized cost \u00a520,000 3.330 3.330 \u2013 142 142 153 Deferred and contingent acquisition payables, measured at fair value 2 \u2013 2 1 Other debt, measured at amortized cost 16 \u2013 16 10 Derivative \ufb01nancial instruments, measured at fair value *** \u2013 \u2013 0 2 Other long-term debt 18 0 18 13 Total long-term debt (excluding lease liabilities) 1,414 1,172 2,586 2,791 Lease liabilities **** 244 260 Total long-term debt 2,830 3,051 * Issue price of the \ufb01nancial instrument. ** These bonds are classi\ufb01ed as short-term bonds. Refer also to the table on the following page. *** For further details on these debt-related derivative \ufb01nancial instruments, refer to Note 30 \u2013 Financial Risk Management. **** For the repayment commitments of lease liabilities, refer to Note 20 \u2013 Leasing . RECONCILIATION LONG-TERM DEBT TO NET DEBT 2022 2021 Total long-term debt 2,830 3,051 Borrowings and bank overdrafts: Bank overdrafts, measured at amortized cost Note 27 16 9 Total borrowings and bank overdrafts 16 9 Bonds 2013-2023 700 \u2013 Short-term lease liabilities 69 71 Deferred and contingent acquisition payables measured at fair value Note 30 2 1 Total short-term debt 787 81 Gross debt 3,617 3,132 Minus: Cash and cash equivalents Note 27 (1,346) (1,001) Derivative financial instruments: Non-current assets Note 22 (17) \u2013 Current assets Note 26 (1) \u2013 Net debt 2,253 2,131 ACCOUNTING POLICIES Non-derivative financial liabilities measured at amortized cost Financial liabilities measured at amortized cost are bonds, the Euro Commercial Paper program, private placements, other long-term and short-term debt, and trade payables. The group initially recognizes non-derivative \ufb01nancial liabilities at fair value less any directly attributable transaction costs. Subsequently, these \ufb01nancial liabilities are measured at amortized cost using the effective interest method with any difference between cost and redemption value recognized in pro\ufb01t or loss over the period of the borrowings. RECONCILIATION OF LIABILITIES ARISING FROM FINANCING ACTIVITIES Gross debt, excluding lease liabilities, derivative financial instruments, and bank overdrafts Balance at January 1, 2022 Net cash flows Acquisitions/ Divestments Unwinding of discount Foreign exchange differences Other non-cash movements Balance at December 31, 2022 Bonds 2,625 500 \u2013 3 \u2013 (2) 3,126 Private placements 153 \u2013 \u2013 0 (11) \u2013 142 Other gross debt 12 5 2 \u2013 1 \u2013 20 Total 2,790 505 2 3 (10) (2) 3,288 Balance at January 1, 2021 Net cash flows Acquisitions/ Divestments Unwinding of discount Foreign exchange differences Other non-cash movements Balance at December 31, 2021 Bonds 2,126 500 \u2013 1 \u2013 (2) 2,625 Private placements 157 \u2013 \u2013 0 (4) \u2013 153 Other gross debt 109 (100) 2 \u2013 1 \u2013 12 Total 2,392 400 2 1 (3) (2) 2,790 Lease liabilities current and non current 2022 2021 Position at January 1 331 348 Additions from new leases 27 24 Acquired through business combinations Note 8 2 2 Contract modifications and reassessments of options 10 19 Repayment of lease liabilities (interest and principal portion) * (80) (77) Unwinding of discount of lease liabilities Note 15 9 9 Transfer to liabilities classified as held for sale Note 9 \u2013 (11) Foreign exchange differences 14 17 Position at December 31 313 331 * Repayment of lease liabilities in 2022 excludes payments by the disposal groups classi\ufb01ed as held for sale, amounting to \u20ac1 million. For accounting policies, estimates, and judgments on lease liabilities, refer to Note 20 \u2013 Leasing. LOAN MATURITY The following amounts of gross debt (excluding lease liabilities) at December 31, 2022, are due within and after \ufb01ve years: 2022 2024 409 2025 8 2026 498 2027 499 Due after 2027 1,172 Long-term debt 2,586 Short-term debt (2023) 718 Total (excluding lease liabilities) 3,304 At December 31, 2021, \u20ac10 million was short-term debt, \u20ac1,109 million was due in 2023 and 2024, and \u20ac1,682 million was due after 2026. FINANCIAL LIABILITIES MEASURED AT AMORTIZED COST Bonds The group has senior bonds outstanding for an amount of \u20ac3,126 million at December 31, 2022 (2021: \u20ac2,625 million). The nominal interest rates on the bonds are \ufb01xed until redemption. On September 23, 2022, the group issued a \u20ac500 million four-year senior unsecured Eurobond. The bonds were sold at an issue price of 99.922 percent and carry an annual coupon of 3.000 percent. The senior unsecured bonds will mature on September 23, 2026. The net proceeds of the offering are used for general corporate purposes. Private placements The group holds private placements in Japanese yen. These private placements (\u00a520,000 million) are converted to and hedged against euro via cross-currency interest rate swaps. These swaps have been collateralized for credit risk in line with the treasury risk management policies. There is no collateral outstanding at December 31, 2022 (2021: no collateral outstanding). Multi-currency revolving credit facility Effective July 2022, the group agreed to the \ufb01nal one-year extension of the \u20ac600 million multi-currency revolving credit facility, such that the facility will now mature in 2025. This facility has multi-year environmental, social, and governance (ESG) KPIs, which are linked to the interest rates in the facility. The interest rates in the facility are variable. The facility is used for general corporate purposes. At December 31, 2022, no amounts were drawn under the facility (December 31, 2021: no amounts drawn). The facility is subject to customary conditions, including a \ufb01nancial credit covenant. The facility covenant requires that the consolidated net senior borrowings (excluding fully subordinated debt) to adjusted EBITDA shall not exceed 3.5. In 2022 and 2021, the group was comfortably within the thresholds stipulated in the \ufb01nancial covenant of the facility. Euro Commercial Paper program The group has a Euro Commercial Paper (ECP) program in place, under which it may issue unsecured, short-term debt (ECP notes) for a maximum of \u20ac1.0 billion. The program provides flexible funding for short-term cash needs at attractive rates. At December 31, 2022, no ECP notes were outstanding (2021: no ECP notes outstanding). DEFAULTS AND/OR BREACHES There were no defaults or breaches on the loans and borrowings during 2022 or 2021. Note 30 \u2013 Financial Risk Management RISK MANAGEMENT FRAMEWORK The group\u2019s activities are exposed to a variety of \ufb01nancial risks, including market, liquidity, and credit risk. Identi\ufb01cation and management of \ufb01nancial risks are carried out by the central treasury department (Corporate Treasury), whereby the treasury operations are conducted within a framework of policies and guidelines (Treasury Policy), which are approved by the Executive Board and the Supervisory Board. The Treasury Policy is reviewed at least annually, considering market circumstances and market volatility, and is based on assumptions concerning future events, subject to uncertainties and risks that are outside of the group\u2019s control. The Treasury Committee, comprising the Vice President Group Accounting & Reporting, Controller Corporate Of\ufb01ce, Executive Vice President Treasury & Risk, and representatives of Corporate Treasury and Treasury Back-Of\ufb01ce, meets quarterly to review treasury activities and compliance with the Treasury Policy and reports directly to the Executive Board and the Audit Committee. The Treasury Back-Of\ufb01ce reports deviations directly to the CFO and the Executive Vice President Treasury & Risk. Under the group\u2019s Internal Control Framework, the \ufb01nancial reporting controls, including policies and procedures, of the Corporate Treasury Department are periodically reviewed. Corporate Treasury reports quarterly to the Audit Committee on its compliance with the Treasury Policy. The group\u2019s funding activities are carried out by Corporate Treasury using long-term capital market instruments and committed credit facilities to ensure optimal \ufb01nancial flexibility and capital ef\ufb01ciency. The borrowings, together with cash generated from operations, are lent or contributed as equity to the operating companies. The group targets a net-debt-to-EBITDA ratio of approximately 2.5. However, the group could temporarily deviate from this relative indebtedness ratio. At December 31, 2022, the net-debt-to-EBITDA ratio was 1.3 (2021: 1.4). All treasury activities, in particular the use of derivative \ufb01nancial instruments, are subject to the principle of risk minimization and are executed by specialized treasury personnel. For this reason, \ufb01nancial transactions and risk positions are managed in a central treasury management and payment system. It is the group\u2019s policy that material currency translation exposures and variable interest exposures are partially hedged by Corporate Treasury in accordance with the annual treasury plan approved by the Audit Committee. The group does not purchase or hold derivative \ufb01nancial instruments for speculative purposes. The group\u2019s risk pro\ufb01le is de\ufb01ned and reviewed regularly. Although the economic environment has become more challenging because of the volatility in \ufb01nancial markets, the exposure to \ufb01nancial risks for the group's activities has not signi\ufb01cantly changed, nor has the approach to these risks. MARKET RISK Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates, will affect the group\u2019s pro\ufb01t or loss or the value of its \ufb01nancial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return. CURRENCY RISK The group has identi\ufb01ed transaction and translation risks as currency risks. The transaction risk exposure within individual group entities is relatively immaterial. The transaction prices invoiced to customers for goods and/or services are mainly denominated in the customers\u2019 local currencies. Given the nature of the business, almost all related costs are also incurred in those local currencies. Derivative \ufb01nancial instruments to hedge transaction risks are therefore not frequently used. Translation risk is the risk that exchange rate gains or losses arise from translating the statement of pro\ufb01t or loss, statement of \ufb01nancial position, and statement of cash flows of foreign subsidiaries to the group\u2019s presentation currency (euro) for consolidation purposes. The group\u2019s risk management strategy practice is that material currency translation exposures (including U.S. dollar net investments) are partially hedged by Corporate Treasury. Currency translation exposures which impact the consolidated statements of \ufb01nancial position and/or pro\ufb01t or loss by 10% or more are considered material. The currency translation exposure on the consolidated statement of cash flows is partly mitigated by matching cash inflows and outflows in the same currency. The group\u2019s main translation risk is its exposure to the U.S. dollar. In line with its risk management strategy, the group manages the translation risk using three types of risk mitigating actions, of which two types of transactions are designated as a hedge and for which the group applies hedge accounting. HEDGE ACCOUNTING ACCOUNTING POLICIES Derivative financial instruments and hedging activities The group holds derivative \ufb01nancial instruments to hedge risk exposures. Derivative \ufb01nancial instruments are initially recognized at fair value on the date a derivative contract is concluded and are subsequently remeasured at fair value. The method of recognizing gains or losses depends on whether the derivative is designated as a hedging instrument and if so, the nature of the item being hedged. The group designates derivatives as either: \u2022 Hedges of a risk associated with a recognized asset or liability or a highly probable forecast transaction (cash flow hedge); \u2022 Hedges of a net investment in a foreign operation (net investment hedge); or \u2022 Currency forward instruments to protect the group\u2019s net pro\ufb01t (not qualifying for hedge accounting). With respect to foreign currency forwards used in the cash flow hedges and the net investment hedges, the group designates as a hedging instrument only the change in the value of the spot component of a forward contract (and not the forward element). The differential between the contracted forward rate and the market spot rate, de\ufb01ned as forward points, is recognized in other comprehensive income and accumulated in the hedge reserve within total equity. Cash flow hedge The effective part of changes in the fair value of derivatives that are designated and qualify as cash flow hedges are recognized in other comprehensive income, and accumulated in the hedge reserve within total equity. Amounts accumulated in the hedge reserve are reclassi\ufb01ed to pro\ufb01t or loss within the line where the result from the hedged transaction is recognized, in the same period the hedged item affects the pro\ufb01t or loss. The gain or loss relating to the ineffective part of the hedging relationship is recognized in pro\ufb01t or loss within \ufb01nancing results. Reclassification of hedge reserve to profit or loss When a hedging instrument matures or is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in the hedge reserve at that time remains in the hedge reserve and is only reclassi\ufb01ed when the hedged transaction is ultimately recognized in pro\ufb01t or loss. When a hedged transaction is no longer expected to occur, the cumulative gain or loss in the hedge reserve is reclassi\ufb01ed to pro\ufb01t or loss. Net investment hedge Fair value changes of derivative \ufb01nancial instruments used to hedge the net investment in foreign operations, which are determined to be an effective hedge, are recognized directly in other comprehensive income in the translation reserve. Gains and losses accumulated in the translation reserve are reclassi\ufb01ed to pro\ufb01t or loss when the foreign operation is disposed. If a hedging relationship is terminated and the derivative \ufb01nancial instrument is not sold, future changes in the fair value of the derivative \ufb01nancial instrument are recognized in pro\ufb01t or loss. The gain or loss relating to the ineffective part of the hedging relationship is recognized in pro\ufb01t or loss within \ufb01nancing results. Derivatives that do not qualify for hedge accounting Changes in the fair value of any derivative \ufb01nancial instruments that do not qualify for hedge accounting are recognized in pro\ufb01t or loss within \ufb01nancing results. Net investment hedge The group partially protects total equity from foreign exchange differences using U.S. dollar currency forward contracts qualifying as net investment hedges, which partially offset the translation risk on U.S. dollar-denominated subsidiaries and long-term receivables of the U.S. operations, being the hedged items. The fair value changes of the net investment hedge partially offset the currency differences on translation of U.S. dollar-denominated subsidiaries and long-term receivables from U.S. operations, both recognized in other comprehensive income. The group had U.S. dollar forward contracts outstanding for a total notional amount of \u20ac258 million ($275 million) at December 31, 2022 (2021: \u20ac177 million or $200 million). These hedges created a U.S. dollar balance sheet cover with a future settlement date, recognized as a \ufb01nancial asset with a fair value of \u20ac1 million at December 31, 2022. The group had U.S. dollar liabilities outstanding for a total notional amount of \u20ac473 million ($505 million) at December 31, 2022 (2021: \u20ac406 million or $460 million). The U.S. dollar liabilities include net investment hedges and other U.S. dollar-denominated liabilities. The U.S. dollar balance sheet cover of 11% (2021: 10%) is de\ufb01ned as the sum of U.S. dollar net investment hedges and other U.S. dollar liabilities outstanding divided by the group\u2019s net investment in U.S. dollar-denominated assets. Cash flow hedge The group protects against the translation differences on the Japanese yen private placement (2022 and 2021: \u00a520,000 million) and the related interest payments, using cash flow hedges by means of four cross-currency interest rate swaps. The fair value changes of the cash flow hedges are recognized in equity until the hedging relationship with the corresponding hedged instrument is terminated. At that moment, the translation differences are reclassi\ufb01ed to pro\ufb01t or loss. Currency forwards The group partially protects net pro\ufb01t from foreign exchange differences using U.S. dollar and other currency forwards not qualifying for hedge accounting. The fair value changes of these currency forwards are recognized in \ufb01nancing results and partially offset any translation risk on pro\ufb01t or loss elements. In 2022, the group swapped 74% (2021: 50%) of the net \ufb01nancing results of \u20ac56 million (2021: \u20ac78 million) into U.S. dollars using foreign exchange derivatives of $40 million (2021: $40 million). Sensitivity Based on the percentage of 74% for net \ufb01nancing results payable in U.S. dollars, an instantaneous 1% decline of the U.S. dollar against the euro at December 31, 2022, with all other variables held constant, would result in a decrease of approximately \u20ac0.4 million in net \ufb01nancing results (2021: \u20ac0.4 million). Hedge effectiveness Before applying hedge accounting, the group assesses, in accordance with the group\u2019s risk management policies and the parameters of the hedge, whether the designated hedge is highly effective. In 2022, the group did not record ineffectiveness because of hedging activities (2021: no ineffectiveness). The group measures hedge effectiveness on a forward-looking basis at the inception of the hedging relationship and on an ongoing basis at reporting dates through a qualitative assessment of the critical terms of the hedging instrument and the hedged item. The hedge values will generally move in the opposite direction because of the same risk and hence an economic relationship exists. The results of these effectiveness tests all satis\ufb01ed the effectiveness criterion during the year. CURRENCY RISK SENSITIVITY The following table details the group\u2019s sensitivity to a 1% weakening of the U.S. dollar against the euro: 2022 2021 Revenues (37) (31) Adjusted operating pro\ufb01t (12) (10) Operating pro\ufb01t (11) (10) Adjusted net pro\ufb01t (8) (6) Pro\ufb01t for the year (7) (6) Shareholders\u2019 equity at December 31 (38) (35) Adjusted free cash flow (12) (9) SENSITIVITY ANALYSIS A sensitivity analysis on the derivative \ufb01nancial instruments portfolio yields the following results, assuming an instantaneous 1% decrease of the U.S. dollar and Japanese yen against the euro from their levels at December 31, 2022, and an instantaneous 1% increase of the U.S. dollar, Japanese yen, and euro interest rates: in millions Hedged risk Amount Type of instrument Exchange rate movement \u20ac Interest rate movement \u20ac Cash flow hedge Changes in \u00a5 floating interest payments and \u00a5 exchange rates \u00a520,000 Cross-currency interest rate swaps (1) (4) Net investment hedge Changes of the U.S. dollar net investments due to fluctuations of U.S. dollar exchange rates $275 Forward contracts 2 0 INTEREST RATE RISK The group is exposed to interest rate risk. The group aims to mitigate the impact on its results and cash flows of interest rate movements, both by arranging \ufb01xed or variable rate funding and by use of derivative \ufb01nancial instruments. At December 31, 2022, the group\u2019s interest rate position (excluding cash and cash equivalents and lease liabilities) was 100% (2021: 100%) carried at a \ufb01xed rate. The credit facility and the Euro Commercial Paper program have a variable interest rate. Assuming the same mix of variable and \ufb01xed interest rate instruments, an instantaneous increase of interest rates of 1% compared to the rates on December 31, 2022, with all other variables held constant, would hardly result, on an annual basis, in an increase of net \ufb01nancing results (2021: identical at December 31, 2021). Interest rate benchmark transition for non-derivative financial instruments For non-derivative third-party contracts and internal contracts, IBOR references were primarily used in internal \ufb01nancing-related contracts. At December 31, 2022, all U.K., Swiss and Japanese IBOR references in these internal contracts were replaced by alternative benchmark rates. Other IBOR references will only be replaced once such IBORs are discontinued. During 2022, the group has transitioned its \u20ac600 million credit facility agreement from LIBOR to risk-free rates. Interest rate benchmark transition for derivative financial instruments The \ufb01xed interest payments on the Japanese Yen private placements are converted to and hedged against euro via cross-currency interest rate swaps. The Interest Rate Benchmark Reform did not impact these \ufb01xed interest payments. However, both the Japanese Libor and Euribor were inputs in the fair value determination. During 2022, the input in the fair value determination was changed to the Tokia Overnight Rate (TONA) curve and the Euro Short-Term Rate (\u20acSTR). In addition, the Euro Overnight Index Average (EONIA) reference in the Credit Support Annex was amended to the Euro Short-Term Rate (\u20acSTR). The IBOR-reform did not result in changes to the group\u2019s risk management strategy. LIQUIDITY RISK Liquidity risk is the risk that the group will encounter dif\ufb01culty in meeting the obligations associated with its \ufb01nancial liabilities that are settled by delivering cash or another \ufb01nancial asset. The group\u2019s approach to manage liquidity is to ensure, as far as possible, that it will have enough liquidity to meet its liabilities when they are due. The group actively manages liquidity risk by maintaining enough cash and cash equivalents, and by the availability of committed borrowing capacity. To reduce liquidity risk, the group has established the following minimum requirements: \u2022 No more than 25% of outstanding gross debt minus available cash should be repayable within a 12-month period; \u2022 Acquiring of funding to start at least one year in advance of all maturing debt or alternative committed funding should be in place; and \u2022 Minimum headroom of \u20ac500 million (sum of unused committed credit facilities, cash and cash equivalents, and derivative \ufb01nancial assets, minus other short-term debt, current deferred acquisition payables, current derivative \ufb01nancial liabilities, and bank overdrafts). Per December 31, 2022, the group has access to the unused part of the committed credit facilities of \u20ac600 million in total (2021: \u20ac600 million), cash and cash equivalents of \u20ac1,346 million (2021: \u20ac1,001 million), and has derivative \ufb01nancial assets totaling \u20ac18 million (2021: none), minus other short-term debt, current deferred and contingent acquisition payables, bank overdrafts, Euro Commercial Paper, and current derivative \ufb01nancial liabilities totaling \u20ac18 million (2021: \u20ac10 million). The headroom was \u20ac1,946 million at year-end 2022 (2021: \u20ac1,591 million). No assets have been collateralized or in any other way secured under debt contracts. Exposure to liquidity risk The following tables relate to the remaining contractual cash flows of \ufb01nancial liabilities at the reporting date. These tables show net cash flow amounts for derivative \ufb01nancial instruments that have simultaneous cash settlements. The amounts for the non-derivative \ufb01nancial instruments are gross and undiscounted and include estimated interest payments and exclude the impact of netting agreements. For the remaining contractual cash flows of lease liabilities, refer to Note 20 \u2013 Leasing. CONTRACTUAL CASH FLOWS 2022 Carrying amount Contractual undiscounted cash flows Less than 1 year 1-2 years 2-5 years More than 5 years Non-derivative financial liabilities (excl. lease liabilities) Bonds: Bonds 2008-2028 36 49 2 2 7 38 Bonds 2013-2023 700 720 720 \u2013 \u2013 \u2013 Bonds 2014-2024 399 420 10 410 \u2013 \u2013 Bonds 2017-2027 499 539 8 8 523 \u2013 Bonds 2020-2030 496 530 4 4 11 511 Bonds 2021-2028 498 507 1 1 4 501 Bonds 2022-2026 498 560 15 15 530 \u2013 Private placements: Private placement 2008-2038 142 216 5 5 14 192 Long- and short-term deferred and contingent acquisition payables 4 4 2 2 \u2013 \u2013 Other debt 16 16 \u2013 8 8 \u2013 Borrowings and bank overdrafts 16 16 16 \u2013 \u2013 \u2013 Trade payables 147 147 147 \u2013 \u2013 \u2013 Total 3,451 3,724 930 455 1,097 1,242 Derivative financial instruments (Receipts) (260) (260) Payments 258 258 Foreign exchange derivatives (1) (2) (2) 0 0 0 (Receipts) (216) (5) (5) (14) (192) Payments 245 8 8 23 206 Cross-currency interest rate swaps (17) 29 3 3 9 14 Total derivative financial liabilities/(assets) (18) 27 1 3 9 14 CONTRACTUAL CASH FLOWS 2021 Carrying amount Contractual undiscounted cash flows Less than 1 year 1-2 years 2-5 years More than 5 years Non-derivative financial liabilities (excl. lease liabilities) Bonds: Bonds 2008-2028 36 52 2 2 7 41 Bonds 2013-2023 699 740 20 720 \u2013 \u2013 Bonds 2014-2024 399 430 10 10 410 \u2013 Bonds 2017-2027 498 547 8 8 23 508 Bonds 2020-2030 495 534 4 4 11 515 Bonds 2021-2028 498 509 1 1 4 503 Private placements: Private placement 2008-2038 153 237 5 5 15 212 Long- and short-term deferred and contingent acquisition payables 2 2 1 1 \u2013 \u2013 Other debt 10 10 \u2013 5 5 \u2013 Borrowings and bank overdrafts 9 9 9 \u2013 \u2013 \u2013 Trade payables 123 123 123 \u2013 \u2013 \u2013 Total 2,922 3,193 183 756 475 1,779 Derivative financial instruments (Receipts) (175) (175) \u2013 \u2013 \u2013 Payments 177 177 \u2013 \u2013 \u2013 Foreign exchange derivatives 0 2 2 0 0 0 (Receipts) (237) (5) (5) (15) (212) Payments 253 8 8 23 214 Cross-currency interest rate swaps 2 16 3 3 8 2 Total derivative financial liabilities/(assets) 2 18 5 3 8 2 CREDIT RISK Credit risk represents the loss that would be recognized if a customer or counterparty to a \ufb01nancial instrument fails to meet its contractual obligations, and arises principally from the group\u2019s receivables from customers, unbilled revenues, and investments in debt securities. The carrying amount of non-derivative \ufb01nancial assets represents the maximum credit exposure and amounted to \u20ac2,572 million at December 31, 2022 (2021: \u20ac2,138 million). Financial instruments and excess cash at financial institutions The group is exposed to credit risks due to its use of derivatives and because of excess cash deposited at banks. It is the group\u2019s policy to conclude \ufb01nancial transactions under ISDA (International Swap Dealers Association) master agreements. Cash invested and \ufb01nancial transactions are only concluded with \ufb01nancial institutions with strong credit ratings (at least a credit rating of A-/A3). Furthermore, credit limits per counterparty are in place and are monitored periodically. At December 31, 2022, there were no material credit risk concentrations outstanding while the average weighted credit rating of counterparties was A (2021: A). The aim is to spread transactions among counterparties. No credit limits were materially exceeded during the reporting period and management does not expect any losses from non-performance by these counterparties on current outstanding contracts. Trade receivables and unbilled revenues The group has a natural exposure to credit risk in its operational business. This exposure of the group\u2019s operating companies to credit risk is inherently limited, considering the diversi\ufb01ed customer portfolio of the group, and since a substantial part of the transactions is prepaid by customers. The group\u2019s operating companies actively monitor the solvency of their key accounts and assess creditworthiness of customers before concluding a contract. The group determines the impairment on trade receivables and unbilled revenues using the lifetime expected credit loss model, whereby the historical credit losses on trade receivables (a credit event) are used as a base for the future expected credit losses. The accounting policy and the assumptions are periodically evaluated by the group using macroeconomic data and historical back- testing of the assumptions. At December 31, 2022, the loss allowance on trade receivables and unbilled revenues amounted to \u20ac85 million. The majority of this loss allowance relates to trade receivables that are overdue for more than one year, as legislation in various countries do not allow a write-off until a certain number of years is passed. The trade receivables and unbilled revenues that are not overdue for more than one year or have no speci\ufb01c impairment risk have sound creditworthiness and meet the credit rating grades as de\ufb01ned in the internal policy for assessing the impairment of \ufb01nancial assets. For each trade receivable less than one year overdue, there is a loss allowance of at least 0.5% of the outstanding balance. For accounting policies, estimates, and judgments applied in determining the loss allowance on trade receivables and unbilled revenues, refer to Note 10 \u2013 Sales Costs and Note 25 \u2013 Contract Assets and Liabilities. FAIR VALUE OF FINANCIAL INSTRUMENTS The following table shows the carrying amounts and fair values of \ufb01nancial assets and liabilities (excluding lease liabilities), including their levels in the fair value hierarchy. 2022 2021 Carrying value Fair value Level 1 Level 2 Level 3 Carrying value Fair value Non-derivative financial instruments: Financial assets at fair value through profit or loss 0 0 0 0 0 Unbilled revenues * 101 101 95 95 Trade receivables * 1,088 1,088 1,008 1,008 Miscellaneous receivables * 32 32 34 34 Interest receivable * 5 5 0 0 Cash and cash equivalents * 1,346 1,346 1,001 1,001 Total non-derivative \ufb01nancial assets 2,572 2,572 2,138 2,138 Bonds 2008-2028 36 41 41 36 50 Bonds 2013-2023 700 701 701 699 727 Bonds 2014-2024 399 396 396 399 422 Bonds 2017-2027 499 459 459 498 529 Bonds 2020-2030 496 399 399 495 503 Bonds 2021-2028 498 417 417 498 493 Bonds 2022-2026 498 489 489 \u2013 \u2013 Private placement 2008-2038 142 172 172 153 206 Long- and short-term deferred and contingent acquisition payables 4 4 4 2 2 Other debt * 16 16 10 10 Borrowings and bank overdrafts * 16 16 9 9 Trade payables * 147 147 123 123 Interest payable * 39 39 34 34 Total non-derivative \ufb01nancial liabilities 3,490 3,296 2,902 172 4 2,956 3,108 Derivative financial instruments: Non-current assets 17 17 17 \u2013 \u2013 Current assets 1 1 1 \u2013 \u2013 Total derivative \ufb01nancial assets 18 18 18 0 0 Non-current liabilities \u2013 \u2013 \u2013 2 2 Total derivative \ufb01nancial liabilities 0 0 0 2 2 * Fair value approximates the carrying amount. FAIR VALUE HIERARCHY The fair values have been determined by the group based on market data and appropriate valuation methods/quotes. Valuation methods include: \u2022 Level 1: reference to quoted prices (unadjusted) in active markets for similar assets and liabilities; \u2022 Level 2: inputs other than quoted prices that are observable for the asset or liability and that may have a signi\ufb01cant impact on the fair value, either directly (i.e., as prices) or indirectly (i.e., derived from prices) based on discounted cash flow analyses, using data input of observable \ufb01nancial markets and \ufb01nancial institutions; and \u2022 Level 3: inputs that are not based on observable market data. The valuation method can be based on discounted cash flow analyses, or other models that are substantially identical. There has been no change in the fair value hierarchy compared to 2021. The Level 3 fair value movements in non-derivative \ufb01nancial liabilities are as follows: 2022 2021 Balance at January 1 2 0 Acquired through business combinations Note 8 3 2 Settlements Note 8 (1) 0 Fair value changes of contingent considerations Note 12 0 0 Foreign exchange differences 0 0 Balance at December 31 4 2 DEFERRED AND CONTINGENT ACQUISITION PAYABLES ACCOUNTING POLICIES Non-derivative \ufb01nancial liabilities at fair value through pro\ufb01t or loss comprise deferred and contingent considerations and are measured at fair value. Changes therein are recognized in pro\ufb01t or loss. The contingent considerations are based on a discounted cash flow model, which considers the present value of expected payments, using a risk-adjusted discount rate. The expected payment is determined by considering possible scenarios, the amount to be paid under each scenario, and the probability of each scenario. The estimated fair value could increase (or decrease) if assumptions change. The fair value of the deferred and contingent acquisition payables balance amounted to \u20ac4 million (2021: \u20ac2 million) and can be presented as follows: Fair value December 31, 2022 Of which: short term Of which: long term Maximum exposure (undiscounted) Fair value December 31, 2021 Total 4 2 2 4 2 ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfFinancialInstrumentsExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-470": {
"value": "ACCOUNTING POLICIES Financial assets at fair value through pro\ufb01t or loss comprise equity investments. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialAssetsExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-471": {
"value": "ACCOUNTING POLICIES Financial assets at fair value through pro\ufb01t or loss comprise equity investments. ACCOUNTING POLICIES Non-derivative \ufb01nancial liabilities at fair value through pro\ufb01t or loss comprise deferred and contingent considerations and are measured at fair value. Changes therein are recognized in pro\ufb01t or loss. The contingent considerations are based on a discounted cash flow model, which considers the present value of expected payments, using a risk-adjusted discount rate. The expected payment is determined by considering possible scenarios, the amount to be paid under each scenario, and the probability of each scenario. The estimated fair value could increase (or decrease) if assumptions change. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialInstrumentsAtFairValueThroughProfitOrLossExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-472": {
"value": "FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS 2022 2021 Position at January 1 0 0 Financial assets arising from divestment of operations Note 8 \u2013 6 Fair value changes of financial assets Note 15 0 (5) Foreign exchange differences 0 (1) Position at December 31 0 0 DEFERRED AND CONTINGENT ACQUISITION PAYABLES ACCOUNTING POLICIES Non-derivative \ufb01nancial liabilities at fair value through pro\ufb01t or loss comprise deferred and contingent considerations and are measured at fair value. Changes therein are recognized in pro\ufb01t or loss. The contingent considerations are based on a discounted cash flow model, which considers the present value of expected payments, using a risk-adjusted discount rate. The expected payment is determined by considering possible scenarios, the amount to be paid under each scenario, and the probability of each scenario. The estimated fair value could increase (or decrease) if assumptions change. The fair value of the deferred and contingent acquisition payables balance amounted to \u20ac4 million (2021: \u20ac2 million) and can be presented as follows: Fair value December 31, 2022 Of which: short term Of which: long term Maximum exposure (undiscounted) Fair value December 31, 2021 Total 4 2 2 4 2 ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfFinancialInstrumentsAtFairValueThroughProfitOrLossExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-473": {
"value": "DEFERRED TAX ASSETS AND LIABILITIES temporary differences arising from: Assets Liabilities 2022 2021 Intangible assets 7 (402) (395) (390) Property, plant, and equipment, right-of-use assets, and lease liabilities 20 (3) 17 1 Employee bene\ufb01ts 38 0 38 37 Tax value of loss carry-forwards recognized 31 \u2013 31 38 Other items 103 (31) 72 82 Total before set-off of tax 199 (436) (237) (232) Set-off of tax (137) 137 0 0 Position at December 31 62 (299) (237) (232) The actual recognition of deferred tax assets depends on the generation of future taxable income during the periods in which the temporary differences become deductible. Based on projected future taxable income and available strategies, the group considers the future realization of these deferred tax assets as probable. Other items mainly include recognition of deferred tax assets and liabilities for temporary differences on working capital items. MOVEMENTS IN TEMPORARY DIFFERENCES, 2022 Balance at January 1, 2022 Acquisitions/ divestments Transfer to assets and liabilities classified as held for sale (Note 9) Recognized in profit or loss (Note 16) Recognized in equity and other comprehensive income Foreign exchange differences Balance at December 31, 2022 Intangible assets (390) (19) \u2013 31 \u2013 (17) (395) PPE, right-of-use assets, and lease liabilities 1 \u2013 \u2013 16 \u2013 0 17 Employee bene\ufb01ts 37 \u2013 \u2013 4 (5) 2 38 Tax value of loss carry-forwards recognized 38 \u2013 \u2013 (9) \u2013 2 31 Other items 82 0 \u2013 (18) 4 4 72 Total (232) (19) 0 24 (1) (9) (237) MOVEMENTS IN TEMPORARY DIFFERENCES, 2021 Balance at January 1, 2021 Acquisitions/ divestments Transfer to assets and liabilities classified as held for sale (Note 9) Recognized in profit or loss (Note 16) Recognized in equity and other comprehensive income Foreign exchange differences Balance at December 31, 2021 Intangible assets (403) 4 0 34 \u2013 (25) (390) PPE, right-of-use assets, and lease liabilities 5 \u2013 0 (4) \u2013 0 1 Employee bene\ufb01ts 42 0 0 (4) (4) 3 37 Tax value of loss carry-forwards recognized 43 \u2013 \u2013 (8) \u2013 3 38 Other items 80 4 (1) (4) 0 3 82 Total (233) 8 (1) 14 (4) (16) (232) DEFERRED TAX ON ITEMS RECOGNIZED IMMEDIATELY IN OTHER COMPREHENSIVE INCOME AND EQUITY 2022 2021 Amount before tax Tax Amount net of tax Amount before tax Tax Amount net of tax Exchange differences on translation of foreign operations, recycling of foreign exchange differences on loss of control, and net investment hedges 216 4 220 339 0 339 Gains/(losses) on cash flow hedges 29 \u2013 29 10 \u2013 10 Remeasurement gains/(losses) on de\ufb01ned bene\ufb01t plans 18 (5) 13 16 (4) 12 Recognized in other comprehensive income 263 (1) 262 365 (4) 361 Share-based payments 28 \u2013 28 24 \u2013 24 Recognized in equity 28 0 28 24 0 24 MOVEMENTS IN OVERALL TAX POSITION 2022 2021 Position at January 1 Current income tax assets 59 23 Current income tax liabilities (142) (169) Deferred tax assets 62 72 Deferred tax liabilities (294) (305) Overall tax position (315) (379) Movements Total income tax expense Note 16 (249) (201) Deferred tax from acquisitions and divestments (19) 8 Current income tax from acquisitions and divestments (1) 0 Deferred tax on items recognized directly in other comprehensive income (1) (4) Paid income tax 289 277 Transfer to assets and liabilities classified as held for sale Note 9 \u2013 1 Foreign exchange differences (9) (17) Total movements 10 64 Position at December 31 Current income tax assets 61 59 Current income tax liabilities (129) (142) Deferred tax assets 62 62 Deferred tax liabilities (299) (294) Overall tax position (305) (315) The current income tax liabilities include, to a large extent, uncertain tax positions. For most of these uncertain tax positions, it is expected that the audit by tax authorities will \ufb01nalize beyond one year. For the estimates and judgments applied to uncertain tax positions, refer to Note 16 \u2013 Income Tax Expense. The group paid income taxes for the amounts of \u20ac162 million (2021: \u20ac166 million) in North America, \u20ac119 million (2021: \u20ac104 million) in Europe, and \u20ac8 million (2021: \u20ac7 million) in Asia Paci\ufb01c and Rest of World. The amount of deferred tax assets arising from recognized tax loss carry-forwards, which relate to tax jurisdictions where the group continued to incur tax losses in the current and/or preceding year, was \u20ac0 million at December 31, 2022 (2021: \u20ac11 million). It is considered probable based on forecasts that future taxable pro\ufb01ts will be available. UNRECOGNIZED TAX LOSSES AND TEMPORARY DIFFERENCES The group has not recognized deferred tax assets that relate to unused tax losses and temporary differences amounting to \u20ac293 million (2021: \u20ac253 million), as it is not probable that future taxable pro\ufb01t will be available against which the group can use the bene\ufb01ts. Of these unused tax losses and temporary differences, 14% expire within the next \ufb01ve years (2021: 11%), 10% expire after \ufb01ve years (2021: 13%), and 76% carry forward inde\ufb01nitely (2021: 76%). In addition, the group has not recognized net deferred tax assets of \u20ac21 million (2021: \u20ac20 million), relating to unused state tax losses in the U.S. Of these unused state tax losses, 23% expire within the next \ufb01ve years (2021: 21%) and 77% expire after \ufb01ve years (2021: 79%). ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfDeferredTaxesExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-474": {
"value": "MOVEMENTS IN OVERALL TAX POSITION 2022 2021 Position at January 1 Current income tax assets 59 23 Current income tax liabilities (142) (169) Deferred tax assets 62 72 Deferred tax liabilities (294) (305) Overall tax position (315) (379) Movements Total income tax expense Note 16 (249) (201) Deferred tax from acquisitions and divestments (19) 8 Current income tax from acquisitions and divestments (1) 0 Deferred tax on items recognized directly in other comprehensive income (1) (4) Paid income tax 289 277 Transfer to assets and liabilities classified as held for sale Note 9 \u2013 1 Foreign exchange differences (9) (17) Total movements 10 64 Position at December 31 Current income tax assets 61 59 Current income tax liabilities (129) (142) Deferred tax assets 62 62 Deferred tax liabilities (299) (294) Overall tax position (305) (315) The current income tax liabilities include, to a large extent, uncertain tax positions. For most of these uncertain tax positions, it is expected that the audit by tax authorities will \ufb01nalize beyond one year. For the estimates and judgments applied to uncertain tax positions, refer to Note 16 \u2013 Income Tax Expense. The group paid income taxes for the amounts of \u20ac162 million (2021: \u20ac166 million) in North America, \u20ac119 million (2021: \u20ac104 million) in Europe, and \u20ac8 million (2021: \u20ac7 million) in Asia Paci\ufb01c and Rest of World. ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfTaxReceivablesAndPayablesExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-475": {
"value": "Note 24 \u2013 Inventories 2022 2021 Work in progress 27 21 Finished products and trade goods 52 44 Total 79 65 ACCOUNTING POLICIES Inventories are valued at the lower of cost and net realizable value. The cost of inventories includes all costs incurred in bringing the inventories to their present location and condition. Net realizable value is the estimated selling price in the ordinary course of business less the estimated cost of completion and the estimated cost necessary to complete the sale. Inventories also include internally developed commercial software products. The cost of internally produced goods includes the development, manufacturing, content-creation, and publishing costs. Trade goods purchased from third parties are valued at the purchase price. At December 31, 2022, the provision for obsolescence deducted from the inventory carrying values amounted to \u20ac18 million (2021: \u20ac18 million). In 2022, an amount of \u20ac5 million was recognized as an expense for the change in the provision for obsolescence (2021: \u20ac2 million) and is presented as part of cost of revenues in the consolidated statement of pro\ufb01t or loss. ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfInventoriesExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-476": {
"value": "ACCOUNTING POLICIES Inventories are valued at the lower of cost and net realizable value. The cost of inventories includes all costs incurred in bringing the inventories to their present location and condition. Net realizable value is the estimated selling price in the ordinary course of business less the estimated cost of completion and the estimated cost necessary to complete the sale. Inventories also include internally developed commercial software products. The cost of internally produced goods includes the development, manufacturing, content-creation, and publishing costs. Trade goods purchased from third parties are valued at the purchase price. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForMeasuringInventories",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-477": {
"value": "2022 2021 Trade receivables 1,088 1,008 Non-current contract assets 17 19 Current contract assets 153 138 Non-current deferred income 112 113 Current deferred income 1,858 1,709 Other current contract liabilities 88 80 ACCOUNTING POLICIES Trade receivables Trade receivables are recognized at transaction price and subsequently measured at amortized cost minus loss allowance. A receivable is recognized when the group\u2019s right to consideration is unconditional except for the passage of time. Impairment Any impairment of assets relating to contracts with customers is measured, presented, and disclosed in accordance with IFRS 9. The determination of the provision for impairment is based on the group\u2019s historical average of three years of credit losses, which is used as a proxy for expected losses on trade receivables with similar characteristics and credit pro\ufb01le, adjusted as appropriate to reflect the current conditions and estimates of future economic conditions. Trade receivables longer than one year overdue and trade receivables with speci\ufb01c risk with no reasonable expectation of recovery, are impaired and provided for in full, unless reliable supporting information is available to conclude otherwise. The group presents its impairment losses in the notes to the consolidated \ufb01nancial statements. GENERAL In general, the group applies payment terms in line with common industry practice. There are no signi\ufb01cant contracts with a material \ufb01nancing component. There are contracts with variable consideration, but the related estimates are almost never constrained. To a very limited extent, the group acts as an agent in its contracts with customers. Most of the contracts with customers require prepayment of the consideration. Trade receivables and unbilled revenues are shown net of impairment losses amounting to \u20ac85 million (2021: \u20ac83 million). The fair value of the receivables approximates the carrying amount. Impairment losses on trade receivables and unbilled revenues are presented as part of sales costs in the consolidated statement of pro\ufb01t or loss. LOSS ALLOWANCE 2022 2021 Position at January 1 83 84 Divestment of operations Note 8 0 (1) Transfer to assets classified as held for sale Note 9 \u2013 (1) Additions to loss allowances Note 10 33 28 Releases from loss allowances Note 10 (12) (8) Usage of loss allowances (22) (25) Foreign exchange differences 3 6 Position at December 31 85 83 ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfTradeAndOtherReceivablesExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-478": {
"value": "ACCOUNTING POLICIES Trade receivables Trade receivables are recognized at transaction price and subsequently measured at amortized cost minus loss allowance. A receivable is recognized when the group\u2019s right to consideration is unconditional except for the passage of time. Impairment Any impairment of assets relating to contracts with customers is measured, presented, and disclosed in accordance with IFRS 9. The determination of the provision for impairment is based on the group\u2019s historical average of three years of credit losses, which is used as a proxy for expected losses on trade receivables with similar characteristics and credit pro\ufb01le, adjusted as appropriate to reflect the current conditions and estimates of future economic conditions. Trade receivables longer than one year overdue and trade receivables with speci\ufb01c risk with no reasonable expectation of recovery, are impaired and provided for in full, unless reliable supporting information is available to conclude otherwise. The group presents its impairment losses in the notes to the consolidated \ufb01nancial statements. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForTradeAndOtherReceivablesExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-479": {
"value": "Unbilled revenues and deferred income When either party to a customer contract has performed, the group recognizes unbilled revenues or deferred income, depending on the relationship between the group\u2019s performance and the timing of the customer's payment. If the value of the services rendered by the group exceeds the invoiced amounts, unbilled revenues are recognized. If the invoiced amounts exceed the value of services rendered, deferred income is recognized. Unbilled revenues are recognized when the group\u2019s right to consideration is conditional on something other than the passage of time, for example future performance of the entity. Deferred income represents the part of the amount invoiced to customers that has not yet met the criteria for revenue recognition and thus still must be earned as revenues by means of the delivery of goods and/or services in the future. Deferred income is recognized at its nominal value. For contracts whereby neither party has performed, trade receivables and deferred income balances are presented on a net basis. DEFERRED INCOME current and non-current 2022 2021 Position at January 1 1,822 1,630 New and existing contracts with customers 3,944 3,683 Recognized as revenues from opening balance (1,709) (1,518) Recognized as revenues in the year on new and existing contracts (2,137) (2,007) Change in netting against trade receivables (25) (45) Autonomous movements in deferred income 73 113 Acquired through business combinations Note 8 0 6 Divestment of operations Note 8 0 (2) Transfer to liabilities classified as held for sale Note 9 \u2013 (27) Foreign exchange differences 75 102 Position at December 31 1,970 1,822 No material amount of revenues was recognized in 2022 from performance obligations satis\ufb01ed or partially satis\ufb01ed in previous years because of events such as changes in transaction price. Furthermore, the group did not have material changes in deferred income because of contract modi\ufb01cations or changes in estimates. The aggregate amount of the transaction price allocated to the remaining performance obligations that are unsatis\ufb01ed at year-end 2022 was \u20ac4,055 million (2021: \u20ac3,727 million), of which \u20ac1,970 million was included in deferred income (2021: \u20ac1,822 million). The unful\ufb01lled performance obligations not recognized in deferred income relate to multi-year contracts agreed with customers, whereby the group expects to satisfy these performance obligations for a large part within one year and for the remainder between one to \ufb01ve years. ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfDeferredIncomeExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-480": {
"value": "Cost to obtain a contract Incremental costs for obtaining a contract (primarily sales commissions) will be capitalized and amortized if the contract term is expected to be longer than 12 months, as the practical expedient of IFRS 15 is applied. The amortization period will usually be one to \ufb01ve years, or the underlying contract life if longer, subject to the nature of the underlying performance obligations. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForCustomerAcquisitionCostsExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-481": {
"value": "Impairment Any impairment of assets relating to contracts with customers is measured, presented, and disclosed in accordance with IFRS 9. The determination of the provision for impairment is based on the group\u2019s historical average of three years of credit losses, which is used as a proxy for expected losses on trade receivables with similar characteristics and credit pro\ufb01le, adjusted as appropriate to reflect the current conditions and estimates of future economic conditions. Trade receivables longer than one year overdue and trade receivables with speci\ufb01c risk with no reasonable expectation of recovery, are impaired and provided for in full, unless reliable supporting information is available to conclude otherwise. The group presents its impairment losses in the notes to the consolidated \ufb01nancial statements. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfFinancialAssetsExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-482": {
"value": "LOSS ALLOWANCE 2022 2021 Position at January 1 83 84 Divestment of operations Note 8 0 (1) Transfer to assets classified as held for sale Note 9 \u2013 (1) Additions to loss allowances Note 10 33 28 Releases from loss allowances Note 10 (12) (8) Usage of loss allowances (22) (25) Foreign exchange differences 3 6 Position at December 31 85 83 For further information on credit risk, refer to Note 30 \u2013 Financial Risk Management. ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfAllowanceForCreditLossesExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-483": {
"value": "Note 26 \u2013 Other Receivables 2022 2021 Prepaid royalties 16 18 Non-current other receivables 16 18 Prepaid royalties 55 81 Other prepayments 157 251 Miscellaneous receivables 32 34 Interest receivable 5 0 Derivative financial instruments 1 \u2013 Current other receivables 250 366 ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfPrepaymentsAndOtherAssetsExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-484": {
"value": "Note 27 \u2013 Cash and Cash Equivalents 2022 2021 Deposits 909 610 Cash and bank balances 437 391 Total cash and cash equivalents in the consolidated statement of financial position 1,346 1,001 Minus: Bank overdrafts used for cash management purposes Note 29 (16) (9) Plus: Cash included in assets held for sale Note 9 \u2013 2 Total cash and cash equivalents minus bank overdrafts, including cash included in assets held for sale in the consolidated statement of cash flows 1,330 994 ACCOUNTING POLICIES Cash and cash equivalents comprise cash and bank balances and deposits. Bank overdrafts predominantly result from cash pool arrangements and are presented within borrowings and bank overdrafts in current liabilities. The group discloses the \ufb01nancial assets and \ufb01nancial liabilities within these arrangements on a gross basis. An amount of \u20ac0 million (2021: \u20ac0 million) relates to cash and cash equivalent balances of entities that the group does not fully own (see Note 17 \u2013 Non-controlling Interests). Cash equivalents include bank deposits that are held as part of the group\u2019s cash management for the purpose of meeting short-term cash commitments. At December 31, 2022, bank balances include an amount of \u20ac38 million (2021: \u20ac45 million) of restricted cash, primarily due to local exchange control regulations that restrict exporting cash and/or capital from the relevant country. ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfCashAndCashEquivalentsExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-485": {
"value": "ACCOUNTING POLICIES Cash and cash equivalents comprise cash and bank balances and deposits. Bank overdrafts predominantly result from cash pool arrangements and are presented within borrowings and bank overdrafts in current liabilities. The group discloses the \ufb01nancial assets and \ufb01nancial liabilities within these arrangements on a gross basis. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyToDetermineComponentsOfCashAndCashEquivalents",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-486": {
"value": "At December 31, 2022, bank balances include an amount of \u20ac38 million (2021: \u20ac45 million) of restricted cash, primarily due to local exchange control regulations that restrict exporting cash and/or capital from the relevant country. ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfRestrictedCashAndCashEquivalentsExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-487": {
"value": "Note 28 \u2013 Trade and Other Payables 2022 2021 Trade payables 147 123 Salaries, holiday allowances, and other benefits 276 284 VAT, sales tax, social security premiums, and other taxation 95 88 Pension-related payables 28 24 Royalty payables 88 90 Other accruals and payables 315 300 Interest payable 39 34 Deferred and contingent acquisition payables Note 30 2 1 Total 990 944 ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfTradeAndOtherPayablesExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-488": {
"value": "Note 28 \u2013 Trade and Other Payables 2022 2021 Trade payables 147 123 Salaries, holiday allowances, and other benefits 276 284 VAT, sales tax, social security premiums, and other taxation 95 88 Pension-related payables 28 24 Royalty payables 88 90 Other accruals and payables 315 300 Interest payable 39 34 Deferred and contingent acquisition payables Note 30 2 1 Total 990 944 ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfAccruedExpensesAndOtherLiabilitiesExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-489": {
"value": "Nominal value Effective interest rate in % Nominal interest rate in % Repayment commitments 1-5 years Repayment commitments >5 years 2022 2021 Bonds 2008-2028 (100.00 * ) \u20ac36 6.812 6.748 \u2013 36 36 36 Bonds 2013-2023 (99.709 * ) ** \u20ac700 2.950 2.875 \u2013 \u2013 0 699 Bonds 2014-2024 (99.164 * ) \u20ac400 2.640 2.500 399 \u2013 399 399 Bonds 2017-2027 (99.659 * ) \u20ac500 1.575 1.500 499 \u2013 499 498 Bonds 2020-2030 (99.292 * ) \u20ac500 0.862 0.750 \u2013 496 496 495 Bonds 2021-2028 (99.958 * ) \u20ac500 0.307 0.250 \u2013 498 498 498 Bonds 2022-2026 (99.922 * ) \u20ac500 3.096 3.000 498 \u2013 498 \u2013 Bonds, measured at amortized cost 1,396 1,030 2,426 2,625 Private placement 2008-2038, measured at amortized cost \u00a520,000 3.330 3.330 \u2013 142 142 153 Deferred and contingent acquisition payables, measured at fair value 2 \u2013 2 1 Other debt, measured at amortized cost 16 \u2013 16 10 Derivative \ufb01nancial instruments, measured at fair value *** \u2013 \u2013 0 2 Other long-term debt 18 0 18 13 Total long-term debt (excluding lease liabilities) 1,414 1,172 2,586 2,791 Lease liabilities **** 244 260 Total long-term debt 2,830 3,051 * Issue price of the \ufb01nancial instrument. ** These bonds are classi\ufb01ed as short-term bonds. Refer also to the table on the following page. *** For further details on these debt-related derivative \ufb01nancial instruments, refer to Note 30 \u2013 Financial Risk Management. **** For the repayment commitments of lease liabilities, refer to Note 20 \u2013 Leasing . RECONCILIATION LONG-TERM DEBT TO NET DEBT 2022 2021 Total long-term debt 2,830 3,051 Borrowings and bank overdrafts: Bank overdrafts, measured at amortized cost Note 27 16 9 Total borrowings and bank overdrafts 16 9 Bonds 2013-2023 700 \u2013 Short-term lease liabilities 69 71 Deferred and contingent acquisition payables measured at fair value Note 30 2 1 Total short-term debt 787 81 Gross debt 3,617 3,132 Minus: Cash and cash equivalents Note 27 (1,346) (1,001) Derivative financial instruments: Non-current assets Note 22 (17) \u2013 Current assets Note 26 (1) \u2013 Net debt 2,253 2,131 ACCOUNTING POLICIES Non-derivative financial liabilities measured at amortized cost Financial liabilities measured at amortized cost are bonds, the Euro Commercial Paper program, private placements, other long-term and short-term debt, and trade payables. The group initially recognizes non-derivative \ufb01nancial liabilities at fair value less any directly attributable transaction costs. Subsequently, these \ufb01nancial liabilities are measured at amortized cost using the effective interest method with any difference between cost and redemption value recognized in pro\ufb01t or loss over the period of the borrowings. RECONCILIATION OF LIABILITIES ARISING FROM FINANCING ACTIVITIES Gross debt, excluding lease liabilities, derivative financial instruments, and bank overdrafts Balance at January 1, 2022 Net cash flows Acquisitions/ Divestments Unwinding of discount Foreign exchange differences Other non-cash movements Balance at December 31, 2022 Bonds 2,625 500 \u2013 3 \u2013 (2) 3,126 Private placements 153 \u2013 \u2013 0 (11) \u2013 142 Other gross debt 12 5 2 \u2013 1 \u2013 20 Total 2,790 505 2 3 (10) (2) 3,288 Balance at January 1, 2021 Net cash flows Acquisitions/ Divestments Unwinding of discount Foreign exchange differences Other non-cash movements Balance at December 31, 2021 Bonds 2,126 500 \u2013 1 \u2013 (2) 2,625 Private placements 157 \u2013 \u2013 0 (4) \u2013 153 Other gross debt 109 (100) 2 \u2013 1 \u2013 12 Total 2,392 400 2 1 (3) (2) 2,790 LOAN MATURITY The following amounts of gross debt (excluding lease liabilities) at December 31, 2022, are due within and after \ufb01ve years: 2022 2024 409 2025 8 2026 498 2027 499 Due after 2027 1,172 Long-term debt 2,586 Short-term debt (2023) 718 Total (excluding lease liabilities) 3,304 At December 31, 2021, \u20ac10 million was short-term debt, \u20ac1,109 million was due in 2023 and 2024, and \u20ac1,682 million was due after 2026. FINANCIAL LIABILITIES MEASURED AT AMORTIZED COST Bonds The group has senior bonds outstanding for an amount of \u20ac3,126 million at December 31, 2022 (2021: \u20ac2,625 million). The nominal interest rates on the bonds are \ufb01xed until redemption. On September 23, 2022, the group issued a \u20ac500 million four-year senior unsecured Eurobond. The bonds were sold at an issue price of 99.922 percent and carry an annual coupon of 3.000 percent. The senior unsecured bonds will mature on September 23, 2026. The net proceeds of the offering are used for general corporate purposes. Private placements The group holds private placements in Japanese yen. These private placements (\u00a520,000 million) are converted to and hedged against euro via cross-currency interest rate swaps. These swaps have been collateralized for credit risk in line with the treasury risk management policies. There is no collateral outstanding at December 31, 2022 (2021: no collateral outstanding). Multi-currency revolving credit facility Effective July 2022, the group agreed to the \ufb01nal one-year extension of the \u20ac600 million multi-currency revolving credit facility, such that the facility will now mature in 2025. This facility has multi-year environmental, social, and governance (ESG) KPIs, which are linked to the interest rates in the facility. The interest rates in the facility are variable. The facility is used for general corporate purposes. At December 31, 2022, no amounts were drawn under the facility (December 31, 2021: no amounts drawn). The facility is subject to customary conditions, including a \ufb01nancial credit covenant. The facility covenant requires that the consolidated net senior borrowings (excluding fully subordinated debt) to adjusted EBITDA shall not exceed 3.5. In 2022 and 2021, the group was comfortably within the thresholds stipulated in the \ufb01nancial covenant of the facility. Euro Commercial Paper program The group has a Euro Commercial Paper (ECP) program in place, under which it may issue unsecured, short-term debt (ECP notes) for a maximum of \u20ac1.0 billion. The program provides flexible funding for short-term cash needs at attractive rates. At December 31, 2022, no ECP notes were outstanding (2021: no ECP notes outstanding). DEFAULTS AND/OR BREACHES There were no defaults or breaches on the loans and borrowings during 2022 or 2021. ",
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},
"fact-490": {
"value": "Nominal value Effective interest rate in % Nominal interest rate in % Repayment commitments 1-5 years Repayment commitments >5 years 2022 2021 Bonds 2008-2028 (100.00 * ) \u20ac36 6.812 6.748 \u2013 36 36 36 Bonds 2013-2023 (99.709 * ) ** \u20ac700 2.950 2.875 \u2013 \u2013 0 699 Bonds 2014-2024 (99.164 * ) \u20ac400 2.640 2.500 399 \u2013 399 399 Bonds 2017-2027 (99.659 * ) \u20ac500 1.575 1.500 499 \u2013 499 498 Bonds 2020-2030 (99.292 * ) \u20ac500 0.862 0.750 \u2013 496 496 495 Bonds 2021-2028 (99.958 * ) \u20ac500 0.307 0.250 \u2013 498 498 498 Bonds 2022-2026 (99.922 * ) \u20ac500 3.096 3.000 498 \u2013 498 \u2013 Bonds, measured at amortized cost 1,396 1,030 2,426 2,625 Private placement 2008-2038, measured at amortized cost \u00a520,000 3.330 3.330 \u2013 142 142 153 Deferred and contingent acquisition payables, measured at fair value 2 \u2013 2 1 Other debt, measured at amortized cost 16 \u2013 16 10 Derivative \ufb01nancial instruments, measured at fair value *** \u2013 \u2013 0 2 Other long-term debt 18 0 18 13 Total long-term debt (excluding lease liabilities) 1,414 1,172 2,586 2,791 Lease liabilities **** 244 260 Total long-term debt 2,830 3,051 * Issue price of the \ufb01nancial instrument. ** These bonds are classi\ufb01ed as short-term bonds. Refer also to the table on the following page. *** For further details on these debt-related derivative \ufb01nancial instruments, refer to Note 30 \u2013 Financial Risk Management. **** For the repayment commitments of lease liabilities, refer to Note 20 \u2013 Leasing 2022 2021 Total long-term debt 2,830 3,051 Borrowings and bank overdrafts: Bank overdrafts, measured at amortized cost Note 27 16 9 Total borrowings and bank overdrafts 16 9 Bonds 2013-2023 700 \u2013 Short-term lease liabilities 69 71 Deferred and contingent acquisition payables measured at fair value Note 30 2 1 Total short-term debt 787 81 Gross debt 3,617 3,132 Minus: Cash and cash equivalents Note 27 (1,346) (1,001) Derivative financial instruments: Non-current assets Note 22 (17) \u2013 Current assets Note 26 (1) \u2013 Net debt 2,253 2,131 Derivative financial instruments and hedging activities The group holds derivative \ufb01nancial instruments to hedge risk exposures. Derivative \ufb01nancial instruments are initially recognized at fair value on the date a derivative contract is concluded and are subsequently remeasured at fair value. The method of recognizing gains or losses depends on whether the derivative is designated as a hedging instrument and if so, the nature of the item being hedged. The group designates derivatives as either: \u2022 Hedges of a risk associated with a recognized asset or liability or a highly probable forecast transaction (cash flow hedge); \u2022 Hedges of a net investment in a foreign operation (net investment hedge); or \u2022 Currency forward instruments to protect the group\u2019s net pro\ufb01t (not qualifying for hedge accounting). With respect to foreign currency forwards used in the cash flow hedges and the net investment hedges, the group designates as a hedging instrument only the change in the value of the spot component of a forward contract (and not the forward element). The differential between the contracted forward rate and the market spot rate, de\ufb01ned as forward points, is recognized in other comprehensive income and accumulated in the hedge reserve within total equity. Cash flow hedge The effective part of changes in the fair value of derivatives that are designated and qualify as cash flow hedges are recognized in other comprehensive income, and accumulated in the hedge reserve within total equity. Amounts accumulated in the hedge reserve are reclassi\ufb01ed to pro\ufb01t or loss within the line where the result from the hedged transaction is recognized, in the same period the hedged item affects the pro\ufb01t or loss. The gain or loss relating to the ineffective part of the hedging relationship is recognized in pro\ufb01t or loss within \ufb01nancing results. Reclassification of hedge reserve to profit or loss When a hedging instrument matures or is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in the hedge reserve at that time remains in the hedge reserve and is only reclassi\ufb01ed when the hedged transaction is ultimately recognized in pro\ufb01t or loss. When a hedged transaction is no longer expected to occur, the cumulative gain or loss in the hedge reserve is reclassi\ufb01ed to pro\ufb01t or loss. Net investment hedge Fair value changes of derivative \ufb01nancial instruments used to hedge the net investment in foreign operations, which are determined to be an effective hedge, are recognized directly in other comprehensive income in the translation reserve. Gains and losses accumulated in the translation reserve are reclassi\ufb01ed to pro\ufb01t or loss when the foreign operation is disposed. If a hedging relationship is terminated and the derivative \ufb01nancial instrument is not sold, future changes in the fair value of the derivative \ufb01nancial instrument are recognized in pro\ufb01t or loss. The gain or loss relating to the ineffective part of the hedging relationship is recognized in pro\ufb01t or loss within \ufb01nancing results. Derivatives that do not qualify for hedge accounting Changes in the fair value of any derivative \ufb01nancial instruments that do not qualify for hedge accounting are recognized in pro\ufb01t or loss within \ufb01nancing results. Net investment hedge The group partially protects total equity from foreign exchange differences using U.S. dollar currency forward contracts qualifying as net investment hedges, which partially offset the translation risk on U.S. dollar-denominated subsidiaries and long-term receivables of the U.S. operations, being the hedged items. The fair value changes of the net investment hedge partially offset the currency differences on translation of U.S. dollar-denominated subsidiaries and long-term receivables from U.S. operations, both recognized in other comprehensive income. The group had U.S. dollar forward contracts outstanding for a total notional amount of \u20ac258 million ($275 million) at December 31, 2022 (2021: \u20ac177 million or $200 million). These hedges created a U.S. dollar balance sheet cover with a future settlement date, recognized as a \ufb01nancial asset with a fair value of \u20ac1 million at December 31, 2022. The group had U.S. dollar liabilities outstanding for a total notional amount of \u20ac473 million ($505 million) at December 31, 2022 (2021: \u20ac406 million or $460 million). The U.S. dollar liabilities include net investment hedges and other U.S. dollar-denominated liabilities. The U.S. dollar balance sheet cover of 11% (2021: 10%) is de\ufb01ned as the sum of U.S. dollar net investment hedges and other U.S. dollar liabilities outstanding divided by the group\u2019s net investment in U.S. dollar-denominated assets. Cash flow hedge The group protects against the translation differences on the Japanese yen private placement (2022 and 2021: \u00a520,000 million) and the related interest payments, using cash flow hedges by means of four cross-currency interest rate swaps. The fair value changes of the cash flow hedges are recognized in equity until the hedging relationship with the corresponding hedged instrument is terminated. At that moment, the translation differences are reclassi\ufb01ed to pro\ufb01t or loss. Currency forwards The group partially protects net pro\ufb01t from foreign exchange differences using U.S. dollar and other currency forwards not qualifying for hedge accounting. The fair value changes of these currency forwards are recognized in \ufb01nancing results and partially offset any translation risk on pro\ufb01t or loss elements. In 2022, the group swapped 74% (2021: 50%) of the net \ufb01nancing results of \u20ac56 million (2021: \u20ac78 million) into U.S. dollars using foreign exchange derivatives of $40 million (2021: $40 million). Sensitivity Based on the percentage of 74% for net \ufb01nancing results payable in U.S. dollars, an instantaneous 1% decline of the U.S. dollar against the euro at December 31, 2022, with all other variables held constant, would result in a decrease of approximately \u20ac0.4 million in net \ufb01nancing results (2021: \u20ac0.4 million). Hedge effectiveness Before applying hedge accounting, the group assesses, in accordance with the group\u2019s risk management policies and the parameters of the hedge, whether the designated hedge is highly effective. In 2022, the group did not record ineffectiveness because of hedging activities (2021: no ineffectiveness). The group measures hedge effectiveness on a forward-looking basis at the inception of the hedging relationship and on an ongoing basis at reporting dates through a qualitative assessment of the critical terms of the hedging instrument and the hedged item. The hedge values will generally move in the opposite direction because of the same risk and hence an economic relationship exists. The results of these effectiveness tests all satis\ufb01ed the effectiveness criterion during the year. ",
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},
"fact-491": {
"value": "Nominal value Effective interest rate in % Nominal interest rate in % Repayment commitments 1-5 years Repayment commitments >5 years 2022 2021 Bonds 2008-2028 (100.00 * ) \u20ac36 6.812 6.748 \u2013 36 36 36 Bonds 2013-2023 (99.709 * ) ** \u20ac700 2.950 2.875 \u2013 \u2013 0 699 Bonds 2014-2024 (99.164 * ) \u20ac400 2.640 2.500 399 \u2013 399 399 Bonds 2017-2027 (99.659 * ) \u20ac500 1.575 1.500 499 \u2013 499 498 Bonds 2020-2030 (99.292 * ) \u20ac500 0.862 0.750 \u2013 496 496 495 Bonds 2021-2028 (99.958 * ) \u20ac500 0.307 0.250 \u2013 498 498 498 Bonds 2022-2026 (99.922 * ) \u20ac500 3.096 3.000 498 \u2013 498 \u2013 Bonds, measured at amortized cost 1,396 1,030 2,426 2,625 Private placement 2008-2038, measured at amortized cost \u00a520,000 3.330 3.330 \u2013 142 142 153 Deferred and contingent acquisition payables, measured at fair value 2 \u2013 2 1 Other debt, measured at amortized cost 16 \u2013 16 10 Derivative \ufb01nancial instruments, measured at fair value *** \u2013 \u2013 0 2 Other long-term debt 18 0 18 13 Total long-term debt (excluding lease liabilities) 1,414 1,172 2,586 2,791 Lease liabilities **** 244 260 Total long-term debt 2,830 3,051 * Issue price of the \ufb01nancial instrument. ** These bonds are classi\ufb01ed as short-term bonds. Refer also to the table on the following page. *** For further details on these debt-related derivative \ufb01nancial instruments, refer to Note 30 \u2013 Financial Risk Management. **** For the repayment commitments of lease liabilities, refer to Note 20 \u2013 Leasing . CONTRACTUAL CASH FLOWS 2022 Carrying amount Contractual undiscounted cash flows Less than 1 year 1-2 years 2-5 years More than 5 years Non-derivative financial liabilities (excl. lease liabilities) Bonds: Bonds 2008-2028 36 49 2 2 7 38 Bonds 2013-2023 700 720 720 \u2013 \u2013 \u2013 Bonds 2014-2024 399 420 10 410 \u2013 \u2013 Bonds 2017-2027 499 539 8 8 523 \u2013 Bonds 2020-2030 496 530 4 4 11 511 Bonds 2021-2028 498 507 1 1 4 501 Bonds 2022-2026 498 560 15 15 530 \u2013 Private placements: Private placement 2008-2038 142 216 5 5 14 192 Long- and short-term deferred and contingent acquisition payables 4 4 2 2 \u2013 \u2013 Other debt 16 16 \u2013 8 8 \u2013 Borrowings and bank overdrafts 16 16 16 \u2013 \u2013 \u2013 Trade payables 147 147 147 \u2013 \u2013 \u2013 Total 3,451 3,724 930 455 1,097 1,242 Derivative financial instruments (Receipts) (260) (260) Payments 258 258 Foreign exchange derivatives (1) (2) (2) 0 0 0 (Receipts) (216) (5) (5) (14) (192) Payments 245 8 8 23 206 Cross-currency interest rate swaps (17) 29 3 3 9 14 Total derivative financial liabilities/(assets) (18) 27 1 3 9 14 CONTRACTUAL CASH FLOWS 2021 Carrying amount Contractual undiscounted cash flows Less than 1 year 1-2 years 2-5 years More than 5 years Non-derivative financial liabilities (excl. lease liabilities) Bonds: Bonds 2008-2028 36 52 2 2 7 41 Bonds 2013-2023 699 740 20 720 \u2013 \u2013 Bonds 2014-2024 399 430 10 10 410 \u2013 Bonds 2017-2027 498 547 8 8 23 508 Bonds 2020-2030 495 534 4 4 11 515 Bonds 2021-2028 498 509 1 1 4 503 Private placements: Private placement 2008-2038 153 237 5 5 15 212 Long- and short-term deferred and contingent acquisition payables 2 2 1 1 \u2013 \u2013 Other debt 10 10 \u2013 5 5 \u2013 Borrowings and bank overdrafts 9 9 9 \u2013 \u2013 \u2013 Trade payables 123 123 123 \u2013 \u2013 \u2013 Total 2,922 3,193 183 756 475 1,779 Derivative financial instruments (Receipts) (175) (175) \u2013 \u2013 \u2013 Payments 177 177 \u2013 \u2013 \u2013 Foreign exchange derivatives 0 2 2 0 0 0 (Receipts) (237) (5) (5) (15) (212) Payments 253 8 8 23 214 Cross-currency interest rate swaps 2 16 3 3 8 2 Total derivative financial liabilities/(assets) 2 18 5 3 8 2 RECONCILIATION LONG-TERM DEBT TO NET DEBT 2022 2021 Total long-term debt 2,830 3,051 Borrowings and bank overdrafts: Bank overdrafts, measured at amortized cost Note 27 16 9 Total borrowings and bank overdrafts 16 9 Bonds 2013-2023 700 \u2013 Short-term lease liabilities 69 71 Deferred and contingent acquisition payables measured at fair value Note 30 2 1 Total short-term debt 787 81 Gross debt 3,617 3,132 Minus: Cash and cash equivalents Note 27 (1,346) (1,001) Derivative financial instruments: Non-current assets Note 22 (17) \u2013 Current assets Note 26 (1) \u2013 Net debt 2,253 2,131 ACCOUNTING POLICIES Non-derivative financial liabilities measured at amortized cost Financial liabilities measured at amortized cost are bonds, the Euro Commercial Paper program, private placements, other long-term and short-term debt, and trade payables. The group initially recognizes non-derivative \ufb01nancial liabilities at fair value less any directly attributable transaction costs. Subsequently, these \ufb01nancial liabilities are measured at amortized cost using the effective interest method with any difference between cost and redemption value recognized in pro\ufb01t or loss over the period of the borrowings. RECONCILIATION OF LIABILITIES ARISING FROM FINANCING ACTIVITIES Gross debt, excluding lease liabilities, derivative financial instruments, and bank overdrafts Balance at January 1, 2022 Net cash flows Acquisitions/ Divestments Unwinding of discount Foreign exchange differences Other non-cash movements Balance at December 31, 2022 Bonds 2,625 500 \u2013 3 \u2013 (2) 3,126 Private placements 153 \u2013 \u2013 0 (11) \u2013 142 Other gross debt 12 5 2 \u2013 1 \u2013 20 Total 2,790 505 2 3 (10) (2) 3,288 Balance at January 1, 2021 Net cash flows Acquisitions/ Divestments Unwinding of discount Foreign exchange differences Other non-cash movements Balance at December 31, 2021 Bonds 2,126 500 \u2013 1 \u2013 (2) 2,625 Private placements 157 \u2013 \u2013 0 (4) \u2013 153 Other gross debt 109 (100) 2 \u2013 1 \u2013 12 Total 2,392 400 2 1 (3) (2) 2,790 LOAN MATURITY The following amounts of gross debt (excluding lease liabilities) at December 31, 2022, are due within and after \ufb01ve years: 2022 2024 409 2025 8 2026 498 2027 499 Due after 2027 1,172 Long-term debt 2,586 Short-term debt (2023) 718 Total (excluding lease liabilities) 3,304 At December 31, 2021, \u20ac10 million was short-term debt, \u20ac1,109 million was due in 2023 and 2024, and \u20ac1,682 million was due after 2026. FINANCIAL LIABILITIES MEASURED AT AMORTIZED COST Bonds The group has senior bonds outstanding for an amount of \u20ac3,126 million at December 31, 2022 (2021: \u20ac2,625 million). The nominal interest rates on the bonds are \ufb01xed until redemption. On September 23, 2022, the group issued a \u20ac500 million four-year senior unsecured Eurobond. The bonds were sold at an issue price of 99.922 percent and carry an annual coupon of 3.000 percent. The senior unsecured bonds will mature on September 23, 2026. The net proceeds of the offering are used for general corporate purposes. Private placements The group holds private placements in Japanese yen. These private placements (\u00a520,000 million) are converted to and hedged against euro via cross-currency interest rate swaps. These swaps have been collateralized for credit risk in line with the treasury risk management policies. There is no collateral outstanding at December 31, 2022 (2021: no collateral outstanding). Multi-currency revolving credit facility Effective July 2022, the group agreed to the \ufb01nal one-year extension of the \u20ac600 million multi-currency revolving credit facility, such that the facility will now mature in 2025. This facility has multi-year environmental, social, and governance (ESG) KPIs, which are linked to the interest rates in the facility. The interest rates in the facility are variable. The facility is used for general corporate purposes. At December 31, 2022, no amounts were drawn under the facility (December 31, 2021: no amounts drawn). The facility is subject to customary conditions, including a \ufb01nancial credit covenant. The facility covenant requires that the consolidated net senior borrowings (excluding fully subordinated debt) to adjusted EBITDA shall not exceed 3.5. In 2022 and 2021, the group was comfortably within the thresholds stipulated in the \ufb01nancial covenant of the facility. Euro Commercial Paper program The group has a Euro Commercial Paper (ECP) program in place, under which it may issue unsecured, short-term debt (ECP notes) for a maximum of \u20ac1.0 billion. The program provides flexible funding for short-term cash needs at attractive rates. At December 31, 2022, no ECP notes were outstanding (2021: no ECP notes outstanding). DEFAULTS AND/OR BREACHES There were no defaults or breaches on the loans and borrowings during 2022 or 2021. The group\u2019s funding activities are carried out by Corporate Treasury using long-term capital market instruments and committed credit facilities to ensure optimal \ufb01nancial flexibility and capital ef\ufb01ciency. The borrowings, together with cash generated from operations, are lent or contributed as equity to the operating companies. The group targets a net-debt-to-EBITDA ratio of approximately 2.5. However, the group could temporarily deviate from this relative indebtedness ratio. At December 31, 2022, the net-debt-to-EBITDA ratio was 1.3 (2021: 1.4). FAIR VALUE OF FINANCIAL INSTRUMENTS The following table shows the carrying amounts and fair values of \ufb01nancial assets and liabilities (excluding lease liabilities), including their levels in the fair value hierarchy. 2022 2021 Carrying value Fair value Level 1 Level 2 Level 3 Carrying value Fair value Non-derivative financial instruments: Financial assets at fair value through profit or loss 0 0 0 0 0 Unbilled revenues * 101 101 95 95 Trade receivables * 1,088 1,088 1,008 1,008 Miscellaneous receivables * 32 32 34 34 Interest receivable * 5 5 0 0 Cash and cash equivalents * 1,346 1,346 1,001 1,001 Total non-derivative \ufb01nancial assets 2,572 2,572 2,138 2,138 Bonds 2008-2028 36 41 41 36 50 Bonds 2013-2023 700 701 701 699 727 Bonds 2014-2024 399 396 396 399 422 Bonds 2017-2027 499 459 459 498 529 Bonds 2020-2030 496 399 399 495 503 Bonds 2021-2028 498 417 417 498 493 Bonds 2022-2026 498 489 489 \u2013 \u2013 Private placement 2008-2038 142 172 172 153 206 Long- and short-term deferred and contingent acquisition payables 4 4 4 2 2 Other debt * 16 16 10 10 Borrowings and bank overdrafts * 16 16 9 9 Trade payables * 147 147 123 123 Interest payable * 39 39 34 34 Total non-derivative \ufb01nancial liabilities 3,490 3,296 2,902 172 4 2,956 3,108 Derivative financial instruments: Non-current assets 17 17 17 \u2013 \u2013 Current assets 1 1 1 \u2013 \u2013 Total derivative \ufb01nancial assets 18 18 18 0 0 Non-current liabilities \u2013 \u2013 \u2013 2 2 Total derivative \ufb01nancial liabilities 0 0 0 2 2 ",
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"fact-492": {
"value": "ACCOUNTING POLICIES Non-derivative financial liabilities measured at amortized cost Financial liabilities measured at amortized cost are bonds, the Euro Commercial Paper program, private placements, other long-term and short-term debt, and trade payables. The group initially recognizes non-derivative \ufb01nancial liabilities at fair value less any directly attributable transaction costs. Subsequently, these \ufb01nancial liabilities are measured at amortized cost using the effective interest method with any difference between cost and redemption value recognized in pro\ufb01t or loss over the period of the borrowings. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForBorrowingsExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
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},
"fact-493": {
"value": "ACCOUNTING POLICIES Non-derivative financial liabilities measured at amortized cost Financial liabilities measured at amortized cost are bonds, the Euro Commercial Paper program, private placements, other long-term and short-term debt, and trade payables. The group initially recognizes non-derivative \ufb01nancial liabilities at fair value less any directly attributable transaction costs. Subsequently, these \ufb01nancial liabilities are measured at amortized cost using the effective interest method with any difference between cost and redemption value recognized in pro\ufb01t or loss over the period of the borrowings. ACCOUNTING POLICIES Non-derivative \ufb01nancial liabilities at fair value through pro\ufb01t or loss comprise deferred and contingent considerations and are measured at fair value. Changes therein are recognized in pro\ufb01t or loss. The contingent considerations are based on a discounted cash flow model, which considers the present value of expected payments, using a risk-adjusted discount rate. The expected payment is determined by considering possible scenarios, the amount to be paid under each scenario, and the probability of each scenario. The estimated fair value could increase (or decrease) if assumptions change. ",
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"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
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},
"fact-494": {
"value": "These swaps have been collateralized for credit risk in line with the treasury risk management policies. There is no collateral outstanding at December 31, 2022 (2021: no collateral outstanding). No assets have been collateralized or in any other way secured under debt contracts",
"dimensions": {
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"fact-495": {
"value": "Note 30 \u2013 Financial Risk Management RISK MANAGEMENT FRAMEWORK The group\u2019s activities are exposed to a variety of \ufb01nancial risks, including market, liquidity, and credit risk. Identi\ufb01cation and management of \ufb01nancial risks are carried out by the central treasury department (Corporate Treasury), whereby the treasury operations are conducted within a framework of policies and guidelines (Treasury Policy), which are approved by the Executive Board and the Supervisory Board. The Treasury Policy is reviewed at least annually, considering market circumstances and market volatility, and is based on assumptions concerning future events, subject to uncertainties and risks that are outside of the group\u2019s control. The Treasury Committee, comprising the Vice President Group Accounting & Reporting, Controller Corporate Of\ufb01ce, Executive Vice President Treasury & Risk, and representatives of Corporate Treasury and Treasury Back-Of\ufb01ce, meets quarterly to review treasury activities and compliance with the Treasury Policy and reports directly to the Executive Board and the Audit Committee. The Treasury Back-Of\ufb01ce reports deviations directly to the CFO and the Executive Vice President Treasury & Risk. Under the group\u2019s Internal Control Framework, the \ufb01nancial reporting controls, including policies and procedures, of the Corporate Treasury Department are periodically reviewed. Corporate Treasury reports quarterly to the Audit Committee on its compliance with the Treasury Policy. The group\u2019s funding activities are carried out by Corporate Treasury using long-term capital market instruments and committed credit facilities to ensure optimal \ufb01nancial flexibility and capital ef\ufb01ciency. The borrowings, together with cash generated from operations, are lent or contributed as equity to the operating companies. The group targets a net-debt-to-EBITDA ratio of approximately 2.5. However, the group could temporarily deviate from this relative indebtedness ratio. At December 31, 2022, the net-debt-to-EBITDA ratio was 1.3 (2021: 1.4). All treasury activities, in particular the use of derivative \ufb01nancial instruments, are subject to the principle of risk minimization and are executed by specialized treasury personnel. For this reason, \ufb01nancial transactions and risk positions are managed in a central treasury management and payment system. It is the group\u2019s policy that material currency translation exposures and variable interest exposures are partially hedged by Corporate Treasury in accordance with the annual treasury plan approved by the Audit Committee. The group does not purchase or hold derivative \ufb01nancial instruments for speculative purposes. The group\u2019s risk pro\ufb01le is de\ufb01ned and reviewed regularly. Although the economic environment has become more challenging because of the volatility in \ufb01nancial markets, the exposure to \ufb01nancial risks for the group's activities has not signi\ufb01cantly changed, nor has the approach to these risks. MARKET RISK Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates, will affect the group\u2019s pro\ufb01t or loss or the value of its \ufb01nancial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return. CURRENCY RISK The group has identi\ufb01ed transaction and translation risks as currency risks. The transaction risk exposure within individual group entities is relatively immaterial. The transaction prices invoiced to customers for goods and/or services are mainly denominated in the customers\u2019 local currencies. Given the nature of the business, almost all related costs are also incurred in those local currencies. Derivative \ufb01nancial instruments to hedge transaction risks are therefore not frequently used. Translation risk is the risk that exchange rate gains or losses arise from translating the statement of pro\ufb01t or loss, statement of \ufb01nancial position, and statement of cash flows of foreign subsidiaries to the group\u2019s presentation currency (euro) for consolidation purposes. The group\u2019s risk management strategy practice is that material currency translation exposures (including U.S. dollar net investments) are partially hedged by Corporate Treasury. Currency translation exposures which impact the consolidated statements of \ufb01nancial position and/or pro\ufb01t or loss by 10% or more are considered material. The currency translation exposure on the consolidated statement of cash flows is partly mitigated by matching cash inflows and outflows in the same currency. The group\u2019s main translation risk is its exposure to the U.S. dollar. In line with its risk management strategy, the group manages the translation risk using three types of risk mitigating actions, of which two types of transactions are designated as a hedge and for which the group applies hedge accounting. 172 Wolters Kluwer 2022 Annual Report Strategic Report | Governance | Financial Statements \u2190 \u2192 Note 30 \u2013 Financial Risk Management continued HEDGE ACCOUNTING ACCOUNTING POLICIES Derivative financial instruments and hedging activities The group holds derivative \ufb01nancial instruments to hedge risk exposures. Derivative \ufb01nancial instruments are initially recognized at fair value on the date a derivative contract is concluded and are subsequently remeasured at fair value. The method of recognizing gains or losses depends on whether the derivative is designated as a hedging instrument and if so, the nature of the item being hedged. The group designates derivatives as either: \u2022 Hedges of a risk associated with a recognized asset or liability or a highly probable forecast transaction (cash flow hedge); \u2022 Hedges of a net investment in a foreign operation (net investment hedge); or \u2022 Currency forward instruments to protect the group\u2019s net pro\ufb01t (not qualifying for hedge accounting). With respect to foreign currency forwards used in the cash flow hedges and the net investment hedges, the group designates as a hedging instrument only the change in the value of the spot component of a forward contract (and not the forward element). The differential between the contracted forward rate and the market spot rate, de\ufb01ned as forward points, is recognized in other comprehensive income and accumulated in the hedge reserve within total equity. Cash flow hedge The effective part of changes in the fair value of derivatives that are designated and qualify as cash flow hedges are recognized in other comprehensive income, and accumulated in the hedge reserve within total equity. Amounts accumulated in the hedge reserve are reclassi\ufb01ed to pro\ufb01t or loss within the line where the result from the hedged transaction is recognized, in the same period the hedged item affects the pro\ufb01t or loss. The gain or loss relating to the ineffective part of the hedging relationship is recognized in pro\ufb01t or loss within \ufb01nancing results. Reclassification of hedge reserve to profit or loss When a hedging instrument matures or is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in the hedge reserve at that time remains in the hedge reserve and is only reclassi\ufb01ed when the hedged transaction is ultimately recognized in pro\ufb01t or loss. When a hedged transaction is no longer expected to occur, the cumulative gain or loss in the hedge reserve is reclassi\ufb01ed to pro\ufb01t or loss. Net investment hedge Fair value changes of derivative \ufb01nancial instruments used to hedge the net investment in foreign operations, which are determined to be an effective hedge, are recognized directly in other comprehensive income in the translation reserve. Gains and losses accumulated in the translation reserve are reclassi\ufb01ed to pro\ufb01t or loss when the foreign operation is disposed. If a hedging relationship is terminated and the derivative \ufb01nancial instrument is not sold, future changes in the fair value of the derivative \ufb01nancial instrument are recognized in pro\ufb01t or loss. The gain or loss relating to the ineffective part of the hedging relationship is recognized in pro\ufb01t or loss within \ufb01nancing results. Derivatives that do not qualify for hedge accounting Changes in the fair value of any derivative \ufb01nancial instruments that do not qualify for hedge accounting are recognized in pro\ufb01t or loss within \ufb01nancing results. \u2190 \u2192
Wolters Kluwer 2022 Annual Report 173
Note 30 \u2013 Financial Risk Management continued
Net investment hedge
The group partially protects total equity from foreign exchange differences using U.S. dollar currency forward contracts qualifying as
net investment hedges, which partially offset the translation risk on U.S. dollar-denominated subsidiaries and long-term receivables
of the U.S. operations, being the hedged items. The fair value changes of the net investment hedge partially offset the currency
differences on translation of U.S. dollar-denominated subsidiaries and long-term receivables from U.S. operations, both recognized in
other comprehensive income.
The group had U.S. dollar forward contracts outstanding for a total notional amount of \u20ac258 million ($275 million) at December
31, 2022 (2021: \u20ac177 million or $200 million). These hedges created a U.S. dollar balance sheet cover with a future settlement date,
recognized as a \ufb01nancial asset with a fair value of \u20ac1 million at December 31, 2022.
The group had U.S. dollar liabilities outstanding for a total notional amount of \u20ac473 million ($505 million) at December 31, 2022 (2021:
\u20ac406 million or $460 million). The U.S. dollar liabilities include net investment hedges and other U.S. dollar-denominated liabilities.
The U.S. dollar balance sheet cover of 11% (2021: 10%) is de\ufb01ned as the sum of U.S. dollar net investment hedges and other U.S. dollar
liabilities outstanding divided by the group\u2019s net investment in U.S. dollar-denominated assets.
Cash flow hedge
The group protects against the translation differences on the Japanese yen private placement (2022 and 2021: \u00a520,000 million) and
the related interest payments, using cash flow hedges by means of four cross-currency interest rate swaps. The fair value changes of
the cash flow hedges are recognized in equity until the hedging relationship with the corresponding hedged instrument is terminated.
At that moment, the translation differences are reclassi\ufb01ed to pro\ufb01t or loss.
Currency forwards
The group partially protects net pro\ufb01t from foreign exchange differences using U.S. dollar and other currency forwards not qualifying
for hedge accounting. The fair value changes of these currency forwards are recognized in \ufb01nancing results and partially offset any
translation risk on pro\ufb01t or loss elements.
In 2022, the group swapped 74% (2021: 50%) of the net \ufb01nancing results of \u20ac56 million (2021: \u20ac78 million) into U.S. dollars using foreign
exchange derivatives of $40 million (2021: $40 million).
Sensitivity
Based on the percentage of 74% for net \ufb01nancing results payable in U.S. dollars, an instantaneous 1% decline of the U.S. dollar
against the euro at December 31, 2022, with all other variables held constant, would result in a decrease of approximately \u20ac0.4 million
in net \ufb01nancing results (2021: \u20ac0.4 million).
Hedge effectiveness
Before applying hedge accounting, the group assesses, in accordance with the group\u2019s risk management policies and the parameters
of the hedge, whether the designated hedge is highly effective. In 2022, the group did not record ineffectiveness because of hedging
activities (2021: no ineffectiveness). The group measures hedge effectiveness on a forward-looking basis at the inception of the
hedging relationship and on an ongoing basis at reporting dates through a qualitative assessment of the critical terms of the hedging
instrument and the hedged item. The hedge values will generally move in the opposite direction because of the same risk and hence
an economic relationship exists. The results of these effectiveness tests all satis\ufb01ed the effectiveness criterion during the year.
174 Wolters Kluwer 2022 Annual Report
Strategic Report |
Governance |
Financial Statements
\u2190 \u2192
Note 30 \u2013 Financial Risk Management continued
CURRENCY RISK SENSITIVITY
The following table details the group\u2019s sensitivity to a 1% weakening of the U.S. dollar against the euro:
2022 2021
Revenues (37) (31)
Adjusted operating pro\ufb01t (12) (10)
Operating pro\ufb01t (11) (10)
Adjusted net pro\ufb01t (8) (6)
Pro\ufb01t for the year (7) (6)
Shareholders\u2019 equity at December 31 (38) (35)
Adjusted free cash flow (12) (9)
SENSITIVITY ANALYSIS
A sensitivity analysis on the derivative \ufb01nancial instruments portfolio yields the following results, assuming an instantaneous
1% decrease of the U.S. dollar and Japanese yen against the euro from their levels at December 31, 2022, and an instantaneous 1%
increase of the U.S. dollar, Japanese yen, and euro interest rates:
in millions Hedged risk Amount
Type of
instrument
Exchange
rate
movement
\u20ac
Interest
rate
movement
\u20ac
Cash flow hedge
Changes in \u00a5 floating
interest payments and
\u00a5 exchange rates
\u00a520,000
Cross-currency
interest
rate swaps
(1) (4)
Net investment hedge
Changes of the U.S. dollar
net investments due to
fluctuations of U.S. dollar
exchange rates
$275
Forward
contracts 2 0
INTEREST RATE RISK
The group is exposed to interest rate risk. The group aims to mitigate the impact on its results and cash flows of interest rate
movements, both by arranging \ufb01xed or variable rate funding and by use of derivative \ufb01nancial instruments. At December 31, 2022, the
group\u2019s interest rate position (excluding cash and cash equivalents and lease liabilities) was 100% (2021: 100%) carried at a \ufb01xed rate.
The credit facility and the Euro Commercial Paper program have a variable interest rate.
Assuming the same mix of variable and \ufb01xed interest rate instruments, an instantaneous increase of interest rates of 1% compared to
the rates on December 31, 2022, with all other variables held constant, would hardly result, on an annual basis, in an increase of net
\ufb01nancing results (2021: identical at December 31, 2021).
Interest rate benchmark transition for non-derivative financial instruments
For non-derivative third-party contracts and internal contracts, IBOR references were primarily used in internal \ufb01nancing-related
contracts. At December 31, 2022, all U.K., Swiss and Japanese IBOR references in these internal contracts were replaced by alternative
benchmark rates. Other IBOR references will only be replaced once such IBORs are discontinued.
During 2022, the group has transitioned its \u20ac600 million credit facility agreement from LIBOR to risk-free rates.
\u2190 \u2192 Wolters Kluwer 2022 Annual Report 175 Note 30 \u2013 Financial Risk Management continued Interest rate benchmark transition for derivative financial instruments The \ufb01xed interest payments on the Japanese Yen private placements are converted to and hedged against euro via cross-currency interest rate swaps. The Interest Rate Benchmark Reform did not impact these \ufb01xed interest payments. However, both the Japanese Libor and Euribor were inputs in the fair value determination. During 2022, the input in the fair value determination was changed to the Tokia Overnight Rate (TONA) curve and the Euro Short-Term Rate (\u20acSTR). In addition, the Euro Overnight Index Average (EONIA) reference in the Credit Support Annex was amended to the Euro Short-Term Rate (\u20acSTR). The IBOR-reform did not result in changes to the group\u2019s risk management strategy. LIQUIDITY RISK Liquidity risk is the risk that the group will encounter dif\ufb01culty in meeting the obligations associated with its \ufb01nancial liabilities that are settled by delivering cash or another \ufb01nancial asset. The group\u2019s approach to manage liquidity is to ensure, as far as possible, that it will have enough liquidity to meet its liabilities when they are due. The group actively manages liquidity risk by maintaining enough cash and cash equivalents, and by the availability of committed borrowing capacity. To reduce liquidity risk, the group has established the following minimum requirements: \u2022 No more than 25% of outstanding gross debt minus available cash should be repayable within a 12-month period; \u2022 Acquiring of funding to start at least one year in advance of all maturing debt or alternative committed funding should be in place; and \u2022 Minimum headroom of \u20ac500 million (sum of unused committed credit facilities, cash and cash equivalents, and derivative \ufb01nancial assets, minus other short-term debt, current deferred acquisition payables, current derivative \ufb01nancial liabilities, and bank overdrafts). Per December 31, 2022, the group has access to the unused part of the committed credit facilities of \u20ac600 million in total (2021: \u20ac600 million), cash and cash equivalents of \u20ac1,346 million (2021: \u20ac1,001 million), and has derivative \ufb01nancial assets totaling \u20ac18 million (2021: none), minus other short-term debt, current deferred and contingent acquisition payables, bank overdrafts, Euro Commercial Paper, and current derivative \ufb01nancial liabilities totaling \u20ac18 million (2021: \u20ac10 million). The headroom was \u20ac1,946 million at year-end 2022 (2021: \u20ac1,591 million). No assets have been collateralized or in any other way secured under debt contracts. Exposure to liquidity risk The following tables relate to the remaining contractual cash flows of \ufb01nancial liabilities at the reporting date. These tables show net cash flow amounts for derivative \ufb01nancial instruments that have simultaneous cash settlements. The amounts for the non-derivative \ufb01nancial instruments are gross and undiscounted and include estimated interest payments and exclude the impact of netting agreements. For the remaining contractual cash flows of lease liabilities, refer to Note 20 \u2013 Leasing. 176 Wolters Kluwer 2022 Annual Report Strategic Report | Governance | Financial Statements \u2190 \u2192 Note 30 \u2013 Financial Risk Management continued CONTRACTUAL CASH FLOWS 2022 Carrying amount Contractual undiscounted cash flows Less than 1 year 1-2 years 2-5 years More than 5 years Non-derivative financial liabilities (excl. lease liabilities) Bonds: Bonds 2008-2028 36 49 2 2 7 38 Bonds 2013-2023 700 720 720 \u2013 \u2013 \u2013 Bonds 2014-2024 399 420 10 410 \u2013 \u2013 Bonds 2017-2027 499 539 8 8 523 \u2013 Bonds 2020-2030 496 530 4 4 11 511 Bonds 2021-2028 498 507 1 1 4 501 Bonds 2022-2026 498 560 15 15 530 \u2013 Private placements: Private placement 2008-2038 142 216 5 5 14 192 Long- and short-term deferred and contingent acquisition payables 4 4 2 2 \u2013 \u2013 Other debt 16 16 \u2013 8 8 \u2013 Borrowings and bank overdrafts 16 16 16 \u2013 \u2013 \u2013 Trade payables 147 147 147 \u2013 \u2013 \u2013 Total 3,451 3,724 930 455 1,097 1,242 Derivative financial instruments (Receipts) (260) (260) Payments 258 258 Foreign exchange derivatives (1) (2) (2) 0 0 0 (Receipts) (216) (5) (5) (14) (192) Payments 245 8 8 23 206 Cross-currency interest rate swaps (17) 29 3 3 9 14 Total derivative financial liabilities/(assets) (18) 27 1 3 9 14 \u2190 \u2192 Wolters Kluwer 2022 Annual Report 177 Note 30 \u2013 Financial Risk Management continued CONTRACTUAL CASH FLOWS 2021 Carrying amount Contractual undiscounted cash flows Less than 1 year 1-2 years 2-5 years More than 5 years Non-derivative financial liabilities (excl. lease liabilities) Bonds: Bonds 2008-2028 36 52 2 2 7 41 Bonds 2013-2023 699 740 20 720 \u2013 \u2013 Bonds 2014-2024 399 430 10 10 410 \u2013 Bonds 2017-2027 498 547 8 8 23 508 Bonds 2020-2030 495 534 4 4 11 515 Bonds 2021-2028 498 509 1 1 4 503 Private placements: Private placement 2008-2038 153 237 5 5 15 212 Long- and short-term deferred and contingent acquisition payables 2 2 1 1 \u2013 \u2013 Other debt 10 10 \u2013 5 5 \u2013 Borrowings and bank overdrafts 9 9 9 \u2013 \u2013 \u2013 Trade payables 123 123 123 \u2013 \u2013 \u2013 Total 2,922 3,193 183 756 475 1,779 Derivative financial instruments (Receipts) (175) (175) \u2013 \u2013 \u2013 Payments 177 177 \u2013 \u2013 \u2013 Foreign exchange derivatives 0 2 2 0 0 0 (Receipts) (237) (5) (5) (15) (212) Payments 253 8 8 23 214 Cross-currency interest rate swaps 2 16 3 3 8 2 Total derivative financial liabilities/(assets) 2 18 5 3 8 2 178 Wolters Kluwer 2022 Annual Report Strategic Report | Governance | Financial Statements \u2190 \u2192 Note 30 \u2013 Financial Risk Management continued CREDIT RISK Credit risk represents the loss that would be recognized if a customer or counterparty to a \ufb01nancial instrument fails to meet its contractual obligations, and arises principally from the group\u2019s receivables from customers, unbilled revenues, and investments in debt securities. The carrying amount of non-derivative \ufb01nancial assets represents the maximum credit exposure and amounted to \u20ac2,572 million at December 31, 2022 (2021: \u20ac2,138 million). Financial instruments and excess cash at financial institutions The group is exposed to credit risks due to its use of derivatives and because of excess cash deposited at banks. It is the group\u2019s policy to conclude \ufb01nancial transactions under ISDA (International Swap Dealers Association) master agreements. Cash invested and \ufb01nancial transactions are only concluded with \ufb01nancial institutions with strong credit ratings (at least a credit rating of A-/A3). Furthermore, credit limits per counterparty are in place and are monitored periodically. At December 31, 2022, there were no material credit risk concentrations outstanding while the average weighted credit rating of counterparties was A (2021: A). The aim is to spread transactions among counterparties. No credit limits were materially exceeded during the reporting period and management does not expect any losses from non-performance by these counterparties on current outstanding contracts. Trade receivables and unbilled revenues The group has a natural exposure to credit risk in its operational business. This exposure of the group\u2019s operating companies to credit risk is inherently limited, considering the diversi\ufb01ed customer portfolio of the group, and since a substantial part of the transactions is prepaid by customers. The group\u2019s operating companies actively monitor the solvency of their key accounts and assess creditworthiness of customers before concluding a contract. The group determines the impairment on trade receivables and unbilled revenues using the lifetime expected credit loss model, whereby the historical credit losses on trade receivables (a credit event) are used as a base for the future expected credit losses. The accounting policy and the assumptions are periodically evaluated by the group using macroeconomic data and historical back- testing of the assumptions. At December 31, 2022, the loss allowance on trade receivables and unbilled revenues amounted to \u20ac85 million. The majority of this loss allowance relates to trade receivables that are overdue for more than one year, as legislation in various countries do not allow a write-off until a certain number of years is passed. The trade receivables and unbilled revenues that are not overdue for more than one year or have no speci\ufb01c impairment risk have sound creditworthiness and meet the credit rating grades as de\ufb01ned in the internal policy for assessing the impairment of \ufb01nancial assets. For each trade receivable less than one year overdue, there is a loss allowance of at least 0.5% of the outstanding balance. For accounting policies, estimates, and judgments applied in determining the loss allowance on trade receivables and unbilled revenues, refer to Note 10 \u2013 Sales Costs and Note 25 \u2013 Contract Assets and Liabilities. \u2190 \u2192 Wolters Kluwer 2022 Annual Report 179 Note 30 \u2013 Financial Risk Management continued FAIR VALUE OF FINANCIAL INSTRUMENTS The following table shows the carrying amounts and fair values of \ufb01nancial assets and liabilities (excluding lease liabilities), including their levels in the fair value hierarchy. 2022 2021 Carrying value Fair value Level 1 Level 2 Level 3 Carrying value Fair value Non-derivative financial instruments: Financial assets at fair value through profit or loss 0 0 0 0 0 Unbilled revenues * 101 101 95 95 Trade receivables * 1,088 1,088 1,008 1,008 Miscellaneous receivables * 32 32 34 34 Interest receivable * 5 5 0 0 Cash and cash equivalents * 1,346 1,346 1,001 1,001 Total non-derivative \ufb01nancial assets 2,572 2,572 2,138 2,138 Bonds 2008-2028 36 41 41 36 50 Bonds 2013-2023 700 701 701 699 727 Bonds 2014-2024 399 396 396 399 422 Bonds 2017-2027 499 459 459 498 529 Bonds 2020-2030 496 399 399 495 503 Bonds 2021-2028 498 417 417 498 493 Bonds 2022-2026 498 489 489 \u2013 \u2013 Private placement 2008-2038 142 172 172 153 206 Long- and short-term deferred and contingent acquisition payables 4 4 4 2 2 Other debt * 16 16 10 10 Borrowings and bank overdrafts * 16 16 9 9 Trade payables * 147 147 123 123 Interest payable * 39 39 34 34 Total non-derivative \ufb01nancial liabilities 3,490 3,296 2,902 172 4 2,956 3,108 Derivative financial instruments: Non-current assets 17 17 17 \u2013 \u2013 Current assets 1 1 1 \u2013 \u2013 Total derivative \ufb01nancial assets 18 18 18 0 0 Non-current liabilities \u2013 \u2013 \u2013 2 2 Total derivative \ufb01nancial liabilities 0 0 0 2 2 * Fair value approximates the carrying amount. Note 30 \u2013 Financial Risk Management continued FAIR VALUE HIERARCHY The fair values have been determined by the group based on market data and appropriate valuation methods/quotes. Valuation methods include: \u2022 Level 1: reference to quoted prices (unadjusted) in active markets for similar assets and liabilities; \u2022 Level 2: inputs other than quoted prices that are observable for the asset or liability and that may have a signi\ufb01cant impact on the fair value, either directly (i.e., as prices) or indirectly (i.e., derived from prices) based on discounted cash flow analyses, using data input of observable \ufb01nancial markets and \ufb01nancial institutions; and \u2022 Level 3: inputs that are not based on observable market data. The valuation method can be based on discounted cash flow analyses, or other models that are substantially identical. There has been no change in the fair value hierarchy compared to 2021. The Level 3 fair value movements in non-derivative \ufb01nancial liabilities are as follows: 2022 2021 Balance at January 1 2 0 Acquired through business combinations Note 8 3 2 Settlements Note 8 (1) 0 Fair value changes of contingent considerations Note 12 0 0 Foreign exchange differences 0 0 Balance at December 31 4 2 DEFERRED AND CONTINGENT ACQUISITION PAYABLES ACCOUNTING POLICIES Non-derivative \ufb01nancial liabilities at fair value through pro\ufb01t or loss comprise deferred and contingent considerations and are measured at fair value. Changes therein are recognized in pro\ufb01t or loss. The contingent considerations are based on a discounted cash flow model, which considers the present value of expected payments, using a risk-adjusted discount rate. The expected payment is determined by considering possible scenarios, the amount to be paid under each scenario, and the probability of each scenario. The estimated fair value could increase (or decrease) if assumptions change. The fair value of the deferred and contingent acquisition payables balance amounted to \u20ac4 million (2021: \u20ac2 million) and can be presented as follows: Fair value December 31, 2022 Of which: short term Of which: long term Maximum exposure (undiscounted) Fair value December 31, 2021 Total 4 2 2 4 2 ",
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"value": "ACCOUNTING POLICIES Derivative financial instruments and hedging activities The group holds derivative \ufb01nancial instruments to hedge risk exposures. Derivative \ufb01nancial instruments are initially recognized at fair value on the date a derivative contract is concluded and are subsequently remeasured at fair value. The method of recognizing gains or losses depends on whether the derivative is designated as a hedging instrument and if so, the nature of the item being hedged. The group designates derivatives as either: \u2022 Hedges of a risk associated with a recognized asset or liability or a highly probable forecast transaction (cash flow hedge); \u2022 Hedges of a net investment in a foreign operation (net investment hedge); or \u2022 Currency forward instruments to protect the group\u2019s net pro\ufb01t (not qualifying for hedge accounting). With respect to foreign currency forwards used in the cash flow hedges and the net investment hedges, the group designates as a hedging instrument only the change in the value of the spot component of a forward contract (and not the forward element). The differential between the contracted forward rate and the market spot rate, de\ufb01ned as forward points, is recognized in other comprehensive income and accumulated in the hedge reserve within total equity. Cash flow hedge The effective part of changes in the fair value of derivatives that are designated and qualify as cash flow hedges are recognized in other comprehensive income, and accumulated in the hedge reserve within total equity. Amounts accumulated in the hedge reserve are reclassi\ufb01ed to pro\ufb01t or loss within the line where the result from the hedged transaction is recognized, in the same period the hedged item affects the pro\ufb01t or loss. The gain or loss relating to the ineffective part of the hedging relationship is recognized in pro\ufb01t or loss within \ufb01nancing results. Reclassification of hedge reserve to profit or loss When a hedging instrument matures or is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in the hedge reserve at that time remains in the hedge reserve and is only reclassi\ufb01ed when the hedged transaction is ultimately recognized in pro\ufb01t or loss. When a hedged transaction is no longer expected to occur, the cumulative gain or loss in the hedge reserve is reclassi\ufb01ed to pro\ufb01t or loss. Net investment hedge Fair value changes of derivative \ufb01nancial instruments used to hedge the net investment in foreign operations, which are determined to be an effective hedge, are recognized directly in other comprehensive income in the translation reserve. Gains and losses accumulated in the translation reserve are reclassi\ufb01ed to pro\ufb01t or loss when the foreign operation is disposed. If a hedging relationship is terminated and the derivative \ufb01nancial instrument is not sold, future changes in the fair value of the derivative \ufb01nancial instrument are recognized in pro\ufb01t or loss. The gain or loss relating to the ineffective part of the hedging relationship is recognized in pro\ufb01t or loss within \ufb01nancing results. Derivatives that do not qualify for hedge accounting Changes in the fair value of any derivative \ufb01nancial instruments that do not qualify for hedge accounting are recognized in pro\ufb01t or loss within \ufb01nancing results. ",
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"fact-498": {
"value": "ACCOUNTING POLICIES Derivative financial instruments and hedging activities The group holds derivative \ufb01nancial instruments to hedge risk exposures. Derivative \ufb01nancial instruments are initially recognized at fair value on the date a derivative contract is concluded and are subsequently remeasured at fair value. The method of recognizing gains or losses depends on whether the derivative is designated as a hedging instrument and if so, the nature of the item being hedged. The group designates derivatives as either: \u2022 Hedges of a risk associated with a recognized asset or liability or a highly probable forecast transaction (cash flow hedge); \u2022 Hedges of a net investment in a foreign operation (net investment hedge); or \u2022 Currency forward instruments to protect the group\u2019s net pro\ufb01t (not qualifying for hedge accounting). With respect to foreign currency forwards used in the cash flow hedges and the net investment hedges, the group designates as a hedging instrument only the change in the value of the spot component of a forward contract (and not the forward element). The differential between the contracted forward rate and the market spot rate, de\ufb01ned as forward points, is recognized in other comprehensive income and accumulated in the hedge reserve within total equity. Cash flow hedge The effective part of changes in the fair value of derivatives that are designated and qualify as cash flow hedges are recognized in other comprehensive income, and accumulated in the hedge reserve within total equity. Amounts accumulated in the hedge reserve are reclassi\ufb01ed to pro\ufb01t or loss within the line where the result from the hedged transaction is recognized, in the same period the hedged item affects the pro\ufb01t or loss. The gain or loss relating to the ineffective part of the hedging relationship is recognized in pro\ufb01t or loss within \ufb01nancing results. Reclassification of hedge reserve to profit or loss When a hedging instrument matures or is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in the hedge reserve at that time remains in the hedge reserve and is only reclassi\ufb01ed when the hedged transaction is ultimately recognized in pro\ufb01t or loss. When a hedged transaction is no longer expected to occur, the cumulative gain or loss in the hedge reserve is reclassi\ufb01ed to pro\ufb01t or loss. Net investment hedge Fair value changes of derivative \ufb01nancial instruments used to hedge the net investment in foreign operations, which are determined to be an effective hedge, are recognized directly in other comprehensive income in the translation reserve. Gains and losses accumulated in the translation reserve are reclassi\ufb01ed to pro\ufb01t or loss when the foreign operation is disposed. If a hedging relationship is terminated and the derivative \ufb01nancial instrument is not sold, future changes in the fair value of the derivative \ufb01nancial instrument are recognized in pro\ufb01t or loss. The gain or loss relating to the ineffective part of the hedging relationship is recognized in pro\ufb01t or loss within \ufb01nancing results. Derivatives that do not qualify for hedge accounting Changes in the fair value of any derivative \ufb01nancial instruments that do not qualify for hedge accounting are recognized in pro\ufb01t or loss within \ufb01nancing results. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForDerivativeFinancialInstrumentsAndHedgingExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-499": {
"value": "Derivative financial instruments and hedging activities The group holds derivative \ufb01nancial instruments to hedge risk exposures. Derivative \ufb01nancial instruments are initially recognized at fair value on the date a derivative contract is concluded and are subsequently remeasured at fair value. The method of recognizing gains or losses depends on whether the derivative is designated as a hedging instrument and if so, the nature of the item being hedged. The group designates derivatives as either: \u2022 Hedges of a risk associated with a recognized asset or liability or a highly probable forecast transaction (cash flow hedge); \u2022 Hedges of a net investment in a foreign operation (net investment hedge); or \u2022 Currency forward instruments to protect the group\u2019s net pro\ufb01t (not qualifying for hedge accounting). With respect to foreign currency forwards used in the cash flow hedges and the net investment hedges, the group designates as a hedging instrument only the change in the value of the spot component of a forward contract (and not the forward element). The differential between the contracted forward rate and the market spot rate, de\ufb01ned as forward points, is recognized in other comprehensive income and accumulated in the hedge reserve within total equity. Cash flow hedge The effective part of changes in the fair value of derivatives that are designated and qualify as cash flow hedges are recognized in other comprehensive income, and accumulated in the hedge reserve within total equity. Amounts accumulated in the hedge reserve are reclassi\ufb01ed to pro\ufb01t or loss within the line where the result from the hedged transaction is recognized, in the same period the hedged item affects the pro\ufb01t or loss. The gain or loss relating to the ineffective part of the hedging relationship is recognized in pro\ufb01t or loss within \ufb01nancing results. Reclassification of hedge reserve to profit or loss When a hedging instrument matures or is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in the hedge reserve at that time remains in the hedge reserve and is only reclassi\ufb01ed when the hedged transaction is ultimately recognized in pro\ufb01t or loss. When a hedged transaction is no longer expected to occur, the cumulative gain or loss in the hedge reserve is reclassi\ufb01ed to pro\ufb01t or loss. Net investment hedge Fair value changes of derivative \ufb01nancial instruments used to hedge the net investment in foreign operations, which are determined to be an effective hedge, are recognized directly in other comprehensive income in the translation reserve. Gains and losses accumulated in the translation reserve are reclassi\ufb01ed to pro\ufb01t or loss when the foreign operation is disposed. If a hedging relationship is terminated and the derivative \ufb01nancial instrument is not sold, future changes in the fair value of the derivative \ufb01nancial instrument are recognized in pro\ufb01t or loss. The gain or loss relating to the ineffective part of the hedging relationship is recognized in pro\ufb01t or loss within \ufb01nancing results. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForHedgingExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-500": {
"value": "LIQUIDITY RISK Liquidity risk is the risk that the group will encounter dif\ufb01culty in meeting the obligations associated with its \ufb01nancial liabilities that are settled by delivering cash or another \ufb01nancial asset. The group\u2019s approach to manage liquidity is to ensure, as far as possible, that it will have enough liquidity to meet its liabilities when they are due. The group actively manages liquidity risk by maintaining enough cash and cash equivalents, and by the availability of committed borrowing capacity. To reduce liquidity risk, the group has established the following minimum requirements: \u2022 No more than 25% of outstanding gross debt minus available cash should be repayable within a 12-month period; \u2022 Acquiring of funding to start at least one year in advance of all maturing debt or alternative committed funding should be in place; and \u2022 Minimum headroom of \u20ac500 million (sum of unused committed credit facilities, cash and cash equivalents, and derivative \ufb01nancial assets, minus other short-term debt, current deferred acquisition payables, current derivative \ufb01nancial liabilities, and bank overdrafts). Per December 31, 2022, the group has access to the unused part of the committed credit facilities of \u20ac600 million in total (2021: \u20ac600 million), cash and cash equivalents of \u20ac1,346 million (2021: \u20ac1,001 million), and has derivative \ufb01nancial assets totaling \u20ac18 million (2021: none), minus other short-term debt, current deferred and contingent acquisition payables, bank overdrafts, Euro Commercial Paper, and current derivative \ufb01nancial liabilities totaling \u20ac18 million (2021: \u20ac10 million). The headroom was \u20ac1,946 million at year-end 2022 (2021: \u20ac1,591 million). No assets have been collateralized or in any other way secured under debt contracts. Exposure to liquidity risk The following tables relate to the remaining contractual cash flows of \ufb01nancial liabilities at the reporting date. These tables show net cash flow amounts for derivative \ufb01nancial instruments that have simultaneous cash settlements. The amounts for the non-derivative \ufb01nancial instruments are gross and undiscounted and include estimated interest payments and exclude the impact of netting agreements. For the remaining contractual cash flows of lease liabilities, refer to Note 20 \u2013 Leasing. ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfLiquidityRiskExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-501": {
"value": "CREDIT RISK Credit risk represents the loss that would be recognized if a customer or counterparty to a \ufb01nancial instrument fails to meet its contractual obligations, and arises principally from the group\u2019s receivables from customers, unbilled revenues, and investments in debt securities. The carrying amount of non-derivative \ufb01nancial assets represents the maximum credit exposure and amounted to \u20ac2,572 million at December 31, 2022 (2021: \u20ac2,138 million). Financial instruments and excess cash at financial institutions The group is exposed to credit risks due to its use of derivatives and because of excess cash deposited at banks. It is the group\u2019s policy to conclude \ufb01nancial transactions under ISDA (International Swap Dealers Association) master agreements. Cash invested and \ufb01nancial transactions are only concluded with \ufb01nancial institutions with strong credit ratings (at least a credit rating of A-/A3). Furthermore, credit limits per counterparty are in place and are monitored periodically. At December 31, 2022, there were no material credit risk concentrations outstanding while the average weighted credit rating of counterparties was A (2021: A). The aim is to spread transactions among counterparties. No credit limits were materially exceeded during the reporting period and management does not expect any losses from non-performance by these counterparties on current outstanding contracts. Trade receivables and unbilled revenues The group has a natural exposure to credit risk in its operational business. This exposure of the group\u2019s operating companies to credit risk is inherently limited, considering the diversi\ufb01ed customer portfolio of the group, and since a substantial part of the transactions is prepaid by customers. The group\u2019s operating companies actively monitor the solvency of their key accounts and assess creditworthiness of customers before concluding a contract. The group determines the impairment on trade receivables and unbilled revenues using the lifetime expected credit loss model, whereby the historical credit losses on trade receivables (a credit event) are used as a base for the future expected credit losses. The accounting policy and the assumptions are periodically evaluated by the group using macroeconomic data and historical back- testing of the assumptions. At December 31, 2022, the loss allowance on trade receivables and unbilled revenues amounted to \u20ac85 million. The majority of this loss allowance relates to trade receivables that are overdue for more than one year, as legislation in various countries do not allow a write-off until a certain number of years is passed. The trade receivables and unbilled revenues that are not overdue for more than one year or have no speci\ufb01c impairment risk have sound creditworthiness and meet the credit rating grades as de\ufb01ned in the internal policy for assessing the impairment of \ufb01nancial assets. For each trade receivable less than one year overdue, there is a loss allowance of at least 0.5% of the outstanding balance. For accounting policies, estimates, and judgments applied in determining the loss allowance on trade receivables and unbilled revenues, refer to Note 10 \u2013 Sales Costs and Note 25 \u2013 Contract Assets and Liabilities. ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfCreditRiskExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-502": {
"value": "FAIR VALUE OF FINANCIAL INSTRUMENTS The following table shows the carrying amounts and fair values of \ufb01nancial assets and liabilities (excluding lease liabilities), including their levels in the fair value hierarchy. 2022 2021 Carrying value Fair value Level 1 Level 2 Level 3 Carrying value Fair value Non-derivative financial instruments: Financial assets at fair value through profit or loss 0 0 0 0 0 Unbilled revenues * 101 101 95 95 Trade receivables * 1,088 1,088 1,008 1,008 Miscellaneous receivables * 32 32 34 34 Interest receivable * 5 5 0 0 Cash and cash equivalents * 1,346 1,346 1,001 1,001 Total non-derivative \ufb01nancial assets 2,572 2,572 2,138 2,138 Bonds 2008-2028 36 41 41 36 50 Bonds 2013-2023 700 701 701 699 727 Bonds 2014-2024 399 396 396 399 422 Bonds 2017-2027 499 459 459 498 529 Bonds 2020-2030 496 399 399 495 503 Bonds 2021-2028 498 417 417 498 493 Bonds 2022-2026 498 489 489 \u2013 \u2013 Private placement 2008-2038 142 172 172 153 206 Long- and short-term deferred and contingent acquisition payables 4 4 4 2 2 Other debt * 16 16 10 10 Borrowings and bank overdrafts * 16 16 9 9 Trade payables * 147 147 123 123 Interest payable * 39 39 34 34 Total non-derivative \ufb01nancial liabilities 3,490 3,296 2,902 172 4 2,956 3,108 Derivative financial instruments: Non-current assets 17 17 17 \u2013 \u2013 Current assets 1 1 1 \u2013 \u2013 Total derivative \ufb01nancial assets 18 18 18 0 0 Non-current liabilities \u2013 \u2013 \u2013 2 2 Total derivative \ufb01nancial liabilities 0 0 0 2 2 * Fair value approximates the carrying amount",
"dimensions": {
"concept": "ifrs-full:DisclosureOfFairValueOfFinancialInstrumentsExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-503": {
"value": "FAIR VALUE HIERARCHY The fair values have been determined by the group based on market data and appropriate valuation methods/quotes. Valuation methods include: \u2022 Level 1: reference to quoted prices (unadjusted) in active markets for similar assets and liabilities; \u2022 Level 2: inputs other than quoted prices that are observable for the asset or liability and that may have a signi\ufb01cant impact on the fair value, either directly (i.e., as prices) or indirectly (i.e., derived from prices) based on discounted cash flow analyses, using data input of observable \ufb01nancial markets and \ufb01nancial institutions; and \u2022 Level 3: inputs that are not based on observable market data. The valuation method can be based on discounted cash flow analyses, or other models that are substantially identical. There has been no change in the fair value hierarchy compared to 2021. The Level 3 fair value movements in non-derivative \ufb01nancial liabilities are as follows: 2022 2021 Balance at January 1 2 0 Acquired through business combinations Note 8 3 2 Settlements Note 8 (1) 0 Fair value changes of contingent considerations Note 12 0 0 Foreign exchange differences 0 0 Balance at December 31 4 2 TSR-condition The fair value of the shares based on the TSR performance condition, a market condition under IFRS 2 \u2013 Share-based Payment, is measured using a Monte Carlo simulation model considering the terms and conditions upon which the shares were awarded. ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfFairValueMeasurementExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-504": {
"value": "ACCOUNTING POLICIES Defined contribution plans Obligations for contributions to de\ufb01ned contribution plans are recognized as personnel expenses in pro\ufb01t or loss in the period during which services are rendered by employees. Prepaid contributions are recognized as an asset to the extent that a cash refund or reduction in future payments is available. Defined benefit plans The group\u2019s net obligation in respect of de\ufb01ned employee bene\ufb01t plans is calculated separately for each plan by estimating the amount of future bene\ufb01ts that employees have earned in the current and prior periods, discounting that amount, and deducting the fair value of any plan assets. The calculation of de\ufb01ned bene\ufb01t obligations is performed annually by a quali\ufb01ed actuary using the projected unit credit method. When the calculation results in a potential asset for the group, the recognized asset is limited to the present value of economic bene\ufb01ts available in the form of any future refunds from the plan, or reductions in future contributions to the plan. To calculate the present value of economic bene\ufb01ts, consideration is given to any applicable minimum funding requirements. All remeasurement gains and losses of the net de\ufb01ned bene\ufb01t liabilities or assets, which consist of actuarial gains and losses, return on plan assets (excluding interest), and the effect of the asset ceiling (if any, excluding interest), are recognized immediately in other comprehensive income, in the period in which they occur. The group determines the net interest expense or income on the net de\ufb01ned bene\ufb01t liability or asset for the period by applying the discount rate used to measure the de\ufb01ned bene\ufb01t obligation at the beginning of the annual period to the net de\ufb01ned bene\ufb01t liability or asset, considering any changes in the net de\ufb01ned bene\ufb01t liability or asset during the period resulting from contributions and bene\ufb01t payments. Net interest expense and other expenses related to de\ufb01ned bene\ufb01t plans, such as fund administration costs, are recognized in pro\ufb01t or loss, when incurred. When the bene\ufb01ts of a plan are changed or when a plan is curtailed, the resulting change in the de\ufb01ned bene\ufb01ts that relates to past service or the gain or loss on curtailment is recognized directly in pro\ufb01t or loss. The group recognizes gains and losses on the settlement of a de\ufb01ned bene\ufb01t plan when the settlement occurs. A curtailment occurs when an entity signi\ufb01cantly reduces the number of employees covered by a plan. Amendments to the terms of a de\ufb01ned bene\ufb01t plan will be considered plan amendments and will be fully accounted for as past service costs. If a plan amendment, curtailment, or settlement occurs, the current service cost and the net interest for the period after the remeasurement are determined using the assumptions applied for the remeasurement. Long-term service benefits The group\u2019s net obligation in respect of long-term service bene\ufb01ts, such as jubilee bene\ufb01ts, is the amount of future bene\ufb01ts that employees have earned in return for their service in the current and prior periods. The obligation is calculated using the projected unit credit method and is discounted to its present value, with the fair value of any related assets deducted. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForEmployeeBenefitsExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-505": {
"value": "Note 32 \u2013 Provisions 2022 2021 Provision for restructuring commitments 5 12 Provision for acquisition integration 0 0 Restructuring provisions 5 12 Legal provisions 13 16 Other provisions 6 6 Total 24 34 Of which short term 19 27 ACCOUNTING POLICIES A provision is recognized when the group has a present legal or constructive obligation because of a past event, it is probable that an outflow of resources in the form of economic bene\ufb01ts will be required to settle the obligation, and the amount of the obligation can be reliably estimated. Restructuring provisions The restructuring provisions include liabilities arising from changes in the organizational structure, integration of activities, expected redundancy payments, and onerous contracts. A provision for restructuring is recognized only when the general recognition criteria are met. Redundancy payments are recognized as an expense when the group is demonstrably committed, without realistic possibility of withdrawal, to a formal detailed plan to either terminate employment before the normal retirement date, or to provide termination bene\ufb01ts as a result of an offer made to encourage voluntary redundancy. Acquisition integration provisions The acquisition integration provisions relate to non-recurring expenses to be incurred for the integration of activities acquired through business combinations, and mainly consist of expected redundancy payments, IT migration costs, and onerous contracts. Legal provisions For legal and judicial proceedings against the group, a legal provision is recognized only if both an adverse outcome is probable and the amount of the loss can be reliably estimated. If one of these conditions is not met, the proceeding or claim is disclosed as a contingent liability if material. Other provisions Other provisions primarily include provisions for -dilapidation commitments on real estate leases. ESTIMATES AND JUDGMENTS Legal provisions The group is involved in legal and judicial proceedings in the ordinary course of business. Provisions and contingencies related to these matters are periodically assessed based on the latest information available, usually after consultation with and the assistance of lawyers and other specialists. The prediction of the outcome and the assessment of a possible loss by management are based on management\u2019s judgments and estimates. The actual outcome of a proceeding or claim may differ from the estimated liability. Refer to Note 37 \u2013 Commitments, Contingent Assets, and Contingent Liabilities. MOVEMENTS IN PROVISIONS Restructuring provisions Legal provisions Other provisions 2022 2021 Long-term provisions at January 1 1 2 4 7 4 Add: short-term provisions 11 14 2 27 48 Total provisions at January 1 12 16 6 34 52 Movements Additions for restructuring of stranded costs Note 8 2 \u2013 \u2013 2 2 Additions for acquisition integration Note 12 3 \u2013 \u2013 3 4 Other additions 4 4 1 9 12 Total additions 9 4 1 14 18 Appropriation of provisions (14) (1) 0 (15) (36) Release of provisions (2) (6) (1) (9) (3) Transfer to liabilities classified as held for sale Note 9 \u2013 \u2013 \u2013 0 (1) Exchange differences 0 0 0 0 4 Total movements (7) (3) 0 (10) (18) Total provisions at December 31 5 13 6 24 34 Less: short-term provisions (4) (13) (2) (19) (27) Long-term provisions at December 31 1 0 4 5 7 Other additions to restructuring provisions of \u20ac4 million mainly relate to restructuring programs in Legal & Regulatory. ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfProvisionsExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-506": {
"value": "ACCOUNTING POLICIES A provision is recognized when the group has a present legal or constructive obligation because of a past event, it is probable that an outflow of resources in the form of economic bene\ufb01ts will be required to settle the obligation, and the amount of the obligation can be reliably estimated. Restructuring provisions The restructuring provisions include liabilities arising from changes in the organizational structure, integration of activities, expected redundancy payments, and onerous contracts. A provision for restructuring is recognized only when the general recognition criteria are met. Redundancy payments are recognized as an expense when the group is demonstrably committed, without realistic possibility of withdrawal, to a formal detailed plan to either terminate employment before the normal retirement date, or to provide termination bene\ufb01ts as a result of an offer made to encourage voluntary redundancy. Acquisition integration provisions The acquisition integration provisions relate to non-recurring expenses to be incurred for the integration of activities acquired through business combinations, and mainly consist of expected redundancy payments, IT migration costs, and onerous contracts. Legal provisions For legal and judicial proceedings against the group, a legal provision is recognized only if both an adverse outcome is probable and the amount of the loss can be reliably estimated. If one of these conditions is not met, the proceeding or claim is disclosed as a contingent liability if material. Other provisions Other provisions primarily include provisions for -dilapidation commitments on real estate leases. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForProvisionsExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-507": {
"value": "Note 33 \u2013 Capital and Reserves SHARE CAPITAL AND NUMBER OF SHARES The authorized share capital amounts to \u20ac143.04 million, consisting of \u20ac71.52 million in ordinary shares (596 million of ordinary shares with a nominal value of \u20ac0.12 per ordinary share) and \u20ac71.52 million in preference shares (596 million of preference shares with a nominal value of \u20ac0.12 per preference share). ORDINARY SHARES The issued share capital consists of ordinary shares. On August 31, 2022, the company completed the reduction in ordinary share capital approved by shareholders at the Annual General Meeting of Shareholders held on April 21, 2022. In 2022, the company canceled 5,000,000 ordinary shares to the amount of \u20ac451 million previously held as treasury shares (2021: 5,000,000 ordinary shares were canceled to the amount of \u20ac336 million). Consequently, in 2022, the total number of issued ordinary shares is reduced to 257,516,153 with a nominal value of \u20ac31 million (2021: 262,516,153 shares with a nominal value of \u20ac32 million). Incremental costs directly attributable to the issuance of ordinary shares are recognized as a deduction from equity, net of any tax effects. PREFERENCE SHARES Preference share capital is classi\ufb01ed as equity if it is non-redeemable or redeemable only at the company\u2019s option, and any dividends are discretionary. There are no preference shares issued. REPURCHASE AND REISSUE OF SHARE CAPITAL (TREASURY SHARES) When share capital recognized as equity is repurchased (treasury shares), the amount of the consideration paid, including directly attributable costs, is recognized as a change in equity. For a reconciliation of the weighted-average number of shares and earnings per share, see Note 7 \u2013 Earnings per Share. NUMBER OF SHARES Number of ordinary shares Minus: number of treasury shares Total number of ordinary shares outstanding in thousands of shares, unless otherwise stated 2022 2021 2022 2021 2022 2021 At January 1 262,516 267,516 (4,324) (5,072) 258,192 262,444 Cancelation of shares (5,000) (5,000) 5,000 5,000 0 0 Repurchased shares \u2013 \u2013 (10,128) (4,957) (10,128) (4,957) Long-Term Incentive Plan \u2013 \u2013 650 705 650 705 At December 31 257,516 262,516 (8,802) (4,324) 248,714 258,192 Issued share capital at \u20ac0.12 (\u20ac\u2019000) 30,902 31,502 Proposed dividend per share (\u20ac) 1.81 1.57 Proposed dividend distribution (\u20ac\u2019000) 450,172 405,362 TREASURY SHARES Shares repurchased by the company are added to and held as treasury shares. Treasury shares are measured at cost, representing the market price on the acquisition date. The treasury share reserve is not available for distribution. Treasury shares are deducted from retained earnings. The group offsets the dilution of its performance share issuance annually via share repurchases. A part of the treasury shares is retained and used to meet future obligations under share-based incentive schemes. In 2022, the group executed a share buyback of \u20ac1,000 million (2021: \u20ac410 million), originally consisting of a share buyback of \u20ac600 million and subsequently expanded to \u20ac1,000 million. The group repurchased 10.1 million (2021: 5.0 million) of ordinary shares under this program at an average stock price of \u20ac98.75 (2021: \u20ac82.62). In 2022, the group used 0.7 million shares held in treasury for the vesting of the LTIP grant 2019-21. In November 2022, the company signed a mandate to execute up to \u20ac100 million in share buybacks for the period starting January 2, 2023, up to and including February 20, 2023. LEGAL RESERVE PARTICIPATIONS Legal reserve participations contain appropriations of pro\ufb01ts of group companies, which are allocated to a legal reserve based on statutory and/or legal requirements. The legal reserve is not available for distribution. HEDGE RESERVE Hedge reserve relates to the effective portion of the changes in fair value of the hedging instruments used for cash flow hedging and net investment hedging purposes. The hedge reserve is a legal reserve and not available for distribution. TRANSLATION RESERVE Translation reserve contains foreign exchange differences arising from the translation of the net investments in foreign operations. When a foreign operation is sold, accumulated exchange differences that were recognized in equity prior to the sale are reclassi\ufb01ed from equity to pro\ufb01t or loss as part of the gain or loss on divestment. The translation reserve is a legal reserve and is not available for distribution. DIVIDENDS Dividends are recognized as a liability upon declaration. Pursuant to Article 29 of the Articles of Association, and with the approval of the Supervisory Board, a proposal will be submitted to the Annual General Meeting of Shareholders to make a total distribution of \u20ac1.81 per share over \ufb01nancial year 2022 (dividend over \ufb01nancial year 2021: \u20ac1.57 per share). The group applies a semi-annual dividend policy. On February 21, 2022, the Supervisory Board and the Executive Board resolved to distribute an interim dividend of \u20ac0.63 per share, equal to 40% of prior year\u2019s dividend (2021 interim dividend: 40% of prior year\u2019s dividend). The interim dividend of \u20ac160 million was paid on September 22, 2022. Subject to the approval of the Annual General Meeting of Shareholders, a \ufb01nal dividend of \u20ac290 million, or \u20ac1. 18 per ordinary share, will be paid in cash on June 6, 2023. Refer also to Note 50 \u2013 Profit Appropriation. Dividend distributions over financial year 2022 2021 2020 Originally proposed 450 405 357 Actual payments: Interim dividend (paid in the financial year) 160 140 124 Final dividend (paid in the subsequent financial year) 264 232 Total dividend distribution 404 356 In 2022, dividends paid to the shareholders of the company amounted to \u20ac424 million, or \u20ac1 .66 per ordinary share, consisting of \u20ac160 million interim dividend 2022, or \u20ac0.63 per ordinary share, and \u20ac264 million \ufb01nal dividend 2021, or \u20ac1.03 per ordinary share. In 2021, dividends paid to the shareholders of the company amounted to \u20ac372 million, or \u20ac1.43 per ordinary share, consisting of \u20ac140 million interim dividend 2021, or \u20ac0.54 per ordinary share, and \u20ac232 million \ufb01nal dividend 2020, or \u20ac0.89 per ordinary share. FREE DISTRIBUTABLE RESERVES The share premium reserve, retained earnings, and undistributed pro\ufb01t for the year are available for dividend distribution. OPTION PREFERENCE SHARES The company has granted an option to purchase preference shares to the Wolters Kluwer Preference Shares Foundation (Stichting Preferente Aandelen Wolters Kluwer). The dividend on these shares would equal a normal market rate of return based on a weighted- average interest rate applied by the European Central Bank. Therefore, the fair value of the option is deemed to be zero. SHAREHOLDER\u2019S EQUITY MOVEMENT SCHEDULE For the equity movement schedule, refer to Note 47 \u2013 Shareholders\u2019 Equity. ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfShareCapitalReservesAndOtherEquityInterestExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-508": {
"value": "Note 33 \u2013 Capital and Reserves SHARE CAPITAL AND NUMBER OF SHARES The authorized share capital amounts to \u20ac143.04 million, consisting of \u20ac71.52 million in ordinary shares (596 million of ordinary shares with a nominal value of \u20ac0.12 per ordinary share) and \u20ac71.52 million in preference shares (596 million of preference shares with a nominal value of \u20ac0.12 per preference share). ORDINARY SHARES The issued share capital consists of ordinary shares. On August 31, 2022, the company completed the reduction in ordinary share capital approved by shareholders at the Annual General Meeting of Shareholders held on April 21, 2022. In 2022, the company canceled 5,000,000 ordinary shares to the amount of \u20ac451 million previously held as treasury shares (2021: 5,000,000 ordinary shares were canceled to the amount of \u20ac336 million). Consequently, in 2022, the total number of issued ordinary shares is reduced to 257,516,153 with a nominal value of \u20ac31 million (2021: 262,516,153 shares with a nominal value of \u20ac32 million). Incremental costs directly attributable to the issuance of ordinary shares are recognized as a deduction from equity, net of any tax effects. PREFERENCE SHARES Preference share capital is classi\ufb01ed as equity if it is non-redeemable or redeemable only at the company\u2019s option, and any dividends are discretionary. There are no preference shares issued. REPURCHASE AND REISSUE OF SHARE CAPITAL (TREASURY SHARES) When share capital recognized as equity is repurchased (treasury shares), the amount of the consideration paid, including directly attributable costs, is recognized as a change in equity. For a reconciliation of the weighted-average number of shares and earnings per share, see Note 7 \u2013 Earnings per Share. NUMBER OF SHARES Number of ordinary shares Minus: number of treasury shares Total number of ordinary shares outstanding in thousands of shares, unless otherwise stated 2022 2021 2022 2021 2022 2021 At January 1 262,516 267,516 (4,324) (5,072) 258,192 262,444 Cancelation of shares (5,000) (5,000) 5,000 5,000 0 0 Repurchased shares \u2013 \u2013 (10,128) (4,957) (10,128) (4,957) Long-Term Incentive Plan \u2013 \u2013 650 705 650 705 At December 31 257,516 262,516 (8,802) (4,324) 248,714 258,192 Issued share capital at \u20ac0.12 (\u20ac\u2019000) 30,902 31,502 Proposed dividend per share (\u20ac) 1.81 1.57 Proposed dividend distribution (\u20ac\u2019000) 450,172 405,362 TREASURY SHARES Shares repurchased by the company are added to and held as treasury shares. Treasury shares are measured at cost, representing the market price on the acquisition date. The treasury share reserve is not available for distribution. Treasury shares are deducted from retained earnings. The group offsets the dilution of its performance share issuance annually via share repurchases. A part of the treasury shares is retained and used to meet future obligations under share-based incentive schemes. In 2022, the group executed a share buyback of \u20ac1,000 million (2021: \u20ac410 million), originally consisting of a share buyback of \u20ac600 million and subsequently expanded to \u20ac1,000 million. The group repurchased 10.1 million (2021: 5.0 million) of ordinary shares under this program at an average stock price of \u20ac98.75 (2021: \u20ac82.62). In 2022, the group used 0.7 million shares held in treasury for the vesting of the LTIP grant 2019-21. In November 2022, the company signed a mandate to execute up to \u20ac100 million in share buybacks for the period starting January 2, 2023, up to and including February 20, 2023. LEGAL RESERVE PARTICIPATIONS Legal reserve participations contain appropriations of pro\ufb01ts of group companies, which are allocated to a legal reserve based on statutory and/or legal requirements. The legal reserve is not available for distribution. HEDGE RESERVE Hedge reserve relates to the effective portion of the changes in fair value of the hedging instruments used for cash flow hedging and net investment hedging purposes. The hedge reserve is a legal reserve and not available for distribution. TRANSLATION RESERVE Translation reserve contains foreign exchange differences arising from the translation of the net investments in foreign operations. When a foreign operation is sold, accumulated exchange differences that were recognized in equity prior to the sale are reclassi\ufb01ed from equity to pro\ufb01t or loss as part of the gain or loss on divestment. The translation reserve is a legal reserve and is not available for distribution. DIVIDENDS Dividends are recognized as a liability upon declaration. Pursuant to Article 29 of the Articles of Association, and with the approval of the Supervisory Board, a proposal will be submitted to the Annual General Meeting of Shareholders to make a total distribution of \u20ac1.81 per share over \ufb01nancial year 2022 (dividend over \ufb01nancial year 2021: \u20ac1.57 per share). The group applies a semi-annual dividend policy. On February 21, 2022, the Supervisory Board and the Executive Board resolved to distribute an interim dividend of \u20ac0.63 per share, equal to 40% of prior year\u2019s dividend (2021 interim dividend: 40% of prior year\u2019s dividend). The interim dividend of \u20ac160 million was paid on September 22, 2022. Subject to the approval of the Annual General Meeting of Shareholders, a \ufb01nal dividend of \u20ac290 million, or \u20ac1. 18 per ordinary share, will be paid in cash on June 6, 2023. Refer also to Note 50 \u2013 Profit Appropriation. Dividend distributions over financial year 2022 2021 2020 Originally proposed 450 405 357 Actual payments: Interim dividend (paid in the financial year) 160 140 124 Final dividend (paid in the subsequent financial year) 264 232 Total dividend distribution 404 356 In 2022, dividends paid to the shareholders of the company amounted to \u20ac424 million, or \u20ac1 .66 per ordinary share, consisting of \u20ac160 million interim dividend 2022, or \u20ac0.63 per ordinary share, and \u20ac264 million \ufb01nal dividend 2021, or \u20ac1.03 per ordinary share. In 2021, dividends paid to the shareholders of the company amounted to \u20ac372 million, or \u20ac1.43 per ordinary share, consisting of \u20ac140 million interim dividend 2021, or \u20ac0.54 per ordinary share, and \u20ac232 million \ufb01nal dividend 2020, or \u20ac0.89 per ordinary share. FREE DISTRIBUTABLE RESERVES The share premium reserve, retained earnings, and undistributed pro\ufb01t for the year are available for dividend distribution. OPTION PREFERENCE SHARES The company has granted an option to purchase preference shares to the Wolters Kluwer Preference Shares Foundation (Stichting Preferente Aandelen Wolters Kluwer). The dividend on these shares would equal a normal market rate of return based on a weighted- average interest rate applied by the European Central Bank. Therefore, the fair value of the option is deemed to be zero. SHAREHOLDER\u2019S EQUITY MOVEMENT SCHEDULE For the equity movement schedule, refer to Note 47 \u2013 Shareholders\u2019 Equity. ",
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"fact-509": {
"value": "SHARE CAPITAL AND NUMBER OF SHARES The authorized share capital amounts to \u20ac143.04 million, consisting of \u20ac71.52 million in ordinary shares (596 million of ordinary shares with a nominal value of \u20ac0.12 per ordinary share) and \u20ac71.52 million in preference shares (596 million of preference shares with a nominal value of \u20ac0.12 per preference share). ORDINARY SHARES The issued share capital consists of ordinary shares. On August 31, 2022, the company completed the reduction in ordinary share capital approved by shareholders at the Annual General Meeting of Shareholders held on April 21, 2022. In 2022, the company canceled 5,000,000 ordinary shares to the amount of \u20ac451 million previously held as treasury shares (2021: 5,000,000 ordinary shares were canceled to the amount of \u20ac336 million). Consequently, in 2022, the total number of issued ordinary shares is reduced to 257,516,153 with a nominal value of \u20ac31 million (2021: 262,516,153 shares with a nominal value of \u20ac32 million). Incremental costs directly attributable to the issuance of ordinary shares are recognized as a deduction from equity, net of any tax effects. PREFERENCE SHARES Preference share capital is classi\ufb01ed as equity if it is non-redeemable or redeemable only at the company\u2019s option, and any dividends are discretionary. There are no preference shares issued. REPURCHASE AND REISSUE OF SHARE CAPITAL (TREASURY SHARES) When share capital recognized as equity is repurchased (treasury shares), the amount of the consideration paid, including directly attributable costs, is recognized as a change in equity. For a reconciliation of the weighted-average number of shares and earnings per share, see Note 7 \u2013 Earnings per Share. NUMBER OF SHARES Number of ordinary shares Minus: number of treasury shares Total number of ordinary shares outstanding in thousands of shares, unless otherwise stated 2022 2021 2022 2021 2022 2021 At January 1 262,516 267,516 (4,324) (5,072) 258,192 262,444 Cancelation of shares (5,000) (5,000) 5,000 5,000 0 0 Repurchased shares \u2013 \u2013 (10,128) (4,957) (10,128) (4,957) Long-Term Incentive Plan \u2013 \u2013 650 705 650 705 At December 31 257,516 262,516 (8,802) (4,324) 248,714 258,192 Issued share capital at \u20ac0.12 (\u20ac\u2019000) 30,902 31,502 Proposed dividend per share (\u20ac) 1.81 1.57 Proposed dividend distribution (\u20ac\u2019000) 450,172 405,362 ",
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"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
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"fact-510": {
"value": "REPURCHASE AND REISSUE OF SHARE CAPITAL (TREASURY SHARES) When share capital recognized as equity is repurchased (treasury shares), the amount of the consideration paid, including directly attributable costs, is recognized as a change in equity. For a reconciliation of the weighted-average number of shares and earnings per share, see Note 7 \u2013 Earnings per Share. ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfRepurchaseAndReverseRepurchaseAgreementsExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
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"fact-511": {
"value": "TREASURY SHARES Shares repurchased by the company are added to and held as treasury shares. Treasury shares are measured at cost, representing the market price on the acquisition date. The treasury share reserve is not available for distribution. Treasury shares are deducted from retained earnings. The group offsets the dilution of its performance share issuance annually via share repurchases. A part of the treasury shares is retained and used to meet future obligations under share-based incentive schemes. In 2022, the group executed a share buyback of \u20ac1,000 million (2021: \u20ac410 million), originally consisting of a share buyback of \u20ac600 million and subsequently expanded to \u20ac1,000 million. The group repurchased 10.1 million (2021: 5.0 million) of ordinary shares under this program at an average stock price of \u20ac98.75 (2021: \u20ac82.62). In 2022, the group used 0.7 million shares held in treasury for the vesting of the LTIP grant 2019-21. In November 2022, the company signed a mandate to execute up to \u20ac100 million in share buybacks for the period starting January 2, 2023, up to and including February 20, 2023. ",
"dimensions": {
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"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
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"fact-512": {
"value": "Shares repurchased by the company are added to and held as treasury shares. Treasury shares are measured at cost, representing the market price on the acquisition date.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForTreasurySharesExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
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"fact-513": {
"value": "DIVIDENDS Dividends are recognized as a liability upon declaration. Pursuant to Article 29 of the Articles of Association, and with the approval of the Supervisory Board, a proposal will be submitted to the Annual General Meeting of Shareholders to make a total distribution of \u20ac1.81 per share over \ufb01nancial year 2022 (dividend over \ufb01nancial year 2021: \u20ac1.57 per share). The group applies a semi-annual dividend policy. On February 21, 2022, the Supervisory Board and the Executive Board resolved to distribute an interim dividend of \u20ac0.63 per share, equal to 40% of prior year\u2019s dividend (2021 interim dividend: 40% of prior year\u2019s dividend). The interim dividend of \u20ac160 million was paid on September 22, 2022. Subject to the approval of the Annual General Meeting of Shareholders, a \ufb01nal dividend of \u20ac290 million, or \u20ac1. 18 per ordinary share, will be paid in cash on June 6, 2023. Refer also to Note 50 \u2013 Profit Appropriation. Dividend distributions over financial year 2022 2021 2020 Originally proposed 450 405 357 Actual payments: Interim dividend (paid in the financial year) 160 140 124 Final dividend (paid in the subsequent financial year) 264 232 Total dividend distribution 404 356 In 2022, dividends paid to the shareholders of the company amounted to \u20ac424 million, or \u20ac1 .66 per ordinary share, consisting of \u20ac160 million interim dividend 2022, or \u20ac0.63 per ordinary share, and \u20ac264 million \ufb01nal dividend 2021, or \u20ac1.03 per ordinary share. In 2021, dividends paid to the shareholders of the company amounted to \u20ac372 million, or \u20ac1.43 per ordinary share, consisting of \u20ac140 million interim dividend 2021, or \u20ac0.54 per ordinary share, and \u20ac232 million \ufb01nal dividend 2020, or \u20ac0.89 per ordinary share. ",
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"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
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"fact-514": {
"value": "Dividends are recognized as a liability upon declaration.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForDividendsExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
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"fact-515": {
"value": "290000000",
"decimals": -6,
"dimensions": {
"concept": "ifrs-full:DividendsProposedOrDeclaredBeforeFinancialStatementsAuthorisedForIssueButNotRecognisedAsDistributionToOwners",
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"period": "2022-01-01T00:00:00/2023-01-01T00:00:00",
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"fact-516": {
"value": "1.18",
"decimals": 2,
"dimensions": {
"concept": "ifrs-full:DividendsProposedOrDeclaredBeforeFinancialStatementsAuthorisedForIssueButNotRecognisedAsDistributionToOwnersPerShare",
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"fact-517": {
"value": "1.66",
"decimals": 2,
"dimensions": {
"concept": "ifrs-full:DividendsRecognisedAsDistributionsToOwnersPerShare",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00",
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"fact-518": {
"value": "1.43",
"decimals": 2,
"dimensions": {
"concept": "ifrs-full:DividendsRecognisedAsDistributionsToOwnersPerShare",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2021-01-01T00:00:00/2022-01-01T00:00:00",
"unit": "iso4217:EUR/xbrli:shares"
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"fact-519": {
"value": "Note 34 \u2013 Share-based Payments ACCOUNTING POLICIES The Long-Term Incentive Plan (LTIP) quali\ufb01es as an equity-settled share-based payments transaction. Executive Board members and senior management are awarded shares under the LTIP with performance conditions based on Diluted Earnings per Share (EPS) at constant currencies and Total Shareholder Return (TSR) for the LTIP awards 2019-21 and 2020-22. For the LTIP 2021-23 and 2022-24 awards, the diluted EPS performance measure has been replaced by diluted adjusted EPS and a new performance measure of Return on Invested Capital (ROIC) has been introduced. The fair value of shares awarded is recognized as an expense with a corresponding increase in equity. The fair value is measured at the grant date and recognized over the period during which the employees become unconditionally entitled to the shares. The amount recognized as an expense is adjusted for actual forfeitures due to participants\u2019 resignations before the vesting date. TSR-condition The fair value of the shares based on the TSR performance condition, a market condition under IFRS 2 \u2013 Share-based Payment, is measured using a Monte Carlo simulation model considering the terms and conditions upon which the shares were awarded. Diluted (adjusted) EPS-condition and ROIC-condition The fair values of the shares based on the non-market performance conditions of diluted (adjusted) EPS and ROIC are equal to the opening share price of the Wolters Kluwer shares of the year of the grant, adjusted by the present value of the future dividend payments during the three-year performance period. The amount recognized as an expense in each year is adjusted to reflect the number of share awards for which the related service and non-market performance conditions are expected to be met, such that the amount ultimately recognized as an expense is based on the number of awards that meet the related service and non-market conditions at the vesting date. LONG-TERM INCENTIVE PLAN General For the Executive Board, the LTIP 2019-21 and 2020-22 awards depend partially on TSR performance (50% of the value of the conditionally awarded rights on shares) and partially on EPS performance (50% of the value of the conditionally awarded rights on shares). For senior management, the LTIP 2019-21 and 2020-22 awards depend partially on TSR performance (50% of the conditionally awarded rights on shares) and partially on EPS performance (50% of the conditionally awarded rights on shares). The LTIP 2021-23 and 2022-24 awards are based on TSR performance (weighting of 50%), diluted adjusted EPS performance (weighting of 30%), and ROIC performance (weighting of 20%). The TSR-related LTIP awards for the Executive Board and senior management are based on the same payout schedules. In 2022, \u20ac28 million has been recognized within personnel expenses in pro\ufb01t or loss (2021: \u20ac24 million) related to the total cost of the LTIP grants for 2020-22, and 2021-23, and 2022-24. Refer to Note 13 \u2013 Personnel Expenses. Conditionally awarded TSR-related LTIP shares For the conditional TSR awards up to and including 2022, the payout of shares after three years fully depends on the group\u2019s TSR relative to a pre-de\ufb01ned group of 15 peer companies. Vesting of these conditional grants is subject to the condition that the participant stays with the group until the plan\u2019s maturity. The performance period of the LTIP is three years, at the beginning of which a base number of shares (norm payout) is conditionally awarded to each bene\ufb01ciary. The expense of TSR-related LTIP is recognized ratably in pro\ufb01t or loss over the performance period. Actual awards at the end of the performance period range from 0% to 150% of the norm payout. There are no payouts for the Executive Board and senior management if the group ends below the eighth position in the TSR ranking, while other payouts will be made as follows: 150% for \ufb01rst or second position, 125% for third or fourth position, 100% for \ufb01fth or sixth position, and 75% for seventh or eighth position. Conditionally awarded diluted (adjusted) EPS- and ROIC-related LTIP shares The amount recognized as an expense in a year is adjusted to reflect the number of share awards for which the related service and non-market performance conditions are expected to be met, such that the amount ultimately recognized as an expense is based on the number of awards that meet the related service and non-market conditions at the vesting date. For the diluted (adjusted) EPS- and ROIC-related shares, there are no payouts if the performance over three years is less than 50% of the targets. In case of overachievement of the targets, the Executive Board and senior management can earn up to a maximum of 150% of the conditionally awarded shares. KEY ASSUMPTIONS TO THE TSR SHARES The fair value of TSR shares is calculated at the grant date using a Monte Carlo simulation model. For the TSR shares granted in the LTIP 2022-24, the fair value is estimated to be \u20ac71.71 as of January 1, 2022. The inputs to the valuation were the Wolters Kluwer share price of \u20ac103.60 on the grant date (January 1, 2022) and an expected volatility of 21.2% based on historical daily prices over the three years prior to January 1, 2022. Dividends are assumed to increase annually (from the 2021 dividend) based on historical trends and management plans. The model assumes a contractual life of three years and uses the risk-free rate on Dutch three-year government bonds. Fair value summary of conditionally awarded LTIP shares The fair value of each conditionally awarded share under the running LTIP grants for the Executive Board and senior management of the group, as determined by an external consulting \ufb01rm, is as follows: in euros Fair value of Adjusted EPS and ROIC shares at grant date Fair value EPS shares at grant date Fair value TSR shares at grant date LTIP 2022-24 97.82 \u2013 71.71 LTIP 2021-23 64.06 \u2013 47.03 LTIP 2020-22 \u2013 60.68 40.85 The fair values of the conditionally awarded shares under the LTIP 2022-24 grants increased compared to the prior year plan, mainly because of the higher share price of Wolters Kluwer at January 1, 2022, compared to January 1, 2021. LTIP 2019-21 The LTIP 2019-21 vested on December 31, 2021. On TSR, Wolters Kluwer ranked fourth relative to the peer group of 15 companies, resulting in a payout of 125% of the conditional base number of shares awarded to the Executive Board and senior management. The EPS-related shares resulted in a payout of 150%. A total of 649,774 shares were released on February 24, 2022. At that date, the volume-weighted-average share price of Wolters Kluwer N.V. was \u20ac88.0883. LTIP 2019-21: NUMBER OF SHARES VESTED AND THE CASH EQUIVALENT THEREOF number of shares, unless otherwise stated Outstanding at December 31, 2021 Increase in conditional number of TSR shares (25%) Increase in conditional number of EPS shares (50%) Payout/ vested shares February 24, 2022 Cash value vested shares * Executive Board 120,792 17,466 25,464 163,722 14,422 Senior management 353,908 43,956 88,188 486,052 42,815 Total 474,700 61,422 113,652 649,774 57,237 * Cash value in thousands of euros, calculated as the number of shares vested multiplied by the volume-weighted-average price on February 24, 2022. LTIP 2020-22 The LTIP 2020-22 vested on December 31, 2022. On TSR, Wolters Kluwer ranked third relative to its peer group of 15 companies, resulting in a payout of 125% of the conditional base number of shares awarded to the Executive Board and senior management. The EPS-related shares resulted in a payout of 150%. The shares will be released on February 23, 2023. The volume-weighted-average price for the shares released will be based on the average exchange prices traded on the Euronext Amsterdam N.V. on February 23, 2023, the \ufb01rst day following the publication of the company\u2019s annual results. NUMBER OF PERFORMANCE SHARES OUTSTANDING LTIP 2020-22 number of shares Total EPS-condition TSR-condition Conditionally awarded grant 2020 448,223 213,365 234,858 Forfeited in previous years (48,613) (24,308) (24,305) Shares outstanding at January 1, 2022 399,610 189,057 210,553 Forfeited during the year (8,582) (4,286) (4,296) Effect of 125% vesting based on TSR-ranking 51,584 \u2013 51,584 Effect of 150% vesting based on EPS-ranking 92,451 92,451 \u2013 Vested at December 31, 2022 535,063 277,222 257,841 LTIP 2021-23 base number of shares at 100% payout Total Adjusted EPS- condition ROIC-condition TSR-condition Conditionally awarded grant 2021 456,649 132,695 88,463 235,491 Forfeited in previous years (26,245) (7,874) (5,249) (13,122) Shares outstanding at January 1, 2022 430,404 124,821 83,214 222,369 Forfeited during the year (11,664) (3,485) (2,327) (5,852) Shares outstanding at December 31, 2022 418,740 121,336 80,887 216,517 LTIP 2022-24 base number of shares at 100% payout Total Adjusted EPS- condition ROIC-condition TSR-condition Conditionally awarded grant 2022 303,253 88,324 58,886 156,043 Forfeited during the year (562) (169) (112) (281) Shares outstanding at December 31, 2022 302,691 88,155 58,774 155,762 Overview of outstanding performance shares: LTIP 2021-23 and LTIP 2022-24 base numbers of shares at 100% payout LTIP 2021-23 LTIP 2022-24 Total Conditionally awarded grant 2021 456,649 \u2013 456,649 Forfeited in previous years (26,245) \u2013 (26,245) Shares outstanding at January 1, 2022 430,404 0 430,404 Conditionally awarded grant 2022 303,253 303,253 Forfeited during the year (11,664) (562) (12,226) Shares outstanding at December 31, 2022 418,740 302,691 721,431 ",
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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-520": {
"value": "ACCOUNTING POLICIES The Long-Term Incentive Plan (LTIP) quali\ufb01es as an equity-settled share-based payments transaction. Executive Board members and senior management are awarded shares under the LTIP with performance conditions based on Diluted Earnings per Share (EPS) at constant currencies and Total Shareholder Return (TSR) for the LTIP awards 2019-21 and 2020-22. For the LTIP 2021-23 and 2022-24 awards, the diluted EPS performance measure has been replaced by diluted adjusted EPS and a new performance measure of Return on Invested Capital (ROIC) has been introduced. The fair value of shares awarded is recognized as an expense with a corresponding increase in equity. The fair value is measured at the grant date and recognized over the period during which the employees become unconditionally entitled to the shares. The amount recognized as an expense is adjusted for actual forfeitures due to participants\u2019 resignations before the vesting date. TSR-condition The fair value of the shares based on the TSR performance condition, a market condition under IFRS 2 \u2013 Share-based Payment, is measured using a Monte Carlo simulation model considering the terms and conditions upon which the shares were awarded. Diluted (adjusted) EPS-condition and ROIC-condition The fair values of the shares based on the non-market performance conditions of diluted (adjusted) EPS and ROIC are equal to the opening share price of the Wolters Kluwer shares of the year of the grant, adjusted by the present value of the future dividend payments during the three-year performance period. The amount recognized as an expense in each year is adjusted to reflect the number of share awards for which the related service and non-market performance conditions are expected to be met, such that the amount ultimately recognized as an expense is based on the number of awards that meet the related service and non-market conditions at the vesting date. ",
"dimensions": {
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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-521": {
"value": "TSR-condition The fair value of the shares based on the TSR performance condition, a market condition under IFRS 2 \u2013 Share-based Payment, is measured using a Monte Carlo simulation model considering the terms and conditions upon which the shares were awarded. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForFairValueMeasurementExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
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},
"fact-522": {
"value": "Note 35 \u2013 Related Party Transactions The company has related party relationships with its subsidiaries, equity-accounted investees, pension funds, and members of the Supervisory Board and the Executive Board. Related party transactions are conducted at arm\u2019s length with terms comparable to transactions with third parties. The group has no signi\ufb01cant transactions with, receivables from, or payables to its equity-accounted investees. For transactions with key management, refer to Note 38 \u2013 Remuneration of the Executive Board and the Supervisory Board and the Remuneration Report. Wolters Kluwer N.V. has \ufb01led a list of subsidiaries and af\ufb01liated companies at the of\ufb01ces of the Chamber of Commerce of The Hague, the Netherlands. Note 38 \u2013 Remuneration of the Executive Board and the Supervisory Board REMUNERATION EXECUTIVE BOARD The table below provides the total compensation of the Executive Board recognized in the consolidated statement of pro\ufb01t or loss: in thousands of euros 2022 2021 Fixed compensation: Salary 2,260 2,042 Social security 123 44 Defined contribution plan 176 157 Other benefits * 385 775 Total fixed compensation 2,944 3,018 Variable compensation: STIP 2,818 2,853 LTIP ** 6,405 6,345 Total variable compensation 9,223 9,198 Sub-total fixed and variable compensation 12,167 12,216 Tax-related costs *** (525) 565 Total remuneration Executive Board 11,642 12,781 Salary, social security, other bene\ufb01ts, STIP, and tax-related costs are short-term employee bene\ufb01ts, de\ufb01ned contribution plan is a post-employment bene\ufb01t, and LTIP is a share-based payment scheme. * Executive Board members are eligible for bene\ufb01ts such as health insurance, life insurance, a car, and to participate in whatever all-employee plans may be offered at any given point. ** LTIP share-based payments are based on IFRS accounting policies and therefore do not reflect the actual payout or value of performance shares released upon vesting. *** Tax-related costs are costs to the company pertaining to the Executive Board members ex-patriate assignments. The 2022 tax-related costs decreased compared to 2021 mainly due to the cumulative tax impact of spending less time in the Netherlands from 2020 through 2022, lowering Ms. McKinstry\u2019s effective global tax rate. SHARES OWNED BY EXECUTIVE BOARD MEMBERS At December 31, 2022, the Executive Board jointly held 412,167 shares of the company (2021: 412,167 shares). REMUNERATION SUPERVISORY BOARD The total remuneration of the Supervisory Board members was \u20ac766 thousand in 2022 (2021: \u20ac678 thousand). SHARES OWNED BY SUPERVISORY BOARD MEMBERS At December 31, 2022, Mrs. A.E. Ziegler held 1,894 American Depositary Receipts of shares of the company (2021: 1,894 ADRs). For further details, refer to the Remuneration Report. ",
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"concept": "ifrs-full:DisclosureOfRelatedPartyExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-523": {
"value": "Note 36 \u2013 Audit Fees With reference to Section 2:382a (1) and (2) of the Dutch Civil Code, the following fees for the \ufb01nancial year have been charged by Deloitte Accountants B.V. to the group . Deloitte is not involved in most of the statutory audits of entities that are outside the scope of the group audit. AUDIT FEES 2022 Deloitte Accountants B.V. Other Deloitte member firms and affiliates Total Deloitte Statutory audit of annual accounts 1.0 2.0 3.0 Other assurance services 0.1 0.1 0.2 Tax advisory services \u2013 0.0 0.0 Other non-audit services \u2013 0.0 0.0 Total 1.1 2.1 3.2 AUDIT FEES 2021 Deloitte Accountants B.V. Other Deloitte member firms and affiliates Total Deloitte Statutory audit of annual accounts 1.0 2.0 3.0 Other assurance services 0.1 0.0 0.1 Tax advisory services \u2013 0.0 0.0 Other non-audit services 0.0 0.2 0.2 Total 1.1 2.2 3.3 The audit fees for 2022 and 2021 include \ufb01nal invoicing with respect to the statutory audits of 2021 and 2020, respectively. ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfAuditorsRemunerationExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-524": {
"value": "Note 37 \u2013 Commitments, Contingent Assets, and Contingent Liabilities GUARANTEES The group has the following outstanding guarantees at December 31: 2022 2021 Parental performance guarantees to third parties 5 12 Guarantee to the trustees of the U.K. retirement plan Note 31 20 21 Real estate and other guarantees 11 12 Drawn bank credit facilities 1 1 Total 37 46 At December 31, 2022, the total guarantees issued for bank credit facilities on behalf of several subsidiaries amounted to \u20ac114 million (2021: \u20ac113 million), of which \u20ac113 million was not utilized (2021: \u20ac112 million). LEGAL AND JUDICIAL PROCEEDINGS The group is involved in legal and judicial proceedings in the ordinary course of business. Provisions and contingencies relating to these matters are periodically assessed based upon the latest information available, usually with the assistance of lawyers and other specialists. While it is not practically possible to estimate the success rate of proceedings or claims against the group, the group has a policy to insure the group entities against such claims. The group did not have material contingent liabilities arising from legal and judicial proceedings at December 31, 2022, and December 31, 2021. OTHER COMMITMENTS For any commitments with respect to the group\u2019s share buybacks, refer to Note 33 \u2013 Capital and Reserves. ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfOtherProvisionsContingentLiabilitiesAndContingentAssetsExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-525": {
"value": "GUARANTEES The group has the following outstanding guarantees at December 31: 2022 2021 Parental performance guarantees to third parties 5 12 Guarantee to the trustees of the U.K. retirement plan Note 31 20 21 Real estate and other guarantees 11 12 Drawn bank credit facilities 1 1 Total 37 46 At December 31, 2022, the total guarantees issued for bank credit facilities on behalf of several subsidiaries amounted to \u20ac114 million (2021: \u20ac113 million), of which \u20ac113 million was not utilized (2021: \u20ac112 million). LEGAL AND JUDICIAL PROCEEDINGS The group is involved in legal and judicial proceedings in the ordinary course of business. Provisions and contingencies relating to these matters are periodically assessed based upon the latest information available, usually with the assistance of lawyers and other specialists. While it is not practically possible to estimate the success rate of proceedings or claims against the group, the group has a policy to insure the group entities against such claims. The group did not have material contingent liabilities arising from legal and judicial proceedings at December 31, 2022, and December 31, 2021. OTHER COMMITMENTS For any commitments with respect to the group\u2019s share buybacks, refer to Note 33 \u2013 Capital and Reserves. ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfCommitmentsAndContingentLiabilitiesExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-526": {
"value": "GUARANTEES The group has the following outstanding guarantees at December 31: 2022 2021 Parental performance guarantees to third parties 5 12 Guarantee to the trustees of the U.K. retirement plan Note 31 20 21 Real estate and other guarantees 11 12 Drawn bank credit facilities 1 1 Total 37 46 At December 31, 2022, the total guarantees issued for bank credit facilities on behalf of several subsidiaries amounted to \u20ac114 million (2021: \u20ac113 million), of which \u20ac113 million was not utilized (2021: \u20ac112 million). LEGAL AND JUDICIAL PROCEEDINGS The group is involved in legal and judicial proceedings in the ordinary course of business. Provisions and contingencies relating to these matters are periodically assessed based upon the latest information available, usually with the assistance of lawyers and other specialists. While it is not practically possible to estimate the success rate of proceedings or claims against the group, the group has a policy to insure the group entities against such claims. The group did not have material contingent liabilities arising from legal and judicial proceedings at December 31, 2022, and December 31, 2021. ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfContingentLiabilitiesExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-527": {
"value": "OTHER COMMITMENTS For any commitments with respect to the group\u2019s share buybacks, refer to Note 33 \u2013 Capital and Reserves. ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfCommitmentsExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-528": {
"value": "Note 38 \u2013 Remuneration of the Executive Board and the Supervisory Board REMUNERATION EXECUTIVE BOARD The table below provides the total compensation of the Executive Board recognized in the consolidated statement of pro\ufb01t or loss: in thousands of euros 2022 2021 Fixed compensation: Salary 2,260 2,042 Social security 123 44 Defined contribution plan 176 157 Other benefits * 385 775 Total fixed compensation 2,944 3,018 Variable compensation: STIP 2,818 2,853 LTIP ** 6,405 6,345 Total variable compensation 9,223 9,198 Sub-total fixed and variable compensation 12,167 12,216 Tax-related costs *** (525) 565 Total remuneration Executive Board 11,642 12,781 Salary, social security, other bene\ufb01ts, STIP, and tax-related costs are short-term employee bene\ufb01ts, de\ufb01ned contribution plan is a post-employment bene\ufb01t, and LTIP is a share-based payment scheme. * Executive Board members are eligible for bene\ufb01ts such as health insurance, life insurance, a car, and to participate in whatever all-employee plans may be offered at any given point. ** LTIP share-based payments are based on IFRS accounting policies and therefore do not reflect the actual payout or value of performance shares released upon vesting. *** Tax-related costs are costs to the company pertaining to the Executive Board members ex-patriate assignments. The 2022 tax-related costs decreased compared to 2021 mainly due to the cumulative tax impact of spending less time in the Netherlands from 2020 through 2022, lowering Ms. McKinstry\u2019s effective global tax rate. SHARES OWNED BY EXECUTIVE BOARD MEMBERS At December 31, 2022, the Executive Board jointly held 412,167 shares of the company (2021: 412,167 shares). REMUNERATION SUPERVISORY BOARD The total remuneration of the Supervisory Board members was \u20ac766 thousand in 2022 (2021: \u20ac678 thousand). SHARES OWNED BY SUPERVISORY BOARD MEMBERS At December 31, 2022, Mrs. A.E. Ziegler held 1,894 American Depositary Receipts of shares of the company (2021: 1,894 ADRs). For further details, refer to the Remuneration Report. ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfInformationAboutKeyManagementPersonnelExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-529": {
"value": "Note 39 \u2013 Overview of Signi\ufb01cant Subsidiaries
Below is a list of signi\ufb01cant subsidiaries at December 31, 2022, in alphabetical order (legal entity name and the unit of the organizational
structure it belongs to). The group has a 100% interest in all these subsidiaries.
AUSTRALIA
\u2022 Wolters Kluwer Australia Pty Limited (Tax & Accounting)
BELGIUM
\u2022 Wolters Kluwer Belgium NV (Tax & Accounting and
Legal & Regulatory)
\u2022 Wolters Kluwer Financial Services Belgium NV
(Governance, Risk & Compliance)
CANADA
\u2022 Wolters Kluwer Canada Limited (Tax & Accounting)
FRANCE
\u2022 Enablon S.A.S. (Legal & Regulatory)
GERMANY
\u2022 Akademische Arbeitsgemeinschaft Verlagsgesellschaft GmbH
(Tax & Accounting)
\u2022 Wolters Kluwer Deutschland GmbH (Legal & Regulatory)
\u2022 Wolters Kluwer Software und Service GmbH (Tax & Accounting)
IRELAND
\u2022 Wolters Kluwer Finance Ireland DAC (Corporate Of\ufb01ce)
\u2022 Wolters Kluwer Ireland Holding Limited (Corporate Of\ufb01ce)
ITALY
\u2022 Tagetik Software S.r.l. (Tax & Accounting)
\u2022 Wolters Kluwer Italia S.r.l. (Tax & Accounting and
Legal & Regulatory)
LUXEMBOURG
\u2022 Wolters Kluwer Financial Services Luxembourg S.A.
(Governance, Risk & Compliance)
POLAND
\u2022 Wolters Kluwer Polska SP. z o.o. (Legal & Regulatory)
SPAIN
\u2022 Wolters Kluwer Tax and Accounting Espa\u00f1a, S.L.
(Tax & Accounting)
THE NETHERLANDS
\u2022 eVision Industry Software B.V. (Legal & Regulatory)
\u2022 Wolters Kluwer Global Business Services B.V. (Global Business
Services)
\u2022 Wolters Kluwer Holding Nederland B.V. (Legal & Regulatory)
\u2022 Wolters Kluwer International Holding B.V. (Corporate Of\ufb01ce)
\u2022 Wolters Kluwer Nederland B.V. (Legal & Regulatory)
\u2022 Wolters Kluwer Technology B.V. (Digital eXperience Group)
\u2022 Wolters Kluwer USA Holding B.V. (Corporate Of\ufb01ce)
UNITED KINGDOM
\u2022 Wolters Kluwer Holdings (UK) PLC (Tax & Accounting)
\u2022 Wolters Kluwer (UK) Limited (Tax & Accounting)
UNITED STATES
\u2022 CCH Incorporated (Tax & Accounting and Legal & Regulatory)
\u2022 C T Corporation System (Governance, Risk & Compliance)
\u2022 Emmi Solutions, LLC (Health)
\u2022 eOriginal, Inc. (Governance, Risk & Compliance)
\u2022 Health Language, Inc. (Health)
\u2022 International Document Services, Inc. (Governance, Risk &
Compliance)
\u2022 National Registered Agents, Inc. (Governance, Risk &
Compliance)
\u2022 Ovid Technologies, Inc. (Health)
\u2022 Paperless Transaction Management, Inc. (Governance, Risk &
Compliance)
\u2022 Universal Tax Systems, Inc. (Tax & Accounting)
\u2022 UpToDate, Inc. (Health)
\u2022 Wolters Kluwer DXG U.S., Inc. (Digital eXperience Group)
\u2022 Wolters Kluwer ELM Solutions, Inc. (Governance, Risk
& Compliance)
\u2022 Wolters Kluwer Financial Services, Inc. (Tax & Accounting and
Governance, Risk & Compliance)
\u2022 Wolters Kluwer Health, Inc. (Health)
\u2022 Wolters Kluwer North America, Inc. (Corporate Of\ufb01ce)
\u2022 Wolters Kluwer R&D U.S. LP (Digital eXperience Group)
\u2022 Wolters Kluwer United States Inc. (Global Business Services
and Corporate Of\ufb01ce)
\u2022 Wolters Kluwer U.S. Corporation (Corporate Of\ufb01ce)
Note 39 \u2013 Overview of Signi\ufb01cant Subsidiaries continued
A subsidiary is categorized as signi\ufb01cant depending on its revenues, operating pro\ufb01t, net pro\ufb01t, and/or total assets.
In addition to these signi\ufb01cant subsidiaries, the group has other consolidated entities in the countries listed, and also in the
following countries: Austria, Brazil, China, the Czech Republic, Denmark, Hong Kong, Hungary, India, Indonesia, Japan, Malaysia, Mexico,
New Zealand, Norway, the Philippines, Portugal, Qatar, Romania, Russia, Singapore, Slovakia, South Africa, South Korea, Sweden,
Switzerland, and Ukraine.
The group also has branches in Finland, Saudi Arabia, Taiwan, Thailand, and the United Arab Emirates.
Apart from certain cash restrictions (refer to Note 27 \u2013 Cash and Cash Equivalents), there are no signi\ufb01cant restrictions on the
group\u2019s ability to access or use assets, or to settle liabilities. There are no interests in consolidated structured entities.
Refer to Note 8 \u2013 Acquisitions and Divestments for the consequences of losing control of subsidiaries during 2022 and 2021.
The \ufb01nancial statements of the parent and the subsidiaries used in the preparation of the consolidated \ufb01nancial statements have
the same reporting date, except for the group's Indian subsidiaries that have a March \ufb01nancial year end.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfInterestsInOtherEntitiesExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-530": {
"value": "Note 39 \u2013 Overview of Signi\ufb01cant Subsidiaries Below is a list of signi\ufb01cant subsidiaries at December 31, 2022, in alphabetical order (legal entity name and the unit of the organizational structure it belongs to). The group has a 100% interest in all these subsidiaries. AUSTRALIA \u2022 Wolters Kluwer Australia Pty Limited (Tax & Accounting) BELGIUM \u2022 Wolters Kluwer Belgium NV (Tax & Accounting and Legal & Regulatory) \u2022 Wolters Kluwer Financial Services Belgium NV (Governance, Risk & Compliance) CANADA \u2022 Wolters Kluwer Canada Limited (Tax & Accounting) FRANCE \u2022 Enablon S.A.S. (Legal & Regulatory) GERMANY \u2022 Akademische Arbeitsgemeinschaft Verlagsgesellschaft GmbH (Tax & Accounting) \u2022 Wolters Kluwer Deutschland GmbH (Legal & Regulatory) \u2022 Wolters Kluwer Software und Service GmbH (Tax & Accounting) IRELAND \u2022 Wolters Kluwer Finance Ireland DAC (Corporate Of\ufb01ce) \u2022 Wolters Kluwer Ireland Holding Limited (Corporate Of\ufb01ce) ITALY \u2022 Tagetik Software S.r.l. (Tax & Accounting) \u2022 Wolters Kluwer Italia S.r.l. (Tax & Accounting and Legal & Regulatory) LUXEMBOURG \u2022 Wolters Kluwer Financial Services Luxembourg S.A. (Governance, Risk & Compliance) POLAND \u2022 Wolters Kluwer Polska SP. z o.o. (Legal & Regulatory) SPAIN \u2022 Wolters Kluwer Tax and Accounting Espa\u00f1a, S.L. (Tax & Accounting) THE NETHERLANDS \u2022 eVision Industry Software B.V. (Legal & Regulatory) \u2022 Wolters Kluwer Global Business Services B.V. (Global Business Services) \u2022 Wolters Kluwer Holding Nederland B.V. (Legal & Regulatory) \u2022 Wolters Kluwer International Holding B.V. (Corporate Of\ufb01ce) \u2022 Wolters Kluwer Nederland B.V. (Legal & Regulatory) \u2022 Wolters Kluwer Technology B.V. (Digital eXperience Group) \u2022 Wolters Kluwer USA Holding B.V. (Corporate Of\ufb01ce) UNITED KINGDOM \u2022 Wolters Kluwer Holdings (UK) PLC (Tax & Accounting) \u2022 Wolters Kluwer (UK) Limited (Tax & Accounting) UNITED STATES \u2022 CCH Incorporated (Tax & Accounting and Legal & Regulatory) \u2022 C T Corporation System (Governance, Risk & Compliance) \u2022 Emmi Solutions, LLC (Health) \u2022 eOriginal, Inc. (Governance, Risk & Compliance) \u2022 Health Language, Inc. (Health) \u2022 International Document Services, Inc. (Governance, Risk & Compliance) \u2022 National Registered Agents, Inc. (Governance, Risk & Compliance) \u2022 Ovid Technologies, Inc. (Health) \u2022 Paperless Transaction Management, Inc. (Governance, Risk & Compliance) \u2022 Universal Tax Systems, Inc. (Tax & Accounting) \u2022 UpToDate, Inc. (Health) \u2022 Wolters Kluwer DXG U.S., Inc. (Digital eXperience Group) \u2022 Wolters Kluwer ELM Solutions, Inc. (Governance, Risk & Compliance) \u2022 Wolters Kluwer Financial Services, Inc. (Tax & Accounting and Governance, Risk & Compliance) \u2022 Wolters Kluwer Health, Inc. (Health) \u2022 Wolters Kluwer North America, Inc. (Corporate Of\ufb01ce) \u2022 Wolters Kluwer R&D U.S. LP (Digital eXperience Group) \u2022 Wolters Kluwer United States Inc. (Global Business Services and Corporate Of\ufb01ce) \u2022 Wolters Kluwer U.S. Corporation (Corporate Of\ufb01ce) Note 39 \u2013 Overview of Signi\ufb01cant Subsidiaries continued A subsidiary is categorized as signi\ufb01cant depending on its revenues, operating pro\ufb01t, net pro\ufb01t, and/or total assets. In addition to these signi\ufb01cant subsidiaries, the group has other consolidated entities in the countries listed, and also in the following countries: Austria, Brazil, China, the Czech Republic, Denmark, Hong Kong, Hungary, India, Indonesia, Japan, Malaysia, Mexico, New Zealand, Norway, the Philippines, Portugal, Qatar, Romania, Russia, Singapore, Slovakia, South Africa, South Korea, Sweden, Switzerland, and Ukraine. The group also has branches in Finland, Saudi Arabia, Taiwan, Thailand, and the United Arab Emirates. Apart from certain cash restrictions (refer to Note 27 \u2013 Cash and Cash Equivalents), there are no signi\ufb01cant restrictions on the group\u2019s ability to access or use assets, or to settle liabilities. There are no interests in consolidated structured entities. Refer to Note 8 \u2013 Acquisitions and Divestments for the consequences of losing control of subsidiaries during 2022 and 2021. The \ufb01nancial statements of the parent and the subsidiaries used in the preparation of the consolidated \ufb01nancial statements have the same reporting date, except for the group's Indian subsidiaries that have a March \ufb01nancial year end. ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfSignificantInvestmentsInSubsidiariesExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-531": {
"value": "Note 40 \u2013 Events after the Reporting Period
Subsequent events were evaluated up to February 21, 2023, which is the date the consolidated \ufb01nancial statements were authorized
for issuance by the Executive Board and the Supervisory Board.
On January 9, 2023, Wolters Kluwer Health completed the acquisition of 100% of the shares of NurseTim, Inc. (NurseTim), a U.S.-
based provider of nursing education solutions for \u20ac24 million, which is subject to a working capital settlement. There is no other
deferred and contingent consideration. NurseTim will become part of Wolters Kluwer\u2019s Health Learning, Research & Practice business,
which will create a comprehensive suite of solutions that generates greater value for customers. NurseTim is based in Minneapolis,
Minnesota, U.S., and has 48 employees. The group expects the investment to deliver a return on invested capital (ROIC) above its
weighted-average cost of capital (8%) within three to \ufb01ve years and expects the transaction to have an immaterial impact on adjusted
earnings. The group did not yet complete the purchase price allocation calculation due to the recent timing of the acquisition.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfEventsAfterReportingPeriodExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-532": {
"value": "N.V.",
"dimensions": {
"concept": "ifrs-full:LegalFormOfEntity",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"fact-533": {
"value": "Authorization for Issuance Alphen aan den Rijn, February 21, 2023 Executive Board N. McKinstry, CEO and Chair of the Executive Board K.B. Entricken, CFO and member of the Executive Board Supervisory Board A.E. Ziegler, Chair J.P. de Kreij, Vice-Chair B.J.F. Bodson J.A. Horan H.H. Kersten S. Vandebroek C.F.H.H. Vogelzang",
"dimensions": {
"concept": "ifrs-full:DisclosureOfAuthorisationOfFinancialStatementsExplanatory",
"language": "en",
"entity": "scheme:724500TEM53I0U077B74",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
}
}
}