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},
"f23045": {
"value": "Consolidated Statement of Cash Flows
\nfor the year ended 31\u00a0December
\n2022
2021
2020
\nNotes
$m
$m
$m
\nCash flows from operating activities
\nProfit/(loss) before tax
2,501
(265)
3,916
\nFinance income and expense
3
1,251
1,257
1,219
\nShare of after tax losses of associates and joint ventures
11
5
64
27
\nDepreciation, amortisation and impairment
5,480
6,530
3,149
\nIncrease in trade and other receivables
(1,349)
(961)
(739)
\nDecrease/(increase) in inventories
3,941
1,577
(621)
\nIncrease in trade and other payables and provisions
1,165
1,405
1,721
\nGains on disposal of intangible assets
2
(104)
(513)
(1,030)
\nGains on disposal of investments in associates and joint ventures
2
\u2013
(776)
\u2013
\nFair value movements on contingent consideration arising from business combinations
20
82
14
(272)
\nNon-cash and other movements
17
(692)
95
(276)
\nCash generated from operations
12,280
8,427
7,094
\nInterest paid
(849)
(721)
(733)
\nTax paid
(1,623)
(1,743)
(1,562)
\nNet cash inflow from operating activities
9,808
5,963
4,799
\nCash flows from investing activities
\nAcquisition of subsidiaries, net of cash acquired
27
(48)
(9,263)
\u2013
\nPayments upon vesting of employee share awards attributable to business combinations
27
(215)
(211)
\u2013
\nPayment of contingent consideration from business combinations
20
(772)
(643)
(822)
\nPurchase of property, plant and equipment
(1,091)
(1,091)
(961)
\nDisposal of property, plant and equipment
282
13
106
\nPurchase of intangible assets
(1,480)
(1,109)
(1,645)
\nDisposal of intangible assets and assets held for sale
447
587
951
\nMovement in profit-participation liability
2
\u2013
20
40
\nPurchase of non-current asset investments
(45)
(184)
(119)
\nDisposal of non-current asset investments
42
9
1,381
\nMovement in short-term investments, fixed deposits and other investing instruments
(114)
96
745
\nPayments to associates and joint ventures
11
(26)
(92)
(8)
\nDisposal of investments in associates and joint ventures
\u2013
776
\u2013
\nInterest received
60
34
47
\nNet cash outflow from investing activities
(2,960)
(11,058)
(285)
\nNet cash inflow/(outflow) before financing activities
6,848
(5,095)
4,514
\nCash flows from financing activities
\nProceeds from issue of share capital
29
29
30
\nIssue of loans and borrowings
\u2013
12,929
2,968
\nRepayment of loans and borrowings
(1,271)
(4,759)
(1,609)
\nDividends paid
(4,364)
(3,856)
(3,572)
\nHedge contracts relating to dividend payments
(127)
(29)
(101)
\nRepayment of obligations under leases
(244)
(240)
(207)
\nMovement in short-term borrowings
74
(276)
288
\nPayments to acquire non-controlling interests
\u2013
(149)
\u2013
\nPayment of Acerta Pharma share purchase liability
(920)
\u2013
\u2013
\nNet cash (outflow)/inflow from financing activities
(6,823)
3,649
(2,203)
\nNet increase/(decrease) in Cash and cash equivalents in the period
25
(1,446)
2,311
\nCash and cash equivalents at the beginning of the period
6,038
7,546
5,223
\nExchange rate effects
(80)
(62)
12
\nCash and cash equivalents at the end of the period
17
5,983
6,038
7,546
Timing of cash \ufb02ows and interest
\nThe Group is currently under audit in several
\ncountries and the timing of any resolution of
\nthese audits is uncertain.
\nIt is not possible to estimate the timing of tax
\ncash \ufb02ows in relation to each outcome. It is
\nanticipated that tax payments may be required
\nin relation to a number of signi\ufb01cant disputes
\nwhich may be resolved over the next one to two
\nyears. AstraZeneca considers the tax liabilities
\nset out above to appropriately re\ufb02ect the
\nexpected value of any \ufb01nal settlement. Some
\nof the items discussed above are not currently
\nwithin the scope of tax authority audits and
\nmay take longer to resolve.
\nIncluded within other payables is a net amount
\nof interest arising on tax contingencies of
\n$106m (2021: $85m; 2020: $82m).
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfCashFlowStatementExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f23058": {
"value": "2501000000",
"decimals": -6,
"dimensions": {
"concept": "ifrs-full:ProfitLossBeforeTax",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
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"value": "Group Accounting Policies \nBasis of accounting and preparation
\nof \ufb01nancial information
\nThe Consolidated Financial Statements have
\nbeen prepared under the historical cost
\nconvention, modi\ufb01ed to include revaluation to
\nfair value of certain \ufb01nancial instruments as
\ndescribed below, in accordance with UK-
\nadopted International Accounting Standards
\nand with the requirements of the Companies
\nAct 2006 as applicable to companies reporting
\nunder those standards. The Consolidated
\nFinancial Statements also comply fully with
\nInternational Financial Reporting Standards
\n(IFRSs) as issued by the International Accounting
\nStandards Board (IASB) and International
\nAccounting Standards as adopted by the
\nEuropean Union.
\nThe Consolidated Financial Statements are
\npresented in US dollars, which is the Company\u2019s
\nfunctional currency.
\nIn preparing their individual \ufb01nancial statements,
\nthe accounting policies of some overseas
\nsubsidiaries do not conform with IASB-issued
\nIFRSs. Therefore, where appropriate,
\nadjustments are made in order to present
\nthe Consolidated Financial Statements on a
\nconsistent basis.
\nBasis for preparation of Financial
\nStatements on a going concern basis
\nThe Group has considerable \ufb01nancial resources
\navailable. As at 31 December 2022, the Group
\nhas $11.1bn in \ufb01nancial resources (Cash and
\ncash equivalent balances of $6.2bn and
\nundrawn committed bank facilities of $4.9bn
\navailable until April 2026 with only $5.5bn of
\nborrowings due within one year). All facilities
\ncontain no \ufb01nancial covenants and were
\nundrawn at 31 December 2022. On 2 February
\n2023, the Group entered into an additional
\n$2.0bn of two-year committed bank facilities.
\nThe Group\u2019s revenues are largely derived from
\nsales of medicines covered by patents, which
\nprovide a relatively high level of resilience
\nand predictability to cash in\ufb02ows, although
\ngovernment price interventions in response to
\nbudgetary constraints are expected to continue
\nto adversely affect revenues in some of our
\nsigni\ufb01cant markets. The Group, however,
\nanticipates new revenue streams from both
\nrecently launched medicines and those in
\ndevelopment, and the Group has a wide
\ndiversity of customers and suppliers across
\ndifferent geographic areas.
\nConsequently, the Directors believe that, overall,
\nthe Group is well placed to manage its business
\nrisks successfully. Accordingly, they continue
\nto adopt the going concern basis in preparing
\nthe Annual Report and Financial Statements.
\nEstimates and judgements
\nThe preparation of the Financial Statements in
\nconformity with generally accepted accounting
\nprinciples requires management to make
\nestimates and judgements that affect the
\nreported amounts of assets and liabilities at
\nthe date of the Financial Statements and the
\nreported amounts of revenues and expenses
\nduring the reporting period. Actual results
\ncould differ from those estimates.
\nThe accounting policy descriptions set out the
\nareas where judgements and estimates need
\nexercising, the most signi\ufb01cant of which include
\nthe following Key Judgements
and
\nSigni\ufb01cant Estimates
:
\n>
revenue recognition \u2013 see Revenue
\nAccounting Policy on page 142
\nand Note 1 on page 149
\n>
expensing of internal development
\nexpenses \u2013 see Research and
\nDevelopment Policy on page 144
\n>
impairment reviews of Intangible assets
\n\u2013 see Note 10 on page 161
\n>
useful economic life of Intangible assets \u2013
\nsee Research and Development Policy
\non page 144
\n>
business combinations and Goodwill \u2013 see
\nBusiness Combinations and Goodwill
\nPolicy on page 146
and Note 27
\non page 182
\n>
litigation liabilities \u2013 see Litigation and
\nEnvironmental Liabilities within Note 30
\non page 192
\n>
operating segments \u2013 see Note 6 on
\npage 157
\n>
employee bene\ufb01ts \u2013 see Note 22 on
\npage 173
\n>
taxation \u2013 see Note 30 on page 192
.
\nAstraZeneca has assessed the impact of
\nthe uncertainty presented by the COVID-19
\npandemic and the Russia-Ukraine con\ufb02ict on
\nthe Financial Statements, speci\ufb01cally
\nconsidering the impact on key judgements
\nand signi\ufb01cant estimates along with several
\nother areas of increased risk. No material
\naccounting impacts relating to COVID-19 or
\nthe Russia-Ukraine con\ufb02ict were recognised
\nin the year.
\nThe Group will continue to monitor these areas
\nof increased judgement, estimation and risk
\nfor material changes.
\nThe Group has assessed the impact of climate
\nrisk on its \ufb01nancial reporting. The impact
\nassessment was primarily focused on the
\nvaluation and useful lives of intangible assets
\nand the identi\ufb01cation and valuation of provisions
\nand contingent liabilities, as these are judged
\nto be the key areas that could be impacted by
\nclimate risks. No material accounting impacts
\nor changes to judgements or other required
\ndisclosures were noted.
\nKey Judgements are those judgements
\nmade in applying the Group\u2019s accounting
\npolicies that have a material effect on the
\namounts of assets and liabilities recognised
\nin the \ufb01nancial statements.
\nA Signi\ufb01cant Estimate has a signi\ufb01cant
\nrisk of material adjustment to the carrying
\namounts of assets and liabilities within the
\nnext \ufb01nancial year.
\nFinancial risk management policies are
\ndetailed in Note 28 to the Financial Statements
\nfrom page 184.
\nAstraZeneca\u2019s management considers the
\nfollowing to be the most signi\ufb01cant accounting
\npolicies in the context of the Group\u2019s operations.
\nRevenue
\nRevenue comprises Product Sales and
\nCollaboration Revenue.
\nRevenue excludes inter-company revenues
\nand value-added taxes.
\nProduct Sales
\nProduct Sales represent net invoice value less
\nestimated rebates, returns and chargebacks,
\nwhich are considered to be variable
\nconsideration and include signi\ufb01cant estimates.
\nSales are recognised when the control of the
\ngoods has been transferred to a third party.
\nThis is usually when title passes to the customer,
\neither on shipment or on receipt of goods by
\nthe customer, depending on local trading
\nterms. In markets where returns are signi\ufb01cant,
\nestimates of the quantity and value of goods
\nwhich may ultimately be returned are accounted
\nfor at the point revenue is recognised. Revenue
\nis not recognised in full until it is highly probable
\nthat a signi\ufb01cant reversal in the amount of
\ncumulative revenue recognised will not occur.
\nRebates are amounts payable or credited to
\na customer, usually based on the quantity or
\nvalue of Product Sales to the customer for
\nspeci\ufb01c products in a certain period. Product
\nsales rebates, which relate to Product Sales
\nthat occur over a period of time, are normally
\nissued retrospectively.
\nAt the time Product Sales are invoiced, rebates
\nand deductions that the Group expects to pay
\nare estimated based upon assumptions
\ndeveloped using contractual terms, historical
\nexperience and market related information.
\nThe rebates and deductions are recognised
\nas variable consideration and recorded as a
\nreduction to revenue with an accrual recorded.
\nThese rebates typically arise from sales
\ncontracts with government payers, third-party
\nmanaged care organisations, hospitals,
\nlong-term care facilities, group purchasing
\norganisations and various state programmes.
\n142
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
\n\n\nOur returns accruals are based on actual
\nexperience over the preceding 12 months for
\nestablished products together with market-
\nrelated information such as estimated stock
\nlevels at wholesalers and competitor activity
\nwhich we receive via third-party information
\nservices. For newly launched products, we
\nuse rates based on our experience with similar
\nproducts or a predetermined percentage.
\nWhen a product faces generic competition,
\nparticular attention is given to the possible
\nlevels of returns and, in cases where the
\ncircumstances are such that the level of
\nProduct Sales are considered highly probable
\nto reverse, revenues are only recognised when
\nthe right of return expires, which is generally on
\nultimate prescription of the product to patients.
\nThe methodology and assumptions used to
\nestimate rebates and returns are monitored and
\nadjusted regularly in the light of contractual
\nand legal obligations, historical trends, past
\nexperience and projected market conditions.
\nOnce the uncertainty associated with returns
\nis resolved, revenue is adjusted accordingly.
\nUnder certain collaboration agreements
\nwhich include a pro\ufb01t sharing mechanism,
\nour recognition of Product Sales depends on
\nwhich party acts as principal in sales to the
\nend customer. In the cases where AstraZeneca
\nacts as principal, we record 100% of sales to
\nthe end customer.
\nContracts relating to the supply of certain
\nVaccines & Immune Therapies medicines
\nrelating to the COVID-19 pandemic include
\nconditions whereby payments are receivable
\nfrom customers in advance of the delivery
\nof product. Such amounts are held on the
\nbalance sheet as contract liabilities until the
\nrelated revenue is recognised, generally upon
\nproduct delivery. Certain of these contracts
\ncontain further provisions that restrict the use
\nof inventory manufactured in speci\ufb01ed supply
\nchains to speci\ufb01ed customers, resulting in an
\nenforceable right to payment as the activities
\nare performed. Under IFRS 15, such contracts
\nrequire revenue to be recognised over time
\nusing an appropriate and reasonably
\nmeasurable method to measure progress.
\nRevenue is recognised on these contracts
\nbased on the proportion of product delivered
\ncompared to the total contracted volumes.
\nCertain arrangements include bill-and-hold
\narrangements under which the Group invoices
\na customer for a product but retains physical
\npossession of the product until it is transferred
\nto the customer at a point in time in the future.
\nFor these types of arrangements, an
\nassessment is made to determine when the
\nperformance obligation has been satis\ufb01ed,
\nwhich is when control of the product is
\ntransferred to the customer. If the customer
\nhas obtained control of the product even though
\nthat product remains in the Group\u2019s physical
\npossession, the performance obligation to
\ntransfer a product has been satis\ufb01ed and
\nProduct Sales are recognised. Control is
\nconsidered to have transferred when the
\nproduct is segregated as belonging to the
\ncustomer, is readily available to be delivered
\nto the customer and AstraZeneca is unable to
\nsell the product to another customer.
\nCollaboration Revenue
\nCollaboration Revenue includes income from
\ncollaborative arrangements where either the
\nGroup has out-licensed (sold) or has in-licenced
\n(acquired) certain rights associated with
\nproducts, where either AstraZeneca (out-
\nlicences) or the collaborator (in-licences) retains
\na signi\ufb01cant ongoing economic interest in the
\nproduct. Signi\ufb01cant interest can include
\nongoing supply of \ufb01nished goods, pro\ufb01t
\nsharing arrangements or being principal in the
\nsales of medicines. These collaborations may
\ninclude development, manufacturing and/or
\ncommercialisation arrangements with the
\ncollaborator. Income from out-licences may
\ntake the form of upfront fees, milestones and
\nroyalties and income from in-licences may
\ncomprise the sharing of pro\ufb01t arising from
\nsales made as principal by the collaborator.
\nTiming of recognition of clinical and
\nregulatory milestones is considered to be
\na key judgement. There can be signi\ufb01cant
\nuncertainty over whether it is highly probable
\nthat there would not be a signi\ufb01cant reversal
\nof revenue in respect of speci\ufb01c milestones
\nif these are recognised before they are
\ntriggered due to them being subject to the
\nactions of third parties. In general, where
\nthe triggering of a milestone is subject to the
\ndecisions of third parties (e.g. the acceptance
\nor approval of a \ufb01ling by a regulatory
\nauthority), the Group does not consider that
\nthe threshold for recognition is met until that
\ndecision is made.
\nWhere Collaboration Revenue arises from
\nthe licensing of the Group\u2019s own intellectual
\nproperty, the licences we grant are typically
\nrights to use intellectual property which do not
\nchange during the period of the licence and
\ntherefore related non-conditional revenue is
\nrecognised at the point the license is granted
\nand variable consideration as soon as
\nrecognition criteria are met.
\nOther performance obligations in the contract
\nmight include the supply of product. These
\narrangements typically involve the receipt of an
\nupfront payment, which the contract attributes
\nto the license of the intangible assets, and
\nongoing receipts for supply, which the contract
\nattributes to the sale of the product we
\nmanufacture. In cases where the transaction
\nhas two or more components, we account for
\nthe delivered item (for example, the transfer
\nof title to the intangible asset) as a separate
\nunit of account and record revenue on
\ndelivery of that component. Where practicable,
\nconsideration is allocated to performance
\nobligations on the basis of the standalone
\nselling price of each performance obligation.
\nHowever, where there is a licence of intellectual
\nproperty, it is not always possible to establish
\na reliable estimate of the standalone selling price
\nof the licence as they are unique. Therefore, in
\nthese rare situations, the residual approach is
\nused to determine the consideration attributable
\nto the licence.
\nWhere \ufb01xed amounts are payable over one
\nyear from the effective date of a contract, an
\nassessment is made as to whether a signi\ufb01cant
\n\ufb01nancing component exists, and if so, the fair
\nvalue of this component is deferred and
\nrecognised as \ufb01nancing income over the
\nperiod to the expected date of receipt.
\nWhere control of a right to use licence for an
\nintangible asset passes at the outset of an
\narrangement, revenue is recognised at the
\npoint in time control is transferred. Where the
\nsubstance of a licence arrangement is that of
\na right to access rights attributable to an
\nintangible asset, revenue is recognised over
\ntime, normally on a straight-line basis over the
\nlife of the contract.
\nWhere the Group provides ongoing development
\nservices, revenue in respect of this element is
\nrecognised over the duration of those services.
\nWhere the arrangement meets the de\ufb01nition of
\na licence agreement, sales milestones and
\nsales royalties are recognised when achieved
\nby applying the royalty exemption under IFRS 15.
\nAll other milestones and sales royalties are
\nrecognised when considered it is highly
\nprobable there will not be a signi\ufb01cant reversal
\nof cumulative income. The determination
\nrequires estimates to be made in relation to
\nfuture Product Sales.
\nWhere Collaboration Revenue is recorded
\nand there is a related Intangible asset that is
\nlicensed as part of the arrangement, an
\nappropriate amount of that Intangible asset
\nis charged to Cost of sales based on an
\nallocation of cost or value to the rights that
\nhave been licenced.
\nThe Group periodically enters into transactions
\nwhere it acquires part of the rights to a product
\nintangible (either on-market or in-process
\nR&D), but for commercial reasons does not
\nact as principal in selling the product to the
\ncustomer and therefore does not recognise
\nincome from the product in the form of
\nProduct Sales. This may occur where, for
\nexample, a collaboration partner retains the
\nright to commercialise in a speci\ufb01c territory,
\nand has suf\ufb01cient local control over that
\ncommercialisation to book product sale
\nrevenue, while the Group instead receives a
\nproportion of the value generated by those
\nproduct sales, either in the form of a royalty or
\na pro\ufb01t share (alliance revenue).
\n143
AstraZeneca Annual Report & Form 20-F Information 2022
Group Accounting Policies
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
Cost of sales
\nCost of sales are recognised as the associated
\nrevenue is recognised. Cost of sales include
\nmanufacturing costs, royalties payable on
\nrevenues recognised, movements in provisions
\nfor inventories, inventory write-offs and
\nimpairment charges in relation to manufacturing
\nassets. Cost of sales also includes co-
\ncollaborator sharing of pro\ufb01t arising from
\ncollaborations, and foreign exchange gains and
\nlosses arising from business trading activities.
\nResearch and development
\nResearch expenditure is charged to pro\ufb01t and
\nloss in the year in which it is incurred.
\nInternal development expenditure is
\ncapitalised only if it meets the recognition
\ncriteria of IAS 38 \u2018Intangible Assets\u2019. This is
\nconsidered a key judgement. Where regulatory
\nand other uncertainties are such that the
\ncriteria are not met, the expenditure is
\ncharged to pro\ufb01t and loss and this is almost
\ninvariably the case prior to approval of the
\ndrug by the relevant regulatory authority.
\nWhere, however, recognition criteria are met,
\nIntangible assets are capitalised and
\namortised on a straight-line basis over their
\nuseful economic lives from product launch.
\nAt 31 December 2022, no amounts have met
\nthe recognition criteria.
\nPayments to in-license products and
\ncompounds from third parties for new research
\nand development projects (in process research
\nand development) generally take the form of
\nupfront payments, milestones and royalty
\npayments. Where payments made to third
\nparties represent consideration for future
\nresearch and development activities, an
\nevaluation is made as to the nature of the
\npayments. Such payments are expensed if they
\nrepresent compensation for sub-contracted
\nresearch and development services not
\nresulting in a transfer of intellectual property.
\nBy contrast, payments are capitalised if they
\nrepresent compensation for the transfer of
\nidenti\ufb01able intellectual property developed at
\nthe risk of the third party. Such payments may
\nbe made once development or regulatory
\nmilestones are met and may also be made on
\nthe basis of sales volumes once a product is
\nlaunched. Development and regulatory
\nmilestone payments are capitalised as the
\nmilestone is triggered. Sales-related payments
\nare accrued and capitalised with reference to
\nthe latest Group sales forecasts for approved
\nindications. Assets capitalised are amortised,
\non a straight-line basis, over their useful
\neconomic lives from product launch.
\nThe determination of useful economic
\nlife is considered to be a key judgement.
\nOn product launch, the Group makes a
\njudgement as to the expected useful
\neconomic life with reference to the expiry
\nof associated patents for the product,
\nexpectation around the competitive
\nenvironment speci\ufb01c to the product and
\nour detailed long-term risk-adjusted sales
\nprojections compiled annually across the
\nGroup and approved by the Board.
\nThe useful economic life can extend beyond
\npatent expiry dependent upon the nature
\nof the product and the complexity of the
\ndevelopment and manufacturing process.
\nSigni\ufb01cant sales can often be achieved post
\npatent expiration.
\nIntangible assets
\nIntangible assets are stated at cost less
\namortisation and impairments. Intangible assets
\nrelating to products in development are subject
\nto impairment testing annually. All Intangible
\nassets are tested for impairment when there
\nare indications that the carrying value may
\nnot be recoverable. The determination of the
\nrecoverable amounts include key estimates
\nwhich are highly sensitive to, and depend
\nupon, key assumptions as detailed in Note 10
\nto the Financial Statements from page 161.
\nImpairment reviews have been carried out on
\nall Intangible assets that are in development
\n(and not being amortised), all major intangible
\nassets acquired during the year and all other
\nintangible assets that have had indications
\nof impairment during the year. Recoverable
\namount is determined as the higher of value
\nin use or fair value less costs to sell using a
\ndiscounted cash \ufb02ow calculation, with the
\nproducts\u2019 expected cash \ufb02ows risk-adjusted
\nover their estimated remaining useful economic
\nlife. Sales forecasts and speci\ufb01c allocated
\ncosts (which have both been subject to
\nappropriate senior management review and
\napproval) are risk-adjusted and discounted
\nusing appropriate rates based on our post-tax
\nweighted average cost of capital or for fair value
\nless costs to sell, a required rate of return for a
\nmarket participant. Our weighted average cost
\nof capital re\ufb02ects factors such as our capital
\nstructure and our costs of debt and equity.
\nAny impairment losses are recognised
\nimmediately in Operating pro\ufb01t. Intangible
\nassets relating to products which fail during
\ndevelopment (or for which development
\nceases for other reasons) are also tested for
\nimpairment and are written down to their
\nrecoverable amount (which is usually nil).
\nIf, subsequent to an impairment loss being
\nrecognised, development restarts or other
\nfacts and circumstances change indicating
\nthat the impairment is less or no longer exists,
\nthe value of the asset is re-estimated and its
\ncarrying value is increased to the recoverable
\namount, but not exceeding the original value,
\nby recognising an impairment reversal in
\nOperating pro\ufb01t.
\nGovernment grants
\nGovernment grants are recognised in the
\nConsolidated Statement of Comprehensive
\nIncome so as to match with the related
\nexpenses that they are intended to compensate.
\nWhere grants are received in advance of the
\nrelated expenses, they are initially recognised
\nin the Consolidated Statement of Financial
\nPosition under Trade and other payables as
\ndeferred income and released to net off
\nagainst the related expenditure when incurred.
\nEach contract is assessed to determine
\nwhether there are both grant elements and
\nsupply of product which need to be separated.
\nIn each case, the contracts set out the
\nspeci\ufb01ed terms for the supply of the product
\nand the provisions for funding for certain costs,
\nprimarily research and development associated
\nwith the IP. It is considered whether there are
\nany conditions for the funding to be refunded.
\nThe consideration in the contract is allocated
\nbetween the grant and supply elements.
\nThe standalone selling price for the supply
\nof products is determined by reference to
\nobserved prices with other customers.
\nThe amount allocated as a government grant
\nis determined by reference to the speci\ufb01c
\nagreed costs and activities identi\ufb01ed in the
\ncontract as not directly attributable to the
\nsupply of product. Government grants are
\nrecorded as an offset to the relevant
\nexpense in the Consolidated Statement of
\nComprehensive Income and are capped to
\nmatch the relevant costs incurred.
\nJoint arrangements and associates
\nThe Group has arrangements over which it
\nhas joint control and which qualify as joint
\noperations or joint ventures under IFRS 11
\n\u2018Joint Arrangements\u2019. For joint operations,
\nthe Group recognises its share of revenue
\nthat it earns from the joint operations and its
\nshare of expenses incurred. The Group also
\nrecognises the assets associated with the
\njoint operations that it controls and the
\nliabilities it incurs under the joint arrangement.
\nFor joint ventures and associates, the Group
\nrecognises its interest in the joint venture or
\nassociate as an investment and uses the
\nequity method of accounting.
\nEmployee bene\ufb01ts
\nThe Group accounts for pensions and other
\nemployee bene\ufb01ts (principally healthcare)
\nunder IAS 19 \u2018Employee Bene\ufb01ts\u2019. In respect
\nof de\ufb01ned bene\ufb01t plans, obligations are
\ndetermined using the projected unit credit
\nmethod and are discounted to present value
\nby reference to market yields on high-quality
\ncorporate bonds, while plan assets are
\nmeasured at fair value. Given the extent of the
\nassumptions used to determine the value of
\nscheme assets and scheme liabilities, these
\nare considered to be signi\ufb01cant estimates.
\nThe operating and \ufb01nancing costs of such plans
\nare recognised separately in pro\ufb01t; current
\nservice costs are spread systematically over
\nthe lives of employees and \ufb01nancing costs are
\nrecognised in full in the periods in which they
\narise. Remeasurements of the net de\ufb01ned
\nbene\ufb01t pension liability, including actuarial
\ngains and losses, are recognised immediately
\nin Other comprehensive income.
\nGroup Accounting Policies
\ncontinued
\n144
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
Where the calculation results in a surplus to the
\nGroup, the recognised asset is limited to the
\npresent value of any available future refunds
\nfrom the plan or reductions in future
\ncontributions to the plan subject to consideration
\nof the effect any minimum funding requirement
\nfor future service has on the bene\ufb01t available
\nas a reduction in future contributions.
\nPayments to de\ufb01ned contribution plans are
\nrecognised in pro\ufb01t as they fall due.
\nTaxation
\nThe current tax payable is based on taxable
\npro\ufb01t for the year. Taxable pro\ufb01t differs from
\nreported pro\ufb01t because taxable pro\ufb01t excludes
\nitems that are either never taxable or tax
\ndeductible or items that are taxable or tax
\ndeductible in a different period. The Group\u2019s
\ncurrent tax assets and liabilities are calculated
\nusing tax rates that have been enacted or
\nsubstantively enacted by the reporting date.
\nDeferred tax is provided using the balance
\nsheet liability method, providing for temporary
\ndifferences between the carrying amounts of
\nassets and liabilities for \ufb01nancial reporting
\npurposes and the amounts used for taxation
\npurposes. Deferred tax assets are recognised
\nto the extent that there are future taxable
\ntemporary differences or it is probable that
\nfuture taxable pro\ufb01t will be available against
\nwhich the asset can be utilised. This requires
\njudgements to be made in respect of the
\navailability of future taxable income.
\nNo deferred tax asset or liability is recognised
\nin respect of temporary differences associated
\nwith investments in subsidiaries and branches
\nwhere the Group is able to control the timing
\nof reversal of the temporary differences and it
\nis probable that the temporary differences will
\nnot reverse in the foreseeable future.
\nThe Group\u2019s Deferred tax assets and liabilities
\nare calculated using tax rates that are
\nexpected to apply in the period when the
\nliability is settled or the asset realised based
\non tax rates that have been enacted or
\nsubstantively enacted by the reporting date.
\nDeferred tax assets and liabilities are offset in
\nthe Consolidated Statement of Financial
\nPosition if, and only if, the taxable entity has a
\nlegally enforceable right to set off current tax
\nassets and liabilities, and the Deferred tax
\nassets and liabilities relate to taxes levied by
\nthe same taxation authority on the same
\ntaxable entity.
\nLiabilities for uncertain tax positions require
\nmanagement to make judgements of potential
\nexposures in relation to tax audit issues. Tax
\nbene\ufb01ts are not recognised unless the tax
\npositions will probably be accepted by the tax
\nauthorities. This is based upon management\u2019s
\ninterpretation of applicable laws and regulations
\nand the expectation of how the tax authority
\nwill resolve the matter. Once considered
\nprobable of not being accepted, management
\nreviews each material tax bene\ufb01t and re\ufb02ects
\nthe effect of the uncertainty in determining the
\nrelated taxable result.
\nLiabilities for uncertain tax positions are
\nmeasured using either the most likely amount
\nor the expected value amount depending on
\nwhich method the entity expects to better
\npredict the resolution of the uncertainty.
\nFurther details of the estimates and assumptions
\nmade in determining our recorded liability for
\ntransfer pricing contingencies and other tax
\ncontingencies are included in Note 30 to the
\nFinancial Statements from page 192.
\nShare-based payments
\nAll plans have been classi\ufb01ed as equity settled
\nafter assessment. The grant date fair value of
\nthe market-based performance elements of
\nemployee share plan awards is calculated using
\na modi\ufb01ed Monte Carlo model, with other
\nelements at market price. In accordance with
\nIFRS 2 \u2018Share-based Payment\u2019, the resulting
\ncost is recognised in pro\ufb01t on a straight-line
\nbasis over the vesting period of the awards.
\nThe value of the charge is adjusted to re\ufb02ect
\nexpected and actual levels of awards vesting,
\nexcept where the failure to vest is as a result of
\nnot meeting a market condition. Cancellations of
\nequity instruments are treated as an acceleration
\nof the vesting period and any outstanding
\ncharge is recognised in pro\ufb01t immediately.
\nCash out\ufb02ows relating to the vesting of share
\nplans for our employees are recognised within
\noperating activities, as they relate to employee
\nremuneration. The cash \ufb02ows relating to
\nreplacement awards issued to employees as
\npart of the Alexion acquisition (see Note 27
\nfrom page 182) are classi\ufb01ed within investing
\nactivities, as they are part of the aggregate
\ncash \ufb02ows arising from obtaining control of
\nthe subsidiary.
\nProperty, plant and equipment
\nThe Group\u2019s policy is to depreciate the
\ndifference between the cost of each item of
\nProperty, plant and equipment and its residual
\nvalue over its estimated useful life on a
\nstraight-line basis. Assets under construction
\nare not depreciated until the asset is available
\nfor use, at which point the asset is transferred
\ninto either Land and buildings or Plant and
\nequipment, and depreciated over its estimated
\nuseful economic life.
\nReviews are made annually of the estimated
\nremaining lives and residual values of individual
\nproductive assets, taking account of commercial
\nand technological obsolescence as well as
\nnormal wear and tear. It is impractical to
\ncalculate average asset lives exactly. However,
\nthe useful economic lives range from
\napproximately 10 to 50 years for buildings,
\nand three to 15 years for plant and equipment.
\nAll items of Property, plant and equipment are
\ntested for impairment when there are indications
\nthat the carrying value may not be recoverable.
\nAny impairment losses are recognised
\nimmediately in Operating pro\ufb01t.
\nLeases
\nThe Group\u2019s lease arrangements are principally
\nfor property, most notably a portfolio of of\ufb01ce
\npremises and employee accommodation, and
\nfor a global car \ufb02eet, utilised primarily by our
\nsales and marketing teams.
\nThe lease liability and corresponding right-of-
\nuse asset arising from a lease are initially
\nmeasured on a present value basis. Lease
\nliabilities include the net present value of the
\nfollowing lease payments:
\n>
\ufb01xed payments, less any lease
\nincentives receivable
\n>
variable lease payments that depend on an
\nindex or a rate, initially measured using the
\nindex or rate as at the commencement date
\n>
the exercise price of a purchase option if
\nthe Group is reasonably certain to exercise
\nthat option
\n>
payments of penalties for terminating the
\nlease, if the lease term re\ufb02ects the Group
\nexercising that option, and
\n>
amounts expected to be payable by the
\nGroup under residual value guarantees.
\nRight-of-use assets are measured at cost
\ncomprising the following:
\n>
the amount of the initial measurement of
\nlease liability
\n>
any lease payments made at or before
\nthe commencement date less any lease
\nincentives received
\n>
any initial direct costs, and
\n> restoration costs.
\nJudgements made in calculating the lease
\nliability include assessing whether arrangements
\ncontain a lease and determining the lease term.
\nLease terms are negotiated on an individual
\nbasis and contain a wide range of different
\nterms and conditions. Property leases will often
\ninclude an early termination or extension option
\nto the lease term. Fleet management policies
\nvary by jurisdiction and may include renewal
\nof a lease until a measurement threshold,
\nsuch as mileage, is reached. Extension and
\ntermination options have been considered
\nwhen determining the lease term, along with
\nall facts and circumstances that may create
\nan economic incentive to exercise an extension
\noption, or not exercise a termination option.
\nExtension periods (or periods after termination
\noptions) are only included in the lease term if
\nthe lease is reasonably certain to be extended
\n(or not terminated).
\nThe lease payments are discounted using
\nincremental borrowing rates, as in the majority
\nof leases held by the Group the interest rate
\nimplicit in the lease is not readily identi\ufb01able.
\nCalculating the discount rate is an estimate
\nmade in calculating the lease liability. This rate
\nis the rate that the Group would have to pay to
\nborrow the funds necessary to obtain an asset
\nof similar value to the right-of-use asset in a
\nsimilar economic environment with similar
\nterms, security and conditions. To determine
\n145
AstraZeneca Annual Report & Form 20-F Information 2022
Group Accounting Policies
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
the incremental borrowing rate, the Group
\nuses a risk-free interest rate adjusted for
\ncredit risk, adjusting for terms speci\ufb01c to the
\nlease including term, country and currency.
\nThe Group is exposed to potential future
\nincreases in variable lease payments that are
\nbased on an index or rate, which are initially
\nmeasured as at the commencement date, with
\nany future changes in the index or rate
\nexcluded from the lease liability until they take
\neffect. When adjustments to lease payments
\nbased on an index or rate take effect, the
\nlease liability is reassessed and adjusted
\nagainst the right-of-use asset.
\nLease payments are allocated between
\nprincipal and \ufb01nance cost. The \ufb01nance cost is
\ncharged to the Consolidated Statement of
\nComprehensive Income over the lease period
\nso as to produce a constant periodic rate of
\ninterest on the remaining balance of the
\nliability for each period.
\nPayments associated with short-term leases
\nof Property, plant and equipment and all
\nleases of low-value assets are recognised
\non a straight-line basis as an expense in the
\nConsolidated Statement of Comprehensive
\nIncome. Short-term leases are leases with a
\nlease term of 12 months or less. Low-value
\nleases are those where the underlying asset
\nvalue, when new, is $5,000 or less and includes
\nIT equipment and small items of of\ufb01ce furniture.
\nContracts may contain both lease and
\nnon-lease components. The Group allocates
\nthe consideration in the contract to the lease
\nand non-lease components based on their
\nrelative standalone prices.
\nRight-of-use assets are generally depreciated
\nover the shorter of the asset\u2019s useful life and
\nthe lease term on a straight-line basis. If the
\nGroup is reasonably certain to exercise a
\npurchase option, the right-of-use asset is
\ndepreciated over the underlying asset\u2019s useful
\nlife. It is impractical to calculate average asset
\nlives exactly. However, the total lives range
\nfrom approximately 10 to 50 years for buildings,
\nand three to 15 years for motor vehicles and
\nother assets.
\nThere are no material lease agreements under
\nwhich the Group is a lessor.
\nBusiness combinations and goodwill
\nIn assessing whether an acquired set of
\nassets and activities is a business or an asset,
\nmanagement will \ufb01rst elect whether to apply
\nan optional concentration test to simplify the
\nassessment. Where the concentration test is
\napplied, the acquisition will be treated as the
\nacquisition of an asset if substantially all of
\nthe fair value of the gross assets acquired
\n(excluding cash and cash equivalents,
\ndeferred tax assets, and related goodwill) is
\nconcentrated in a single asset or group of
\nsimilar identi\ufb01able assets.
\nWhere the concentration test is not applied,
\nor is not met, a further assessment of whether
\nthe acquired set of assets and activities is a
\nbusiness will be performed.
\nThe determination of whether an acquired
\nset of assets and activities is a business or
\nan asset can be judgemental, particularly if
\nthe target is not producing outputs.
\nManagement uses a number of factors to
\nmake this determination, which are primarily
\nfocused on whether the acquired set of
\nassets and activities include substantive
\nprocesses that mean the set is capable of
\nbeing managed for the purpose of providing
\na return. Key determining factors include the
\nstage of development of any assets acquired,
\nthe readiness and ability of the acquired set
\nto produce outputs and the presence of key
\nexperienced employees capable of
\nconducting activities required to develop or
\nmanufacture the assets. Typically, the
\nspecialised nature of many pharmaceutical
\nassets and processes is such that until
\nassets are substantively ready for production
\nand promotion, there are not the required
\nprocesses for a set of assets and activities
\nto meet the de\ufb01nition of a business in IFRS 3.
\nOn the acquisition of a business, fair values
\nare attributed to the identi\ufb01able assets and
\nliabilities. Attributing fair values is a key
\njudgement; refer to Note 27 to the Financial
\nStatements on page 182 for additional details
\nof the 2021 acquisition. Contingent liabilities
\nare also recorded at fair value unless the fair
\nvalue cannot be measured reliably, in which
\ncase the value is subsumed into goodwill.
\nWhere fair values of acquired contingent
\nliabilities cannot be measured reliably, the
\nassumed contingent liability is not recognised
\nbut is disclosed in the same manner as other
\ncontingent liabilities. Where the Group fully
\nacquires, through a business combination,
\nassets that were previously held in joint
\noperations, the Group has elected not to uplift
\nthe book value of the existing interest in the
\nasset held in the joint operation to fair value at
\nthe date full control is taken.
\nWhere not all of the equity of a subsidiary
\nis acquired, the non-controlling interest is
\nrecognised either at fair value or at the
\nnon-controlling interest\u2019s proportionate
\nshare of the net assets of the subsidiary,
\non a case-by-case basis. Put options over
\nnon-controlling interests are recognised as
\na \ufb01nancial liability, with a corresponding entry
\nin either Retained earnings or against
\nnon-controlling interest reserves on a
\ncase-by-case basis.
\nThe timing and amount of future contingent
\nelements of consideration is an estimate.
\nContingent consideration, which may include
\ndevelopment and launch milestones, revenue
\nthreshold milestones and revenue-based
\nroyalties, is fair valued at the date of acquisition
\nusing decision-tree analysis with key inputs
\nincluding probability of success, consideration
\nof potential delays and revenue projections
\nbased on the Group\u2019s internal forecasts.
\nUnsettled amounts of consideration are held
\nat fair value within payables with changes in
\nfair value recognised immediately in pro\ufb01t.
\nGoodwill is the difference between the fair
\nvalue of the consideration and the fair value of
\nnet assets acquired.
\nGoodwill arising on acquisitions is capitalised
\nand subject to an impairment review, both
\nannually and when there is an indication that
\nthe carrying value may not be recoverable.
\nThe Group\u2019s policy up to and including 1997
\nwas to eliminate Goodwill arising upon
\nacquisitions against reserves. Under IFRS 1
\n\u2018First-time Adoption of International Financial
\nReporting Standards\u2019 and IFRS 3 \u2018Business
\nCombinations\u2019, such Goodwill will remain
\neliminated against reserves.
\nSubsidiaries
\nA subsidiary is an entity controlled, directly
\nor indirectly, by AstraZeneca PLC. Control is
\nregarded as the exposure or rights to the
\nvariable returns of the entity when combined
\nwith the power to affect those returns. Control
\nis normally evidenced by holding more than 50%
\nof the share capital of the company, however
\nother agreements may be in place that result
\nin control where they give AstraZeneca \ufb01nance
\ndecision-making authority over the relevant
\nactivities of the company.
\nThe \ufb01nancial results of subsidiaries are
\nconsolidated from the date control is obtained
\nuntil the date that control ceases.
\nInventories
\nInventories are stated at the lower of cost and
\nnet realisable value. The \ufb01rst in, \ufb01rst out or an
\naverage method of valuation is used. For
\n\ufb01nished goods and work in progress, cost
\nincludes directly attributable costs and certain
\noverhead expenses (including depreciation).
\nSelling expenses and certain other overhead
\nexpenses (principally central administration
\ncosts) are excluded. Net realisable value is
\ndetermined as estimated selling price less all
\nestimated costs of completion and costs to be
\nincurred in selling and distribution.
\nWrite-downs of inventory occur in the general
\ncourse of business and are recognised in
\nCost of sales for launched or approved
\nproducts and in Research and development
\nexpense for products in development.
\nAssets held for sale
\nNon-current assets are classi\ufb01ed as Assets
\nheld for sale when their carrying amount is to be
\nrecovered principally through a sale transaction
\nand a sale is considered highly probable.
\nA sale is considered highly probable only
\nwhen the appropriate level of management
\nhas committed to the sale.
\nGroup Accounting Policies
\ncontinued
\n146
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
Assets held for sale are stated at the lower of
\ncarrying amount and fair value less costs to sell.
\nWhere there is a partial transfer of a non-current
\nasset to held for sale, an allocation of value is
\nmade between the current and non-current
\nportions of the asset based on the relative
\nvalue of the two portions, unless there is a
\nmethodology that better re\ufb02ects the asset to
\nbe disposed of.
\nAssets held for sale are not depreciated
\nor amortised.
\nTrade and other receivables
\nFinancial assets included in Trade and other
\nreceivables are recognised initially at fair value.
\nThe Group holds the Trade receivables with the
\nobjective to collect the contractual cash \ufb02ows
\nand therefore measures them subsequently at
\namortised cost using the effective interest rate
\nmethod, less any impairment losses.
\nTrade receivables that are subject to debt
\nfactoring arrangements are derecognised if
\nthey meet the conditions for derecognition
\ndetailed in IFRS 9 \u2018Financial Instruments\u2019.
\nTrade and other payables
\nFinancial liabilities included in Trade and other
\npayables are recognised initially at fair value.
\nSubsequent to initial recognition they are
\nmeasured at amortised cost using the effective
\ninterest rate method. Contingent consideration
\npayables are held at fair value within Level 3 of
\nthe fair value hierarchy as de\ufb01ned in Note 12.
\nFinancial instruments
\nThe Group\u2019s \ufb01nancial instruments include Lease
\nliabilities, Trade and other receivables and
\npayables, liabilities for contingent consideration
\nand put options under business combinations,
\nand rights and obligations under employee
\nbene\ufb01t plans which are dealt with in speci\ufb01c
\naccounting policies.
\nThe Group\u2019s other \ufb01nancial instruments include:
\n>
Cash and cash equivalents
\n> Fixed deposits
\n> Other investments
\n>
Bank and other borrowings
\n> Derivatives.
\nCash and cash equivalents
\nCash and cash equivalents comprise cash in
\nhand, current balances with banks and similar
\ninstitutions, and highly liquid investments
\nwith maturities of three months or less when
\nacquired. They are readily convertible into
\nknown amounts of cash and are held at
\namortised cost under the hold to collect
\nclassi\ufb01cation, where they meet the hold to
\ncollect \u2018solely payments of principal and
\ninterest\u2019 test criteria under IFRS 9. Those not
\nmeeting these criteria are held at fair value
\nthrough pro\ufb01t and loss. Cash and cash
\nequivalents in the Consolidated Statement of
\nCash Flows include unsecured bank overdrafts
\nat the balance sheet date where balances often
\n\ufb02uctuate between a cash and overdraft position.
\nFixed deposits
\nFixed deposits, principally comprising
\nfunds held with banks and other \ufb01nancial
\ninstitutions, are initially measured at fair
\nvalue, plus direct transaction costs, and are
\nsubsequently measured at amortised cost
\nusing the effective interest rate method at
\neach reporting date. Changes in carrying
\nvalue are recognised in the Consolidated
\nStatement of Comprehensive Income.
\nOther investments
\nInvestments are classi\ufb01ed as fair value through
\npro\ufb01t or loss (FVPL), unless the Group makes
\nan irrevocable election at initial recognition for
\ncertain non-current equity investments to
\npresent changes in Other comprehensive
\nincome (FVOCI). If this election is made, there
\nis no subsequent reclassi\ufb01cation of fair value
\ngains and losses to pro\ufb01t and loss following
\nthe derecognition of the investment.
\nBank and other borrowings
\nThe Group uses derivatives, principally
\ninterest rate swaps, to hedge the interest rate
\nexposure inherent in a portion of its \ufb01xed
\ninterest rate debt. In such cases the Group will
\neither designate the debt as fair value through
\npro\ufb01t and loss when certain criteria are met or
\nas the hedged item under a fair value hedge.
\nIf the debt instrument is designated as fair
\nvalue through pro\ufb01t or loss, the debt is initially
\nmeasured at fair value (with direct transaction
\ncosts being included in pro\ufb01t as an expense)
\nand is remeasured to fair value at each reporting
\ndate with changes in carrying value being
\nrecognised in pro\ufb01t (along with changes in the
\nfair value of the related derivative), with the
\nexception of changes in the fair value of the debt
\ninstrument relating to own credit risk which are
\nrecorded in Other comprehensive income in
\naccordance with IFRS 9. Such a designation has
\nbeen made where this signi\ufb01cantly reduces an
\naccounting mismatch which would result from
\nrecognising gains and losses on different bases.
\nIf the debt is designated as the hedged item
\nunder a fair value hedge, the debt is initially
\nmeasured at fair value (with direct transaction
\ncosts being amortised over the life of the debt)
\nand is remeasured for fair value changes in
\nrespect of the hedged risk at each reporting
\ndate with changes in carrying value being
\nrecognised in pro\ufb01t (along with changes in the
\nfair value of the related derivative).
\nIf the debt is designated in a cash \ufb02ow hedge,
\nthe debt is measured at amortised cost (with
\ngains or losses taken to pro\ufb01t and direct
\ntransaction costs being amortised over the
\nlife of the debt). The related derivative is
\nremeasured for fair value changes at each
\nreporting date with the portion of the gain or
\nloss on the derivative that is determined to
\nbe an effective hedge recognised in Other
\ncomprehensive income. The amounts that
\nhave been recognised in Other comprehensive
\nincome are reclassi\ufb01ed to pro\ufb01t in the same
\nperiod that the hedged forecast cash \ufb02ows
\naffect pro\ufb01t. The reclassi\ufb01cation adjustment is
\nincluded in Finance expense in the Consolidated
\nStatement of Comprehensive Income.
\nOther interest-bearing loans are initially
\nmeasured at fair value (with direct transaction
\ncosts being amortised over the life of the loan)
\nand are subsequently measured at amortised
\ncost using the effective interest rate method at
\neach reporting date. Changes in carrying
\nvalue are recognised in the Consolidated
\nStatement of Comprehensive Income.
\nDerivatives
\nDerivatives are initially measured at fair value
\n(with direct transaction costs being included
\nin pro\ufb01t as an expense) and are subsequently
\nremeasured to fair value at each reporting
\ndate. Changes in carrying value of derivatives
\nnot designated in hedging relationships are
\nrecognised in pro\ufb01t or loss.
\nThe Group has agreements with some bank
\ncounterparties whereby the parties agree to
\npost cash collateral, for the bene\ufb01t of the other,
\nequivalent to the market valuation of all of the
\nderivative positions above a predetermined
\nthreshold. Cash collateral received from
\ncounterparties is included within current
\nInterest-bearing loans and borrowings within the
\nConsolidated Statement of Financial Position.
\nCash collateral pledged to counterparties is
\nrecognised as a \ufb01nancial asset and is included
\nin current Other investments within the
\nConsolidated Statement of Financial Position.
\nIn prior years, cash collateral pledged to
\ncounterparties was included in Cash and
\ncash equivalents. Cash collateral received is
\nincluded in Movement in short-term borrowings
\nwithin \ufb01nancing activities in the Consolidated
\nCash Flow Statement. Cash collateral paid
\nis included in Movements in short-term
\ninvestments within investing activities in the
\nConsolidated Cash Flow Statement. The cash
\n\ufb02ow presentation of cash paid and received
\nfollows the Consolidated Statement of
\nFinancial Position presentation of the \ufb01nancial
\nasset and \ufb01nancial liability that is recognised
\nfrom posting the collateral.
\nForeign currencies
\nForeign currency transactions, being
\ntransactions denominated in a currency other
\nthan an individual Group entity\u2019s functional
\ncurrency, are translated into the relevant
\nfunctional currencies of individual Group entities
\nat average rates for the relevant monthly
\naccounting periods, which approximate to
\nactual rates.
\nMonetary assets and liabilities arising from
\nforeign currency transactions are retranslated
\nat exchange rates prevailing at the reporting
\ndate. Exchange gains and losses on loans and
\non short-term foreign currency borrowings
\nand deposits are included within Finance
\nexpense. Exchange differences on all other
\nforeign currency transactions are recognised
\nin Operating pro\ufb01t in the individual Group
\nentity\u2019s accounting records.
\n147
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Group Accounting Policies
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
Non-monetary items arising from foreign
\ncurrency transactions are not retranslated in the
\nindividual Group entity\u2019s accounting records.
\nIn the Consolidated Financial Statements,
\nincome and expense items for Group entities
\nwith a functional currency other than US dollars
\nare translated into US dollars at average
\nexchange rates, which approximate to actual
\nrates, for the relevant accounting periods.
\nAssets and liabilities are translated at the
\nUS dollar exchange rates prevailing at the
\nreporting date. Exchange differences arising
\non consolidation are recognised in Other
\ncomprehensive income.
\nIf certain criteria are met, non-US dollar-
\ndenominated loans or derivatives are designated
\nas net investment hedges of foreign operations.
\nExchange differences arising on retranslation
\nof net investments, and of foreign currency
\nloans which are designated in an effective net
\ninvestment hedge relationship, are recognised
\nin Other comprehensive income in the
\nConsolidated Financial Statements. Foreign
\nexchange derivatives hedging net investments
\nin foreign operations are carried at fair value.
\nEffective fair value movements are recognised
\nin Other comprehensive income, with any
\nineffectiveness taken to pro\ufb01t. Gains and
\nlosses accumulated in the translation reserve
\nwill be recycled to pro\ufb01t and loss when the
\nforeign operation is sold.
\nProvisions
\nProvisions are recognised when either a legal
\nor constructive obligation as a result of a past
\nevent exists at the Consolidated Statement of
\nFinancial Position date, it is probable that an
\nout\ufb02ow of economic resources will be required
\nto settle the obligation and a reasonable
\nestimate can be made of the amount of the
\nobligation (the timing or amount of the liability
\nis uncertain).
\nLitigation and environmental liabilities
\nAstraZeneca is involved in legal disputes, the
\nsettlement of which may involve cost to the
\nGroup. Provision is made where an adverse
\noutcome is probable and associated costs,
\nincluding related legal costs, can be estimated
\nreliably. In other cases, appropriate disclosures
\nare included. Determining the timing of
\nrecognition of when an adverse outcome is
\nprobable is considered a key judgement, refer
\nto Note 30 to the Financial Statements on
\npage 192.
\nWhere it is considered that the Group is more
\nlikely than not to prevail, or in the extremely
\nrare circumstances where the amount of the
\nlegal liability cannot be estimated reliably,
\nlegal costs involved in defending the claim are
\ncharged to the Consolidated Statement of
\nComprehensive Income as they are incurred.
\nWhere it is considered that the Group has
\na valid contract which provides the right to
\nreimbursement (from insurance or otherwise)
\nof legal costs and/or all or part of any loss
\nincurred or for which a provision has been
\nestablished, the best estimate of the amount
\nexpected to be received is recognised as an
\nasset only when it is virtually certain.
\nAstraZeneca is exposed to environmental
\nliabilities relating to its past operations,
\nprincipally in respect of soil and groundwater
\nremediation costs. Provisions for these costs
\nare made when there is a present obligation
\nand where it is probable that expenditure on
\nremedial work will be required and a reliable
\nestimate can be made of the cost. Provisions
\nare discounted at the relevant pre-tax discount
\nrate where the effect is material.
\nRestructuring
\nRestructuring costs are incurred in programmes
\nthat are planned and controlled by the Group
\nwhich materially change either the scope of
\na business undertaken by the Group, or the
\nmanner in which that business is conducted.
\nA provision for restructuring costs is recognised
\nwhen a detailed formal plan is in place and
\nhas either been announced to those affected
\nor has started to be implemented. The general
\nrecognition criteria for provisions must also be
\nmet, as described in the Provisions policy.
\nImpairment
\nThe carrying values of non-\ufb01nancial assets,
\nother than Inventories and Deferred tax assets,
\nare reviewed at least annually to determine
\nwhether there is any indication of impairment.
\nFor Goodwill, Intangible assets under
\ndevelopment and for any other assets where
\nsuch indication exists, the asset\u2019s recoverable
\namount is estimated based on the greater of
\nits value in use and its fair value less cost to
\nsell. In assessing the recoverable amount, the
\nestimated future cash \ufb02ows, adjusted for the
\nrisks associated with the probability of success
\nspeci\ufb01c to each asset, as well as in\ufb02ationary
\nimpacts, are discounted to their present value
\nusing a nominal discount rate that re\ufb02ects
\ncurrent market assessments of the time value
\nof money, the general risks affecting the
\npharmaceutical industry and other risks
\nspeci\ufb01c to each asset. For the purpose of
\nimpairment testing, assets are grouped
\ntogether into the smallest group of assets that
\ngenerates cash in\ufb02ows from continuing use
\nthat are largely independent of the cash \ufb02ows
\nof other assets. Impairment losses are
\nrecognised immediately in the Consolidated
\nStatement of Comprehensive Income.
\nInternational accounting transition
\nOn transition to using adopted IFRSs in the
\nyear ended 31 December 2005, the Group took
\nadvantage of several optional exemptions
\navailable in IFRS 1 \u2018First-time Adoption of
\nInternational Financial Reporting Standards\u2019.
\nThe major impacts which are of continuing
\nimportance are detailed below:
\n>
Business combinations\u2013 IFRS 3 \u2018Business
\nCombinations\u2019 has been applied from
\n1 January 2003, the date of transition, rather
\nthan being applied fully retrospectively.
\nAs a result, the combination of Astra and
\nZeneca is still accounted for as a merger,
\nrather than through purchase accounting.
\nIf purchase accounting had been adopted,
\nZeneca would have been deemed to have
\nacquired Astra.
\n> Cumulative exchange differences\u2013
\nthe Group chose to set the cumulative
\nexchange difference reserve at
\n1 January 2003 to nil.
\nApplicable accounting standards
\nand interpretations issued but not
\nyet adopted
\nAt the date of authorisation of these \ufb01nancial
\nstatements, certain new accounting standards
\nand amendments were in issue relating to the
\nfollowing standards and interpretations but
\nnot yet adopted by the Group:
\n>
amendments to IAS 12 \u2018Income Taxes\u2019,
\nIAS 8 \u2018Accounting Policies, Changes in
\nAccounting Estimates and Errors\u2019, IAS 1
\n\u2018Presentation of Financial Statements\u2019
\nand IFRS Practice Statement 2 \u2018Making
\nMateriality Judgements\u2019, effective for
\nperiods beginning on or after 1 January
\n2023 \u2013 endorsed by the UK Endorsement
\nBoard (UKEB) on 30 November 2022
\n>
new accounting standard IFRS 17 \u2018Insurance
\nContracts\u2019, effective for periods beginning
\non or after 1 January 2023 \u2013 endorsed by
\nthe UKEB on 16 May 2022, and
\n>
amendments to IAS 1 \u2018Presentation of
\nFinancial Statements\u2019 and IFRS 16 \u2018Leases\u2019,
\neffective for periods beginning on or after
\n1 January 2024 \u2013 not endorsed by the UKEB.
\nThese new standards, amendments and
\ninterpretations are not expected to have a
\nsigni\ufb01cant impact on the Group\u2019s net results.
\nGroup Accounting Policies
\ncontinued
\n148
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
Notes to the Group Financial Statements
\n1 Revenue
\nProduct Sales
\n2022
2021
2020
\nEmerging
Rest of
Emerging
Rest of
Emerging
Rest of
\nMarkets
US
Europe
World
Total
Markets
US
Europe
World
Total
Markets
US
Europe
World
Total
\n$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
\nOncology:
\nTagrisso
1,567
2,007
1,023
847
5,444
1,336
1,780
986
913
5,015
1,208
1,566
748
806
4,328
\nImfinzi
287
1,552
544
401
2,784
277
1,245
485
405
2,412
158
1,185
370
329
2,042
\nLynparza
488
1,226
655
269
2,638
384
1,087
618
259
2,348
264
876
435
201
1,776
\nCalquence
45
1,657
286
69
2,057
20
1,089
111
18
1,238
6
511
2
3
522
\nEnhertu
51
\u2013
21
7
79
12
\u2013
4
1
17
\u2013
\u2013
\u2013
\u2013
\u2013
\nOrpathys
33
\u2013
\u2013
\u2013
33
16
\u2013
\u2013
\u2013
16
\u2013
\u2013
\u2013
\u2013
\u2013
\nZoladex
657
15
133
122
927
\u00a0
619
13
147
169
948
561
5
140
182
888
\nFaslodex
159
17
55
103
334
\u00a0
167
30
113
121
431
180
55
221
124
580
\nIressa
94
9
2
9
114
151
11
5
16
183
221
14
12
21
268
\nArimidex
76
\u2013
\u2013
23
99
\u00a0
106
\u2013
4
29
139
147
\u2013
3
35
185
\nCasodex
53
\u2013
1
24
78
\u00a0
105
\u2013
3
35
143
133
\u2013
3
36
172
\nOthers
27
1
6
10
44
29
\u2013
5
16
50
28
\u2013
4
19
51
\n3,537
6,484
2,726
1,884
14,631
\u00a0
3,222
5,255
2,481
1,982
12,940
2,906
4,212
1,938
1,756
10,812
\nCardiovascular, Renal & Metabolism:
\u00a0
\nFarxiga
1,665
1,071
1,297
348
4,381
\u00a0
1,195
732
810
263
3,000
686
569
507
197
1,959
\nBrilinta
286
744
282
46
1,358
\u00a0
328
735
346
63
1,472
461
732
342
58
1,593
\nLokelma
20
170
30
69
289
3
115
13
44
175
5
57
4
10
76
\nRoxadustat
197
\u2013
\u2013
\u2013
197
174
\u2013
\u2013
\u2013
174
\u2013
\u2013
\u2013
\u2013
\u2013
\nAndexxa
\u2013
77
41
32
150
\u2013
50
18
\u2013
68
\u2013
\u2013
\u2013
\u2013
\u2013
\nCrestor
794
65
41
148
1,048
\u00a0
775
80
52
189
1,096
748
92
129
211
1,180
\nSeloken
/
Toprol-XL
839
\u2013
14
9
862
\u00a0
928
1
11
11
951
782
13
16
10
821
\nBydureon
3
242
35
\u2013
280
\u00a0
3
321
55
6
385
4
382
53
9
448
\nOnglyza
121
76
38
22
257
\u00a0
179
88
61
32
360
201
166
58
45
470
\nOthers
194
34
128
10
366
\u00a0
195
52
146
14
407
316
72
119
42
549
\n4,119
2,479
1,906
684
9,188
\u00a0
3,780
2,174
1,512
622
8,088
3,203
2,083
1,228
582
7,096
\nRespiratory & Immunology:
\u00a0
\nSymbicort
608
973
582
375
2,538
\u00a0
609
1,065
670
384
2,728
567
1,022
694
438
2,721
\nFasenra
43
906
305
142
1,396
\u00a0
20
790
286
162
1,258
12
603
203
131
949
\nBreztri
92
239
33
34
398
55
115
7
26
203
14
5
\u2013
9
28
\nSaphnelo
\u2013
111
2
3
116
\u2013
8
\u2013
\u2013
8
\u2013
\u2013
\u2013
\u2013
\u2013
\nTezspire
\u2013
\u2013
2
2
4
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\nPulmicort
462
65
69
49
645
770
72
73
47
962
798
71
73
54
996
\nDaliresp
/
Daxas
3
176
9
1
189
\u00a0
4
207
15
1
227
4
190
22
1
217
\nBevespi
5
42
10
1
58
4
39
11
\u2013
54
1
44
3
\u2013
48
\nOthers
230
143
42
6
421\u00a0
287
108
185
14
594
203
6
176
13
398
\n1,443
2,655
1,054
613
5,765\u00a0
1,749
2,404
1,247
634
6,034
1,599
1,941
1,171
646
5,357
\nVaccines & Immune Therapies:
\nVaxzevria
729
79
365
625
1,798
2,240
64
1,035
578
3,917
\u2013
\u2013
2
\u2013
2
\nEvusheld
413
1,067
298
407
2,185
19
\u2013
66
\u2013
85
\u2013
\u2013
\u2013
\u2013
\u2013
\nSynagis
173
1
213
191
578
\u00a0
35
23
203
149
410
\u2013
47
325
\u2013
372
\nFluMist
1
21
151
2
175\u00a0
2
27
222
2
253
1
70
219
5
295
\n1,316
1,168
1,027
1,225
4,736
2,296
114
1,526
729
4,665
1
117
546
5
669
\nRare Disease:
\nSoliris
301
2,180
805
476
3,762
170
1,068
439
197
1,874
\u2013
\u2013
\u2013
\u2013
\u2013
\nUltomiris
38
1,136
481
310
1,965
9
381
169
129
688
\u2013
\u2013
\u2013
\u2013
\u2013
\nStrensiq
35
769
78
76
958
10
297
36
35
378
\u2013
\u2013
\u2013
\u2013
\u2013
\nKoselugo
26
162
20
\u2013
208
1
104
3
\u2013
108
\u2013
38
\u2013
\u2013
38
\nKanuma
31
77
44
8
160
7
32
20
3
62
\u2013
\u2013
\u2013
\u2013
\u2013
\n431
4,324
1,428
870
7,053
197
1,882
667
364
3,110
\u2013
38
\u2013
\u2013
38
\nOther:
\u00a0
\nNexium
568
120
46
551
1,285
\u00a0
705
128
62
431
1,326
757
169
71
495
1,492
\nOthers
220
24
77
19
340
\u00a0
212
43
109
14
378
213
78
105
30
426
\n788
144
123
570
1,625
\u00a0
917
171
171
445
1,704
970
247
176
525
1,918
\nProduct Sales
11,634
17,254
8,264
5,846
42,998
\u00a0
12,161
12,000
7,604
4,776
36,541
8,679
8,638
5,059
3,514
25,890
\n149
AstraZeneca Annual Report & Form 20-F Information 2022
Notes to the Group Financial Statements
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
1 Revenue
continued
\nRebates and chargebacks in the US
\nThe major market where estimates are seen as signi\ufb01cant is the US. When invoicing Product Sales in the US, we estimate the rebates and chargebacks
\nwe expect to pay and we consider there to be a signi\ufb01cant estimate associated with the rebates for Managed Care, Medicaid and Medicare Part D.
\nThe total adjustment in respect of prior year net US Product Sales revenue in 2022 was 1.3% (2021: 1.5%; 2020: 3.5%); this represents the difference
\nbetween our prior year estimates for rebates and chargebacks against actual amounts paid for the US business. The most signi\ufb01cant of these relate
\nto the Medicaid and state programmes with an adjustment in respect of prior year net US Product Sales revenue in 2022 of 0.5% (2021: 0.4%;
\n2020: 1.1%) and Managed Care and Medicare of 0.8% (2021: 0.7%; 2020: 1.5%).
\nThe adjustment in respect of the prior year net US Product Sales revenue, excluding the Rare Disease therapy area in 2022, was 1.6% (2021: 1.8%),
\nwith Medicaid and state programmes of 0.6% (2021: 0.5%) and Managed Care and Medicare of 1.1% (2021: 0.8%).
\nThese values demonstrate the level of sensitivity; further meaningful sensitivity is not able to be provided due to the large volume of variables that
\ncontribute to the overall rebates, chargebacks, returns and other revenue accruals.
\nCollaboration Revenue
\n2022
2021
2020
\n$m
$m\u00a0
$m
\nEnhertu
: alliance revenue
\n1
\n519
193
94
\nTezspire
: alliance revenue
\n1
\n79
\u2013
\u2013
\nRoxadustat: alliance revenue
\n1
\n5
6
30
\nLynparza
/
Koselugo
(MSD) \u2013 regulatory milestones
355
\u2013
160
\nLynparza
/
Koselugo
(MSD) \u2013 sales-related milestones
\u2013
400
300
\nTralokinumab: sales milestone
110
\u2013
\u2013
\nVaxzevria
: royalties
76
64
\u2013
\nOther royalty income
72
74
62
\nNexium
: sale of rights
62
75
\u2013
\nOther Collaboration Revenue
75
64
81
\n1,353
876
727
\n1
Alliance revenue (previously referred to as share of gross profits) comprises income arising from collaborative arrangements, where AstraZeneca is entitled to a share of gross profits but
\ndoes not lead on the commercialisation in the territory and so does not recognise Product Sales. Alliance revenue is included within Collaboration Revenue.
\nCollaboration Revenue includes some income that does not arise from the satisfaction of performance obligations, in particular pro\ufb01t share entitlements
\narising from product sales made by collaborators who have licenced intellectual property to AstraZeneca. $607m of Collaboration Revenue in 2022
\n(2021: $200m; 2020: $128m) relates to such income. Substantially all other Collaboration Revenue relates to performance obligations satis\ufb01ed in
\nprior periods.
\n2 Operating pro\ufb01t
\nOperating pro\ufb01t includes the following signi\ufb01cant items:
\nCost of sales
\nIn 2022, Cost of sales includes a charge of $3,484m (2021: charge of $2,198m) in relation to the release, in line with sales, of fair value uplift to inventory
\nthat was recognised under IFRS 3 \u2018Business Combinations\u2019 upon the acquisition of Alexion (see Note 27).
\nDuring the year no government grants were recognised within Cost of sales (2021: $290m; 2020: $nil). The grants recognised in 2021 related to
\nfunding of manufactured
Vaxzevria
product for the US government, which expired prior to being accepted by the FDA.
\nSelling, general and administrative expense
\nIn 2022, Selling, general and administrative expense includes a charge of $182m (2021: charge of $42m; 2020: credit of $51m) resulting from changes
\nin the fair value of contingent consideration arising from the acquisition of the diabetes alliance from BMS. These adjustments re\ufb02ect revised estimates
\nfor future sales performance for the products acquired and, as a result, revised estimates for future royalties payable.
\nIn 2022, Selling, general and administrative costs includes a credit of $49m (2021: charge of $5m; 2020: credit of $143m) resulting from changes in
\nthe fair value of contingent consideration arising from the acquisition of Almirall\u2019s respiratory business. These adjustments re\ufb02ect revised estimates
\nfor future sales performance for the products acquired and, as a result, revised estimates for future milestones payable.
\nIn 2022, Selling, general and administrative expense also includes a charge of $789m (2021: charge of $48m; 2020: credit of $9m) relating to a number
\nof legal proceedings including settlements in various jurisdictions in relation to several marketed products (see Note 30).
\nResearch and development expense: Government grants
\nDuring the year $113m (2021: $531m; 2020: $222m) of government grants were recognised within Research and development expense. The grants
\nrecognised relate to funding for research and development and related expenses for
Evusheld
of $112m (2021: $222m; 2020: $61m) and
Vaxzevria
\nof $1m (2021: $309m; 2020: $161m).
\nNotes to the Group Financial Statements
\ncontinued
\n150
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
Other operating income and expense
\n2022
2021
2020
\n$m
$m\u00a0
$m
\nRoyalty income
59
62
147
\nGains on disposal of intangible assets
104
513
1,030
\nGains on disposal of investments in associates and joint ventures
\u2013
776
\u2013
\nNet gains/(losses) on disposal of other non-current assets
112
(4)
25
\nImpairment of property, plant and equipment
\u2013
\u2013
(12)
\nOther income
\n1
\n439
453
406
\nOther expense
(200)
(308)
(68)
\nOther operating income and expense
514
1,492
1,528
\n1
Other income in 2022 includes $138m of payments from Allergan in respect of the development of brazikumab (2021: $99m; 2020: $107m).
\nGains on disposal of intangible assets in 2021 includes $317m on disposal of rights to
Crestor
in over 30 countries in Europe, except in the UK and Spain.
\nGains on disposal of intangible assets in 2020 includes $350m on disposal of global rights excluding US, India and Japan to established hypertension
\nmedicines to Atnahs Pharma, $400m on disposal of rights in over 70 countries to
Atacand
to Cheplapharm and $120m on the sale of an FDA Priority
\nReview Voucher.
\nNet gains/(losses) on disposal of other non-current assets in 2022 includes a $125m gain in respect of the Waltham R&D site sale and leaseback in
\nMA, US (see Note 8).
\nGains on disposal of investments in associates and joint ventures in 2021 relates to the disposal of the 26.7% ownership in Viela Bio, as part of the
\nacquisition of Viela by Horizon Therapeutics plc. AstraZeneca received cash proceeds and pro\ufb01t of $776m upon closing, with the pro\ufb01t recorded as
\nOther operating income.
\nAs part of the total consideration received in respect of the agreement to sell US rights to
Synagis
in 2019, $210m in total has been received related
\nto the rights to participate in the future cash \ufb02ows from the US pro\ufb01ts or losses for nirsevimab. The full amount has been recognised as a \ufb01nancial
\nliability as the Group has not fully transferred the risks and rewards of the underlying cash \ufb02ows arising from nirsevimab to Sobi. This liability is
\npresented in Other payables within Non-current liabilities. The associated cash \ufb02ow is presented within investing activities as the Group has received
\nthe cash in exchange for agreeing to transfer future cash \ufb02ows relating to an intangible asset. In 2021, as a result of the Probability of Technical/
\nRegulatory Success unwind, an increase of $114m to the Pro\ufb01t Participation Liability was recorded in Other operating expense.
\nRestructuring costs
\nIn conjunction with the acquisition of Alexion in 2021, the enlarged Group initiated a comprehensive Post Alexion Acquisition Group Review, aimed
\nat integrating systems, structure and processes, optimising the global footprint and prioritising resource allocations and investments. These activities
\nare expected to be substantially complete by the end of 2025, with a number of planned activities having commenced in late 2021 and during 2022.
\nThe Group has also continued to progress other legacy restructuring programmes.
\nDuring 2022, the Group has incurred $717m of restructuring costs, of which $675m resulted from activities that are part of the Post Alexion Acquisition
\nGroup Review, bringing the cumulative charges under this programme to $1,705m. Costs in 2022 included $266m within Cost of sales due to the
\nrationalisation of our manufacturing capacity and footprint across certain production sites, $152m within Selling, general and administrative expenses
\nin relation to the transfer of Alexion\u2019s distribution contracts with third parties to AstraZeneca Group companies, and $83m in Selling, general and
\nadministrative expenses related to rationalisation of commercial teams in China.
\nTotal restructuring costs in 2022 include impairment reversal of Property, plant and equipment of $4m (2021: charge of $343m; 2020: charge of $7m)
\nand impairment reversal of Intangible assets (software development costs) of $17m (2021: charge of $16m; 2020: $nil).
\nThe tables below show the costs that have been charged in respect of restructuring programmes by cost category and type. Severance provisions
\nare detailed in Note 21.
\n2022
2021
2020
\n$m
$m
$m
\nCost of sales
266
722
53
\nDistribution expense
2
\u2013
\u2013
\nResearch and development expense
111
223
35
\nSelling, general and administrative expense
405
338
162
\nOther operating income and expense
(67)
\u2013
1
\nTotal charge
717
1,283
251
\n2022
2021
2020
\n$m
$m
$m
\nSeverance costs
187
217
26
\nAccelerated depreciation and impairment charges
135
371
17
\nOther
\n1
\n395
695
208
\nTotal charge
717
1,283
251
\n1
Other costs are those incurred in designing and implementing the Group\u2019s various restructuring initiatives, including costs of integrating systems, structure and processes as part of our
\nPost Alexion Acquisition Group Review, costs relating to the Alexion acquisition, internal project costs and external consultancy fees.
\n151
AstraZeneca Annual Report & Form 20-F Information 2022
Notes to the Group Financial Statements
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
2 Operating pro\ufb01t
continued
\nFinancial instruments
\nIncluded within Operating pro\ufb01t are the following net gains and losses on \ufb01nancial instruments:
\n2022
2021
2020
\n$m
$m
$m
\nGains/(losses) on forward foreign exchange contracts
150
(21)
(86)
\n(Losses)/gains on receivables and payables
(203)
(42)
89
\nTotal
(53)
(63)
3
\nImpairment charges
\nDetails of impairment charges for 2022, 2021 and 2020 are included in Notes 7, 8 and 10.
\n3 Finance income and expense
\n2022
2021
2020
\n$m
$m
$m
\nFinance income
\nReturns on deposits and equity securities
78
12
41
\nFair value gains on debt and interest rate swaps
14
\u2013
4
\nDiscount unwind on other long-term assets
\u2013
\u2013
6
\nInterest income on income tax balances
3
31
36
\nTotal
95
43
87
\nFinance expense
\nInterest on debt, leases and other financing costs
(889)
(774)
(736)
\nNet interest on post-employment defined benefit plan net liabilities (Note\u00a022)
(29)
(26)
(37)
\nNet exchange losses
(16)
(20)
(34)
\nDiscount unwind on contingent consideration arising from business combinations (Note\u00a020)
(168)
(226)
(278)
\nDiscount unwind on other long-term liabilities
\n1
\n(216)
(248)
(219)
\nFair value losses on debt and interest rate swaps
\u2013
(4)
\u2013
\nInterest expense on income tax balances
(28)
(2)
(2)
\nTotal
(1,346)
(1,300)
(1,306)
\nNet finance expense
(1,251)
(1,257)
(1,219)
\n1
Included within Discount unwind on other long-term liabilities is $108m relating to the Acerta Pharma share purchase liability (2021: $161m; 2020: $151m), see Note 20 for further details.
\nThere was no interest capitalised during the year.
\nFinancial instruments
\nIncluded within \ufb01nance income and expense are the following net gains and losses on \ufb01nancial instruments:
\n2022
2021
2020
\n$m
$m
$m
\nInterest and fair value adjustments in respect of debt designated at fair value through profit or loss, net of derivatives
(9)
(5)
(8)
\nInterest and changes in carrying values of debt designated as hedged items in fair value hedges, net of derivatives
\u2013
(9)
(6)
\nInterest and fair value changes on fixed and short-term deposits, equity securities, other derivatives and tax balances
54
16
42
\nInterest on debt, commercial paper, overdrafts and lease liabilities held at amortised cost
(837)
(738)
(660)
\nThe interest rate fair value hedges were closed in 2021. Fair value gain or loss of $nil (2021: loss of $33m; 2020: gain of $33m) on interest rate fair value
\nhedging instruments and $nil fair value gain or loss (2021: gain of $29m; 2020: loss of $32m) on the related hedged items have been included within
\nInterest and changes in carrying values of debt designated as hedged items, net of derivatives.
\nFair value loss of $25m (2021: loss of $19m; 2020: gain of $2m) on derivatives related to debt instruments designated at fair value through pro\ufb01t or
\nloss and $26m fair value gain (2021: gain of $19m; 2020: loss of $3m) on debt instruments designated at fair value through pro\ufb01t or loss have been
\nincluded within Interest and fair value adjustments in respect of debt designated at fair value through pro\ufb01t or loss, net of derivatives.
\nNotes to the Group Financial Statements
\ncontinued
\n152
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
4 Taxation
\nTaxation charge/(credit) recognised in the Consolidated Statement of Comprehensive Income is as follows:
\n2022
2021
2020
\n$m
$m
$m
\nCurrent tax
\nCurrent year
1,823
1,200
981
\nAdjustment to prior years
(187)
(5)
(10)
\nTotal
1,636
1,195
971
\nDeferred tax
\nOrigination and reversal of temporary differences
(2,563)
(1,417)
(178)
\nAdjustment to prior years
135
(158)
(21)
\nTotal
(2,428)
(1,575)
(199)
\nTaxation (credit)/charge recognised in the profit for the period
(792)
(380)
772
\nTaxation (charge)/credit recognised in Other comprehensive income is as follows:
\n2022
2021
2020
\n$m
$m
$m
\nCurrent and deferred tax
\nItems that will not be reclassified to profit or loss:
\u00a0
\nRemeasurement of the defined benefit liability
(231)
(117)
36
\nEquity investments measured at fair value through Other comprehensive income
15
27
(180)
\nMovement in deferred taxes relating to changes in tax rates
\u2013
195
63
\nTotal
(216)
105
(81)
\nItems that may be reclassified subsequently to profit or loss:
\nForeign exchange arising on designated liabilities in net investment hedges
\n1
\n73
43
(61)
\nFair value movement on cash flow hedges
\n2
\n\u2013
(5)
22
\nMovement in deferred taxes relating to changes in tax rates
\u2013
8
\u2013
\nTotal
73
46
(39)
\nTaxation (charge)/credit recognised in Other comprehensive income
(143)
151
(120)
\n1
Previously reported as Foreign exchange arising on consolidation.
\n2
Previously reported within Foreign exchange arising on designated liabilities in net investment hedges.
\nThe reported tax rate in the year was (32)% and included a one-time favourable net adjustment of $876m to deferred taxes arising from an internal
\nreorganisation to integrate the Alexion organisation which took place in the year. The internal legal entity reorganisation did not result in any corporate
\nincome tax becoming payable in the year, however it did result in a one-off deferred tax adjustment of $876m to the income statement and a further
\n$49m credit included in Other comprehensive income. Following the reorganisation, it was necessary to re-measure certain deferred tax balances
\nto re\ufb02ect the tax rates applicable on their reversal, as under the revised structure there is a change in the income \ufb02ows to the relevant territories.
\nThe 2022 reported tax rate also bene\ufb01ted from Intellectual Property incentive regimes, geographical mix of pro\ufb01ts and favourable adjustments to
\nprior year tax liabilities in a number of major jurisdictions, many of which were one-time items.
\nThe income tax paid for the year was $1,623m.
\nTaxation has been provided at current rates on the pro\ufb01ts earned for the periods covered by the Group Financial Statements. The 2022 prior period
\ncurrent tax adjustment relates mainly to tax accrual to tax return adjustments and updates to liabilities for uncertain tax positions. The 2021 prior
\nperiod current tax adjustment relates mainly to tax accrual to tax return adjustments. The 2020 prior period current tax adjustment relates mainly
\nto net reductions in liabilities for uncertain tax positions and tax accrual to tax return adjustments.
\nThe 2022 prior period deferred tax adjustments relate mainly to tax accrual to tax return adjustments and updates to liabilities for uncertain tax
\npositions. The 2021 prior period deferred tax adjustments relate mainly to tax accrual to tax return adjustments and updates to estimates of prior
\nperiod tax liabilities following settlements with tax authorities. The 2020 prior period deferred tax adjustments relate mainly to tax accrual to tax
\nreturn adjustments offset by net increases in liabilities for uncertain tax positions.
\nTo the extent that dividends remitted from overseas subsidiaries, joint ventures and associates are expected to result in additional taxes, appropriate
\namounts have been provided for. Unremitted earnings or differences in the carrying value and tax basis of investments may be liable to additional
\ntaxes if distributed as dividends or on a liquidation event. Deferred tax is provided for such differences in relation to Group entities where management
\nis intending to remit earnings in the foreseeable future. The aggregate amount of gross temporary differences associated with investments in
\nsubsidiaries, partnerships and branches for which deferred tax liabilities have not been recognised totalled approximately $5,454m at 31 December
\n2022, $2,113m of which has a corresponding deductible temporary difference of the same gross value which is not recognised as it is not probable
\nof reversing in the foreseeable future but on which different tax rates apply.
\n153
AstraZeneca Annual Report & Form 20-F Information 2022
Notes to the Group Financial Statements
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
4 Taxation
continued
\nFactors affecting future tax charges
\nAs a Group with worldwide operations, AstraZeneca is subject to several factors that may affect future tax charges, principally the levels and mix
\nof pro\ufb01tability in different jurisdictions, transfer pricing regulations, tax rates imposed and tax regime reforms. In 2021, the UK Government enacted
\nlegislation to increase the main rate of UK statutory Corporation Tax to 25% effective 1 April 2023. In December 2021, the OECD issued model rules
\nfor a new global minimum tax framework (Pillar Two) and in 2022, the UK released draft legislation including the intention to bring these into effect
\nfor accounting periods commencing after 31 December 2023. AstraZeneca expects to fall within the global minimum tax framework which requires
\ncalculation of a new measure of effective tax rate by legal entity. It is possible that this may result in top-up taxes in some territories in which
\nAstraZeneca operates. Whilst the UK released draft legislation that has not been substantively enacted at 31 December 2022, we are continuing
\nto review the draft rules, and the IASB\u2019s staff paper and initial consideration, published in November 2022, to understand any potential impacts.
\nTax reconciliation to UK statutory rate
\nThe table below reconciles the UK statutory tax charge to the Group\u2019s total tax (credit)/charge:
\n2022
2021
2020
\n$m
$m
$m
\nProfit/(loss) before tax
2,501
(265)
3,916
\nNotional taxation charge at UK corporation tax rate of 19%
475
(50)
744
\nDifferences in effective overseas tax rates
(59)
1
(49)
\nDeferred tax (credit)/charge relating to change in tax rates
\n1
\n(108)
54
138
\nUnrecognised deferred tax asset
\n2
\n68
32
3
\nItems not deductible for tax purposes
90
208
71
\nItems not chargeable for tax purposes
\u2013
(163)
(4)
\nIntellectual Property incentive regimes
\n3
\n(265)
\u2013
(35)
\nOther items
\n4
\n(941)
(299)
(65)
\nAdjustments in respect of prior periods
\n5
\n(52)
(163)
(31)
\nTotal tax (credit)/charge for the period
(792)
(380)
772
\n1
The 2022 item relates to the impact of the US state tax rate change and the impact of the difference in the UK current tax and deferred tax rates during 2022. The 2021 item relates to substantive
\nenactment of the increase in UK Corporation Tax rate from 19% to 25% effective 1 April 2023 (debit of $12m), the increase in the Dutch Corporate Income Tax rate from 25% to 25.8% effective
\n1 January 2022 (debit of $39m) and other (debit of $3m). The 2020 item relates to the increase in the 2020 substantively enacted Dutch Corporate Income Tax rate (debit of $151m) and other (debit
\nof $5m). In 2020, it was substantively enacted that the planned reduction in the Dutch Corporate Income Tax rate to 21.7% from 25% effective 1 January 2021 would not take place. In addition, the
\nplanned reduction in the UK corporation tax rate to 17% was not enacted with the corporation tax rate remaining at 19% (credit of $18m).
\n2
The 2022 item relates to the derecognition of previously recognised deferred tax assets. The 2021 item includes a $15m debit arising on derecognition of previously recognised deferred tax assets.
\nThe 2020 item includes a $22m credit arising on recognition of previously unrecognised deferred tax assets.
\n3
Previously reported within Items not deductible for tax purposes.
\n4
Other items in 2022 relate to the aforementioned one-time favourable net adjustment of $876m to deferred taxes arising from an internal reorganisation to integrate the Alexion organisation which
\ntook place in 2022 and a credit of $65m relating to the reduction of tax liabilities arising from adjustments on expiry of the relevant statute of limitations. Other items in 2021 relate to a net credit of
\n$299m relating to the reduction of tax liabilities arising from updates to estimates of prior period tax liabilities following settlements with tax authorities and on expiry of the relevant statute
\nof limitations partially offset by a provision for transfer pricing and other uncertain tax treatments. Other items in 2020 relate to a net credit of $65m relating to the release of tax liabilities
\nfollowing the expiry of the relevant statute of limitations partially offset by a provision for transfer pricing and other uncertain tax treatments.
\n5
Further details explaining the adjustments in respect of prior periods are set out on page 153.
\nAstraZeneca is domiciled in the UK but operates in other countries where the tax rates and laws are different to those in the UK. The impact on
\ndifferences in effective overseas tax rates on the Group\u2019s overall tax charge is noted above. Pro\ufb01ts arising from our manufacturing operation in
\nPuerto Rico are granted special status and are taxed at a reduced rate compared with the normal rate of tax in that territory under a tax incentive
\ngrant continuing until 2031. The Group receives tax incentives in relation to Intellectual Property incentives in certain jurisdictions, resulting in a
\nreduction to the tax charge in the income statement of $265m in 2022.
\nNotes to the Group Financial Statements
\ncontinued
\n154
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
Deferred tax
\nThe total movement in the net deferred tax balance in the year was $2,195m. The movements are as follows:
\nIntangibles,
Pension and
Elimination of
Losses and
Accrued
\nproperty,\u00a0plant
post-retirement
unrealised profit
Untaxed
tax credits
expenses
\nand equipment
\n1
\nbenefits
on inventory
reserves
\n2
\ncarried forward
and other
Total
\n$m
$m
$m
$m
$m
$m
$m
\nNet deferred tax balance at 1\u00a0January 2020
(2,265)
561
1,293
(598)
546
691
228
\nIncome statement
(226)
(64)
444
(92)
136
1
199
\nOther comprehensive income
(78)
101
\u2013
(1)
\u2013
72
94
\nEquity
\u2013
\u2013
\u2013
\u2013
\u2013
(16)
(16)
\nExchange
(58)
58
70
(110)
32
23
15
\nNet deferred tax balance at 31\u00a0December 2020
(2,627)
656
1,807
(801)
714
771
520
\nIncome statement
782
(166)
(59)
(139)
307
850
1,575
\nOther comprehensive income
52
83
\u2013
\u2013
\u2013
40
175
\nEquity
\u2013
\u2013
\u2013
\u2013
\u2013
14
14
\nAdditions through business combinations
\n3
\n(3,744)
13
166
\u2013
507
(1,116)
(4,174)
\nExchange
57
(33)
(53)
78
(10)
(25)
14
\nNet deferred tax balance at 31\u00a0December 2021
(5,480)
553
1,861
(862)
1,518
534
(1,876)
\nIncome statement
\n4
\n1,414
(55)
274
38
(126)
883
2,428
\nOther comprehensive income
72
(231)
\u2013
\u2013
\u2013
16
(143)
\nEquity
\u2013
\u2013
\u2013
\u2013
\u2013
38
38
\nExchange
63
(36)
(111)
108
(134)
(18)
(128)
\nNet deferred tax balance at 31\u00a0December 2022
\n5
\n(3,931)
231
2,024
(716)
1,258
1,453
319
\n1
Includes deferred tax of $281m on contingent consideration liabilities in respect of intangibles.
\n2
Untaxed reserves relate to taxable profits where the tax liability is deferred to later periods.
\n3
The deferred tax liability of $4,174m relates to deferred tax on purchase accounting adjustments arising from the acquisition of Alexion (Note 27). Accrued expenses and other includes the
\ndeferred tax on the purchase accounting of inventory.
\n4
The income statement movement in 2022 includes the aforementioned net adjustment to deferred taxes of $876m arising on the internal legal entity reorganisation to integrate the Alexion organisation,
\nthe majority of which arises on Intangibles, property, plant and equipment.
\n5
The Group recognises deferred tax assets to the extent that there are either taxable temporary differences or that it is probable that sufficient future taxable profits will arise, against which these
\ndeductible temporary differences can be utilised. The US includes a net deferred tax asset of $283m and the UK includes a net deferred tax asset of $503m as at 31 December 2022 which include
\ntax losses and other deductible temporary differences. The Group has performed an assessment of recovery of deferred tax assets and for these entities, the Group has forecasted future taxable
\nprofits and considers that it is probable that sufficient future taxable profits will arise against which these deductible temporary differences can be utilised. In arriving at these forecasts, the
\nGroup has reviewed the Group-level budgets and forecasts and the ability of those entities to generate future income from developing and commercialising products, including local tax laws
\nand the scheduling of reversal of deductible temporary differences. Deferred tax assets are recognised on the basis there is sufficient forecast future taxable profits arising from the performance
\nof on-market products and pipeline assets, including
Imfinzi
. For the UK, losses are forecast to be utilised within five years. For the US, recognised deferred taxes on losses and other items are
\nforecast to be utilised within 15 years. It is considered that these sources of income are sufficiently predictable or diversified to support a recognition period in excess of five years. A sensitivity
\nassessment has been performed which shows that a change in profit of 10% results in an immaterial adjustment to the amount of deferred tax asset recognised. Assessing the availability of
\nfuture taxable income to support recognition of deferred tax assets relies upon our Group forecasts and changes in these Group forecasts will impact the recoverability of deferred tax assets.
\nTo the extent that there are neither taxable temporary differences nor sufficient taxable profits, no deferred tax asset is recognised and details of unrecognised deferred tax assets are included
\nin the table below.
\nThe net deferred tax balance, before the offset of balances within countries, consists of:
\nIntangibles,
Pension and
Elimination of
Losses and
Accrued
\nproperty,\u00a0plant
post-retirement
unrealised profit
Untaxed
tax credits
expenses
\nand equipment
benefits
on inventory
reserves
carried forward
and other
Total
\n$m
$m
$m
$m
$m
$m
$m
\nDeferred tax assets at 31\u00a0December 2020
1,061
690
2,286
\u2013
852
1,130
6,019
\nDeferred tax liabilities at 31\u00a0December 2020
(3,688)
(34)
(479)
(801)
(138)
(359)
(5,499)
\nNet deferred tax balance at 31\u00a0December 2020
(2,627)
656
1,807
(801)
714
771
520
\nDeferred tax assets at 31\u00a0December 2021
1,476
574
1,910
\u2013
1,571
1,735
7,266
\nDeferred tax liabilities at 31\u00a0December 2021
(6,956)
(21)
(49)
(862)
(53)
(1,201)
(9,142)
\nNet deferred tax balance at 31\u00a0December 2021
(5,480)
553
1,861
(862)
1,518
534
(1,876)
\nDeferred tax assets at 31\u00a0December 2022
1,499
276
2,048
\u2013
1,274
1,614
6,711
\nDeferred tax liabilities at 31\u00a0December 2022
(5,430)
(45)
(24)
(716)
(16)
(161)
(6,392)
\nNet deferred tax balance at 31\u00a0December 2022
(3,931)
231
2,024
(716)
1,258
1,453
319
\n155
AstraZeneca Annual Report & Form 20-F Information 2022
Notes to the Group Financial Statements
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
4 Taxation
continued
\nAnalysed in the Consolidated Statement of Financial Position, after offset of balances within countries, as follows:
\n2022
2021
2020
\n$m
$m
$m
\nDeferred tax assets
3,263
4,330
3,438
\nDeferred tax liabilities
(2,944)
(6,206)
(2,918)
\nNet deferred tax balance
319
(1,876)
520
\nUnrecognised deferred tax assets
\nDeferred tax assets (DTA) of $807m (2021: $719m; 2020: $428m) have not been recognised in respect of deductible temporary differences because
\nit is not probable that future taxable pro\ufb01t will be available against which the Group can utilise the bene\ufb01ts therefrom.
\n2022
2022
2021
2021
2020
2020
\nTemporary
Unrecognised
Temporary
Unrecognised
Temporary
Unrecognised
\ndifferences
DTA
differences
DTA
differences
DTA
\n$m
$m
$m
$m
$m
$m
\nTrading and capital losses expiring:
\nWithin 10 years
104
26
4
1
2
\u2013
\nMore than 10 years
153
32
53
11
\u2013
\u2013
\nIndefinite
686
163
300
79
234
63
\n943
221
357
91
236
63
\nTax credits and State tax losses expiring:
\nWithin 10 years
115
101
36
\nMore than 10 years
384
441
255
\nIndefinite
87
86
74
\n586
628
365
\nTotal
807
719
428
\n5 Earnings per $0.25 Ordinary Share
\n2022
2021
2020
\nProfit for the year attributable to equity holders ($m)
3,288
112
3,196
\nBasic earnings per Ordinary Share
$2.12
$0.08
$2.44
\nDiluted earnings per Ordinary Share
$2.11
$0.08
$2.44
\nWeighted average number of Ordinary Shares in issue for basic earnings (millions)
1,548
1,418
1,312
\nDilutive impact of share options outstanding (millions)
12
9
1
\nDiluted weighted average number of Ordinary Shares in issue (millions)
1,560
1,427
1,313
\nThe earnings \ufb01gures used in the calculations above are post-tax. The weighted average number of Ordinary Shares in issue is calculated by taking
\nthe number of Ordinary Shares outstanding each day weighted by the number of days that those shares were outstanding.
\nNotes to the Group Financial Statements
\ncontinued
\n156
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
6 Segment information
\nThe Group has reviewed its assessment of reportable segments under IFRS 8 \u2018Operating Segments\u2019 and concluded that the Group continues to
\nhave one reportable segment.
\nThis determination is considered to be a Key Judgement and this judgement has been taken with reference to the following factors:
\n1 The level of integration across the different functions of the Group\u2019s pharmaceutical business:
\nAstraZeneca is engaged in a single business activity of pharmaceuticals and the Group does not have multiple operating segments. AstraZeneca\u2019s
\npharmaceuticals business consists of the discovery and development of new products, which are then manufactured, marketed and sold. All of these
\nfunctional activities take place (and are managed) globally on a highly integrated basis. These individual functional areas are not managed separately.
\n2 The identi\ufb01cation of the Chief Operating Decision Maker (CODM) and the nature and extent of the \ufb01nancial information reviewed by the CODM:
\nThe SET, established and chaired by the CEO, is the vehicle through which the CEO exercises the authority delegated to him from the Board for the
\nmanagement, development and performance of AstraZeneca as a whole. It is considered that the SET is AstraZeneca\u2019s Chief Operating Decision
\nMaking body (as de\ufb01ned by IFRS 8). The operation of the SET is principally driven by the management of the Commercial operations, R&D,
\nmanufacturing and supply and enabling functions. All signi\ufb01cant operating decisions are undertaken by the SET. While members of the SET have
\nresponsibility for implementation of decisions in their respective areas, operating decision making is at SET level as a whole. Where necessary, these
\nare implemented through cross-functional sub-committees that consider the Group-wide impact of a new decision. For example, product launch
\ndecisions would be initially considered by the SET and, on approval, passed to an appropriate sub team for implementation. The ability of the
\nenterprise to develop, produce, deliver and commercialise a wide range of pharmaceutical products are central to the SET decision-making process.
\nIn assessing performance, the SET reviews \ufb01nancial information on an integrated basis for the Group as a whole, substantially in the form of, and
\non the same basis as, the Group\u2019s IFRS Financial Statements. The high upfront cost of discovering and developing new products, coupled with
\nthe relatively insigni\ufb01cant and stable unit cost of production, means that there is not the clear link that exists in many manufacturing businesses
\nbetween the revenue generated on an individual product sale and the associated cost and hence margin generated on a product. Consequently,
\nthe pro\ufb01tability of individual drugs or classes of drugs is not considered a key measure of performance for the business and is not monitored by
\nthe SET. The focus of additional \ufb01nancial information reviewed is at brand sales and gross margin level within speci\ufb01c geographies. Expenditure
\nanalysis is completed for the science units, operations and enabling functions; there is no allocation of these centrally managed Group costs to
\nthe individual product or brands. The bonus of SET members\u2019 continues to be derived from the Group scorecard outcome as discussed in our
\nDirectors\u2019 Remuneration Report.
\n3 How resources are allocated:
\nResources are allocated on a Group-wide basis according to need. In particular, capital expenditure, in-licensing, and R&D resources are allocated
\nbetween activities on merit, based on overall therapeutic considerations and strategy under the aegis of the Group\u2019s Early-Stage Product Committees
\nand Late-Stage Product Committees.
\nGeographic areas
\nThe following table shows information for Total Revenue by geographic area and material countries. The additional tables show the Operating pro\ufb01t
\nand Pro\ufb01t before tax made by companies located in that area, together with Non-current assets, Total assets, assets acquired, net operating assets,
\nand Property, plant and equipment owned by the same companies. Product Sales by geographic market are included in the area/country where
\nthe legal entity resides and from which those sales were made.
\nTotal Revenue
\n2022
2021
2020
\n$m
$m
$m
\nUK
3,117
3,245
1,741
\nRest of Europe
\nFrance
1,107
915
653
\nGermany
1,902
1,486
937
\nItaly
735
577
431
\nSpain
738
578
398
\nSweden
1,721
2,322
1,026
\nOthers
2,706
1,949
1,391
\n8,909
7,827
4,836
\nThe Americas
\nCanada
1,166
772
596
\nUS
17,278
12,047
8,955
\nOthers
1,175
1,203
761
\n19,619
14,022
10,312
\nAsia, Africa & Australasia
\nAustralia
571
547
282
\nChina
5,743
6,002
5,345
\nJapan
3,986
3,395
2,567
\nOthers
2,406
2,379
1,534
\n12,706
12,323
9,728
\nTotal Revenue
44,351
37,417
26,617
\nTotal Revenue outside of the UK totalled $41,234m for the year ended 31 December 2022 (2021: $34,172m; 2020: $24,876m).
\n157
AstraZeneca Annual Report & Form 20-F Information 2022
Notes to the Group Financial Statements
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
6 Segment information
continued
\nOperating profit/(loss)
Profit/(loss) before tax
\n2022
2021
2020
2022
2021
2020
\n$m
$m
$m
$m
$m
$m
\nUK
1,120
(950)
824
272
(1,477)
518
\nRest of Europe
2,945
2,999
2,838
2,709
2,682
2,356
\nThe Americas
(954)
(1,936)
758
(1,140)
(2,401)
297
\nAsia, Africa & Australasia
646
943
742
660
931
745
\nContinuing operations
3,757
1,056
5,162
2,501
(265)
3,916
\nNon-current assets
\n1
\nTotal assets
\n2022
2021
2020
2022
2021
2020
\n$m
$m
$m
$m
$m
$m
\nUK
8,635
7,692
7,900
16,786
16,615
17,851
\nRest of Europe
35,093
39,171
15,821
40,669
48,383
19,738
\nThe Americas
25,736
26,570
18,501
32,990
34,301
23,640
\nAsia, Africa & Australasia
1,089
1,254
1,354
6,038
6,064
5,500
\nContinuing operations
70,553
74,687
43,576
96,483
105,363
66,729
\nAssets acquired
\n2
\nNet operating assets
\n3
\n2022
2021
2020
2022
2021
2020
\n$m
$m
$m
$m
$m
$m
\nUK
2,301
810
1,611
3,863
3,239
5,244
\nRest of Europe
522
26,527
505
32,726
40,161
10,242
\nThe Americas
421
10,810
286
23,290
24,786
15,697
\nAsia, Africa & Australasia
51
94
116
1,895
736
607
\nContinuing operations
3,295
38,241
2,518
61,774
68,922
31,790
\n1
Non-current assets exclude Deferred tax assets and Derivative financial instruments.
\n2
Included in Assets acquired are those assets that are expected to be used during more than one period (Property, plant and equipment, Goodwill and Intangible assets) and include those
\nacquired through business combinations (Note 27).
\n3
Net operating assets exclude short-term investments, cash, short-term borrowings, loans, Derivative financial instruments, Retirement benefit obligations and non-operating receivables
\nand payables.
\nProperty, plant and equipment
\n2022
2021
2020
\n$m
$m
$m
\nUK
2,526
2,542
2,227
\nIreland
1,040
969
\u2013
\nSweden
1,472
1,593
1,755
\nUS
2,176
2,660
2,662
\nRest of the world
1,293
1,419
1,607
\nContinuing operations
8,507
9,183
8,251
\nGeographic markets
\nThe table below shows Product Sales in each geographic market in which customers are located.
\n2022
2021
2020
\n$m
$m\u00a0
$m
\nUK
996
1,206
611
\nRest of Europe
7,503
6,792
4,446
\nThe Americas
20,126
14,893
10,004
\nAsia, Africa & Australasia
14,373
13,650
10,829
\nContinuing operations
42,998
36,541
25,890
\nProduct Sales are recognised when control of the goods has been transferred to a third party. A signi\ufb01cant proportion of this is upon delivery of the
\nproducts to wholesalers. One wholesaler (2021: one; 2020: one) individually represented greater than 10% of Product Sales. The value of Product Sales
\nto this wholesaler was $5,387m (2021: $4,862m; 2020: $3,321m).
\nNotes to the Group Financial Statements
\ncontinued
\n158
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
7 Property, plant and equipment
\nAssets in
Total property,
\nLand and
Plant and
course of
plant and
\nbuildings
equipment
construction
equipment
\n$m
$m
$m
$m
\nCost
\nAt 1\u00a0January 2020
5,532
7,383
2,086
15,001
\nCapital expenditure
10
42
874
926
\nTransfer of assets into use
137
462
(599)
\u2013
\nDisposals and other movements
(48)
(615)
(18)
(681)
\nExchange adjustments
220
466
135
821
\nAt 31\u00a0December 2020
5,851
7,738
2,478
16,067
\nAdditions through business combinations (Note\u00a027)
542
339
254
1,135
\nCapital expenditure
9
31
1,112
1,152
\nTransfer of assets into use
236
611
(847)
\u2013
\nDisposals and other movements
(92)
(469)
(200)
(761)
\nExchange adjustments
(169)
(347)
(69)
(585)
\nAt 31\u00a0December 2021
6,377
7,903
2,728
17,008
\nCapital expenditure
5
19
1,042
1,066
\nTransfer of assets into use
226
683
(909)
\u2013
\nTransferred to Assets held for sale (Note 18)
(434)
(293)
\u2013
(727)
\nDisposals and other movements
(425)
(146)
28
(543)
\nExchange adjustments
(309)
(610)
(236)
(1,155)
\nAt 31\u00a0December 2022
5,440
7,556
2,653
15,649
\nDepreciation and impairment
\nAt 1\u00a0January 2020
2,505
4,808
\u2013
7,313
\nDepreciation charge for the year
227
462
\u2013
689
\nImpairment (reversal)/charge
(1)
2
12
13
\nDisposals and other movements
(42)
(606)
(12)
(660)
\nExchange adjustments
137
324
\u2013
461
\nAt 31\u00a0December 2020
2,826
4,990
\u2013
7,816
\nDepreciation charge for the year
231
493
\u2013
724
\nImpairment (reversal)/charge
(1)
121
223
343
\nDisposals and other movements
(74)
(428)
(223)
(725)
\nExchange adjustments
(105)
(228)
\u2013
(333)
\nAt 31\u00a0December 2021
2,877
4,948
\u2013
7,825
\nDepreciation charge for the year
286
566
\u2013
852
\nImpairment charge/(reversal)
20
8
(28)
\u2013
\nTransferred to Assets held for sale (Note 18)
(300)
(277)
\u2013
(577)
\nDisposals and other movements
(227)
(188)
28
(387)
\nExchange adjustments
(167)
(404)
\u2013
(571)
\nAt 31\u00a0December 2022
2,489
4,653
\u2013
7,142
\nNet book value
\nAt 31\u00a0December 2020
3,025
2,748
2,478
8,251
\nAt 31\u00a0December 2021
3,500
2,955
2,728
9,183
\nAt 31\u00a0December 2022
2,951
2,903
2,653
8,507
\nImpairment charges in 2021 totalling $343m were recognised for Plant and equipment and Assets in course of construction due to the rationalisation
\nof our manufacturing capacity and footprint across certain production sites as a result of restructuring programmes, including the Post Alexion
\nAcquisition Group Review (see Note 2). These charges were recognised in Cost of sales. The revised carrying value of the impacted assets is nil,
\nunder fair value less costs to sell.
\n2022
2021
2020
\n$m
$m
$m
\nThe net book value of land and buildings comprised:
\nFreeholds
2,555
2,985
2,583
\nLeaseholds
396
515
442
\n159
AstraZeneca Annual Report & Form 20-F Information 2022
Notes to the Group Financial Statements
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
8 Leases
\nRight-of-use assets
\nTotal right-
\nLand and
Motor
of-use
\nbuildings
vehicles
Other
assets
\n$m
$m
$m
$m
\nCost
\nAt 1\u00a0January 2020
627
202
22
851
\nAdditions \u2013 separately acquired
87
89
15
191
\nDisposals and other movements
\u2013
(27)
(2)
(29)
\nExchange adjustments
21
8
1
30
\nAt 31\u00a0December 2020
735
272
36
1,043
\nAdditions through business combinations (Note\u00a027)
255
8
\u2013
263
\nAdditions \u2013 separately acquired
145
98
2
245
\nDisposals and other movements
25
(44)
(4)
(23)
\nExchange adjustments
(27)
(13)
(1)
(41)
\nAt 31\u00a0December 2021
1,133
321
33
1,487
\nAdditions through business combinations
4
\u2013
\u2013
4
\nAdditions \u2013 separately acquired
140
81
14
235
\nDisposals and other movements
(33)
(58)
(13)
(104)
\nExchange adjustments
(62)
(15)
(2)
(79)
\nAt 31\u00a0December 2022
1,182
329
32
1,543
\nDepreciation and impairment
\nAt 1\u00a0January 2020
132
64
8
204
\nDepreciation charge for the year
131
75
9
215
\nDisposals and other movements
(24)
(26)
(4)
(54)
\nExchange adjustments
8
4
\u2013
12
\nAt 31\u00a0December 2020
247
117
13
377
\nDepreciation charge for the year
144
85
6
235
\nDisposals and other movements
(54)
(42)
\u2013
(96)
\nExchange adjustments
(11)
(6)
\u2013
(17)
\nAt 31\u00a0December 2021
326
154
19
499
\nDepreciation charge for the year
160
80
6
246
\nImpairment charge
2
\u2013
\u2013
2
\nDisposals and other movements
(54)
(50)
(10)
(114)
\nExchange adjustments
(23)
(8)
(1)
(32)
\nAt 31\u00a0December 2022
411
176
14
601
\nNet book value
\nAt 31\u00a0December 2020
488
155
23
666
\nAt 31\u00a0December 2021
807
167
14
988
\nAt 31\u00a0December 2022
771
153
18
942
\nLease Liability
\n2022
2021
2020
\n$m
$m
$m
\nThe present value of lease liabilities is as follows:
\nWithin one year
(228)
(233)
(192)
\nLater than one year and not later than five years
(549)
(544)
(389)
\nLater than five years
(176)
(210)
(100)
\nTotal lease liabilities
(953)
(987)
(681)
\nThe interest expense on lease liabilities included within \ufb01nance costs was $24m (2021: $22m; 2020: $21m).
\nThe total cash out\ufb02ow for leases in 2022 was $268m (2021: $262m; 2020: $228m).
\nThe discount rates used for calculating the present value of lease liabilities range from 0% to 63%.
\nThe Group has entered into lease contracts that have not yet commenced. The nominal value of estimated future lease payments under these lease
\ncontracts approximates $1,460m as of 31 December 2022. Of this value, $1,349m relates to a property lease in the US which is expected to commence
\nin 2026 with a lease term of 15 years.
\nThe Group entered into a sale and leaseback agreement in relation to the Waltham R&D site in MA, US in 2022. Prior to the sale, the carrying value
\nof the Property, plant and equipment was $124m. Cash proceeds of $265m have been received, recorded within Disposal of property, plant and
\nequipment within the Consolidated Statement of Cash Flows, and a gain on disposal of $125m has been recorded within Other operating income and
\nexpense within the Consolidated Statement of Comprehensive Income. A lease liability and a corresponding right-of-use asset have been
\nrecorded of $28m and $13m, respectively.
\nNotes to the Group Financial Statements
\ncontinued
\n160
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
9 Goodwill
\n2022
2021
2020
\n$m
$m
$m
\nCost
\nAt 1\u00a0January
20,311
12,164
11,982
\nAdditions through business combinations (Note\u00a027)
15
8,287
\u2013
\nExchange and other adjustments
(195)
(140)
182
\nAt 31\u00a0December
20,131
20,311
12,164
\nAmortisation and impairment losses
\nAt 1\u00a0January
314
319
314
\nExchange and other adjustments
(3)
(5)
5
\nAt 31\u00a0December
311
314
319
\nNet book value
\nAt 31\u00a0December
19,820
19,997
11,845
\nGoodwill is tested for impairment at the operating segment level, this being the level at which goodwill is monitored for internal management purposes.
\nAs detailed in Note 6, the Group does not have multiple operating segments and is engaged in a single business activity of pharmaceuticals.
\nRecoverable amount is determined on a fair value less costs to sell basis using the market value of the Company\u2019s outstanding Ordinary Shares.
\nOur market capitalisation is compared to the book value of the Group\u2019s net assets and this indicates a signi\ufb01cant surplus at 31 December 2022
\n(and 31 December 2021 and 31 December 2020). No goodwill impairment was identi\ufb01ed.
\n10 Intangible assets
\nProduct,
Software
\nmarketing and
Other
development
\ndistribution rights
intangibles
costs
Total
\n$m
$m
$m
$m
\nCost
\nAt 1\u00a0January 2020
40,654
2,649
1,781
45,084
\nAdditions \u2013 separately acquired
1,454
2
136
1,592
\nDisposals
(970)
(66)
(636)
(1,672)
\nExchange and other adjustments
1,539
57
7
1,603
\nAt 31\u00a0December 2020
42,677
2,642
1,288
46,607
\nAdditions through business combinations (Note\u00a027)
26,455
430
70
26,955
\nAdditions \u2013 separately acquired
587
6
119
712
\nTransferred to Assets held for sale (Note\u00a018)
(1,266)
(47)
\u2013
(1,313)
\nDisposals
(801)
(402)
(23)
(1,226)
\nExchange and other adjustments
(1,062)
(18)
(22)
(1,102)
\nAt 31\u00a0December 2021
66,590
2,611
1,432
70,633
\nAdditions through business combinations (Note 27)
\u2013
46
\u2013
46
\nAdditions \u2013 separately acquired
2,051
12
105
2,168
\nDisposals
(57)
(105)
(36)
(198)
\nExchange and other adjustments
(1,799)
(122)
(106)
(2,027)
\nAt 31\u00a0December 2022
66,785
2,442
1,395
70,622
\nAmortisation and impairment losses
\nAt 1\u00a0January 2020
20,605
2,097
1,549
24,251
\nAmortisation for year
1,872
59
61
1,992
\nImpairment charges
405
\u2013
\u2013
405
\nImpairment reversals
(165)
\u2013
\u2013
(165)
\nDisposals
(899)
(66)
(636)
(1,601)
\nExchange and other adjustments
746
38
(6)
778
\nAt 31\u00a0December 2020
22,564
2,128
968
25,660
\nAmortisation for year
2,908
172
63
3,143
\nImpairment charges
2,067
\u2013
18
2,085
\nTransferred to Assets held for sale (Note\u00a018)
(931)
(14)
\u2013
(945)
\nDisposals
(797)
(402)
(21)
(1,220)
\nExchange and other adjustments
(535)
(21)
(26)
(582)
\nAt 31\u00a0December 2021
25,276
1,863
1,002
28,141
\nAmortisation for year
3,899
181
76
4,156
\nImpairment charges
236
82
\u2013
318
\nImpairment reversals
(77)
\u2013
(17)
(94)
\nDisposals
(55)
(105)
(20)
(180)
\nExchange and other adjustments
(887)
(76)
(63)
(1,026)
\nAt 31\u00a0December 2022
28,392
1,945
978
31,315
\nNet book value
\nAt 31\u00a0December 2020
20,113
514
320
20,947
\nAt 31\u00a0December 2021
41,314
748
430
42,492
\nAt 31\u00a0December 2022
38,393
497
417
39,307
\n161
AstraZeneca Annual Report & Form 20-F Information 2022
Notes to the Group Financial Statements
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
10 Intangible assets
continued
\n2022
2021
2020
\n$m
$m
$m
\nNet book value
\nCurrent intangible assets
\u2013
105
\u2013
\nNon-current intangible assets
39,307
42,387
20,947
\nAt 31\u00a0December
39,307
42,492
20,947
\nOther intangibles consist mainly of research and device technologies and the Alexion brand name. Included within Software development costs are
\nassets currently in development that will commence amortisation when ready for use.
\nIncluded within Additions \u2212 separately acquired are amounts of $1,135m (2021: $124m; 2020: $835m), relating to deferred payments and other non-cash
\nconsideration for the acquisition of Product, marketing and distribution rights, which are not re\ufb02ected in the current year Consolidated Statement of
\nCash Flows. Disposals include amounts related to fully depreciated assets that are no longer in use by the Group.
\nAmortisation charges are recognised in pro\ufb01t as follows:
\nProduct,
Software
\nmarketing and
Other
development
\ndistribution rights
intangibles
costs
Total
\n$m
$m
$m
$m
\nYear ended 31\u00a0December 2020
\nCost of sales
66
\u2013
\u2013
66
\nResearch and development expense
\u2013
29
\u2013
29
\nSelling, general and administrative expense
1,806
28
61
1,895
\nOther operating income and expense
\u2013
2
\u2013
2
\nTotal
1,872
59
61
1,992
\nYear ended 31\u00a0December 2021
\nCost of sales
66
\u2013
\u2013
66
\nResearch and development expense
\u2013
33
\u2013
33
\nSelling, general and administrative expense
2,842
138
63
3,043
\nOther operating income and expense
\u2013
1
\u2013
1
\nTotal
2,908
172
63
3,143
\nYear ended 31\u00a0December 2022
\nCost of sales
32
\u2013
\u2013
32
\nResearch and development expense
\u2013
30
\u2013
30
\nSelling, general and administrative expense
3,867
151
76
4,094
\nTotal
3,899
181
76
4,156
\nNet impairment charges are recognised in pro\ufb01t as follows:
\nProduct,
Software
\nmarketing and
Other
development
\ndistribution rights
intangibles
costs
Total
\n$m
$m
$m
$m
\nYear ended 31\u00a0December 2020
\nResearch and development expense
55
\u2013
\u2013
55
\nSelling, general and administrative expense
185
\u2013
\u2013
185
\nTotal
240
\u2013
\u2013
240
\nYear ended 31\u00a0December 2021
\nResearch and development expense
1,464
\u2013
\u2013
1,464
\nSelling, general and administrative expense
603
\u2013
18
621
\nTotal
2,067
\u2013
18
2,085
\nYear ended 31\u00a0December 2022
\nResearch and development expense
95
\u2013
\u2013
95
\nSelling, general and administrative expense
64
82
(17)
129
\nTotal
159
82
(17)
224
\nImpairment charges and reversals
\nWe perform a rigorous impairment trigger assessment for all our intangible assets. Intangible assets under development and not available for use
\nare tested annually for impairment and other intangible assets are tested when there is an indication of impairment loss or reversal. Where testing
\nis required, the recoverable amount of the assets is estimated in order to determine the extent of the impairment loss or reversal. Where it is not
\npossible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the Cash Generating Unit (CGU)
\nto which it belongs. The Group considers that as the intangible assets are linked to individual products and that product cash \ufb02ows are considered
\nto be largely independent of other product cash \ufb02ows, the CGU for intangibles is at the product level. Group level budgets and forecasts include
\nforecast capital investment and operational impacts related to sustainability projects, as well as in\ufb02ationary impacts, and form the basis for the
\nvalue in use models used for impairment testing.
\nNotes to the Group Financial Statements
\ncontinued
\n162
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
An asset\u2019s recoverable amount is determined as the higher of an asset\u2019s or CGU\u2019s fair value less costs to sell or value in use, in both cases using
\ndiscounted cash \ufb02ow calculations where the asset\u2019s expected post-tax cash \ufb02ows are risk-adjusted over their estimated remaining period of expected
\neconomic bene\ufb01t. Where the value in use approach is used, the post-tax risk-adjusted cash \ufb02ows are discounted using AstraZeneca\u2019s post-tax
\nweighted average cost of capital (7% for 2022, 2021 and 2020), which is a nominal rate. There is no material difference in the approach taken to using
\npre-tax cash \ufb02ows and a pre-tax rate compared to post-tax cash \ufb02ows and a post-tax rate, as required by IAS 36. Where fair value less costs to sell
\nis used to determine recoverable value, the discount rate is assessed with reference to a market participant; this is not usually materially different to
\nthe AstraZeneca post-tax weighted average cost of capital rate of 7%. Legacy Alexion assets have been tested for impairment at risk-adjusted post-tax
\ndiscount rates ranging between 8.5% to 10.5% as they are integrated into the Group. No impairments have been recognised on these assets.
\nThe estimates used in calculating the recoverable amount are considered signi\ufb01cant estimates, highly sensitive and depend on assumptions
\nspeci\ufb01c to the nature of the Group\u2019s activities including:
\n>
outcome of R&D activities
\n>
probability of technical and regulatory success
\n>
market volume, share and pricing (to derive peak year sales)
\n>
amount and timing of projected future cash \ufb02ows
\n>
sales erosion curves following patent expiry.
\nFor assets held at fair value less costs to sell, we make appropriate adjustments to re\ufb02ect market participant assessments.
\nIn 2022, the Group recorded impairment charges of $146m in respect of launched products. Impairment charges recorded against products in
\ndevelopment totalled $172m due to decisions made to terminate the related activities.
\nIn 2021, the Group recorded impairment charges of $603m in respect of launched products, including
Bydureon
($469m, revised carrying amount
\nof $50m) under value in use model, roxadustat ($121m, revised carrying amount of $215m) under value in use model and other launched products
\ntotalling $13m.
\nImpairment charges recorded against products in development in 2021, based on fair value less costs to sell, totalled $1,464m, principally Ardea
\n($1,172m) which was fully impaired following the decision to discontinue development of verinurad. The remaining impairments relate to full impairments
\nof various products in development, due to either management\u2019s decision to discontinue development as part of a Group-wide portfolio prioritisation
\nreview, or due to the outcome of research activities.
\nIn 2020, the Group recorded impairment charges of $350m in respect of launched products, including
Duaklir
($200m, revised carrying amount of
\n$210m) under fair value less costs to sell,
Bydureon
($102m, revised carrying amount of $581m) under value in use model, and other launched products
\ntotalling $48m. The fair value less costs to sell valuation model for
Duaklir
was based on discounted cash \ufb02ows, and was categorised at Level 3 in
\nthe fair value hierarchy. Key assumptions in this model were forecast future revenue and costs of production. Impairment charges recorded against
\nproducts in development totalled $55m.
\nThe Group has performed an assessment on assets which have had impairments recorded in previous periods to determine if any reversals of
\nimpairments were required. Impairment reversals of $94m were recorded in 2022, including $77m in respect of products in development. No impairment
\nreversals were recorded in 2021. Impairment reversals of $165m were recorded in 2020 in respect of launched products, including
FluMist
($147m,
\nrevised carrying amount of $300m, driven by expanded vaccination efforts increasing global demand), and other launched products of $18m.
\nWhen launched products, such as the ones detailed above, are partially impaired, the carrying values of these assets in future periods are particularly
\nsensitive to changes in forecast assumptions, including those assumptions set out above, as the asset is impaired down to its recoverable amount.
\nSigni\ufb01cant assets
\nCarrying value
\nRemaining
\namortisation
\n$m
period
\nC5 franchise (
Soliris/Ultomiris
) intangible assets arising from the acquisition of Alexion
16,040
5 to 13 years
\nIntangible assets arising from the acquisition of Acerta Pharma
4,817
10 years
\nStrensiq, Kanuma
and
Andexxa
intangible assets arising from the acquisition of Alexion
4,583
10 to 16 years
\nEnhertu
intangible assets acquired from Daiichi Sankyo
2,960
11 years
\nIntangible asset products in development arising from the acquisition of Alexion
\n1
\n2,760
Not amortised
\nIntangible assets arising from the acquisition of ZS Pharma
2,012
9 years
\nOther intangible assets (DS-1062) acquired from Daiichi Sankyo
\n1
\n937
Not amortised
\nIntangible assets arising from the restructuring of a historical joint venture with MSD
569
4 to 7 years
\nFarxiga
/
Forxiga
intangible assets acquired from BMS
528
4 years
\nIntangible assets arising from the acquisition of Pearl Therapeutics
462
6 to 7 years
\nRSV franchise assets arising from the acquisition of MedImmune
458
3 years
\nMonalizumab intangible assets acquired from Innate Pharma
\n1
\n350
Not amortised
\n1
Assets in development are not amortised but are tested annually for impairment.
\nThe acquisition of intangible assets relating to DS-1062 in 2020 was assessed under the optional concentration test in IFRS 3 and was determined
\nto be an asset acquisition, as substantially all of the value of the gross assets acquired was concentrated in a single asset.
\n163
AstraZeneca Annual Report & Form 20-F Information 2022
Notes to the Group Financial Statements
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
11 Investments in associates and joint ventures
\n2022
2021
2020
\n$m
$m
$m
\nAt 1\u00a0January
69
39
58
\nAdditions
26
92
8
\nShare of after tax losses
(5)
(64)
(27)
\nExchange and other adjustments
(14)
2
\u2013
\nAt 31\u00a0December
76
69
39
\nOn 29 January 2021, AstraZeneca entered into an agreement with IHP Holdings Limited to create and run an online platform (iHospital) offering
\nconsultations with physicians, repeat prescriptions and e-pharmacy in China. The agreement resulted in the formation of a new entity, IHP HK
\nHoldings Limited. AstraZeneca contributed $30m in initial funds and holds a 50% interest in the associate entity.
\nOn 1 December 2020, AstraZeneca and China International Capital Corporation (CICC) entered into an agreement to set up a Global Healthcare
\nIndustrial Fund to drive healthcare system innovation by leveraging local capital and accelerating China-related innovation incubation. The agreement
\nresulted in the formation of a new entity, Wuxi AstraZeneca-CICC Venture Capital Partnership (Limited Partnership). AstraZeneca holds a 22%
\ninterest in the associate entity and contributed $1m in initial funds in 2020, with contributions of $45m and $21m made in 2021 and 2022 respectively.
\nOn 23 September 2021, AstraZeneca entered into an agreement with VaxEquity Limited to collaborate and develop self-amplifying RNA technology
\nwith the aim of generating treatments for target diseases. AstraZeneca contributed $14m in initial funds and holds a 40% interest in the associate entity.
\nOn 23 February 2018, AstraZeneca entered into an agreement with a consortium of investors to form a new, US-domiciled standalone company
\ncalled Viela Bio. In February 2021, AstraZeneca agreed to divest its 26.7% ownership in Viela Bio, as part of the acquisition of Viela by Horizon
\nTherapeutics plc. AstraZeneca received cash proceeds and pro\ufb01t of $776m upon closing with the pro\ufb01t recorded as Other operating income. In 2021,
\nprior to divestment, the Group provided transitional research and development services to Viela Bio, comprising $nil (2020: $3m) of services provided
\ndirectly by the Group and $1m (2020: $15m) of passed-through third-party costs incurred by the Group on behalf of Viela Bio.
\nOn 27 November 2017, AstraZeneca entered into a joint venture agreement with Chinese Future Industry Investment Fund (FIIF), to discover, develop
\nand commercialise potential new medicines to help address unmet medical needs globally, and to bring innovative new medicines to patients in
\nChina more quickly. The agreement resulted in the formation of a joint venture entity based in China, Dizal (Jiangsu) Pharmaceutical Co., Limited
\n(Dizal). Since its establishment, AstraZeneca has contributed $80m in cash to the joint venture entity and has a 27% interest in the joint venture.
\nOn 1 December 2015, AstraZeneca entered into a joint venture agreement with Fuji\ufb01lm Kyowa Kirin Biologics Co., Ltd. to develop a biosimilar using
\nthe combined capabilities of the two parties. The agreement resulted in the formation of a joint venture entity based in the UK, Centus Biotherapeutics
\nLimited (Centus). Since its establishment, AstraZeneca has contributed $135m in cash to the joint venture entity and has a 50% interest in the
\njoint venture.
\nOn 30 April 2014, AstraZeneca entered into a joint venture agreement with Samsung Biologics Co., Ltd. which resulted in the formation of a joint
\nventure entity based in the UK, Archigen Biotech Limited (Archigen). On 31 March 2022, Archigen entered a voluntary liquidation process.
\nAll investments are accounted for using the equity method. At 31 December 2022, unrecognised losses in associates and joint ventures totalled
\n$92m (2021: $73m; 2020: $56m) which have not been recognised due to the investment carrying value reaching $nil value.
\nAggregated summarised \ufb01nancial information for the associate and joint venture entities is set out below:
\n2022
2021
2020
\n$m
$m
$m
\nNon-current assets
290
215
324
\nCurrent assets
300
506
552
\nTotal liabilities
(72)
(99)
(105)
\nNet assets
518
622
771
\nAmount attributable to AstraZeneca
91
65
38
\nExchange adjustments
(15)
4
1
\nCarrying value of investments in associates and joint ventures
76
69
39
\nA joint contractual arrangement was entered into between AstraZeneca and Daiichi Sankyo Company Limited (Daiichi Sankyo) in March 2019 for
\nthe co-development and co-commercialisation of
Enhertu
. Each party shares global pre-tax net income from the collaboration on a 50:50 basis
\n(with the exception of Japan where Daiichi Sankyo maintains exclusive rights and AstraZeneca receives a royalty). The joint operation is not
\nstructured through a separate legal entity, and it operates from AstraZeneca and Daiichi Sankyo\u2019s respective principal places of business.
\nNotes to the Group Financial Statements
\ncontinued
\n164
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
12 Other investments
\n2022
2021
2020
\n$m
$m\u00a0
$m
\nNon-current investments
\nEquity securities at fair value through Other comprehensive income
1,056
1,168
1,108
\nFixed income securities at fair value through profit and loss
10
\u2013
\u2013
\nTotal
1,066
1,168
1,108
\nCurrent investments
\nFixed income securities at fair value through profit and loss
13
16
118
\nCash collateral pledged to counterparties
162
\u2013
\u2013
\nFixed deposits
64
53
42
\nTotal
239
69
160
\nOther investments held at fair value through Other comprehensive income include equity securities which are not held for trading and which the
\nGroup has irrevocably elected at initial recognition to recognise in this category. Other investments held at fair value through pro\ufb01t and loss mainly
\ncomprise \ufb01xed income securities that the Group holds to sell.
\nThe fair value of listed investments is based on year end quoted market prices. Fixed deposits and Cash collateral pledged to counterparties are
\nheld at amortised cost with carrying value being a reasonable approximation of fair value given their short-term nature.
\nCash collateral pledged to counterparties relates to collateral pledged on derivatives entered into to hedge the Group\u2019s risk exposures. In 2022,
\nfollowing signi\ufb01cant foreign currency volatility increasing the collateral requirements, the Group revised its presentation to Other investments.
\nPrior year amounts of $47m in 2021 and $11m in 2020 are presented within Cash and cash equivalents.
\nFair value hierarchy
\nThe table below analyses equity securities and bonds, contained within Other investments and carried at fair value, by valuation method. The different
\nlevels have been de\ufb01ned as follows:
\n>
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
\n>
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or
\nindirectly (i.e. derived from prices)
\n>
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
\n2022
2022
2021
2021
2020
2020
\nFVPL
FVOCI
FVPL
FVOCI
FVPL
FVOCI
\n$m
$m
$m\u00a0
$m
$m
$m
\nLevel 1
13
880
16
1,064
118
891
\nLevel 2
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\nLevel 3
10
176
\u2013
104
\u2013
217
\nTotal
23
1,056
16
1,168
118
1,108
\nDuring 2020, AstraZeneca sold a proportion of its equity portfolio receiving consideration of $1,381m, a large proportion of which related to the
\ndisposal of its full holding in Moderna Therapeutics, Inc. All related gains were accounted through Other comprehensive income.
\nEquity securities that are analysed at Level 3 include investments in private biotech companies. In the absence of speci\ufb01c market data, these
\nunlisted investments are held at fair value based on the cost of investment and adjusting as necessary for impairments and revaluations on new
\nfunding rounds, which approximates to fair value. Movements in Level 3 investments are detailed below:
\n2022
2022
2021
2020
\nFVPL
FVOCI
FVOCI
FVOCI
\n$m
$m\u00a0
$m
$m
\nAt 1 January
\u2013
104
217
227
\nAdditions
10
32
1
96
\nRevaluations
\u2013
50
\u2013
63
\nNet transfers out
\u2013
(4)
(113)
(103)
\nDisposals
\u2013
(5)
\u2013
(86)
\nImpairments and exchange adjustments
\u2013
(1)
(1)
20
\nAt 31\u00a0December
10
176
104
217
\nAssets are transferred in or out of Level 3 on the date of the event or change in circumstances that caused the transfer.
\n165
AstraZeneca Annual Report & Form 20-F Information 2022
Notes to the Group Financial Statements
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
13 Derivative \ufb01nancial instruments
\nNon-current
Current
Current
Non-current
\nassets
assets
liabilities
liabilities
Total
\n$m
$m
$m
$m
$m
\nInterest rate swaps related to instruments designated at fair value through profit and loss
45
\u2013
\u2013
\u2013
45
\nCross currency swaps designated in a net investment hedge
19
\u2013
\u2013
(2)
17
\nCross currency swaps designated in a cash flow hedge
107
43
\u2013
\u2013
150
\nCross currency swaps designated in a fair value hedge
\n1
\n\u2013
43
\u2013
\u2013
43
\nForward FX designated in a cash flow hedge
\n2
\n\u2013
8
(3)
\u2013
5
\nOther derivatives
\u2013
48
(30)
\u2013
18
\n31\u00a0December 2020
171
142
(33)
(2)
278
\nNon-current
Current
Current
Non-current
\nassets
assets
liabilities
liabilities
Total
\n$m
$m
$m
$m
$m
\nInterest rate swaps related to instruments designated at fair value through profit and loss
25
\u2013
\u2013
\u2013
25
\nCross currency swaps designated in a net investment hedge
62
\u2013
\u2013
(2)
60
\nCross currency swaps designated in a cash flow hedge
\u2013
\u2013
\u2013
(43)
(43)
\nForward FX designated in a cash flow hedge
\n2
\n\u2013
13
\u2013
\u2013
13
\nOther derivatives
15
70
(79)
\u2013
6
\n31\u00a0December 2021
102
83
(79)
(45)
61
\nNon-current
Current
Current
Non-current
\nassets
assets
liabilities
liabilities
Total
\n$m
$m
$m
$m
$m
\nInterest rate swaps related to instruments designated at fair value through profit and loss
\u2013
1
\u2013
\u2013
1
\nCross currency swaps designated in a net investment hedge
55
\u2013
\u2013
(4)
51
\nCross currency swaps designated in a cash flow hedge
\u2013
\u2013
\u2013
(160)
(160)
\nForward FX designated in a cash flow hedge
\n2
\n\u2013
1
(13)
\u2013
(12)
\nOther derivatives
19
85
(80)
\u2013
24
\n31\u00a0December 2022
74
87
(93)
(164)
(96)
\n1
Cross currency swaps designated in a fair value hedge refers to a cross currency interest rate swap that hedges a designated euro 300m portion of our euro 750m 0.875% 2021 Non-callable
\nbond against exposure to movements in the euro:US dollar exchange rate. The swap matured in November 2021 when the related bond matured.
\n2
Forward FX designated in a cash flow hedge relates to contracts hedging anticipated CNY, EUR, GBP, JPY and SEK transactions occurring in the quarter immediately after the balance
\nsheet date.
\nAll derivatives are held at fair value and fall within Level 2 of the fair value hierarchy as de\ufb01ned in Note 12, except for an equity warrant which falls
\nwithin Level 3 (valued at $19m (2021: $15m), held within Non-current assets). None of the derivatives have been reclassi\ufb01ed in the year.
\nThe fair value of interest rate swaps and cross currency swaps is estimated using appropriate zero coupon curve valuation techniques to discount
\nfuture contractual cash \ufb02ows based on rates at the current year end.
\nThe fair value of forward foreign exchange contracts and currency options are estimated by cash \ufb02ow accounting models using appropriate yield
\ncurves based on market forward foreign exchange rates at the year end. The majority of forward foreign exchange contracts for existing transactions
\nhad maturities of less than one month from year end.
\nThe interest rates used to discount future cash \ufb02ows for fair value adjustments, where applicable, are based on market swap curves at the reporting
\ndate, and were as follows:
\n2022
2021
2020
\nDerivatives
0.1% to 4.7%
(0.5)% to 3.6%
(0.5)% to 2.4%
\n14 Non-current other receivables
\n2022
2021
2020
\n$m
$m
$m
\nPrepayments
243
391
395
\nAccrued income
44
61
56
\nRetirement benefit scheme surpluses (Note 22)
90
\u2013
\u2013
\nOther receivables
458
443
269
\nNon-current other receivables
835
895
720
\nPrepayments include $nil (2021: $92m; 2020: $121m) in relation to our research collaboration with Moderna. Other receivables include $71m (2021:
\n$44m; 2020: $56m) owed by FibroGen for promotional activity in China pursuant to the roxadustat collaboration.
\nNotes to the Group Financial Statements
\ncontinued
\n166
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
15 Inventories
\n2022
2021
2020
\n$m
$m
$m
\nRaw materials and consumables
1,422
1,755
1,262
\nInventories in process
1,864
5,216
1,331
\nFinished goods and goods for resale
1,413
2,012
1,431
\nInventories
4,699
8,983
4,024
\nThe Group recognised $9,618m (2021: $9,640m; 2020: $3,110m) of inventories as an expense within Cost of sales during the year.
\nInventory write-offs in the year amounted to $479m (2021: $552m; 2020: $149m).
\n16 Current trade and other receivables
\n2022
2021
2020
\n$m
$m\u00a0
$m
\nTrade receivables
7,271
6,054
3,829
\nLess: Expected credit loss provision (Note\u00a028)
(59)
(23)
(23)
\n7,212
6,031
3,806
\nOther receivables
1,659
1,808
1,278
\nPrepayments
1,329
1,512
1,735
\nGovernment grants receivable
25
\u2013
53
\nAccrued income
296
293
150
\nTrade and other receivables
10,521
9,644
7,022
\nTrade receivables include $2,470m (2021: $1,865m; 2020: $1,250m) measured at FVOCI classi\ufb01ed \u2018hold to collect and sell\u2019 as they are due from
\ncustomers that the Group has the option to factor, or relate to bank acceptance drafts received in settlement of trade receivables per common
\npractice in China.
\nAll other \ufb01nancial assets included within Current trade and other receivables are held at amortised cost with carrying value being a reasonable
\napproximation of fair value.
\n17 Cash and cash equivalents
\n2022
2021
2020
\n$m
$m\u00a0
$m
\nCash at bank and in hand
1,411
1,461
1,182
\nShort-term deposits
4,755
4,868
6,650
\nCash and cash equivalents
6,166
6,329
7,832
\nUnsecured bank overdrafts
(183)
(291)
(286)
\nCash and cash equivalents in the cash flow statement
5,983
6,038
7,546
\nAstraZeneca invests in constant net asset value funds and low-volatility net asset value funds with same day access for subscription and redemption.
\nThese investments fail the \u2018solely payments of principal and interest\u2019 test criteria under IFRS 9. They are therefore measured at fair value through
\npro\ufb01t and loss, although the fair value is materially the same as amortised cost.
\nNon-cash and other movements, within operating activities in the Consolidated Statement of Cash Flows, includes:
\n2022
2021
2020
\n$m
$m\u00a0
$m
\nShare-based payments charge for the period
619
615
277
\nSettlement of share plan awards
(592)
(570)
(349)
\nPension contributions
(205)
(174)
(172)
\nPension charges recorded in operating profit
101
136
84
\nLong-term provision charges recorded in operating profit
87
270
66
\nNon-cash intangible additions
\u2013
\u2013
(120)
\n(Gain)/loss on disposal of tangible assets
(112)
4
(25)
\nForeign exchange and other
\n1
\n(590)
(186)
(37)
\nTotal operating activities non-cash and other movements
(692)
95
(276)
\n1
Foreign exchange and other includes, among other items, the foreign exchange of intercompany transactions, including dividends, across Group entities and the related impact from hedging
\nthose transactions.
\n167
AstraZeneca Annual Report & Form 20-F Information 2022
Notes to the Group Financial Statements
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
18 Assets held for sale
\nAssets held for sale amount to $150m (2021: $368m; 2020: $nil). Current year assets comprise Property, plant and equipment assets relating to the
\nWest Chester site in Ohio, US. AstraZeneca signed a contract on 29 November 2022 to sell the site to National Resilience, Inc. subject to anti-trust
\nclearance. The transaction closed on 30 January 2023.
\nIn 2021, Assets held for sale comprised Intangible assets relating to the rights to certain respiratory assets acquired from Almirall and Actavis (including
\nTudorza
and
Duaklir
). The transaction closed on 4 January 2022.
\n19 Interest-bearing loans and borrowings
\nRepayment
2022
2021
2020
\ndates
$m
$m
$m
\nCurrent liabilities
\nBank overdrafts
On demand
183
291
286
\nOther short-term borrowings excluding overdrafts
78
3
84
\nCollateral received from derivative counterparties
89
93
288
\nLease liabilities
228
233
192
\n0.25% Callable bond
euros
2021
\u2013
\u2013
614
\n0.875% Non-callable bond
euros
2021
\u2013
\u2013
919
\nFloating rate notes
US dollars
2022
\u2013
250
\u2013
\n2.375% Callable bond
US dollars
2022
\u2013
999
\u2013
\n0.3% Callable bond
US dollars
2023
1,399
\u2013
\u2013
\n2023 Floating bank loan
US dollars
2023
2,000
\u2013
\u2013
\nFloating rate notes
US dollars
2023
400
\u2013
\u2013
\n3.5% Callable bond
US dollars
2023
849
\u2013
\u2013
\n7% Guaranteed debentures
US dollars
2023
294
\u2013
\u2013
\nOther loans (including commercial paper)
Within one year
22
24
3
\nTotal
5,542
1,893
2,386
\nNon-current liabilities
\nLease liabilities
725
754
489
\nFloating rate notes
US dollars
2022
\u2013
\u2013
250
\n2.375% Callable bond
US dollars
2022
\u2013
\u2013
996
\n0.3% Callable bond
US dollars
2023
\u2013
1,397
\u2013
\n2023 Floating rate bank loan
US dollars
2023
\u2013
1,998
\u2013
\nFloating rate notes
US dollars
2023
\u2013
400
400
\n3.5% Callable bond
US dollars
2023
\u2013
848
847
\n7% Guaranteed debentures
US dollars
2023
\u2013
320
339
\n0.75% Callable bond
euros
2024
957
1,014
1,102
\n0.7% Callable bond
US dollars
2024
1,598
1,598
\u2013
\n2024 Floating rate bank loan
US dollars
2024
1,998
1,997
\u2013
\n3.375% Callable bond
US dollars
2025
1,992
1,988
1,985
\n0.7% Callable bond
US dollars
2026
1,195
1,193
1,192
\n1.2% Callable bond
US dollars
2026
1,246
1,245
\u2013
\n3.125% Callable bond
US dollars
2027
746
745
744
\n1.25% Callable bond
euros
2028
845
896
973
\n1.75% Callable bond
US dollars
2028
1,245
1,244
\u2013
\n4% Callable bond
US dollars
2029
995
994
993
\n0.375% Callable bond
euros
2029
846
898
\u2013
\n1.375% Callable bond
US dollars
2030
1,293
1,292
1,291
\n2.25% Callable bond
US dollars
2031
747
746
\u2013
\n5.75% Non-callable bond
pounds sterling
2031
420
470
475
\n6.45% Callable bond
US dollars
2037
2,724
2,724
2,722
\n4% Callable bond
US dollars
2042
988
988
988
\n4.375% Callable bond
US dollars
2045
981
980
980
\n4.375% Callable bond
US dollars
2048
737
737
737
\n2.125% Callable bond
US dollars
2050
487
486
486
\n3% Callable bond
US dollars
2051
735
734
\u2013
\nOther loans
US dollars
190
202
5
\nTotal
23,690
28,888
17,994
\nTotal interest-bearing loans and borrowings
\n1, 2
\n29,232
30,781
20,380
\n1
All loans and borrowings above are unsecured apart from $22m (2021: $24m) of current and $181m (2021: $188m) of non-current in 2022, both included within Other loans.
\n2
The $2bn USD 2023 floating rate bank loan and $2bn USD 2024 floating rate bank loan pay interest linked to 1 month USD LIBOR. The Group has the right to switch these loans to compounded
\ndaily USD Secured Overnight Funding Rate (SOFR) with five days notice. The loans will automatically switch to compounded SOFR on 30 June 2023 if the Group has not already switched
\nbefore this date. All other floating rate debt is not impacted by LIBOR reference as it either uses non-LIBOR fixings or will mature before the relevant LIBOR rate is withdrawn.
\nNotes to the Group Financial Statements
\ncontinued
\n168
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
Total loans and
Total loans and
Total loans and
\nborrowings
borrowings
borrowings
\n2022
2021
2020
\n$m
$m
$m
\nAt 1\u00a0January
30,781
20,380
18,227
\nChanges from financing cash flows
\nIssue of loans and borrowings
\u2013
12,929
2,968
\nRepayment of loans and borrowings
(1,271)
(4,759)
(1,609)
\nMovement in short-term borrowings
74
(276)
288
\nRepayment of obligations under leases
(244)
(240)
(207)
\nTotal changes in cash flows arising on financing activities from borrowings
(1,441)
7,654
1,440
\nMovement in overdrafts
(85)
31
138
\nNew lease liabilities
253
503
174
\nAdditions through business combinations
5
2,523
\u2013
\nExchange
(287)
(378)
363
\nOther movements
6
68
38
\nAt 31\u00a0December
29,232
30,781
20,380
\nAlso included within cash \ufb02ows arising from \ufb01nancing activities within the Consolidated Statement of Cash Flows is a $920m cash out\ufb02ow (2021: $nil;
\n2020: $nil) related to the Acerta Pharma share purchase liability which has a closing liability at 31 December 2022 of $1,646m (2021: $2,458m; 2020:
\n$2,297m) within Trade and other payables (see Note 20 and Note 26).
\nSet out below is a comparison by category of carrying values and fair values of all the Group\u2019s interest-bearing loans and borrowings:
\nInstruments in a
Instruments
Instruments
Total
\nfair value hedge
designated
designated in
Amortised
carrying
Fair
\nrelationship
\n1
\nat fair value
\n2
\ncash flow hedge
\n3
\ncost
value
value
\n$m
$m
$m
$m
$m
$m
\n2020
\nOverdrafts
\u2013
\u2013
\u2013
286
286
286
\nLease liabilities due within one year
\u2013
\u2013
\u2013
192
192
192
\nLease liabilities due after more than one year
\u2013
\u2013
\u2013
489
489
489
\nLoans and borrowings due within one year
371
\u2013
614
923
1,908
1,922
\nLoans and borrowings due after more than one year
\u2013
339
2,075
15,091
17,505
20,936
\nTotal at 31\u00a0December 2020
371
339
2,689
16,981
20,380
23,825
\n2021
\nOverdrafts
\u2013
\u2013
\u2013
291
291
291
\nLease liabilities due within one year
\u2013
\u2013
\u2013
233
233
233
\nLease liabilities due after more than one year
\u2013
\u2013
\u2013
754
754
754
\nLoans and borrowings due within one year
\u2013
\u2013
\u2013
1,369
1,369
1,378
\nLoans and borrowings due after more than one year
\u2013
320
1,910
25,904
28,134
30,596
\nTotal at 31\u00a0December 2021
\u2013
320
1,910
28,551
30,781
33,252
\n2022
\nOverdrafts
\u2013
\u2013
\u2013
183
183
183
\nLease liabilities due within one year
\u2013
\u2013
\u2013
228
228
228
\nLease liabilities due after more than one year
\u2013
\u2013
\u2013
725
725
725
\nLoans and borrowings due within one year
\u2013
294
\u2013
4,837
5,131
5,105
\nLoans and borrowings due after more than one year
\u2013
\u2013
1,802
21,163
22,965
21,657
\nTotal at 31\u00a0December 2022
\u2013
294
1,802
27,136
29,232
27,898
\n1
Instruments designated as hedged items in a fair value hedge relationship relate to a designated euro 300m portion of our euro 750m 0.875% 2021 Non-callable bond which matured on
\n24 November 2021. The accumulated amount of fair value hedge adjustments to the bond was a loss of $10m.
\n2
Instruments designated at fair value through profit or loss include the US dollar 7% guaranteed debentures repayable in 2023.
\n3
Instruments designated in cash flow hedges are our euro 500m 0.25% Callable bond which matured in 2021, our euro 900m 0.75% 2024 Callable bond and our euro 800m 1.25% 2028
\nCallable bond.
\nThe fair value of \ufb01xed-rate publicly traded debt is based on year end quoted market prices; the fair value of \ufb02oating rate debt is nominal value, as
\nmark-to-market differences would be minimal given the frequency of resets. The carrying value of loans designated at fair value through pro\ufb01t or loss
\nis the fair value; this falls within the Level 1 valuation method as de\ufb01ned in Note 12. For loans designated in a fair value hedge relationship, carrying
\nvalue is initially measured at fair value and remeasured for fair value changes in respect of the hedged risk at each reporting date. All other loans
\nare held at amortised cost. Fair values, as disclosed in the table above, are all determined using the Level 1 valuation method as de\ufb01ned in Note 12,
\nwith the exception of overdrafts and lease liabilities, where fair value approximates to carrying values.
\n169
AstraZeneca Annual Report & Form 20-F Information 2022
Notes to the Group Financial Statements
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
19 Interest-bearing loans and borrowings
continued
\nA gain of $2m was made during the year on the fair value of bonds designated as fair value through pro\ufb01t or loss, due to increased credit risk. A gain
\nof $31m has been made on these bonds since designation due to increased credit risk. Under IFRS 9, the Group records the component of fair value
\nchanges relating to the component of own credit risk through Other comprehensive income. Changes in credit risk had no material effect on any
\nother \ufb01nancial assets and liabilities recognised at fair value in the Group Financial Statements. The change in fair value attributable to changes in
\ncredit risk is calculated as the change in fair value not attributable to market risk. The amount payable at maturity on bonds designated at fair value
\nthrough pro\ufb01t or loss is $287m.
\nThe interest rates used to discount future cash \ufb02ows for fair value adjustments, where applicable, are based on market swap curves at the reporting
\ndate, and were as follows:
\n2022
2021
2020
\nLoans and borrowings
4.3% to 4.9%
0.1% to 0.6%
(0.5)% to 0.1%
\n20 Trade and other payables
\n2022
2021
2020
\n$m
$m
$m
\nCurrent liabilities
\nTrade payables
2,550
2,824
2,350
\nValue-added and payroll taxes and social security
468
463
390
\nRebates, chargebacks, returns and other revenue accruals
6,078
5,298
4,772
\nClinical trial accruals
1,417
1,047
699
\nOther accruals
5,551
5,649
3,905
\nCollaboration Revenue contract liabilities
12
12
12
\nVaccine contract liabilities
169
1,003
1,616
\nDeferred government grant income
1
67
253
\nContingent consideration
757
849
647
\nAcerta Pharma share purchase liability (Note\u00a026)
867
920
\u2013
\nOther payables
1,170
806
1,141
\nTotal
19,040
18,938
15,785
\nNon-current liabilities
\nAccruals
37
25
56
\nCollaboration Revenue contract liabilities
14
26
38
\nContingent consideration
1,465
2,016
2,676
\nAcerta Pharma share purchase liability (Note\u00a026)
779
1,538
2,297
\nOther payables
1,975
1,328
1,017
\nTotal
4,270
4,933
6,084
\nIncluded within Rebates, chargebacks, returns and other revenue accruals are contract liabilities of $87m (2021: $99m; 2020: $77m). The revenue
\nrecognised in the year for contract liabilities is $86m, comprising $74m relating to other revenue accruals and $12m Collaboration Revenue contract
\nliabilities. The major markets with Rebates, chargebacks, returns and other revenue accruals are the US where the liability at 31 December 2022
\namounted to $3,961m (2021: $3,172m; 2020: $3,126m), of which Rare Disease comprises $139m (2021: $127m), and China where the liability at
\n31 December 2022 amounted to $579m (2021: $814m; 2020: $740m).
\nTrade payables includes $67m (2021: $44m; 2020: $248m) due to suppliers that have signed up to a supply chain \ufb01nancing programme, under which
\nthe suppliers can elect on an invoice-by-invoice basis to receive a discounted early payment from the relationship bank rather than being paid in
\nline with the agreed payment terms. If the option is taken, the Group\u2019s liability is assigned by the supplier to be due to the relationship bank rather
\nthan the supplier. The value of the liability payable by the Group remains unchanged. The Group assesses the arrangement against indicators to
\nassess if debts which vendors have sold to the funder under the supplier \ufb01nancing scheme continue to meet the de\ufb01nition of trade payables or
\nshould be classi\ufb01ed as borrowings. At 31 December 2022, the payables met the criteria of Trade payables. The supply chain \ufb01nancing programme
\noperates in the US, UK, Sweden and Germany, and as at 31 December 2022, the programme had 420 suppliers enrolled across these countries.
\nVaccine contract liabilities relate to amounts received from customers, primarily government bodies, in advance of supply of product. Substantially
\nall of the Vaccine contract liabilities are expected to be recognised as revenue during the next \ufb01nancial year. The revenue recognised in the year
\nrelated to Vaccine contract liabilities held at the beginning of the year was $686m.
\nDeferred government grant income relates to government grants received or receivable but for which the related expenses have not been incurred.
\nIncluded within current Other payables are liabilities to Daiichi Sankyo totalling $100m (2021: $nil; 2020: $146m) resulting from the collaboration
\nagreement in relation to
Enhertu
entered into in March 2019 and $nil (2021: $324m; 2020: $324m) in relation to DS-1062 entered into in July 2020.
\nAdditionally, included within non-current Other payables are liabilities totalling $1,125m (2021: $100m; 2020: $100m) as a result of the
Enhertu
\ncollaboration agreement and $nil (2021: $nil; 2020: $323m) as a result of the DS-1062 collaboration agreement.
\nNotes to the Group Financial Statements
\ncontinued
\n170
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
In November 2020,
Calquence
received marketing approval in the EU, which removed all remaining conditionality in respect of the Acerta Pharma
\nput and call options regarding the non-controlling interest; the option was exercised in April 2021 (see Note 26). In October 2019, an amendment
\nto the share purchase and option agreement (SPOA) with the sellers of Acerta Pharma (originally entered into in December 2015) came into effect,
\nchanging certain terms of the SPOA on both the timing and also reducing the maximum consideration that would be required to be made to acquire
\nthe remaining outstanding shares of Acerta Pharma if the options were exercised. The payments will be made in similar annual instalments in
\n2022 through to 2024, with the \ufb01rst payment of $920m made in 2022. The changes to the terms are re\ufb02ected in the assumptions used to calculate
\nthe amortised cost of the liability as at 31 December 2022 of $1,646m (2021: $2,458m; 2020: $2,297m). Interest arising from amortising the liability
\nis included within Finance Expense (see Note 3). The associated cash \ufb02ows are disclosed as \ufb01nancing activities within the Consolidated
\nStatement of Cash Flows.
\nWith the exception of Contingent consideration payables of $2,222m (2021: $2,865m; 2020: $3,323m) which are held at fair value within Level 3
\nof the fair value hierarchy as de\ufb01ned in Note 12, all other \ufb01nancial liabilities are held at amortised cost with carrying value being a reasonable
\napproximation of fair value.
\nContingent consideration
\n2022
2021
2020
\n$m
$m
$m
\nAt 1\u00a0January
2,865
3,323
4,139
\nSettlements
(772)
(643)
(822)
\nDisposals
\n1
\n(121)
\u2013
\u2013
\nRevaluations
82
14
(272)
\nReclassification to Other payables
\u2013
(55)
\u2013
\nDiscount unwind (Note\u00a03)
168
226
278
\nAt 31\u00a0December
2,222
2,865
3,323
\n1
On 4 January 2022, AstraZeneca completed the sale of the global rights to
Tudorza
and
Duaklir
to Covis Pharma GmbH. The divestment resulted in the remaining outstanding Contingent
\nconsideration payable of $121m related to these assets being extinguished on the basis that AstraZeneca is no longer obliged to make such payments to Almirall.
\nContingent consideration arising from business combinations is fair valued using decision-tree analysis, with key inputs including the probability
\nof success, consideration of potential delays and the expected levels of future revenues.
\nRevaluations of Contingent consideration are recognised in Selling, general and administrative expense and include an increase of $182m in 2022
\n(2021: an increase of $42m; 2020: a decrease of $51m) based on revised milestone probabilities, and revenue and royalty forecasts, relating to the
\nacquisition of BMS\u2019s share of the Global Diabetes Alliance. Discount unwind on the liability is included within Finance expense (see Note 3).
\nThe discount rate used for the Contingent consideration balances range from 3% to 9%. The most signi\ufb01cant Contingent consideration balance is
\nthe Global Diabetes Alliance which is discounted at 8% and is reviewed against comparable benchmarks on a regular basis.
\nManagement has identi\ufb01ed that reasonably possible changes in certain key assumptions, including the likelihood of achieving successful trial results,
\nobtaining regulatory approval, the projected market share of the therapy area and expected pricing for launched products, may cause the calculated
\nfair value of the above contingent consideration to vary materially in future years.
\nThe contingent consideration balance relating to BMS\u2019s share of Global Diabetes Alliance of $2,124m (2021: $2,544m; 2020: $2,932m) would increase/
\ndecrease by $212m with an increase/decrease in sales of 10% as compared with the current estimates.
\nThe maximum development and sales milestones payable under outstanding Contingent consideration arrangements arising on business combinations
\nare as follows:
\nNature of
Maximum future milestones
\nAcquisitions
Year
contingent consideration
$m
\nSpirogen
2013
Milestones
180
\nAmplimmune
2013
Milestones
150
\nAlmirall
\n1
\n2014
Milestones and royalties
345
\n1
These contingent consideration liabilities have been designated as the hedge instrument in a net investment hedge of foreign currency risk arising on the Group\u2019s underlying US dollar net
\ninvestments held in non-US dollar denominated subsidiaries. Exchange differences on the retranslation of the contingent consideration liability are recognised in Other comprehensive
\nincome to the extent that the hedge is effective. Any ineffectiveness is taken to profit.
\nThe amount of royalties payable under the arrangements is inherently uncertain and dif\ufb01cult to predict, given the direct link to future sales and the
\nrange of outcomes. The maximum amount of royalties payable in each year is with reference to net sales.
\n171
AstraZeneca Annual Report & Form 20-F Information 2022
Notes to the Group Financial Statements
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
21 Provisions
\nEmployee
Other
\nSeverance
Environmental
benefits
Legal
provisions
Total
\n$m
$m
$m
$m
$m
$m
\nAt 1\u00a0January 2020
241
96
130
642
455
1,564
\nTransfers in
\u2013
\u2013
\u2013
\u2013
258
258
\nCharge for year
116
34
15
16
95
276
\nCash paid
(62)
(30)
(48)
(295)
(56)
(491)
\nReversals
(89)
\u2013
(2)
(14)
(27)
(132)
\nExchange and other movements
8
\u2013
33
(1)
45
85
\nAt 31\u00a0December 2020
214
100
128
348
770
1,560
\nAdditions through business combinations (Note\u00a027)
\u2013
\u2013
41
73
27
141
\nCharge for year
238
23
46
109
456
872
\nCash paid
(172)
(32)
(49)
(285)
(84)
(622)
\nReversals
(62)
\u2013
\u2013
(5)
(175)
(242)
\nExchange and other movements
(6)
(1)
29
(1)
(6)
15
\nAt 31\u00a0December 2021
212
90
195
239
988
1,724
\nCharge for year
227
61
1
830
365
1,484
\nCash paid
(223)
(19)
(41)
(814)
(185)
(1,282)
\nReversals
(43)
\u2013
(27)
(94)
(98)
(262)
\nExchange and other movements
(8)
(1)
15
\u2013
(52)
(46)
\nAt 31\u00a0December 2022
165
131
143
161
1,018
1,618
\n2022
2021
2020
\n$m
$m
$m
\nDue within one year
722
768
976
\nDue after more than one year
896
956
584
\nTotal
1,618
1,724
1,560
\nProvisions are often subject to substantial uncertainties with regard to the timing and \ufb01nal amounts of any payments. As such, once established,
\nthese amounts remain in Provisions until settlement is reached and uncertainty resolved, with no transfer to Trade and other payables prior to payment.
\nSeverance provisions arise predominantly in connection with global restructuring initiatives, including the Post Alexion Acquisition Group Review,
\nwhich involve rationalisation of the global supply chain, the sales and marketing organisation, IT and business support infrastructure, and R&D.
\nIn conjunction with the acquisition of Alexion in 2021, the enlarged Group initiated a comprehensive Post Alexion Acquisition Group Review, aimed
\nat integrating systems, structure and processes, optimising the global footprint and prioritising resource allocations and investments. The Group
\nhas also continued to progress other legacy restructuring programmes.
\nEmployee costs in connection with the initiatives are recognised in severance provisions when a detailed formal plan has been communicated to
\nthose employees affected. Final severance costs are often subject to the completion of the requisite consultations on the areas impacted, with the
\nmajority of the cost expected to be paid within one year. AstraZeneca endeavours to support employees affected by restructuring initiatives to
\nseek alternative roles within the organisation. Where the employee is successful, any severance provisions will be released.
\nDetails of the Environmental provisions totalling $131m (2021: $90m; 2020: $100m) and ongoing matters are provided in Note 30. The legal issues are
\noften subject to substantial uncertainties with regard to the timing and \ufb01nal amounts of any payments. A signi\ufb01cant proportion of the total legal
\nprovision relates to matters settled, but not paid, in previous periods. These uncertainties can also cause reversal in previously established provisions
\nonce \ufb01nal settlement is reached.
\nThe majority of Employee bene\ufb01t provisions relate to Executive Deferred Compensation Plans, which include uncertainty over the ultimate timing
\nand amount of payment to be made to the executives.
\nOther provisions comprise amounts relating to speci\ufb01c contractual or constructive obligations and disputes. Included within Other provisions are
\namounts associated with long-standing product liability settlements that arose prior to the merger of Astra and Zeneca, which given the nature of
\nthe provision, the amounts are expected to be settled over many years; the \ufb01nal settlement values and timings are uncertain. Also included in Other
\nprovisions is an amount of $165m (2021: $185m; 2020: $258m), in relation to third-party liability and other risks (including incurred but not yet reported
\nclaims); the claims are considered to be uncertain as to timing and amount. In 2022, charges to Other provisions included $301m in relation to
\ntermination fees and onerous contracts with contract manufacturing organisations and are expected to be settled within the next 12 months. Charges
\nto Other provisions in 2022 also included $12m (2021: $243m) in relation to the Post Alexion Acquisition Group Review restructuring programme, which
\nhas a closing provision of $143m (2021: $243m), including $95m (2021: $158m) held in non-current provisions expected to be settled over time by 2025.
\nNo provision has been released or applied for any purpose other than that for which it was established.
\nNotes to the Group Financial Statements
\ncontinued
\n172
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
22 Post-retirement and other de\ufb01ned bene\ufb01t schemes
\nBackground
\nThis section predominantly covers de\ufb01ned bene\ufb01t arrangements like post retirement pension and medical plans which make up the vast bulk of the
\nGroup\u2019s liabilities. However, it also incorporates other bene\ufb01ts which fall under IAS 19 rules and which require an actuarial valuation, including but
\nnot limited to: Lump Sum plans, Long Service Awards and de\ufb01ned contribution pension plans which have some de\ufb01ned bene\ufb01t characteristics
\n(e.g. a minimum guaranteed level of bene\ufb01t). In total, over 50 plans in 28 countries are covered.
\nThe Group and most of its subsidiaries offer retirement plans which cover the majority of employees. The Group\u2019s policy is to provide de\ufb01ned
\ncontribution (DC) orientated pension provision to its employees unless otherwise compelled by local regulation. As a result, many of these retirement
\nplans are DC, where the Group contribution and resulting charge is \ufb01xed at a set level or is a set percentage of employees\u2019 pay. However, several
\nplans, mainly in the UK, the US and Sweden, are de\ufb01ned bene\ufb01t (DB), where bene\ufb01ts are based on employees\u2019 length of service and linked to their
\nsalary. The major DB plans are largely legacy arrangements as they have been closed to new entrants since 2000, apart from the collectively bargained
\nSwedish plan (which is still open to employees born before 1979). During 2010, following consultation with its UK employees\u2019 representatives, the
\nGroup introduced a freeze on pensionable pay at 30 June 2010 levels for DB members of the UK Pension Fund. The number of active members in
\nthe Fund continues to decline and is now 452 employees. In November 2017, the Group closed the quali\ufb01ed and non-quali\ufb01ed US DB pension plans
\nto future accrual (and removed any salary link) from 31 December 2017.
\nThe major DB plans are funded through separate, \ufb01duciary-administered assets. The cash funding of the plans, which may from time to time involve
\nspecial Group payments, is designed, in consultation with independent quali\ufb01ed actuaries, to ensure that the assets are suf\ufb01cient to meet future
\nobligations as and when they fall due. The funding level is monitored by the Group and local \ufb01duciaries, who take into account the strength of the
\nGroup\u2019s covenant, local regulation, cash \ufb02ows, and the solvency and maturity of the pension scheme.
\nWith a general improvement in funding solvency over the course of 2022, three of the Group\u2019s de\ufb01ned bene\ufb01t plans had surplus positions, with three
\nother plans close to full funding and therefore to surplus. As a result, the Group reviewed its policy on surplus recognition, paying particular attention
\nto the requirements of IFRIC 14 \u2018IAS 19 \u2013 The Limit on a De\ufb01ned Bene\ufb01t Asset, Minimum Funding Requirements and their Interaction\u2019. The Group
\nconcluded that in \ufb01ve instances, the surplus would be repayable, while a small surplus in Sweden was derecognised.
\nFinancing Principles and Funding Framework
\nEighty eight per cent of the Group\u2019s total DB obligations (or 56% of net obligations) at 31 December 2022 are in schemes within the UK, the US and
\nSweden. In these countries, the pension obligations are funded in line with the Group\u2019s \ufb01nancing principles, as disclosed in prior years. There were
\nno changes to these principles during 2022.
\nThe Group has developed a long-term funding framework to implement these principles. This framework targets either full funding on a low-risk
\nfunding measure, or buyout with an external insurer as the pension funds mature, with affordable long-term de-risking of investment strategy
\nalong the way. Unless local regulation dictates otherwise, this framework determines the cash contributions payable.
\nUK
\nThe UK Pension Fund represents approximately 59% of the Group\u2019s DB obligations at 31 December 2022. The \ufb01nancing principles are modi\ufb01ed in
\nlight of the UK regulatory requirements (summarised below) and resulting discussions with the Trustee.
\nRole of Trustee and Regulation
\nThe UK Pension Fund is governed and administered by a corporate Trustee which is legally separate from the Group. The Trustee Directors are
\ncomprised of representatives appointed by both the employer and employees and include an independent professional Trustee Director. The Trustee
\nDirectors are required by law to act in the interest of all relevant bene\ufb01ciaries and are responsible in particular for investment strategy and the
\nday-to-day administration of the bene\ufb01ts. They are also responsible for jointly agreeing with the employer the level of contributions due to the UK
\nPension Fund.
\nThe UK pensions market is regulated by The Pensions Regulator whose statutory objectives and regulatory powers are described on its website,
\nwww.thepensionsregulator.gov.uk.
\nThe Pension Scheme Act 2021 became effective in the UK from 1 October 2021. A section of this Act places additional legal requirements on
\ncompanies who sponsor UK de\ufb01ned bene\ufb01t pension schemes, to monitor and assess corporate activity, with a focus on the potential impact of
\nsuch activity on the ongoing security of these bene\ufb01ts. The Group has developed a framework to ensure it meets its responsibilities under the Act.
\nThere have been two UK High Court Rulings relating to Guaranteed Minimum Pensions (GMP) equalisation in 2018 and 2020. Following the publication
\nof guidance around implementation in 2021, the Trustee, with input from the Group, has made signi\ufb01cant progress in equalising bene\ufb01ts. Further
\ndetails are set out later on in this Note. An estimate of the impact of these changes has already been recognised in 2018 and 2020, and actual
\nexperience is in line with the estimates previously recognised.
\nFunding requirements
\nUK legislation requires that DB pension schemes are funded prudently. On a triennial basis, the Trustee and the Group must agree on a set of
\nassumptions used to value the liabilities as a part of an actuarial valuation. Together with the asset valuation, this facilitates the calculation of a
\nfunding level and of the contributions required (if any) to ensure the UK Pension Fund is fully funded over an appropriate time period and on a
\nsuitably prudent measure. The technical provisions assumptions used to value the liabilities for the triennial actuarial valuation are usually set more
\nprudently than the assumptions used to prepare an accounting valuation of the liabilities, which are set under IAS 19 rules to be a \u2018best estimate\u2019.
\n173
AstraZeneca Annual Report & Form 20-F Information 2022
Notes to the Group Financial Statements
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
22 Post-retirement and other de\ufb01ned bene\ufb01t schemes
continued
\nThe last full actuarial valuation of the UK Pension Fund was carried out by a quali\ufb01ed actuary as at 31 March 2019. It was \ufb01nalised in June 2020
\nand in early 2021, the Pensions Regulator acknowledged the outcome and no issues were raised. The funding assumptions used in this actuarial
\nvaluation were set out in the Group\u2019s 2020 report. The actuarial valuation as at 31 March 2022 is currently in progress, with a likely timescale for
\ncompletion during the second quarter of 2023. However, the value of the Fund\u2019s obligations disclosed at 31 December 2022 incorporates data
\nfrom this latest actuarial valuation including updated membership information and demographic assumptions.
\nAspects of the triennial actuarial valuation are governed by a long-term funding agreement, effective since October 2016 and which sets out a
\npath to full funding on a low-risk measure. Under this agreement, if a de\ufb01cit exists, the Group is required to provide security. A key element of this
\nsecurity is to grant a charge in favour of the Trustee over land and buildings on the Cambridge Biomedical Campus, required to be effective within
\nthree months of the practical completion of the site, or by 30 June 2023 (whichever is earlier). An extension was granted by the Trustee to this
\nbackstop date in 2022. This charge is not currently in force. When effective, the charge would only crystallise in the event of the Group\u2019s insolvency.
\nThis charge will provide long-term security in respect of future UK Pension Fund contributions and is capped at \u00a3350m.
\nIn relation to de\ufb01cit recovery contributions, a lump sum contribution of \u00a339m was made in March 2022, with a further \u00a339m contribution due before
\n31 March 2023. In addition, a contribution of \u00a330m was also made in March 2022, which was a \ufb01nal instalment of a separate deferred contribution
\nexplained below.
\nDuring 2017, the Group provided a letter of credit to the Trustee, to underwrite the deferral of an additional de\ufb01cit recovery contribution of approximately
\n\u00a3126m which was due in 2017. This contribution was paid in \ufb01ve instalments (with interest) from March 2018 to March 2022. The letter of credit
\nunderwriting these payments reduced in value as each annual payment was made and given all payments have been made, the letter of credit has
\nnow expired.
\nSubstantial progress was made over 2022 in equalising GMP for members of the UK Pension Fund. The method of equalisation adopted was to
\nconvert GMP to simplify the structure and administration of bene\ufb01ts. As at 31 December 2022, a majority of pensioner and dependent members
\nhave had their bene\ufb01ts equalised. Further work will be completed over 2023 to address equalisation for the remaining affected members. As part of
\nthe GMP equalisation project, a Pension Increase Exchange (\u201cPiE\u201d) option has also been provisionally made available to the majority of pensioner
\nmembers, at the Group\u2019s discretion. This option provides the member with a choice to opt for a higher pension right away, but with no (or fewer)
\nin\ufb02ation linked increases in the future. The PIE option element of the project is currently ongoing and if it proceeds, will not conclude until 2023.
\nUnder the governing documentation of the UK Pension Fund, any future surplus in the Fund would be returnable to the Group by refund assuming
\ngradual settlement of the liabilities over the lifetime of the Fund. In particular, the Trustee has no unilateral right to wind up the Fund without Company
\nconsent nor does it have the power to unilaterally use surplus to augment bene\ufb01ts prior to wind-up. As such, there are no adjustments required in
\nrespect of IFRIC 14 \u2018IAS 19 \u2013 The Limit on a De\ufb01ned Bene\ufb01t Asset, Minimum Funding Requirements and their Interaction\u2019.
\nOn current bases, it is expected that ongoing contributions (excluding those in respect of past service de\ufb01cit contributions) during the year ending
\n31 December 2023 for the UK scheme will be approximately $20m.
\nLiquidity and liability hedging
\nSigni\ufb01cant increases in UK Government bond yields over September and October created liquidity challenges for many UK de\ufb01ned bene\ufb01t schemes
\nwith liability hedging portfolios, who needed to post collateral quickly to meet margin calls on derivative holdings. The Group\u2019s UK Pension Fund
\nwas not adversely impacted over this period due to a combination of Group and Trustee oversight and a functioning risk management policy. The
\nUK Pension Fund did not require any \ufb01nancial support from the Group, was self-suf\ufb01cient and operated normally throughout this period. The Fund
\nmaintained its investment strategy and funding solvency materially improved over the year. Furthermore, with the UK Pension Fund ahead of its long
\nterm plan, this improvement allowed the Trustee, with support from the Group to de-risk investment strategy ahead of plan, reducing long term
\ninvestment risk both to the Group and members in an affordable manner.
\nUnited States and Sweden
\nThe US and Sweden plans account for 13% and 16%, respectively, of the Group\u2019s de\ufb01ned bene\ufb01t obligations. The US and Sweden pension plans
\nare governed by Fiduciary Bodies with responsibility for the investment of the assets. These plans are funded in line with the Group\u2019s \ufb01nancing
\nprinciples and local regulations.
\nThe US de\ufb01ned bene\ufb01t pension plans were actuarially revalued at 31 December 2022, when plan obligations were $907m and plan assets were $835m.
\nThis includes obligations in respect of the non-quali\ufb01ed plan which is unfunded. The quali\ufb01ed US pension plan is close to fully funded on an IAS 19
\nbasis and has a positive funding balance on the local statutory measure. As such, no contributions are required, and the investment strategy is
\nlargely de-risked. During 2022, the Group submitted the legal documentation required to terminate the plan and move to a full buy-out and settlement
\nof the liabilities. This process is currently ongoing and if the Group proceeds, it is not expected to complete until midway 2023 at the earliest.
\nThe Swedish de\ufb01ned bene\ufb01t pension plans were actuarially valued at 31 December 2022, when plan obligations were estimated to amount to
\n$1,312m and plan assets were $946m. The local Swedish GAAP funding position can in\ufb02uence contribution policy. Over 2022, for the main
\npension fund, the Group did not request a reimbursement of bene\ufb01t payments made throughout the year, which totalled approximately $44m.
\nOn current bases, it is expected that ongoing contributions (excluding those in respect of past service de\ufb01cit contributions) during the year ending
\n31 December 2023 for the United States and Sweden will be approximately $55m.
\nNotes to the Group Financial Statements
\ncontinued
\n174
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
Other de\ufb01ned bene\ufb01t plans
\nThe Group provides bene\ufb01t plans other than pensions which have to be reported under IAS 19. These include Lump Sum plans, Long Service Awards
\nand de\ufb01ned contribution pension plans which have a guaranteed minimum bene\ufb01t. However, the largest category of these \u2018other\u2019 non-pension plans
\nare healthcare bene\ufb01ts.
\nIn the US, and to a lesser extent in certain other countries, the Group\u2019s employment practices include the provision of healthcare and life assurance
\nbene\ufb01ts for eligible retired employees. As at 31 December 2022, some 3,393 retired employees and covered dependants currently bene\ufb01t from
\nthese provisions and some 2,339 current employees will be eligible on their retirement. The Group accrues for the present value of such retiree
\nobligations over the working life of the employee. In practice, these bene\ufb01ts will be funded with reference to the \ufb01nancing principles.
\nIn the US, the Post Retirement Welfare Plan which provides retiree medical bene\ufb01ts has a surplus of $62m. As a result, the investment strategy
\nhas been fully de-risked. The Group has concluded that under current legislation, the surplus would be repayable in the future to subsidise other
\nmedical bene\ufb01ts offered to employees. As such, there are no adjustments required in respect of IFRIC 14 \u2018IAS 19 \u2013 The limit on a De\ufb01ned Bene\ufb01t
\nAsset, Minimum Funding Requirements and their Interaction\u2019.
\nThe cost of post-retirement bene\ufb01ts other than pensions for the Group in 2022 was $1m (2021: $1m; 2020: $1m). Plan assets were $173m and plan
\nobligations were $129m at 31 December 2022. These bene\ufb01t plans have been included in the disclosure of post-retirement bene\ufb01ts under IAS 19.
\nFinancial assumptions
\nQuali\ufb01ed independent actuaries have updated the actuarial valuations under IAS 19 for the major de\ufb01ned bene\ufb01t schemes operated by the Group
\nto 31 December 2022. The assumptions used may not necessarily be borne out in practice, due to the inherent \ufb01nancial and demographic uncertainty
\nassociated with making long-term projections. These assumptions re\ufb02ect the changes which have the most material impact on the results of the
\nGroup and were as follows:
\n2021
\nUK
US
Sweden
Rest of Group
\n4
\nInflation assumption
3.3%
\u2013
2.3%
2.2%
\nRate of increase in salaries
\u2013
\n1
\n\u2013
3.8%
3.7%
\nRate of increase in pensions in payment
3.1%
\u2013
2.3%
2.2%
\nDiscount rate \u2013 defined benefit obligation
1.9%
2.8%
1.8%
1.2%
\nDiscount rate \u2013 interest cost
1.9%
2.2%
1.6%
1.0%
\nDiscount rate \u2013 service cost
1.9%
n/a
1.9%
1.4%
\n2022
\nUK
US
Sweden
Rest of Group
\n4
\nInflation assumption
3.2%
\u2013
1.9%
2.5%
\nRate of increase in salaries
\u2013
\n1
\n\u2013
3.4%
4.0%
\nRate of increase in pensions in payment
3.1%
\u2013
1.9%
2.5%
\nDiscount rate \u2013 defined benefit obligation
\n2
\n4.9%
5.0%
4.1%
3.7%
\nDiscount rate \u2013 interest cost
\n3
\n5.0%
4.9%
4.0%
3.8%
\nDiscount rate \u2013 service cost
\n3
\n4.8%
n/a
4.0%
3.7%
\n1
Pensionable pay frozen at 30 June 2010 levels following UK fund changes.
\n2
Group defined benefit obligation as at 31 December 2022 calculated using discount rates based on market conditions as at 31 December 2022.
\n3
2022 interest costs and service costs calculated using discount rates based on market conditions as at 31 December 2021.
\n4
Rest of Group reflects the assumptions in Germany as these have the most material impact on the Group.
\nThe weighted average duration of the post-retirement scheme obligations is approximately 12 years in the UK, 10 years in the US, 16 years in
\nSweden and 14 years for the Rest of the Group (including Germany).
\nDemographic assumptions
\nThe mortality assumptions are based on country-speci\ufb01c mortality tables. These are compared to actual experience and adjusted where suf\ufb01cient
\ndata are available. Additional allowance for future improvements in life expectancy is included for all major schemes where there is credible data
\nto support a continuing trend.
\nThe table below illustrates life expectancy assumptions at age 65 for male and female members retiring in 2022 and male and female members
\nexpected to retire in 2042 (2021: 2021 and 2041 respectively).
\nLife expectancy assumption for a male member retiring at age 65
Life expectancy assumption for a female member retiring at age 65
\nCountry
2022
2042
2021
2041
2022
2042
2021
2041
\nUK
22.2
23.2
22.5
23.7
23.8
24.9
23.9
25.2
\nUS
22.0
23.2
21.9
23.2
23.4
25.0
23.3
24.9
\nSweden
21.8
23.6
21.9
23.6
23.9
26.0
24.5
25.6
\nIn the UK, the Group updated the mortality tables used, re\ufb02ecting analysis carried out as part of the latest actuarial valuation and adopted the
\nCMI 2021 Mortality Projections Model with a 1% long-term improvement rate. Other demographic assumptions were updated based on analysis
\ncarried out as part of the 2022 actuarial valuation including the assumed age gap between members and their partners. The Group assumes that
\n25% of members (2021: 30%) will transfer out of the de\ufb01ned bene\ufb01t section of the AstraZeneca Pension Fund at the point of retirement.
\nIn the US and Sweden the Group continues to use the most recently published mortality tables. No update was published in the US in 2022 and
\nMP-2021 continues to be used, but a new table, DUS21, has been used in Sweden.
\n175
AstraZeneca Annual Report & Form 20-F Information 2022
Notes to the Group Financial Statements
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
22 Post-retirement and other de\ufb01ned bene\ufb01t schemes
continued
\nRisks associated with the Group\u2019s de\ufb01ned bene\ufb01t pension schemes
\nThe UK de\ufb01ned bene\ufb01t plan accounts for 59% of the Group\u2019s de\ufb01ned bene\ufb01t obligations and exposes the Group to a number of risks, the most
\nsigni\ufb01cant of which are:
\nRisk
Description
Mitigation
\nVolatile asset
\nreturns
\nThe De\ufb01ned Bene\ufb01t Obligation (DBO) is calculated using a discount rate
\nset with reference to AA-rated corporate bond yields; asset returns that
\ndiffer from the discount rate will create an element of volatility in the
\nsolvency ratio. Approximately 60% of the UK Pension Fund is invested in
\ngrowth assets. Although these growth assets are expected to outperform
\nAA-rated corporate bonds in the long term, they can lead to volatility and
\nmismatching risk in the short term. The allocation to growth assets is
\nmonitored to ensure it remains appropriate given the UK Pension Fund\u2019s
\nlong-term objectives.
\nIn order to mitigate investment risk, the Trustee invests in a suitably
\ndiversi\ufb01ed range of asset classes, return drivers and investment managers.
\nThe investment strategy will evolve to further improve the expected risk/
\nreturn pro\ufb01le as opportunities arise. De-risking of the investment strategy
\ntook place over 2022, as the Fund moved ahead of its long-term target, with
\nexposure to Growth Assets reducing from approximately 72.5% to 61.0%.
\nThe Trustee has hedged approximately 93% of unintended non-sterling,
\noverseas currency risk within the UK Pension Fund assets.
\nChanges in
\nbond yields
\nA decrease in corporate bond yields will increase the present value placed
\non the DBO for accounting purposes.
\nThe interest rate hedge of the UK Pension Fund is implemented via holding
\ngilts (and gilt repurchase agreements or \u201cgilt repo\u201d) of appropriate duration,
\nset to target a hedge ratio of approximately 100% of total assets. This hedge
\nprotects to a large degree against falls in long-term interest rates and the
\nUK Pension Fund is approximately 98% hedged as a percentage of assets
\nat the end of 2022. Furthermore, over 2022, the liability hedging benchmark
\nwas moved to a 100% gilt-based hedging strategy to reduce funding basis
\nrisk and almost all net swap exposure was removed. Nonetheless, there
\nremain differences in the bonds and instruments held by the UK Pension
\nFund to hedge interest rate risk on the statutory and long-term funding
\nbasis (gilts and gilt repo) and the bonds analysed to set the DBO discount
\nrate on an accounting basis (AA corporate bonds). As such, there remains
\nsome mismatching risk (albeit less than in previous years) on an accounting
\nbasis should yields on gilts diverge compared to AA corporate bonds.
\nInflation risk
The majority of the DBO is indexed in line with price in\ufb02ation (mainly
\nin\ufb02ation as measured by the UK Retail Price Index (RPI) but also for some
\nmembers a component of pensions is indexed by the UK Consumer Price
\nIndex (CPI)) and higher in\ufb02ation will lead to higher liabilities (although, in
\nmost cases, this is capped at an annual increase of 5%). It was con\ufb01rmed
\nin November 2020 the intention to align RPI with Consumer Price Index
\nincluding Housing (CPIH) from 2030. Other things being equal, this will
\nlead to lower liability valuations.
\nThe UK Pension Fund holds RPI index-linked gilts and gilt repo. As with
\nthe interest rate hedge, the liability benchmark was changed over 2022 to
\nfacilitate hedging solely with gilts rather than the previous mix of gilts and
\nswaps. The in\ufb02ation hedge of the UK Pension Fund protects to some degree
\nagainst higher-than-expected in\ufb02ation increases on the DBO (approximately
\n93% hedged as a percentage of assets at the end of 2022). There is a
\nframework in place to gradually increase the level of in\ufb02ation hedging to
\n100% of assets over time.
\nLife
\nexpectancy
\nThe majority of the UK Pension Fund\u2019s obligations are to provide bene\ufb01ts
\nfor the life of the member, so increases in life expectancy will result in an
\nincrease in the liabilities.
\nThe UK Pension Fund entered into a longevity swap during 2013 which
\nprovides hedging against the longevity risk of increasing life expectancy
\nover the next 75 years for around 10,000 of the UK Pension Fund\u2019s current
\npensioners and covers $1.9bn of the UK Pension Fund\u2019s liabilities.
\nA\u00a0one-year increase in life expectancy would result in a $191m increase in
\npension fund obligations, which would be partially offset by a $103m
\nincrease in the value of the longevity swap and hence the pension fund
\nassets. The impact of the COVID-19 pandemic on long-term mortality
\nassumptions is not yet known. The Group will conduct a mortality review
\nonce robust data is available.
\nOther risks
\nThere are a number of other risks of administering the UK Pension Fund which the Trustee manages with Group input. Some of the major risks
\ninclude counterparty risks from using derivatives and collateral management risk (mitigated by using a specialist investment manager to oversee a
\ndiversi\ufb01ed range of counterparties of high standing, ensuring positions are collateralised daily and having a robust collateral management policy).
\nFurthermore, there are operational risks (such as paying out the wrong bene\ufb01ts) and legislative risks (such as the pensions regulator introducing
\nnew legislation). These are mitigated so far as possible via the governance structure in place which oversees and administers the pension funds.
\nThe Group\u2019s pension plans in the US and Sweden also manage these key risks, where they are relevant, in a similar way, with the local \ufb01duciary
\nbodies investing in a diversi\ufb01ed manner and employing a framework to hedge interest rate risk.
\nLocal \ufb01duciary boards are aware of Environmental, Social and Governance (ESG) risks as they pertain to investment policy, and where local regulation
\nallows, have policies in place to monitor and manage such risks and comply with local legislation and disclosure requirements.
\nAssets and obligations of de\ufb01ned bene\ufb01t schemes
\nThe assets and obligations of the de\ufb01ned bene\ufb01t schemes operated by the Group at 31 December 2022, as calculated in accordance with IAS 19,
\nare shown below. The fair values of the schemes\u2019 assets are not intended to be realised in the short term and may be subject to signi\ufb01cant change
\nbefore they are realised. The present value of the schemes\u2019 obligations is derived from cash \ufb02ow projections over long periods and is therefore
\ninherently uncertain.
\nThere has been a material fall in both asset and liability valuations over 2022, predominantly due to signi\ufb01cant increases in long-term global bond
\nyields. This had the impact of lowering liability and asset valuations.
\nNotes to the Group Financial Statements
\ncontinued
\n176
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
Scheme assets
\n2021
\nUK
US
Sweden
Rest of Group
Total
\nQuoted
Unquoted
Quoted
Unquoted
Quoted
Unquoted
Quoted
Unquoted
Quoted
Unquoted
Total
\n$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
\nGovernment bonds
\n1
\n2,500
\u2013
303
\u2013
\u2013
\u2013
75
\u2013
2,878
\u2013
2,878
\nCorporate bonds
\n2
\n\u2013
\u2013
877
\u2013
\u2013
\u2013
16
\u2013
893
\u2013
893
\nDerivatives
\n3
\n\u2013
(237)
2
(1)
\u2013
259
(1)
\u2013
1
21
22
\nInvestment funds: Listed Equities
\n4
\n\u2013
1,427
\u2013
\u2013
\u2013
134
55
6
55
1,567
1,622
\nInvestment funds:
\nAbsolute Return/Multi\u00a0Strategy
\n4
\n\u2013
2,342
\u2013
\u2013
\u2013
647
8
\u2013
8
2,989
2,997
\nInvestment funds: Corporate Bonds/Credit
\n4
\n\u2013
1,006
\u2013
\u2013
\u2013
192
53
11
53
1,209
1,262
\nCash and cash equivalents
34
261
227
\u2013
\u2013
2
\u2013
2
261
265
526
\nOther
\u2013
\u2013
\u2013
5
\u2013
\u2013
1
358
1
363
364
\nTotal fair value of scheme assets
\n5
\n2,534
4,799
1,409
4
\u2013
1,234
207
377
4,150
6,414
10,564
\n2022
\nUK
US
Sweden
Rest of Group
Total
\nQuoted
Unquoted
Quoted
Unquoted
Quoted
Unquoted
Quoted
Unquoted
Quoted
Unquoted
Total
\n$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
\nGovernment bonds
\n1
\n1,931
\u2013
104
\u2013
\u2013
\u2013
60
\u2013
2,095
\u2013
2,095
\nCorporate bonds
\n2
\n\u2013
\u2013
622
\u2013
\u2013
\u2013
11
\u2013
633
\u2013
633
\nDerivatives
\n3
\n\u2013
(608)
(2)
(3)
\u2013
325
(2)
\u2013
(4)
(286)
(290)
\nInvestment funds: Listed Equities
\n4
\n\u2013
265
\u2013
\u2013
\u2013
\u2013
49
4
49
269
318
\nInvestment funds:
\nAbsolute Return/Multi Strategy
\n4
\n\u2013
1,701
\u2013
\u2013
\u2013
475
6
\u2013
6
2,176
2,182
\nInvestment funds: Corporate Bonds/Credit
\n4
\n\u2013
817
\u2013
\u2013
\u2013
144
49
10
49
971
1,020
\nCash and cash equivalents
52
415
285
\u2013
\u2013
2
\u2013
4
337
421
758
\nOther
\u2013
\u2013
\u2013
2
\u2013
\u2013
1
311
1
313
314
\nTotal fair value of scheme assets
\n5
\n1,983
2,590
1,009
(1)
\u2013
946
174
329
3,166
3,864
7,030
\n1
Predominantly developed markets in nature.
\n2
Predominantly developed markets in nature and investment grade (AAA-BBB).
\n3
Includes interest rate swaps, inflation swaps, longevity swap, equity total return swaps and other contracts. More detail is given in the section Risks associated with the Group\u2019s defined
\nbenefit pensions on page 176. Valuations are determined by independent third parties.
\n4
Investment Funds are pooled, commingled vehicles, whereby the pension scheme owns units in the fund, alongside other investors. The pension schemes invest in a number of Investment
\nFunds, including Listed Equities (primarily developed markets with some emerging markets), Corporate Bonds/Credit (a range of investment-grade and non investment-grade credit) and
\nAbsolute Return/Multi Strategy (multi-asset exposure both across and within traditional and alternative asset classes). The price of the funds is set by independent administrators/custodians
\nemployed by the investment managers and based on the value of the underlying assets held in the fund. Details of pricing methodology is set out within internal control reports provided for
\neach fund. Prices are updated daily, weekly or monthly depending upon the frequency of the fund\u2019s dealing.
\n5
Included in scheme assets is less than $1m of the Group\u2019s own assets (2021: $nil). The assets are AstraZeneca corporate debt held by the US qualified plan and amount to 0.05% of the plan\u2019s assets.
\nScheme obligations
\n2021
\nUK
US
Sweden
Rest of Group
Total
\n$m
$m
$m
$m
$m
\nPresent value of scheme obligations in respect of:
\nActive membership
(532)
(81)
(926)
(523)
(2,062)
\nDeferred membership
(1,709)
(693)
(718)
(465)
(3,585)
\nPensioners
(5,700)
(630)
(729)
(312)
(7,371)
\nTotal value of scheme obligations
(7,941)
(1,404)
(2,373)
(1,300)
(13,018)
\n2022
\nUK
US
Sweden
Rest of Group
Total
\n$m
$m
$m
$m
$m
\nPresent value of scheme obligations in respect of:
\nActive membership
(212)
(54)
(430)
(424)
(1,120)
\nDeferred membership
(804)
(437)
(369)
(299)
(1,909)
\nPensioners
(3,785)
(531)
(513)
(250)
(5,079)
\nTotal value of scheme obligations
(4,801)
(1,022)
(1,312)
(973)
(8,108)
\n177
AstraZeneca Annual Report & Form 20-F Information 2022
Notes to the Group Financial Statements
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
22 Post-retirement and other de\ufb01ned bene\ufb01t schemes
continued
\nNet (de\ufb01cit)/surplus in the scheme
\n2021
\nUK
US
Sweden
Rest of Group
Total
\n$m
$m
$m
$m
$m
\nTotal fair value of scheme assets
7,333
1,413
1,234
584
10,564
\nTotal value of scheme obligations
(7,941)
(1,404)
(2,373)
(1,300)
(13,018)
\nDeficit in the scheme as recognised in the
\nConsolidated Statement of Financial Position
(608)
9
(1,139)
(716)
(2,454)
\nIncluded in Non-current other receivables
\u2013
\u2013
\u2013
\u2013
\u2013
\nIncluded in Retirement benefit obligations
(608)
9
(1,139)
(716)
(2,454)
\n(608)
9
(1,139)
(716)
(2,454)
\n2022
\nUK
US
Sweden
Rest of Group
Total
\n$m
$m
$m
$m
$m
\nTotal fair value of scheme assets
4,573
1,008
946
503
7,030
\nTotal value of scheme obligations
(4,801)
(1,022)
(1,312)
(973)
(8,108)
\nDeficit in the scheme as recognised in the
\nConsolidated Statement of Financial Position
(228)
(14)
(366)
(470)
(1,078)
\nIncluded in Non-current other receivables
\u2013
62
\u2013
28
\n1
\n90
\nIncluded in Retirement benefit obligations
(228)
(76)
(366)
(498)
(1,168)
\n(228)
(14)
(366)
(470)
(1,078)
\n1
Surpluses were recognised in Ireland and Belgium.
\nFair value of scheme assets
\n2022
2021
\nUK
US
Sweden
Rest of Group
Total
UK
US
Sweden
Rest of Group
Total
\n$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
\nAt beginning of year
7,333
1,413
1,234
584
10,564
7,179
1,570
1,338
581
10,668
\nInterest income on scheme assets
123
29
18
5
175
75
27
12
4
118
\nExpenses
(5)
(2)
\u2013
\u2013
(7)
(7)
\u2013
\u2013
\u2013
(7)
\nActuarial gains/(losses)
(1,964)
(295)
(153)
(55)
(2,467)
372
(22)
62
3
415
\nExchange and other adjustments
(728)
\u2013
(152)
(34)
(914)
(77)
(5)
(132)
1
(213)
\nEmployer contributions
118
7
43
37
205
122
19
5
28
174
\nParticipant contributions
1
5
\u2013
5
11
2
\u2013
\u2013
2
4
\nBenefits paid
(305)
(149)
(44)
(39)
(537)
(333)
(176)
(51)
(35)
(595)
\nScheme assets\u2019 fair value at end of year
4,573
1,008
946
503
7,030
7,333
1,413
1,234
584
10,564
\nThe actual return on the plan assets was a loss of $2,292m (2021: gain of $533m). The asset loss was driven predominantly by a fall in the value of
\nthe liability hedging portfolio in the UK and to a lesser extent, in the US and Sweden as long term bond yields increased. The asset loss was more
\nthan offset by the fall in the liability value shown in the table below.
\nMovement in post-retirement scheme obligations
\n2022
2021
\nUK
US
Sweden
Rest of Group
Total
UK
US
Sweden
Rest of Group
Total
\n$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
\nPresent value of obligations in scheme at beginning of year
(7,941)
(1,404)
(2,373)
(1,300) (13,018)
(8,425)
(1,601)
(2,525)
(1,319) (13,870)
\nCurrent service cost
(14)
(1)
(35)
(38)
(88)
(18)
(2)
(69)
(34)
(123)
\nPast service (cost)/credit
(5)
\u2013
(4)
3
(6)
(4)
\u2013
(1)
\u2013
(5)
\nParticipant contributions
(1)
(4)
\u2013
(5)
(10)
(2)
\u2013
\u2013
(2)
(4)
\nBenefits paid
305
149
44
39
537
333
176
51
35
595
\nInterest expense on post-retirement scheme obligations
(132)
(29)
(31)
(12)
(204)
(87)
(28)
(22)
(8)
(145)
\nActuarial gains/(losses)
2,243
268
806
268
3,585
199
46
(43)
9
211
\nExchange and other adjustments
744
(1)
281
72
1,096
63
5
236
19
323
\nPresent value of obligations in scheme at end of year
(4,801)
(1,022)
(1,312)
(973)
(8,108)
(7,941)
(1,404)
(2,373)
(1,300)
(13,018)
\nThe obligations arise from over 50 plans in 28 countries:
\n2022
2021
\nUK
US
Sweden
Rest of Group
Total
UK
US
Sweden
Rest of Group
Total
\n$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
\nFunded \u2013 pension schemes
\n1
\n(4,787)
(851)
(1,310)
(842)
(7,790)
(7,927)
(1,178)
(2,371)
(1,160) (12,636)
\nFunded \u2013 post-retirement healthcare
\u2013
(111)
\u2013
\u2013
(111)
\u2013
(143)
\u2013
\u2013
(143)
\nUnfunded \u2013 pension schemes
\n1
\n\u2013
(60)
(2)
(122)
(184)
\u2013
(83)
(2)
(127)
(212)
\nUnfunded \u2013 post-retirement healthcare
(14)
\u2013
\u2013
(9)
(23)
(14)
\u2013
\u2013
(13)
(27)
\nTotal
(4,801)
(1,022)
(1,312)
(973)
(8,108)
(7,941)
(1,404)
(2,373)
(1,300)
(13,018)
\n1
Includes defined benefit pension schemes and other plans, such as Lump Sum, Long Service Award and DC plans with underpins.
\nNotes to the Group Financial Statements
\ncontinued
\n178
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
Consolidated Statement of Comprehensive Income disclosures
\nThe amounts that have been charged to the Consolidated Statement of Comprehensive Income, in respect of de\ufb01ned bene\ufb01t schemes for the
\nyear ended 31 December 2022, are set out below.
\n2022
2021
\nUK
US
Sweden
Rest of Group
Total
UK
US
Sweden
Rest of Group
Total
\n$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
\nOperating profit
\nCurrent service cost
(14)
(1)
(35)
(38)
(88)
(18)
(2)
(69)
(35)
(124)
\nPast service (cost)/credit
(5)
\u2013
(4)
3
(6)
(4)
\u2013
(1)
\u2013
(5)
\nExpenses
(5)
(2)
\u2013
\u2013
(7)
(7)
\u2013
\u2013
\u2013
(7)
\nTotal charge to Operating profit
(24)
(3)
(39)
(35)
(101)
(29)
(2)
(70)
(35)
(136)
\nFinance expense
\nInterest income on scheme assets
123
29
18
5
175
75
27
12
5
119
\nInterest expense on post-retirement scheme obligations
(132)
(29)
(31)
(12)
(204)
(87)
(28)
(22)
(8)
(145)
\nNet interest on post-employment defined benefit plan liabilities
(9)
\u2013
(13)
(7)
(29)
(12)
(1)
(10)
(3)
(26)
\nCharge before taxation
(33)
(3)
(52)
(42)
(130)
(41)
(3)
(80)
(38)
(162)
\nOther comprehensive income
\nDifference between the actual return and the
\nexpected return on the post-retirement scheme assets
(1,964)
(295)
(153)
(55)
(2,467)
372
(22)
62
3
415
\nExperience gains/(losses) arising on the
\npost-retirement scheme obligations
55
(16)
(99)
(6)
(66)
(43)
(9)
\u2013
74
22
\nChanges in financial assumptions underlying the
\npresent value of the post-retirement scheme obligations
2,272
284
896
275
3,727
239
59
(43)
(61)
194
\nChanges in demographic assumptions
(84)
\u2013
9
(1)
(76)
3
(4)
\u2013
(4)
(5)
\nRemeasurement of the defined benefit liability
279
(27)
653
213
1,118
571
24
19
12
626
\nPast service costs include granting early retirement in UK and Sweden.
\nTotal Group pension costs in respect of de\ufb01ned contribution and de\ufb01ned bene\ufb01t schemes during the year are set out below (see Note 29).
\n2022
2021
\n$m
$m
\nDefined contribution schemes
445
428
\nDefined benefit schemes \u2212 current service costs and expenses
95
131
\nDefined benefit schemes \u2212 past service cost
6
5
\nPension costs
546
564
\nRate sensitivities
\nThe following table shows the US dollar effect of a change in the signi\ufb01cant actuarial assumptions used to determine the retirement bene\ufb01ts
\nobligations in our three main de\ufb01ned bene\ufb01t pension obligation countries.
\n2022
2021
\n+0.5%
-0.5%
+0.5%
-0.5%
\nDiscount rate
\nUK ($m)
262
(289)
565
(634)
\nUS ($m)
46
(49)
79
(84)
\nSweden ($m)
95
(107)
197
(226)
\nTotal ($m)
403
(445)
841
(944)
\n2022
2021
\n+0.5%
-0.5%
+0.5%
-0.5%
\nInflation rate
\n1
\nUK ($m)
(173)
165
(386)
375
\nUS ($m)
n/a
n/a
n/a
n/a
\nSweden ($m)
(104)
93
(207)
196
\nTotal ($m)
(277)
258
(593)
571
\n2022
2021
\n+0.5%
-0.5%
+0.5%
-0.5%
\nRate of increase in salaries
\nUK ($m)
n/a
n/a
n/a
n/a
\nUS ($m)
n/a
n/a
n/a
n/a
\nSweden ($m)
(47)
43
(90)
82
\nTotal ($m)
(47)
43
(90)
82
\n179
AstraZeneca Annual Report & Form 20-F Information 2022
Notes to the Group Financial Statements
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
22 Post-retirement and other de\ufb01ned bene\ufb01t schemes
continued
\n2022
2021
\n+1 year
\u22121 year
+1 year
\u22121 year
\nMortality rate
\nUK ($m)
(191)
\n2
\n193
\n3
\n(390)
388
\nUS ($m)
(20)
20
(29)
29
\nSweden ($m)
(44)
44
(94)
93
\nTotal ($m)
(255)
257
(513)
510
\n1
Rate of increase in pensions in payment follows inflation.
\n2
Of the $191m increase, $103m is covered by the longevity swap.
\n3
Of the $193m decrease, $103m is covered by the longevity swap.
\nThe sensitivity to the \ufb01nancial assumptions shown above has been estimated taking into account the approximate duration of the liabilities and the
\noverall pro\ufb01le of the plan membership.
\nThe in\ufb02ation sensitivity allows for the impact of a change in in\ufb02ation on salary increases and pension increases (where these assumptions are
\nin\ufb02ation-linked).
\nThe salary increase sensitivity re\ufb02ects the impact of an increase of only salary relative to in\ufb02ation.
\nThe sensitivity to the life expectancy assumption is estimated based on a revised mortality assumption that extends/reduces the current life expectancy
\nby one year for a particular age.
\n23 Reserves
\nRetained earnings
\nThe cumulative amount of goodwill written off directly to reserves resulting from acquisitions, net of disposals, amounted to $591m (2021: $615m;
\n2020: $636m) using year-end rates of exchange.
\nAt 31 December 2022, 1,671,446 shares, at a cost of $112m, have been deducted from Retained earnings (2021: 3,922,122 shares, at a cost of $239m;
\n2020: 556,108 shares, at a cost of $51m) to satisfy future vesting of employee share plans.
\nThere are no signi\ufb01cant statutory or contractual restrictions on the distribution of current pro\ufb01ts of subsidiaries; undistributed pro\ufb01ts of prior years
\nare, in the main, permanently employed in the businesses of these companies. The undistributed income of AstraZeneca companies overseas might
\nbe liable to overseas taxes and/or UK taxation (after allowing for double taxation relief) if they were to be distributed as dividends (see Note 4).
\n2022
2021
2020
\n$m
$m
$m
\nCumulative translation differences included within Retained earnings
\nAt 1\u00a0January
(1,934)
(1,143)
(2,189)
\nForeign exchange arising on consolidation
(1,446)
(483)
443
\nExchange adjustments on goodwill (recorded against other reserves)
(24)
(21)
22
\nForeign exchange arising on designated liabilities in net investment hedges
\n1
\n(282)
(321)
573
\nFair value movements on derivatives designated in net investment hedges
(8)
34
8
\nNet exchange movement in Retained earnings
(1,760)
(791)
1,046
\nAt 31\u00a0December
(3,694)
(1,934)
(1,143)
\n1
Foreign exchange arising on designated liabilities in net investment hedges includes $102m in respect of designated bonds and $(384)m in respect of designated contingent consideration and
\nother liabilities. The change in value of designated contingent consideration liabilities relates to $(369)m in respect of BMS\u2019 share of Global Diabetes Alliance, and $(15)m in respect of Almirall.
\nThe cumulative loss with respect to costs of hedging is $3m (2021: gain of $4m; 2020: gain of $9m) and the loss during the year was $7m (2021: loss
\nof $6m; 2020: gain of $9m).
\nThe balance remaining in the foreign currency translation reserve from net investment hedging relationships for which hedge accounting no longer
\napplied is a gain of $527m.
\nOther reserves
\nThe other reserves arose from the cancellation of \u00a31,255m of share premium account by the Company in 1993 and the redenomination of share
\ncapital of $157m in 1999. The reserves are available for writing off goodwill arising on consolidation and, subject to guarantees given to preserve
\ncreditors at the date of the court order, are available for distribution.
\n24 Share capital
\nAllotted,\u00a0called-up and fully paid
\n2022
2021
2020
\n$m
$m
$m
\nIssued Ordinary Shares ($0.25 each)
387
387
328
\nRedeemable Preference Shares (\u00a31 each \u2013 \u00a350,000)
\u2013
\u2013
\u2013
\nAt 31\u00a0December
387
387
328
\nThe Redeemable Preference Shares carry limited class voting rights and no dividend rights. This class of shares is capable of redemption at par at
\nthe option of the Company on the giving of seven days\u2019 written notice to the registered holder of the shares.
\nNotes to the Group Financial Statements
\ncontinued
\n180
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
The Company does not have a limited amount of authorised share capital.
\nThe movements in the number of Ordinary Shares during the year can be summarised as follows:
\nNo.\u00a0of\u00a0shares
\n2022
2021
2020
\nAt 1\u00a0January
1,549,400,665
1,312,668,724
1,312,137,976
\nIssue of share capital (business combinations)
\u2013
236,321,411
\u2013
\nIssue of shares (share schemes)
399,365
410,530
530,748
\nAt 31\u00a0December
1,549,800,030
1,549,400,665
1,312,668,724
\nShare issues
\nIssue of share capital (business combinations) represents share capital issued as part of the acquisition of Alexion (see Note 27).
\nShare repurchases
\nNo Ordinary Shares were repurchased by the Company in 2022 (2021: nil; 2020: nil).
\nShares held by subsidiaries
\nNo shares in the Company were held by subsidiaries in any year.
\n25 Dividends to shareholders
\n2022
2021
2020
2022
2021
2020
\nPer\u00a0share
Per share
Per share
$m
$m
$m
\nSecond interim (March 2022)
$1.97
$1.90
$1.90
3,046
2,490
2,489
\nFirst interim (September 2022)
$0.93
$0.90
$0.90
1,440
1,392
1,180
\nTotal
$2.90
$2.80
$2.80
4,486
3,882
3,669
\nThe Company has exercised its authority in accordance with the provisions set out in the Company\u2019s Articles of Association, that the balance of
\nunclaimed dividends outstanding past 12 years be forfeited. Unclaimed dividends of $1m (2021: $nil; 2020: $1m) have been adjusted for in Retained
\nearnings in 2022.
\nThe 2021 second interim dividend of $1.97 per share was paid on 28 March 2022. The 2022 \ufb01rst interim dividend of $0.93 per share was paid on
\n12 September 2022.
\nReconciliation of dividends charged to equity to cash \ufb02ow statement:
\n2022
2021
2020
\n$m
$m
$m
\nDividends charged to equity
4,486
3,882
3,669
\nExchange losses on payment of dividend
5
3
4
\nHedge contracts relating to payment of dividends (cash flow statement)
(127)
(29)
(101)
\nDividends paid (cash flow statement)
4,364
3,856
3,572
\n26 Non-controlling interests
\nThe Group Financial Statements at 31 December 2022 re\ufb02ect equity of $21m (2021: $19m; 2020: $16m) and total comprehensive income of $2m
\n(2021: $3m; 2020: $3m) attributable to the non-controlling interests in AstraZeneca Pharma India Limited, P.T. AstraZeneca Indonesia and Beijing
\nFalikang Pharmaceutical (China) Co. Limited.
\nIn addition to the non-controlling interests in AstraZeneca Pharma India Limited, P.T. AstraZeneca Indonesia and Beijing Falikang Pharmaceutical
\n(China) Co. Limited, the Group Financial Statements at 31 December 2022 also re\ufb02ect total comprehensive losses of $nil (2021: $nil; 2020: $55m)
\nattributable to the non-controlling interest in Acerta Pharma, resulting in reported total comprehensive income of $2m (2021: income of $3m,
\n2020: losses of $52m).
\nIn February 2016, AstraZeneca acquired a 55% controlling stake in Acerta Pharma where the non-controlling interest was subject to put and call
\noptions. The put option gave rise to a liability (see Note 20). The ability of the parties to exercise their respective put and call options, as well as
\nthe timing and amount of exercise, was dependent on certain conditions, the last of which was based on regulatory outcomes of
Calquence
in the EU.
\nIn November 2020,
Calquence
received marketing approval in the EU, which removed all remaining conditionality in respect of the options. From
\nNovember 2020, the minority shareholders were considered to have no further substantive variability in risk and reward related to their shares as it
\nwas considered highly likely that one of the options would be exercised, and the price of the options was \ufb01xed. Therefore, from November 2020, no
\nfurther amounts of the consolidated AstraZeneca result were attributed to the minority shareholders of Acerta Pharma. The Non-controlling interests
\nreserve relating to the minority shareholders of Acerta Pharma, totalling $1,401m, was reclassi\ufb01ed into Retained earnings (see Consolidated Statement
\nof Changes in Equity) in 2020. AstraZeneca exercised its option to acquire the remaining 45% of shares in Acerta Pharma in April 2021.
\nAs part of the acquisition of Alexion in July 2021, a pre-existing non-controlling interest in Caelum Biosciences was recognised (Note 27). This was
\nvalued at $150m, the agreed-upon exercise price for the exclusive option to acquire the remaining equity. The option was exercised on 28 September
\n2021 and the acquisition of Caelum Biosciences closed shortly thereafter on 5 October 2021.
\n181
AstraZeneca Annual Report & Form 20-F Information 2022
Notes to the Group Financial Statements
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
27 Acquisition of business operations
\nAcquisitions of business operations in 2022
\nOn 16 November 2022, AstraZeneca completed the acquisition of 100% of the issued shares of LogicBio Therapeutics, Inc. (LogicBio) based in
\nLexington, MA, US. LogicBio is a clinical-stage genetic medicine company pioneering genome editing and gene delivery platforms to address rare
\nand serious diseases from infancy through adulthood. The total consideration was $72m. Cash of $68m was paid on the completion date, with $4m
\nof outstanding options, which will be settled in cash, recorded in current Trade and other payables. Goodwill of $15m, assets of $82m, including $46m
\nof intangible assets, and liabilities of $25m were recognised on acquisition. LogicBio\u2019s results have been consolidated into the Group\u2019s results from
\n16 November 2022.
\nAcquisitions of business operations in 2021
\nOn 21 July 2021, AstraZeneca completed the acquisition of 100% of the issued shares of Alexion Pharmaceuticals, Inc (Alexion), based in Boston, MA,
\nUS. Alexion is a global biopharmaceutical company focused on serving patients and families affected by rare diseases and devastating conditions
\nthrough the discovery, development and commercialisation of life-changing medicines.
\nAt closing, Alexion shareholders received 2.1243 AstraZeneca American Depository Shares (ADSs) and $60 in cash for each of their Alexion shares.
\nUnvested Alexion employee share awards were converted to equivalent AstraZeneca share awards. The fair value of the purchase consideration
\nwas $41,058m, comprising AstraZeneca ADSs of $27,196m, cash of $13,349m and replacement employee share awards of $513m.
\nThe Group funded the cash element of the acquisition with $8bn of new long-term debt, issued in May and June 2021, $4bn of term loans drawn in
\nJuly 2021 under the $17.5bn committed bank facilities entered into in December 2020 to secure the acquisition \ufb01nancing, and existing cash balances.
\nThe Group cancelled the remaining $13.5bn of the facilities in June, July and October 2021. Loans and borrowings of $2.3bn acquired with Alexion
\nwere repaid in full shortly following completion of the acquisition.
\nThe acquisition was accounted for as a business combination using the acquisition method of accounting in accordance with IFRS 3 \u2018Business
\nCombinations\u2019 and consequently the Alexion assets acquired, and liabilities assumed were recorded by AstraZeneca at fair value, with the excess
\nof the purchase price over the fair value of the identi\ufb01able assets and liabilities being recognised as goodwill.
\nAs part of the Alexion acquisition in 2021, we identi\ufb01ed the assets (comprising principally launched products and IPR&D post pre-clinical stage)
\nand liabilities acquired. Attributing fair values to assets acquired and liabilities assumed as part of business combinations is considered to be a
\nkey judgement. The purchase price allocation was performed with assistance from an independent valuer to advise on the valuation techniques
\nand key assumptions in the valuation, in particular in respect of the valuation of the intangible assets and inventory.
\nThe fair values assigned to the Alexion business combination in 2021 were:
\nFair value
\n$m
\nNon-current assets
\nProperty, plant and equipment
1,135
\nRight-of-use assets
263
\nIntangible assets
26,855
\nOther non-current assets
301
\n28,554
\nCurrent assets
\nInventories
6,769
\nTrade and other receivables
2,096
\nIntangible assets
100
\nCash and cash equivalents
4,086
\n13,051
\nCurrent liabilities
\nInterest-bearing loans and borrowings
(2,336)
\nTrade and other payables
(1,192)
\nOther current liabilities
(40)
\n(3,568)
\nNon-current liabilities
\nLease liabilities
(228)
\nDeferred tax liabilities
(4,191)
\nOther non-current liabilities
(697)
\n(5,116)
\nTotal net assets acquired
32,921
\nLess: non-controlling interests
(150)
\nGoodwill
8,287
\nTotal fair value of consideration
41,058
\nLess: fair value of equity consideration
(27,196)
\nLess: fair value of replacement employee share awards
(513)
\nLess: cash and cash equivalents acquired
(4,086)
\nNet cash outflow
9,263
\nNotes to the Group Financial Statements
\ncontinued
\n182
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
The estimated fair value and useful lives of intangible assets were as follows:
\nFair value
Useful lives
\n$m
Years
\nLaunched products \u2013 C5 franchise (
Soliris
/
Ultomiris
)
18,480
6 to 15
\nLaunched products \u2013
Strensiq
,
Kanuma
,
Andexxa
5,215
11 to 17
\nProducts in development
2,760
Not amortised
\nOther intangibles
500
5 to 10
\n26,955
\nThe fair value attributed to intangible assets was $26,955m and primarily represents intellectual property rights over launched products of $23,695m
\nand products under development of $2,760m. These were fair valued using the multi-period excess earnings method, which uses a number of estimates
\nregarding the amount and timing of future cash \ufb02ows. The key assumptions in the cash \ufb02ows are PTRS, peak year sales and revenue erosion curves.
\nIn accordance with the Group\u2019s policy on impairment assessments as set out on page 148, the assets were assessed for impairment in the \ufb01nal
\nquarter of 2022 and 2021. Future milestones have been included in the valuation of the intangible assets (as a deduction of cash \ufb02ows).
\nThe fair value of inventory, which includes raw materials, work in progress and \ufb01nished goods related to the launched products was estimated at
\n$6,769m, an uplift of $5,635m on the carrying value prior to the acquisition. The fair value adjustment relates only to work in progress and \ufb01nished
\ngoods and was calculated as the estimated selling price less costs to complete and sell the inventory, associated margins on these activities and
\nholding costs. The vast majority of the fair value uplift has been unwound by 31 December 2022, with the unwind of the remaining inventory fair value
\nuplift expected in 2023.
\nProperty, plant and equipment principally comprises the manufacturing facilities in Dublin and Athlone, Ireland and was fair valued using a cost
\napproach. The estimated fair value of $1,135m represents an uplift of $111m over carrying value.
\nThe estimated fair value of contingent liabilities was $76m, relating to various claims and disputes in each case where there is a possible, but not
\nprobable, future \ufb01nancial exposure, and involve an assessment of the likelihood of a number of scenarios in relation to those matters. This amount
\nhas been included within other non-current liabilities of $697m.
\nThe estimated fair value of trade and other receivables was $2,096m, which approximated the contractual cash \ufb02ows.
\nThe net deferred tax position re\ufb02ected an adjustment of $5,215m related to the deferred tax impact of the fair value uplifts on intangible assets,
\ninventories, property, plant and equipment and contingent liabilities as described above.
\nGoodwill amounting to $8,287m was recognised on acquisition and is underpinned by a number of elements, which individually could not be quanti\ufb01ed.
\nMost signi\ufb01cant among these is the premium attributable to a pre-existing, well-positioned business in the innovation-intensive, high-growth rare
\ndiseases market with a highly skilled workforce and established reputation. Other important elements include the potential unidenti\ufb01ed products that
\nfuture research and development may yield and the core technological capabilities and knowledge base of the company. Goodwill is not expected
\nto be deductible for tax purposes.
\nNon-controlling interests re\ufb02ect Alexion\u2019s pre-existing minority equity interest in Caelum Biosciences and have been valued at $150m, the agreed-
\nupon exercise price for the exclusive option to acquire the remaining equity. The option was exercised on 28 September 2021 and the acquisition
\nof Caelum Biosciences closed shortly thereafter on 5 October 2021 (Note 26).
\nAlexion\u2019s results have been consolidated into the Group\u2019s results from 21 July 2021. For the period from acquisition to 31 December 2021, before
\nre\ufb02ecting the fair value adjustments arising on the acquisition, Alexion\u2019s Total Revenues were $3,071m and Pro\ufb01t after tax was $889m. If the acquisition
\nhad taken effect at the beginning of the reporting period in which the acquisition occurred (1 January 2021), on a pro forma basis, after re\ufb02ecting
\nthe fair value adjustments arising on the acquisition, the Total Revenue of the combined Group for the year ended 31 December 2021 would have
\nbeen $41,132m and the Loss after tax would have been $1,152m. This pro forma information does not purport to represent the results of the combined
\nGroup that actually would have occurred had the acquisition taken place on 1 January 2021 and should not be taken to be representative of
\nfuture results.
\nTotal acquisition-related costs of $4m (2021: $171m) have been incurred by the Group, which include advisory, legal and other professional fees.
\nThese costs are presented in the Statement of Comprehensive Income within Selling, general and administrative expense.
\nThe terms of the acquisition include a retention bonus plan for legacy Alexion employees whereby up to $50m may be used for retention bonus awards
\nto employees at the level of Vice President or below. These bonuses vested and were paid six months after the acquisition, or earlier. In 2022, a cost
\nof $3m (2021: $24m) has been recorded in the Statement of Comprehensive Income.
\nUpon completion of the acquisition, all unvested Alexion employee share awards were converted into AstraZeneca restricted stock awards that
\ncontinue to have, and shall be subject to, the same terms and conditions as applied in the corresponding Alexion awards immediately prior to
\ncompletion. Alexion Performance Stock Plan (PSU) awards that included performance-based vesting conditions were converted using the greater
\nof the original target level and Alexion\u2019s assessment of the level of achievement immediately prior to completion (subject to a limit of 175 per cent.
\nfor the awards granted in 2019 and a limit of 150 per cent. for the awards granted in 2020). In the year, a cost of $257m (2021: $257m) has been
\nrecorded in the Statement of Comprehensive Income ($9m (2021: $9m)) in Cost of sales, $92m (2021: $73m) in Research and development expense
\nand $156m (2021: $175m) in Selling, general and administrative expense). Payments made to the Employee Bene\ufb01t Trust upon vesting of share
\nawards recognised as part of the consideration for the acquisition of Alexion are recognised within investing activities in the Group\u2019s Statement of
\nCash Flows as the cash payment relates to the settlement of the obligation that arose on the acquisition of Alexion that was included as part of the
\nconsideration for the acquisition.
\nThere were no acquisitions of business operations in 2020.
\n183
AstraZeneca Annual Report & Form 20-F Information 2022
Notes to the Group Financial Statements
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
28 Financial risk management objectives and policies
\nThe Group\u2019s principal \ufb01nancial instruments, other than derivatives, comprise bank overdrafts, loans and other borrowings, lease liabilities, current
\nand non-current investments, cash and short-term deposits. The main purpose of these \ufb01nancial instruments is to manage the Group\u2019s funding and
\nliquidity requirements. The Group has other \ufb01nancial assets and liabilities such as trade receivables and trade payables, which arise directly from
\nits operations.
\nThe principal \ufb01nancial risks to which the Group is exposed are those of liquidity, interest rate, foreign currency and credit. Each of these is managed
\nin accordance with Board-approved policies. These policies, together with the Group\u2019s approach to capital management, are set out below.
\nCapital management
\nThe capital structure of the Group consists of Shareholders\u2019 equity (Note 24), Debt (Note 19), Other current investments (Note 12) and Cash (Note 17).
\nFor the foreseeable future, the Board will maintain a capital structure that supports the Group\u2019s strategic objectives through:
\n>
managing funding and liquidity risk
\n> optimising shareholder return
\n>
maintaining a strong, investment-grade credit rating.
\nThe Group utilises factoring arrangements for selected trade receivables. These factoring arrangements qualify for full derecognition of the associated
\ntrade receivables under IFRS 9. Amounts due on invoices that have not been factored at year end, from customers that are subject to factoring
\narrangements are disclosed in Note 16.
\nFunding and liquidity risk are reviewed regularly by the Board and managed in accordance with policies described below.
\nThe Board regularly reviews its shareholders\u2019 distribution policy, which comprises a regular cash dividend and potentially a share repurchase
\ncomponent. No share repurchases have been made since 2012.
\nThe Group\u2019s net debt position (loans and borrowings net of Cash and cash equivalents, Other investments and Derivative \ufb01nancial instruments) has
\ndecreased by $1,399m from a net debt position of $24,322m at the beginning of the year to a net debt position of $22,923m at 31 December 2022.
\nGross debt reduced from $30,781m to $29,232m, principally due to the repayment of the $1,000m 2.75% bond and a $250m \ufb02oating rate note.
\nLiquidity risk
\nThe Board reviews the Group\u2019s ongoing liquidity risks annually as part of the planning process and on an ad hoc basis. The Board considers
\nshort-term requirements against available sources of funding, taking into account forecast cash \ufb02ows. The Group manages liquidity risk by maintaining
\naccess to a number of sources of funding which are suf\ufb01cient to meet anticipated funding requirements. Speci\ufb01cally, the Group uses US and
\nEuropean commercial paper, bank loans, committed bank facilities and cash resources to manage short-term liquidity and manages long-term
\nliquidity by raising funds through the capital markets. At 31 December 2022, the Group was assigned short-term credit ratings of P-2 by Moody\u2019s
\nand A-1 by Standard and Poor\u2019s. The Group\u2019s long-term credit rating was A3 Stable outlook by Moody\u2019s and A Stable outlook by Standard and Poor\u2019s.
\nIn addition to Cash and cash equivalents of $6,166m, short-term \ufb01xed income investments of $13m, \ufb01xed deposits of $64m, less overdrafts of $183m
\nat 31 December 2022, the Group has committed bank facilities of $4,875m available to manage liquidity. These committed bank facilities have no
\n\ufb01nancial covenants and mature in April 2026. The Group regularly monitors the credit standing of the banks providing the facilities and currently does
\nnot anticipate any issue with drawing on the committed facilities should this be necessary. Advances under these facilities currently bear an interest
\nrate per annum based on US dollar LIBOR (or other relevant benchmark rate) plus a margin. The facilities contain arrangements to switch to alternative
\nrisk free rate benchmarks before June 2023.
\nAt 31 December 2022, the Group has $3,068m outstanding from debt issued under a Euro Medium Term Note programme and $20,651m under an
\nSEC-registered programme. The funds made available under these facility agreements may be used for the general corporate purposes of the Group.
\nThe maturity pro\ufb01le of the anticipated future contractual cash \ufb02ows including interest in relation to the Group\u2019s \ufb01nancial liabilities, on an undiscounted
\nbasis and which, therefore, differs from both the carrying value and fair value, is as follows:
\nBank
Total
Derivative
Derivative
Total
\noverdrafts
Trade non-derivative
financial
financial
derivative
\nand other
Bonds and
Lease
and other
financial
instruments
instruments
financial
\nloans
bank loans
liability
payables
instruments
receivable
payable
instruments
Total
\n$m
$m
$m
$m
$m
$m
$m
$m
$m
\nWithin one year
667
2,136
207
15,812
18,822
(9,719)
9,620
(99)
18,723
\nIn one to two years
\u2013
1,839
168
2,584
4,591
(60)
67
7
4,598
\nIn two to three years
\u2013
2,101
120
1,658
3,879
(59)
67
8
3,887
\nIn three to four years
\u2013
1,617
82
1,728
3,427
(1,151)
1,080
(71)
3,356
\nIn four to five years
\u2013
2,502
53
722
3,277
(36)
40
4
3,281
\nIn more than five years
\u2013
16,921
108
1,435
18,464
(1,707)
1,652
(55)
18,409
\n667
27,116
738
23,939
52,460
(12,732)
12,526
(206)
52,254
\nEffect of interest
\u2013
(7,974)
\u2013
\u2013
(7,974)
379
(405)
(26)
(8,000)
\nEffect of discounting, fair values and issue costs
(1)
(109)
(57)
(2,070)
(2,237)
(70)
24
(46)
(2,283)
\n31\u00a0December\u00a02020
666
19,033
681
21,869
42,249
(12,423)
12,145
(278)
41,971
\nNotes to the Group Financial Statements
\ncontinued
\n184
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
Bank
Total
Derivative
Derivative
Total
\noverdrafts
Trade non-derivative
financial
financial
derivative
\nand other
Bonds and
Lease
and other
financial
instruments
instruments
financial
\nloans
bank loans
liability
payables
instruments
receivable
payable
instruments
Total
\n$m
$m
$m
$m
$m
$m
$m
$m
$m
\nWithin one year
387
1,981
256
19,007
21,631
(11,766)
11,774
8
21,639
\nIn one to two years
\u2013
5,647
210
2,521
8,378
(55)
66
11
8,389
\nIn two to three years
\u2013
5,242
163
1,669
7,074
(1,060)
1,079
19
7,093
\nIn three to four years
\u2013
2,591
130
862
3,583
(35)
39
4
3,587
\nIn four to five years
\u2013
2,970
96
233
3,299
(118)
111
(7)
3,292
\nIn more than five years
\u2013
19,727
221
2,212
22,160
(1,521)
1,480
(41)
22,119
\n387
38,158
1,076
26,504
66,125
(14,555)
14,549
(6)
66,119
\nEffect of interest
\u2013
(8,609)
\u2013
\u2013
(8,609)
299
(325)
(26)
(8,635)
\nEffect of discounting, fair values and issue costs
\u2013
(142)
(89)
(2,633)
(2,864)
(36)
7
(29)
(2,893)
\n31\u00a0December\u00a02021
387
29,407
987
23,871
54,652
(14,292)
14,231
(61)
54,591
\nBank
Total
Derivative
Derivative
Total
\noverdrafts
Trade non-derivative
financial
financial
derivative
\nand other
Bonds and
Lease
and other
financial
instruments
instruments
financial
\nloans
bank loans
liability
payables
instruments
receivable
payable
instruments
Total
\n$m
$m
$m
$m
$m
$m
$m
$m
$m
\nWithin one year
365
5,777
249
19,065
25,456
(12,445)
12,478
33
25,489
\nIn one to two years
\u2013
5,233
208
2,086
7,527
(1,012)
1,078
66
7,593
\nIn two to three years
\u2013
2,608
172
872
3,652
(34)
38
4
3,656
\nIn three to four years
\u2013
2,983
128
595
3,706
(103)
103
\u2013
3,706
\nIn four to five years
\u2013
1,267
84
814
2,165
(32)
35
3
2,168
\nIn more than five years
\u2013
18,156
184
3,177
21,517
(1,436)
1,378
(58)
21,459
\n365
36,024
1,025
26,609
64,023
(15,062)
15,110
48
64,071
\nEffect of interest
(15)
(7,982)
\u2013
\u2013
(7,997)
227
(249)
(22)
(8,019)
\nEffect of discounting, fair values and issue costs
\u2013
(113)
(72)
(3,299)
(3,484)
63
7
70
(3,414)
\n31\u00a0December\u00a02022
350
27,929
953
23,310
52,542
(14,772)
14,868
96
52,638
\nWhere interest payments are on a \ufb02oating rate basis, it is assumed that rates will remain unchanged from the last business day of each year ended
\n31 December.
\nThe Group has $2bn of bank loans that mature in July 2023 and $2bn of bank loans that mature in July 2024, which the Group can repay before
\nmaturity at face value. Other than that, it is not expected that the cash \ufb02ows in the maturity pro\ufb01le could occur signi\ufb01cantly earlier or at signi\ufb01cantly
\ndifferent amounts, with the exception of $2,222m of contingent consideration held within Trade and other payables (see Note 20).
\nMarket risk
\nInterest rate risk
\nThe Group maintains a Board-approved mix of \ufb01xed and \ufb02oating rate debt and uses underlying debt, interest rate swaps and forward rate agreements
\nto manage this mix.
\nAt 31 December 2022, interest rate swaps with a notional value of $288m are fair valued through pro\ufb01t or loss and this has effectively converted the
\n7% guaranteed debentures payable in 2023 to \ufb02oating rates. No new interest rate swaps were entered into during 2022.
\nThe majority of surplus cash is currently invested in US dollar liquidity funds and investment-grade \ufb01xed income securities.
\nThe interest rate pro\ufb01le of the Group\u2019s interest-bearing \ufb01nancial instruments are set out below. In the case of current and non-current \ufb01nancial
\nliabilities, the classi\ufb01cation includes the impact of interest rate swaps which convert the debt to \ufb02oating rate.
\n2022
2021
2020
\nFixed rate
Floating rate
Total
Fixed rate
Floating rate
Total
Fixed rate
Floating rate
Total
\n$m
$m
$m
$m
$m
$m
$m
$m
$m
\nFinancial liabilities
\nInterest-bearing loans and borrowings
\nCurrent
2,476
3,066
5,542
1,232
661
1,893
1,357
1,029
2,386
\nNon-current
21,511
2,179
23,690
23,985
4,903
28,888
17,005
989
17,994
\nTotal
23,987
5,245
29,232
25,217
5,564
30,781
18,362
2,018
20,380
\nFinancial assets
\nFixed deposits
64
\u2013
64
53
\u2013
53
42
\u2013
42
\nCash collateral pledged to counterparties
\u2013
162
162
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\nCash and cash equivalents
250
5,916
6,166
\u2013
6,329
6,329
\u2013
7,832
7,832
\nTotal
314
6,078
6,392
53
6,329
6,382
42
7,832
7,874
\nIn addition to the \ufb01nancial assets above, there are $9,546m (2021: $8,765m; 2020: $6,328m) of other current and non-current asset investments
\nand other \ufb01nancial assets. Of these, $nil receive \ufb02oating rate interest (2021: $nil; 2020: $nil).
\n185
AstraZeneca Annual Report & Form 20-F Information 2022
Notes to the Group Financial Statements
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
28 Financial risk management objectives and policies
continued
\nThe Group is also exposed to market risk on other investments.
\n2022
2021
2020
\n$m
$m\u00a0
$m
\nEquity securities at fair value through Other comprehensive income (Note\u00a012)
1,056
1,168
1,108
\nNon-current fixed income securities at fair value through profit and loss (Note 12)
10
\u2013
\u2013
\nTotal
1,066
1,168
1,108
\nForeign currency risk
\nThe US dollar is the Group\u2019s most signi\ufb01cant currency. As a consequence, the Group results are presented in US dollars and exposures are managed
\nagainst US dollars accordingly.
\nTranslational
\nApproximately 61% of Group external sales in 2022 were denominated in currencies other than the US dollar, while a signi\ufb01cant proportion of
\nmanufacturing, and research and development costs were denominated in pounds sterling and Swedish krona. Surplus cash generated by business
\nunits is substantially converted to, and held centrally in, US dollars. As a result, operating pro\ufb01t and total cash \ufb02ow in US dollars will be affected
\nby movements in exchange rates.
\nThis currency exposure is managed centrally, based on forecast cash \ufb02ows. The impact of movements in exchange rates is mitigated signi\ufb01cantly
\nby the correlations which exist between the major currencies to which the Group is exposed and the US dollar. Monitoring of currency exposures
\nand correlations is undertaken on a regular basis and hedging is subject to pre-execution approval.
\nAs at 31 December 2022, before the impact of derivatives, 2% of interest-bearing loans and borrowings were denominated in pounds sterling and
\n9% were denominated in euros. Where there is non-US dollar debt and an underlying net investment of that amount in the same currency, the Group
\napplies net investment hedging. Exchange differences on the retranslation of debt designated as net investment hedges are recognised in Other
\ncomprehensive income to the extent that the hedge is effective. Any ineffectiveness is taken to pro\ufb01t. For details of non-US dollar debt in a
\ndesignated hedging relationship please see the Hedge accounting section within this Note 28 from page 188.
\nThe Group holds cross-currency swaps to hedge against the impact of \ufb02uctuations in foreign exchange rates. Fair value movements on the revaluation
\nof the cross-currency swaps are recognised in Other comprehensive income to the extent that the hedge is effective, with any ineffectiveness taken
\nto pro\ufb01t.
\nAs at 31 December 2022, the Group operates in three countries designated as hyperin\ufb02ationary, being Argentina, Venezuela and Turkey. The foreign
\nexchange risk of these markets has been assessed and deemed to be immaterial.
\nTransactional
\nThe Group aims to hedge all its forecasted major transactional currency exposures on working capital balances, which typically extend for up to three
\nmonths. Where practicable, these are hedged using forward foreign exchange contracts. In addition, external dividend payments in pounds sterling
\nto UK shareholders and in Swedish krona to Swedish shareholders are fully hedged from announcement date to payment date. Foreign exchange
\ngains and losses on forward contracts transacted for transactional hedging are taken to pro\ufb01t or to Other comprehensive income if the contract is
\nin a designated cash\ufb02ow hedge.
\nSensitivity analysis
\nThe sensitivity analysis set out below summarises the sensitivity of the market value of our \ufb01nancial instruments to hypothetical changes in market
\nrates and prices. The range of variables chosen for the sensitivity analysis re\ufb02ects our view of changes which are reasonably possible over a one-year
\nperiod. Market values are the present value of future cash \ufb02ows based on market rates and prices at the valuation date. For long-term debt, an
\nincrease in interest rates results in a decline in the fair value of debt.
\nThe sensitivity analysis assumes an instantaneous 100 basis point change in interest rates in all currencies from their levels at 31 December 2022,
\nwith all other variables held constant. Based on the composition of our long-term debt portfolio and cash reserves as at 31 December 2022, a 1%
\nincrease in interest rates would result in an additional $52m in interest expense on the debt and an additional $59m interest income on the cash
\nreserves. The exchange rate sensitivity analysis assumes an instantaneous 10% change in foreign currency exchange rates from their levels at
\n31 December 2022, with all other variables held constant. The +10% case assumes a 10% strengthening of the US dollar against all other currencies
\nand the -10% case assumes a 10% weakening of the US dollar.
\nEach incremental 10% movement in foreign currency exchange rates would have approximately the same effect as the initial 10% detailed in the
\ntable below and each incremental 1% change in interest rates would have approximately the same effect as the 1% detailed in the table below.
\nInterest rates
Exchange rates
\n31\u00a0December\u00a02020
+1%
-1%
+10%
-10%
\nIncrease/(decrease) in fair value of financial instruments ($m)
1,696
(1,758)
114
(132)
\nImpact on profit: (loss)/gain ($m)
\u2013
\u2013
(57)
74
\nImpact on equity: gain/(loss) ($m)
\u2013
\u2013
171
(206)
\nInterest rates
Exchange rates
\n31\u00a0December\u00a02021
+1%
-1%
+10%
-10%
\nIncrease/(decrease) in fair value of financial instruments ($m)
1,978
(2,106)
82
(85)
\nImpact on profit: gain/(loss) ($m)
\u2013
\u2013
24
(9)
\nImpact on equity: gain/(loss) ($m)
\u2013
\u2013
58
(76)
\nNotes to the Group Financial Statements
\ncontinued
\n186
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
Interest rates
Exchange rates
\n31\u00a0December\u00a02022
+1%
-1%
+10%
-10%
\nIncrease/(decrease) in fair value of financial instruments ($m)
1,317
(1,490)
81
(89)
\nImpact on profit: gain/(loss) ($m)
\u2013
\u2013
26
(15)
\nImpact on equity: gain/(loss) ($m)
\u2013
\u2013
55
(74)
\nCredit risk
\nThe Group is exposed to credit risk on \ufb01nancial assets, such as cash investments, derivative instruments, and Trade and other receivables. The Group
\nis also exposed in its Net asset position to its own credit risk in respect of the 2023 debentures which are accounted for at fair value through pro\ufb01t
\nor loss. Under IFRS 9, the effect of the losses and gains arising from own credit risk on the fair value of bonds designated at fair value through pro\ufb01t
\nor loss are recorded in Other comprehensive income.
\nFinancial counterparty credit risk
\nThe majority of the AstraZeneca Group\u2019s cash is centralised within the Group treasury entity and is subject to counterparty risk on the principal
\ninvested. The level of the Group\u2019s cash investments and hence credit risk will depend on the cash \ufb02ow generated by the Group and the timing of
\nthe use of that cash. The credit risk is mitigated through a policy of prioritising security and liquidity over return and, as such, cash is only invested
\nin high credit-quality investments. Counterparty limits are set according to the assessed risk of each counterparty and exposures are monitored
\nagainst these limits on a regular basis.
\nThe Group\u2019s principal \ufb01nancial counterparty credit risks at 31 December 2022 were as follows:
\nCurrent assets
\n2022
2021
2020
\n$m
$m\u00a0
$m
\nCash at bank and in hand
1,411
1,461
1,182
\nMoney market liquidity funds
4,486
4,772
6,602
\nOther short-term cash equivalents
269
96
48
\nTotal Cash and cash equivalents (Note\u00a017)
6,166
6,329
7,832
\nFixed income securities at fair value through profit and loss (Note\u00a012)
13
16
118
\nCash collateral pledged to counterparties (Note 12)
162
\u2013
\u2013
\nFixed deposits (Note\u00a012)
64
53
42
\nTotal derivative financial instruments (Note\u00a013)
87
83
142
\nCurrent assets subject to credit risk
6,492
6,481
8,134
\nNon-current assets
\n2022
2021
2020
\n$m
$m\u00a0
$m
\nDerivative financial instruments (Note\u00a013)
74
102
171
\nNon-current assets subject to credit risk
74
102
171
\nThe majority of the Group\u2019s cash is invested in US dollar AAA rated money market liquidity funds. The money market liquidity fund portfolios are
\nmanaged by \ufb01ve external third-party fund managers to maintain an AAA rating. The Group\u2019s investments represent no more than 10% of each
\noverall fund value. There were no other signi\ufb01cant concentrations of \ufb01nancial credit risk at the reporting date.
\nAll \ufb01nancial derivatives are transacted with commercial banks, in line with standard market practice. The Group has agreements with some bank
\ncounterparties whereby the parties agree to post cash collateral, for the bene\ufb01t of the other, equivalent to the market valuation of the derivative
\npositions above a predetermined threshold. The carrying value of such cash collateral held by the Group at 31 December 2022 was $89m (2021: $93m;
\n2020: $288m) and the carrying value of such cash collateral posted by the Group at 31 December 2022 was $162m (2021: $47m; 2020: $11m).
\nThe impairment provision for other \ufb01nancial assets at 31 December 2022 was immaterial.
\nTrade receivables
\nTrade receivable exposures are managed locally in the operating units where they arise and credit limits are set as deemed appropriate for the
\ncustomer. The Group is exposed to customers ranging from government-backed agencies and large private wholesalers to privately owned pharmacies,
\nand the underlying local economic and sovereign risks vary throughout the world. Where appropriate, the Group endeavours to minimise risks by
\nthe use of trade \ufb01nance instruments such as letters of credit and insurance. The Group applies the expected credit loss approach to establish an
\nallowance for impairment that represents its estimate of expected losses in respect of Trade receivables.
\nThe Group applies the IFRS 9 simpli\ufb01ed approach to measuring expected credit losses which uses a lifetime expected loss allowance for all Trade
\nreceivables. To measure expected credit losses, Trade receivables have been grouped based on shared credit characteristics and the days past due.
\nThe expected loss rates are based on payment pro\ufb01les over a period of 36 months before 31 December 2022, 31 December 2021 or 31 December
\n2020 respectively and the corresponding historical credit losses experienced within this period. The historical loss rates are adjusted to re\ufb02ect current
\nand forward-looking information on macroeconomic factors affecting the ability of the customer to settle the receivables.
\nOn that basis, the loss allowance was determined as follows:
\n0-90 days
90-180 days
Over 180 days
\n31\u00a0December 2020
Current
past due
past due
past due
Total
\nExpected loss rate
0.1%
1.6%
19.4%
60.6%
\nGross carrying amount ($m)
3,659
124
21
25
3,829
\nLoss allowance ($m)
2
2
4
15
23
\n187
AstraZeneca Annual Report & Form 20-F Information 2022
Notes to the Group Financial Statements
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
28 Financial risk management objectives and policies
continued
\n0-90 days
90-180 days
Over 180 days
\n31\u00a0December 2021
Current
past due
past due
past due
Total
\nExpected loss rate
0.1%
1.2%
22.6%
11.0%
\nGross carrying amount ($m)
5,617
328
18
91
6,054
\nLoss allowance ($m)
5
4
4
10
23
\n0-90 days
90-180 days
Over 180 days
\n31\u00a0December 2022
Current
past due
past due
past due
Total
\nExpected loss rate
0.03%
0.3%
32.0%
40.6%
\nGross carrying amount ($m)
6,791
331
50
99
7,271
\nLoss allowance ($m)
2
1
16
40
59
\nTrade receivables are written off where there is no reasonable expectation of recovery.
\nImpairment losses on Trade receivables are presented as net impairment losses within Operating pro\ufb01t, any subsequent recoveries are credited
\nagainst the same line.
\nIn the US, sales to three wholesalers accounted for approximately 73% of US sales (2021: three wholesalers accounted for approximately 94%;
\n2020: three wholesalers accounted for approximately 95%).
\nThe movements of the Group expected credit losses provision are follows:
\n2022
2021
2020
\n$m
$m
$m
\nAt 1\u00a0January
23
23
21
\nNet movement recognised in income statement
37
(2)
3
\nAmounts utilised, exchange and other movements
(1)
2
(1)
\nAt 31\u00a0December
59
23
23
\nGiven the pro\ufb01le of our customers, including large wholesalers and government-backed agencies, no further credit risk has been identi\ufb01ed with the
\nTrade receivables not past due other than those balances for which an allowance has been made. The income statement credit or charge is recorded
\nin Operating pro\ufb01t.
\nHedge accounting
\nThe Group uses foreign currency borrowings, foreign currency forwards and swaps, currency options, interest rate swaps and cross-currency interest
\nrate swaps for the purpose of hedging its foreign currency and interest rate risks. The Group may designate certain \ufb01nancial instruments as fair value
\nhedges, cash \ufb02ow hedges or net investment hedges in accordance with IFRS 9. Hedge effectiveness is determined at the inception of the hedge
\nrelationship, and through periodic prospective effectiveness assessments to ensure that an economic relationship exists between the hedged item
\nand hedging instrument. Sources of hedge effectiveness will depend on the hedge relationship designation but may include:
\n>
a signi\ufb01cant change in the credit risk of either party to the hedging relationship
\n>
a timing mismatch between the hedging instrument and the hedged item
\n>
movements in foreign currency basis spread for derivatives in a fair value hedge
\n>
a signi\ufb01cant change in the value of the foreign currency denominated net assets of the Group in a net investment hedge.
\nThe hedge ratio for each designation will be established by comparing the quantity of the hedging instrument and the quantity of the hedged item to
\ndetermine their relative weighting; for all of the Group\u2019s existing hedge relationships the hedge ratio has been determined as 1:1. Designated hedges
\nare expected to be effective and therefore the impact of ineffectiveness on pro\ufb01t is not expected to be material. The accounting treatment for fair
\nvalue hedges and debt designated as fair value through pro\ufb01t or loss is disclosed in the Group Accounting Policies section from page 142.
\nThe following table represents the Group\u2019s continuing designated hedge relationships under IFRS 9.
\n2020
\nOther comprehensive income
\nFair value
\nloss
\nOpening
Fair value
recycled
Closing
\nNominal
balance
(gain)/loss
to the
balance
Average
\namounts
Carrying
1\u00a0January
deferred
Income
31\u00a0December
Average
Average
pay
\nin local
value
2020
to OCI
statement
2020
maturity
USD FX
interest
\ncurrency
$m
$m
$m
$m
$m
year
rate
rate
\nFair value hedge \u2013 foreign currency and interest rate risk
\n1
\nUSD LIBOR
\n+ 1.27%
Cross currency interest rate swap \u2013 Euro bond
EUR 300m
43
\u2013
\u2013
\u2013
\u2013
2021
1.09
\nCash flow hedges \u2013 foreign currency and interest rate risk
\n2, 4, 5
\nCross currency interest rate swaps \u2013 Euro bonds
EUR 2,200m
150
(30)
(163)
239
46
2025
1.14
USD 2.69%
\nFX Forwards \u2212 short term FX risk
USD 618m
5
\u2013
(20)
15
(5)
2021
\u2013
\u2013
\nNet investment hedge \u2013 foreign exchange risk
\n3, 4
\nTransactions matured pre-2020
\u2013
(565)
\u2013
\u2013
(565)
\u2013
\u2013
\u2013
\nCross currency interest rate swap \u2013 JPY investment
JPY 58.5bn
19
(4)
(15)
\u2013
(19)
2029
108.03
JPY 1.53%
\nCross currency interest rate swap \u2013 CNY investment
CNY 458m
(2)
1
1
\u2013
2
2026
6.68
CNY 4.80%
\nForeign currency borrowing \u2013 GBP investment
GBP 350m
(475)
(251)
18
\u2013
(233)
2031
n/a
GBP 5.75%
\nForeign currency borrowing \u2013 EUR investment
\n6
\nEUR 450m
(548)
34
51
\u2013
85
2021
n/a
EUR 0.88%
\nContingent consideration liabilities and Acerta Pharma
\nput\u00a0option liability \u2013 AZUK and AZAB USD investments
USD 5,252m
(5,252)
2,053
(642)
\u2013
1,411
\u2013
\u2013
\u2013
\nNotes to the Group Financial Statements
\ncontinued
\n188
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
2021
\nOther comprehensive income
\nFair value
\nloss
\nOpening
Fair value
recycled
Closing
\nNominal
balance
(gain)/loss
to the
balance
Average
\namounts
Carrying
1\u00a0January
deferred
Income
31\u00a0December
Average
Average
pay
\nin local
value
2021
to OCI
statement
2021
maturity
USD FX
interest
\ncurrency
$m
$m
$m
$m
$m
year
rate
rate
\nCash flow hedges \u2013 foreign currency and interest rate risk
\n2, 4, 5
\nCross currency interest rate swaps \u2013 Euro bonds
EUR 1,700m
(43)
46
182
(201)
27
2026
1.14
USD 2.85%
\nFX Forwards \u2212 short term FX risk
USD 1,220m
12
(5)
\u2013
(7)
(12)
2022
\u2013
\u2013
\nNet investment hedge \u2013 foreign exchange risk
\n3, 4
\nTransactions matured pre-2021
\u2013
(565)
\u2013
\u2013
(565)
\u2013
\u2013
\u2013
\nCross currency interest rate swap \u2013 JPY investment
JPY 58.3bn
62
(19)
(43)
\u2013
(62)
2029
108.03
JPY 1.53%
\nCross currency interest rate swap \u2013 CNY investment
CNY 458m
(2)
2
\u2013
\u2013
2
2026
6.68
CNY 4.80%
\nForeign currency borrowing \u2013 GBP investment
GBP 350m
470
(233)
(5)
\u2013
(238)
2031
n/a
GBP 5.75%
\nForeign currency borrowing \u2013 EUR investment
\n6
\nEUR 450m
\u2013
85
(47)
\u2013
38
2021
n/a
EUR 0.88%
\nForeign currency borrowing \u2013 EUR investment
\n7
\nEUR 800m
898
\u2013
(50)
\u2013
(50)
2029
n/a
EUR 0.38%
\nContingent consideration liabilities and Acerta Pharma share
\npurchase liability \u2013 AZUK and AZAB USD investments
USD 2,658m
(2,658)
1,411
421
\u2013
1,832
\u2013
\u2013
\u2013
\n2022
\nOther comprehensive income
\nFair value
\n(gain)/loss
\nOpening
Fair value
recycled
Closing
\nNominal
balance
(gain)/loss
to the
balance
Average
\namounts
Carrying
1\u00a0January
deferred
Income
31\u00a0December
Average
Average
pay
\nin local
value
2022
to OCI
statement
2022
maturity
USD FX
interest
\ncurrency
$m
$m
$m
$m
$m
year
rate
rate
\nCash flow hedges \u2013 foreign currency and interest rate risk
\n2, 4, 5
\nCross currency interest rate swaps \u2013 Euro bonds
EUR 1,700m
(160)
27
118
(111)
34
2026
1.14
USD 2.85%
\nFX Forwards \u2212 short term FX risk
USD 1,126m
(12)
(12)
(14)
38
12
2023
\u2013
\u2013
\nNet investment hedge \u2013 foreign exchange risk
\n3, 4
\nTransactions matured pre-2022
\u2013
(527)
\u2013
\u2013
(527)
\u2013
\u2013
\u2013
\nCross currency interest rate swap \u2013 JPY investment
JPY 58.3bn
55
(62)
7
\u2013
(55)
2029
108.03
JPY 1.53%
\nCross currency interest rate swap \u2013 CNY investment
CNY 458m
(4)
2
2
\u2013
4
2026
6.68
CNY 4.80%
\nForeign currency borrowing \u2013 GBP investment
GBP 350m
420
(238)
(50)
\u2013
(288)
2031
n/a
GBP 5.75%
\nForeign currency borrowing \u2013 EUR investment
\n7
\nEUR 800m
846
(50)
(52)
\u2013
(102)
2029
n/a
EUR 0.38%
\nContingent consideration liabilities and Acerta Pharma
\nshare\u00a0purchase liability \u2013 AZUK and AZAB USD investments
USD 2,093m
(2,093)
1,832
384
\u2013
2,216
\u2013
\u2013
\u2013
\n1
Swaps designated in a fair value hedge matured on 24 November 2021 and hedge ineffectiveness during 2022 was $nil (2021: $nil; 2020: gain of $1m).
\n2
Hedge ineffectiveness recognised on swaps designated in a cash flow hedge during the period was $nil (2021: $nil; 2020: $nil).
\n3
Hedge ineffectiveness recognised on swaps designated in a net investment hedge during the period was $nil (2021: $nil; 2020: $nil).
\n4
Fair value movements on cross-currency interest rate swaps in cash flow hedge and net investment hedge relationships are shown inclusive of the impact of costs of hedging.
\n5
Nominal amount of FX forwards in a cash flow hedge of $1,710m represents the USD equivalent notional of the FX forwards. By currency, the nominal amounts were SEK 8,148m at FX rate
\n10.4568, JPY 18,963m at 132.15, GBP 455m at 0.8288 and EUR 224m at 0.9389. All FX forwards in a cash flow hedge mature on 25 January 2023.
\n6
The EUR 450m NIH matured in November 2021, when the hedging instrument, a EUR bond matured.
\n7
On 3 June 2021, upon issuance of the EUR 800m 0.375% 2029 Non-callable bond, EUR 550m was designated in a net investment hedge of the foreign currency exposure in relation of an equivalent
\namount of EUR-denominated net assets. The remaining EUR 250m was subsequently designated in a net investment hedge upon maturity of the EUR 450m bond on 24 November 2021.
\nKey controls applied to transactions in derivative \ufb01nancial instruments are to use only instruments where good market liquidity exists, to revalue all
\n\ufb01nancial instruments regularly using current market rates and to sell options only to offset previously purchased options or as part of a risk management
\nstrategy. The Group is not a net seller of options, and does not use derivative \ufb01nancial instruments for speculative purposes. The Group held no
\noptions during the reporting period.
\n29 Employee costs and share plans for employees
\nEmployee costs
\nThe monthly average number of people, to the nearest hundred, employed by the Group is set out in the table below. In accordance with the Companies
\nAct 2006, this includes part-time employees.
\n2022
2021
2020
\nEmployees
\nUK
9,800
8,900
7,900
\nRest of Europe
20,600
18,300
16,600
\nThe Americas
20,900
18,800
17,300
\nAsia, Africa\u00a0& Australasia
30,700
33,600
33,000
\nContinuing operations
82,000
79,600
74,800
\nGeographical distribution described in the table above is by location of legal entity employing staff. Certain staff will undertake some or all of their
\nactivity in a different location.
\nThe number of people employed by the Group at the end of 2022 was 83,500 (2021: 83,100; 2020: 76,100).
\n189
AstraZeneca Annual Report & Form 20-F Information 2022
Notes to the Group Financial Statements
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
The costs incurred during the year in respect of these employees were:
\n2022
2021
2020
\n$m
$m
$m
\nWages and salaries
8,656
7,633
6,273
\nSocial security costs
991
886
726
\nPension costs
546
564
435
\nOther employment costs
1,338
1,192
813
\nTotal
11,531
10,275
8,247
\nSeverance costs of $227m are not included above (2021: $238m; 2020: $116m).
\nThe charge for share-based payments in respect of share plans is $619m (2021: $615m; 2020: $277m). Payments made to the Employee Bene\ufb01t
\nTrust upon vesting of share awards are recognised within operating cash \ufb02ows, re\ufb02ecting the substance of the arrangement in place between the
\ngroup and the Trust. The plans are equity settled.
\nThe Directors believe that, together with the basic salary system, the Group\u2019s employee incentive schemes provide competitive and market-related
\npackages to motivate employees. They should also align the interests of employees with those of shareholders, as a whole, through long-term share
\nownership in the Company. The Group\u2019s current US, UK and Swedish schemes are described below, other arrangements apply elsewhere.
\nBonus and share plans
\nUS
\nIn the US, there are two all-employee short-term or annual performance bonus plans in operation to differentiate and reward strong individual
\nperformance. Annual bonuses are paid in cash. There is also one senior staff long-term incentive scheme, under which 190 participants may be eligible
\nfor awards granted as AstraZeneca ADRs. AstraZeneca ADRs necessary to satisfy the awards are purchased in the market or funded via a share
\ntrust. The AstraZeneca Performance Share Plan and the AstraZeneca Global Restricted Stock Plan operate in respect of relevant employees in the US.
\nUK
\nThe AstraZeneca UK Performance Bonus Plan
\nEmployees of participating AstraZeneca UK companies are invited to participate in this bonus plan, which rewards strong individual performance.
\nBonuses are paid in cash.
\nThe AstraZeneca UK All-Employee Share Plan
\nThe Company offers UK employees the opportunity to buy Partnership Shares (Ordinary Shares). Employees may invest up to \u00a3150 a month to
\npurchase Partnership Shares in the Company at the current market value. In 2010, the Company introduced a Matching Share element, the \ufb01rst award
\nof which was made in 2011. Currently one Matching Share is awarded for every four Partnership Shares purchased. Partnership Shares and Matching
\nShares are held in the HM Revenue & Customs (HMRC)-approved All-Employee Share Plan. At the Company\u2019s AGM in 2002, shareholders approved
\nthe issue of new shares for the purposes of the All-Employee Share Plan.
\nSweden
\nIn Sweden, an all-employee performance bonus plan is in operation, which rewards strong individual performance. Bonuses are paid 50% into a
\nfund investing in AstraZeneca equities and 50% in cash. The AstraZeneca Executive Annual Bonus Scheme, the AstraZeneca Performance Share
\nPlan and the AstraZeneca Global Restricted Stock Plan all operate in respect of relevant AstraZeneca employees in Sweden.
\nOther bonus and share plans that operate across the Group are described below.
\nThe AstraZeneca Executive Annual Bonus Scheme
\nThis scheme is a performance bonus scheme for Directors and senior employees who do not participate in the AstraZeneca UK Performance Bonus
\nPlan. Annual bonuses are paid in cash and re\ufb02ect both corporate and individual performance measures. The Remuneration Committee has discretion
\nto reduce or withhold bonuses if business performance falls suf\ufb01ciently short of expectations in any year such as to make the payment of
\nbonuses inappropriate.
\nThe AstraZeneca Deferred Bonus Plan
\nThis plan was introduced in 2006 and is used to defer a portion of the bonus earned under the AstraZeneca Executive Annual Bonus Scheme into
\nOrdinary Shares in the Company for a period of three years. The plan currently operates only in respect of Executive Directors and members of
\nthe SET (with awards granted as AstraZeneca ADRs for members of SET employed within the US). Awards of shares under this plan are typically
\nmade in March each year, the \ufb01rst award having been made in February 2006.
\nThe AstraZeneca Performance Share Plan
\nThis plan was approved by shareholders in 2020 for a period of 10 years (subsequently amended by approval of shareholders in 2021) and replaces
\nthe 2014 AstraZeneca Performance Share Plan. Generally, awards can be granted at any time, but not during a closed period of the Company. The
\n\ufb01rst grant of Performance Share Plan awards was made in May 2014 under the 2014 AstraZeneca Performance Share Plan. Awards granted under
\nthe plan vest after three years, or in the case of Executive Directors and members of the SET, after an additional two-year holding period, and is
\nsubject to the achievement of performance conditions. For awards granted to all participants in 2022, vesting is subject to a combination of measures
\nfocused on science and innovation, revenue growth, \ufb01nancial performance and carbon reduction. The Remuneration Committee has responsibility
\nfor agreeing any awards under the plan and for setting the policy for the way in which the plan should be operated, including agreeing performance
\ntargets and which employees should be invited to participate.
\nNotes to the Group Financial Statements
\ncontinued
\n29 Employee costs and share plans for employees
continued
\n190
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
The AstraZeneca Investment Plan
\nThis plan was introduced in 2010 and approved by shareholders at the 2010 AGM. The \ufb01nal grant of awards under this plan took place in March 2016.
\nAwards granted under the plan vest after eight years and are subject to performance conditions measured over a period of four years.
\nThe AstraZeneca Global Restricted Stock Plan
\nThis plan was introduced in 2010. This plan provides for the grant of restricted stock unit (RSU) awards to selected below SET-level employees and
\nis used in conjunction with the AstraZeneca Performance Share Plan to provide a mix of RSUs and performance shares. Awards typically vest on the
\nthird anniversary of the date of grant and are contingent on continued employment with the Company. The Remuneration Committee has responsibility
\nfor agreeing any awards under the plan and for setting the policy for the way in which the plan should be operated.
\nThe AstraZeneca Restricted Share Plan
\nThis plan was introduced in 2008 and provides for the grant of restricted share awards to key employees, excluding Executive Directors. Awards are
\nmade on an ad hoc basis with variable vesting dates. The plan has been used four times in 2022 to make awards to 112 employees. The Remuneration
\nCommittee has responsibility for agreeing any awards under the plan and for setting the policy for the way in which the plan should be operated.
\nThe AstraZeneca Extended Incentive Plan
\nThis plan was introduced in 2018 and provides for the grant of awards to key employees, excluding Executive Directors. Awards are made on an
\nad hoc basis and 50% of the award will normally vest on the \ufb01fth anniversary of grant, with the balance vesting on the tenth anniversary of grant.
\nThe award can be subject to the achievement of performance conditions. The Remuneration Committee has responsibility for agreeing any awards
\nunder the plan and for setting the policy for the way in which the plan should be operated, including agreeing performance targets (if any) and which
\nemployees should be invited to participate.
\nDetails of share options outstanding during the year for the main share plans are shown below.
\nThe AstraZeneca
\nPerformance Share Plan
\nThe AstraZeneca
\nGlobal Restricted Stock Plan
\nThe AstraZeneca
\nRestricted Share Plan
\nThe AstraZeneca
\nExtended Incentive Plan
\nOrdinary
\nShares
\nADR
\nShares
\nOrdinary
\nShares
\nADR
\nShares
\n1
\nOrdinary
\nShares
\nADR
\nShares
\nOrdinary
\nShares
\nADR
\nShares
\n\u2019000
\u2019000
\u2019000
\u2019000
\u2019000
\u2019000
\u2019000
\u2019000
\nOutstanding at 1 January 2020
2,859
5,206
1,328
9,770
176
649
282
65
\nGranted
932
1,767
689
3,671
80
295
18
\u2013
\nForfeited
(191)
(478)
(113)
(1,077)
(6)
(79)
\u2013
\u2013
\nCancelled
(3)
\u2013
\u2013
(9)
\u2013
\u2013
\u2013
\u2013
\nExercised
(552)
(1,704)
(278)
(3,180)
(89)
(359)
\u2013
\u2013
\nOutstanding at 31 December 2020
3,045
4,791
1,626
9,175
161
506
300
65
\nGranted
1,275
2,082
902
4,509
139
481
\u2013
175
\nForfeited
(220)
(494)
(158)
(1,254)
(18)
(42)
(18)
(45)
\nCancelled
(9)
\u2013
(1)
(8)
\u2013
\u2013
\u2013
\u2013
\nExercised
(632)
(1,201)
(341)
(2,881)
(27)
(182)
\u2013
\u2013
\nOutstanding at 31 December 2021
3,459
5,178
2,028
9,541
255
763
282
195
\nGranted
1,059
2,339
1,237
6,478
75
216
\u2013
\u2013
\nForfeited
(132)
(570)
(190)
(1,627)
(25)
(136)
(23)
\u2013
\nCancelled
\u2013
\u2013
\u2013
(3)
\u2013
\u2013
\u2013
\u2013
\nExercised
(756)
(1,223)
(606)
(2,706)
(72)
(165)
\u2013
\u2013
\nOutstanding at 31 December 2022
3,630
5,724
2,469
11,683
233
678
259
195
\n1
Shares issued to Alexion employees under the GRSP are covered under the Alexion employee share award below.
\nThe AstraZeneca
\nPerformance Share Plan
\nThe AstraZeneca
\nGlobal Restricted Stock Plan
\nThe AstraZeneca
\nRestricted Share Plan
\nThe AstraZeneca
\nExtended Incentive Plan
\nWAFV
\n1
\nWAFV
WAFV
WAFV
WAFV
WAFV
WAFV
WAFV
\npence
$
pence
$
pence
$
pence
$
\nWAFV of 2020 grants
6664
43.24
7408
47.71
7931
52.92
8386
\u2013
\nWAFV of 2021 grants
6012
41.56
6893
47.75
7415
53.96
\u2013
56.83
\nWAFV of 2022 grants
8328
55.73
9167
61.21
9894
63.35
\u2013
\u2013
\n1
Weighted average fair value.
\nAlexion employee share award plan
\nAt acquisition in 2021, Alexion employee share awards were converted into AstraZeneca restricted stock awards that continue to have, and shall be
\nsubject to, the same terms and conditions as applied in the corresponding Alexion awards immediately prior to completion. The fair value at the
\ngrant date was $57.54 and of the 15,220,000 ADR shares outstanding at 31 December 2021, 8,627,000 were exercised during 2022 and 980,000
\nwere forfeited. During 2022, Alexion employees had the option to defer awards due to vest in July 2022 until February 2023 when they would also
\nreceive an additional vest equivalent to 15% of the shares deferred. As a result, 1,780,000 shares were deferred, resulting in an additional 267,000
\nADR shares being issued under the Global Restricted Stock Plan, under original Alexion terms and conditions, with a grant date fair value of $65.62.
\nThe weighted average fair value for awards granted under the AstraZeneca Performance Share Plan is primarily based on the market price at the point
\nof grant adjusted for the market-based performance elements which are valued using a modi\ufb01ed version of the Monte Carlo method. The fair values
\nof all other plans are set using the market price at the point of award. These awards are settled in equity including dividends accumulated from the
\ndate of award to vesting.
\n191
AstraZeneca Annual Report & Form 20-F Information 2022
Notes to the Group Financial Statements
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
30 Commitments, contingent liabilities and contingent assets
\n2022
2021
2020
\nCommitments
$m
$m
$m
\nContracts placed for future capital expenditure on Property, plant and equipment and
\nsoftware development costs not provided for in these financial statements
502
388
689
\nGuarantees and contingencies arising in the ordinary course of business, for which no security has been given, are not expected to result in any
\nmaterial \ufb01nancial loss.
\nResearch and development collaboration payments
\nThe Group has various ongoing collaborations, including in-licensing and similar arrangements with development partners. Such collaborations may
\nrequire the Group to make payments on achievement of stages of development, launch or revenue milestones, although the Group generally has
\nthe right to terminate these agreements at no cost. The Group recognises research and development milestones as an intangible asset once it is
\ncommitted to payment, which is generally when the Group reaches set trigger points in the development cycle. Revenue-related milestones are
\nrecognised as intangible assets on product launch at a value based on the Group\u2019s long-term revenue forecasts for the related product. The table
\nbelow indicates potential development and revenue-related payments that the Group may be required to make under such collaborations.
\nYears 5
\nTotal
Under 1 year
Years 1 and 2
Years 3 and 4
and greater
\n$m
$m
$m
$m
$m
\nFuture potential research and development milestone payments
11,729
1,320
2,662
2,698
5,049
\nFuture potential revenue milestone payments
17,499
65
368
1,859
15,207
\nThe table includes all potential payments for achievement of milestones under ongoing research and development arrangements. Revenue-related
\nmilestone payments represent the maximum possible amount payable on achievement of speci\ufb01ed levels of revenue as set out in individual contract
\nagreements, but exclude variable payments that are based on unit sales (e.g. royalty-type payments) which are expensed as the associated sale is
\nrecognised. The table excludes any payments already capitalised in the Financial Statements for the year ended 31 December 2022.
\nThe future payments we disclose represent contracted payments and, as such, are not discounted and are not risk-adjusted. As detailed in the Risk
\nsection from page 56, the development of any pharmaceutical product candidate is a complex and risky process that may fail at any stage in the
\ndevelopment process due to a number of factors (including items such as failure to obtain regulatory approval, unfavourable data from key studies,
\nadverse reactions to the product candidate or indications of other safety concerns). The timing of the payments is based on the Group\u2019s current best
\nestimate of achievement of the relevant milestone.
\nNotes to the Group Financial Statements
\ncontinued
\nEnvironmental costs and liabilities
\nThe Group\u2019s expenditure on environmental
\nprotection, including both capital and revenue
\nitems, relates to costs that are necessary for
\nimplementing internal systems and programmes,
\nand meeting legal and regulatory requirements
\nfor processes and products. This includes
\ninvestment to conserve natural resources and
\notherwise minimise the impact of our activities
\non the environment.
\nThey are an integral part of normal ongoing
\nexpenditure for carrying out the Group\u2019s
\nresearch, manufacturing and commercial
\noperations and are not separated from overall
\noperating and development costs. There are
\nno known changes in legal, regulatory or other
\nrequirements resulting in material changes to
\nthe levels of expenditure for 2020, 2021 or 2022.
\nIn addition to expenditure for meeting current
\nand foreseen environmental protection
\nrequirements, the Group incurs costs in
\ninvestigating and cleaning up legacy land and
\ngroundwater contamination. In particular,
\nAstraZeneca has environmental liabilities at
\nsome currently or formerly owned, leased and
\nthird-party sites.
\nIn the US, Zeneca Inc., and/or its indemnitees,
\nhave been named as potentially responsible
\nparties (PRPs) or defendants at a number of
\nsites where Zeneca Inc. is likely to incur future
\nenvironmental investigation, remediation,
\noperation and maintenance costs under federal,
\nstate, statutory or common law environmental
\nliability allocation schemes (together, US
\nEnvironmental Consequences). Similarly,
\nStauffer Management Company LLC (SMC),
\nwhich was established in 1987 to own and
\nmanage certain assets of Stauffer Chemical
\nCompany acquired that year, and/or its
\nindemnitees, have been named as PRPs or
\ndefendants at a number of sites where SMC is
\nlikely to incur US Environmental Consequences.
\nAstraZeneca has also given indemnities to third
\nparties for a number of sites outside the US.
\nThese environmental liabilities arise from legacy
\noperations that are not currently part of the
\nGroup\u2019s business and, at most of these sites,
\nremediation, where required, is either completed
\nor in progress. AstraZeneca has made
\nprovisions for the estimated costs of future
\nenvironmental investigation, remediation,
\noperation and maintenance activity beyond
\nnormal ongoing expenditure for maintaining the
\nGroup\u2019s R&D and manufacturing capacity and
\nproduct ranges, where a present obligation
\nexists, it is probable that such costs will be
\nincurred and they can be estimated reliably. With
\nrespect to such estimated future costs, there
\nwere provisions at 31 December 2022 in the
\naggregate of $131m (2021: $90m; 2020: $100m),
\nmainly relating to the US. Where we are jointly
\nliable or otherwise have cost-sharing
\nagreements with third parties, we re\ufb02ect only
\nour share of the obligation. Where the liability is
\ninsured in part or in whole by insurance or other
\narrangements for reimbursement, an asset is
\nrecognised to the extent that this recovery is
\nvirtually certain.
\nIt is possible that AstraZeneca could incur
\nfuture environmental costs beyond the extent
\nof our current provisions. The extent of such
\npossible additional costs is inherently dif\ufb01cult
\nto estimate due to a number of factors, including:
\n(i) the nature and extent of claims that may be
\nasserted in the future; (ii) whether AstraZeneca
\nhas or will have any legal obligation with respect
\nto asserted or unasserted claims; (iii) the type of
\nremedial action, if any, that may be selected at
\nsites where the remedy is presently not known;
\n(iv) the potential for recoveries from or allocation
\nof liability to third parties; and (v) the length of
\ntime that the environmental investigation,
\nremediation and liability allocation process can
\ntake. As per our accounting policy on page
\n148, provisions for these costs are made when
\nthere is a present obligation and where it is
\nprobable that expenditure on remedial work will
\nbe required and a reliable estimate can be made
\nof the cost. Notwithstanding and subject to the
\nforegoing, we estimate the potential additional
\nloss for future environmental investigation,
\nremediation, remedial operation and
\nmaintenance activity above and beyond our
\nprovisions to be, in aggregate, between $113m
\nand $188m (2021: $99m and $165m; 2020: $95m
\nand $158m) which relates mainly to the US.
\nLegal proceedings
\nAstraZeneca is involved in various legal
\nproceedings considered typical to its business,
\nincluding actual or threatened litigation and
\nactual or potential government investigations
\nrelating to employment matters, product liability,
\ncommercial disputes, pricing, sales and
\n192
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
marketing practices, infringement of IP rights,
\nand the validity of certain patents and
\ncompetition laws. The more signi\ufb01cant matters
\nare discussed below.
\nMost of the claims involve highly complex
\nissues. Often these issues are subject to
\nsubstantial uncertainties and, therefore, the
\nprobability of a loss, if any, being sustained
\nand/or an estimate of the amount of any loss
\nis dif\ufb01cult to ascertain.
\nThere is one matter, which is considered
\nprobable that an out\ufb02ow will be required, but
\nfor which we are unable to make an estimate
\nof the possible loss or range of possible losses
\nat this stage.
\nWe do not believe that disclosure of the
\namounts sought by plaintiffs, if known, would
\nbe meaningful with respect to these legal
\nproceedings. This is due to a number of factors,
\nincluding (i) the stage of the proceedings
\n(in many cases trial dates have not been set)
\nand the overall length and extent of pre-trial
\ndiscovery; (ii) the entitlement of the parties to
\nan action to appeal a decision; (iii) clarity as to
\ntheories of liability, damages and governing
\nlaw; (iv) uncertainties in timing of litigation;
\nand (v) the possible need for further legal
\nproceedings to establish the appropriate
\namount of damages, if any.
\nWhile there can be no assurance regarding the
\noutcome of any of the legal proceedings referred
\nto in this Note 30, based on management\u2019s
\ncurrent and considered view of each situation,
\nwe do not currently expect them to have a
\nmaterial adverse effect on our \ufb01nancial position
\nincluding within the next \ufb01nancial year. This
\nposition could of course change over time, not
\nleast because of the factors referred to above.
\nIn cases that have been settled or adjudicated,
\nor where quanti\ufb01able \ufb01nes and penalties have
\nbeen assessed and which are not subject to
\nappeal (or other similar forms of relief), or where
\na loss is probable and we are able to make a
\nreasonable estimate of the loss, we indicate
\nthe loss absorbed or make a provision for our
\nbest estimate of the expected loss.
\nWhere it is considered that the Group is more
\nlikely than not to prevail, legal costs involved
\nin defending the claim are charged to pro\ufb01t as
\nthey are incurred.
\nWhere it is considered that the Group has
\na valid contract which provides the right to
\nreimbursement (from insurance or otherwise)
\nof legal costs and/or all or part of any loss
\nincurred or for which a provision has been
\nestablished, and we consider recovery to
\nbe virtually certain, the best estimate of the
\namount expected to be received is recognised
\nas an asset.
\nAssessments as to whether or not to
\nrecognise provisions or assets, and of the
\namounts concerned, usually involve a series of
\ncomplex judgements about future events and
\ncan rely heavily on estimates and assumptions.
\nAstraZeneca believes that the provisions
\nrecorded are adequate based on currently
\navailable information and that the insurance
\nrecoveries recorded will be received. However,
\ngiven the inherent uncertainties involved in
\nassessing the outcomes of these cases, and
\nin estimating the amount of the potential losses
\nand the associated insurance recoveries, we
\ncould in the future incur judgments or insurance
\nsettlements that could have a material adverse
\neffect on our results in any particular period.
\nIP claims include challenges to the Group\u2019s
\npatents on various products or processes and
\nassertions of non-infringement of patents.
\nA loss in any of these cases could result in loss
\nof patent protection on the related product.
\nThe consequences of any such loss could be
\na signi\ufb01cant decrease in Product Sales, which
\ncould have a material adverse effect on our
\nresults. The lawsuits \ufb01led by AstraZeneca for
\npatent infringement against companies that
\nhave \ufb01led abbreviated new drug applications
\n(ANDAs) in the US, seeking to market generic
\nforms of products sold by the Group prior to the
\nexpiry of the applicable patents covering these
\nproducts, typically also involve allegations of
\nnon-infringement, invalidity and unenforceability
\nof these patents by the ANDA \ufb01lers. In the event
\nthat the Group is unsuccessful in these actions
\nor the statutory 30-month stay expires before
\na ruling is obtained, the ANDA \ufb01lers involved
\nwill also have the ability, subject to FDA
\napproval, to introduce generic versions of the
\nproduct concerned.
\nAstraZeneca has full con\ufb01dence in, and will
\nvigorously defend and enforce, its IP.
\nOver the course of the past several years,
\nincluding in 2022, a signi\ufb01cant number of
\ncommercial litigation claims in which
\nAstraZeneca is involved have been resolved,
\nparticularly in the US, thereby reducing potential
\ncontingent liability exposure arising from such
\nlitigation. Similarly, in part due to patent litigation
\nand settlement developments, greater certainty
\nhas been achieved regarding possible generic
\nentry dates with respect to some of our patented
\nproducts. At the same time, like other
\ncompanies in the pharmaceutical sector and
\nother industries, AstraZeneca continues to be
\nsubject to government investigations around
\nthe world.
\nPatent litigation
\nLegal proceedings brought against AstraZeneca
\nconsidered to be contingent liabilities
\nEnhertu
\nUS patent proceedings
\nIn October 2020, Seagen Inc. (Seagen) \ufb01led a
\ncomplaint against Daiichi Sankyo Company,
\nLimited in the US District Court for the Eastern
\nDistrict of Texas alleging that
Enhertu
infringes
\nUS Patent No. 10,808,039 (the \u2018039 patent).
\nAstraZeneca Pharmaceuticals LP co-
\ncommercialises
Enhertu
with Daiichi Sankyo,
\nInc. in the US. After trial in April 2022, the jury
\nfound that the patent was infringed and
\nawarded Seagen $41.82m in past damages.
\nIn July 2022, the District Court entered \ufb01nal
\njudgment and declined to enhance damages
\non the basis of willfulness. The parties await
\nconsideration of post-trial motions.
\nIn December 2020 and January 2021,
\nAstraZeneca and Daiichi Sankyo, Inc. \ufb01led
\npost-grant review (PGR) petitions with the US
\nPatent and Trademark Of\ufb01ce (USPTO) alleging,
\ninter alia, that the Seagen patent is invalid for
\nlack of written description and enablement.
\nThe USPTO initially declined to institute the
\nPGRs, but, in April 2022, the USPTO granted
\nthe rehearing requests, instituting both PGR
\npetitions. Seagen subsequently disclaimed all
\npatent claims at issue in one of the PGR
\nproceedings. In July 2022, the USPTO reversed
\nits institution decision and declined to institute
\nthe other PGR petition. AstraZeneca and Daiichi
\nSankyo, Inc. have requested reconsideration of
\nthe decision not to institute review of the patent.
\nIm\ufb01nzi
\nUS patent proceedings
\nIn March 2022, Bristol-Myers Squibb Co. and
\nE.R. Squibb & Sons, LLC \ufb01led a lawsuit in US
\nDistrict Court for the District of Delaware against
\nAstraZeneca alleging that AstraZeneca\u2019s
\nmarketing of
Im\ufb01nzi
infringes several of their
\npatents. Trial has been scheduled for April 2024.
\nPatent proceedings outside the US
\nIn February 2022, in Japan, Ono Pharmaceuticals
\n\ufb01led a lawsuit in Tokyo District Court, Civil
\nDivision against AstraZeneca alleging that
\nAstraZeneca\u2019s marketing of
Im\ufb01nzi
in Japan
\ninfringes several of their patents.
\nImjudo
\nUS patent proceedings
\nIn January 2023, Bristol-Myers Squibb Co. and
\nE.R. Squibb & Sons, LLC \ufb01led a lawsuit in US
\nDistrict Court for the District of Delaware
\nagainst AstraZeneca alleging that AstraZeneca\u2019s
\nmarketing of
Imjudo
infringes two of their patents.
\nTagrisso
\nUS patent proceedings
\nIn September 2021, Puma Biotechnology, Inc.
\nand Wyeth LLC \ufb01led a patent infringement
\nlawsuit in the US District Court for the District
\nof Delaware against AstraZeneca relating to
\nTagrisso
. Trial has been scheduled for May 2024.
\nMovantik
\nUS patent proceedings
\nIn March 2020, Aether Therapeutics, Inc. \ufb01led
\na patent infringement lawsuit in the US District
\nCourt for the District of Delaware against
\nAstraZeneca, Nektar Therapeutics and Daiichi
\nSankyo, Inc., relating to
Movantik
. Trial has
\nbeen scheduled for March 2023.
\n193
AstraZeneca Annual Report & Form 20-F Information 2022
Notes to the Group Financial Statements
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
30 Commitments, contingent liabilities and contingent assets
continued
\nLegal proceedings brought against
\nAstraZeneca which have been concluded
\nRoxadustat
\nUS patent proceedings
\nIn April 2021, Akebia Therapeutics, Inc. (Akebia)
\nand Otsuka America Pharmaceutical, Inc.
\n(Otsuka) served AstraZeneca with a complaint
\nseeking a declaration of invalidity and
\nnon-infringement for several of FibroGen, Inc\u2019s
\n(FibroGen) method of use patents related to
\nHIF prolylhydroxylase inhibitors. AstraZeneca
\nis the exclusive licensee of FibroGen in the
\nUnited States. In April 2022, this matter was
\ndismissed and is now concluded.
\nUltomiris
\nUS patent proceedings
\nIn November and December of 2018, Chugai
\nPharmaceutical Co., Ltd. (Chugai) \ufb01led lawsuits
\nagainst Alexion in the Delaware District Court
\nas well as in Tokyo District Court, alleging that
\nUltomiris
infringed US and Japanese patents
\nheld by Chugai. In March 2022, Alexion entered
\ninto a settlement agreement with Chugai for
\n$775m that resolved all patent disputes between
\nthe two companies related to
Ultomiris
. This
\nmatter is now concluded.
\nLegal proceedings brought by AstraZeneca
\nconsidered to be contingent assets
\nBrilinta
\nUS patent proceedings
\nIn 2015 and subsequently, in response to
\nParagraph IV notices from ANDA \ufb01lers,
\nAstraZeneca \ufb01led patent infringement lawsuits
\nin the US District Court for the District of
\nDelaware (the District Court) relating to patents
\nlisted in the FDA Orange Book with reference
\nto
Brilinta
. In 2022, AstraZeneca entered into
\nseveral separate settlements and the District
\nCourt entered consent judgments to dismiss
\neach of the corresponding litigations.
\nAdditional proceedings are ongoing in the
\nDistrict Court. No trial date has been set.
\nCalquence
\nUS patent proceedings
\nIn February 2022, in response to Paragraph IV
\nnotices from multiple ANDA \ufb01lers, AstraZeneca
\n\ufb01led patent infringement lawsuits in the US
\nDistrict Court for the District of Delaware. In its
\ncomplaint, AstraZeneca alleges that a generic
\nversion of
Calquence
, if approved and marketed,
\nwould infringe patents listed in the US FDA
\nOrange Book with reference to
Calquence
\nthat are owned or licensed by AstraZeneca.
\nTrial has been scheduled for March 2025.
\nIn February 2023, Sandoz Inc. \ufb01led a petition
\nfor inter partes review with the US Patent
\nand Trademark Of\ufb01ce (USPTO) of certain
\nCalquence
patent claims in US Patent No.
\n10,272,083 (the \u2018083 patent). AstraZeneca has
\nasserted claims for infringement of the \u2018083
\npatent against Sandoz and other defendants
\nin the US ANDA litigation. AstraZeneca is
\nconsidering its response to Sandoz\u2019s petition
\nbefore the USPTO.
\nDaliresp
\nUS patent proceedings
\nIn 2015 and subsequently, in response to
\nParagraph IV notices from ANDA \ufb01lers,
\nAstraZeneca \ufb01led patent infringement lawsuits
\nin the US District Court for the District of New
\nJersey (the District Court) relating to patents
\nlisted in the FDA Orange Book with reference
\nto
Daliresp
. In 2022, AstraZeneca entered
\ninto a settlement and the District Court
\nentered a consent judgment to dismiss the
\ncorresponding litigation. Additional ANDA
\nchallenges are pending.
\nFaslodex
\nPatent proceedings outside the US
\nIn 2021 in Japan, AstraZeneca received notice
\nfrom the Japan Patent Of\ufb01ce (JPO) that Sandoz
\nK.K. and Sun Pharma Japan Ltd. (Sun) were
\nseeking to invalidate the
Faslodex
formulation
\npatent. AstraZeneca defended the challenged
\npatent, and Sun withdrew from the JPO patent
\nchallenge. In May 2022, the JPO held the hearing
\nin the matter and issued its preliminary decision
\nin September 2022 upholding various claims
\nof the challenged patent and determining that
\nother patent claims were invalid. A \ufb01nal JPO
\ndecision is forthcoming.
\nTagrisso
\nPatent proceedings outside the US
\nIn Russia in October 2021, AstraZeneca \ufb01led a
\nlawsuit in the Arbitration Court of the Moscow
\nRegion (the Court) against Axelpharm, LLC
\nto prevent it from obtaining authorisation to
\nmarket a generic version of
Tagrisso
prior to the
\nexpiration of AstraZeneca\u2019s patents covering
\nTagrisso
. The lawsuit also names the Ministry
\nof Health of the Russian Federation as a third
\nparty. In March 2022, the Court dismissed
\nthe lawsuit. In June 2022, the dismissal was
\naf\ufb01rmed on appeal. In January 2023, the
\ndismissal was af\ufb01rmed on further appeal.
\nAstraZeneca is considering its option.
\nFarxiga
/
Forxiga
\nUS patent proceedings
\nIn 2018, in response to Paragraph IV notices,
\nAstraZeneca initiated ANDA litigation against
\nZydus Pharmaceuticals (USA) Inc. (Zydus) in the
\nUS District Court for the District of Delaware
\n(the District Court). In May 2021, trial against
\nZydus proceeded in the District Court and
\nin October 2021, the District Court issued
\na decision \ufb01nding the asserted claims of
\nAstraZeneca\u2019s patent as valid and infringed
\nby Zydus\u2019s ANDA product. In August 2022,
\nZydus appealed the District Court\u2019s decision.
\nIn November 2022, Zydus\u2019s appeal was
\ndismissed. Additional ANDA challenges
\nare pending.
\nLokelma
\nUS patent proceedings
\nIn August 2022, in response to Paragraph IV
\nnotices, AstraZeneca initiated ANDA litigation
\nagainst multiple generic \ufb01lers in the US District
\nCourt for the District of Delaware. Trial has
\nbeen scheduled for March 2025.
\nSymbicort
\nUS patent proceedings
\nAstraZeneca is involved in ongoing ANDA
\nlitigations with Mylan Pharmaceuticals Inc.
\n(Mylan) and Kindeva Drug Delivery L.P.
\n(Kindeva) brought in the US District Court
\nfor the Northern District of West Virginia
\n(the District Court). In the actions, AstraZeneca
\nalleges that the defendants\u2019 generic versions
\nof
Symbicort
, if approved and marketed,
\nwould infringe various AstraZeneca patents.
\nIn one of those matters, in November 2022,
\nthe District Court determined that the asserted
\npatent was invalid. In November 2022,
\nAstraZeneca appealed that decision to the
\nUnited States Court of Appeals for the Federal
\nCircuit (the Federal Circuit). With respect to
\nthe other matter, following a stipulation of
\ninfringement and validity by Mylan and Kindeva
\nthat was subject to certain appeal issues, in
\nDecember 2022, the District Court issued a Final
\nJudgment in favour of AstraZeneca. In December
\n2022, Mylan and Kindeva appealed the Final
\nJudgment to the Federal Circuit. Both appeals
\nare scheduled to be heard in March 2023.
\nLynparza
\nUS patent proceedings
\nIn December 2022, AstraZeneca received a
\nParagraph IV notice letter from an ANDA \ufb01ler
\nrelating to patents listed in the FDA Orange
\nBook with reference to
Lynparza
. AstraZeneca
\nis reviewing the notice letter.
\nLegal proceedings brought by AstraZeneca
\nwhich have been concluded
\nTagrisso
\nUS patent proceedings
\nIn February 2020, in response to Paragraph IV
\nnotices from multiple ANDA \ufb01lers, AstraZeneca
\n\ufb01led patent infringement lawsuits in the US
\nDistrict Court for the District of Delaware. In its
\ncomplaint, AstraZeneca alleges that a generic
\nversion of
Tagrisso
, if approved and marketed,
\nwould infringe a US Orange Book-listed
Tagrisso
\npatent. In the fourth quarter of 2021 and April
\n2022, AstraZeneca entered into settlement
\nagreements with Zydus Pharmaceuticals
\n(USA) Inc., Cadila Healthcare Limited, MSN
\nLaboratories Pvt. Ltd., MSN Pharmaceuticals
\nInc. and Alembic Pharmaceuticals Limited.
\nThese settlements resolve all US patent litigation
\nbetween the parties relating to
Tagrisso
.
\nProduct liability litigation
\nLegal proceedings brought against AstraZeneca
\nconsidered to be contingent liabilities
\nFarxiga
and
Xigduo
XR
\nUS proceedings
\nIn several jurisdictions in the US, AstraZeneca
\nhas been named as a defendant in lawsuits
\ninvolving plaintiffs claiming physical injury,
\nincluding Fournier\u2019s Gangrene and necrotising
\nfasciitis, from treatment with
Farxiga
and/or
\nXigduo
XR. A majority of these claims are \ufb01led
\nin Delaware state court and remain pending.
\nOne case, \ufb01led in state court in Minnesota, is
\nscheduled for trial in October 2023.
\nNotes to the Group Financial Statements
\ncontinued
\n194
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
Nexium
and
Losec
/
Prilosec
\nUS proceedings
\nIn the US, AstraZeneca is defending various
\nlawsuits brought in federal and state courts
\ninvolving multiple plaintiffs claiming that they
\nhave been diagnosed with various injuries
\nfollowing treatment with proton pump inhibitors
\n(PPIs), including
Nexium
and
Prilosec
. The vast
\nmajority of those lawsuits relate to allegations
\nof kidney injuries. In May 2017, counsel for a
\ngroup of such plaintiffs claiming that they have
\nbeen diagnosed with kidney injuries \ufb01led a
\nmotion with the Judicial Panel on Multidistrict
\nLitigation (JPML) seeking the transfer of any
\ncurrently pending federal court cases as well
\nas any similar, subsequently \ufb01led cases to
\na coordinated and consolidated pre-trial
\nmultidistrict litigation (MDL) proceeding. In
\nAugust 2017, the JPML granted the motion and
\nconsolidated the pending federal court cases
\nin an MDL proceeding in District Court in New
\nJersey for pre-trial purposes. A bellwether trial
\nhas been scheduled for June 2023, with
\nsubsequent bellwether trials scheduled for July
\nand September 2023. In addition to the MDL
\ncases, there are cases \ufb01led in several state
\ncourts around the US; a case that was
\npreviously set to go to trial in Delaware state
\ncourt was dismissed in October 2022.
\nIn addition, AstraZeneca has been defending
\nlawsuits involving allegations of gastric cancer
\nfollowing treatment with PPIs. One such claim
\nis \ufb01led in the US District Court for the Middle
\nDistrict of Louisiana and was scheduled to go
\nto trial in January 2023. That case has been
\npostponed and a new trial date has not yet
\nbeen set.
\nCanada proceedings
\nIn Canada, in July and August 2017, AstraZeneca
\nwas served with three putative class action
\nlawsuits. Two of the lawsuits have been
\ndismissed, one in 2019 and one in 2021. The
\nthird lawsuit seeks authorisation to represent
\nindividual residents in Canada who allegedly
\nsuffered kidney injuries from the use of proton
\npump inhibitors, including
Nexium
and
Losec
.
\nOnglyza
and
Kombiglyze
\nUS proceedings
\nIn the US, AstraZeneca is defending various
\nlawsuits alleging heart failure, cardiac injuries,
\nand/or death from treatment with
Onglyza
or
\nKombiglyze
. In February 2018, the Judicial
\nPanel on Multidistrict Litigation ordered the
\ntransfer of various pending federal actions to
\nthe US District Court for the Eastern District of
\nKentucky (the District Court) for consolidated
\npre-trial proceedings with the federal actions
\npending in the District Court. In the California
\nState Court coordinated proceeding,
\nAstraZeneca\u2019s motion for summary judgment
\nwas granted in March 2022. The District Court
\ngranted AstraZeneca\u2019s motion for summary
\njudgment in August 2022. Plaintiffs are in the
\nprocess of appealing both decisions.
\nLegal proceedings brought against AstraZeneca
\nwhich have been concluded
\nByetta
/
Bydureon
\nUS proceedings
\nIn the US, Amylin Pharmaceuticals, LLC
\n(a wholly owned subsidiary of AstraZeneca) and
\nAstraZeneca are among multiple defendants in
\nvarious lawsuits \ufb01led in federal and state courts
\ninvolving claims of physical injury from treatment
\nwith
Byetta
and/or
Bydureon
. The lawsuits allege
\nseveral types of injuries including pancreatic
\ncancer and thyroid cancer. A multidistrict
\nlitigation was established in the US District Court
\nfor the Southern District of California (the District
\nCourt) in regard to the alleged pancreatic cancer
\ncases in federal courts. Further, a coordinated
\nproceeding has been established in Superior
\nCourt in Los Angeles, California (the California
\nCourt) for cases in California state courts. In
\nMarch and April 2021, the District Court and
\nthe California Court respectively granted the
\nDefendants\u2019 summary judgment motions,
\ndismissing all cases alleging pancreatic cancer
\nwith prejudice. All remaining claims in both
\ncourts, including those alleging thyroid cancer,
\nhave since been dismissed. This matter is
\nnow concluded.
\nCommercial litigation
\nLegal proceedings brought against AstraZeneca
\nconsidered to be contingent liabilities
\nAlexion Shareholder Litigation (US)
\nIn December 2016, putative securities class
\naction lawsuits were \ufb01led in the US District Court
\nfor the District of Connecticut (the District
\nCourt) against Alexion and certain of\ufb01cers and
\ndirectors, on behalf of purchasers of Alexion
\npublicly traded securities during the period
\n30 January 2014 through 26 May 2017. The
\namended complaint alleges that defendants
\nengaged in securities fraud, including by making
\nmisrepresentations and omissions in its public
\ndisclosures concerning Alexion\u2019s
Soliris
sales
\npractices, management changes, and related
\ninvestigations. In August 2021, the District Court
\nissued a decision denying in part Defendants\u2019
\nmotion to dismiss the matter. Plaintiffs\u2019 motion
\nfor class certi\ufb01cation, which Alexion opposed
\nin April 2022, remains pending.
\nAnti-Terrorism Act Civil Lawsuit
\nIn the US, in October 2017, AstraZeneca and
\ncertain other pharmaceutical and/or medical
\ndevice companies were named as defendants
\nin a complaint \ufb01led in US District Court for the
\nDistrict of Columbia (the District Court) by US
\nnationals (or their estates, survivors, or heirs)
\nwho were killed or wounded in Iraq between
\n2005 and 2013. The plaintiffs allege that the
\ndefendants violated the US Anti-Terrorism Act
\nand various state laws by selling pharmaceuticals
\nand medical supplies to the Iraqi Ministry of
\nHealth. In July 2020, the District Court granted
\nAstraZeneca\u2019s and the other defendants\u2019 motion
\nand dismissed the lawsuit, and the plaintiffs
\nappealed to the DC Circuit Court of Appeals
\n(the Appellate Court). In January 2022, a panel
\nof the Appellate Court reversed the dismissal
\nand remanded the case back to the District
\nCourt. AstraZeneca and the other defendants
\nhave \ufb01led petitions requesting en banc review by
\nthe entire Appellate Court, which were denied
\nin February 2023.
\nAZD1222 Securities Litigation
\nIn January 2021, putative securities class action
\nlawsuits were \ufb01led in the US District Court for
\nthe Southern District of New York (the District
\nCourt) against AstraZeneca PLC and certain
\nof\ufb01cers, on behalf of purchasers of AstraZeneca
\npublicly traded securities during a period later
\namended to cover 15 June 2020 through
\n29 January 2021. The Amended Complaint
\nalleges that defendants made materially false
\nand misleading statements in connection with
\nthe development of AZD1222, AstraZeneca\u2019s
\nvaccine for the prevention of COVID-19. In
\nSeptember 2022, the District Court granted
\nAstraZeneca\u2019s motion to dismiss the Amended
\nComplaint with prejudice, disallowing any
\nfurther amendments. Plaintiffs have appealed
\nthis decision.
\nDe\ufb01niens
\nIn Germany, in July 2020, AstraZeneca received
\na notice of arbitration \ufb01led with the German
\nInstitution of Arbitration from the sellers of
\nDe\ufb01niens AG (the Sellers) regarding the 2014
\nShare Purchase Agreement (SPA) between
\nAstraZeneca and the Sellers. The Sellers claim
\nthat they are owed approximately $140m in
\nearn-outs under the SPA. The arbitration
\nhearing has been scheduled for March 2023.
\nEmployment Litigation (US)
\nIn December 2022, AstraZeneca was served
\nwith a lawsuit \ufb01led by seven former employees
\nin the US District Court for the District of
\nDelaware asserting age, religion, and disability
\ndiscrimination claims related to AstraZeneca\u2019s
\nCOVID-19 vaccine mandate. These claims are
\npled on a single-plaintiff and class action basis.
\nEquity Litigation (US)
\nAstraZeneca was defending a putative class
\nand collective action matter in the US District
\nCourt for the Northern District of Illinois brought
\nby three named plaintiffs, who are former
\nAstraZeneca pharmaceutical sales
\nrepresentatives. The case involved claims under
\nthe federal and Illinois Equal Pay Acts, with the
\nplaintiffs alleging they were paid less than male
\nemployees who performed substantially similar
\nand/or equal work. The plaintiffs sought various
\ndamages on behalf of themselves and the
\nputative class and/or collective, including
\nwithout limitation backpay, liquidated damages,
\ncompensatory and punitive damages,
\nattorneys\u2019 fees, and interest. In January 2023,
\nthe District Court granted AstraZeneca\u2019s
\nmotion to dismiss plaintiffs\u2019 complaint.
\n195
AstraZeneca Annual Report & Form 20-F Information 2022
Notes to the Group Financial Statements
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
30 Commitments, contingent liabilities and contingent assets
continued
\nPortola Shareholder Litigation
\nIn the US, in connection with Alexion\u2019s July 2020
\nacquisition of Portola Pharmaceuticals, Inc
\n(Portola), Alexion assumed litigation to which
\nPortola is a party. In January 2020, putative
\nsecurities class action lawsuits were \ufb01led in the
\nUS District Court for the Northern District of
\nCalifornia against Portola and certain of\ufb01cers
\nand directors, on behalf of purchasers of Portola
\npublicly traded securities during the period
\n8 January 2019 through 26 February 2020.
\nThe operative complaints allege that
\ndefendants made materially false and/or
\nmisleading statements or omissions with
\nregard to
Andexxa
. In June 2022, the parties
\nreached a settlement in principle of this
\nmatter, which is subject to court approval.
\nSeroquel
XR (Antitrust Litigation)
\nIn the US in 2019, AstraZeneca was named in
\nseveral related complaints brought in the US
\nDistrict Court for the Southern District of New
\nYork (the District Court), including several putative
\nclass action lawsuits that were purportedly
\nbrought on behalf of classes of direct purchasers
\nor end payors of
Seroquel XR
, that allege
\nAstraZeneca and generic drug manufacturers
\nviolated US antitrust laws when settling patent
\nlitigation related to
Seroquel XR
. In July 2022, in
\nresponse to AstraZeneca\u2019s motion, the District
\nCourt dismissed all claims relating to the
\nsettlement with one of the generic manufacturers
\nbut denied the motion with respect to all claims
\nrelating to the second generic manufacturer
\nand allowed those claims to proceed.
\nSyntimmune
\nIn connection with Alexion\u2019s prior acquisition of
\nSyntimmune, Inc., (Syntimmune) in December
\n2020, Alexion was served with a lawsuit \ufb01led by
\nthe stockholders\u2019 representative for Syntimmune
\nin Delaware State Court that alleged, among
\nother things, breaches of contractual obligations
\nrelating to the 2018 merger agreement. The
\nstockholders\u2019 representative alleges that Alexion
\nfailed to meet its obligations under the merger
\nagreement to use commercially reasonable
\nefforts to achieve the milestones. Alexion also
\n\ufb01led a claim for breach of the representations
\nin the 2018 merger agreement.
\nLegal proceedings brought against AstraZeneca
\nwhich have been concluded
\nArray BioPharma
\nIn December 2017, AstraZeneca was served
\nwith a complaint \ufb01led in New York State court by
\nArray BioPharma, Inc. (Array) alleging breaches
\nof contractual obligations relating to a 2003
\ncollaboration agreement between AstraZeneca
\nand Array. In May 2022, the parties resolved
\nthis dispute. This matter is now concluded.
\nLegal proceedings brought by AstraZeneca
\nconsidered to be contingent assets
\nPARP Inhibitor Royalty Dispute
\nIn October 2012, Tesaro, Inc. (now wholly owned
\nby GlaxoSmithKline plc, \u2018GSK\u2019) entered into
\ntwo worldwide, royalty-bearing patent license
\nagreements with AstraZeneca related to GSK\u2019s
\nproduct niraparib. In May 2021, AstraZeneca
\n\ufb01led a lawsuit against GSK in the Commercial
\nCourt of England and Wales alleging that GSK
\nhas failed to pay all of the royalties due on
\nniraparib sales under the license agreements.
\nThe case has been transferred to the Chancery
\nDivision and the trial has been scheduled for
\nMarch 2023.
\nGovernment investigations/proceedings
\nLegal proceedings brought against AstraZeneca
\nconsidered to be contingent liabilities
\nBrazilian tax assessment matter
\nIn connection with an ongoing matter, in August
\n2019, the Brazilian Federal Revenue Service
\nprovided a Notice of Tax and Description of
\nthe Facts (the Tax Assessment) to two Alexion
\nsubsidiaries (the Brazil Subsidiaries), as well as
\nto two additional entities, a logistics provider
\nutilised by Alexion and a distributor. The Tax
\nAssessment focuses on the importation of
\nSoliris
vials pursuant to Alexion\u2019s free drug
\nsupply to patients programme in Brazil.
\nAlexion prevailed in the \ufb01rst level of
\nadministrative appeals in the Brazilian federal
\nadministrative proceeding system based on
\na de\ufb01ciency in the Brazil Tax Assessment.
\nThe decision was subject to an automatic
\n(ex of\ufb01cio) appeal to the second level of the
\nadministrative courts, which is pending.
\nCOVID-19 vaccine supply and
\nmanufacturing\u00a0inquiries
\nIn February 2022, a Brazilian Public Prosecutor
\n\ufb01led a lawsuit against several defendants
\nincluding the Brazilian Federal Government,
\nAstraZeneca, and other COVID-19 vaccine
\nmanufacturers. In April 2022, a Brazilian Court
\nissued an order dismissing the lawsuit. An
\nappeal is pending.
\nTurkish Ministry of Health matter
\nIn Turkey, in July 2020, the Turkish Ministry
\nof Health (Ministry of Health) initiated an
\ninvestigation regarding payments to healthcare
\nproviders by Alexion Turkey and former
\nemployees and consultants. The investigation
\narose from Alexion\u2019s disclosure of a $21.5m civil
\nsettlement with the US Securities & Exchange
\nCommission (SEC) in July 2020 fully resolving
\nthe SEC\u2019s investigation into possible violations
\nof the FCPA. In September 2021, the Ministry of
\nHealth completed its draft investigation report,
\nand referred the matter to the Ankara Public
\nProsecutor\u2019s Of\ufb01ce with a recommendation
\nfor further proceedings against certain
\nformer employees.
\nTexas Qui Tam
\nUS proceedings
\nIn December 2022, AstraZeneca was served with
\nan unsealed civil lawsuit brought by a qui tam
\nrelator on behalf of the State of Texas in Texas
\nstate court, which alleges that AstraZeneca
\nengaged in unlawful marketing practices.
\nVermont US Attorney investigation
\nUS proceedings
\nIn April 2020, AstraZeneca received a Civil
\nInvestigative Demand from the US Attorney\u2019s
\nOf\ufb01ce in Vermont and the Department of
\nJustice, Civil Division, seeking documents and
\ninformation relating to AstraZeneca\u2019s
\nrelationships with electronic health-record
\nvendors. AstraZeneca is cooperating with
\nthis enquiry.
\nLegal proceedings brought against AstraZeneca
\nwhich have been concluded
\nBrazilian operations investigation
\nIn May 2017, Brazilian authorities seized records
\nand data from Alexion\u2019s Brazil of\ufb01ces as part of
\nan investigation being conducted into Alexion\u2019s
\nBrazilian operations. AstraZeneca cooperated
\nwith this enquiry. The prosecutor
\nrecommended discontinuance in September
\n2022 after determining that there was
\ninsuf\ufb01cient evidence to support a legal claim.
\nThe judicial authority approved discontinuance
\nof the investigation, without any further
\nenforcement action, in November 2022. This
\nmatter is now concluded.
\nCOVID-19 vaccine supply and
\nmanufacturing\u00a0inquiries
\nIn June 2021, Argentina\u2019s Federal Criminal
\nProsecutor\u2019s Of\ufb01ce (the Prosecutor) contacted
\nAstraZeneca Argentina seeking documents and
\nelectronic records in connection with a local
\ncriminal investigation relating to the public
\nprocurement and supply of
Vaxzevria
in that
\ncountry. In October 2021, the Prosecutor \ufb01led a
\nsubmission with the presiding court requesting
\ndismissal of the criminal investigation, and that
\nrequest was granted by the court in February
\n2022. This matter is now closed.
\nLegal proceedings brought by AstraZeneca
\nwhich have been concluded
\nCanadian pricing matter
\nIn October 2017, Alexion \ufb01led proceedings in the
\nFederal Court of Canada to seek judicial review
\nof a determination by the Canadian Patented
\nMedicine Prices Review Board (PMPRB) that
\nAlexion had excessively priced
Soliris
in a
\nmanner inconsistent with the Canadian
\npricing rules and guidelines. In June 2022,
\nthe parties resolved this matter. This matter is
\nnow concluded.
\nNotes to the Group Financial Statements
\ncontinued
\n196
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
Other
\nUS 340B litigations and proceedings
\nUS proceedings
\nAstraZeneca is involved in several matters
\nrelating to its contract pharmacy recognition
\npolicy under the 340B Drug Pricing Program in
\nthe US. AstraZeneca has sought to intervene in
\nthree lawsuits against several US government
\nagencies and their of\ufb01cials relating to the
\nappropriate interpretation of the governing
\nstatute for the 340B Drug Pricing Program.
\nTwo of the three cases are currently stayed
\npending further proceedings and the third
\ncase has been dismissed.
\nAdministrative Dispute Resolution proceedings
\nhave also been initiated against AstraZeneca
\nbefore the US Health Resources and
\nServices Administration.
\nAs previously disclosed, in January 2021,
\nAstraZeneca \ufb01led a separate lawsuit in the
\nUS District Court for the District of Delaware
\nalleging that an Advisory Opinion issued by
\nthe Department of Health and Human Services
\nviolates the Administrative Procedure Act.
\nIn June 2021, the District Court found in favour
\nof AstraZeneca, invalidating the Advisory
\nOpinion. Prior to the District Court\u2019s ruling,
\nhowever, in May 2021, the US government
\nissued new and separate letters to AstraZeneca
\n(and other companies) asserting that our
\ncontract pharmacy policy violates the 340B
\nstatute. AstraZeneca amended the complaint to
\ninclude allegations challenging the letter sent in
\nMay, and in February 2022, the District Court
\nruled in favour of AstraZeneca invalidating those
\nletters sent by the US Government. In January
\n2023, the Court of Appeals af\ufb01rmed the District
\nCourt decision in AstraZeneca\u2019s favour.
\nIn September 2021, AstraZeneca was served
\nwith a class-action antitrust complaint \ufb01led in
\nthe US District Court for the Western District of
\nNew York (the District Court) by Mosaic Health
\nalleging a conspiracy to restrict access to
\n340B discounts in the diabetes market through
\ncontract pharmacies. In September 2022, the
\nDistrict Court granted Defendants\u2019 motion to
\ndismiss the Complaint. Plaintiffs are now
\nseeking leave to amend their complaint.
\nAdditional government inquiries
\nAs is true for most, if not all, major prescription
\npharmaceutical companies, AstraZeneca is
\ncurrently involved in multiple inquiries into drug
\nmarketing and pricing practices. In addition to
\nthe investigations described above, various
\nlaw enforcement of\ufb01ces have, from time to
\ntime, requested information from the Group.
\nThere have been no material developments in
\nthose matters.
\nTax
\nAstraZeneca considers whether it is probable
\nthat a taxation authority will accept an uncertain
\ntax treatment. If it is concluded that it is not
\nprobable that the taxation authority will accept
\nan uncertain tax treatment, where tax exposures
\ncan be quanti\ufb01ed, a tax liability is recognised
\nbased on either the most likely amount method or
\nthe expected value method depending on which
\nmethod management expects to better predict
\nthe resolution of the uncertainty. Tax liabilities
\nfor uncertain tax treatments can be built up over
\na long period of time but the resolution of such
\ntax exposures usually occurs at a point in time,
\nand given the inherent uncertainties in assessing
\nthe outcomes of these exposures (which
\nsometimes can be binary in nature), we could, in
\nfuture periods, experience adjustments to the
\nliabilities recognised in respect of uncertain tax
\ntreatments that have a material positive or
\nnegative effect on our results in any particular
\nperiod. Details of the movements in relation to
\nmaterial uncertain tax treatments are
\ndiscussed below.
\nAstraZeneca faces a number of audits
\nand reviews in jurisdictions around the world
\nand, in some cases, is in dispute with the tax
\nauthorities. The issues under discussion are
\noften complex and can require many years to
\nresolve. Tax liabilities recognised for uncertain
\ntax treatments require management to make
\nkey judgements with respect to the outcome
\nof current and potential future tax audits, and
\nactual results could vary from these estimates.
\nThe total net tax liability recognised in the Group
\nFinancial Statements in respect of uncertain
\ntax positions is $830m (2021: $768m; 2020:
\n$1,014m). The net tax liability consists of $632m
\n(2021: $702m; 2020: $852m) included within
\nincome tax payable, $20m (2021: $17m; 2020:
\n$nil) included within deferred tax liability and
\n$291m (2021: $(33)m; 2020: $76m) included
\nwithin deferred tax asset, partially offset by
\n$113m (2021: additional $82m; 2020: additional
\n$86m) included within income tax receivable.
\nTransfer pricing
\nThe net tax liability included in the Group
\nFinancial Statements to cover the worldwide
\nexposure to uncertain tax treatments is $260m
\n(2021: $77m; 2020: $287m). These matters can
\nbe complex and judgemental. The liability
\nincludes uncertain tax treatments which are
\nestimated using the expected value method and
\ndepend on AstraZeneca\u2019s assessment of the
\nlikelihood of the approach taken by the tax
\nauthorities and could change in the future to
\nre\ufb02ect progress in tax authority reviews, the
\nextent that any tax authority challenge is
\nconcluded, or matters lapse including following
\nexpiry of the relevant statutes of limitation
\nresulting in a reduction in the tax charge in
\nfuture periods.
\nFor transfer pricing matters, including items
\nunder tax audit, AstraZeneca estimates the
\npotential for additional tax liabilities above the
\namount provided where the possibility of the
\nadditional liabilities falling due is more than
\nremote, to be up to $245m (2021: $48m; 2020:
\n$251m) including associated interest.
\nThere were no uncertain tax treatments
\nrelating to transfer pricing which give rise to
\npotential for additional tax liabilities where the
\npossibility of the additional liabilities falling
\ndue is more than remote.
\nManagement believes that it is unlikely that these
\nadditional liabilities will arise. It is possible that
\nsome of these contingencies may change in the
\nfuture to re\ufb02ect progress in tax authority reviews,
\nto the extent that any tax authority challenge is
\nconcluded, or matters lapse including following
\nexpiry of the relevant statutes of limitation
\nresulting in a reduction in the tax charge in
\nfuture periods. Management continues to
\nbelieve that AstraZeneca\u2019s positions on all its
\ntransfer pricing positions, audits and disputes
\nare robust, and that AstraZeneca has recognised
\nappropriate tax balances, including
\nconsideration of whether corresponding relief
\nwill be available under Mutual Agreement
\nprocedures or unilaterally.
\nThe increase in the net tax liability for uncertain
\ntax positions relating to transfer pricing of $183m
\ncompared with 2021 is mainly as a result of an
\nincrease of tax liabilities arising from updates
\nto estimates of prior period tax liabilities
\nfollowing progression of tax authority reviews.
\nOther uncertain tax treatments
\nIncluded in the net tax liability is $570m (2021:
\n$691m; 2020: $727m) relating to a number of
\nother uncertain tax treatments. The decrease
\nof $121m in the net tax liability relating to the
\nother uncertain tax treatments mainly relates to
\nreleases of tax liabilities following the expiry of
\nthe relevant statute of limitations and exchange
\nrate effects. The majority of the liability relates
\nto tax liabilities in respect of uncertain tax
\ntreatments which are estimated using the
\nexpected value method and depend on
\nAstraZeneca\u2019s assessment of the likelihood of
\nthe approach taken by the tax authorities and
\ncould change in the future to re\ufb02ect progress
\nin tax authority reviews, the extent that any
\ntax authority challenge is concluded, or
\nmatters lapse including following expiry of the
\nrelevant statutes of limitation resulting in a
\nreduction in the tax charge in future periods.
\nFor these other tax liabilities in respect of
\nuncertain tax treatments, AstraZeneca
\nestimates the potential for additional liabilities
\nabove the amount provided where the
\npossibility of the additional liabilities falling
\ndue is more than remote, to be up to $209m
\n(2021: $273m; 2020: $293m) including
\n197
AstraZeneca Annual Report & Form 20-F Information 2022
Notes to the Group Financial Statements
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
associated interest. It is possible that some
\nof these liabilities may reduce in the future if
\nany tax authority challenge is concluded or
\nmatters lapse following expiry of the relevant
\nstatutes of limitation, resulting in a reduction
\nin the tax charge in future periods.
\nFor uncertain tax treatments relating to other
\ntax matters for which no tax liability has been
\nrecognised, AstraZeneca estimates the potential
\nfor additional tax liabilities where the possibility
\nof the additional liabilities falling due is more
\nthan remote to be up to $280m (2021: $325m;
\n2020: $224m) including associated interest.
\nTiming of cash \ufb02ows and interest
\nThe Group is currently under audit in several
\ncountries and the timing of any resolution of
\nthese audits is uncertain.
\nIt is not possible to estimate the timing of tax
\ncash \ufb02ows in relation to each outcome. It is
\nanticipated that tax payments may be required
\nin relation to a number of signi\ufb01cant disputes
\nwhich may be resolved over the next one to two
\nyears. AstraZeneca considers the tax liabilities
\nset out above to appropriately re\ufb02ect the
\nexpected value of any \ufb01nal settlement. Some
\nof the items discussed above are not currently
\nwithin the scope of tax authority audits and
\nmay take longer to resolve.
\nIncluded within other payables is a net amount
\nof interest arising on tax contingencies of
\n$106m (2021: $85m; 2020: $82m).
\nNotes to the Group Financial Statements
\ncontinued
\n31 Statutory and other information
\n2022
2021
2020
\n$m
$m
$m
\nFees payable to PricewaterhouseCoopers LLP and its associates:
\nGroup audit fee
9.9
10.5
6.3
\nFees payable to PricewaterhouseCoopers LLP and its associates for other services:
\nThe audit of subsidiaries pursuant to legislation
15.1
15.2
10.8
\nAttestation under s404 of Sarbanes-Oxley Act 2002
3.1
2.0
2.0
\nAudit-related assurance services
0.7
4.5
0.7
\nOther assurance services
0.2
3.4
0.2
\nFees payable to PricewaterhouseCoopers Associates in respect of the Group\u2019s pension schemes:
\nThe audit of subsidiaries\u2019 pension schemes
0.3
0.3
0.3
\n29.3
35.9
20.3
\n$0.6m of fees payable in 2022 are in respect of the Group audit and audit of subsidiaries related to prior years (2021: $0.4m in respect of the Group
\naudit and audit of subsidiaries related to prior years).
\n$0.3m of 2021 Group audit fees and $0.7m of 2021 Audit-related assurance services and Other assurance services relate to pre-acquisition fees
\nincurred by Alexion.
\nIncluded in the 2021 Audit-related assurance services and Other assurance services are $6.1m of services provided in relation to the acquisition
\nof Alexion and related debt issuance.
\nRelated party transactions
\nThe Group had no material related party transactions which might reasonably be expected to in\ufb02uence decisions made by the users of these
\nFinancial Statements.
\nKey management personnel compensation
\nKey management personnel are de\ufb01ned for the purpose of disclosure under IAS 24 \u2018Related Party Disclosures\u2019 as the members of the Board and
\nthe members of the SET.
\n2022
2021
2020
\n$\u2019000
$\u2019000
$\u2019000
\nShort-term employee benefits
38,632
32,985
29,126
\nPost-employment benefits
1,388
1,378
1,602
\nShare-based payments
56,297
45,234
27,666
\n96,317
79,597
58,394
\nTotal remuneration is included within employee costs (see Note 29).
\n32 Subsequent events
\nOn 9 January 2023, it was announced that AstraZeneca had entered into a de\ufb01nitive agreement to acquire CinCor Pharma, Inc. (CinCor), a US-based
\nclinical-stage biopharmaceutical company, focused on developing novel treatments for resistant and uncontrolled hypertension as well as chronic
\nkidney disease. On 23 January 2023, AstraZeneca initiated a tender offer to acquire all of CinCor\u2019s outstanding shares for a price of $26 per share in
\ncash at closing, plus a non-tradable contingent value right of $10 per share in cash payable upon a speci\ufb01ed regulatory submission of a baxdrostat
\nproduct. Combined, the upfront and maximum potential contingent value payments represent, if achieved, a transaction value of approximately $1.8bn.
\nAs part of the transaction, AstraZeneca will acquire the cash and marketable securities on CinCor\u2019s balance sheet, which totalled approximately
\n$522m as of 30 September 2022. The transaction is expected to close in the \ufb01rst quarter of 2023.
\nOn 16 January 2023, AstraZeneca completed the acquisition of Neogene Therapeutics Inc. (Neogene). AstraZeneca acquired all outstanding equity
\nof Neogene for a total consideration of up to $320m, on a cash and debt free basis. This includes an initial payment of $200m on deal closing, and
\na further up to $120m in both contingent milestones-based and non-contingent consideration.
\nOn 30 January 2023, AstraZeneca completed the sale of its West Chester site in Ohio, US, to National Resilience, Inc. On completion of the sale, the
\nProperty, plant and equipment assets associated with this transaction of $150m which were recorded as Assets held for sale as at 31 December
\n2022 have been disposed of, with no net impact recorded in the Consolidated Statement of Comprehensive Income.
\nOn 2 February 2023, the Group entered into an additional $2.0bn of two-year committed bank facilities.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfNotesAndOtherExplanatoryInformationExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f23401": {
"value": "Group Accounting Policies \nBasis of accounting and preparation
\nof \ufb01nancial information
\nThe Consolidated Financial Statements have
\nbeen prepared under the historical cost
\nconvention, modi\ufb01ed to include revaluation to
\nfair value of certain \ufb01nancial instruments as
\ndescribed below, in accordance with UK-
\nadopted International Accounting Standards
\nand with the requirements of the Companies
\nAct 2006 as applicable to companies reporting
\nunder those standards. The Consolidated
\nFinancial Statements also comply fully with
\nInternational Financial Reporting Standards
\n(IFRSs) as issued by the International Accounting
\nStandards Board (IASB) and International
\nAccounting Standards as adopted by the
\nEuropean Union.
\nThe Consolidated Financial Statements are
\npresented in US dollars, which is the Company\u2019s
\nfunctional currency.
\nIn preparing their individual \ufb01nancial statements,
\nthe accounting policies of some overseas
\nsubsidiaries do not conform with IASB-issued
\nIFRSs. Therefore, where appropriate,
\nadjustments are made in order to present
\nthe Consolidated Financial Statements on a
\nconsistent basis.
\nBasis for preparation of Financial
\nStatements on a going concern basis
\nThe Group has considerable \ufb01nancial resources
\navailable. As at 31 December 2022, the Group
\nhas $11.1bn in \ufb01nancial resources (Cash and
\ncash equivalent balances of $6.2bn and
\nundrawn committed bank facilities of $4.9bn
\navailable until April 2026 with only $5.5bn of
\nborrowings due within one year). All facilities
\ncontain no \ufb01nancial covenants and were
\nundrawn at 31 December 2022. On 2 February
\n2023, the Group entered into an additional
\n$2.0bn of two-year committed bank facilities.
\nThe Group\u2019s revenues are largely derived from
\nsales of medicines covered by patents, which
\nprovide a relatively high level of resilience
\nand predictability to cash in\ufb02ows, although
\ngovernment price interventions in response to
\nbudgetary constraints are expected to continue
\nto adversely affect revenues in some of our
\nsigni\ufb01cant markets. The Group, however,
\nanticipates new revenue streams from both
\nrecently launched medicines and those in
\ndevelopment, and the Group has a wide
\ndiversity of customers and suppliers across
\ndifferent geographic areas.
\nConsequently, the Directors believe that, overall,
\nthe Group is well placed to manage its business
\nrisks successfully. Accordingly, they continue
\nto adopt the going concern basis in preparing
\nthe Annual Report and Financial Statements.
\nEstimates and judgements
\nThe preparation of the Financial Statements in
\nconformity with generally accepted accounting
\nprinciples requires management to make
\nestimates and judgements that affect the
\nreported amounts of assets and liabilities at
\nthe date of the Financial Statements and the
\nreported amounts of revenues and expenses
\nduring the reporting period. Actual results
\ncould differ from those estimates.
\nThe accounting policy descriptions set out the
\nareas where judgements and estimates need
\nexercising, the most signi\ufb01cant of which include
\nthe following Key Judgements
and
\nSigni\ufb01cant Estimates
:
\n>
revenue recognition \u2013 see Revenue
\nAccounting Policy on page 142
\nand Note 1 on page 149
\n>
expensing of internal development
\nexpenses \u2013 see Research and
\nDevelopment Policy on page 144
\n>
impairment reviews of Intangible assets
\n\u2013 see Note 10 on page 161
\n>
useful economic life of Intangible assets \u2013
\nsee Research and Development Policy
\non page 144
\n>
business combinations and Goodwill \u2013 see
\nBusiness Combinations and Goodwill
\nPolicy on page 146
and Note 27
\non page 182
\n>
litigation liabilities \u2013 see Litigation and
\nEnvironmental Liabilities within Note 30
\non page 192
\n>
operating segments \u2013 see Note 6 on
\npage 157
\n>
employee bene\ufb01ts \u2013 see Note 22 on
\npage 173
\n>
taxation \u2013 see Note 30 on page 192
.
\nAstraZeneca has assessed the impact of
\nthe uncertainty presented by the COVID-19
\npandemic and the Russia-Ukraine con\ufb02ict on
\nthe Financial Statements, speci\ufb01cally
\nconsidering the impact on key judgements
\nand signi\ufb01cant estimates along with several
\nother areas of increased risk. No material
\naccounting impacts relating to COVID-19 or
\nthe Russia-Ukraine con\ufb02ict were recognised
\nin the year.
\nThe Group will continue to monitor these areas
\nof increased judgement, estimation and risk
\nfor material changes.
\nThe Group has assessed the impact of climate
\nrisk on its \ufb01nancial reporting. The impact
\nassessment was primarily focused on the
\nvaluation and useful lives of intangible assets
\nand the identi\ufb01cation and valuation of provisions
\nand contingent liabilities, as these are judged
\nto be the key areas that could be impacted by
\nclimate risks. No material accounting impacts
\nor changes to judgements or other required
\ndisclosures were noted.
\nKey Judgements are those judgements
\nmade in applying the Group\u2019s accounting
\npolicies that have a material effect on the
\namounts of assets and liabilities recognised
\nin the \ufb01nancial statements.
\nA Signi\ufb01cant Estimate has a signi\ufb01cant
\nrisk of material adjustment to the carrying
\namounts of assets and liabilities within the
\nnext \ufb01nancial year.
\nFinancial risk management policies are
\ndetailed in Note 28 to the Financial Statements
\nfrom page 184.
\nAstraZeneca\u2019s management considers the
\nfollowing to be the most signi\ufb01cant accounting
\npolicies in the context of the Group\u2019s operations.
\nRevenue
\nRevenue comprises Product Sales and
\nCollaboration Revenue.
\nRevenue excludes inter-company revenues
\nand value-added taxes.
\nProduct Sales
\nProduct Sales represent net invoice value less
\nestimated rebates, returns and chargebacks,
\nwhich are considered to be variable
\nconsideration and include signi\ufb01cant estimates.
\nSales are recognised when the control of the
\ngoods has been transferred to a third party.
\nThis is usually when title passes to the customer,
\neither on shipment or on receipt of goods by
\nthe customer, depending on local trading
\nterms. In markets where returns are signi\ufb01cant,
\nestimates of the quantity and value of goods
\nwhich may ultimately be returned are accounted
\nfor at the point revenue is recognised. Revenue
\nis not recognised in full until it is highly probable
\nthat a signi\ufb01cant reversal in the amount of
\ncumulative revenue recognised will not occur.
\nRebates are amounts payable or credited to
\na customer, usually based on the quantity or
\nvalue of Product Sales to the customer for
\nspeci\ufb01c products in a certain period. Product
\nsales rebates, which relate to Product Sales
\nthat occur over a period of time, are normally
\nissued retrospectively.
\nAt the time Product Sales are invoiced, rebates
\nand deductions that the Group expects to pay
\nare estimated based upon assumptions
\ndeveloped using contractual terms, historical
\nexperience and market related information.
\nThe rebates and deductions are recognised
\nas variable consideration and recorded as a
\nreduction to revenue with an accrual recorded.
\nThese rebates typically arise from sales
\ncontracts with government payers, third-party
\nmanaged care organisations, hospitals,
\nlong-term care facilities, group purchasing
\norganisations and various state programmes.
\n142
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
\n\n\nOur returns accruals are based on actual
\nexperience over the preceding 12 months for
\nestablished products together with market-
\nrelated information such as estimated stock
\nlevels at wholesalers and competitor activity
\nwhich we receive via third-party information
\nservices. For newly launched products, we
\nuse rates based on our experience with similar
\nproducts or a predetermined percentage.
\nWhen a product faces generic competition,
\nparticular attention is given to the possible
\nlevels of returns and, in cases where the
\ncircumstances are such that the level of
\nProduct Sales are considered highly probable
\nto reverse, revenues are only recognised when
\nthe right of return expires, which is generally on
\nultimate prescription of the product to patients.
\nThe methodology and assumptions used to
\nestimate rebates and returns are monitored and
\nadjusted regularly in the light of contractual
\nand legal obligations, historical trends, past
\nexperience and projected market conditions.
\nOnce the uncertainty associated with returns
\nis resolved, revenue is adjusted accordingly.
\nUnder certain collaboration agreements
\nwhich include a pro\ufb01t sharing mechanism,
\nour recognition of Product Sales depends on
\nwhich party acts as principal in sales to the
\nend customer. In the cases where AstraZeneca
\nacts as principal, we record 100% of sales to
\nthe end customer.
\nContracts relating to the supply of certain
\nVaccines & Immune Therapies medicines
\nrelating to the COVID-19 pandemic include
\nconditions whereby payments are receivable
\nfrom customers in advance of the delivery
\nof product. Such amounts are held on the
\nbalance sheet as contract liabilities until the
\nrelated revenue is recognised, generally upon
\nproduct delivery. Certain of these contracts
\ncontain further provisions that restrict the use
\nof inventory manufactured in speci\ufb01ed supply
\nchains to speci\ufb01ed customers, resulting in an
\nenforceable right to payment as the activities
\nare performed. Under IFRS 15, such contracts
\nrequire revenue to be recognised over time
\nusing an appropriate and reasonably
\nmeasurable method to measure progress.
\nRevenue is recognised on these contracts
\nbased on the proportion of product delivered
\ncompared to the total contracted volumes.
\nCertain arrangements include bill-and-hold
\narrangements under which the Group invoices
\na customer for a product but retains physical
\npossession of the product until it is transferred
\nto the customer at a point in time in the future.
\nFor these types of arrangements, an
\nassessment is made to determine when the
\nperformance obligation has been satis\ufb01ed,
\nwhich is when control of the product is
\ntransferred to the customer. If the customer
\nhas obtained control of the product even though
\nthat product remains in the Group\u2019s physical
\npossession, the performance obligation to
\ntransfer a product has been satis\ufb01ed and
\nProduct Sales are recognised. Control is
\nconsidered to have transferred when the
\nproduct is segregated as belonging to the
\ncustomer, is readily available to be delivered
\nto the customer and AstraZeneca is unable to
\nsell the product to another customer.
\nCollaboration Revenue
\nCollaboration Revenue includes income from
\ncollaborative arrangements where either the
\nGroup has out-licensed (sold) or has in-licenced
\n(acquired) certain rights associated with
\nproducts, where either AstraZeneca (out-
\nlicences) or the collaborator (in-licences) retains
\na signi\ufb01cant ongoing economic interest in the
\nproduct. Signi\ufb01cant interest can include
\nongoing supply of \ufb01nished goods, pro\ufb01t
\nsharing arrangements or being principal in the
\nsales of medicines. These collaborations may
\ninclude development, manufacturing and/or
\ncommercialisation arrangements with the
\ncollaborator. Income from out-licences may
\ntake the form of upfront fees, milestones and
\nroyalties and income from in-licences may
\ncomprise the sharing of pro\ufb01t arising from
\nsales made as principal by the collaborator.
\nTiming of recognition of clinical and
\nregulatory milestones is considered to be
\na key judgement. There can be signi\ufb01cant
\nuncertainty over whether it is highly probable
\nthat there would not be a signi\ufb01cant reversal
\nof revenue in respect of speci\ufb01c milestones
\nif these are recognised before they are
\ntriggered due to them being subject to the
\nactions of third parties. In general, where
\nthe triggering of a milestone is subject to the
\ndecisions of third parties (e.g. the acceptance
\nor approval of a \ufb01ling by a regulatory
\nauthority), the Group does not consider that
\nthe threshold for recognition is met until that
\ndecision is made.
\nWhere Collaboration Revenue arises from
\nthe licensing of the Group\u2019s own intellectual
\nproperty, the licences we grant are typically
\nrights to use intellectual property which do not
\nchange during the period of the licence and
\ntherefore related non-conditional revenue is
\nrecognised at the point the license is granted
\nand variable consideration as soon as
\nrecognition criteria are met.
\nOther performance obligations in the contract
\nmight include the supply of product. These
\narrangements typically involve the receipt of an
\nupfront payment, which the contract attributes
\nto the license of the intangible assets, and
\nongoing receipts for supply, which the contract
\nattributes to the sale of the product we
\nmanufacture. In cases where the transaction
\nhas two or more components, we account for
\nthe delivered item (for example, the transfer
\nof title to the intangible asset) as a separate
\nunit of account and record revenue on
\ndelivery of that component. Where practicable,
\nconsideration is allocated to performance
\nobligations on the basis of the standalone
\nselling price of each performance obligation.
\nHowever, where there is a licence of intellectual
\nproperty, it is not always possible to establish
\na reliable estimate of the standalone selling price
\nof the licence as they are unique. Therefore, in
\nthese rare situations, the residual approach is
\nused to determine the consideration attributable
\nto the licence.
\nWhere \ufb01xed amounts are payable over one
\nyear from the effective date of a contract, an
\nassessment is made as to whether a signi\ufb01cant
\n\ufb01nancing component exists, and if so, the fair
\nvalue of this component is deferred and
\nrecognised as \ufb01nancing income over the
\nperiod to the expected date of receipt.
\nWhere control of a right to use licence for an
\nintangible asset passes at the outset of an
\narrangement, revenue is recognised at the
\npoint in time control is transferred. Where the
\nsubstance of a licence arrangement is that of
\na right to access rights attributable to an
\nintangible asset, revenue is recognised over
\ntime, normally on a straight-line basis over the
\nlife of the contract.
\nWhere the Group provides ongoing development
\nservices, revenue in respect of this element is
\nrecognised over the duration of those services.
\nWhere the arrangement meets the de\ufb01nition of
\na licence agreement, sales milestones and
\nsales royalties are recognised when achieved
\nby applying the royalty exemption under IFRS 15.
\nAll other milestones and sales royalties are
\nrecognised when considered it is highly
\nprobable there will not be a signi\ufb01cant reversal
\nof cumulative income. The determination
\nrequires estimates to be made in relation to
\nfuture Product Sales.
\nWhere Collaboration Revenue is recorded
\nand there is a related Intangible asset that is
\nlicensed as part of the arrangement, an
\nappropriate amount of that Intangible asset
\nis charged to Cost of sales based on an
\nallocation of cost or value to the rights that
\nhave been licenced.
\nThe Group periodically enters into transactions
\nwhere it acquires part of the rights to a product
\nintangible (either on-market or in-process
\nR&D), but for commercial reasons does not
\nact as principal in selling the product to the
\ncustomer and therefore does not recognise
\nincome from the product in the form of
\nProduct Sales. This may occur where, for
\nexample, a collaboration partner retains the
\nright to commercialise in a speci\ufb01c territory,
\nand has suf\ufb01cient local control over that
\ncommercialisation to book product sale
\nrevenue, while the Group instead receives a
\nproportion of the value generated by those
\nproduct sales, either in the form of a royalty or
\na pro\ufb01t share (alliance revenue).
\n143
AstraZeneca Annual Report & Form 20-F Information 2022
Group Accounting Policies
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
Cost of sales
\nCost of sales are recognised as the associated
\nrevenue is recognised. Cost of sales include
\nmanufacturing costs, royalties payable on
\nrevenues recognised, movements in provisions
\nfor inventories, inventory write-offs and
\nimpairment charges in relation to manufacturing
\nassets. Cost of sales also includes co-
\ncollaborator sharing of pro\ufb01t arising from
\ncollaborations, and foreign exchange gains and
\nlosses arising from business trading activities.
\nResearch and development
\nResearch expenditure is charged to pro\ufb01t and
\nloss in the year in which it is incurred.
\nInternal development expenditure is
\ncapitalised only if it meets the recognition
\ncriteria of IAS 38 \u2018Intangible Assets\u2019. This is
\nconsidered a key judgement. Where regulatory
\nand other uncertainties are such that the
\ncriteria are not met, the expenditure is
\ncharged to pro\ufb01t and loss and this is almost
\ninvariably the case prior to approval of the
\ndrug by the relevant regulatory authority.
\nWhere, however, recognition criteria are met,
\nIntangible assets are capitalised and
\namortised on a straight-line basis over their
\nuseful economic lives from product launch.
\nAt 31 December 2022, no amounts have met
\nthe recognition criteria.
\nPayments to in-license products and
\ncompounds from third parties for new research
\nand development projects (in process research
\nand development) generally take the form of
\nupfront payments, milestones and royalty
\npayments. Where payments made to third
\nparties represent consideration for future
\nresearch and development activities, an
\nevaluation is made as to the nature of the
\npayments. Such payments are expensed if they
\nrepresent compensation for sub-contracted
\nresearch and development services not
\nresulting in a transfer of intellectual property.
\nBy contrast, payments are capitalised if they
\nrepresent compensation for the transfer of
\nidenti\ufb01able intellectual property developed at
\nthe risk of the third party. Such payments may
\nbe made once development or regulatory
\nmilestones are met and may also be made on
\nthe basis of sales volumes once a product is
\nlaunched. Development and regulatory
\nmilestone payments are capitalised as the
\nmilestone is triggered. Sales-related payments
\nare accrued and capitalised with reference to
\nthe latest Group sales forecasts for approved
\nindications. Assets capitalised are amortised,
\non a straight-line basis, over their useful
\neconomic lives from product launch.
\nThe determination of useful economic
\nlife is considered to be a key judgement.
\nOn product launch, the Group makes a
\njudgement as to the expected useful
\neconomic life with reference to the expiry
\nof associated patents for the product,
\nexpectation around the competitive
\nenvironment speci\ufb01c to the product and
\nour detailed long-term risk-adjusted sales
\nprojections compiled annually across the
\nGroup and approved by the Board.
\nThe useful economic life can extend beyond
\npatent expiry dependent upon the nature
\nof the product and the complexity of the
\ndevelopment and manufacturing process.
\nSigni\ufb01cant sales can often be achieved post
\npatent expiration.
\nIntangible assets
\nIntangible assets are stated at cost less
\namortisation and impairments. Intangible assets
\nrelating to products in development are subject
\nto impairment testing annually. All Intangible
\nassets are tested for impairment when there
\nare indications that the carrying value may
\nnot be recoverable. The determination of the
\nrecoverable amounts include key estimates
\nwhich are highly sensitive to, and depend
\nupon, key assumptions as detailed in Note 10
\nto the Financial Statements from page 161.
\nImpairment reviews have been carried out on
\nall Intangible assets that are in development
\n(and not being amortised), all major intangible
\nassets acquired during the year and all other
\nintangible assets that have had indications
\nof impairment during the year. Recoverable
\namount is determined as the higher of value
\nin use or fair value less costs to sell using a
\ndiscounted cash \ufb02ow calculation, with the
\nproducts\u2019 expected cash \ufb02ows risk-adjusted
\nover their estimated remaining useful economic
\nlife. Sales forecasts and speci\ufb01c allocated
\ncosts (which have both been subject to
\nappropriate senior management review and
\napproval) are risk-adjusted and discounted
\nusing appropriate rates based on our post-tax
\nweighted average cost of capital or for fair value
\nless costs to sell, a required rate of return for a
\nmarket participant. Our weighted average cost
\nof capital re\ufb02ects factors such as our capital
\nstructure and our costs of debt and equity.
\nAny impairment losses are recognised
\nimmediately in Operating pro\ufb01t. Intangible
\nassets relating to products which fail during
\ndevelopment (or for which development
\nceases for other reasons) are also tested for
\nimpairment and are written down to their
\nrecoverable amount (which is usually nil).
\nIf, subsequent to an impairment loss being
\nrecognised, development restarts or other
\nfacts and circumstances change indicating
\nthat the impairment is less or no longer exists,
\nthe value of the asset is re-estimated and its
\ncarrying value is increased to the recoverable
\namount, but not exceeding the original value,
\nby recognising an impairment reversal in
\nOperating pro\ufb01t.
\nGovernment grants
\nGovernment grants are recognised in the
\nConsolidated Statement of Comprehensive
\nIncome so as to match with the related
\nexpenses that they are intended to compensate.
\nWhere grants are received in advance of the
\nrelated expenses, they are initially recognised
\nin the Consolidated Statement of Financial
\nPosition under Trade and other payables as
\ndeferred income and released to net off
\nagainst the related expenditure when incurred.
\nEach contract is assessed to determine
\nwhether there are both grant elements and
\nsupply of product which need to be separated.
\nIn each case, the contracts set out the
\nspeci\ufb01ed terms for the supply of the product
\nand the provisions for funding for certain costs,
\nprimarily research and development associated
\nwith the IP. It is considered whether there are
\nany conditions for the funding to be refunded.
\nThe consideration in the contract is allocated
\nbetween the grant and supply elements.
\nThe standalone selling price for the supply
\nof products is determined by reference to
\nobserved prices with other customers.
\nThe amount allocated as a government grant
\nis determined by reference to the speci\ufb01c
\nagreed costs and activities identi\ufb01ed in the
\ncontract as not directly attributable to the
\nsupply of product. Government grants are
\nrecorded as an offset to the relevant
\nexpense in the Consolidated Statement of
\nComprehensive Income and are capped to
\nmatch the relevant costs incurred.
\nJoint arrangements and associates
\nThe Group has arrangements over which it
\nhas joint control and which qualify as joint
\noperations or joint ventures under IFRS 11
\n\u2018Joint Arrangements\u2019. For joint operations,
\nthe Group recognises its share of revenue
\nthat it earns from the joint operations and its
\nshare of expenses incurred. The Group also
\nrecognises the assets associated with the
\njoint operations that it controls and the
\nliabilities it incurs under the joint arrangement.
\nFor joint ventures and associates, the Group
\nrecognises its interest in the joint venture or
\nassociate as an investment and uses the
\nequity method of accounting.
\nEmployee bene\ufb01ts
\nThe Group accounts for pensions and other
\nemployee bene\ufb01ts (principally healthcare)
\nunder IAS 19 \u2018Employee Bene\ufb01ts\u2019. In respect
\nof de\ufb01ned bene\ufb01t plans, obligations are
\ndetermined using the projected unit credit
\nmethod and are discounted to present value
\nby reference to market yields on high-quality
\ncorporate bonds, while plan assets are
\nmeasured at fair value. Given the extent of the
\nassumptions used to determine the value of
\nscheme assets and scheme liabilities, these
\nare considered to be signi\ufb01cant estimates.
\nThe operating and \ufb01nancing costs of such plans
\nare recognised separately in pro\ufb01t; current
\nservice costs are spread systematically over
\nthe lives of employees and \ufb01nancing costs are
\nrecognised in full in the periods in which they
\narise. Remeasurements of the net de\ufb01ned
\nbene\ufb01t pension liability, including actuarial
\ngains and losses, are recognised immediately
\nin Other comprehensive income.
\nGroup Accounting Policies
\ncontinued
\n144
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
Where the calculation results in a surplus to the
\nGroup, the recognised asset is limited to the
\npresent value of any available future refunds
\nfrom the plan or reductions in future
\ncontributions to the plan subject to consideration
\nof the effect any minimum funding requirement
\nfor future service has on the bene\ufb01t available
\nas a reduction in future contributions.
\nPayments to de\ufb01ned contribution plans are
\nrecognised in pro\ufb01t as they fall due.
\nTaxation
\nThe current tax payable is based on taxable
\npro\ufb01t for the year. Taxable pro\ufb01t differs from
\nreported pro\ufb01t because taxable pro\ufb01t excludes
\nitems that are either never taxable or tax
\ndeductible or items that are taxable or tax
\ndeductible in a different period. The Group\u2019s
\ncurrent tax assets and liabilities are calculated
\nusing tax rates that have been enacted or
\nsubstantively enacted by the reporting date.
\nDeferred tax is provided using the balance
\nsheet liability method, providing for temporary
\ndifferences between the carrying amounts of
\nassets and liabilities for \ufb01nancial reporting
\npurposes and the amounts used for taxation
\npurposes. Deferred tax assets are recognised
\nto the extent that there are future taxable
\ntemporary differences or it is probable that
\nfuture taxable pro\ufb01t will be available against
\nwhich the asset can be utilised. This requires
\njudgements to be made in respect of the
\navailability of future taxable income.
\nNo deferred tax asset or liability is recognised
\nin respect of temporary differences associated
\nwith investments in subsidiaries and branches
\nwhere the Group is able to control the timing
\nof reversal of the temporary differences and it
\nis probable that the temporary differences will
\nnot reverse in the foreseeable future.
\nThe Group\u2019s Deferred tax assets and liabilities
\nare calculated using tax rates that are
\nexpected to apply in the period when the
\nliability is settled or the asset realised based
\non tax rates that have been enacted or
\nsubstantively enacted by the reporting date.
\nDeferred tax assets and liabilities are offset in
\nthe Consolidated Statement of Financial
\nPosition if, and only if, the taxable entity has a
\nlegally enforceable right to set off current tax
\nassets and liabilities, and the Deferred tax
\nassets and liabilities relate to taxes levied by
\nthe same taxation authority on the same
\ntaxable entity.
\nLiabilities for uncertain tax positions require
\nmanagement to make judgements of potential
\nexposures in relation to tax audit issues. Tax
\nbene\ufb01ts are not recognised unless the tax
\npositions will probably be accepted by the tax
\nauthorities. This is based upon management\u2019s
\ninterpretation of applicable laws and regulations
\nand the expectation of how the tax authority
\nwill resolve the matter. Once considered
\nprobable of not being accepted, management
\nreviews each material tax bene\ufb01t and re\ufb02ects
\nthe effect of the uncertainty in determining the
\nrelated taxable result.
\nLiabilities for uncertain tax positions are
\nmeasured using either the most likely amount
\nor the expected value amount depending on
\nwhich method the entity expects to better
\npredict the resolution of the uncertainty.
\nFurther details of the estimates and assumptions
\nmade in determining our recorded liability for
\ntransfer pricing contingencies and other tax
\ncontingencies are included in Note 30 to the
\nFinancial Statements from page 192.
\nShare-based payments
\nAll plans have been classi\ufb01ed as equity settled
\nafter assessment. The grant date fair value of
\nthe market-based performance elements of
\nemployee share plan awards is calculated using
\na modi\ufb01ed Monte Carlo model, with other
\nelements at market price. In accordance with
\nIFRS 2 \u2018Share-based Payment\u2019, the resulting
\ncost is recognised in pro\ufb01t on a straight-line
\nbasis over the vesting period of the awards.
\nThe value of the charge is adjusted to re\ufb02ect
\nexpected and actual levels of awards vesting,
\nexcept where the failure to vest is as a result of
\nnot meeting a market condition. Cancellations of
\nequity instruments are treated as an acceleration
\nof the vesting period and any outstanding
\ncharge is recognised in pro\ufb01t immediately.
\nCash out\ufb02ows relating to the vesting of share
\nplans for our employees are recognised within
\noperating activities, as they relate to employee
\nremuneration. The cash \ufb02ows relating to
\nreplacement awards issued to employees as
\npart of the Alexion acquisition (see Note 27
\nfrom page 182) are classi\ufb01ed within investing
\nactivities, as they are part of the aggregate
\ncash \ufb02ows arising from obtaining control of
\nthe subsidiary.
\nProperty, plant and equipment
\nThe Group\u2019s policy is to depreciate the
\ndifference between the cost of each item of
\nProperty, plant and equipment and its residual
\nvalue over its estimated useful life on a
\nstraight-line basis. Assets under construction
\nare not depreciated until the asset is available
\nfor use, at which point the asset is transferred
\ninto either Land and buildings or Plant and
\nequipment, and depreciated over its estimated
\nuseful economic life.
\nReviews are made annually of the estimated
\nremaining lives and residual values of individual
\nproductive assets, taking account of commercial
\nand technological obsolescence as well as
\nnormal wear and tear. It is impractical to
\ncalculate average asset lives exactly. However,
\nthe useful economic lives range from
\napproximately 10 to 50 years for buildings,
\nand three to 15 years for plant and equipment.
\nAll items of Property, plant and equipment are
\ntested for impairment when there are indications
\nthat the carrying value may not be recoverable.
\nAny impairment losses are recognised
\nimmediately in Operating pro\ufb01t.
\nLeases
\nThe Group\u2019s lease arrangements are principally
\nfor property, most notably a portfolio of of\ufb01ce
\npremises and employee accommodation, and
\nfor a global car \ufb02eet, utilised primarily by our
\nsales and marketing teams.
\nThe lease liability and corresponding right-of-
\nuse asset arising from a lease are initially
\nmeasured on a present value basis. Lease
\nliabilities include the net present value of the
\nfollowing lease payments:
\n>
\ufb01xed payments, less any lease
\nincentives receivable
\n>
variable lease payments that depend on an
\nindex or a rate, initially measured using the
\nindex or rate as at the commencement date
\n>
the exercise price of a purchase option if
\nthe Group is reasonably certain to exercise
\nthat option
\n>
payments of penalties for terminating the
\nlease, if the lease term re\ufb02ects the Group
\nexercising that option, and
\n>
amounts expected to be payable by the
\nGroup under residual value guarantees.
\nRight-of-use assets are measured at cost
\ncomprising the following:
\n>
the amount of the initial measurement of
\nlease liability
\n>
any lease payments made at or before
\nthe commencement date less any lease
\nincentives received
\n>
any initial direct costs, and
\n> restoration costs.
\nJudgements made in calculating the lease
\nliability include assessing whether arrangements
\ncontain a lease and determining the lease term.
\nLease terms are negotiated on an individual
\nbasis and contain a wide range of different
\nterms and conditions. Property leases will often
\ninclude an early termination or extension option
\nto the lease term. Fleet management policies
\nvary by jurisdiction and may include renewal
\nof a lease until a measurement threshold,
\nsuch as mileage, is reached. Extension and
\ntermination options have been considered
\nwhen determining the lease term, along with
\nall facts and circumstances that may create
\nan economic incentive to exercise an extension
\noption, or not exercise a termination option.
\nExtension periods (or periods after termination
\noptions) are only included in the lease term if
\nthe lease is reasonably certain to be extended
\n(or not terminated).
\nThe lease payments are discounted using
\nincremental borrowing rates, as in the majority
\nof leases held by the Group the interest rate
\nimplicit in the lease is not readily identi\ufb01able.
\nCalculating the discount rate is an estimate
\nmade in calculating the lease liability. This rate
\nis the rate that the Group would have to pay to
\nborrow the funds necessary to obtain an asset
\nof similar value to the right-of-use asset in a
\nsimilar economic environment with similar
\nterms, security and conditions. To determine
\n145
AstraZeneca Annual Report & Form 20-F Information 2022
Group Accounting Policies
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
the incremental borrowing rate, the Group
\nuses a risk-free interest rate adjusted for
\ncredit risk, adjusting for terms speci\ufb01c to the
\nlease including term, country and currency.
\nThe Group is exposed to potential future
\nincreases in variable lease payments that are
\nbased on an index or rate, which are initially
\nmeasured as at the commencement date, with
\nany future changes in the index or rate
\nexcluded from the lease liability until they take
\neffect. When adjustments to lease payments
\nbased on an index or rate take effect, the
\nlease liability is reassessed and adjusted
\nagainst the right-of-use asset.
\nLease payments are allocated between
\nprincipal and \ufb01nance cost. The \ufb01nance cost is
\ncharged to the Consolidated Statement of
\nComprehensive Income over the lease period
\nso as to produce a constant periodic rate of
\ninterest on the remaining balance of the
\nliability for each period.
\nPayments associated with short-term leases
\nof Property, plant and equipment and all
\nleases of low-value assets are recognised
\non a straight-line basis as an expense in the
\nConsolidated Statement of Comprehensive
\nIncome. Short-term leases are leases with a
\nlease term of 12 months or less. Low-value
\nleases are those where the underlying asset
\nvalue, when new, is $5,000 or less and includes
\nIT equipment and small items of of\ufb01ce furniture.
\nContracts may contain both lease and
\nnon-lease components. The Group allocates
\nthe consideration in the contract to the lease
\nand non-lease components based on their
\nrelative standalone prices.
\nRight-of-use assets are generally depreciated
\nover the shorter of the asset\u2019s useful life and
\nthe lease term on a straight-line basis. If the
\nGroup is reasonably certain to exercise a
\npurchase option, the right-of-use asset is
\ndepreciated over the underlying asset\u2019s useful
\nlife. It is impractical to calculate average asset
\nlives exactly. However, the total lives range
\nfrom approximately 10 to 50 years for buildings,
\nand three to 15 years for motor vehicles and
\nother assets.
\nThere are no material lease agreements under
\nwhich the Group is a lessor.
\nBusiness combinations and goodwill
\nIn assessing whether an acquired set of
\nassets and activities is a business or an asset,
\nmanagement will \ufb01rst elect whether to apply
\nan optional concentration test to simplify the
\nassessment. Where the concentration test is
\napplied, the acquisition will be treated as the
\nacquisition of an asset if substantially all of
\nthe fair value of the gross assets acquired
\n(excluding cash and cash equivalents,
\ndeferred tax assets, and related goodwill) is
\nconcentrated in a single asset or group of
\nsimilar identi\ufb01able assets.
\nWhere the concentration test is not applied,
\nor is not met, a further assessment of whether
\nthe acquired set of assets and activities is a
\nbusiness will be performed.
\nThe determination of whether an acquired
\nset of assets and activities is a business or
\nan asset can be judgemental, particularly if
\nthe target is not producing outputs.
\nManagement uses a number of factors to
\nmake this determination, which are primarily
\nfocused on whether the acquired set of
\nassets and activities include substantive
\nprocesses that mean the set is capable of
\nbeing managed for the purpose of providing
\na return. Key determining factors include the
\nstage of development of any assets acquired,
\nthe readiness and ability of the acquired set
\nto produce outputs and the presence of key
\nexperienced employees capable of
\nconducting activities required to develop or
\nmanufacture the assets. Typically, the
\nspecialised nature of many pharmaceutical
\nassets and processes is such that until
\nassets are substantively ready for production
\nand promotion, there are not the required
\nprocesses for a set of assets and activities
\nto meet the de\ufb01nition of a business in IFRS 3.
\nOn the acquisition of a business, fair values
\nare attributed to the identi\ufb01able assets and
\nliabilities. Attributing fair values is a key
\njudgement; refer to Note 27 to the Financial
\nStatements on page 182 for additional details
\nof the 2021 acquisition. Contingent liabilities
\nare also recorded at fair value unless the fair
\nvalue cannot be measured reliably, in which
\ncase the value is subsumed into goodwill.
\nWhere fair values of acquired contingent
\nliabilities cannot be measured reliably, the
\nassumed contingent liability is not recognised
\nbut is disclosed in the same manner as other
\ncontingent liabilities. Where the Group fully
\nacquires, through a business combination,
\nassets that were previously held in joint
\noperations, the Group has elected not to uplift
\nthe book value of the existing interest in the
\nasset held in the joint operation to fair value at
\nthe date full control is taken.
\nWhere not all of the equity of a subsidiary
\nis acquired, the non-controlling interest is
\nrecognised either at fair value or at the
\nnon-controlling interest\u2019s proportionate
\nshare of the net assets of the subsidiary,
\non a case-by-case basis. Put options over
\nnon-controlling interests are recognised as
\na \ufb01nancial liability, with a corresponding entry
\nin either Retained earnings or against
\nnon-controlling interest reserves on a
\ncase-by-case basis.
\nThe timing and amount of future contingent
\nelements of consideration is an estimate.
\nContingent consideration, which may include
\ndevelopment and launch milestones, revenue
\nthreshold milestones and revenue-based
\nroyalties, is fair valued at the date of acquisition
\nusing decision-tree analysis with key inputs
\nincluding probability of success, consideration
\nof potential delays and revenue projections
\nbased on the Group\u2019s internal forecasts.
\nUnsettled amounts of consideration are held
\nat fair value within payables with changes in
\nfair value recognised immediately in pro\ufb01t.
\nGoodwill is the difference between the fair
\nvalue of the consideration and the fair value of
\nnet assets acquired.
\nGoodwill arising on acquisitions is capitalised
\nand subject to an impairment review, both
\nannually and when there is an indication that
\nthe carrying value may not be recoverable.
\nThe Group\u2019s policy up to and including 1997
\nwas to eliminate Goodwill arising upon
\nacquisitions against reserves. Under IFRS 1
\n\u2018First-time Adoption of International Financial
\nReporting Standards\u2019 and IFRS 3 \u2018Business
\nCombinations\u2019, such Goodwill will remain
\neliminated against reserves.
\nSubsidiaries
\nA subsidiary is an entity controlled, directly
\nor indirectly, by AstraZeneca PLC. Control is
\nregarded as the exposure or rights to the
\nvariable returns of the entity when combined
\nwith the power to affect those returns. Control
\nis normally evidenced by holding more than 50%
\nof the share capital of the company, however
\nother agreements may be in place that result
\nin control where they give AstraZeneca \ufb01nance
\ndecision-making authority over the relevant
\nactivities of the company.
\nThe \ufb01nancial results of subsidiaries are
\nconsolidated from the date control is obtained
\nuntil the date that control ceases.
\nInventories
\nInventories are stated at the lower of cost and
\nnet realisable value. The \ufb01rst in, \ufb01rst out or an
\naverage method of valuation is used. For
\n\ufb01nished goods and work in progress, cost
\nincludes directly attributable costs and certain
\noverhead expenses (including depreciation).
\nSelling expenses and certain other overhead
\nexpenses (principally central administration
\ncosts) are excluded. Net realisable value is
\ndetermined as estimated selling price less all
\nestimated costs of completion and costs to be
\nincurred in selling and distribution.
\nWrite-downs of inventory occur in the general
\ncourse of business and are recognised in
\nCost of sales for launched or approved
\nproducts and in Research and development
\nexpense for products in development.
\nAssets held for sale
\nNon-current assets are classi\ufb01ed as Assets
\nheld for sale when their carrying amount is to be
\nrecovered principally through a sale transaction
\nand a sale is considered highly probable.
\nA sale is considered highly probable only
\nwhen the appropriate level of management
\nhas committed to the sale.
\nGroup Accounting Policies
\ncontinued
\n146
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
Assets held for sale are stated at the lower of
\ncarrying amount and fair value less costs to sell.
\nWhere there is a partial transfer of a non-current
\nasset to held for sale, an allocation of value is
\nmade between the current and non-current
\nportions of the asset based on the relative
\nvalue of the two portions, unless there is a
\nmethodology that better re\ufb02ects the asset to
\nbe disposed of.
\nAssets held for sale are not depreciated
\nor amortised.
\nTrade and other receivables
\nFinancial assets included in Trade and other
\nreceivables are recognised initially at fair value.
\nThe Group holds the Trade receivables with the
\nobjective to collect the contractual cash \ufb02ows
\nand therefore measures them subsequently at
\namortised cost using the effective interest rate
\nmethod, less any impairment losses.
\nTrade receivables that are subject to debt
\nfactoring arrangements are derecognised if
\nthey meet the conditions for derecognition
\ndetailed in IFRS 9 \u2018Financial Instruments\u2019.
\nTrade and other payables
\nFinancial liabilities included in Trade and other
\npayables are recognised initially at fair value.
\nSubsequent to initial recognition they are
\nmeasured at amortised cost using the effective
\ninterest rate method. Contingent consideration
\npayables are held at fair value within Level 3 of
\nthe fair value hierarchy as de\ufb01ned in Note 12.
\nFinancial instruments
\nThe Group\u2019s \ufb01nancial instruments include Lease
\nliabilities, Trade and other receivables and
\npayables, liabilities for contingent consideration
\nand put options under business combinations,
\nand rights and obligations under employee
\nbene\ufb01t plans which are dealt with in speci\ufb01c
\naccounting policies.
\nThe Group\u2019s other \ufb01nancial instruments include:
\n>
Cash and cash equivalents
\n> Fixed deposits
\n> Other investments
\n>
Bank and other borrowings
\n> Derivatives.
\nCash and cash equivalents
\nCash and cash equivalents comprise cash in
\nhand, current balances with banks and similar
\ninstitutions, and highly liquid investments
\nwith maturities of three months or less when
\nacquired. They are readily convertible into
\nknown amounts of cash and are held at
\namortised cost under the hold to collect
\nclassi\ufb01cation, where they meet the hold to
\ncollect \u2018solely payments of principal and
\ninterest\u2019 test criteria under IFRS 9. Those not
\nmeeting these criteria are held at fair value
\nthrough pro\ufb01t and loss. Cash and cash
\nequivalents in the Consolidated Statement of
\nCash Flows include unsecured bank overdrafts
\nat the balance sheet date where balances often
\n\ufb02uctuate between a cash and overdraft position.
\nFixed deposits
\nFixed deposits, principally comprising
\nfunds held with banks and other \ufb01nancial
\ninstitutions, are initially measured at fair
\nvalue, plus direct transaction costs, and are
\nsubsequently measured at amortised cost
\nusing the effective interest rate method at
\neach reporting date. Changes in carrying
\nvalue are recognised in the Consolidated
\nStatement of Comprehensive Income.
\nOther investments
\nInvestments are classi\ufb01ed as fair value through
\npro\ufb01t or loss (FVPL), unless the Group makes
\nan irrevocable election at initial recognition for
\ncertain non-current equity investments to
\npresent changes in Other comprehensive
\nincome (FVOCI). If this election is made, there
\nis no subsequent reclassi\ufb01cation of fair value
\ngains and losses to pro\ufb01t and loss following
\nthe derecognition of the investment.
\nBank and other borrowings
\nThe Group uses derivatives, principally
\ninterest rate swaps, to hedge the interest rate
\nexposure inherent in a portion of its \ufb01xed
\ninterest rate debt. In such cases the Group will
\neither designate the debt as fair value through
\npro\ufb01t and loss when certain criteria are met or
\nas the hedged item under a fair value hedge.
\nIf the debt instrument is designated as fair
\nvalue through pro\ufb01t or loss, the debt is initially
\nmeasured at fair value (with direct transaction
\ncosts being included in pro\ufb01t as an expense)
\nand is remeasured to fair value at each reporting
\ndate with changes in carrying value being
\nrecognised in pro\ufb01t (along with changes in the
\nfair value of the related derivative), with the
\nexception of changes in the fair value of the debt
\ninstrument relating to own credit risk which are
\nrecorded in Other comprehensive income in
\naccordance with IFRS 9. Such a designation has
\nbeen made where this signi\ufb01cantly reduces an
\naccounting mismatch which would result from
\nrecognising gains and losses on different bases.
\nIf the debt is designated as the hedged item
\nunder a fair value hedge, the debt is initially
\nmeasured at fair value (with direct transaction
\ncosts being amortised over the life of the debt)
\nand is remeasured for fair value changes in
\nrespect of the hedged risk at each reporting
\ndate with changes in carrying value being
\nrecognised in pro\ufb01t (along with changes in the
\nfair value of the related derivative).
\nIf the debt is designated in a cash \ufb02ow hedge,
\nthe debt is measured at amortised cost (with
\ngains or losses taken to pro\ufb01t and direct
\ntransaction costs being amortised over the
\nlife of the debt). The related derivative is
\nremeasured for fair value changes at each
\nreporting date with the portion of the gain or
\nloss on the derivative that is determined to
\nbe an effective hedge recognised in Other
\ncomprehensive income. The amounts that
\nhave been recognised in Other comprehensive
\nincome are reclassi\ufb01ed to pro\ufb01t in the same
\nperiod that the hedged forecast cash \ufb02ows
\naffect pro\ufb01t. The reclassi\ufb01cation adjustment is
\nincluded in Finance expense in the Consolidated
\nStatement of Comprehensive Income.
\nOther interest-bearing loans are initially
\nmeasured at fair value (with direct transaction
\ncosts being amortised over the life of the loan)
\nand are subsequently measured at amortised
\ncost using the effective interest rate method at
\neach reporting date. Changes in carrying
\nvalue are recognised in the Consolidated
\nStatement of Comprehensive Income.
\nDerivatives
\nDerivatives are initially measured at fair value
\n(with direct transaction costs being included
\nin pro\ufb01t as an expense) and are subsequently
\nremeasured to fair value at each reporting
\ndate. Changes in carrying value of derivatives
\nnot designated in hedging relationships are
\nrecognised in pro\ufb01t or loss.
\nThe Group has agreements with some bank
\ncounterparties whereby the parties agree to
\npost cash collateral, for the bene\ufb01t of the other,
\nequivalent to the market valuation of all of the
\nderivative positions above a predetermined
\nthreshold. Cash collateral received from
\ncounterparties is included within current
\nInterest-bearing loans and borrowings within the
\nConsolidated Statement of Financial Position.
\nCash collateral pledged to counterparties is
\nrecognised as a \ufb01nancial asset and is included
\nin current Other investments within the
\nConsolidated Statement of Financial Position.
\nIn prior years, cash collateral pledged to
\ncounterparties was included in Cash and
\ncash equivalents. Cash collateral received is
\nincluded in Movement in short-term borrowings
\nwithin \ufb01nancing activities in the Consolidated
\nCash Flow Statement. Cash collateral paid
\nis included in Movements in short-term
\ninvestments within investing activities in the
\nConsolidated Cash Flow Statement. The cash
\n\ufb02ow presentation of cash paid and received
\nfollows the Consolidated Statement of
\nFinancial Position presentation of the \ufb01nancial
\nasset and \ufb01nancial liability that is recognised
\nfrom posting the collateral.
\nForeign currencies
\nForeign currency transactions, being
\ntransactions denominated in a currency other
\nthan an individual Group entity\u2019s functional
\ncurrency, are translated into the relevant
\nfunctional currencies of individual Group entities
\nat average rates for the relevant monthly
\naccounting periods, which approximate to
\nactual rates.
\nMonetary assets and liabilities arising from
\nforeign currency transactions are retranslated
\nat exchange rates prevailing at the reporting
\ndate. Exchange gains and losses on loans and
\non short-term foreign currency borrowings
\nand deposits are included within Finance
\nexpense. Exchange differences on all other
\nforeign currency transactions are recognised
\nin Operating pro\ufb01t in the individual Group
\nentity\u2019s accounting records.
\n147
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Group Accounting Policies
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
\n\nNon-monetary items arising from foreign
\ncurrency transactions are not retranslated in the
\nindividual Group entity\u2019s accounting records.
\nIn the Consolidated Financial Statements,
\nincome and expense items for Group entities
\nwith a functional currency other than US dollars
\nare translated into US dollars at average
\nexchange rates, which approximate to actual
\nrates, for the relevant accounting periods.
\nAssets and liabilities are translated at the
\nUS dollar exchange rates prevailing at the
\nreporting date. Exchange differences arising
\non consolidation are recognised in Other
\ncomprehensive income.
\nIf certain criteria are met, non-US dollar-
\ndenominated loans or derivatives are designated
\nas net investment hedges of foreign operations.
\nExchange differences arising on retranslation
\nof net investments, and of foreign currency
\nloans which are designated in an effective net
\ninvestment hedge relationship, are recognised
\nin Other comprehensive income in the
\nConsolidated Financial Statements. Foreign
\nexchange derivatives hedging net investments
\nin foreign operations are carried at fair value.
\nEffective fair value movements are recognised
\nin Other comprehensive income, with any
\nineffectiveness taken to pro\ufb01t. Gains and
\nlosses accumulated in the translation reserve
\nwill be recycled to pro\ufb01t and loss when the
\nforeign operation is sold.
\nProvisions
\nProvisions are recognised when either a legal
\nor constructive obligation as a result of a past
\nevent exists at the Consolidated Statement of
\nFinancial Position date, it is probable that an
\nout\ufb02ow of economic resources will be required
\nto settle the obligation and a reasonable
\nestimate can be made of the amount of the
\nobligation (the timing or amount of the liability
\nis uncertain).
\nLitigation and environmental liabilities
\nAstraZeneca is involved in legal disputes, the
\nsettlement of which may involve cost to the
\nGroup. Provision is made where an adverse
\noutcome is probable and associated costs,
\nincluding related legal costs, can be estimated
\nreliably. In other cases, appropriate disclosures
\nare included. Determining the timing of
\nrecognition of when an adverse outcome is
\nprobable is considered a key judgement, refer
\nto Note 30 to the Financial Statements on
\npage 192.
\nWhere it is considered that the Group is more
\nlikely than not to prevail, or in the extremely
\nrare circumstances where the amount of the
\nlegal liability cannot be estimated reliably,
\nlegal costs involved in defending the claim are
\ncharged to the Consolidated Statement of
\nComprehensive Income as they are incurred.
\nWhere it is considered that the Group has
\na valid contract which provides the right to
\nreimbursement (from insurance or otherwise)
\nof legal costs and/or all or part of any loss
\nincurred or for which a provision has been
\nestablished, the best estimate of the amount
\nexpected to be received is recognised as an
\nasset only when it is virtually certain.
\nAstraZeneca is exposed to environmental
\nliabilities relating to its past operations,
\nprincipally in respect of soil and groundwater
\nremediation costs. Provisions for these costs
\nare made when there is a present obligation
\nand where it is probable that expenditure on
\nremedial work will be required and a reliable
\nestimate can be made of the cost. Provisions
\nare discounted at the relevant pre-tax discount
\nrate where the effect is material.
\nRestructuring
\nRestructuring costs are incurred in programmes
\nthat are planned and controlled by the Group
\nwhich materially change either the scope of
\na business undertaken by the Group, or the
\nmanner in which that business is conducted.
\nA provision for restructuring costs is recognised
\nwhen a detailed formal plan is in place and
\nhas either been announced to those affected
\nor has started to be implemented. The general
\nrecognition criteria for provisions must also be
\nmet, as described in the Provisions policy.
\nImpairment
\nThe carrying values of non-\ufb01nancial assets,
\nother than Inventories and Deferred tax assets,
\nare reviewed at least annually to determine
\nwhether there is any indication of impairment.
\nFor Goodwill, Intangible assets under
\ndevelopment and for any other assets where
\nsuch indication exists, the asset\u2019s recoverable
\namount is estimated based on the greater of
\nits value in use and its fair value less cost to
\nsell. In assessing the recoverable amount, the
\nestimated future cash \ufb02ows, adjusted for the
\nrisks associated with the probability of success
\nspeci\ufb01c to each asset, as well as in\ufb02ationary
\nimpacts, are discounted to their present value
\nusing a nominal discount rate that re\ufb02ects
\ncurrent market assessments of the time value
\nof money, the general risks affecting the
\npharmaceutical industry and other risks
\nspeci\ufb01c to each asset. For the purpose of
\nimpairment testing, assets are grouped
\ntogether into the smallest group of assets that
\ngenerates cash in\ufb02ows from continuing use
\nthat are largely independent of the cash \ufb02ows
\nof other assets. Impairment losses are
\nrecognised immediately in the Consolidated
\nStatement of Comprehensive Income.
\nInternational accounting transition
\nOn transition to using adopted IFRSs in the
\nyear ended 31 December 2005, the Group took
\nadvantage of several optional exemptions
\navailable in IFRS 1 \u2018First-time Adoption of
\nInternational Financial Reporting Standards\u2019.
\nThe major impacts which are of continuing
\nimportance are detailed below:
\n>
Business combinations\u2013 IFRS 3 \u2018Business
\nCombinations\u2019 has been applied from
\n1 January 2003, the date of transition, rather
\nthan being applied fully retrospectively.
\nAs a result, the combination of Astra and
\nZeneca is still accounted for as a merger,
\nrather than through purchase accounting.
\nIf purchase accounting had been adopted,
\nZeneca would have been deemed to have
\nacquired Astra.
\n> Cumulative exchange differences\u2013
\nthe Group chose to set the cumulative
\nexchange difference reserve at
\n1 January 2003 to nil.
\nApplicable accounting standards
\nand interpretations issued but not
\nyet adopted
\nAt the date of authorisation of these \ufb01nancial
\nstatements, certain new accounting standards
\nand amendments were in issue relating to the
\nfollowing standards and interpretations but
\nnot yet adopted by the Group:
\n>
amendments to IAS 12 \u2018Income Taxes\u2019,
\nIAS 8 \u2018Accounting Policies, Changes in
\nAccounting Estimates and Errors\u2019, IAS 1
\n\u2018Presentation of Financial Statements\u2019
\nand IFRS Practice Statement 2 \u2018Making
\nMateriality Judgements\u2019, effective for
\nperiods beginning on or after 1 January
\n2023 \u2013 endorsed by the UK Endorsement
\nBoard (UKEB) on 30 November 2022
\n>
new accounting standard IFRS 17 \u2018Insurance
\nContracts\u2019, effective for periods beginning
\non or after 1 January 2023 \u2013 endorsed by
\nthe UKEB on 16 May 2022, and
\n>
amendments to IAS 1 \u2018Presentation of
\nFinancial Statements\u2019 and IFRS 16 \u2018Leases\u2019,
\neffective for periods beginning on or after
\n1 January 2024 \u2013 not endorsed by the UKEB.
\nThese new standards, amendments and
\ninterpretations are not expected to have a
\nsigni\ufb01cant impact on the Group\u2019s net results.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f23405": {
"value": "Basis of accounting and preparation \nof \ufb01nancial information
\nThe Consolidated Financial Statements have
\nbeen prepared under the historical cost
\nconvention, modi\ufb01ed to include revaluation to
\nfair value of certain \ufb01nancial instruments as
\ndescribed below, in accordance with UK-
\nadopted International Accounting Standards
\nand with the requirements of the Companies
\nAct 2006 as applicable to companies reporting
\nunder those standards. The Consolidated
\nFinancial Statements also comply fully with
\nInternational Financial Reporting Standards
\n(IFRSs) as issued by the International Accounting
\nStandards Board (IASB) and International
\nAccounting Standards as adopted by the
\nEuropean Union.
\nThe Consolidated Financial Statements are
\npresented in US dollars, which is the Company\u2019s
\nfunctional currency.
\nIn preparing their individual \ufb01nancial statements,
\nthe accounting policies of some overseas
\nsubsidiaries do not conform with IASB-issued
\nIFRSs. Therefore, where appropriate,
\nadjustments are made in order to present
\nthe Consolidated Financial Statements on a
\nconsistent basis.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfBasisOfConsolidationExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f23406": {
"value": "Basis of accounting and preparation \nof \ufb01nancial information
\nThe Consolidated Financial Statements have
\nbeen prepared under the historical cost
\nconvention, modi\ufb01ed to include revaluation to
\nfair value of certain \ufb01nancial instruments as
\ndescribed below, in accordance with UK-
\nadopted International Accounting Standards
\nand with the requirements of the Companies
\nAct 2006 as applicable to companies reporting
\nunder those standards. The Consolidated
\nFinancial Statements also comply fully with
\nInternational Financial Reporting Standards
\n(IFRSs) as issued by the International Accounting
\nStandards Board (IASB) and International
\nAccounting Standards as adopted by the
\nEuropean Union.
\nThe Consolidated Financial Statements are
\npresented in US dollars, which is the Company\u2019s
\nfunctional currency.
\nIn preparing their individual \ufb01nancial statements,
\nthe accounting policies of some overseas
\nsubsidiaries do not conform with IASB-issued
\nIFRSs. Therefore, where appropriate,
\nadjustments are made in order to present
\nthe Consolidated Financial Statements on a
\nconsistent basis.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f23407": {
"value": "Basis of accounting and preparation \nof \ufb01nancial information
\nThe Consolidated Financial Statements have
\nbeen prepared under the historical cost
\nconvention, modi\ufb01ed to include revaluation to
\nfair value of certain \ufb01nancial instruments as
\ndescribed below, in accordance with UK-
\nadopted International Accounting Standards
\nand with the requirements of the Companies
\nAct 2006 as applicable to companies reporting
\nunder those standards. The Consolidated
\nFinancial Statements also comply fully with
\nInternational Financial Reporting Standards
\n(IFRSs) as issued by the International Accounting
\nStandards Board (IASB) and International
\nAccounting Standards as adopted by the
\nEuropean Union.
\nThe Consolidated Financial Statements are
\npresented in US dollars, which is the Company\u2019s
\nfunctional currency.
\nIn preparing their individual \ufb01nancial statements,
\nthe accounting policies of some overseas
\nsubsidiaries do not conform with IASB-issued
\nIFRSs. Therefore, where appropriate,
\nadjustments are made in order to present
\nthe Consolidated Financial Statements on a
\nconsistent basis.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfBasisOfPreparationOfFinancialStatementsExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f23413": {
"value": "The Consolidated Financial Statements have \nbeen prepared under the historical cost
\nconvention, modi\ufb01ed to include revaluation to
\nfair value of certain \ufb01nancial instruments as
\ndescribed below, in accordance with UK-
\nadopted International Accounting Standards
\nand with the requirements of the Companies
\nAct 2006 as applicable to companies reporting
\nunder those standards. The Consolidated
\nFinancial Statements also comply fully with
\nInternational Financial Reporting Standards
\n(IFRSs) as issued by the International Accounting
\nStandards Board (IASB) and International
\nAccounting Standards as adopted by the
\nEuropean Union.
\nThe Consolidated Financial Statements are
\npresented in US dollars, which is the Company\u2019s
\nfunctional currency.
\nIn preparing their individual \ufb01nancial statements,
\nthe accounting policies of some overseas
\nsubsidiaries do not conform with IASB-issued
\nIFRSs. Therefore, where appropriate,
\nadjustments are made in order to present
\nthe Consolidated Financial Statements on a
\nconsistent basis.",
"dimensions": {
"concept": "ifrs-full:StatementOfIFRSCompliance",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f23444": {
"value": "Basis for preparation of Financial \nStatements on a going concern basis
\nThe Group has considerable \ufb01nancial resources
\navailable. As at 31 December 2022, the Group
\nhas $11.1bn in \ufb01nancial resources (Cash and
\ncash equivalent balances of $6.2bn and
\nundrawn committed bank facilities of $4.9bn
\navailable until April 2026 with only $5.5bn of
\nborrowings due within one year). All facilities
\ncontain no \ufb01nancial covenants and were
\nundrawn at 31 December 2022. On 2 February
\n2023, the Group entered into an additional
\n$2.0bn of two-year committed bank facilities.
\nThe Group\u2019s revenues are largely derived from
\nsales of medicines covered by patents, which
\nprovide a relatively high level of resilience
\nand predictability to cash in\ufb02ows, although
\ngovernment price interventions in response to
\nbudgetary constraints are expected to continue
\nto adversely affect revenues in some of our
\nsigni\ufb01cant markets. The Group, however,
\nanticipates new revenue streams from both
\nrecently launched medicines and those in
\ndevelopment, and the Group has a wide
\ndiversity of customers and suppliers across
\ndifferent geographic areas.
\nConsequently, the Directors believe that, overall,
\nthe Group is well placed to manage its business
\nrisks successfully. Accordingly, they continue
\nto adopt the going concern basis in preparing
\nthe Annual Report and Financial Statements.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfGoingConcernExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f23478": {
"value": "Estimates and judgements \nThe preparation of the Financial Statements in
\nconformity with generally accepted accounting
\nprinciples requires management to make
\nestimates and judgements that affect the
\nreported amounts of assets and liabilities at
\nthe date of the Financial Statements and the
\nreported amounts of revenues and expenses
\nduring the reporting period. Actual results
\ncould differ from those estimates.
\nThe accounting policy descriptions set out the
\nareas where judgements and estimates need
\nexercising, the most signi\ufb01cant of which include
\nthe following Key Judgements
and
\nSigni\ufb01cant Estimates
:
\n>
revenue recognition \u2013 see Revenue
\nAccounting Policy on page 142
\nand Note 1 on page 149
\n>
expensing of internal development
\nexpenses \u2013 see Research and
\nDevelopment Policy on page 144
\n>
impairment reviews of Intangible assets
\n\u2013 see Note 10 on page 161
\n>
useful economic life of Intangible assets \u2013
\nsee Research and Development Policy
\non page 144
\n>
business combinations and Goodwill \u2013 see
\nBusiness Combinations and Goodwill
\nPolicy on page 146
and Note 27
\non page 182
\n>
litigation liabilities \u2013 see Litigation and
\nEnvironmental Liabilities within Note 30
\non page 192
\n>
operating segments \u2013 see Note 6 on
\npage 157
\n>
employee bene\ufb01ts \u2013 see Note 22 on
\npage 173
\n>
taxation \u2013 see Note 30 on page 192
.
\nAstraZeneca has assessed the impact of
\nthe uncertainty presented by the COVID-19
\npandemic and the Russia-Ukraine con\ufb02ict on
\nthe Financial Statements, speci\ufb01cally
\nconsidering the impact on key judgements
\nand signi\ufb01cant estimates along with several
\nother areas of increased risk. No material
\naccounting impacts relating to COVID-19 or
\nthe Russia-Ukraine con\ufb02ict were recognised
\nin the year.
\nThe Group will continue to monitor these areas
\nof increased judgement, estimation and risk
\nfor material changes.
\nThe Group has assessed the impact of climate
\nrisk on its \ufb01nancial reporting. The impact
\nassessment was primarily focused on the
\nvaluation and useful lives of intangible assets
\nand the identi\ufb01cation and valuation of provisions
\nand contingent liabilities, as these are judged
\nto be the key areas that could be impacted by
\nclimate risks. No material accounting impacts
\nor changes to judgements or other required
\ndisclosures were noted.
\nKey Judgements are those judgements
\nmade in applying the Group\u2019s accounting
\npolicies that have a material effect on the
\namounts of assets and liabilities recognised
\nin the \ufb01nancial statements.
\nA Signi\ufb01cant Estimate has a signi\ufb01cant
\nrisk of material adjustment to the carrying
\namounts of assets and liabilities within the
\nnext \ufb01nancial year.
\nFinancial risk management policies are
\ndetailed in Note 28 to the Financial Statements
\nfrom page 184.
\nAstraZeneca\u2019s management considers the
\nfollowing to be the most signi\ufb01cant accounting
\npolicies in the context of the Group\u2019s operations.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfAccountingJudgementsAndEstimatesExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f23479": {
"value": "Estimates and judgements \nThe preparation of the Financial Statements in \nconformity with generally accepted accounting \nprinciples requires management to make \nestimates and judgements that affect the \nreported amounts of assets and liabilities at \nthe date of the Financial Statements and the \nreported amounts of revenues and expenses \nduring the reporting period. Actual results \ncould differ from those estimates. \nThe accounting policy descriptions set out the \nareas where judgements and estimates need \nexercising, the most signi\ufb01cant of which include \nthe following Key Judgements and \nSigni\ufb01cant Estimates : \n> revenue recognition \u2013 see Revenue \nAccounting Policy on page 142 \nand Note 1 on page 149 \n> expensing of internal development \nexpenses \u2013 see Research and \nDevelopment Policy on page 144 \n> impairment reviews of Intangible assets \n\u2013 see Note 10 on page 161 \n> useful economic life of Intangible assets \u2013 \nsee Research and Development Policy \non page 144 \n> business combinations and Goodwill \u2013 see \nBusiness Combinations and Goodwill \nPolicy on page 146 and Note 27 \non page 182 \n> litigation liabilities \u2013 see Litigation and \nEnvironmental Liabilities within Note 30 \non page 192 \n> operating segments \u2013 see Note 6 on \npage 157 \n> employee bene\ufb01ts \u2013 see Note 22 on \npage 173 \n> taxation \u2013 see Note 30 on page 192 . \nAstraZeneca has assessed the impact of \nthe uncertainty presented by the COVID-19 \npandemic and the Russia-Ukraine con\ufb02ict on \nthe Financial Statements, speci\ufb01cally \nconsidering the impact on key judgements \nand signi\ufb01cant estimates along with several \nother areas of increased risk. No material \naccounting impacts relating to COVID-19 or \nthe Russia-Ukraine con\ufb02ict were recognised \nin the year. \nThe Group will continue to monitor these areas \nof increased judgement, estimation and risk \nfor material changes. \nThe Group has assessed the impact of climate \nrisk on its \ufb01nancial reporting. The impact \nassessment was primarily focused on the \nvaluation and useful lives of intangible assets \nand the identi\ufb01cation and valuation of provisions \nand contingent liabilities, as these are judged \nto be the key areas that could be impacted by \nclimate risks. No material accounting impacts \nor changes to judgements or other required \ndisclosures were noted. \nKey Judgements are those judgements \nmade in applying the Group\u2019s accounting \npolicies that have a material effect on the \namounts of assets and liabilities recognised \nin the \ufb01nancial statements. \nA Signi\ufb01cant Estimate has a signi\ufb01cant \nrisk of material adjustment to the carrying \namounts of assets and liabilities within the \nnext \ufb01nancial year. \nFinancial risk management policies are \ndetailed in Note 28 to the Financial Statements \nfrom page 184. \nAstraZeneca\u2019s management considers the \nfollowing to be the most signi\ufb01cant accounting \npolicies in the context of the Group\u2019s operations.",
"dimensions": {
"concept": "ifrs-full:ExplanationOfAssumptionAboutFutureWithSignificantRiskOfResultingInMaterialAdjustments",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f23480": {
"value": "Estimates and judgements \nThe preparation of the Financial Statements in
\nconformity with generally accepted accounting
\nprinciples requires management to make
\nestimates and judgements that affect the
\nreported amounts of assets and liabilities at
\nthe date of the Financial Statements and the
\nreported amounts of revenues and expenses
\nduring the reporting period. Actual results
\ncould differ from those estimates.
\nThe accounting policy descriptions set out the
\nareas where judgements and estimates need
\nexercising, the most signi\ufb01cant of which include
\nthe following Key Judgements
and
\nSigni\ufb01cant Estimates
:
\n>
revenue recognition \u2013 see Revenue
\nAccounting Policy on page 142
\nand Note 1 on page 149
\n>
expensing of internal development
\nexpenses \u2013 see Research and
\nDevelopment Policy on page 144
\n>
impairment reviews of Intangible assets
\n\u2013 see Note 10 on page 161
\n>
useful economic life of Intangible assets \u2013
\nsee Research and Development Policy
\non page 144
\n>
business combinations and Goodwill \u2013 see
\nBusiness Combinations and Goodwill
\nPolicy on page 146
and Note 27
\non page 182
\n>
litigation liabilities \u2013 see Litigation and
\nEnvironmental Liabilities within Note 30
\non page 192
\n>
operating segments \u2013 see Note 6 on
\npage 157
\n>
employee bene\ufb01ts \u2013 see Note 22 on
\npage 173
\n>
taxation \u2013 see Note 30 on page 192
.
\nAstraZeneca has assessed the impact of
\nthe uncertainty presented by the COVID-19
\npandemic and the Russia-Ukraine con\ufb02ict on
\nthe Financial Statements, speci\ufb01cally
\nconsidering the impact on key judgements
\nand signi\ufb01cant estimates along with several
\nother areas of increased risk. No material
\naccounting impacts relating to COVID-19 or
\nthe Russia-Ukraine con\ufb02ict were recognised
\nin the year.
\nThe Group will continue to monitor these areas
\nof increased judgement, estimation and risk
\nfor material changes.
\nThe Group has assessed the impact of climate
\nrisk on its \ufb01nancial reporting. The impact
\nassessment was primarily focused on the
\nvaluation and useful lives of intangible assets
\nand the identi\ufb01cation and valuation of provisions
\nand contingent liabilities, as these are judged
\nto be the key areas that could be impacted by
\nclimate risks. No material accounting impacts
\nor changes to judgements or other required
\ndisclosures were noted.
\nKey Judgements are those judgements
\nmade in applying the Group\u2019s accounting
\npolicies that have a material effect on the
\namounts of assets and liabilities recognised
\nin the \ufb01nancial statements.
\nA Signi\ufb01cant Estimate has a signi\ufb01cant
\nrisk of material adjustment to the carrying
\namounts of assets and liabilities within the
\nnext \ufb01nancial year.
\nFinancial risk management policies are
\ndetailed in Note 28 to the Financial Statements
\nfrom page 184.
\nAstraZeneca\u2019s management considers the
\nfollowing to be the most signi\ufb01cant accounting
\npolicies in the context of the Group\u2019s operations.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfAssetsAndLiabilitiesWithSignificantRiskOfMaterialAdjustmentExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f23576": {
"value": "Revenue \nRevenue comprises Product Sales and
\nCollaboration Revenue.
\nRevenue excludes inter-company revenues
\nand value-added taxes.
\nProduct Sales
\nProduct Sales represent net invoice value less
\nestimated rebates, returns and chargebacks,
\nwhich are considered to be variable
\nconsideration and include signi\ufb01cant estimates.
\nSales are recognised when the control of the
\ngoods has been transferred to a third party.
\nThis is usually when title passes to the customer,
\neither on shipment or on receipt of goods by
\nthe customer, depending on local trading
\nterms. In markets where returns are signi\ufb01cant,
\nestimates of the quantity and value of goods
\nwhich may ultimately be returned are accounted
\nfor at the point revenue is recognised. Revenue
\nis not recognised in full until it is highly probable
\nthat a signi\ufb01cant reversal in the amount of
\ncumulative revenue recognised will not occur.
\nRebates are amounts payable or credited to
\na customer, usually based on the quantity or
\nvalue of Product Sales to the customer for
\nspeci\ufb01c products in a certain period. Product
\nsales rebates, which relate to Product Sales
\nthat occur over a period of time, are normally
\nissued retrospectively.
\nAt the time Product Sales are invoiced, rebates
\nand deductions that the Group expects to pay
\nare estimated based upon assumptions
\ndeveloped using contractual terms, historical
\nexperience and market related information.
\nThe rebates and deductions are recognised
\nas variable consideration and recorded as a
\nreduction to revenue with an accrual recorded.
\nThese rebates typically arise from sales
\ncontracts with government payers, third-party
\nmanaged care organisations, hospitals,
\nlong-term care facilities, group purchasing
\norganisations and various state programmes.
\n142
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
\n\n\n\n\nOur returns accruals are based on actual
\nexperience over the preceding 12 months for
\nestablished products together with market-
\nrelated information such as estimated stock
\nlevels at wholesalers and competitor activity
\nwhich we receive via third-party information
\nservices. For newly launched products, we
\nuse rates based on our experience with similar
\nproducts or a predetermined percentage.
\nWhen a product faces generic competition,
\nparticular attention is given to the possible
\nlevels of returns and, in cases where the
\ncircumstances are such that the level of
\nProduct Sales are considered highly probable
\nto reverse, revenues are only recognised when
\nthe right of return expires, which is generally on
\nultimate prescription of the product to patients.
\nThe methodology and assumptions used to
\nestimate rebates and returns are monitored and
\nadjusted regularly in the light of contractual
\nand legal obligations, historical trends, past
\nexperience and projected market conditions.
\nOnce the uncertainty associated with returns
\nis resolved, revenue is adjusted accordingly.
\nUnder certain collaboration agreements
\nwhich include a pro\ufb01t sharing mechanism,
\nour recognition of Product Sales depends on
\nwhich party acts as principal in sales to the
\nend customer. In the cases where AstraZeneca
\nacts as principal, we record 100% of sales to
\nthe end customer.
\nContracts relating to the supply of certain
\nVaccines & Immune Therapies medicines
\nrelating to the COVID-19 pandemic include
\nconditions whereby payments are receivable
\nfrom customers in advance of the delivery
\nof product. Such amounts are held on the
\nbalance sheet as contract liabilities until the
\nrelated revenue is recognised, generally upon
\nproduct delivery. Certain of these contracts
\ncontain further provisions that restrict the use
\nof inventory manufactured in speci\ufb01ed supply
\nchains to speci\ufb01ed customers, resulting in an
\nenforceable right to payment as the activities
\nare performed. Under IFRS 15, such contracts
\nrequire revenue to be recognised over time
\nusing an appropriate and reasonably
\nmeasurable method to measure progress.
\nRevenue is recognised on these contracts
\nbased on the proportion of product delivered
\ncompared to the total contracted volumes.
\nCertain arrangements include bill-and-hold
\narrangements under which the Group invoices
\na customer for a product but retains physical
\npossession of the product until it is transferred
\nto the customer at a point in time in the future.
\nFor these types of arrangements, an
\nassessment is made to determine when the
\nperformance obligation has been satis\ufb01ed,
\nwhich is when control of the product is
\ntransferred to the customer. If the customer
\nhas obtained control of the product even though
\nthat product remains in the Group\u2019s physical
\npossession, the performance obligation to
\ntransfer a product has been satis\ufb01ed and
\nProduct Sales are recognised. Control is
\nconsidered to have transferred when the
\nproduct is segregated as belonging to the
\ncustomer, is readily available to be delivered
\nto the customer and AstraZeneca is unable to
\nsell the product to another customer.
\nCollaboration Revenue
\nCollaboration Revenue includes income from
\ncollaborative arrangements where either the
\nGroup has out-licensed (sold) or has in-licenced
\n(acquired) certain rights associated with
\nproducts, where either AstraZeneca (out-
\nlicences) or the collaborator (in-licences) retains
\na signi\ufb01cant ongoing economic interest in the
\nproduct. Signi\ufb01cant interest can include
\nongoing supply of \ufb01nished goods, pro\ufb01t
\nsharing arrangements or being principal in the
\nsales of medicines. These collaborations may
\ninclude development, manufacturing and/or
\ncommercialisation arrangements with the
\ncollaborator. Income from out-licences may
\ntake the form of upfront fees, milestones and
\nroyalties and income from in-licences may
\ncomprise the sharing of pro\ufb01t arising from
\nsales made as principal by the collaborator.
\nTiming of recognition of clinical and
\nregulatory milestones is considered to be
\na key judgement. There can be signi\ufb01cant
\nuncertainty over whether it is highly probable
\nthat there would not be a signi\ufb01cant reversal
\nof revenue in respect of speci\ufb01c milestones
\nif these are recognised before they are
\ntriggered due to them being subject to the
\nactions of third parties. In general, where
\nthe triggering of a milestone is subject to the
\ndecisions of third parties (e.g. the acceptance
\nor approval of a \ufb01ling by a regulatory
\nauthority), the Group does not consider that
\nthe threshold for recognition is met until that
\ndecision is made.
\nWhere Collaboration Revenue arises from
\nthe licensing of the Group\u2019s own intellectual
\nproperty, the licences we grant are typically
\nrights to use intellectual property which do not
\nchange during the period of the licence and
\ntherefore related non-conditional revenue is
\nrecognised at the point the license is granted
\nand variable consideration as soon as
\nrecognition criteria are met.
\nOther performance obligations in the contract
\nmight include the supply of product. These
\narrangements typically involve the receipt of an
\nupfront payment, which the contract attributes
\nto the license of the intangible assets, and
\nongoing receipts for supply, which the contract
\nattributes to the sale of the product we
\nmanufacture. In cases where the transaction
\nhas two or more components, we account for
\nthe delivered item (for example, the transfer
\nof title to the intangible asset) as a separate
\nunit of account and record revenue on
\ndelivery of that component. Where practicable,
\nconsideration is allocated to performance
\nobligations on the basis of the standalone
\nselling price of each performance obligation.
\nHowever, where there is a licence of intellectual
\nproperty, it is not always possible to establish
\na reliable estimate of the standalone selling price
\nof the licence as they are unique. Therefore, in
\nthese rare situations, the residual approach is
\nused to determine the consideration attributable
\nto the licence.
\nWhere \ufb01xed amounts are payable over one
\nyear from the effective date of a contract, an
\nassessment is made as to whether a signi\ufb01cant
\n\ufb01nancing component exists, and if so, the fair
\nvalue of this component is deferred and
\nrecognised as \ufb01nancing income over the
\nperiod to the expected date of receipt.
\nWhere control of a right to use licence for an
\nintangible asset passes at the outset of an
\narrangement, revenue is recognised at the
\npoint in time control is transferred. Where the
\nsubstance of a licence arrangement is that of
\na right to access rights attributable to an
\nintangible asset, revenue is recognised over
\ntime, normally on a straight-line basis over the
\nlife of the contract.
\nWhere the Group provides ongoing development
\nservices, revenue in respect of this element is
\nrecognised over the duration of those services.
\nWhere the arrangement meets the de\ufb01nition of
\na licence agreement, sales milestones and
\nsales royalties are recognised when achieved
\nby applying the royalty exemption under IFRS 15.
\nAll other milestones and sales royalties are
\nrecognised when considered it is highly
\nprobable there will not be a signi\ufb01cant reversal
\nof cumulative income. The determination
\nrequires estimates to be made in relation to
\nfuture Product Sales.
\nWhere Collaboration Revenue is recorded
\nand there is a related Intangible asset that is
\nlicensed as part of the arrangement, an
\nappropriate amount of that Intangible asset
\nis charged to Cost of sales based on an
\nallocation of cost or value to the rights that
\nhave been licenced.
\nThe Group periodically enters into transactions
\nwhere it acquires part of the rights to a product
\nintangible (either on-market or in-process
\nR&D), but for commercial reasons does not
\nact as principal in selling the product to the
\ncustomer and therefore does not recognise
\nincome from the product in the form of
\nProduct Sales. This may occur where, for
\nexample, a collaboration partner retains the
\nright to commercialise in a speci\ufb01c territory,
\nand has suf\ufb01cient local control over that
\ncommercialisation to book product sale
\nrevenue, while the Group instead receives a
\nproportion of the value generated by those
\nproduct sales, either in the form of a royalty or
\na pro\ufb01t share (alliance revenue).",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForRecognitionOfRevenue",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f23577": {
"value": "Revenue \nRevenue comprises Product Sales and
\nCollaboration Revenue.
\nRevenue excludes inter-company revenues
\nand value-added taxes.
\nProduct Sales
\nProduct Sales represent net invoice value less
\nestimated rebates, returns and chargebacks,
\nwhich are considered to be variable
\nconsideration and include signi\ufb01cant estimates.
\nSales are recognised when the control of the
\ngoods has been transferred to a third party.
\nThis is usually when title passes to the customer,
\neither on shipment or on receipt of goods by
\nthe customer, depending on local trading
\nterms. In markets where returns are signi\ufb01cant,
\nestimates of the quantity and value of goods
\nwhich may ultimately be returned are accounted
\nfor at the point revenue is recognised. Revenue
\nis not recognised in full until it is highly probable
\nthat a signi\ufb01cant reversal in the amount of
\ncumulative revenue recognised will not occur.
\nRebates are amounts payable or credited to
\na customer, usually based on the quantity or
\nvalue of Product Sales to the customer for
\nspeci\ufb01c products in a certain period. Product
\nsales rebates, which relate to Product Sales
\nthat occur over a period of time, are normally
\nissued retrospectively.
\nAt the time Product Sales are invoiced, rebates
\nand deductions that the Group expects to pay
\nare estimated based upon assumptions
\ndeveloped using contractual terms, historical
\nexperience and market related information.
\nThe rebates and deductions are recognised
\nas variable consideration and recorded as a
\nreduction to revenue with an accrual recorded.
\nThese rebates typically arise from sales
\ncontracts with government payers, third-party
\nmanaged care organisations, hospitals,
\nlong-term care facilities, group purchasing
\norganisations and various state programmes.
\n142
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
\n\n\n\n\nOur returns accruals are based on actual
\nexperience over the preceding 12 months for
\nestablished products together with market-
\nrelated information such as estimated stock
\nlevels at wholesalers and competitor activity
\nwhich we receive via third-party information
\nservices. For newly launched products, we
\nuse rates based on our experience with similar
\nproducts or a predetermined percentage.
\nWhen a product faces generic competition,
\nparticular attention is given to the possible
\nlevels of returns and, in cases where the
\ncircumstances are such that the level of
\nProduct Sales are considered highly probable
\nto reverse, revenues are only recognised when
\nthe right of return expires, which is generally on
\nultimate prescription of the product to patients.
\nThe methodology and assumptions used to
\nestimate rebates and returns are monitored and
\nadjusted regularly in the light of contractual
\nand legal obligations, historical trends, past
\nexperience and projected market conditions.
\nOnce the uncertainty associated with returns
\nis resolved, revenue is adjusted accordingly.
\nUnder certain collaboration agreements
\nwhich include a pro\ufb01t sharing mechanism,
\nour recognition of Product Sales depends on
\nwhich party acts as principal in sales to the
\nend customer. In the cases where AstraZeneca
\nacts as principal, we record 100% of sales to
\nthe end customer.
\nContracts relating to the supply of certain
\nVaccines & Immune Therapies medicines
\nrelating to the COVID-19 pandemic include
\nconditions whereby payments are receivable
\nfrom customers in advance of the delivery
\nof product. Such amounts are held on the
\nbalance sheet as contract liabilities until the
\nrelated revenue is recognised, generally upon
\nproduct delivery. Certain of these contracts
\ncontain further provisions that restrict the use
\nof inventory manufactured in speci\ufb01ed supply
\nchains to speci\ufb01ed customers, resulting in an
\nenforceable right to payment as the activities
\nare performed. Under IFRS 15, such contracts
\nrequire revenue to be recognised over time
\nusing an appropriate and reasonably
\nmeasurable method to measure progress.
\nRevenue is recognised on these contracts
\nbased on the proportion of product delivered
\ncompared to the total contracted volumes.
\nCertain arrangements include bill-and-hold
\narrangements under which the Group invoices
\na customer for a product but retains physical
\npossession of the product until it is transferred
\nto the customer at a point in time in the future.
\nFor these types of arrangements, an
\nassessment is made to determine when the
\nperformance obligation has been satis\ufb01ed,
\nwhich is when control of the product is
\ntransferred to the customer. If the customer
\nhas obtained control of the product even though
\nthat product remains in the Group\u2019s physical
\npossession, the performance obligation to
\ntransfer a product has been satis\ufb01ed and
\nProduct Sales are recognised. Control is
\nconsidered to have transferred when the
\nproduct is segregated as belonging to the
\ncustomer, is readily available to be delivered
\nto the customer and AstraZeneca is unable to
\nsell the product to another customer.
\nCollaboration Revenue
\nCollaboration Revenue includes income from
\ncollaborative arrangements where either the
\nGroup has out-licensed (sold) or has in-licenced
\n(acquired) certain rights associated with
\nproducts, where either AstraZeneca (out-
\nlicences) or the collaborator (in-licences) retains
\na signi\ufb01cant ongoing economic interest in the
\nproduct. Signi\ufb01cant interest can include
\nongoing supply of \ufb01nished goods, pro\ufb01t
\nsharing arrangements or being principal in the
\nsales of medicines. These collaborations may
\ninclude development, manufacturing and/or
\ncommercialisation arrangements with the
\ncollaborator. Income from out-licences may
\ntake the form of upfront fees, milestones and
\nroyalties and income from in-licences may
\ncomprise the sharing of pro\ufb01t arising from
\nsales made as principal by the collaborator.
\nTiming of recognition of clinical and
\nregulatory milestones is considered to be
\na key judgement. There can be signi\ufb01cant
\nuncertainty over whether it is highly probable
\nthat there would not be a signi\ufb01cant reversal
\nof revenue in respect of speci\ufb01c milestones
\nif these are recognised before they are
\ntriggered due to them being subject to the
\nactions of third parties. In general, where
\nthe triggering of a milestone is subject to the
\ndecisions of third parties (e.g. the acceptance
\nor approval of a \ufb01ling by a regulatory
\nauthority), the Group does not consider that
\nthe threshold for recognition is met until that
\ndecision is made.
\nWhere Collaboration Revenue arises from
\nthe licensing of the Group\u2019s own intellectual
\nproperty, the licences we grant are typically
\nrights to use intellectual property which do not
\nchange during the period of the licence and
\ntherefore related non-conditional revenue is
\nrecognised at the point the license is granted
\nand variable consideration as soon as
\nrecognition criteria are met.
\nOther performance obligations in the contract
\nmight include the supply of product. These
\narrangements typically involve the receipt of an
\nupfront payment, which the contract attributes
\nto the license of the intangible assets, and
\nongoing receipts for supply, which the contract
\nattributes to the sale of the product we
\nmanufacture. In cases where the transaction
\nhas two or more components, we account for
\nthe delivered item (for example, the transfer
\nof title to the intangible asset) as a separate
\nunit of account and record revenue on
\ndelivery of that component. Where practicable,
\nconsideration is allocated to performance
\nobligations on the basis of the standalone
\nselling price of each performance obligation.
\nHowever, where there is a licence of intellectual
\nproperty, it is not always possible to establish
\na reliable estimate of the standalone selling price
\nof the licence as they are unique. Therefore, in
\nthese rare situations, the residual approach is
\nused to determine the consideration attributable
\nto the licence.
\nWhere \ufb01xed amounts are payable over one
\nyear from the effective date of a contract, an
\nassessment is made as to whether a signi\ufb01cant
\n\ufb01nancing component exists, and if so, the fair
\nvalue of this component is deferred and
\nrecognised as \ufb01nancing income over the
\nperiod to the expected date of receipt.
\nWhere control of a right to use licence for an
\nintangible asset passes at the outset of an
\narrangement, revenue is recognised at the
\npoint in time control is transferred. Where the
\nsubstance of a licence arrangement is that of
\na right to access rights attributable to an
\nintangible asset, revenue is recognised over
\ntime, normally on a straight-line basis over the
\nlife of the contract.
\nWhere the Group provides ongoing development
\nservices, revenue in respect of this element is
\nrecognised over the duration of those services.
\nWhere the arrangement meets the de\ufb01nition of
\na licence agreement, sales milestones and
\nsales royalties are recognised when achieved
\nby applying the royalty exemption under IFRS 15.
\nAll other milestones and sales royalties are
\nrecognised when considered it is highly
\nprobable there will not be a signi\ufb01cant reversal
\nof cumulative income. The determination
\nrequires estimates to be made in relation to
\nfuture Product Sales.
\nWhere Collaboration Revenue is recorded
\nand there is a related Intangible asset that is
\nlicensed as part of the arrangement, an
\nappropriate amount of that Intangible asset
\nis charged to Cost of sales based on an
\nallocation of cost or value to the rights that
\nhave been licenced.
\nThe Group periodically enters into transactions
\nwhere it acquires part of the rights to a product
\nintangible (either on-market or in-process
\nR&D), but for commercial reasons does not
\nact as principal in selling the product to the
\ncustomer and therefore does not recognise
\nincome from the product in the form of
\nProduct Sales. This may occur where, for
\nexample, a collaboration partner retains the
\nright to commercialise in a speci\ufb01c territory,
\nand has suf\ufb01cient local control over that
\ncommercialisation to book product sale
\nrevenue, while the Group instead receives a
\nproportion of the value generated by those
\nproduct sales, either in the form of a royalty or
\na pro\ufb01t share (alliance revenue).",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForDiscountsAndRebatesExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f23851": {
"value": "Cost of sales \nCost of sales are recognised as the associated
\nrevenue is recognised. Cost of sales include
\nmanufacturing costs, royalties payable on
\nrevenues recognised, movements in provisions
\nfor inventories, inventory write-offs and
\nimpairment charges in relation to manufacturing
\nassets. Cost of sales also includes co-
\ncollaborator sharing of pro\ufb01t arising from
\ncollaborations, and foreign exchange gains and
\nlosses arising from business trading activities.
\nResearch and development
\nResearch expenditure is charged to pro\ufb01t and
\nloss in the year in which it is incurred.
\nInternal development expenditure is
\ncapitalised only if it meets the recognition
\ncriteria of IAS 38 \u2018Intangible Assets\u2019. This is
\nconsidered a key judgement. Where regulatory
\nand other uncertainties are such that the
\ncriteria are not met, the expenditure is
\ncharged to pro\ufb01t and loss and this is almost
\ninvariably the case prior to approval of the
\ndrug by the relevant regulatory authority.
\nWhere, however, recognition criteria are met,
\nIntangible assets are capitalised and
\namortised on a straight-line basis over their
\nuseful economic lives from product launch.
\nAt 31 December 2022, no amounts have met
\nthe recognition criteria.
\nPayments to in-license products and
\ncompounds from third parties for new research
\nand development projects (in process research
\nand development) generally take the form of
\nupfront payments, milestones and royalty
\npayments. Where payments made to third
\nparties represent consideration for future
\nresearch and development activities, an
\nevaluation is made as to the nature of the
\npayments. Such payments are expensed if they
\nrepresent compensation for sub-contracted
\nresearch and development services not
\nresulting in a transfer of intellectual property.
\nBy contrast, payments are capitalised if they
\nrepresent compensation for the transfer of
\nidenti\ufb01able intellectual property developed at
\nthe risk of the third party. Such payments may
\nbe made once development or regulatory
\nmilestones are met and may also be made on
\nthe basis of sales volumes once a product is
\nlaunched. Development and regulatory
\nmilestone payments are capitalised as the
\nmilestone is triggered. Sales-related payments
\nare accrued and capitalised with reference to
\nthe latest Group sales forecasts for approved
\nindications. Assets capitalised are amortised,
\non a straight-line basis, over their useful
\neconomic lives from product launch.
\nThe determination of useful economic
\nlife is considered to be a key judgement.
\nOn product launch, the Group makes a
\njudgement as to the expected useful
\neconomic life with reference to the expiry
\nof associated patents for the product,
\nexpectation around the competitive
\nenvironment speci\ufb01c to the product and
\nour detailed long-term risk-adjusted sales
\nprojections compiled annually across the
\nGroup and approved by the Board.
\nThe useful economic life can extend beyond
\npatent expiry dependent upon the nature
\nof the product and the complexity of the
\ndevelopment and manufacturing process.
\nSigni\ufb01cant sales can often be achieved post
\npatent expiration.
\nIntangible assets
\nIntangible assets are stated at cost less
\namortisation and impairments. Intangible assets
\nrelating to products in development are subject
\nto impairment testing annually. All Intangible
\nassets are tested for impairment when there
\nare indications that the carrying value may
\nnot be recoverable. The determination of the
\nrecoverable amounts include key estimates
\nwhich are highly sensitive to, and depend
\nupon, key assumptions as detailed in Note 10
\nto the Financial Statements from page 161.
\nImpairment reviews have been carried out on
\nall Intangible assets that are in development
\n(and not being amortised), all major intangible
\nassets acquired during the year and all other
\nintangible assets that have had indications
\nof impairment during the year. Recoverable
\namount is determined as the higher of value
\nin use or fair value less costs to sell using a
\ndiscounted cash \ufb02ow calculation, with the
\nproducts\u2019 expected cash \ufb02ows risk-adjusted
\nover their estimated remaining useful economic
\nlife. Sales forecasts and speci\ufb01c allocated
\ncosts (which have both been subject to
\nappropriate senior management review and
\napproval) are risk-adjusted and discounted
\nusing appropriate rates based on our post-tax
\nweighted average cost of capital or for fair value
\nless costs to sell, a required rate of return for a
\nmarket participant. Our weighted average cost
\nof capital re\ufb02ects factors such as our capital
\nstructure and our costs of debt and equity.
\nAny impairment losses are recognised
\nimmediately in Operating pro\ufb01t. Intangible
\nassets relating to products which fail during
\ndevelopment (or for which development
\nceases for other reasons) are also tested for
\nimpairment and are written down to their
\nrecoverable amount (which is usually nil).
\nIf, subsequent to an impairment loss being
\nrecognised, development restarts or other
\nfacts and circumstances change indicating
\nthat the impairment is less or no longer exists,
\nthe value of the asset is re-estimated and its
\ncarrying value is increased to the recoverable
\namount, but not exceeding the original value,
\nby recognising an impairment reversal in
\nOperating pro\ufb01t.
\nGovernment grants
\nGovernment grants are recognised in the
\nConsolidated Statement of Comprehensive
\nIncome so as to match with the related
\nexpenses that they are intended to compensate.
\nWhere grants are received in advance of the
\nrelated expenses, they are initially recognised
\nin the Consolidated Statement of Financial
\nPosition under Trade and other payables as
\ndeferred income and released to net off
\nagainst the related expenditure when incurred.
\nEach contract is assessed to determine
\nwhether there are both grant elements and
\nsupply of product which need to be separated.
\nIn each case, the contracts set out the
\nspeci\ufb01ed terms for the supply of the product
\nand the provisions for funding for certain costs,
\nprimarily research and development associated
\nwith the IP. It is considered whether there are
\nany conditions for the funding to be refunded.
\nThe consideration in the contract is allocated
\nbetween the grant and supply elements.
\nThe standalone selling price for the supply
\nof products is determined by reference to
\nobserved prices with other customers.
\nThe amount allocated as a government grant
\nis determined by reference to the speci\ufb01c
\nagreed costs and activities identi\ufb01ed in the
\ncontract as not directly attributable to the
\nsupply of product. Government grants are
\nrecorded as an offset to the relevant
\nexpense in the Consolidated Statement of
\nComprehensive Income and are capped to
\nmatch the relevant costs incurred.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForExpensesExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f23864": {
"value": "Research and development \nResearch expenditure is charged to pro\ufb01t and
\nloss in the year in which it is incurred.
\nInternal development expenditure is
\ncapitalised only if it meets the recognition
\ncriteria of IAS 38 \u2018Intangible Assets\u2019. This is
\nconsidered a key judgement. Where regulatory
\nand other uncertainties are such that the
\ncriteria are not met, the expenditure is
\ncharged to pro\ufb01t and loss and this is almost
\ninvariably the case prior to approval of the
\ndrug by the relevant regulatory authority.
\nWhere, however, recognition criteria are met,
\nIntangible assets are capitalised and
\namortised on a straight-line basis over their
\nuseful economic lives from product launch.
\nAt 31 December 2022, no amounts have met
\nthe recognition criteria.
\nPayments to in-license products and
\ncompounds from third parties for new research
\nand development projects (in process research
\nand development) generally take the form of
\nupfront payments, milestones and royalty
\npayments. Where payments made to third
\nparties represent consideration for future
\nresearch and development activities, an
\nevaluation is made as to the nature of the
\npayments. Such payments are expensed if they
\nrepresent compensation for sub-contracted
\nresearch and development services not
\nresulting in a transfer of intellectual property.
\nBy contrast, payments are capitalised if they
\nrepresent compensation for the transfer of
\nidenti\ufb01able intellectual property developed at
\nthe risk of the third party. Such payments may
\nbe made once development or regulatory
\nmilestones are met and may also be made on
\nthe basis of sales volumes once a product is
\nlaunched. Development and regulatory
\nmilestone payments are capitalised as the
\nmilestone is triggered. Sales-related payments
\nare accrued and capitalised with reference to
\nthe latest Group sales forecasts for approved
\nindications. Assets capitalised are amortised,
\non a straight-line basis, over their useful
\neconomic lives from product launch.
\nThe determination of useful economic
\nlife is considered to be a key judgement.
\nOn product launch, the Group makes a
\njudgement as to the expected useful
\neconomic life with reference to the expiry
\nof associated patents for the product,
\nexpectation around the competitive
\nenvironment speci\ufb01c to the product and
\nour detailed long-term risk-adjusted sales
\nprojections compiled annually across the
\nGroup and approved by the Board.
\nThe useful economic life can extend beyond
\npatent expiry dependent upon the nature
\nof the product and the complexity of the
\ndevelopment and manufacturing process.
\nSigni\ufb01cant sales can often be achieved post
\npatent expiration.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForResearchAndDevelopmentExpenseExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f23929": {
"value": "Intangible assets
\nIntangible assets are stated at cost less
\namortisation and impairments. Intangible assets
\nrelating to products in development are subject
\nto impairment testing annually. All Intangible
\nassets are tested for impairment when there
\nare indications that the carrying value may
\nnot be recoverable. The determination of the
\nrecoverable amounts include key estimates
\nwhich are highly sensitive to, and depend
\nupon, key assumptions as detailed in Note 10
\nto the Financial Statements from page 161.
\nImpairment reviews have been carried out on
\nall Intangible assets that are in development
\n(and not being amortised), all major intangible
\nassets acquired during the year and all other
\nintangible assets that have had indications
\nof impairment during the year. Recoverable
\namount is determined as the higher of value
\nin use or fair value less costs to sell using a
\ndiscounted cash \ufb02ow calculation, with the
\nproducts\u2019 expected cash \ufb02ows risk-adjusted
\nover their estimated remaining useful economic
\nlife. Sales forecasts and speci\ufb01c allocated
\ncosts (which have both been subject to
\nappropriate senior management review and
\napproval) are risk-adjusted and discounted
\nusing appropriate rates based on our post-tax
\nweighted average cost of capital or for fair value
\nless costs to sell, a required rate of return for a
\nmarket participant. Our weighted average cost
\nof capital re\ufb02ects factors such as our capital
\nstructure and our costs of debt and equity.
\nAny impairment losses are recognised
\nimmediately in Operating pro\ufb01t. Intangible
\nassets relating to products which fail during
\ndevelopment (or for which development
\nceases for other reasons) are also tested for
\nimpairment and are written down to their
\nrecoverable amount (which is usually nil).
\nIf, subsequent to an impairment loss being
\nrecognised, development restarts or other
\nfacts and circumstances change indicating
\nthat the impairment is less or no longer exists,
\nthe value of the asset is re-estimated and its
\ncarrying value is increased to the recoverable
\namount, but not exceeding the original value,
\nby recognising an impairment reversal in
\nOperating pro\ufb01t.
Business combinations and goodwill
\nIn assessing whether an acquired set of
\nassets and activities is a business or an asset,
\nmanagement will \ufb01rst elect whether to apply
\nan optional concentration test to simplify the
\nassessment. Where the concentration test is
\napplied, the acquisition will be treated as the
\nacquisition of an asset if substantially all of
\nthe fair value of the gross assets acquired
\n(excluding cash and cash equivalents,
\ndeferred tax assets, and related goodwill) is
\nconcentrated in a single asset or group of
\nsimilar identi\ufb01able assets.
\nWhere the concentration test is not applied,
\nor is not met, a further assessment of whether
\nthe acquired set of assets and activities is a
\nbusiness will be performed.
\nThe determination of whether an acquired
\nset of assets and activities is a business or
\nan asset can be judgemental, particularly if
\nthe target is not producing outputs.
\nManagement uses a number of factors to
\nmake this determination, which are primarily
\nfocused on whether the acquired set of
\nassets and activities include substantive
\nprocesses that mean the set is capable of
\nbeing managed for the purpose of providing
\na return. Key determining factors include the
\nstage of development of any assets acquired,
\nthe readiness and ability of the acquired set
\nto produce outputs and the presence of key
\nexperienced employees capable of
\nconducting activities required to develop or
\nmanufacture the assets. Typically, the
\nspecialised nature of many pharmaceutical
\nassets and processes is such that until
\nassets are substantively ready for production
\nand promotion, there are not the required
\nprocesses for a set of assets and activities
\nto meet the de\ufb01nition of a business in IFRS 3.
\nOn the acquisition of a business, fair values
\nare attributed to the identi\ufb01able assets and
\nliabilities. Attributing fair values is a key
\njudgement; refer to Note 27 to the Financial
\nStatements on page 182 for additional details
\nof the 2021 acquisition. Contingent liabilities
\nare also recorded at fair value unless the fair
\nvalue cannot be measured reliably, in which
\ncase the value is subsumed into goodwill.
\nWhere fair values of acquired contingent
\nliabilities cannot be measured reliably, the
\nassumed contingent liability is not recognised
\nbut is disclosed in the same manner as other
\ncontingent liabilities. Where the Group fully
\nacquires, through a business combination,
\nassets that were previously held in joint
\noperations, the Group has elected not to uplift
\nthe book value of the existing interest in the
\nasset held in the joint operation to fair value at
\nthe date full control is taken.
\nWhere not all of the equity of a subsidiary
\nis acquired, the non-controlling interest is
\nrecognised either at fair value or at the
\nnon-controlling interest\u2019s proportionate
\nshare of the net assets of the subsidiary,
\non a case-by-case basis. Put options over
\nnon-controlling interests are recognised as
\na \ufb01nancial liability, with a corresponding entry
\nin either Retained earnings or against
\nnon-controlling interest reserves on a
\ncase-by-case basis.
\nThe timing and amount of future contingent
\nelements of consideration is an estimate.
\nContingent consideration, which may include
\ndevelopment and launch milestones, revenue
\nthreshold milestones and revenue-based
\nroyalties, is fair valued at the date of acquisition
\nusing decision-tree analysis with key inputs
\nincluding probability of success, consideration
\nof potential delays and revenue projections
\nbased on the Group\u2019s internal forecasts.
\nUnsettled amounts of consideration are held
\nat fair value within payables with changes in
\nfair value recognised immediately in pro\ufb01t.
\nGoodwill is the difference between the fair
\nvalue of the consideration and the fair value of
\nnet assets acquired.
\nGoodwill arising on acquisitions is capitalised
\nand subject to an impairment review, both
\nannually and when there is an indication that
\nthe carrying value may not be recoverable.
\nThe Group\u2019s policy up to and including 1997
\nwas to eliminate Goodwill arising upon
\nacquisitions against reserves. Under IFRS 1
\n\u2018First-time Adoption of International Financial
\nReporting Standards\u2019 and IFRS 3 \u2018Business
\nCombinations\u2019, such Goodwill will remain
\neliminated against reserves.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsAndGoodwillExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f23931": {
"value": "Intangible assets \nIntangible assets are stated at cost less
\namortisation and impairments. Intangible assets
\nrelating to products in development are subject
\nto impairment testing annually. All Intangible
\nassets are tested for impairment when there
\nare indications that the carrying value may
\nnot be recoverable. The determination of the
\nrecoverable amounts include key estimates
\nwhich are highly sensitive to, and depend
\nupon, key assumptions as detailed in Note 10
\nto the Financial Statements from page 161.
\nImpairment reviews have been carried out on
\nall Intangible assets that are in development
\n(and not being amortised), all major intangible
\nassets acquired during the year and all other
\nintangible assets that have had indications
\nof impairment during the year. Recoverable
\namount is determined as the higher of value
\nin use or fair value less costs to sell using a
\ndiscounted cash \ufb02ow calculation, with the
\nproducts\u2019 expected cash \ufb02ows risk-adjusted
\nover their estimated remaining useful economic
\nlife. Sales forecasts and speci\ufb01c allocated
\ncosts (which have both been subject to
\nappropriate senior management review and
\napproval) are risk-adjusted and discounted
\nusing appropriate rates based on our post-tax
\nweighted average cost of capital or for fair value
\nless costs to sell, a required rate of return for a
\nmarket participant. Our weighted average cost
\nof capital re\ufb02ects factors such as our capital
\nstructure and our costs of debt and equity.
\nAny impairment losses are recognised
\nimmediately in Operating pro\ufb01t. Intangible
\nassets relating to products which fail during
\ndevelopment (or for which development
\nceases for other reasons) are also tested for
\nimpairment and are written down to their
\nrecoverable amount (which is usually nil).
\nIf, subsequent to an impairment loss being
\nrecognised, development restarts or other
\nfacts and circumstances change indicating
\nthat the impairment is less or no longer exists,
\nthe value of the asset is re-estimated and its
\ncarrying value is increased to the recoverable
\namount, but not exceeding the original value,
\nby recognising an impairment reversal in
\nOperating pro\ufb01t.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsOtherThanGoodwillExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f23983": {
"value": "Government grants \nGovernment grants are recognised in the
\nConsolidated Statement of Comprehensive
\nIncome so as to match with the related
\nexpenses that they are intended to compensate.
\nWhere grants are received in advance of the
\nrelated expenses, they are initially recognised
\nin the Consolidated Statement of Financial
\nPosition under Trade and other payables as
\ndeferred income and released to net off
\nagainst the related expenditure when incurred.
\nEach contract is assessed to determine
\nwhether there are both grant elements and
\nsupply of product which need to be separated.
\nIn each case, the contracts set out the
\nspeci\ufb01ed terms for the supply of the product
\nand the provisions for funding for certain costs,
\nprimarily research and development associated
\nwith the IP. It is considered whether there are
\nany conditions for the funding to be refunded.
\nThe consideration in the contract is allocated
\nbetween the grant and supply elements.
\nThe standalone selling price for the supply
\nof products is determined by reference to
\nobserved prices with other customers.
\nThe amount allocated as a government grant
\nis determined by reference to the speci\ufb01c
\nagreed costs and activities identi\ufb01ed in the
\ncontract as not directly attributable to the
\nsupply of product. Government grants are
\nrecorded as an offset to the relevant
\nexpense in the Consolidated Statement of
\nComprehensive Income and are capped to
\nmatch the relevant costs incurred.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForGovernmentGrants",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f24021": {
"value": "Joint arrangements and associates \nThe Group has arrangements over which it
\nhas joint control and which qualify as joint
\noperations or joint ventures under IFRS 11
\n\u2018Joint Arrangements\u2019. For joint operations,
\nthe Group recognises its share of revenue
\nthat it earns from the joint operations and its
\nshare of expenses incurred. The Group also
\nrecognises the assets associated with the
\njoint operations that it controls and the
\nliabilities it incurs under the joint arrangement.
\nFor joint ventures and associates, the Group
\nrecognises its interest in the joint venture or
\nassociate as an investment and uses the
\nequity method of accounting.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentInAssociatesAndJointVenturesExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f24022": {
"value": "Joint arrangements and associates \nThe Group has arrangements over which it
\nhas joint control and which qualify as joint
\noperations or joint ventures under IFRS 11
\n\u2018Joint Arrangements\u2019. For joint operations,
\nthe Group recognises its share of revenue
\nthat it earns from the joint operations and its
\nshare of expenses incurred. The Group also
\nrecognises the assets associated with the
\njoint operations that it controls and the
\nliabilities it incurs under the joint arrangement.
\nFor joint ventures and associates, the Group
\nrecognises its interest in the joint venture or
\nassociate as an investment and uses the
\nequity method of accounting.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentsInJointVentures",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f24023": {
"value": "Joint arrangements and associates \nThe Group has arrangements over which it
\nhas joint control and which qualify as joint
\noperations or joint ventures under IFRS 11
\n\u2018Joint Arrangements\u2019. For joint operations,
\nthe Group recognises its share of revenue
\nthat it earns from the joint operations and its
\nshare of expenses incurred. The Group also
\nrecognises the assets associated with the
\njoint operations that it controls and the
\nliabilities it incurs under the joint arrangement.
\nFor joint ventures and associates, the Group
\nrecognises its interest in the joint venture or
\nassociate as an investment and uses the
\nequity method of accounting.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentInAssociates",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f24045": {
"value": "Employee bene\ufb01ts \nThe Group accounts for pensions and other
\nemployee bene\ufb01ts (principally healthcare)
\nunder IAS 19 \u2018Employee Bene\ufb01ts\u2019. In respect
\nof de\ufb01ned bene\ufb01t plans, obligations are
\ndetermined using the projected unit credit
\nmethod and are discounted to present value
\nby reference to market yields on high-quality
\ncorporate bonds, while plan assets are
\nmeasured at fair value. Given the extent of the
\nassumptions used to determine the value of
\nscheme assets and scheme liabilities, these
\nare considered to be signi\ufb01cant estimates.
\nThe operating and \ufb01nancing costs of such plans
\nare recognised separately in pro\ufb01t; current
\nservice costs are spread systematically over
\nthe lives of employees and \ufb01nancing costs are
\nrecognised in full in the periods in which they
\narise. Remeasurements of the net de\ufb01ned
\nbene\ufb01t pension liability, including actuarial
\ngains and losses, are recognised immediately
\nin Other comprehensive income.
\nGroup Accounting Policies
\ncontinued
\n144
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
\n\nWhere the calculation results in a surplus to the
\nGroup, the recognised asset is limited to the
\npresent value of any available future refunds
\nfrom the plan or reductions in future
\ncontributions to the plan subject to consideration
\nof the effect any minimum funding requirement
\nfor future service has on the bene\ufb01t available
\nas a reduction in future contributions.
\nPayments to de\ufb01ned contribution plans are
\nrecognised in pro\ufb01t as they fall due.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForEmployeeBenefitsExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f24098": {
"value": "Taxation \nThe current tax payable is based on taxable
\npro\ufb01t for the year. Taxable pro\ufb01t differs from
\nreported pro\ufb01t because taxable pro\ufb01t excludes
\nitems that are either never taxable or tax
\ndeductible or items that are taxable or tax
\ndeductible in a different period. The Group\u2019s
\ncurrent tax assets and liabilities are calculated
\nusing tax rates that have been enacted or
\nsubstantively enacted by the reporting date.
\nDeferred tax is provided using the balance
\nsheet liability method, providing for temporary
\ndifferences between the carrying amounts of
\nassets and liabilities for \ufb01nancial reporting
\npurposes and the amounts used for taxation
\npurposes. Deferred tax assets are recognised
\nto the extent that there are future taxable
\ntemporary differences or it is probable that
\nfuture taxable pro\ufb01t will be available against
\nwhich the asset can be utilised. This requires
\njudgements to be made in respect of the
\navailability of future taxable income.
\nNo deferred tax asset or liability is recognised
\nin respect of temporary differences associated
\nwith investments in subsidiaries and branches
\nwhere the Group is able to control the timing
\nof reversal of the temporary differences and it
\nis probable that the temporary differences will
\nnot reverse in the foreseeable future.
\nThe Group\u2019s Deferred tax assets and liabilities
\nare calculated using tax rates that are
\nexpected to apply in the period when the
\nliability is settled or the asset realised based
\non tax rates that have been enacted or
\nsubstantively enacted by the reporting date.
\nDeferred tax assets and liabilities are offset in
\nthe Consolidated Statement of Financial
\nPosition if, and only if, the taxable entity has a
\nlegally enforceable right to set off current tax
\nassets and liabilities, and the Deferred tax
\nassets and liabilities relate to taxes levied by
\nthe same taxation authority on the same
\ntaxable entity.
\nLiabilities for uncertain tax positions require
\nmanagement to make judgements of potential
\nexposures in relation to tax audit issues. Tax
\nbene\ufb01ts are not recognised unless the tax
\npositions will probably be accepted by the tax
\nauthorities. This is based upon management\u2019s
\ninterpretation of applicable laws and regulations
\nand the expectation of how the tax authority
\nwill resolve the matter. Once considered
\nprobable of not being accepted, management
\nreviews each material tax bene\ufb01t and re\ufb02ects
\nthe effect of the uncertainty in determining the
\nrelated taxable result.
\nLiabilities for uncertain tax positions are
\nmeasured using either the most likely amount
\nor the expected value amount depending on
\nwhich method the entity expects to better
\npredict the resolution of the uncertainty.
\nFurther details of the estimates and assumptions
\nmade in determining our recorded liability for
\ntransfer pricing contingencies and other tax
\ncontingencies are included in Note 30 to the
\nFinancial Statements from page 192. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForIncomeTaxExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f24110": {
"value": "Deferred tax is provided using the balance \nsheet liability method, providing for temporary
\ndifferences between the carrying amounts of
\nassets and liabilities for \ufb01nancial reporting
\npurposes and the amounts used for taxation
\npurposes. Deferred tax assets are recognised
\nto the extent that there are future taxable
\ntemporary differences or it is probable that
\nfuture taxable pro\ufb01t will be available against
\nwhich the asset can be utilised. This requires
\njudgements to be made in respect of the
\navailability of future taxable income.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForDeferredIncomeTaxExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f24170": {
"value": "Share-based payments \nAll plans have been classi\ufb01ed as equity settled
\nafter assessment. The grant date fair value of
\nthe market-based performance elements of
\nemployee share plan awards is calculated using
\na modi\ufb01ed Monte Carlo model, with other
\nelements at market price. In accordance with
\nIFRS 2 \u2018Share-based Payment\u2019, the resulting
\ncost is recognised in pro\ufb01t on a straight-line
\nbasis over the vesting period of the awards.
\nThe value of the charge is adjusted to re\ufb02ect
\nexpected and actual levels of awards vesting,
\nexcept where the failure to vest is as a result of
\nnot meeting a market condition. Cancellations of
\nequity instruments are treated as an acceleration
\nof the vesting period and any outstanding
\ncharge is recognised in pro\ufb01t immediately.
\nCash out\ufb02ows relating to the vesting of share
\nplans for our employees are recognised within
\noperating activities, as they relate to employee
\nremuneration. The cash \ufb02ows relating to
\nreplacement awards issued to employees as
\npart of the Alexion acquisition (see Note 27
\nfrom page 182) are classi\ufb01ed within investing
\nactivities, as they are part of the aggregate
\ncash \ufb02ows arising from obtaining control of
\nthe subsidiary.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForSharebasedPaymentTransactionsExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f24200": {
"value": "Property, plant and equipment \nThe Group\u2019s policy is to depreciate the
\ndifference between the cost of each item of
\nProperty, plant and equipment and its residual
\nvalue over its estimated useful life on a
\nstraight-line basis. Assets under construction
\nare not depreciated until the asset is available
\nfor use, at which point the asset is transferred
\ninto either Land and buildings or Plant and
\nequipment, and depreciated over its estimated
\nuseful economic life.
\nReviews are made annually of the estimated
\nremaining lives and residual values of individual
\nproductive assets, taking account of commercial
\nand technological obsolescence as well as
\nnormal wear and tear. It is impractical to
\ncalculate average asset lives exactly. However,
\nthe useful economic lives range from
\napproximately 10 to 50 years for buildings,
\nand three to 15 years for plant and equipment.
\nAll items of Property, plant and equipment are
\ntested for impairment when there are indications
\nthat the carrying value may not be recoverable.
\nAny impairment losses are recognised
\nimmediately in Operating pro\ufb01t.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForPropertyPlantAndEquipmentExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f24201": {
"value": "Property, plant and equipment \nThe Group\u2019s policy is to depreciate the
\ndifference between the cost of each item of
\nProperty, plant and equipment and its residual
\nvalue over its estimated useful life on a
\nstraight-line basis. Assets under construction
\nare not depreciated until the asset is available
\nfor use, at which point the asset is transferred
\ninto either Land and buildings or Plant and
\nequipment, and depreciated over its estimated
\nuseful economic life.
\nReviews are made annually of the estimated
\nremaining lives and residual values of individual
\nproductive assets, taking account of commercial
\nand technological obsolescence as well as
\nnormal wear and tear. It is impractical to
\ncalculate average asset lives exactly. However,
\nthe useful economic lives range from
\napproximately 10 to 50 years for buildings,
\nand three to 15 years for plant and equipment.
\nAll items of Property, plant and equipment are
\ntested for impairment when there are indications
\nthat the carrying value may not be recoverable.
\nAny impairment losses are recognised
\nimmediately in Operating pro\ufb01t.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForConstructionInProgressExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f24202": {
"value": "Property, plant and equipment \nThe Group\u2019s policy is to depreciate the
\ndifference between the cost of each item of
\nProperty, plant and equipment and its residual
\nvalue over its estimated useful life on a
\nstraight-line basis. Assets under construction
\nare not depreciated until the asset is available
\nfor use, at which point the asset is transferred
\ninto either Land and buildings or Plant and
\nequipment, and depreciated over its estimated
\nuseful economic life.
\nReviews are made annually of the estimated
\nremaining lives and residual values of individual
\nproductive assets, taking account of commercial
\nand technological obsolescence as well as
\nnormal wear and tear. It is impractical to
\ncalculate average asset lives exactly. However,
\nthe useful economic lives range from
\napproximately 10 to 50 years for buildings,
\nand three to 15 years for plant and equipment.
\nAll items of Property, plant and equipment are
\ntested for impairment when there are indications
\nthat the carrying value may not be recoverable.
\nAny impairment losses are recognised
\nimmediately in Operating pro\ufb01t.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForDepreciationExpenseExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f24234": {
"value": "Leases \nThe Group\u2019s lease arrangements are principally
\nfor property, most notably a portfolio of of\ufb01ce
\npremises and employee accommodation, and
\nfor a global car \ufb02eet, utilised primarily by our
\nsales and marketing teams.
\nThe lease liability and corresponding right-of-
\nuse asset arising from a lease are initially
\nmeasured on a present value basis. Lease
\nliabilities include the net present value of the
\nfollowing lease payments:
\n>
\ufb01xed payments, less any lease
\nincentives receivable
\n>
variable lease payments that depend on an
\nindex or a rate, initially measured using the
\nindex or rate as at the commencement date
\n>
the exercise price of a purchase option if
\nthe Group is reasonably certain to exercise
\nthat option
\n>
payments of penalties for terminating the
\nlease, if the lease term re\ufb02ects the Group
\nexercising that option, and
\n>
amounts expected to be payable by the
\nGroup under residual value guarantees.
\nRight-of-use assets are measured at cost
\ncomprising the following:
\n>
the amount of the initial measurement of
\nlease liability
\n>
any lease payments made at or before
\nthe commencement date less any lease
\nincentives received
\n>
any initial direct costs, and
\n> restoration costs.
\nJudgements made in calculating the lease
\nliability include assessing whether arrangements
\ncontain a lease and determining the lease term.
\nLease terms are negotiated on an individual
\nbasis and contain a wide range of different
\nterms and conditions. Property leases will often
\ninclude an early termination or extension option
\nto the lease term. Fleet management policies
\nvary by jurisdiction and may include renewal
\nof a lease until a measurement threshold,
\nsuch as mileage, is reached. Extension and
\ntermination options have been considered
\nwhen determining the lease term, along with
\nall facts and circumstances that may create
\nan economic incentive to exercise an extension
\noption, or not exercise a termination option.
\nExtension periods (or periods after termination
\noptions) are only included in the lease term if
\nthe lease is reasonably certain to be extended
\n(or not terminated).
\nThe lease payments are discounted using
\nincremental borrowing rates, as in the majority
\nof leases held by the Group the interest rate
\nimplicit in the lease is not readily identi\ufb01able.
\nCalculating the discount rate is an estimate
\nmade in calculating the lease liability. This rate
\nis the rate that the Group would have to pay to
\nborrow the funds necessary to obtain an asset
\nof similar value to the right-of-use asset in a
\nsimilar economic environment with similar
\nterms, security and conditions. To determine
\n145
AstraZeneca Annual Report & Form 20-F Information 2022
Group Accounting Policies
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
\n\n\nthe incremental borrowing rate, the Group
\nuses a risk-free interest rate adjusted for
\ncredit risk, adjusting for terms speci\ufb01c to the
\nlease including term, country and currency.
\nThe Group is exposed to potential future
\nincreases in variable lease payments that are
\nbased on an index or rate, which are initially
\nmeasured as at the commencement date, with
\nany future changes in the index or rate
\nexcluded from the lease liability until they take
\neffect. When adjustments to lease payments
\nbased on an index or rate take effect, the
\nlease liability is reassessed and adjusted
\nagainst the right-of-use asset.
\nLease payments are allocated between
\nprincipal and \ufb01nance cost. The \ufb01nance cost is
\ncharged to the Consolidated Statement of
\nComprehensive Income over the lease period
\nso as to produce a constant periodic rate of
\ninterest on the remaining balance of the
\nliability for each period.
\nPayments associated with short-term leases
\nof Property, plant and equipment and all
\nleases of low-value assets are recognised
\non a straight-line basis as an expense in the
\nConsolidated Statement of Comprehensive
\nIncome. Short-term leases are leases with a
\nlease term of 12 months or less. Low-value
\nleases are those where the underlying asset
\nvalue, when new, is $5,000 or less and includes
\nIT equipment and small items of of\ufb01ce furniture.
\nContracts may contain both lease and
\nnon-lease components. The Group allocates
\nthe consideration in the contract to the lease
\nand non-lease components based on their
\nrelative standalone prices.
\nRight-of-use assets are generally depreciated
\nover the shorter of the asset\u2019s useful life and
\nthe lease term on a straight-line basis. If the
\nGroup is reasonably certain to exercise a
\npurchase option, the right-of-use asset is
\ndepreciated over the underlying asset\u2019s useful
\nlife. It is impractical to calculate average asset
\nlives exactly. However, the total lives range
\nfrom approximately 10 to 50 years for buildings,
\nand three to 15 years for motor vehicles and
\nother assets.
\nThere are no material lease agreements under
\nwhich the Group is a lessor.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForLeasesExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f24377": {
"value": "Business combinations and goodwill \nIn assessing whether an acquired set of
\nassets and activities is a business or an asset,
\nmanagement will \ufb01rst elect whether to apply
\nan optional concentration test to simplify the
\nassessment. Where the concentration test is
\napplied, the acquisition will be treated as the
\nacquisition of an asset if substantially all of
\nthe fair value of the gross assets acquired
\n(excluding cash and cash equivalents,
\ndeferred tax assets, and related goodwill) is
\nconcentrated in a single asset or group of
\nsimilar identi\ufb01able assets.
\nWhere the concentration test is not applied,
\nor is not met, a further assessment of whether
\nthe acquired set of assets and activities is a
\nbusiness will be performed.
\nThe determination of whether an acquired
\nset of assets and activities is a business or
\nan asset can be judgemental, particularly if
\nthe target is not producing outputs.
\nManagement uses a number of factors to
\nmake this determination, which are primarily
\nfocused on whether the acquired set of
\nassets and activities include substantive
\nprocesses that mean the set is capable of
\nbeing managed for the purpose of providing
\na return. Key determining factors include the
\nstage of development of any assets acquired,
\nthe readiness and ability of the acquired set
\nto produce outputs and the presence of key
\nexperienced employees capable of
\nconducting activities required to develop or
\nmanufacture the assets. Typically, the
\nspecialised nature of many pharmaceutical
\nassets and processes is such that until
\nassets are substantively ready for production
\nand promotion, there are not the required
\nprocesses for a set of assets and activities
\nto meet the de\ufb01nition of a business in IFRS 3.
\nOn the acquisition of a business, fair values
\nare attributed to the identi\ufb01able assets and
\nliabilities. Attributing fair values is a key
\njudgement; refer to Note 27 to the Financial
\nStatements on page 182 for additional details
\nof the 2021 acquisition. Contingent liabilities
\nare also recorded at fair value unless the fair
\nvalue cannot be measured reliably, in which
\ncase the value is subsumed into goodwill.
\nWhere fair values of acquired contingent
\nliabilities cannot be measured reliably, the
\nassumed contingent liability is not recognised
\nbut is disclosed in the same manner as other
\ncontingent liabilities. Where the Group fully
\nacquires, through a business combination,
\nassets that were previously held in joint
\noperations, the Group has elected not to uplift
\nthe book value of the existing interest in the
\nasset held in the joint operation to fair value at
\nthe date full control is taken.
\nWhere not all of the equity of a subsidiary
\nis acquired, the non-controlling interest is
\nrecognised either at fair value or at the
\nnon-controlling interest\u2019s proportionate
\nshare of the net assets of the subsidiary,
\non a case-by-case basis. Put options over
\nnon-controlling interests are recognised as
\na \ufb01nancial liability, with a corresponding entry
\nin either Retained earnings or against
\nnon-controlling interest reserves on a
\ncase-by-case basis.
\nThe timing and amount of future contingent
\nelements of consideration is an estimate.
\nContingent consideration, which may include
\ndevelopment and launch milestones, revenue
\nthreshold milestones and revenue-based
\nroyalties, is fair valued at the date of acquisition
\nusing decision-tree analysis with key inputs
\nincluding probability of success, consideration
\nof potential delays and revenue projections
\nbased on the Group\u2019s internal forecasts.
\nUnsettled amounts of consideration are held
\nat fair value within payables with changes in
\nfair value recognised immediately in pro\ufb01t.
\nGoodwill is the difference between the fair
\nvalue of the consideration and the fair value of
\nnet assets acquired.
\nGoodwill arising on acquisitions is capitalised
\nand subject to an impairment review, both
\nannually and when there is an indication that
\nthe carrying value may not be recoverable.
\nThe Group\u2019s policy up to and including 1997
\nwas to eliminate Goodwill arising upon
\nacquisitions against reserves. Under IFRS 1
\n\u2018First-time Adoption of International Financial
\nReporting Standards\u2019 and IFRS 3 \u2018Business
\nCombinations\u2019, such Goodwill will remain
\neliminated against reserves.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsAndGoodwillExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f24378": {
"value": "Business combinations and goodwill \nIn assessing whether an acquired set of
\nassets and activities is a business or an asset,
\nmanagement will \ufb01rst elect whether to apply
\nan optional concentration test to simplify the
\nassessment. Where the concentration test is
\napplied, the acquisition will be treated as the
\nacquisition of an asset if substantially all of
\nthe fair value of the gross assets acquired
\n(excluding cash and cash equivalents,
\ndeferred tax assets, and related goodwill) is
\nconcentrated in a single asset or group of
\nsimilar identi\ufb01able assets.
\nWhere the concentration test is not applied,
\nor is not met, a further assessment of whether
\nthe acquired set of assets and activities is a
\nbusiness will be performed.
\nThe determination of whether an acquired
\nset of assets and activities is a business or
\nan asset can be judgemental, particularly if
\nthe target is not producing outputs.
\nManagement uses a number of factors to
\nmake this determination, which are primarily
\nfocused on whether the acquired set of
\nassets and activities include substantive
\nprocesses that mean the set is capable of
\nbeing managed for the purpose of providing
\na return. Key determining factors include the
\nstage of development of any assets acquired,
\nthe readiness and ability of the acquired set
\nto produce outputs and the presence of key
\nexperienced employees capable of
\nconducting activities required to develop or
\nmanufacture the assets. Typically, the
\nspecialised nature of many pharmaceutical
\nassets and processes is such that until
\nassets are substantively ready for production
\nand promotion, there are not the required
\nprocesses for a set of assets and activities
\nto meet the de\ufb01nition of a business in IFRS 3.
\nOn the acquisition of a business, fair values
\nare attributed to the identi\ufb01able assets and
\nliabilities. Attributing fair values is a key
\njudgement; refer to Note 27 to the Financial
\nStatements on page 182 for additional details
\nof the 2021 acquisition. Contingent liabilities
\nare also recorded at fair value unless the fair
\nvalue cannot be measured reliably, in which
\ncase the value is subsumed into goodwill.
\nWhere fair values of acquired contingent
\nliabilities cannot be measured reliably, the
\nassumed contingent liability is not recognised
\nbut is disclosed in the same manner as other
\ncontingent liabilities. Where the Group fully
\nacquires, through a business combination,
\nassets that were previously held in joint
\noperations, the Group has elected not to uplift
\nthe book value of the existing interest in the
\nasset held in the joint operation to fair value at
\nthe date full control is taken.
\nWhere not all of the equity of a subsidiary
\nis acquired, the non-controlling interest is
\nrecognised either at fair value or at the
\nnon-controlling interest\u2019s proportionate
\nshare of the net assets of the subsidiary,
\non a case-by-case basis. Put options over
\nnon-controlling interests are recognised as
\na \ufb01nancial liability, with a corresponding entry
\nin either Retained earnings or against
\nnon-controlling interest reserves on a
\ncase-by-case basis.
\nThe timing and amount of future contingent
\nelements of consideration is an estimate.
\nContingent consideration, which may include
\ndevelopment and launch milestones, revenue
\nthreshold milestones and revenue-based
\nroyalties, is fair valued at the date of acquisition
\nusing decision-tree analysis with key inputs
\nincluding probability of success, consideration
\nof potential delays and revenue projections
\nbased on the Group\u2019s internal forecasts.
\nUnsettled amounts of consideration are held
\nat fair value within payables with changes in
\nfair value recognised immediately in pro\ufb01t.
\nGoodwill is the difference between the fair
\nvalue of the consideration and the fair value of
\nnet assets acquired.
\nGoodwill arising on acquisitions is capitalised
\nand subject to an impairment review, both
\nannually and when there is an indication that
\nthe carrying value may not be recoverable.
\nThe Group\u2019s policy up to and including 1997
\nwas to eliminate Goodwill arising upon
\nacquisitions against reserves. Under IFRS 1
\n\u2018First-time Adoption of International Financial
\nReporting Standards\u2019 and IFRS 3 \u2018Business
\nCombinations\u2019, such Goodwill will remain
\neliminated against reserves.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForContingentLiabilitiesAndContingentAssetsExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f24379": {
"value": "Business combinations and goodwill \nIn assessing whether an acquired set of
\nassets and activities is a business or an asset,
\nmanagement will \ufb01rst elect whether to apply
\nan optional concentration test to simplify the
\nassessment. Where the concentration test is
\napplied, the acquisition will be treated as the
\nacquisition of an asset if substantially all of
\nthe fair value of the gross assets acquired
\n(excluding cash and cash equivalents,
\ndeferred tax assets, and related goodwill) is
\nconcentrated in a single asset or group of
\nsimilar identi\ufb01able assets.
\nWhere the concentration test is not applied,
\nor is not met, a further assessment of whether
\nthe acquired set of assets and activities is a
\nbusiness will be performed.
\nThe determination of whether an acquired
\nset of assets and activities is a business or
\nan asset can be judgemental, particularly if
\nthe target is not producing outputs.
\nManagement uses a number of factors to
\nmake this determination, which are primarily
\nfocused on whether the acquired set of
\nassets and activities include substantive
\nprocesses that mean the set is capable of
\nbeing managed for the purpose of providing
\na return. Key determining factors include the
\nstage of development of any assets acquired,
\nthe readiness and ability of the acquired set
\nto produce outputs and the presence of key
\nexperienced employees capable of
\nconducting activities required to develop or
\nmanufacture the assets. Typically, the
\nspecialised nature of many pharmaceutical
\nassets and processes is such that until
\nassets are substantively ready for production
\nand promotion, there are not the required
\nprocesses for a set of assets and activities
\nto meet the de\ufb01nition of a business in IFRS 3.
\nOn the acquisition of a business, fair values
\nare attributed to the identi\ufb01able assets and
\nliabilities. Attributing fair values is a key
\njudgement; refer to Note 27 to the Financial
\nStatements on page 182 for additional details
\nof the 2021 acquisition. Contingent liabilities
\nare also recorded at fair value unless the fair
\nvalue cannot be measured reliably, in which
\ncase the value is subsumed into goodwill.
\nWhere fair values of acquired contingent
\nliabilities cannot be measured reliably, the
\nassumed contingent liability is not recognised
\nbut is disclosed in the same manner as other
\ncontingent liabilities. Where the Group fully
\nacquires, through a business combination,
\nassets that were previously held in joint
\noperations, the Group has elected not to uplift
\nthe book value of the existing interest in the
\nasset held in the joint operation to fair value at
\nthe date full control is taken.
\nWhere not all of the equity of a subsidiary
\nis acquired, the non-controlling interest is
\nrecognised either at fair value or at the
\nnon-controlling interest\u2019s proportionate
\nshare of the net assets of the subsidiary,
\non a case-by-case basis. Put options over
\nnon-controlling interests are recognised as
\na \ufb01nancial liability, with a corresponding entry
\nin either Retained earnings or against
\nnon-controlling interest reserves on a
\ncase-by-case basis.
\nThe timing and amount of future contingent
\nelements of consideration is an estimate.
\nContingent consideration, which may include
\ndevelopment and launch milestones, revenue
\nthreshold milestones and revenue-based
\nroyalties, is fair valued at the date of acquisition
\nusing decision-tree analysis with key inputs
\nincluding probability of success, consideration
\nof potential delays and revenue projections
\nbased on the Group\u2019s internal forecasts.
\nUnsettled amounts of consideration are held
\nat fair value within payables with changes in
\nfair value recognised immediately in pro\ufb01t.
\nGoodwill is the difference between the fair
\nvalue of the consideration and the fair value of
\nnet assets acquired.
\nGoodwill arising on acquisitions is capitalised
\nand subject to an impairment review, both
\nannually and when there is an indication that
\nthe carrying value may not be recoverable.
\nThe Group\u2019s policy up to and including 1997
\nwas to eliminate Goodwill arising upon
\nacquisitions against reserves. Under IFRS 1
\n\u2018First-time Adoption of International Financial
\nReporting Standards\u2019 and IFRS 3 \u2018Business
\nCombinations\u2019, such Goodwill will remain
\neliminated against reserves.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForTransactionsWithNoncontrollingInterestsExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f24380": {
"value": "Business combinations and goodwill \nIn assessing whether an acquired set of
\nassets and activities is a business or an asset,
\nmanagement will \ufb01rst elect whether to apply
\nan optional concentration test to simplify the
\nassessment. Where the concentration test is
\napplied, the acquisition will be treated as the
\nacquisition of an asset if substantially all of
\nthe fair value of the gross assets acquired
\n(excluding cash and cash equivalents,
\ndeferred tax assets, and related goodwill) is
\nconcentrated in a single asset or group of
\nsimilar identi\ufb01able assets.
\nWhere the concentration test is not applied,
\nor is not met, a further assessment of whether
\nthe acquired set of assets and activities is a
\nbusiness will be performed.
\nThe determination of whether an acquired
\nset of assets and activities is a business or
\nan asset can be judgemental, particularly if
\nthe target is not producing outputs.
\nManagement uses a number of factors to
\nmake this determination, which are primarily
\nfocused on whether the acquired set of
\nassets and activities include substantive
\nprocesses that mean the set is capable of
\nbeing managed for the purpose of providing
\na return. Key determining factors include the
\nstage of development of any assets acquired,
\nthe readiness and ability of the acquired set
\nto produce outputs and the presence of key
\nexperienced employees capable of
\nconducting activities required to develop or
\nmanufacture the assets. Typically, the
\nspecialised nature of many pharmaceutical
\nassets and processes is such that until
\nassets are substantively ready for production
\nand promotion, there are not the required
\nprocesses for a set of assets and activities
\nto meet the de\ufb01nition of a business in IFRS 3.
\nOn the acquisition of a business, fair values
\nare attributed to the identi\ufb01able assets and
\nliabilities. Attributing fair values is a key
\njudgement; refer to Note 27 to the Financial
\nStatements on page 182 for additional details
\nof the 2021 acquisition. Contingent liabilities
\nare also recorded at fair value unless the fair
\nvalue cannot be measured reliably, in which
\ncase the value is subsumed into goodwill.
\nWhere fair values of acquired contingent
\nliabilities cannot be measured reliably, the
\nassumed contingent liability is not recognised
\nbut is disclosed in the same manner as other
\ncontingent liabilities. Where the Group fully
\nacquires, through a business combination,
\nassets that were previously held in joint
\noperations, the Group has elected not to uplift
\nthe book value of the existing interest in the
\nasset held in the joint operation to fair value at
\nthe date full control is taken.
\nWhere not all of the equity of a subsidiary
\nis acquired, the non-controlling interest is
\nrecognised either at fair value or at the
\nnon-controlling interest\u2019s proportionate
\nshare of the net assets of the subsidiary,
\non a case-by-case basis. Put options over
\nnon-controlling interests are recognised as
\na \ufb01nancial liability, with a corresponding entry
\nin either Retained earnings or against
\nnon-controlling interest reserves on a
\ncase-by-case basis.
\nThe timing and amount of future contingent
\nelements of consideration is an estimate.
\nContingent consideration, which may include
\ndevelopment and launch milestones, revenue
\nthreshold milestones and revenue-based
\nroyalties, is fair valued at the date of acquisition
\nusing decision-tree analysis with key inputs
\nincluding probability of success, consideration
\nof potential delays and revenue projections
\nbased on the Group\u2019s internal forecasts.
\nUnsettled amounts of consideration are held
\nat fair value within payables with changes in
\nfair value recognised immediately in pro\ufb01t.
\nGoodwill is the difference between the fair
\nvalue of the consideration and the fair value of
\nnet assets acquired.
\nGoodwill arising on acquisitions is capitalised
\nand subject to an impairment review, both
\nannually and when there is an indication that
\nthe carrying value may not be recoverable.
\nThe Group\u2019s policy up to and including 1997
\nwas to eliminate Goodwill arising upon
\nacquisitions against reserves. Under IFRS 1
\n\u2018First-time Adoption of International Financial
\nReporting Standards\u2019 and IFRS 3 \u2018Business
\nCombinations\u2019, such Goodwill will remain
\neliminated against reserves.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f24381": {
"value": "Business combinations and goodwill \nIn assessing whether an acquired set of
\nassets and activities is a business or an asset,
\nmanagement will \ufb01rst elect whether to apply
\nan optional concentration test to simplify the
\nassessment. Where the concentration test is
\napplied, the acquisition will be treated as the
\nacquisition of an asset if substantially all of
\nthe fair value of the gross assets acquired
\n(excluding cash and cash equivalents,
\ndeferred tax assets, and related goodwill) is
\nconcentrated in a single asset or group of
\nsimilar identi\ufb01able assets.
\nWhere the concentration test is not applied,
\nor is not met, a further assessment of whether
\nthe acquired set of assets and activities is a
\nbusiness will be performed.
\nThe determination of whether an acquired
\nset of assets and activities is a business or
\nan asset can be judgemental, particularly if
\nthe target is not producing outputs.
\nManagement uses a number of factors to
\nmake this determination, which are primarily
\nfocused on whether the acquired set of
\nassets and activities include substantive
\nprocesses that mean the set is capable of
\nbeing managed for the purpose of providing
\na return. Key determining factors include the
\nstage of development of any assets acquired,
\nthe readiness and ability of the acquired set
\nto produce outputs and the presence of key
\nexperienced employees capable of
\nconducting activities required to develop or
\nmanufacture the assets. Typically, the
\nspecialised nature of many pharmaceutical
\nassets and processes is such that until
\nassets are substantively ready for production
\nand promotion, there are not the required
\nprocesses for a set of assets and activities
\nto meet the de\ufb01nition of a business in IFRS 3.
\nOn the acquisition of a business, fair values
\nare attributed to the identi\ufb01able assets and
\nliabilities. Attributing fair values is a key
\njudgement; refer to Note 27 to the Financial
\nStatements on page 182 for additional details
\nof the 2021 acquisition. Contingent liabilities
\nare also recorded at fair value unless the fair
\nvalue cannot be measured reliably, in which
\ncase the value is subsumed into goodwill.
\nWhere fair values of acquired contingent
\nliabilities cannot be measured reliably, the
\nassumed contingent liability is not recognised
\nbut is disclosed in the same manner as other
\ncontingent liabilities. Where the Group fully
\nacquires, through a business combination,
\nassets that were previously held in joint
\noperations, the Group has elected not to uplift
\nthe book value of the existing interest in the
\nasset held in the joint operation to fair value at
\nthe date full control is taken.
\nWhere not all of the equity of a subsidiary
\nis acquired, the non-controlling interest is
\nrecognised either at fair value or at the
\nnon-controlling interest\u2019s proportionate
\nshare of the net assets of the subsidiary,
\non a case-by-case basis. Put options over
\nnon-controlling interests are recognised as
\na \ufb01nancial liability, with a corresponding entry
\nin either Retained earnings or against
\nnon-controlling interest reserves on a
\ncase-by-case basis.
\nThe timing and amount of future contingent
\nelements of consideration is an estimate.
\nContingent consideration, which may include
\ndevelopment and launch milestones, revenue
\nthreshold milestones and revenue-based
\nroyalties, is fair valued at the date of acquisition
\nusing decision-tree analysis with key inputs
\nincluding probability of success, consideration
\nof potential delays and revenue projections
\nbased on the Group\u2019s internal forecasts.
\nUnsettled amounts of consideration are held
\nat fair value within payables with changes in
\nfair value recognised immediately in pro\ufb01t.
\nGoodwill is the difference between the fair
\nvalue of the consideration and the fair value of
\nnet assets acquired.
\nGoodwill arising on acquisitions is capitalised
\nand subject to an impairment review, both
\nannually and when there is an indication that
\nthe carrying value may not be recoverable.
\nThe Group\u2019s policy up to and including 1997
\nwas to eliminate Goodwill arising upon
\nacquisitions against reserves. Under IFRS 1
\n\u2018First-time Adoption of International Financial
\nReporting Standards\u2019 and IFRS 3 \u2018Business
\nCombinations\u2019, such Goodwill will remain
\neliminated against reserves.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForGoodwillExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f24490": {
"value": "Subsidiaries \nA subsidiary is an entity controlled, directly
\nor indirectly, by AstraZeneca PLC. Control is
\nregarded as the exposure or rights to the
\nvariable returns of the entity when combined
\nwith the power to affect those returns. Control
\nis normally evidenced by holding more than 50%
\nof the share capital of the company, however
\nother agreements may be in place that result
\nin control where they give AstraZeneca \ufb01nance
\ndecision-making authority over the relevant
\nactivities of the company.
\nThe \ufb01nancial results of subsidiaries are
\nconsolidated from the date control is obtained
\nuntil the date that control ceases.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForSubsidiariesExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f24494": {
"value": "AstraZeneca PLC",
"dimensions": {
"concept": "ifrs-full:NameOfParentEntity",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f24495": {
"value": "AstraZeneca PLC",
"dimensions": {
"concept": "ifrs-full:NameOfUltimateParentOfGroup",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f24496": {
"value": "AstraZeneca PLC",
"dimensions": {
"concept": "ifrs-full:NameOfReportingEntityOrOtherMeansOfIdentification",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f24511": {
"value": "Inventories \nInventories are stated at the lower of cost and
\nnet realisable value. The \ufb01rst in, \ufb01rst out or an
\naverage method of valuation is used. For
\n\ufb01nished goods and work in progress, cost
\nincludes directly attributable costs and certain
\noverhead expenses (including depreciation).
\nSelling expenses and certain other overhead
\nexpenses (principally central administration
\ncosts) are excluded. Net realisable value is
\ndetermined as estimated selling price less all
\nestimated costs of completion and costs to be
\nincurred in selling and distribution.
\nWrite-downs of inventory occur in the general
\ncourse of business and are recognised in
\nCost of sales for launched or approved
\nproducts and in Research and development
\nexpense for products in development.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForMeasuringInventories",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f24532": {
"value": "Assets held for sale \nNon-current assets are classi\ufb01ed as Assets
\nheld for sale when their carrying amount is to be
\nrecovered principally through a sale transaction
\nand a sale is considered highly probable.
\nA sale is considered highly probable only
\nwhen the appropriate level of management
\nhas committed to the sale.
\nGroup Accounting Policies
\ncontinued
\n146
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
Assets held for sale are stated at the lower of
\ncarrying amount and fair value less costs to sell.
\nWhere there is a partial transfer of a non-current
\nasset to held for sale, an allocation of value is
\nmade between the current and non-current
\nportions of the asset based on the relative
\nvalue of the two portions, unless there is a
\nmethodology that better re\ufb02ects the asset to
\nbe disposed of.
\nAssets held for sale are not depreciated
\nor amortised.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForNoncurrentAssetsOrDisposalGroupsClassifiedAsHeldForSaleExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f24570": {
"value": "Trade and other receivables \nFinancial assets included in Trade and other
\nreceivables are recognised initially at fair value.
\nThe Group holds the Trade receivables with the
\nobjective to collect the contractual cash \ufb02ows
\nand therefore measures them subsequently at
\namortised cost using the effective interest rate
\nmethod, less any impairment losses.
\nTrade receivables that are subject to debt
\nfactoring arrangements are derecognised if
\nthey meet the conditions for derecognition
\ndetailed in IFRS 9 \u2018Financial Instruments\u2019.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForTradeAndOtherReceivablesExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f24571": {
"value": "Trade and other receivables \nFinancial assets included in Trade and other
\nreceivables are recognised initially at fair value.
\nThe Group holds the Trade receivables with the
\nobjective to collect the contractual cash \ufb02ows
\nand therefore measures them subsequently at
\namortised cost using the effective interest rate
\nmethod, less any impairment losses.
\nTrade receivables that are subject to debt
\nfactoring arrangements are derecognised if
\nthey meet the conditions for derecognition
\ndetailed in IFRS 9 \u2018Financial Instruments\u2019.
\nTrade and other payables
\nFinancial liabilities included in Trade and other
\npayables are recognised initially at fair value.
\nSubsequent to initial recognition they are
\nmeasured at amortised cost using the effective
\ninterest rate method. Contingent consideration
\npayables are held at fair value within Level 3 of
\nthe fair value hierarchy as de\ufb01ned in Note 12.
\nFinancial instruments
\nThe Group\u2019s \ufb01nancial instruments include Lease
\nliabilities, Trade and other receivables and
\npayables, liabilities for contingent consideration
\nand put options under business combinations,
\nand rights and obligations under employee
\nbene\ufb01t plans which are dealt with in speci\ufb01c
\naccounting policies.
\nThe Group\u2019s other \ufb01nancial instruments include:
\n>
Cash and cash equivalents
\n> Fixed deposits
\n> Other investments
\n>
Bank and other borrowings
\n> Derivatives.
\nCash and cash equivalents
\nCash and cash equivalents comprise cash in
\nhand, current balances with banks and similar
\ninstitutions, and highly liquid investments
\nwith maturities of three months or less when
\nacquired. They are readily convertible into
\nknown amounts of cash and are held at
\namortised cost under the hold to collect
\nclassi\ufb01cation, where they meet the hold to
\ncollect \u2018solely payments of principal and
\ninterest\u2019 test criteria under IFRS 9. Those not
\nmeeting these criteria are held at fair value
\nthrough pro\ufb01t and loss. Cash and cash
\nequivalents in the Consolidated Statement of
\nCash Flows include unsecured bank overdrafts
\nat the balance sheet date where balances often
\n\ufb02uctuate between a cash and overdraft position.
\nFixed deposits
\nFixed deposits, principally comprising
\nfunds held with banks and other \ufb01nancial
\ninstitutions, are initially measured at fair
\nvalue, plus direct transaction costs, and are
\nsubsequently measured at amortised cost
\nusing the effective interest rate method at
\neach reporting date. Changes in carrying
\nvalue are recognised in the Consolidated
\nStatement of Comprehensive Income.
\nOther investments
\nInvestments are classi\ufb01ed as fair value through
\npro\ufb01t or loss (FVPL), unless the Group makes
\nan irrevocable election at initial recognition for
\ncertain non-current equity investments to
\npresent changes in Other comprehensive
\nincome (FVOCI). If this election is made, there
\nis no subsequent reclassi\ufb01cation of fair value
\ngains and losses to pro\ufb01t and loss following
\nthe derecognition of the investment.
\nBank and other borrowings
\nThe Group uses derivatives, principally
\ninterest rate swaps, to hedge the interest rate
\nexposure inherent in a portion of its \ufb01xed
\ninterest rate debt. In such cases the Group will
\neither designate the debt as fair value through
\npro\ufb01t and loss when certain criteria are met or
\nas the hedged item under a fair value hedge.
\nIf the debt instrument is designated as fair
\nvalue through pro\ufb01t or loss, the debt is initially
\nmeasured at fair value (with direct transaction
\ncosts being included in pro\ufb01t as an expense)
\nand is remeasured to fair value at each reporting
\ndate with changes in carrying value being
\nrecognised in pro\ufb01t (along with changes in the
\nfair value of the related derivative), with the
\nexception of changes in the fair value of the debt
\ninstrument relating to own credit risk which are
\nrecorded in Other comprehensive income in
\naccordance with IFRS 9. Such a designation has
\nbeen made where this signi\ufb01cantly reduces an
\naccounting mismatch which would result from
\nrecognising gains and losses on different bases.
\nIf the debt is designated as the hedged item
\nunder a fair value hedge, the debt is initially
\nmeasured at fair value (with direct transaction
\ncosts being amortised over the life of the debt)
\nand is remeasured for fair value changes in
\nrespect of the hedged risk at each reporting
\ndate with changes in carrying value being
\nrecognised in pro\ufb01t (along with changes in the
\nfair value of the related derivative).
\nIf the debt is designated in a cash \ufb02ow hedge,
\nthe debt is measured at amortised cost (with
\ngains or losses taken to pro\ufb01t and direct
\ntransaction costs being amortised over the
\nlife of the debt). The related derivative is
\nremeasured for fair value changes at each
\nreporting date with the portion of the gain or
\nloss on the derivative that is determined to
\nbe an effective hedge recognised in Other
\ncomprehensive income. The amounts that
\nhave been recognised in Other comprehensive
\nincome are reclassi\ufb01ed to pro\ufb01t in the same
\nperiod that the hedged forecast cash \ufb02ows
\naffect pro\ufb01t. The reclassi\ufb01cation adjustment is
\nincluded in Finance expense in the Consolidated
\nStatement of Comprehensive Income.
\nOther interest-bearing loans are initially
\nmeasured at fair value (with direct transaction
\ncosts being amortised over the life of the loan)
\nand are subsequently measured at amortised
\ncost using the effective interest rate method at
\neach reporting date. Changes in carrying
\nvalue are recognised in the Consolidated
\nStatement of Comprehensive Income.
\nDerivatives
\nDerivatives are initially measured at fair value
\n(with direct transaction costs being included
\nin pro\ufb01t as an expense) and are subsequently
\nremeasured to fair value at each reporting
\ndate. Changes in carrying value of derivatives
\nnot designated in hedging relationships are
\nrecognised in pro\ufb01t or loss.
\nThe Group has agreements with some bank
\ncounterparties whereby the parties agree to
\npost cash collateral, for the bene\ufb01t of the other,
\nequivalent to the market valuation of all of the
\nderivative positions above a predetermined
\nthreshold. Cash collateral received from
\ncounterparties is included within current
\nInterest-bearing loans and borrowings within the
\nConsolidated Statement of Financial Position.
\nCash collateral pledged to counterparties is
\nrecognised as a \ufb01nancial asset and is included
\nin current Other investments within the
\nConsolidated Statement of Financial Position.
\nIn prior years, cash collateral pledged to
\ncounterparties was included in Cash and
\ncash equivalents. Cash collateral received is
\nincluded in Movement in short-term borrowings
\nwithin \ufb01nancing activities in the Consolidated
\nCash Flow Statement. Cash collateral paid
\nis included in Movements in short-term
\ninvestments within investing activities in the
\nConsolidated Cash Flow Statement. The cash
\n\ufb02ow presentation of cash paid and received
\nfollows the Consolidated Statement of
\nFinancial Position presentation of the \ufb01nancial
\nasset and \ufb01nancial liability that is recognised
\nfrom posting the collateral.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForDerecognitionOfFinancialInstrumentsExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f24572": {
"value": "Trade and other receivables \nFinancial assets included in Trade and other
\nreceivables are recognised initially at fair value.
\nThe Group holds the Trade receivables with the
\nobjective to collect the contractual cash \ufb02ows
\nand therefore measures them subsequently at
\namortised cost using the effective interest rate
\nmethod, less any impairment losses.
\nTrade receivables that are subject to debt
\nfactoring arrangements are derecognised if
\nthey meet the conditions for derecognition
\ndetailed in IFRS 9 \u2018Financial Instruments\u2019.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialAssetsExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f24573": {
"value": "Trade and other receivables \nFinancial assets included in Trade and other
\nreceivables are recognised initially at fair value.
\nThe Group holds the Trade receivables with the
\nobjective to collect the contractual cash \ufb02ows
\nand therefore measures them subsequently at
\namortised cost using the effective interest rate
\nmethod, less any impairment losses.
\nTrade receivables that are subject to debt
\nfactoring arrangements are derecognised if
\nthey meet the conditions for derecognition
\ndetailed in IFRS 9 \u2018Financial Instruments\u2019.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfFinancialAssetsExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f24593": {
"value": "Trade and other payables \nFinancial liabilities included in Trade and other
\npayables are recognised initially at fair value.
\nSubsequent to initial recognition they are
\nmeasured at amortised cost using the effective
\ninterest rate method. Contingent consideration
\npayables are held at fair value within Level 3 of
\nthe fair value hierarchy as de\ufb01ned in Note 12.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForTradeAndOtherPayablesExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f24594": {
"value": "Trade and other payables \nFinancial liabilities included in Trade and other
\npayables are recognised initially at fair value.
\nSubsequent to initial recognition they are
\nmeasured at amortised cost using the effective
\ninterest rate method. Contingent consideration
\npayables are held at fair value within Level 3 of
\nthe fair value hierarchy as de\ufb01ned in Note 12.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialLiabilitiesExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f24607": {
"value": "Financial instruments \nThe Group\u2019s \ufb01nancial instruments include Lease
\nliabilities, Trade and other receivables and
\npayables, liabilities for contingent consideration
\nand put options under business combinations,
\nand rights and obligations under employee
\nbene\ufb01t plans which are dealt with in speci\ufb01c
\naccounting policies.
\nThe Group\u2019s other \ufb01nancial instruments include:
\n>
Cash and cash equivalents
\n> Fixed deposits
\n> Other investments
\n>
Bank and other borrowings
\n> Derivatives.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f24608": {
"value": "Financial instruments \nThe Group\u2019s \ufb01nancial instruments include Lease
\nliabilities, Trade and other receivables and
\npayables, liabilities for contingent consideration
\nand put options under business combinations,
\nand rights and obligations under employee
\nbene\ufb01t plans which are dealt with in speci\ufb01c
\naccounting policies.
\nThe Group\u2019s other \ufb01nancial instruments include:
\n>
Cash and cash equivalents
\n> Fixed deposits
\n> Other investments
\n>
Bank and other borrowings
\n> Derivatives.
\nCash and cash equivalents
\nCash and cash equivalents comprise cash in
\nhand, current balances with banks and similar
\ninstitutions, and highly liquid investments
\nwith maturities of three months or less when
\nacquired. They are readily convertible into
\nknown amounts of cash and are held at
\namortised cost under the hold to collect
\nclassi\ufb01cation, where they meet the hold to
\ncollect \u2018solely payments of principal and
\ninterest\u2019 test criteria under IFRS 9. Those not
\nmeeting these criteria are held at fair value
\nthrough pro\ufb01t and loss. Cash and cash
\nequivalents in the Consolidated Statement of
\nCash Flows include unsecured bank overdrafts
\nat the balance sheet date where balances often
\n\ufb02uctuate between a cash and overdraft position.
\nFixed deposits
\nFixed deposits, principally comprising
\nfunds held with banks and other \ufb01nancial
\ninstitutions, are initially measured at fair
\nvalue, plus direct transaction costs, and are
\nsubsequently measured at amortised cost
\nusing the effective interest rate method at
\neach reporting date. Changes in carrying
\nvalue are recognised in the Consolidated
\nStatement of Comprehensive Income.
\nOther investments
\nInvestments are classi\ufb01ed as fair value through
\npro\ufb01t or loss (FVPL), unless the Group makes
\nan irrevocable election at initial recognition for
\ncertain non-current equity investments to
\npresent changes in Other comprehensive
\nincome (FVOCI). If this election is made, there
\nis no subsequent reclassi\ufb01cation of fair value
\ngains and losses to pro\ufb01t and loss following
\nthe derecognition of the investment.
\nBank and other borrowings
\nThe Group uses derivatives, principally
\ninterest rate swaps, to hedge the interest rate
\nexposure inherent in a portion of its \ufb01xed
\ninterest rate debt. In such cases the Group will
\neither designate the debt as fair value through
\npro\ufb01t and loss when certain criteria are met or
\nas the hedged item under a fair value hedge.
\nIf the debt instrument is designated as fair
\nvalue through pro\ufb01t or loss, the debt is initially
\nmeasured at fair value (with direct transaction
\ncosts being included in pro\ufb01t as an expense)
\nand is remeasured to fair value at each reporting
\ndate with changes in carrying value being
\nrecognised in pro\ufb01t (along with changes in the
\nfair value of the related derivative), with the
\nexception of changes in the fair value of the debt
\ninstrument relating to own credit risk which are
\nrecorded in Other comprehensive income in
\naccordance with IFRS 9. Such a designation has
\nbeen made where this signi\ufb01cantly reduces an
\naccounting mismatch which would result from
\nrecognising gains and losses on different bases.
\nIf the debt is designated as the hedged item
\nunder a fair value hedge, the debt is initially
\nmeasured at fair value (with direct transaction
\ncosts being amortised over the life of the debt)
\nand is remeasured for fair value changes in
\nrespect of the hedged risk at each reporting
\ndate with changes in carrying value being
\nrecognised in pro\ufb01t (along with changes in the
\nfair value of the related derivative).
\nIf the debt is designated in a cash \ufb02ow hedge,
\nthe debt is measured at amortised cost (with
\ngains or losses taken to pro\ufb01t and direct
\ntransaction costs being amortised over the
\nlife of the debt). The related derivative is
\nremeasured for fair value changes at each
\nreporting date with the portion of the gain or
\nloss on the derivative that is determined to
\nbe an effective hedge recognised in Other
\ncomprehensive income. The amounts that
\nhave been recognised in Other comprehensive
\nincome are reclassi\ufb01ed to pro\ufb01t in the same
\nperiod that the hedged forecast cash \ufb02ows
\naffect pro\ufb01t. The reclassi\ufb01cation adjustment is
\nincluded in Finance expense in the Consolidated
\nStatement of Comprehensive Income.
\nOther interest-bearing loans are initially
\nmeasured at fair value (with direct transaction
\ncosts being amortised over the life of the loan)
\nand are subsequently measured at amortised
\ncost using the effective interest rate method at
\neach reporting date. Changes in carrying
\nvalue are recognised in the Consolidated
\nStatement of Comprehensive Income.
\nDerivatives
\nDerivatives are initially measured at fair value
\n(with direct transaction costs being included
\nin pro\ufb01t as an expense) and are subsequently
\nremeasured to fair value at each reporting
\ndate. Changes in carrying value of derivatives
\nnot designated in hedging relationships are
\nrecognised in pro\ufb01t or loss.
\nThe Group has agreements with some bank
\ncounterparties whereby the parties agree to
\npost cash collateral, for the bene\ufb01t of the other,
\nequivalent to the market valuation of all of the
\nderivative positions above a predetermined
\nthreshold. Cash collateral received from
\ncounterparties is included within current
\nInterest-bearing loans and borrowings within the
\nConsolidated Statement of Financial Position.
\nCash collateral pledged to counterparties is
\nrecognised as a \ufb01nancial asset and is included
\nin current Other investments within the
\nConsolidated Statement of Financial Position.
\nIn prior years, cash collateral pledged to
\ncounterparties was included in Cash and
\ncash equivalents. Cash collateral received is
\nincluded in Movement in short-term borrowings
\nwithin \ufb01nancing activities in the Consolidated
\nCash Flow Statement. Cash collateral paid
\nis included in Movements in short-term
\ninvestments within investing activities in the
\nConsolidated Cash Flow Statement. The cash
\n\ufb02ow presentation of cash paid and received
\nfollows the Consolidated Statement of
\nFinancial Position presentation of the \ufb01nancial
\nasset and \ufb01nancial liability that is recognised
\nfrom posting the collateral.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForFairValueMeasurementExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f24609": {
"value": "Financial instruments \nThe Group\u2019s \ufb01nancial instruments include Lease
\nliabilities, Trade and other receivables and
\npayables, liabilities for contingent consideration
\nand put options under business combinations,
\nand rights and obligations under employee
\nbene\ufb01t plans which are dealt with in speci\ufb01c
\naccounting policies.
\nThe Group\u2019s other \ufb01nancial instruments include:
\n>
Cash and cash equivalents
\n> Fixed deposits
\n> Other investments
\n>
Bank and other borrowings
\n> Derivatives.
\nCash and cash equivalents
\nCash and cash equivalents comprise cash in
\nhand, current balances with banks and similar
\ninstitutions, and highly liquid investments
\nwith maturities of three months or less when
\nacquired. They are readily convertible into
\nknown amounts of cash and are held at
\namortised cost under the hold to collect
\nclassi\ufb01cation, where they meet the hold to
\ncollect \u2018solely payments of principal and
\ninterest\u2019 test criteria under IFRS 9. Those not
\nmeeting these criteria are held at fair value
\nthrough pro\ufb01t and loss. Cash and cash
\nequivalents in the Consolidated Statement of
\nCash Flows include unsecured bank overdrafts
\nat the balance sheet date where balances often
\n\ufb02uctuate between a cash and overdraft position.
\nFixed deposits
\nFixed deposits, principally comprising
\nfunds held with banks and other \ufb01nancial
\ninstitutions, are initially measured at fair
\nvalue, plus direct transaction costs, and are
\nsubsequently measured at amortised cost
\nusing the effective interest rate method at
\neach reporting date. Changes in carrying
\nvalue are recognised in the Consolidated
\nStatement of Comprehensive Income.
\nOther investments
\nInvestments are classi\ufb01ed as fair value through
\npro\ufb01t or loss (FVPL), unless the Group makes
\nan irrevocable election at initial recognition for
\ncertain non-current equity investments to
\npresent changes in Other comprehensive
\nincome (FVOCI). If this election is made, there
\nis no subsequent reclassi\ufb01cation of fair value
\ngains and losses to pro\ufb01t and loss following
\nthe derecognition of the investment.
\nBank and other borrowings
\nThe Group uses derivatives, principally
\ninterest rate swaps, to hedge the interest rate
\nexposure inherent in a portion of its \ufb01xed
\ninterest rate debt. In such cases the Group will
\neither designate the debt as fair value through
\npro\ufb01t and loss when certain criteria are met or
\nas the hedged item under a fair value hedge.
\nIf the debt instrument is designated as fair
\nvalue through pro\ufb01t or loss, the debt is initially
\nmeasured at fair value (with direct transaction
\ncosts being included in pro\ufb01t as an expense)
\nand is remeasured to fair value at each reporting
\ndate with changes in carrying value being
\nrecognised in pro\ufb01t (along with changes in the
\nfair value of the related derivative), with the
\nexception of changes in the fair value of the debt
\ninstrument relating to own credit risk which are
\nrecorded in Other comprehensive income in
\naccordance with IFRS 9. Such a designation has
\nbeen made where this signi\ufb01cantly reduces an
\naccounting mismatch which would result from
\nrecognising gains and losses on different bases.
\nIf the debt is designated as the hedged item
\nunder a fair value hedge, the debt is initially
\nmeasured at fair value (with direct transaction
\ncosts being amortised over the life of the debt)
\nand is remeasured for fair value changes in
\nrespect of the hedged risk at each reporting
\ndate with changes in carrying value being
\nrecognised in pro\ufb01t (along with changes in the
\nfair value of the related derivative).
\nIf the debt is designated in a cash \ufb02ow hedge,
\nthe debt is measured at amortised cost (with
\ngains or losses taken to pro\ufb01t and direct
\ntransaction costs being amortised over the
\nlife of the debt). The related derivative is
\nremeasured for fair value changes at each
\nreporting date with the portion of the gain or
\nloss on the derivative that is determined to
\nbe an effective hedge recognised in Other
\ncomprehensive income. The amounts that
\nhave been recognised in Other comprehensive
\nincome are reclassi\ufb01ed to pro\ufb01t in the same
\nperiod that the hedged forecast cash \ufb02ows
\naffect pro\ufb01t. The reclassi\ufb01cation adjustment is
\nincluded in Finance expense in the Consolidated
\nStatement of Comprehensive Income.
\nOther interest-bearing loans are initially
\nmeasured at fair value (with direct transaction
\ncosts being amortised over the life of the loan)
\nand are subsequently measured at amortised
\ncost using the effective interest rate method at
\neach reporting date. Changes in carrying
\nvalue are recognised in the Consolidated
\nStatement of Comprehensive Income.
\nDerivatives
\nDerivatives are initially measured at fair value
\n(with direct transaction costs being included
\nin pro\ufb01t as an expense) and are subsequently
\nremeasured to fair value at each reporting
\ndate. Changes in carrying value of derivatives
\nnot designated in hedging relationships are
\nrecognised in pro\ufb01t or loss.
\nThe Group has agreements with some bank
\ncounterparties whereby the parties agree to
\npost cash collateral, for the bene\ufb01t of the other,
\nequivalent to the market valuation of all of the
\nderivative positions above a predetermined
\nthreshold. Cash collateral received from
\ncounterparties is included within current
\nInterest-bearing loans and borrowings within the
\nConsolidated Statement of Financial Position.
\nCash collateral pledged to counterparties is
\nrecognised as a \ufb01nancial asset and is included
\nin current Other investments within the
\nConsolidated Statement of Financial Position.
\nIn prior years, cash collateral pledged to
\ncounterparties was included in Cash and
\ncash equivalents. Cash collateral received is
\nincluded in Movement in short-term borrowings
\nwithin \ufb01nancing activities in the Consolidated
\nCash Flow Statement. Cash collateral paid
\nis included in Movements in short-term
\ninvestments within investing activities in the
\nConsolidated Cash Flow Statement. The cash
\n\ufb02ow presentation of cash paid and received
\nfollows the Consolidated Statement of
\nFinancial Position presentation of the \ufb01nancial
\nasset and \ufb01nancial liability that is recognised
\nfrom posting the collateral.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialInstrumentsAtFairValueThroughProfitOrLossExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f24630": {
"value": "Cash and cash equivalents \nCash and cash equivalents comprise cash in
\nhand, current balances with banks and similar
\ninstitutions, and highly liquid investments
\nwith maturities of three months or less when
\nacquired. They are readily convertible into
\nknown amounts of cash and are held at
\namortised cost under the hold to collect
\nclassi\ufb01cation, where they meet the hold to
\ncollect \u2018solely payments of principal and
\ninterest\u2019 test criteria under IFRS 9. Those not
\nmeeting these criteria are held at fair value
\nthrough pro\ufb01t and loss. Cash and cash
\nequivalents in the Consolidated Statement of
\nCash Flows include unsecured bank overdrafts
\nat the balance sheet date where balances often
\n\ufb02uctuate between a cash and overdraft position.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyToDetermineComponentsOfCashAndCashEquivalents",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f24650": {
"value": "Fixed deposits \nFixed deposits, principally comprising
\nfunds held with banks and other \ufb01nancial
\ninstitutions, are initially measured at fair
\nvalue, plus direct transaction costs, and are
\nsubsequently measured at amortised cost
\nusing the effective interest rate method at
\neach reporting date. Changes in carrying
\nvalue are recognised in the Consolidated
\nStatement of Comprehensive Income.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfDepositsFromBanksExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f24663": {
"value": "Other investments \nInvestments are classi\ufb01ed as fair value through
\npro\ufb01t or loss (FVPL), unless the Group makes
\nan irrevocable election at initial recognition for
\ncertain non-current equity investments to
\npresent changes in Other comprehensive
\nincome (FVOCI). If this election is made, there
\nis no subsequent reclassi\ufb01cation of fair value
\ngains and losses to pro\ufb01t and loss following
\nthe derecognition of the investment.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentsOtherThanInvestmentsAccountedForUsingEquityMethodExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f24676": {
"value": "Bank and other borrowings \nThe Group uses derivatives, principally
\ninterest rate swaps, to hedge the interest rate
\nexposure inherent in a portion of its \ufb01xed
\ninterest rate debt. In such cases the Group will
\neither designate the debt as fair value through
\npro\ufb01t and loss when certain criteria are met or
\nas the hedged item under a fair value hedge.
\nIf the debt instrument is designated as fair
\nvalue through pro\ufb01t or loss, the debt is initially
\nmeasured at fair value (with direct transaction
\ncosts being included in pro\ufb01t as an expense)
\nand is remeasured to fair value at each reporting
\ndate with changes in carrying value being
\nrecognised in pro\ufb01t (along with changes in the
\nfair value of the related derivative), with the
\nexception of changes in the fair value of the debt
\ninstrument relating to own credit risk which are
\nrecorded in Other comprehensive income in
\naccordance with IFRS 9. Such a designation has
\nbeen made where this signi\ufb01cantly reduces an
\naccounting mismatch which would result from
\nrecognising gains and losses on different bases.
\nIf the debt is designated as the hedged item
\nunder a fair value hedge, the debt is initially
\nmeasured at fair value (with direct transaction
\ncosts being amortised over the life of the debt)
\nand is remeasured for fair value changes in
\nrespect of the hedged risk at each reporting
\ndate with changes in carrying value being
\nrecognised in pro\ufb01t (along with changes in the
\nfair value of the related derivative).
\nIf the debt is designated in a cash \ufb02ow hedge,
\nthe debt is measured at amortised cost (with
\ngains or losses taken to pro\ufb01t and direct
\ntransaction costs being amortised over the
\nlife of the debt). The related derivative is
\nremeasured for fair value changes at each
\nreporting date with the portion of the gain or
\nloss on the derivative that is determined to
\nbe an effective hedge recognised in Other
\ncomprehensive income. The amounts that
\nhave been recognised in Other comprehensive
\nincome are reclassi\ufb01ed to pro\ufb01t in the same
\nperiod that the hedged forecast cash \ufb02ows
\naffect pro\ufb01t. The reclassi\ufb01cation adjustment is
\nincluded in Finance expense in the Consolidated
\nStatement of Comprehensive Income.
\nOther interest-bearing loans are initially
\nmeasured at fair value (with direct transaction
\ncosts being amortised over the life of the loan)
\nand are subsequently measured at amortised
\ncost using the effective interest rate method at
\neach reporting date. Changes in carrying
\nvalue are recognised in the Consolidated
\nStatement of Comprehensive Income.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForBorrowingsExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f24734": {
"value": "Derivatives
\nDerivatives are initially measured at fair value
\n(with direct transaction costs being included
\nin pro\ufb01t as an expense) and are subsequently
\nremeasured to fair value at each reporting
\ndate. Changes in carrying value of derivatives
\nnot designated in hedging relationships are
\nrecognised in pro\ufb01t or loss.
\nThe Group has agreements with some bank
\ncounterparties whereby the parties agree to
\npost cash collateral, for the bene\ufb01t of the other,
\nequivalent to the market valuation of all of the
\nderivative positions above a predetermined
\nthreshold. Cash collateral received from
\ncounterparties is included within current
\nInterest-bearing loans and borrowings within the
\nConsolidated Statement of Financial Position.
\nCash collateral pledged to counterparties is
\nrecognised as a \ufb01nancial asset and is included
\nin current Other investments within the
\nConsolidated Statement of Financial Position.
\nIn prior years, cash collateral pledged to
\ncounterparties was included in Cash and
\ncash equivalents. Cash collateral received is
\nincluded in Movement in short-term borrowings
\nwithin \ufb01nancing activities in the Consolidated
\nCash Flow Statement. Cash collateral paid
\nis included in Movements in short-term
\ninvestments within investing activities in the
\nConsolidated Cash Flow Statement. The cash
\n\ufb02ow presentation of cash paid and received
\nfollows the Consolidated Statement of
\nFinancial Position presentation of the \ufb01nancial
\nasset and \ufb01nancial liability that is recognised
\nfrom posting the collateral.
28 Financial risk management objectives and policies
\nThe Group\u2019s principal \ufb01nancial instruments, other than derivatives, comprise bank overdrafts, loans and other borrowings, lease liabilities, current
\nand non-current investments, cash and short-term deposits. The main purpose of these \ufb01nancial instruments is to manage the Group\u2019s funding and
\nliquidity requirements. The Group has other \ufb01nancial assets and liabilities such as trade receivables and trade payables, which arise directly from
\nits operations.
\nThe principal \ufb01nancial risks to which the Group is exposed are those of liquidity, interest rate, foreign currency and credit. Each of these is managed
\nin accordance with Board-approved policies. These policies, together with the Group\u2019s approach to capital management, are set out below.
\nCapital management
\nThe capital structure of the Group consists of Shareholders\u2019 equity (Note 24), Debt (Note 19), Other current investments (Note 12) and Cash (Note 17).
\nFor the foreseeable future, the Board will maintain a capital structure that supports the Group\u2019s strategic objectives through:
\n>
managing funding and liquidity risk
\n> optimising shareholder return
\n>
maintaining a strong, investment-grade credit rating.
\nThe Group utilises factoring arrangements for selected trade receivables. These factoring arrangements qualify for full derecognition of the associated
\ntrade receivables under IFRS 9. Amounts due on invoices that have not been factored at year end, from customers that are subject to factoring
\narrangements are disclosed in Note 16.
\nFunding and liquidity risk are reviewed regularly by the Board and managed in accordance with policies described below.
\nThe Board regularly reviews its shareholders\u2019 distribution policy, which comprises a regular cash dividend and potentially a share repurchase
\ncomponent. No share repurchases have been made since 2012.
\nThe Group\u2019s net debt position (loans and borrowings net of Cash and cash equivalents, Other investments and Derivative \ufb01nancial instruments) has
\ndecreased by $1,399m from a net debt position of $24,322m at the beginning of the year to a net debt position of $22,923m at 31 December 2022.
\nGross debt reduced from $30,781m to $29,232m, principally due to the repayment of the $1,000m 2.75% bond and a $250m \ufb02oating rate note.
\nLiquidity risk
\nThe Board reviews the Group\u2019s ongoing liquidity risks annually as part of the planning process and on an ad hoc basis. The Board considers
\nshort-term requirements against available sources of funding, taking into account forecast cash \ufb02ows. The Group manages liquidity risk by maintaining
\naccess to a number of sources of funding which are suf\ufb01cient to meet anticipated funding requirements. Speci\ufb01cally, the Group uses US and
\nEuropean commercial paper, bank loans, committed bank facilities and cash resources to manage short-term liquidity and manages long-term
\nliquidity by raising funds through the capital markets. At 31 December 2022, the Group was assigned short-term credit ratings of P-2 by Moody\u2019s
\nand A-1 by Standard and Poor\u2019s. The Group\u2019s long-term credit rating was A3 Stable outlook by Moody\u2019s and A Stable outlook by Standard and Poor\u2019s.
\nIn addition to Cash and cash equivalents of $6,166m, short-term \ufb01xed income investments of $13m, \ufb01xed deposits of $64m, less overdrafts of $183m
\nat 31 December 2022, the Group has committed bank facilities of $4,875m available to manage liquidity. These committed bank facilities have no
\n\ufb01nancial covenants and mature in April 2026. The Group regularly monitors the credit standing of the banks providing the facilities and currently does
\nnot anticipate any issue with drawing on the committed facilities should this be necessary. Advances under these facilities currently bear an interest
\nrate per annum based on US dollar LIBOR (or other relevant benchmark rate) plus a margin. The facilities contain arrangements to switch to alternative
\nrisk free rate benchmarks before June 2023.
\nAt 31 December 2022, the Group has $3,068m outstanding from debt issued under a Euro Medium Term Note programme and $20,651m under an
\nSEC-registered programme. The funds made available under these facility agreements may be used for the general corporate purposes of the Group.
\nThe maturity pro\ufb01le of the anticipated future contractual cash \ufb02ows including interest in relation to the Group\u2019s \ufb01nancial liabilities, on an undiscounted
\nbasis and which, therefore, differs from both the carrying value and fair value, is as follows:
\nBank
Total
Derivative
Derivative
Total
\noverdrafts
Trade non-derivative
financial
financial
derivative
\nand other
Bonds and
Lease
and other
financial
instruments
instruments
financial
\nloans
bank loans
liability
payables
instruments
receivable
payable
instruments
Total
\n$m
$m
$m
$m
$m
$m
$m
$m
$m
\nWithin one year
667
2,136
207
15,812
18,822
(9,719)
9,620
(99)
18,723
\nIn one to two years
\u2013
1,839
168
2,584
4,591
(60)
67
7
4,598
\nIn two to three years
\u2013
2,101
120
1,658
3,879
(59)
67
8
3,887
\nIn three to four years
\u2013
1,617
82
1,728
3,427
(1,151)
1,080
(71)
3,356
\nIn four to five years
\u2013
2,502
53
722
3,277
(36)
40
4
3,281
\nIn more than five years
\u2013
16,921
108
1,435
18,464
(1,707)
1,652
(55)
18,409
\n667
27,116
738
23,939
52,460
(12,732)
12,526
(206)
52,254
\nEffect of interest
\u2013
(7,974)
\u2013
\u2013
(7,974)
379
(405)
(26)
(8,000)
\nEffect of discounting, fair values and issue costs
(1)
(109)
(57)
(2,070)
(2,237)
(70)
24
(46)
(2,283)
\n31\u00a0December\u00a02020
666
19,033
681
21,869
42,249
(12,423)
12,145
(278)
41,971
Bank
Total
Derivative
Derivative
Total
\noverdrafts
Trade non-derivative
financial
financial
derivative
\nand other
Bonds and
Lease
and other
financial
instruments
instruments
financial
\nloans
bank loans
liability
payables
instruments
receivable
payable
instruments
Total
\n$m
$m
$m
$m
$m
$m
$m
$m
$m
\nWithin one year
387
1,981
256
19,007
21,631
(11,766)
11,774
8
21,639
\nIn one to two years
\u2013
5,647
210
2,521
8,378
(55)
66
11
8,389
\nIn two to three years
\u2013
5,242
163
1,669
7,074
(1,060)
1,079
19
7,093
\nIn three to four years
\u2013
2,591
130
862
3,583
(35)
39
4
3,587
\nIn four to five years
\u2013
2,970
96
233
3,299
(118)
111
(7)
3,292
\nIn more than five years
\u2013
19,727
221
2,212
22,160
(1,521)
1,480
(41)
22,119
\n387
38,158
1,076
26,504
66,125
(14,555)
14,549
(6)
66,119
\nEffect of interest
\u2013
(8,609)
\u2013
\u2013
(8,609)
299
(325)
(26)
(8,635)
\nEffect of discounting, fair values and issue costs
\u2013
(142)
(89)
(2,633)
(2,864)
(36)
7
(29)
(2,893)
\n31\u00a0December\u00a02021
387
29,407
987
23,871
54,652
(14,292)
14,231
(61)
54,591
\nBank
Total
Derivative
Derivative
Total
\noverdrafts
Trade non-derivative
financial
financial
derivative
\nand other
Bonds and
Lease
and other
financial
instruments
instruments
financial
\nloans
bank loans
liability
payables
instruments
receivable
payable
instruments
Total
\n$m
$m
$m
$m
$m
$m
$m
$m
$m
\nWithin one year
365
5,777
249
19,065
25,456
(12,445)
12,478
33
25,489
\nIn one to two years
\u2013
5,233
208
2,086
7,527
(1,012)
1,078
66
7,593
\nIn two to three years
\u2013
2,608
172
872
3,652
(34)
38
4
3,656
\nIn three to four years
\u2013
2,983
128
595
3,706
(103)
103
\u2013
3,706
\nIn four to five years
\u2013
1,267
84
814
2,165
(32)
35
3
2,168
\nIn more than five years
\u2013
18,156
184
3,177
21,517
(1,436)
1,378
(58)
21,459
\n365
36,024
1,025
26,609
64,023
(15,062)
15,110
48
64,071
\nEffect of interest
(15)
(7,982)
\u2013
\u2013
(7,997)
227
(249)
(22)
(8,019)
\nEffect of discounting, fair values and issue costs
\u2013
(113)
(72)
(3,299)
(3,484)
63
7
70
(3,414)
\n31\u00a0December\u00a02022
350
27,929
953
23,310
52,542
(14,772)
14,868
96
52,638
\nWhere interest payments are on a \ufb02oating rate basis, it is assumed that rates will remain unchanged from the last business day of each year ended
\n31 December.
\nThe Group has $2bn of bank loans that mature in July 2023 and $2bn of bank loans that mature in July 2024, which the Group can repay before
\nmaturity at face value. Other than that, it is not expected that the cash \ufb02ows in the maturity pro\ufb01le could occur signi\ufb01cantly earlier or at signi\ufb01cantly
\ndifferent amounts, with the exception of $2,222m of contingent consideration held within Trade and other payables (see Note 20).
\nMarket risk
\nInterest rate risk
\nThe Group maintains a Board-approved mix of \ufb01xed and \ufb02oating rate debt and uses underlying debt, interest rate swaps and forward rate agreements
\nto manage this mix.
\nAt 31 December 2022, interest rate swaps with a notional value of $288m are fair valued through pro\ufb01t or loss and this has effectively converted the
\n7% guaranteed debentures payable in 2023 to \ufb02oating rates. No new interest rate swaps were entered into during 2022.
\nThe majority of surplus cash is currently invested in US dollar liquidity funds and investment-grade \ufb01xed income securities.
\nThe interest rate pro\ufb01le of the Group\u2019s interest-bearing \ufb01nancial instruments are set out below. In the case of current and non-current \ufb01nancial
\nliabilities, the classi\ufb01cation includes the impact of interest rate swaps which convert the debt to \ufb02oating rate.
\n2022
2021
2020
\nFixed rate
Floating rate
Total
Fixed rate
Floating rate
Total
Fixed rate
Floating rate
Total
\n$m
$m
$m
$m
$m
$m
$m
$m
$m
\nFinancial liabilities
\nInterest-bearing loans and borrowings
\nCurrent
2,476
3,066
5,542
1,232
661
1,893
1,357
1,029
2,386
\nNon-current
21,511
2,179
23,690
23,985
4,903
28,888
17,005
989
17,994
\nTotal
23,987
5,245
29,232
25,217
5,564
30,781
18,362
2,018
20,380
\nFinancial assets
\nFixed deposits
64
\u2013
64
53
\u2013
53
42
\u2013
42
\nCash collateral pledged to counterparties
\u2013
162
162
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\nCash and cash equivalents
250
5,916
6,166
\u2013
6,329
6,329
\u2013
7,832
7,832
\nTotal
314
6,078
6,392
53
6,329
6,382
42
7,832
7,874
\nIn addition to the \ufb01nancial assets above, there are $9,546m (2021: $8,765m; 2020: $6,328m) of other current and non-current asset investments
\nand other \ufb01nancial assets. Of these, $nil receive \ufb02oating rate interest (2021: $nil; 2020: $nil).
The Group is also exposed to market risk on other investments.
\n2022
2021
2020
\n$m
$m\u00a0
$m
\nEquity securities at fair value through Other comprehensive income (Note\u00a012)
1,056
1,168
1,108
\nNon-current fixed income securities at fair value through profit and loss (Note 12)
10
\u2013
\u2013
\nTotal
1,066
1,168
1,108
\nForeign currency risk
\nThe US dollar is the Group\u2019s most signi\ufb01cant currency. As a consequence, the Group results are presented in US dollars and exposures are managed
\nagainst US dollars accordingly.
\nTranslational
\nApproximately 61% of Group external sales in 2022 were denominated in currencies other than the US dollar, while a signi\ufb01cant proportion of
\nmanufacturing, and research and development costs were denominated in pounds sterling and Swedish krona. Surplus cash generated by business
\nunits is substantially converted to, and held centrally in, US dollars. As a result, operating pro\ufb01t and total cash \ufb02ow in US dollars will be affected
\nby movements in exchange rates.
\nThis currency exposure is managed centrally, based on forecast cash \ufb02ows. The impact of movements in exchange rates is mitigated signi\ufb01cantly
\nby the correlations which exist between the major currencies to which the Group is exposed and the US dollar. Monitoring of currency exposures
\nand correlations is undertaken on a regular basis and hedging is subject to pre-execution approval.
\nAs at 31 December 2022, before the impact of derivatives, 2% of interest-bearing loans and borrowings were denominated in pounds sterling and
\n9% were denominated in euros. Where there is non-US dollar debt and an underlying net investment of that amount in the same currency, the Group
\napplies net investment hedging. Exchange differences on the retranslation of debt designated as net investment hedges are recognised in Other
\ncomprehensive income to the extent that the hedge is effective. Any ineffectiveness is taken to pro\ufb01t. For details of non-US dollar debt in a
\ndesignated hedging relationship please see the Hedge accounting section within this Note 28 from page 188.
\nThe Group holds cross-currency swaps to hedge against the impact of \ufb02uctuations in foreign exchange rates. Fair value movements on the revaluation
\nof the cross-currency swaps are recognised in Other comprehensive income to the extent that the hedge is effective, with any ineffectiveness taken
\nto pro\ufb01t.
\nAs at 31 December 2022, the Group operates in three countries designated as hyperin\ufb02ationary, being Argentina, Venezuela and Turkey. The foreign
\nexchange risk of these markets has been assessed and deemed to be immaterial.
\nTransactional
\nThe Group aims to hedge all its forecasted major transactional currency exposures on working capital balances, which typically extend for up to three
\nmonths. Where practicable, these are hedged using forward foreign exchange contracts. In addition, external dividend payments in pounds sterling
\nto UK shareholders and in Swedish krona to Swedish shareholders are fully hedged from announcement date to payment date. Foreign exchange
\ngains and losses on forward contracts transacted for transactional hedging are taken to pro\ufb01t or to Other comprehensive income if the contract is
\nin a designated cash\ufb02ow hedge.
\nSensitivity analysis
\nThe sensitivity analysis set out below summarises the sensitivity of the market value of our \ufb01nancial instruments to hypothetical changes in market
\nrates and prices. The range of variables chosen for the sensitivity analysis re\ufb02ects our view of changes which are reasonably possible over a one-year
\nperiod. Market values are the present value of future cash \ufb02ows based on market rates and prices at the valuation date. For long-term debt, an
\nincrease in interest rates results in a decline in the fair value of debt.
\nThe sensitivity analysis assumes an instantaneous 100 basis point change in interest rates in all currencies from their levels at 31 December 2022,
\nwith all other variables held constant. Based on the composition of our long-term debt portfolio and cash reserves as at 31 December 2022, a 1%
\nincrease in interest rates would result in an additional $52m in interest expense on the debt and an additional $59m interest income on the cash
\nreserves. The exchange rate sensitivity analysis assumes an instantaneous 10% change in foreign currency exchange rates from their levels at
\n31 December 2022, with all other variables held constant. The +10% case assumes a 10% strengthening of the US dollar against all other currencies
\nand the -10% case assumes a 10% weakening of the US dollar.
\nEach incremental 10% movement in foreign currency exchange rates would have approximately the same effect as the initial 10% detailed in the
\ntable below and each incremental 1% change in interest rates would have approximately the same effect as the 1% detailed in the table below.
\nInterest rates
Exchange rates
\n31\u00a0December\u00a02020
+1%
-1%
+10%
-10%
\nIncrease/(decrease) in fair value of financial instruments ($m)
1,696
(1,758)
114
(132)
\nImpact on profit: (loss)/gain ($m)
\u2013
\u2013
(57)
74
\nImpact on equity: gain/(loss) ($m)
\u2013
\u2013
171
(206)
\nInterest rates
Exchange rates
\n31\u00a0December\u00a02021
+1%
-1%
+10%
-10%
\nIncrease/(decrease) in fair value of financial instruments ($m)
1,978
(2,106)
82
(85)
\nImpact on profit: gain/(loss) ($m)
\u2013
\u2013
24
(9)
\nImpact on equity: gain/(loss) ($m)
\u2013
\u2013
58
(76)
Interest rates
Exchange rates
\n31\u00a0December\u00a02022
+1%
-1%
+10%
-10%
\nIncrease/(decrease) in fair value of financial instruments ($m)
1,317
(1,490)
81
(89)
\nImpact on profit: gain/(loss) ($m)
\u2013
\u2013
26
(15)
\nImpact on equity: gain/(loss) ($m)
\u2013
\u2013
55
(74)
\nCredit risk
\nThe Group is exposed to credit risk on \ufb01nancial assets, such as cash investments, derivative instruments, and Trade and other receivables. The Group
\nis also exposed in its Net asset position to its own credit risk in respect of the 2023 debentures which are accounted for at fair value through pro\ufb01t
\nor loss. Under IFRS 9, the effect of the losses and gains arising from own credit risk on the fair value of bonds designated at fair value through pro\ufb01t
\nor loss are recorded in Other comprehensive income.
\nFinancial counterparty credit risk
\nThe majority of the AstraZeneca Group\u2019s cash is centralised within the Group treasury entity and is subject to counterparty risk on the principal
\ninvested. The level of the Group\u2019s cash investments and hence credit risk will depend on the cash \ufb02ow generated by the Group and the timing of
\nthe use of that cash. The credit risk is mitigated through a policy of prioritising security and liquidity over return and, as such, cash is only invested
\nin high credit-quality investments. Counterparty limits are set according to the assessed risk of each counterparty and exposures are monitored
\nagainst these limits on a regular basis.
\nThe Group\u2019s principal \ufb01nancial counterparty credit risks at 31 December 2022 were as follows:
\nCurrent assets
\n2022
2021
2020
\n$m
$m\u00a0
$m
\nCash at bank and in hand
1,411
1,461
1,182
\nMoney market liquidity funds
4,486
4,772
6,602
\nOther short-term cash equivalents
269
96
48
\nTotal Cash and cash equivalents (Note\u00a017)
6,166
6,329
7,832
\nFixed income securities at fair value through profit and loss (Note\u00a012)
13
16
118
\nCash collateral pledged to counterparties (Note 12)
162
\u2013
\u2013
\nFixed deposits (Note\u00a012)
64
53
42
\nTotal derivative financial instruments (Note\u00a013)
87
83
142
\nCurrent assets subject to credit risk
6,492
6,481
8,134
\nNon-current assets
\n2022
2021
2020
\n$m
$m\u00a0
$m
\nDerivative financial instruments (Note\u00a013)
74
102
171
\nNon-current assets subject to credit risk
74
102
171
\nThe majority of the Group\u2019s cash is invested in US dollar AAA rated money market liquidity funds. The money market liquidity fund portfolios are
\nmanaged by \ufb01ve external third-party fund managers to maintain an AAA rating. The Group\u2019s investments represent no more than 10% of each
\noverall fund value. There were no other signi\ufb01cant concentrations of \ufb01nancial credit risk at the reporting date.
\nAll \ufb01nancial derivatives are transacted with commercial banks, in line with standard market practice. The Group has agreements with some bank
\ncounterparties whereby the parties agree to post cash collateral, for the bene\ufb01t of the other, equivalent to the market valuation of the derivative
\npositions above a predetermined threshold. The carrying value of such cash collateral held by the Group at 31 December 2022 was $89m (2021: $93m;
\n2020: $288m) and the carrying value of such cash collateral posted by the Group at 31 December 2022 was $162m (2021: $47m; 2020: $11m).
\nThe impairment provision for other \ufb01nancial assets at 31 December 2022 was immaterial.
\nTrade receivables
\nTrade receivable exposures are managed locally in the operating units where they arise and credit limits are set as deemed appropriate for the
\ncustomer. The Group is exposed to customers ranging from government-backed agencies and large private wholesalers to privately owned pharmacies,
\nand the underlying local economic and sovereign risks vary throughout the world. Where appropriate, the Group endeavours to minimise risks by
\nthe use of trade \ufb01nance instruments such as letters of credit and insurance. The Group applies the expected credit loss approach to establish an
\nallowance for impairment that represents its estimate of expected losses in respect of Trade receivables.
\nThe Group applies the IFRS 9 simpli\ufb01ed approach to measuring expected credit losses which uses a lifetime expected loss allowance for all Trade
\nreceivables. To measure expected credit losses, Trade receivables have been grouped based on shared credit characteristics and the days past due.
\nThe expected loss rates are based on payment pro\ufb01les over a period of 36 months before 31 December 2022, 31 December 2021 or 31 December
\n2020 respectively and the corresponding historical credit losses experienced within this period. The historical loss rates are adjusted to re\ufb02ect current
\nand forward-looking information on macroeconomic factors affecting the ability of the customer to settle the receivables.
\nOn that basis, the loss allowance was determined as follows:
\n0-90 days
90-180 days
Over 180 days
\n31\u00a0December 2020
Current
past due
past due
past due
Total
\nExpected loss rate
0.1%
1.6%
19.4%
60.6%
\nGross carrying amount ($m)
3,659
124
21
25
3,829
\nLoss allowance ($m)
2
2
4
15
23
0-90 days
90-180 days
Over 180 days
\n31\u00a0December 2021
Current
past due
past due
past due
Total
\nExpected loss rate
0.1%
1.2%
22.6%
11.0%
\nGross carrying amount ($m)
5,617
328
18
91
6,054
\nLoss allowance ($m)
5
4
4
10
23
\n0-90 days
90-180 days
Over 180 days
\n31\u00a0December 2022
Current
past due
past due
past due
Total
\nExpected loss rate
0.03%
0.3%
32.0%
40.6%
\nGross carrying amount ($m)
6,791
331
50
99
7,271
\nLoss allowance ($m)
2
1
16
40
59
\nTrade receivables are written off where there is no reasonable expectation of recovery.
\nImpairment losses on Trade receivables are presented as net impairment losses within Operating pro\ufb01t, any subsequent recoveries are credited
\nagainst the same line.
\nIn the US, sales to three wholesalers accounted for approximately 73% of US sales (2021: three wholesalers accounted for approximately 94%;
\n2020: three wholesalers accounted for approximately 95%).
\nThe movements of the Group expected credit losses provision are follows:
\n2022
2021
2020
\n$m
$m
$m
\nAt 1\u00a0January
23
23
21
\nNet movement recognised in income statement
37
(2)
3
\nAmounts utilised, exchange and other movements
(1)
2
(1)
\nAt 31\u00a0December
59
23
23
\nGiven the pro\ufb01le of our customers, including large wholesalers and government-backed agencies, no further credit risk has been identi\ufb01ed with the
\nTrade receivables not past due other than those balances for which an allowance has been made. The income statement credit or charge is recorded
\nin Operating pro\ufb01t.
\nHedge accounting
\nThe Group uses foreign currency borrowings, foreign currency forwards and swaps, currency options, interest rate swaps and cross-currency interest
\nrate swaps for the purpose of hedging its foreign currency and interest rate risks. The Group may designate certain \ufb01nancial instruments as fair value
\nhedges, cash \ufb02ow hedges or net investment hedges in accordance with IFRS 9. Hedge effectiveness is determined at the inception of the hedge
\nrelationship, and through periodic prospective effectiveness assessments to ensure that an economic relationship exists between the hedged item
\nand hedging instrument. Sources of hedge effectiveness will depend on the hedge relationship designation but may include:
\n>
a signi\ufb01cant change in the credit risk of either party to the hedging relationship
\n>
a timing mismatch between the hedging instrument and the hedged item
\n>
movements in foreign currency basis spread for derivatives in a fair value hedge
\n>
a signi\ufb01cant change in the value of the foreign currency denominated net assets of the Group in a net investment hedge.
\nThe hedge ratio for each designation will be established by comparing the quantity of the hedging instrument and the quantity of the hedged item to
\ndetermine their relative weighting; for all of the Group\u2019s existing hedge relationships the hedge ratio has been determined as 1:1. Designated hedges
\nare expected to be effective and therefore the impact of ineffectiveness on pro\ufb01t is not expected to be material. The accounting treatment for fair
\nvalue hedges and debt designated as fair value through pro\ufb01t or loss is disclosed in the Group Accounting Policies section from page 142.
\nThe following table represents the Group\u2019s continuing designated hedge relationships under IFRS 9.
\n2020
\nOther comprehensive income
\nFair value
\nloss
\nOpening
Fair value
recycled
Closing
\nNominal
balance
(gain)/loss
to the
balance
Average
\namounts
Carrying
1\u00a0January
deferred
Income
31\u00a0December
Average
Average
pay
\nin local
value
2020
to OCI
statement
2020
maturity
USD FX
interest
\ncurrency
$m
$m
$m
$m
$m
year
rate
rate
\nFair value hedge \u2013 foreign currency and interest rate risk
\n1
\nUSD LIBOR
\n+ 1.27%
Cross currency interest rate swap \u2013 Euro bond
EUR 300m
43
\u2013
\u2013
\u2013
\u2013
2021
1.09
\nCash flow hedges \u2013 foreign currency and interest rate risk
\n2, 4, 5
\nCross currency interest rate swaps \u2013 Euro bonds
EUR 2,200m
150
(30)
(163)
239
46
2025
1.14
USD 2.69%
\nFX Forwards \u2212 short term FX risk
USD 618m
5
\u2013
(20)
15
(5)
2021
\u2013
\u2013
\nNet investment hedge \u2013 foreign exchange risk
\n3, 4
\nTransactions matured pre-2020
\u2013
(565)
\u2013
\u2013
(565)
\u2013
\u2013
\u2013
\nCross currency interest rate swap \u2013 JPY investment
JPY 58.5bn
19
(4)
(15)
\u2013
(19)
2029
108.03
JPY 1.53%
\nCross currency interest rate swap \u2013 CNY investment
CNY 458m
(2)
1
1
\u2013
2
2026
6.68
CNY 4.80%
\nForeign currency borrowing \u2013 GBP investment
GBP 350m
(475)
(251)
18
\u2013
(233)
2031
n/a
GBP 5.75%
\nForeign currency borrowing \u2013 EUR investment
\n6
\nEUR 450m
(548)
34
51
\u2013
85
2021
n/a
EUR 0.88%
\nContingent consideration liabilities and Acerta Pharma
\nput\u00a0option liability \u2013 AZUK and AZAB USD investments
USD 5,252m
(5,252)
2,053
(642)
\u2013
1,411
\u2013
\u2013
\u2013
2021
\nOther comprehensive income
\nFair value
\nloss
\nOpening
Fair value
recycled
Closing
\nNominal
balance
(gain)/loss
to the
balance
Average
\namounts
Carrying
1\u00a0January
deferred
Income
31\u00a0December
Average
Average
pay
\nin local
value
2021
to OCI
statement
2021
maturity
USD FX
interest
\ncurrency
$m
$m
$m
$m
$m
year
rate
rate
\nCash flow hedges \u2013 foreign currency and interest rate risk
\n2, 4, 5
\nCross currency interest rate swaps \u2013 Euro bonds
EUR 1,700m
(43)
46
182
(201)
27
2026
1.14
USD 2.85%
\nFX Forwards \u2212 short term FX risk
USD 1,220m
12
(5)
\u2013
(7)
(12)
2022
\u2013
\u2013
\nNet investment hedge \u2013 foreign exchange risk
\n3, 4
\nTransactions matured pre-2021
\u2013
(565)
\u2013
\u2013
(565)
\u2013
\u2013
\u2013
\nCross currency interest rate swap \u2013 JPY investment
JPY 58.3bn
62
(19)
(43)
\u2013
(62)
2029
108.03
JPY 1.53%
\nCross currency interest rate swap \u2013 CNY investment
CNY 458m
(2)
2
\u2013
\u2013
2
2026
6.68
CNY 4.80%
\nForeign currency borrowing \u2013 GBP investment
GBP 350m
470
(233)
(5)
\u2013
(238)
2031
n/a
GBP 5.75%
\nForeign currency borrowing \u2013 EUR investment
\n6
\nEUR 450m
\u2013
85
(47)
\u2013
38
2021
n/a
EUR 0.88%
\nForeign currency borrowing \u2013 EUR investment
\n7
\nEUR 800m
898
\u2013
(50)
\u2013
(50)
2029
n/a
EUR 0.38%
\nContingent consideration liabilities and Acerta Pharma share
\npurchase liability \u2013 AZUK and AZAB USD investments
USD 2,658m
(2,658)
1,411
421
\u2013
1,832
\u2013
\u2013
\u2013
\n2022
\nOther comprehensive income
\nFair value
\n(gain)/loss
\nOpening
Fair value
recycled
Closing
\nNominal
balance
(gain)/loss
to the
balance
Average
\namounts
Carrying
1\u00a0January
deferred
Income
31\u00a0December
Average
Average
pay
\nin local
value
2022
to OCI
statement
2022
maturity
USD FX
interest
\ncurrency
$m
$m
$m
$m
$m
year
rate
rate
\nCash flow hedges \u2013 foreign currency and interest rate risk
\n2, 4, 5
\nCross currency interest rate swaps \u2013 Euro bonds
EUR 1,700m
(160)
27
118
(111)
34
2026
1.14
USD 2.85%
\nFX Forwards \u2212 short term FX risk
USD 1,126m
(12)
(12)
(14)
38
12
2023
\u2013
\u2013
\nNet investment hedge \u2013 foreign exchange risk
\n3, 4
\nTransactions matured pre-2022
\u2013
(527)
\u2013
\u2013
(527)
\u2013
\u2013
\u2013
\nCross currency interest rate swap \u2013 JPY investment
JPY 58.3bn
55
(62)
7
\u2013
(55)
2029
108.03
JPY 1.53%
\nCross currency interest rate swap \u2013 CNY investment
CNY 458m
(4)
2
2
\u2013
4
2026
6.68
CNY 4.80%
\nForeign currency borrowing \u2013 GBP investment
GBP 350m
420
(238)
(50)
\u2013
(288)
2031
n/a
GBP 5.75%
\nForeign currency borrowing \u2013 EUR investment
\n7
\nEUR 800m
846
(50)
(52)
\u2013
(102)
2029
n/a
EUR 0.38%
\nContingent consideration liabilities and Acerta Pharma
\nshare\u00a0purchase liability \u2013 AZUK and AZAB USD investments
USD 2,093m
(2,093)
1,832
384
\u2013
2,216
\u2013
\u2013
\u2013
\n1
Swaps designated in a fair value hedge matured on 24 November 2021 and hedge ineffectiveness during 2022 was $nil (2021: $nil; 2020: gain of $1m).
\n2
Hedge ineffectiveness recognised on swaps designated in a cash flow hedge during the period was $nil (2021: $nil; 2020: $nil).
\n3
Hedge ineffectiveness recognised on swaps designated in a net investment hedge during the period was $nil (2021: $nil; 2020: $nil).
\n4
Fair value movements on cross-currency interest rate swaps in cash flow hedge and net investment hedge relationships are shown inclusive of the impact of costs of hedging.
\n5
Nominal amount of FX forwards in a cash flow hedge of $1,710m represents the USD equivalent notional of the FX forwards. By currency, the nominal amounts were SEK 8,148m at FX rate
\n10.4568, JPY 18,963m at 132.15, GBP 455m at 0.8288 and EUR 224m at 0.9389. All FX forwards in a cash flow hedge mature on 25 January 2023.
\n6
The EUR 450m NIH matured in November 2021, when the hedging instrument, a EUR bond matured.
\n7
On 3 June 2021, upon issuance of the EUR 800m 0.375% 2029 Non-callable bond, EUR 550m was designated in a net investment hedge of the foreign currency exposure in relation of an equivalent
\namount of EUR-denominated net assets. The remaining EUR 250m was subsequently designated in a net investment hedge upon maturity of the EUR 450m bond on 24 November 2021.
\nKey controls applied to transactions in derivative \ufb01nancial instruments are to use only instruments where good market liquidity exists, to revalue all
\n\ufb01nancial instruments regularly using current market rates and to sell options only to offset previously purchased options or as part of a risk management
\nstrategy. The Group is not a net seller of options, and does not use derivative \ufb01nancial instruments for speculative purposes. The Group held no
\noptions during the reporting period.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForDerivativeFinancialInstrumentsAndHedgingExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f24739": {
"value": "Derivatives \nDerivatives are initially measured at fair value
\n(with direct transaction costs being included
\nin pro\ufb01t as an expense) and are subsequently
\nremeasured to fair value at each reporting
\ndate. Changes in carrying value of derivatives
\nnot designated in hedging relationships are
\nrecognised in pro\ufb01t or loss.
\nThe Group has agreements with some bank
\ncounterparties whereby the parties agree to
\npost cash collateral, for the bene\ufb01t of the other,
\nequivalent to the market valuation of all of the
\nderivative positions above a predetermined
\nthreshold. Cash collateral received from
\ncounterparties is included within current
\nInterest-bearing loans and borrowings within the
\nConsolidated Statement of Financial Position.
\nCash collateral pledged to counterparties is
\nrecognised as a \ufb01nancial asset and is included
\nin current Other investments within the
\nConsolidated Statement of Financial Position.
\nIn prior years, cash collateral pledged to
\ncounterparties was included in Cash and
\ncash equivalents. Cash collateral received is
\nincluded in Movement in short-term borrowings
\nwithin \ufb01nancing activities in the Consolidated
\nCash Flow Statement. Cash collateral paid
\nis included in Movements in short-term
\ninvestments within investing activities in the
\nConsolidated Cash Flow Statement. The cash
\n\ufb02ow presentation of cash paid and received
\nfollows the Consolidated Statement of
\nFinancial Position presentation of the \ufb01nancial
\nasset and \ufb01nancial liability that is recognised
\nfrom posting the collateral.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForDerivativeFinancialInstrumentsExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f24740": {
"value": "Derivatives \nDerivatives are initially measured at fair value
\n(with direct transaction costs being included
\nin pro\ufb01t as an expense) and are subsequently
\nremeasured to fair value at each reporting
\ndate. Changes in carrying value of derivatives
\nnot designated in hedging relationships are
\nrecognised in pro\ufb01t or loss.
\nThe Group has agreements with some bank
\ncounterparties whereby the parties agree to
\npost cash collateral, for the bene\ufb01t of the other,
\nequivalent to the market valuation of all of the
\nderivative positions above a predetermined
\nthreshold. Cash collateral received from
\ncounterparties is included within current
\nInterest-bearing loans and borrowings within the
\nConsolidated Statement of Financial Position.
\nCash collateral pledged to counterparties is
\nrecognised as a \ufb01nancial asset and is included
\nin current Other investments within the
\nConsolidated Statement of Financial Position.
\nIn prior years, cash collateral pledged to
\ncounterparties was included in Cash and
\ncash equivalents. Cash collateral received is
\nincluded in Movement in short-term borrowings
\nwithin \ufb01nancing activities in the Consolidated
\nCash Flow Statement. Cash collateral paid
\nis included in Movements in short-term
\ninvestments within investing activities in the
\nConsolidated Cash Flow Statement. The cash
\n\ufb02ow presentation of cash paid and received
\nfollows the Consolidated Statement of
\nFinancial Position presentation of the \ufb01nancial
\nasset and \ufb01nancial liability that is recognised
\nfrom posting the collateral.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForCollateralExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f24783": {
"value": "Foreign currencies \nForeign currency transactions, being
\ntransactions denominated in a currency other
\nthan an individual Group entity\u2019s functional
\ncurrency, are translated into the relevant
\nfunctional currencies of individual Group entities
\nat average rates for the relevant monthly
\naccounting periods, which approximate to
\nactual rates.
\nMonetary assets and liabilities arising from
\nforeign currency transactions are retranslated
\nat exchange rates prevailing at the reporting
\ndate. Exchange gains and losses on loans and
\non short-term foreign currency borrowings
\nand deposits are included within Finance
\nexpense. Exchange differences on all other
\nforeign currency transactions are recognised
\nin Operating pro\ufb01t in the individual Group
\nentity\u2019s accounting records.
\n147
AstraZeneca Annual Report & Form 20-F Information 2022
Group Accounting Policies
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
\n\nNon-monetary items arising from foreign
\ncurrency transactions are not retranslated in the
\nindividual Group entity\u2019s accounting records.
\nIn the Consolidated Financial Statements,
\nincome and expense items for Group entities
\nwith a functional currency other than US dollars
\nare translated into US dollars at average
\nexchange rates, which approximate to actual
\nrates, for the relevant accounting periods.
\nAssets and liabilities are translated at the
\nUS dollar exchange rates prevailing at the
\nreporting date. Exchange differences arising
\non consolidation are recognised in Other
\ncomprehensive income.
\nIf certain criteria are met, non-US dollar-
\ndenominated loans or derivatives are designated
\nas net investment hedges of foreign operations.
\nExchange differences arising on retranslation
\nof net investments, and of foreign currency
\nloans which are designated in an effective net
\ninvestment hedge relationship, are recognised
\nin Other comprehensive income in the
\nConsolidated Financial Statements. Foreign
\nexchange derivatives hedging net investments
\nin foreign operations are carried at fair value.
\nEffective fair value movements are recognised
\nin Other comprehensive income, with any
\nineffectiveness taken to pro\ufb01t. Gains and
\nlosses accumulated in the translation reserve
\nwill be recycled to pro\ufb01t and loss when the
\nforeign operation is sold.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForForeignCurrencyTranslationExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f24784": {
"value": "Foreign currencies \nForeign currency transactions, being
\ntransactions denominated in a currency other
\nthan an individual Group entity\u2019s functional
\ncurrency, are translated into the relevant
\nfunctional currencies of individual Group entities
\nat average rates for the relevant monthly
\naccounting periods, which approximate to
\nactual rates.
\nMonetary assets and liabilities arising from
\nforeign currency transactions are retranslated
\nat exchange rates prevailing at the reporting
\ndate. Exchange gains and losses on loans and
\non short-term foreign currency borrowings
\nand deposits are included within Finance
\nexpense. Exchange differences on all other
\nforeign currency transactions are recognised
\nin Operating pro\ufb01t in the individual Group
\nentity\u2019s accounting records.
\n147
AstraZeneca Annual Report & Form 20-F Information 2022
Group Accounting Policies
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
\n\nNon-monetary items arising from foreign
\ncurrency transactions are not retranslated in the
\nindividual Group entity\u2019s accounting records.
\nIn the Consolidated Financial Statements,
\nincome and expense items for Group entities
\nwith a functional currency other than US dollars
\nare translated into US dollars at average
\nexchange rates, which approximate to actual
\nrates, for the relevant accounting periods.
\nAssets and liabilities are translated at the
\nUS dollar exchange rates prevailing at the
\nreporting date. Exchange differences arising
\non consolidation are recognised in Other
\ncomprehensive income.
\nIf certain criteria are met, non-US dollar-
\ndenominated loans or derivatives are designated
\nas net investment hedges of foreign operations.
\nExchange differences arising on retranslation
\nof net investments, and of foreign currency
\nloans which are designated in an effective net
\ninvestment hedge relationship, are recognised
\nin Other comprehensive income in the
\nConsolidated Financial Statements. Foreign
\nexchange derivatives hedging net investments
\nin foreign operations are carried at fair value.
\nEffective fair value movements are recognised
\nin Other comprehensive income, with any
\nineffectiveness taken to pro\ufb01t. Gains and
\nlosses accumulated in the translation reserve
\nwill be recycled to pro\ufb01t and loss when the
\nforeign operation is sold.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForFunctionalCurrencyExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f24865": {
"value": "Provisions \nProvisions are recognised when either a legal
\nor constructive obligation as a result of a past
\nevent exists at the Consolidated Statement of
\nFinancial Position date, it is probable that an
\nout\ufb02ow of economic resources will be required
\nto settle the obligation and a reasonable
\nestimate can be made of the amount of the
\nobligation (the timing or amount of the liability
\nis uncertain).",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForProvisionsExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f24927": {
"value": "Impairment \nThe carrying values of non-\ufb01nancial assets,
\nother than Inventories and Deferred tax assets,
\nare reviewed at least annually to determine
\nwhether there is any indication of impairment.
\nFor Goodwill, Intangible assets under
\ndevelopment and for any other assets where
\nsuch indication exists, the asset\u2019s recoverable
\namount is estimated based on the greater of
\nits value in use and its fair value less cost to
\nsell. In assessing the recoverable amount, the
\nestimated future cash \ufb02ows, adjusted for the
\nrisks associated with the probability of success
\nspeci\ufb01c to each asset, as well as in\ufb02ationary
\nimpacts, are discounted to their present value
\nusing a nominal discount rate that re\ufb02ects
\ncurrent market assessments of the time value
\nof money, the general risks affecting the
\npharmaceutical industry and other risks
\nspeci\ufb01c to each asset. For the purpose of
\nimpairment testing, assets are grouped
\ntogether into the smallest group of assets that
\ngenerates cash in\ufb02ows from continuing use
\nthat are largely independent of the cash \ufb02ows
\nof other assets. Impairment losses are
\nrecognised immediately in the Consolidated
\nStatement of Comprehensive Income.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfNonfinancialAssetsExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f24928": {
"value": "Impairment \nThe carrying values of non-\ufb01nancial assets,
\nother than Inventories and Deferred tax assets,
\nare reviewed at least annually to determine
\nwhether there is any indication of impairment.
\nFor Goodwill, Intangible assets under
\ndevelopment and for any other assets where
\nsuch indication exists, the asset\u2019s recoverable
\namount is estimated based on the greater of
\nits value in use and its fair value less cost to
\nsell. In assessing the recoverable amount, the
\nestimated future cash \ufb02ows, adjusted for the
\nrisks associated with the probability of success
\nspeci\ufb01c to each asset, as well as in\ufb02ationary
\nimpacts, are discounted to their present value
\nusing a nominal discount rate that re\ufb02ects
\ncurrent market assessments of the time value
\nof money, the general risks affecting the
\npharmaceutical industry and other risks
\nspeci\ufb01c to each asset. For the purpose of
\nimpairment testing, assets are grouped
\ntogether into the smallest group of assets that
\ngenerates cash in\ufb02ows from continuing use
\nthat are largely independent of the cash \ufb02ows
\nof other assets. Impairment losses are
\nrecognised immediately in the Consolidated
\nStatement of Comprehensive Income.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfAssetsExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f25029": {
"value": "1 Revenue \nProduct Sales
\n2022
2021
2020
\nEmerging
Rest of
Emerging
Rest of
Emerging
Rest of
\nMarkets
US
Europe
World
Total
Markets
US
Europe
World
Total
Markets
US
Europe
World
Total
\n$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
\nOncology:
\nTagrisso
1,567
2,007
1,023
847
5,444
1,336
1,780
986
913
5,015
1,208
1,566
748
806
4,328
\nImfinzi
287
1,552
544
401
2,784
277
1,245
485
405
2,412
158
1,185
370
329
2,042
\nLynparza
488
1,226
655
269
2,638
384
1,087
618
259
2,348
264
876
435
201
1,776
\nCalquence
45
1,657
286
69
2,057
20
1,089
111
18
1,238
6
511
2
3
522
\nEnhertu
51
\u2013
21
7
79
12
\u2013
4
1
17
\u2013
\u2013
\u2013
\u2013
\u2013
\nOrpathys
33
\u2013
\u2013
\u2013
33
16
\u2013
\u2013
\u2013
16
\u2013
\u2013
\u2013
\u2013
\u2013
\nZoladex
657
15
133
122
927
\u00a0
619
13
147
169
948
561
5
140
182
888
\nFaslodex
159
17
55
103
334
\u00a0
167
30
113
121
431
180
55
221
124
580
\nIressa
94
9
2
9
114
151
11
5
16
183
221
14
12
21
268
\nArimidex
76
\u2013
\u2013
23
99
\u00a0
106
\u2013
4
29
139
147
\u2013
3
35
185
\nCasodex
53
\u2013
1
24
78
\u00a0
105
\u2013
3
35
143
133
\u2013
3
36
172
\nOthers
27
1
6
10
44
29
\u2013
5
16
50
28
\u2013
4
19
51
\n3,537
6,484
2,726
1,884
14,631
\u00a0
3,222
5,255
2,481
1,982
12,940
2,906
4,212
1,938
1,756
10,812
\nCardiovascular, Renal & Metabolism:
\u00a0
\nFarxiga
1,665
1,071
1,297
348
4,381
\u00a0
1,195
732
810
263
3,000
686
569
507
197
1,959
\nBrilinta
286
744
282
46
1,358
\u00a0
328
735
346
63
1,472
461
732
342
58
1,593
\nLokelma
20
170
30
69
289
3
115
13
44
175
5
57
4
10
76
\nRoxadustat
197
\u2013
\u2013
\u2013
197
174
\u2013
\u2013
\u2013
174
\u2013
\u2013
\u2013
\u2013
\u2013
\nAndexxa
\u2013
77
41
32
150
\u2013
50
18
\u2013
68
\u2013
\u2013
\u2013
\u2013
\u2013
\nCrestor
794
65
41
148
1,048
\u00a0
775
80
52
189
1,096
748
92
129
211
1,180
\nSeloken
/
Toprol-XL
839
\u2013
14
9
862
\u00a0
928
1
11
11
951
782
13
16
10
821
\nBydureon
3
242
35
\u2013
280
\u00a0
3
321
55
6
385
4
382
53
9
448
\nOnglyza
121
76
38
22
257
\u00a0
179
88
61
32
360
201
166
58
45
470
\nOthers
194
34
128
10
366
\u00a0
195
52
146
14
407
316
72
119
42
549
\n4,119
2,479
1,906
684
9,188
\u00a0
3,780
2,174
1,512
622
8,088
3,203
2,083
1,228
582
7,096
\nRespiratory & Immunology:
\u00a0
\nSymbicort
608
973
582
375
2,538
\u00a0
609
1,065
670
384
2,728
567
1,022
694
438
2,721
\nFasenra
43
906
305
142
1,396
\u00a0
20
790
286
162
1,258
12
603
203
131
949
\nBreztri
92
239
33
34
398
55
115
7
26
203
14
5
\u2013
9
28
\nSaphnelo
\u2013
111
2
3
116
\u2013
8
\u2013
\u2013
8
\u2013
\u2013
\u2013
\u2013
\u2013
\nTezspire
\u2013
\u2013
2
2
4
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\nPulmicort
462
65
69
49
645
770
72
73
47
962
798
71
73
54
996
\nDaliresp
/
Daxas
3
176
9
1
189
\u00a0
4
207
15
1
227
4
190
22
1
217
\nBevespi
5
42
10
1
58
4
39
11
\u2013
54
1
44
3
\u2013
48
\nOthers
230
143
42
6
421\u00a0
287
108
185
14
594
203
6
176
13
398
\n1,443
2,655
1,054
613
5,765\u00a0
1,749
2,404
1,247
634
6,034
1,599
1,941
1,171
646
5,357
\nVaccines & Immune Therapies:
\nVaxzevria
729
79
365
625
1,798
2,240
64
1,035
578
3,917
\u2013
\u2013
2
\u2013
2
\nEvusheld
413
1,067
298
407
2,185
19
\u2013
66
\u2013
85
\u2013
\u2013
\u2013
\u2013
\u2013
\nSynagis
173
1
213
191
578
\u00a0
35
23
203
149
410
\u2013
47
325
\u2013
372
\nFluMist
1
21
151
2
175\u00a0
2
27
222
2
253
1
70
219
5
295
\n1,316
1,168
1,027
1,225
4,736
2,296
114
1,526
729
4,665
1
117
546
5
669
\nRare Disease:
\nSoliris
301
2,180
805
476
3,762
170
1,068
439
197
1,874
\u2013
\u2013
\u2013
\u2013
\u2013
\nUltomiris
38
1,136
481
310
1,965
9
381
169
129
688
\u2013
\u2013
\u2013
\u2013
\u2013
\nStrensiq
35
769
78
76
958
10
297
36
35
378
\u2013
\u2013
\u2013
\u2013
\u2013
\nKoselugo
26
162
20
\u2013
208
1
104
3
\u2013
108
\u2013
38
\u2013
\u2013
38
\nKanuma
31
77
44
8
160
7
32
20
3
62
\u2013
\u2013
\u2013
\u2013
\u2013
\n431
4,324
1,428
870
7,053
197
1,882
667
364
3,110
\u2013
38
\u2013
\u2013
38
\nOther:
\u00a0
\nNexium
568
120
46
551
1,285
\u00a0
705
128
62
431
1,326
757
169
71
495
1,492
\nOthers
220
24
77
19
340
\u00a0
212
43
109
14
378
213
78
105
30
426
\n788
144
123
570
1,625
\u00a0
917
171
171
445
1,704
970
247
176
525
1,918
\nProduct Sales
11,634
17,254
8,264
5,846
42,998
\u00a0
12,161
12,000
7,604
4,776
36,541
8,679
8,638
5,059
3,514
25,890
\n149
AstraZeneca Annual Report & Form 20-F Information 2022
Notes to the Group Financial Statements
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
\n\n\n1 Revenue
continued
\nRebates and chargebacks in the US
\nThe major market where estimates are seen as signi\ufb01cant is the US. When invoicing Product Sales in the US, we estimate the rebates and chargebacks
\nwe expect to pay and we consider there to be a signi\ufb01cant estimate associated with the rebates for Managed Care, Medicaid and Medicare Part D.
\nThe total adjustment in respect of prior year net US Product Sales revenue in 2022 was 1.3% (2021: 1.5%; 2020: 3.5%); this represents the difference
\nbetween our prior year estimates for rebates and chargebacks against actual amounts paid for the US business. The most signi\ufb01cant of these relate
\nto the Medicaid and state programmes with an adjustment in respect of prior year net US Product Sales revenue in 2022 of 0.5% (2021: 0.4%;
\n2020: 1.1%) and Managed Care and Medicare of 0.8% (2021: 0.7%; 2020: 1.5%).
\nThe adjustment in respect of the prior year net US Product Sales revenue, excluding the Rare Disease therapy area in 2022, was 1.6% (2021: 1.8%),
\nwith Medicaid and state programmes of 0.6% (2021: 0.5%) and Managed Care and Medicare of 1.1% (2021: 0.8%).
\nThese values demonstrate the level of sensitivity; further meaningful sensitivity is not able to be provided due to the large volume of variables that
\ncontribute to the overall rebates, chargebacks, returns and other revenue accruals.
\nCollaboration Revenue
\n2022
2021
2020
\n$m
$m\u00a0
$m
\nEnhertu
: alliance revenue
\n1
\n519
193
94
\nTezspire
: alliance revenue
\n1
\n79
\u2013
\u2013
\nRoxadustat: alliance revenue
\n1
\n5
6
30
\nLynparza
/
Koselugo
(MSD) \u2013 regulatory milestones
355
\u2013
160
\nLynparza
/
Koselugo
(MSD) \u2013 sales-related milestones
\u2013
400
300
\nTralokinumab: sales milestone
110
\u2013
\u2013
\nVaxzevria
: royalties
76
64
\u2013
\nOther royalty income
72
74
62
\nNexium
: sale of rights
62
75
\u2013
\nOther Collaboration Revenue
75
64
81
\n1,353
876
727
\n1
Alliance revenue (previously referred to as share of gross profits) comprises income arising from collaborative arrangements, where AstraZeneca is entitled to a share of gross profits but
\ndoes not lead on the commercialisation in the territory and so does not recognise Product Sales. Alliance revenue is included within Collaboration Revenue.
\nCollaboration Revenue includes some income that does not arise from the satisfaction of performance obligations, in particular pro\ufb01t share entitlements
\narising from product sales made by collaborators who have licenced intellectual property to AstraZeneca. $607m of Collaboration Revenue in 2022
\n(2021: $200m; 2020: $128m) relates to such income. Substantially all other Collaboration Revenue relates to performance obligations satis\ufb01ed in
\nprior periods.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfRevenueExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f25030": {
"value": "1 Revenue \nProduct Sales
\n2022
2021
2020
\nEmerging
Rest of
Emerging
Rest of
Emerging
Rest of
\nMarkets
US
Europe
World
Total
Markets
US
Europe
World
Total
Markets
US
Europe
World
Total
\n$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
\nOncology:
\nTagrisso
1,567
2,007
1,023
847
5,444
1,336
1,780
986
913
5,015
1,208
1,566
748
806
4,328
\nImfinzi
287
1,552
544
401
2,784
277
1,245
485
405
2,412
158
1,185
370
329
2,042
\nLynparza
488
1,226
655
269
2,638
384
1,087
618
259
2,348
264
876
435
201
1,776
\nCalquence
45
1,657
286
69
2,057
20
1,089
111
18
1,238
6
511
2
3
522
\nEnhertu
51
\u2013
21
7
79
12
\u2013
4
1
17
\u2013
\u2013
\u2013
\u2013
\u2013
\nOrpathys
33
\u2013
\u2013
\u2013
33
16
\u2013
\u2013
\u2013
16
\u2013
\u2013
\u2013
\u2013
\u2013
\nZoladex
657
15
133
122
927
\u00a0
619
13
147
169
948
561
5
140
182
888
\nFaslodex
159
17
55
103
334
\u00a0
167
30
113
121
431
180
55
221
124
580
\nIressa
94
9
2
9
114
151
11
5
16
183
221
14
12
21
268
\nArimidex
76
\u2013
\u2013
23
99
\u00a0
106
\u2013
4
29
139
147
\u2013
3
35
185
\nCasodex
53
\u2013
1
24
78
\u00a0
105
\u2013
3
35
143
133
\u2013
3
36
172
\nOthers
27
1
6
10
44
29
\u2013
5
16
50
28
\u2013
4
19
51
\n3,537
6,484
2,726
1,884
14,631
\u00a0
3,222
5,255
2,481
1,982
12,940
2,906
4,212
1,938
1,756
10,812
\nCardiovascular, Renal & Metabolism:
\u00a0
\nFarxiga
1,665
1,071
1,297
348
4,381
\u00a0
1,195
732
810
263
3,000
686
569
507
197
1,959
\nBrilinta
286
744
282
46
1,358
\u00a0
328
735
346
63
1,472
461
732
342
58
1,593
\nLokelma
20
170
30
69
289
3
115
13
44
175
5
57
4
10
76
\nRoxadustat
197
\u2013
\u2013
\u2013
197
174
\u2013
\u2013
\u2013
174
\u2013
\u2013
\u2013
\u2013
\u2013
\nAndexxa
\u2013
77
41
32
150
\u2013
50
18
\u2013
68
\u2013
\u2013
\u2013
\u2013
\u2013
\nCrestor
794
65
41
148
1,048
\u00a0
775
80
52
189
1,096
748
92
129
211
1,180
\nSeloken
/
Toprol-XL
839
\u2013
14
9
862
\u00a0
928
1
11
11
951
782
13
16
10
821
\nBydureon
3
242
35
\u2013
280
\u00a0
3
321
55
6
385
4
382
53
9
448
\nOnglyza
121
76
38
22
257
\u00a0
179
88
61
32
360
201
166
58
45
470
\nOthers
194
34
128
10
366
\u00a0
195
52
146
14
407
316
72
119
42
549
\n4,119
2,479
1,906
684
9,188
\u00a0
3,780
2,174
1,512
622
8,088
3,203
2,083
1,228
582
7,096
\nRespiratory & Immunology:
\u00a0
\nSymbicort
608
973
582
375
2,538
\u00a0
609
1,065
670
384
2,728
567
1,022
694
438
2,721
\nFasenra
43
906
305
142
1,396
\u00a0
20
790
286
162
1,258
12
603
203
131
949
\nBreztri
92
239
33
34
398
55
115
7
26
203
14
5
\u2013
9
28
\nSaphnelo
\u2013
111
2
3
116
\u2013
8
\u2013
\u2013
8
\u2013
\u2013
\u2013
\u2013
\u2013
\nTezspire
\u2013
\u2013
2
2
4
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\nPulmicort
462
65
69
49
645
770
72
73
47
962
798
71
73
54
996
\nDaliresp
/
Daxas
3
176
9
1
189
\u00a0
4
207
15
1
227
4
190
22
1
217
\nBevespi
5
42
10
1
58
4
39
11
\u2013
54
1
44
3
\u2013
48
\nOthers
230
143
42
6
421\u00a0
287
108
185
14
594
203
6
176
13
398
\n1,443
2,655
1,054
613
5,765\u00a0
1,749
2,404
1,247
634
6,034
1,599
1,941
1,171
646
5,357
\nVaccines & Immune Therapies:
\nVaxzevria
729
79
365
625
1,798
2,240
64
1,035
578
3,917
\u2013
\u2013
2
\u2013
2
\nEvusheld
413
1,067
298
407
2,185
19
\u2013
66
\u2013
85
\u2013
\u2013
\u2013
\u2013
\u2013
\nSynagis
173
1
213
191
578
\u00a0
35
23
203
149
410
\u2013
47
325
\u2013
372
\nFluMist
1
21
151
2
175\u00a0
2
27
222
2
253
1
70
219
5
295
\n1,316
1,168
1,027
1,225
4,736
2,296
114
1,526
729
4,665
1
117
546
5
669
\nRare Disease:
\nSoliris
301
2,180
805
476
3,762
170
1,068
439
197
1,874
\u2013
\u2013
\u2013
\u2013
\u2013
\nUltomiris
38
1,136
481
310
1,965
9
381
169
129
688
\u2013
\u2013
\u2013
\u2013
\u2013
\nStrensiq
35
769
78
76
958
10
297
36
35
378
\u2013
\u2013
\u2013
\u2013
\u2013
\nKoselugo
26
162
20
\u2013
208
1
104
3
\u2013
108
\u2013
38
\u2013
\u2013
38
\nKanuma
31
77
44
8
160
7
32
20
3
62
\u2013
\u2013
\u2013
\u2013
\u2013
\n431
4,324
1,428
870
7,053
197
1,882
667
364
3,110
\u2013
38
\u2013
\u2013
38
\nOther:
\u00a0
\nNexium
568
120
46
551
1,285
\u00a0
705
128
62
431
1,326
757
169
71
495
1,492
\nOthers
220
24
77
19
340
\u00a0
212
43
109
14
378
213
78
105
30
426
\n788
144
123
570
1,625
\u00a0
917
171
171
445
1,704
970
247
176
525
1,918
\nProduct Sales
11,634
17,254
8,264
5,846
42,998
\u00a0
12,161
12,000
7,604
4,776
36,541
8,679
8,638
5,059
3,514
25,890
\n149
AstraZeneca Annual Report & Form 20-F Information 2022
Notes to the Group Financial Statements
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
\n\n\n1 Revenue
continued
\nRebates and chargebacks in the US
\nThe major market where estimates are seen as signi\ufb01cant is the US. When invoicing Product Sales in the US, we estimate the rebates and chargebacks
\nwe expect to pay and we consider there to be a signi\ufb01cant estimate associated with the rebates for Managed Care, Medicaid and Medicare Part D.
\nThe total adjustment in respect of prior year net US Product Sales revenue in 2022 was 1.3% (2021: 1.5%; 2020: 3.5%); this represents the difference
\nbetween our prior year estimates for rebates and chargebacks against actual amounts paid for the US business. The most signi\ufb01cant of these relate
\nto the Medicaid and state programmes with an adjustment in respect of prior year net US Product Sales revenue in 2022 of 0.5% (2021: 0.4%;
\n2020: 1.1%) and Managed Care and Medicare of 0.8% (2021: 0.7%; 2020: 1.5%).
\nThe adjustment in respect of the prior year net US Product Sales revenue, excluding the Rare Disease therapy area in 2022, was 1.6% (2021: 1.8%),
\nwith Medicaid and state programmes of 0.6% (2021: 0.5%) and Managed Care and Medicare of 1.1% (2021: 0.8%).
\nThese values demonstrate the level of sensitivity; further meaningful sensitivity is not able to be provided due to the large volume of variables that
\ncontribute to the overall rebates, chargebacks, returns and other revenue accruals.
\nCollaboration Revenue
\n2022
2021
2020
\n$m
$m\u00a0
$m
\nEnhertu
: alliance revenue
\n1
\n519
193
94
\nTezspire
: alliance revenue
\n1
\n79
\u2013
\u2013
\nRoxadustat: alliance revenue
\n1
\n5
6
30
\nLynparza
/
Koselugo
(MSD) \u2013 regulatory milestones
355
\u2013
160
\nLynparza
/
Koselugo
(MSD) \u2013 sales-related milestones
\u2013
400
300
\nTralokinumab: sales milestone
110
\u2013
\u2013
\nVaxzevria
: royalties
76
64
\u2013
\nOther royalty income
72
74
62
\nNexium
: sale of rights
62
75
\u2013
\nOther Collaboration Revenue
75
64
81
\n1,353
876
727
\n1
Alliance revenue (previously referred to as share of gross profits) comprises income arising from collaborative arrangements, where AstraZeneca is entitled to a share of gross profits but
\ndoes not lead on the commercialisation in the territory and so does not recognise Product Sales. Alliance revenue is included within Collaboration Revenue.
\nCollaboration Revenue includes some income that does not arise from the satisfaction of performance obligations, in particular pro\ufb01t share entitlements
\narising from product sales made by collaborators who have licenced intellectual property to AstraZeneca. $607m of Collaboration Revenue in 2022
\n(2021: $200m; 2020: $128m) relates to such income. Substantially all other Collaboration Revenue relates to performance obligations satis\ufb01ed in
\nprior periods.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfRevenueFromContractsWithCustomersExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f25989": {
"value": "2 Operating pro\ufb01t
\nOperating pro\ufb01t includes the following signi\ufb01cant items:
\nCost of sales
\nIn 2022, Cost of sales includes a charge of $3,484m (2021: charge of $2,198m) in relation to the release, in line with sales, of fair value uplift to inventory
\nthat was recognised under IFRS 3 \u2018Business Combinations\u2019 upon the acquisition of Alexion (see Note 27).
\nDuring the year no government grants were recognised within Cost of sales (2021: $290m; 2020: $nil). The grants recognised in 2021 related to
\nfunding of manufactured
Vaxzevria
product for the US government, which expired prior to being accepted by the FDA.
\nSelling, general and administrative expense
\nIn 2022, Selling, general and administrative expense includes a charge of $182m (2021: charge of $42m; 2020: credit of $51m) resulting from changes
\nin the fair value of contingent consideration arising from the acquisition of the diabetes alliance from BMS. These adjustments re\ufb02ect revised estimates
\nfor future sales performance for the products acquired and, as a result, revised estimates for future royalties payable.
\nIn 2022, Selling, general and administrative costs includes a credit of $49m (2021: charge of $5m; 2020: credit of $143m) resulting from changes in
\nthe fair value of contingent consideration arising from the acquisition of Almirall\u2019s respiratory business. These adjustments re\ufb02ect revised estimates
\nfor future sales performance for the products acquired and, as a result, revised estimates for future milestones payable.
\nIn 2022, Selling, general and administrative expense also includes a charge of $789m (2021: charge of $48m; 2020: credit of $9m) relating to a number
\nof legal proceedings including settlements in various jurisdictions in relation to several marketed products (see Note 30).
\nResearch and development expense: Government grants
\nDuring the year $113m (2021: $531m; 2020: $222m) of government grants were recognised within Research and development expense. The grants
\nrecognised relate to funding for research and development and related expenses for
Evusheld
of $112m (2021: $222m; 2020: $61m) and
Vaxzevria
\nof $1m (2021: $309m; 2020: $161m).
Other operating income and expense
\n2022
2021
2020
\n$m
$m\u00a0
$m
\nRoyalty income
59
62
147
\nGains on disposal of intangible assets
104
513
1,030
\nGains on disposal of investments in associates and joint ventures
\u2013
776
\u2013
\nNet gains/(losses) on disposal of other non-current assets
112
(4)
25
\nImpairment of property, plant and equipment
\u2013
\u2013
(12)
\nOther income
\n1
\n439
453
406
\nOther expense
(200)
(308)
(68)
\nOther operating income and expense
514
1,492
1,528
\n1
Other income in 2022 includes $138m of payments from Allergan in respect of the development of brazikumab (2021: $99m; 2020: $107m).
\nGains on disposal of intangible assets in 2021 includes $317m on disposal of rights to
Crestor
in over 30 countries in Europe, except in the UK and Spain.
\nGains on disposal of intangible assets in 2020 includes $350m on disposal of global rights excluding US, India and Japan to established hypertension
\nmedicines to Atnahs Pharma, $400m on disposal of rights in over 70 countries to
Atacand
to Cheplapharm and $120m on the sale of an FDA Priority
\nReview Voucher.
\nNet gains/(losses) on disposal of other non-current assets in 2022 includes a $125m gain in respect of the Waltham R&D site sale and leaseback in
\nMA, US (see Note 8).
\nGains on disposal of investments in associates and joint ventures in 2021 relates to the disposal of the 26.7% ownership in Viela Bio, as part of the
\nacquisition of Viela by Horizon Therapeutics plc. AstraZeneca received cash proceeds and pro\ufb01t of $776m upon closing, with the pro\ufb01t recorded as
\nOther operating income.
\nAs part of the total consideration received in respect of the agreement to sell US rights to
Synagis
in 2019, $210m in total has been received related
\nto the rights to participate in the future cash \ufb02ows from the US pro\ufb01ts or losses for nirsevimab. The full amount has been recognised as a \ufb01nancial
\nliability as the Group has not fully transferred the risks and rewards of the underlying cash \ufb02ows arising from nirsevimab to Sobi. This liability is
\npresented in Other payables within Non-current liabilities. The associated cash \ufb02ow is presented within investing activities as the Group has received
\nthe cash in exchange for agreeing to transfer future cash \ufb02ows relating to an intangible asset. In 2021, as a result of the Probability of Technical/
\nRegulatory Success unwind, an increase of $114m to the Pro\ufb01t Participation Liability was recorded in Other operating expense.
\nRestructuring costs
\nIn conjunction with the acquisition of Alexion in 2021, the enlarged Group initiated a comprehensive Post Alexion Acquisition Group Review, aimed
\nat integrating systems, structure and processes, optimising the global footprint and prioritising resource allocations and investments. These activities
\nare expected to be substantially complete by the end of 2025, with a number of planned activities having commenced in late 2021 and during 2022.
\nThe Group has also continued to progress other legacy restructuring programmes.
\nDuring 2022, the Group has incurred $717m of restructuring costs, of which $675m resulted from activities that are part of the Post Alexion Acquisition
\nGroup Review, bringing the cumulative charges under this programme to $1,705m. Costs in 2022 included $266m within Cost of sales due to the
\nrationalisation of our manufacturing capacity and footprint across certain production sites, $152m within Selling, general and administrative expenses
\nin relation to the transfer of Alexion\u2019s distribution contracts with third parties to AstraZeneca Group companies, and $83m in Selling, general and
\nadministrative expenses related to rationalisation of commercial teams in China.
\nTotal restructuring costs in 2022 include impairment reversal of Property, plant and equipment of $4m (2021: charge of $343m; 2020: charge of $7m)
\nand impairment reversal of Intangible assets (software development costs) of $17m (2021: charge of $16m; 2020: $nil).
\nThe tables below show the costs that have been charged in respect of restructuring programmes by cost category and type. Severance provisions
\nare detailed in Note 21.
\n2022
2021
2020
\n$m
$m
$m
\nCost of sales
266
722
53
\nDistribution expense
2
\u2013
\u2013
\nResearch and development expense
111
223
35
\nSelling, general and administrative expense
405
338
162
\nOther operating income and expense
(67)
\u2013
1
\nTotal charge
717
1,283
251
\n2022
2021
2020
\n$m
$m
$m
\nSeverance costs
187
217
26
\nAccelerated depreciation and impairment charges
135
371
17
\nOther
\n1
\n395
695
208
\nTotal charge
717
1,283
251
\n1
Other costs are those incurred in designing and implementing the Group\u2019s various restructuring initiatives, including costs of integrating systems, structure and processes as part of our
\nPost Alexion Acquisition Group Review, costs relating to the Alexion acquisition, internal project costs and external consultancy fees.
Financial instruments
\nIncluded within Operating pro\ufb01t are the following net gains and losses on \ufb01nancial instruments:
\n2022
2021
2020
\n$m
$m
$m
\nGains/(losses) on forward foreign exchange contracts
150
(21)
(86)
\n(Losses)/gains on receivables and payables
(203)
(42)
89
\nTotal
(53)
(63)
3
\nImpairment charges
\nDetails of impairment charges for 2022, 2021 and 2020 are included in Notes 7, 8 and 10.
13 Derivative \ufb01nancial instruments
\nNon-current
Current
Current
Non-current
\nassets
assets
liabilities
liabilities
Total
\n$m
$m
$m
$m
$m
\nInterest rate swaps related to instruments designated at fair value through profit and loss
45
\u2013
\u2013
\u2013
45
\nCross currency swaps designated in a net investment hedge
19
\u2013
\u2013
(2)
17
\nCross currency swaps designated in a cash flow hedge
107
43
\u2013
\u2013
150
\nCross currency swaps designated in a fair value hedge
\n1
\n\u2013
43
\u2013
\u2013
43
\nForward FX designated in a cash flow hedge
\n2
\n\u2013
8
(3)
\u2013
5
\nOther derivatives
\u2013
48
(30)
\u2013
18
\n31\u00a0December 2020
171
142
(33)
(2)
278
\nNon-current
Current
Current
Non-current
\nassets
assets
liabilities
liabilities
Total
\n$m
$m
$m
$m
$m
\nInterest rate swaps related to instruments designated at fair value through profit and loss
25
\u2013
\u2013
\u2013
25
\nCross currency swaps designated in a net investment hedge
62
\u2013
\u2013
(2)
60
\nCross currency swaps designated in a cash flow hedge
\u2013
\u2013
\u2013
(43)
(43)
\nForward FX designated in a cash flow hedge
\n2
\n\u2013
13
\u2013
\u2013
13
\nOther derivatives
15
70
(79)
\u2013
6
\n31\u00a0December 2021
102
83
(79)
(45)
61
\nNon-current
Current
Current
Non-current
\nassets
assets
liabilities
liabilities
Total
\n$m
$m
$m
$m
$m
\nInterest rate swaps related to instruments designated at fair value through profit and loss
\u2013
1
\u2013
\u2013
1
\nCross currency swaps designated in a net investment hedge
55
\u2013
\u2013
(4)
51
\nCross currency swaps designated in a cash flow hedge
\u2013
\u2013
\u2013
(160)
(160)
\nForward FX designated in a cash flow hedge
\n2
\n\u2013
1
(13)
\u2013
(12)
\nOther derivatives
19
85
(80)
\u2013
24
\n31\u00a0December 2022
74
87
(93)
(164)
(96)
\n1
Cross currency swaps designated in a fair value hedge refers to a cross currency interest rate swap that hedges a designated euro 300m portion of our euro 750m 0.875% 2021 Non-callable
\nbond against exposure to movements in the euro:US dollar exchange rate. The swap matured in November 2021 when the related bond matured.
\n2
Forward FX designated in a cash flow hedge relates to contracts hedging anticipated CNY, EUR, GBP, JPY and SEK transactions occurring in the quarter immediately after the balance
\nsheet date.
\nAll derivatives are held at fair value and fall within Level 2 of the fair value hierarchy as de\ufb01ned in Note 12, except for an equity warrant which falls
\nwithin Level 3 (valued at $19m (2021: $15m), held within Non-current assets). None of the derivatives have been reclassi\ufb01ed in the year.
\nThe fair value of interest rate swaps and cross currency swaps is estimated using appropriate zero coupon curve valuation techniques to discount
\nfuture contractual cash \ufb02ows based on rates at the current year end.
\nThe fair value of forward foreign exchange contracts and currency options are estimated by cash \ufb02ow accounting models using appropriate yield
\ncurves based on market forward foreign exchange rates at the year end. The majority of forward foreign exchange contracts for existing transactions
\nhad maturities of less than one month from year end.
\nThe interest rates used to discount future cash \ufb02ows for fair value adjustments, where applicable, are based on market swap curves at the reporting
\ndate, and were as follows:
\n2022
2021
2020
\nDerivatives
0.1% to 4.7%
(0.5)% to 3.6%
(0.5)% to 2.4%
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfFairValueMeasurementExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f25990": {
"value": "2 Operating pro\ufb01t
\nOperating pro\ufb01t includes the following signi\ufb01cant items:
\nCost of sales
\nIn 2022, Cost of sales includes a charge of $3,484m (2021: charge of $2,198m) in relation to the release, in line with sales, of fair value uplift to inventory
\nthat was recognised under IFRS 3 \u2018Business Combinations\u2019 upon the acquisition of Alexion (see Note 27).
\nDuring the year no government grants were recognised within Cost of sales (2021: $290m; 2020: $nil). The grants recognised in 2021 related to
\nfunding of manufactured
Vaxzevria
product for the US government, which expired prior to being accepted by the FDA.
\nSelling, general and administrative expense
\nIn 2022, Selling, general and administrative expense includes a charge of $182m (2021: charge of $42m; 2020: credit of $51m) resulting from changes
\nin the fair value of contingent consideration arising from the acquisition of the diabetes alliance from BMS. These adjustments re\ufb02ect revised estimates
\nfor future sales performance for the products acquired and, as a result, revised estimates for future royalties payable.
\nIn 2022, Selling, general and administrative costs includes a credit of $49m (2021: charge of $5m; 2020: credit of $143m) resulting from changes in
\nthe fair value of contingent consideration arising from the acquisition of Almirall\u2019s respiratory business. These adjustments re\ufb02ect revised estimates
\nfor future sales performance for the products acquired and, as a result, revised estimates for future milestones payable.
\nIn 2022, Selling, general and administrative expense also includes a charge of $789m (2021: charge of $48m; 2020: credit of $9m) relating to a number
\nof legal proceedings including settlements in various jurisdictions in relation to several marketed products (see Note 30).
\nResearch and development expense: Government grants
\nDuring the year $113m (2021: $531m; 2020: $222m) of government grants were recognised within Research and development expense. The grants
\nrecognised relate to funding for research and development and related expenses for
Evusheld
of $112m (2021: $222m; 2020: $61m) and
Vaxzevria
\nof $1m (2021: $309m; 2020: $161m).
Other operating income and expense
\n2022
2021
2020
\n$m
$m\u00a0
$m
\nRoyalty income
59
62
147
\nGains on disposal of intangible assets
104
513
1,030
\nGains on disposal of investments in associates and joint ventures
\u2013
776
\u2013
\nNet gains/(losses) on disposal of other non-current assets
112
(4)
25
\nImpairment of property, plant and equipment
\u2013
\u2013
(12)
\nOther income
\n1
\n439
453
406
\nOther expense
(200)
(308)
(68)
\nOther operating income and expense
514
1,492
1,528
\n1
Other income in 2022 includes $138m of payments from Allergan in respect of the development of brazikumab (2021: $99m; 2020: $107m).
\nGains on disposal of intangible assets in 2021 includes $317m on disposal of rights to
Crestor
in over 30 countries in Europe, except in the UK and Spain.
\nGains on disposal of intangible assets in 2020 includes $350m on disposal of global rights excluding US, India and Japan to established hypertension
\nmedicines to Atnahs Pharma, $400m on disposal of rights in over 70 countries to
Atacand
to Cheplapharm and $120m on the sale of an FDA Priority
\nReview Voucher.
\nNet gains/(losses) on disposal of other non-current assets in 2022 includes a $125m gain in respect of the Waltham R&D site sale and leaseback in
\nMA, US (see Note 8).
\nGains on disposal of investments in associates and joint ventures in 2021 relates to the disposal of the 26.7% ownership in Viela Bio, as part of the
\nacquisition of Viela by Horizon Therapeutics plc. AstraZeneca received cash proceeds and pro\ufb01t of $776m upon closing, with the pro\ufb01t recorded as
\nOther operating income.
\nAs part of the total consideration received in respect of the agreement to sell US rights to
Synagis
in 2019, $210m in total has been received related
\nto the rights to participate in the future cash \ufb02ows from the US pro\ufb01ts or losses for nirsevimab. The full amount has been recognised as a \ufb01nancial
\nliability as the Group has not fully transferred the risks and rewards of the underlying cash \ufb02ows arising from nirsevimab to Sobi. This liability is
\npresented in Other payables within Non-current liabilities. The associated cash \ufb02ow is presented within investing activities as the Group has received
\nthe cash in exchange for agreeing to transfer future cash \ufb02ows relating to an intangible asset. In 2021, as a result of the Probability of Technical/
\nRegulatory Success unwind, an increase of $114m to the Pro\ufb01t Participation Liability was recorded in Other operating expense.
\nRestructuring costs
\nIn conjunction with the acquisition of Alexion in 2021, the enlarged Group initiated a comprehensive Post Alexion Acquisition Group Review, aimed
\nat integrating systems, structure and processes, optimising the global footprint and prioritising resource allocations and investments. These activities
\nare expected to be substantially complete by the end of 2025, with a number of planned activities having commenced in late 2021 and during 2022.
\nThe Group has also continued to progress other legacy restructuring programmes.
\nDuring 2022, the Group has incurred $717m of restructuring costs, of which $675m resulted from activities that are part of the Post Alexion Acquisition
\nGroup Review, bringing the cumulative charges under this programme to $1,705m. Costs in 2022 included $266m within Cost of sales due to the
\nrationalisation of our manufacturing capacity and footprint across certain production sites, $152m within Selling, general and administrative expenses
\nin relation to the transfer of Alexion\u2019s distribution contracts with third parties to AstraZeneca Group companies, and $83m in Selling, general and
\nadministrative expenses related to rationalisation of commercial teams in China.
\nTotal restructuring costs in 2022 include impairment reversal of Property, plant and equipment of $4m (2021: charge of $343m; 2020: charge of $7m)
\nand impairment reversal of Intangible assets (software development costs) of $17m (2021: charge of $16m; 2020: $nil).
\nThe tables below show the costs that have been charged in respect of restructuring programmes by cost category and type. Severance provisions
\nare detailed in Note 21.
\n2022
2021
2020
\n$m
$m
$m
\nCost of sales
266
722
53
\nDistribution expense
2
\u2013
\u2013
\nResearch and development expense
111
223
35
\nSelling, general and administrative expense
405
338
162
\nOther operating income and expense
(67)
\u2013
1
\nTotal charge
717
1,283
251
\n2022
2021
2020
\n$m
$m
$m
\nSeverance costs
187
217
26
\nAccelerated depreciation and impairment charges
135
371
17
\nOther
\n1
\n395
695
208
\nTotal charge
717
1,283
251
\n1
Other costs are those incurred in designing and implementing the Group\u2019s various restructuring initiatives, including costs of integrating systems, structure and processes as part of our
\nPost Alexion Acquisition Group Review, costs relating to the Alexion acquisition, internal project costs and external consultancy fees.
Financial instruments
\nIncluded within Operating pro\ufb01t are the following net gains and losses on \ufb01nancial instruments:
\n2022
2021
2020
\n$m
$m
$m
\nGains/(losses) on forward foreign exchange contracts
150
(21)
(86)
\n(Losses)/gains on receivables and payables
(203)
(42)
89
\nTotal
(53)
(63)
3
\nImpairment charges
\nDetails of impairment charges for 2022, 2021 and 2020 are included in Notes 7, 8 and 10.
12 Other investments
\n2022
2021
2020
\n$m
$m\u00a0
$m
\nNon-current investments
\nEquity securities at fair value through Other comprehensive income
1,056
1,168
1,108
\nFixed income securities at fair value through profit and loss
10
\u2013
\u2013
\nTotal
1,066
1,168
1,108
\nCurrent investments
\nFixed income securities at fair value through profit and loss
13
16
118
\nCash collateral pledged to counterparties
162
\u2013
\u2013
\nFixed deposits
64
53
42
\nTotal
239
69
160
\nOther investments held at fair value through Other comprehensive income include equity securities which are not held for trading and which the
\nGroup has irrevocably elected at initial recognition to recognise in this category. Other investments held at fair value through pro\ufb01t and loss mainly
\ncomprise \ufb01xed income securities that the Group holds to sell.
\nThe fair value of listed investments is based on year end quoted market prices. Fixed deposits and Cash collateral pledged to counterparties are
\nheld at amortised cost with carrying value being a reasonable approximation of fair value given their short-term nature.
\nCash collateral pledged to counterparties relates to collateral pledged on derivatives entered into to hedge the Group\u2019s risk exposures. In 2022,
\nfollowing signi\ufb01cant foreign currency volatility increasing the collateral requirements, the Group revised its presentation to Other investments.
\nPrior year amounts of $47m in 2021 and $11m in 2020 are presented within Cash and cash equivalents.
\nFair value hierarchy
\nThe table below analyses equity securities and bonds, contained within Other investments and carried at fair value, by valuation method. The different
\nlevels have been de\ufb01ned as follows:
\n>
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
\n>
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or
\nindirectly (i.e. derived from prices)
\n>
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
\n2022
2022
2021
2021
2020
2020
\nFVPL
FVOCI
FVPL
FVOCI
FVPL
FVOCI
\n$m
$m
$m\u00a0
$m
$m
$m
\nLevel 1
13
880
16
1,064
118
891
\nLevel 2
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\nLevel 3
10
176
\u2013
104
\u2013
217
\nTotal
23
1,056
16
1,168
118
1,108
\nDuring 2020, AstraZeneca sold a proportion of its equity portfolio receiving consideration of $1,381m, a large proportion of which related to the
\ndisposal of its full holding in Moderna Therapeutics, Inc. All related gains were accounted through Other comprehensive income.
\nEquity securities that are analysed at Level 3 include investments in private biotech companies. In the absence of speci\ufb01c market data, these
\nunlisted investments are held at fair value based on the cost of investment and adjusting as necessary for impairments and revaluations on new
\nfunding rounds, which approximates to fair value. Movements in Level 3 investments are detailed below:
\n2022
2022
2021
2020
\nFVPL
FVOCI
FVOCI
FVOCI
\n$m
$m\u00a0
$m
$m
\nAt 1 January
\u2013
104
217
227
\nAdditions
10
32
1
96
\nRevaluations
\u2013
50
\u2013
63
\nNet transfers out
\u2013
(4)
(113)
(103)
\nDisposals
\u2013
(5)
\u2013
(86)
\nImpairments and exchange adjustments
\u2013
(1)
(1)
20
\nAt 31\u00a0December
10
176
104
217
\nAssets are transferred in or out of Level 3 on the date of the event or change in circumstances that caused the transfer.
13 Derivative \ufb01nancial instruments
\nNon-current
Current
Current
Non-current
\nassets
assets
liabilities
liabilities
Total
\n$m
$m
$m
$m
$m
\nInterest rate swaps related to instruments designated at fair value through profit and loss
45
\u2013
\u2013
\u2013
45
\nCross currency swaps designated in a net investment hedge
19
\u2013
\u2013
(2)
17
\nCross currency swaps designated in a cash flow hedge
107
43
\u2013
\u2013
150
\nCross currency swaps designated in a fair value hedge
\n1
\n\u2013
43
\u2013
\u2013
43
\nForward FX designated in a cash flow hedge
\n2
\n\u2013
8
(3)
\u2013
5
\nOther derivatives
\u2013
48
(30)
\u2013
18
\n31\u00a0December 2020
171
142
(33)
(2)
278
\nNon-current
Current
Current
Non-current
\nassets
assets
liabilities
liabilities
Total
\n$m
$m
$m
$m
$m
\nInterest rate swaps related to instruments designated at fair value through profit and loss
25
\u2013
\u2013
\u2013
25
\nCross currency swaps designated in a net investment hedge
62
\u2013
\u2013
(2)
60
\nCross currency swaps designated in a cash flow hedge
\u2013
\u2013
\u2013
(43)
(43)
\nForward FX designated in a cash flow hedge
\n2
\n\u2013
13
\u2013
\u2013
13
\nOther derivatives
15
70
(79)
\u2013
6
\n31\u00a0December 2021
102
83
(79)
(45)
61
\nNon-current
Current
Current
Non-current
\nassets
assets
liabilities
liabilities
Total
\n$m
$m
$m
$m
$m
\nInterest rate swaps related to instruments designated at fair value through profit and loss
\u2013
1
\u2013
\u2013
1
\nCross currency swaps designated in a net investment hedge
55
\u2013
\u2013
(4)
51
\nCross currency swaps designated in a cash flow hedge
\u2013
\u2013
\u2013
(160)
(160)
\nForward FX designated in a cash flow hedge
\n2
\n\u2013
1
(13)
\u2013
(12)
\nOther derivatives
19
85
(80)
\u2013
24
\n31\u00a0December 2022
74
87
(93)
(164)
(96)
\n1
Cross currency swaps designated in a fair value hedge refers to a cross currency interest rate swap that hedges a designated euro 300m portion of our euro 750m 0.875% 2021 Non-callable
\nbond against exposure to movements in the euro:US dollar exchange rate. The swap matured in November 2021 when the related bond matured.
\n2
Forward FX designated in a cash flow hedge relates to contracts hedging anticipated CNY, EUR, GBP, JPY and SEK transactions occurring in the quarter immediately after the balance
\nsheet date.
\nAll derivatives are held at fair value and fall within Level 2 of the fair value hierarchy as de\ufb01ned in Note 12, except for an equity warrant which falls
\nwithin Level 3 (valued at $19m (2021: $15m), held within Non-current assets). None of the derivatives have been reclassi\ufb01ed in the year.
\nThe fair value of interest rate swaps and cross currency swaps is estimated using appropriate zero coupon curve valuation techniques to discount
\nfuture contractual cash \ufb02ows based on rates at the current year end.
\nThe fair value of forward foreign exchange contracts and currency options are estimated by cash \ufb02ow accounting models using appropriate yield
\ncurves based on market forward foreign exchange rates at the year end. The majority of forward foreign exchange contracts for existing transactions
\nhad maturities of less than one month from year end.
\nThe interest rates used to discount future cash \ufb02ows for fair value adjustments, where applicable, are based on market swap curves at the reporting
\ndate, and were as follows:
\n2022
2021
2020
\nDerivatives
0.1% to 4.7%
(0.5)% to 3.6%
(0.5)% to 2.4%
19 Interest-bearing loans and borrowings
\nRepayment
2022
2021
2020
\ndates
$m
$m
$m
\nCurrent liabilities
\nBank overdrafts
On demand
183
291
286
\nOther short-term borrowings excluding overdrafts
78
3
84
\nCollateral received from derivative counterparties
89
93
288
\nLease liabilities
228
233
192
\n0.25% Callable bond
euros
2021
\u2013
\u2013
614
\n0.875% Non-callable bond
euros
2021
\u2013
\u2013
919
\nFloating rate notes
US dollars
2022
\u2013
250
\u2013
\n2.375% Callable bond
US dollars
2022
\u2013
999
\u2013
\n0.3% Callable bond
US dollars
2023
1,399
\u2013
\u2013
\n2023 Floating bank loan
US dollars
2023
2,000
\u2013
\u2013
\nFloating rate notes
US dollars
2023
400
\u2013
\u2013
\n3.5% Callable bond
US dollars
2023
849
\u2013
\u2013
\n7% Guaranteed debentures
US dollars
2023
294
\u2013
\u2013
\nOther loans (including commercial paper)
Within one year
22
24
3
\nTotal
5,542
1,893
2,386
\nNon-current liabilities
\nLease liabilities
725
754
489
\nFloating rate notes
US dollars
2022
\u2013
\u2013
250
\n2.375% Callable bond
US dollars
2022
\u2013
\u2013
996
\n0.3% Callable bond
US dollars
2023
\u2013
1,397
\u2013
\n2023 Floating rate bank loan
US dollars
2023
\u2013
1,998
\u2013
\nFloating rate notes
US dollars
2023
\u2013
400
400
\n3.5% Callable bond
US dollars
2023
\u2013
848
847
\n7% Guaranteed debentures
US dollars
2023
\u2013
320
339
\n0.75% Callable bond
euros
2024
957
1,014
1,102
\n0.7% Callable bond
US dollars
2024
1,598
1,598
\u2013
\n2024 Floating rate bank loan
US dollars
2024
1,998
1,997
\u2013
\n3.375% Callable bond
US dollars
2025
1,992
1,988
1,985
\n0.7% Callable bond
US dollars
2026
1,195
1,193
1,192
\n1.2% Callable bond
US dollars
2026
1,246
1,245
\u2013
\n3.125% Callable bond
US dollars
2027
746
745
744
\n1.25% Callable bond
euros
2028
845
896
973
\n1.75% Callable bond
US dollars
2028
1,245
1,244
\u2013
\n4% Callable bond
US dollars
2029
995
994
993
\n0.375% Callable bond
euros
2029
846
898
\u2013
\n1.375% Callable bond
US dollars
2030
1,293
1,292
1,291
\n2.25% Callable bond
US dollars
2031
747
746
\u2013
\n5.75% Non-callable bond
pounds sterling
2031
420
470
475
\n6.45% Callable bond
US dollars
2037
2,724
2,724
2,722
\n4% Callable bond
US dollars
2042
988
988
988
\n4.375% Callable bond
US dollars
2045
981
980
980
\n4.375% Callable bond
US dollars
2048
737
737
737
\n2.125% Callable bond
US dollars
2050
487
486
486
\n3% Callable bond
US dollars
2051
735
734
\u2013
\nOther loans
US dollars
190
202
5
\nTotal
23,690
28,888
17,994
\nTotal interest-bearing loans and borrowings
\n1, 2
\n29,232
30,781
20,380
\n1
All loans and borrowings above are unsecured apart from $22m (2021: $24m) of current and $181m (2021: $188m) of non-current in 2022, both included within Other loans.
\n2
The $2bn USD 2023 floating rate bank loan and $2bn USD 2024 floating rate bank loan pay interest linked to 1 month USD LIBOR. The Group has the right to switch these loans to compounded
\ndaily USD Secured Overnight Funding Rate (SOFR) with five days notice. The loans will automatically switch to compounded SOFR on 30 June 2023 if the Group has not already switched
\nbefore this date. All other floating rate debt is not impacted by LIBOR reference as it either uses non-LIBOR fixings or will mature before the relevant LIBOR rate is withdrawn.
Total loans and
Total loans and
Total loans and
\nborrowings
borrowings
borrowings
\n2022
2021
2020
\n$m
$m
$m
\nAt 1\u00a0January
30,781
20,380
18,227
\nChanges from financing cash flows
\nIssue of loans and borrowings
\u2013
12,929
2,968
\nRepayment of loans and borrowings
(1,271)
(4,759)
(1,609)
\nMovement in short-term borrowings
74
(276)
288
\nRepayment of obligations under leases
(244)
(240)
(207)
\nTotal changes in cash flows arising on financing activities from borrowings
(1,441)
7,654
1,440
\nMovement in overdrafts
(85)
31
138
\nNew lease liabilities
253
503
174
\nAdditions through business combinations
5
2,523
\u2013
\nExchange
(287)
(378)
363
\nOther movements
6
68
38
\nAt 31\u00a0December
29,232
30,781
20,380
\nAlso included within cash \ufb02ows arising from \ufb01nancing activities within the Consolidated Statement of Cash Flows is a $920m cash out\ufb02ow (2021: $nil;
\n2020: $nil) related to the Acerta Pharma share purchase liability which has a closing liability at 31 December 2022 of $1,646m (2021: $2,458m; 2020:
\n$2,297m) within Trade and other payables (see Note 20 and Note 26).
\nSet out below is a comparison by category of carrying values and fair values of all the Group\u2019s interest-bearing loans and borrowings:
\nInstruments in a
Instruments
Instruments
Total
\nfair value hedge
designated
designated in
Amortised
carrying
Fair
\nrelationship
\n1
\nat fair value
\n2
\ncash flow hedge
\n3
\ncost
value
value
\n$m
$m
$m
$m
$m
$m
\n2020
\nOverdrafts
\u2013
\u2013
\u2013
286
286
286
\nLease liabilities due within one year
\u2013
\u2013
\u2013
192
192
192
\nLease liabilities due after more than one year
\u2013
\u2013
\u2013
489
489
489
\nLoans and borrowings due within one year
371
\u2013
614
923
1,908
1,922
\nLoans and borrowings due after more than one year
\u2013
339
2,075
15,091
17,505
20,936
\nTotal at 31\u00a0December 2020
371
339
2,689
16,981
20,380
23,825
\n2021
\nOverdrafts
\u2013
\u2013
\u2013
291
291
291
\nLease liabilities due within one year
\u2013
\u2013
\u2013
233
233
233
\nLease liabilities due after more than one year
\u2013
\u2013
\u2013
754
754
754
\nLoans and borrowings due within one year
\u2013
\u2013
\u2013
1,369
1,369
1,378
\nLoans and borrowings due after more than one year
\u2013
320
1,910
25,904
28,134
30,596
\nTotal at 31\u00a0December 2021
\u2013
320
1,910
28,551
30,781
33,252
\n2022
\nOverdrafts
\u2013
\u2013
\u2013
183
183
183
\nLease liabilities due within one year
\u2013
\u2013
\u2013
228
228
228
\nLease liabilities due after more than one year
\u2013
\u2013
\u2013
725
725
725
\nLoans and borrowings due within one year
\u2013
294
\u2013
4,837
5,131
5,105
\nLoans and borrowings due after more than one year
\u2013
\u2013
1,802
21,163
22,965
21,657
\nTotal at 31\u00a0December 2022
\u2013
294
1,802
27,136
29,232
27,898
\n1
Instruments designated as hedged items in a fair value hedge relationship relate to a designated euro 300m portion of our euro 750m 0.875% 2021 Non-callable bond which matured on
\n24 November 2021. The accumulated amount of fair value hedge adjustments to the bond was a loss of $10m.
\n2
Instruments designated at fair value through profit or loss include the US dollar 7% guaranteed debentures repayable in 2023.
\n3
Instruments designated in cash flow hedges are our euro 500m 0.25% Callable bond which matured in 2021, our euro 900m 0.75% 2024 Callable bond and our euro 800m 1.25% 2028
\nCallable bond.
\nThe fair value of \ufb01xed-rate publicly traded debt is based on year end quoted market prices; the fair value of \ufb02oating rate debt is nominal value, as
\nmark-to-market differences would be minimal given the frequency of resets. The carrying value of loans designated at fair value through pro\ufb01t or loss
\nis the fair value; this falls within the Level 1 valuation method as de\ufb01ned in Note 12. For loans designated in a fair value hedge relationship, carrying
\nvalue is initially measured at fair value and remeasured for fair value changes in respect of the hedged risk at each reporting date. All other loans
\nare held at amortised cost. Fair values, as disclosed in the table above, are all determined using the Level 1 valuation method as de\ufb01ned in Note 12,
\nwith the exception of overdrafts and lease liabilities, where fair value approximates to carrying values.
A gain of $2m was made during the year on the fair value of bonds designated as fair value through pro\ufb01t or loss, due to increased credit risk. A gain
\nof $31m has been made on these bonds since designation due to increased credit risk. Under IFRS 9, the Group records the component of fair value
\nchanges relating to the component of own credit risk through Other comprehensive income. Changes in credit risk had no material effect on any
\nother \ufb01nancial assets and liabilities recognised at fair value in the Group Financial Statements. The change in fair value attributable to changes in
\ncredit risk is calculated as the change in fair value not attributable to market risk. The amount payable at maturity on bonds designated at fair value
\nthrough pro\ufb01t or loss is $287m.
\nThe interest rates used to discount future cash \ufb02ows for fair value adjustments, where applicable, are based on market swap curves at the reporting
\ndate, and were as follows:
\n2022
2021
2020
\nLoans and borrowings
4.3% to 4.9%
0.1% to 0.6%
(0.5)% to 0.1%
28 Financial risk management objectives and policies
\nThe Group\u2019s principal \ufb01nancial instruments, other than derivatives, comprise bank overdrafts, loans and other borrowings, lease liabilities, current
\nand non-current investments, cash and short-term deposits. The main purpose of these \ufb01nancial instruments is to manage the Group\u2019s funding and
\nliquidity requirements. The Group has other \ufb01nancial assets and liabilities such as trade receivables and trade payables, which arise directly from
\nits operations.
\nThe principal \ufb01nancial risks to which the Group is exposed are those of liquidity, interest rate, foreign currency and credit. Each of these is managed
\nin accordance with Board-approved policies. These policies, together with the Group\u2019s approach to capital management, are set out below.
\nCapital management
\nThe capital structure of the Group consists of Shareholders\u2019 equity (Note 24), Debt (Note 19), Other current investments (Note 12) and Cash (Note 17).
\nFor the foreseeable future, the Board will maintain a capital structure that supports the Group\u2019s strategic objectives through:
\n>
managing funding and liquidity risk
\n> optimising shareholder return
\n>
maintaining a strong, investment-grade credit rating.
\nThe Group utilises factoring arrangements for selected trade receivables. These factoring arrangements qualify for full derecognition of the associated
\ntrade receivables under IFRS 9. Amounts due on invoices that have not been factored at year end, from customers that are subject to factoring
\narrangements are disclosed in Note 16.
\nFunding and liquidity risk are reviewed regularly by the Board and managed in accordance with policies described below.
\nThe Board regularly reviews its shareholders\u2019 distribution policy, which comprises a regular cash dividend and potentially a share repurchase
\ncomponent. No share repurchases have been made since 2012.
\nThe Group\u2019s net debt position (loans and borrowings net of Cash and cash equivalents, Other investments and Derivative \ufb01nancial instruments) has
\ndecreased by $1,399m from a net debt position of $24,322m at the beginning of the year to a net debt position of $22,923m at 31 December 2022.
\nGross debt reduced from $30,781m to $29,232m, principally due to the repayment of the $1,000m 2.75% bond and a $250m \ufb02oating rate note.
\nLiquidity risk
\nThe Board reviews the Group\u2019s ongoing liquidity risks annually as part of the planning process and on an ad hoc basis. The Board considers
\nshort-term requirements against available sources of funding, taking into account forecast cash \ufb02ows. The Group manages liquidity risk by maintaining
\naccess to a number of sources of funding which are suf\ufb01cient to meet anticipated funding requirements. Speci\ufb01cally, the Group uses US and
\nEuropean commercial paper, bank loans, committed bank facilities and cash resources to manage short-term liquidity and manages long-term
\nliquidity by raising funds through the capital markets. At 31 December 2022, the Group was assigned short-term credit ratings of P-2 by Moody\u2019s
\nand A-1 by Standard and Poor\u2019s. The Group\u2019s long-term credit rating was A3 Stable outlook by Moody\u2019s and A Stable outlook by Standard and Poor\u2019s.
\nIn addition to Cash and cash equivalents of $6,166m, short-term \ufb01xed income investments of $13m, \ufb01xed deposits of $64m, less overdrafts of $183m
\nat 31 December 2022, the Group has committed bank facilities of $4,875m available to manage liquidity. These committed bank facilities have no
\n\ufb01nancial covenants and mature in April 2026. The Group regularly monitors the credit standing of the banks providing the facilities and currently does
\nnot anticipate any issue with drawing on the committed facilities should this be necessary. Advances under these facilities currently bear an interest
\nrate per annum based on US dollar LIBOR (or other relevant benchmark rate) plus a margin. The facilities contain arrangements to switch to alternative
\nrisk free rate benchmarks before June 2023.
\nAt 31 December 2022, the Group has $3,068m outstanding from debt issued under a Euro Medium Term Note programme and $20,651m under an
\nSEC-registered programme. The funds made available under these facility agreements may be used for the general corporate purposes of the Group.
\nThe maturity pro\ufb01le of the anticipated future contractual cash \ufb02ows including interest in relation to the Group\u2019s \ufb01nancial liabilities, on an undiscounted
\nbasis and which, therefore, differs from both the carrying value and fair value, is as follows:
\nBank
Total
Derivative
Derivative
Total
\noverdrafts
Trade non-derivative
financial
financial
derivative
\nand other
Bonds and
Lease
and other
financial
instruments
instruments
financial
\nloans
bank loans
liability
payables
instruments
receivable
payable
instruments
Total
\n$m
$m
$m
$m
$m
$m
$m
$m
$m
\nWithin one year
667
2,136
207
15,812
18,822
(9,719)
9,620
(99)
18,723
\nIn one to two years
\u2013
1,839
168
2,584
4,591
(60)
67
7
4,598
\nIn two to three years
\u2013
2,101
120
1,658
3,879
(59)
67
8
3,887
\nIn three to four years
\u2013
1,617
82
1,728
3,427
(1,151)
1,080
(71)
3,356
\nIn four to five years
\u2013
2,502
53
722
3,277
(36)
40
4
3,281
\nIn more than five years
\u2013
16,921
108
1,435
18,464
(1,707)
1,652
(55)
18,409
\n667
27,116
738
23,939
52,460
(12,732)
12,526
(206)
52,254
\nEffect of interest
\u2013
(7,974)
\u2013
\u2013
(7,974)
379
(405)
(26)
(8,000)
\nEffect of discounting, fair values and issue costs
(1)
(109)
(57)
(2,070)
(2,237)
(70)
24
(46)
(2,283)
\n31\u00a0December\u00a02020
666
19,033
681
21,869
42,249
(12,423)
12,145
(278)
41,971
Bank
Total
Derivative
Derivative
Total
\noverdrafts
Trade non-derivative
financial
financial
derivative
\nand other
Bonds and
Lease
and other
financial
instruments
instruments
financial
\nloans
bank loans
liability
payables
instruments
receivable
payable
instruments
Total
\n$m
$m
$m
$m
$m
$m
$m
$m
$m
\nWithin one year
387
1,981
256
19,007
21,631
(11,766)
11,774
8
21,639
\nIn one to two years
\u2013
5,647
210
2,521
8,378
(55)
66
11
8,389
\nIn two to three years
\u2013
5,242
163
1,669
7,074
(1,060)
1,079
19
7,093
\nIn three to four years
\u2013
2,591
130
862
3,583
(35)
39
4
3,587
\nIn four to five years
\u2013
2,970
96
233
3,299
(118)
111
(7)
3,292
\nIn more than five years
\u2013
19,727
221
2,212
22,160
(1,521)
1,480
(41)
22,119
\n387
38,158
1,076
26,504
66,125
(14,555)
14,549
(6)
66,119
\nEffect of interest
\u2013
(8,609)
\u2013
\u2013
(8,609)
299
(325)
(26)
(8,635)
\nEffect of discounting, fair values and issue costs
\u2013
(142)
(89)
(2,633)
(2,864)
(36)
7
(29)
(2,893)
\n31\u00a0December\u00a02021
387
29,407
987
23,871
54,652
(14,292)
14,231
(61)
54,591
\nBank
Total
Derivative
Derivative
Total
\noverdrafts
Trade non-derivative
financial
financial
derivative
\nand other
Bonds and
Lease
and other
financial
instruments
instruments
financial
\nloans
bank loans
liability
payables
instruments
receivable
payable
instruments
Total
\n$m
$m
$m
$m
$m
$m
$m
$m
$m
\nWithin one year
365
5,777
249
19,065
25,456
(12,445)
12,478
33
25,489
\nIn one to two years
\u2013
5,233
208
2,086
7,527
(1,012)
1,078
66
7,593
\nIn two to three years
\u2013
2,608
172
872
3,652
(34)
38
4
3,656
\nIn three to four years
\u2013
2,983
128
595
3,706
(103)
103
\u2013
3,706
\nIn four to five years
\u2013
1,267
84
814
2,165
(32)
35
3
2,168
\nIn more than five years
\u2013
18,156
184
3,177
21,517
(1,436)
1,378
(58)
21,459
\n365
36,024
1,025
26,609
64,023
(15,062)
15,110
48
64,071
\nEffect of interest
(15)
(7,982)
\u2013
\u2013
(7,997)
227
(249)
(22)
(8,019)
\nEffect of discounting, fair values and issue costs
\u2013
(113)
(72)
(3,299)
(3,484)
63
7
70
(3,414)
\n31\u00a0December\u00a02022
350
27,929
953
23,310
52,542
(14,772)
14,868
96
52,638
\nWhere interest payments are on a \ufb02oating rate basis, it is assumed that rates will remain unchanged from the last business day of each year ended
\n31 December.
\nThe Group has $2bn of bank loans that mature in July 2023 and $2bn of bank loans that mature in July 2024, which the Group can repay before
\nmaturity at face value. Other than that, it is not expected that the cash \ufb02ows in the maturity pro\ufb01le could occur signi\ufb01cantly earlier or at signi\ufb01cantly
\ndifferent amounts, with the exception of $2,222m of contingent consideration held within Trade and other payables (see Note 20).
\nMarket risk
\nInterest rate risk
\nThe Group maintains a Board-approved mix of \ufb01xed and \ufb02oating rate debt and uses underlying debt, interest rate swaps and forward rate agreements
\nto manage this mix.
\nAt 31 December 2022, interest rate swaps with a notional value of $288m are fair valued through pro\ufb01t or loss and this has effectively converted the
\n7% guaranteed debentures payable in 2023 to \ufb02oating rates. No new interest rate swaps were entered into during 2022.
\nThe majority of surplus cash is currently invested in US dollar liquidity funds and investment-grade \ufb01xed income securities.
\nThe interest rate pro\ufb01le of the Group\u2019s interest-bearing \ufb01nancial instruments are set out below. In the case of current and non-current \ufb01nancial
\nliabilities, the classi\ufb01cation includes the impact of interest rate swaps which convert the debt to \ufb02oating rate.
\n2022
2021
2020
\nFixed rate
Floating rate
Total
Fixed rate
Floating rate
Total
Fixed rate
Floating rate
Total
\n$m
$m
$m
$m
$m
$m
$m
$m
$m
\nFinancial liabilities
\nInterest-bearing loans and borrowings
\nCurrent
2,476
3,066
5,542
1,232
661
1,893
1,357
1,029
2,386
\nNon-current
21,511
2,179
23,690
23,985
4,903
28,888
17,005
989
17,994
\nTotal
23,987
5,245
29,232
25,217
5,564
30,781
18,362
2,018
20,380
\nFinancial assets
\nFixed deposits
64
\u2013
64
53
\u2013
53
42
\u2013
42
\nCash collateral pledged to counterparties
\u2013
162
162
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\nCash and cash equivalents
250
5,916
6,166
\u2013
6,329
6,329
\u2013
7,832
7,832
\nTotal
314
6,078
6,392
53
6,329
6,382
42
7,832
7,874
\nIn addition to the \ufb01nancial assets above, there are $9,546m (2021: $8,765m; 2020: $6,328m) of other current and non-current asset investments
\nand other \ufb01nancial assets. Of these, $nil receive \ufb02oating rate interest (2021: $nil; 2020: $nil).
The Group is also exposed to market risk on other investments.
\n2022
2021
2020
\n$m
$m\u00a0
$m
\nEquity securities at fair value through Other comprehensive income (Note\u00a012)
1,056
1,168
1,108
\nNon-current fixed income securities at fair value through profit and loss (Note 12)
10
\u2013
\u2013
\nTotal
1,066
1,168
1,108
\nForeign currency risk
\nThe US dollar is the Group\u2019s most signi\ufb01cant currency. As a consequence, the Group results are presented in US dollars and exposures are managed
\nagainst US dollars accordingly.
\nTranslational
\nApproximately 61% of Group external sales in 2022 were denominated in currencies other than the US dollar, while a signi\ufb01cant proportion of
\nmanufacturing, and research and development costs were denominated in pounds sterling and Swedish krona. Surplus cash generated by business
\nunits is substantially converted to, and held centrally in, US dollars. As a result, operating pro\ufb01t and total cash \ufb02ow in US dollars will be affected
\nby movements in exchange rates.
\nThis currency exposure is managed centrally, based on forecast cash \ufb02ows. The impact of movements in exchange rates is mitigated signi\ufb01cantly
\nby the correlations which exist between the major currencies to which the Group is exposed and the US dollar. Monitoring of currency exposures
\nand correlations is undertaken on a regular basis and hedging is subject to pre-execution approval.
\nAs at 31 December 2022, before the impact of derivatives, 2% of interest-bearing loans and borrowings were denominated in pounds sterling and
\n9% were denominated in euros. Where there is non-US dollar debt and an underlying net investment of that amount in the same currency, the Group
\napplies net investment hedging. Exchange differences on the retranslation of debt designated as net investment hedges are recognised in Other
\ncomprehensive income to the extent that the hedge is effective. Any ineffectiveness is taken to pro\ufb01t. For details of non-US dollar debt in a
\ndesignated hedging relationship please see the Hedge accounting section within this Note 28 from page 188.
\nThe Group holds cross-currency swaps to hedge against the impact of \ufb02uctuations in foreign exchange rates. Fair value movements on the revaluation
\nof the cross-currency swaps are recognised in Other comprehensive income to the extent that the hedge is effective, with any ineffectiveness taken
\nto pro\ufb01t.
\nAs at 31 December 2022, the Group operates in three countries designated as hyperin\ufb02ationary, being Argentina, Venezuela and Turkey. The foreign
\nexchange risk of these markets has been assessed and deemed to be immaterial.
\nTransactional
\nThe Group aims to hedge all its forecasted major transactional currency exposures on working capital balances, which typically extend for up to three
\nmonths. Where practicable, these are hedged using forward foreign exchange contracts. In addition, external dividend payments in pounds sterling
\nto UK shareholders and in Swedish krona to Swedish shareholders are fully hedged from announcement date to payment date. Foreign exchange
\ngains and losses on forward contracts transacted for transactional hedging are taken to pro\ufb01t or to Other comprehensive income if the contract is
\nin a designated cash\ufb02ow hedge.
\nSensitivity analysis
\nThe sensitivity analysis set out below summarises the sensitivity of the market value of our \ufb01nancial instruments to hypothetical changes in market
\nrates and prices. The range of variables chosen for the sensitivity analysis re\ufb02ects our view of changes which are reasonably possible over a one-year
\nperiod. Market values are the present value of future cash \ufb02ows based on market rates and prices at the valuation date. For long-term debt, an
\nincrease in interest rates results in a decline in the fair value of debt.
\nThe sensitivity analysis assumes an instantaneous 100 basis point change in interest rates in all currencies from their levels at 31 December 2022,
\nwith all other variables held constant. Based on the composition of our long-term debt portfolio and cash reserves as at 31 December 2022, a 1%
\nincrease in interest rates would result in an additional $52m in interest expense on the debt and an additional $59m interest income on the cash
\nreserves. The exchange rate sensitivity analysis assumes an instantaneous 10% change in foreign currency exchange rates from their levels at
\n31 December 2022, with all other variables held constant. The +10% case assumes a 10% strengthening of the US dollar against all other currencies
\nand the -10% case assumes a 10% weakening of the US dollar.
\nEach incremental 10% movement in foreign currency exchange rates would have approximately the same effect as the initial 10% detailed in the
\ntable below and each incremental 1% change in interest rates would have approximately the same effect as the 1% detailed in the table below.
\nInterest rates
Exchange rates
\n31\u00a0December\u00a02020
+1%
-1%
+10%
-10%
\nIncrease/(decrease) in fair value of financial instruments ($m)
1,696
(1,758)
114
(132)
\nImpact on profit: (loss)/gain ($m)
\u2013
\u2013
(57)
74
\nImpact on equity: gain/(loss) ($m)
\u2013
\u2013
171
(206)
\nInterest rates
Exchange rates
\n31\u00a0December\u00a02021
+1%
-1%
+10%
-10%
\nIncrease/(decrease) in fair value of financial instruments ($m)
1,978
(2,106)
82
(85)
\nImpact on profit: gain/(loss) ($m)
\u2013
\u2013
24
(9)
\nImpact on equity: gain/(loss) ($m)
\u2013
\u2013
58
(76)
Interest rates
Exchange rates
\n31\u00a0December\u00a02022
+1%
-1%
+10%
-10%
\nIncrease/(decrease) in fair value of financial instruments ($m)
1,317
(1,490)
81
(89)
\nImpact on profit: gain/(loss) ($m)
\u2013
\u2013
26
(15)
\nImpact on equity: gain/(loss) ($m)
\u2013
\u2013
55
(74)
\nCredit risk
\nThe Group is exposed to credit risk on \ufb01nancial assets, such as cash investments, derivative instruments, and Trade and other receivables. The Group
\nis also exposed in its Net asset position to its own credit risk in respect of the 2023 debentures which are accounted for at fair value through pro\ufb01t
\nor loss. Under IFRS 9, the effect of the losses and gains arising from own credit risk on the fair value of bonds designated at fair value through pro\ufb01t
\nor loss are recorded in Other comprehensive income.
\nFinancial counterparty credit risk
\nThe majority of the AstraZeneca Group\u2019s cash is centralised within the Group treasury entity and is subject to counterparty risk on the principal
\ninvested. The level of the Group\u2019s cash investments and hence credit risk will depend on the cash \ufb02ow generated by the Group and the timing of
\nthe use of that cash. The credit risk is mitigated through a policy of prioritising security and liquidity over return and, as such, cash is only invested
\nin high credit-quality investments. Counterparty limits are set according to the assessed risk of each counterparty and exposures are monitored
\nagainst these limits on a regular basis.
\nThe Group\u2019s principal \ufb01nancial counterparty credit risks at 31 December 2022 were as follows:
\nCurrent assets
\n2022
2021
2020
\n$m
$m\u00a0
$m
\nCash at bank and in hand
1,411
1,461
1,182
\nMoney market liquidity funds
4,486
4,772
6,602
\nOther short-term cash equivalents
269
96
48
\nTotal Cash and cash equivalents (Note\u00a017)
6,166
6,329
7,832
\nFixed income securities at fair value through profit and loss (Note\u00a012)
13
16
118
\nCash collateral pledged to counterparties (Note 12)
162
\u2013
\u2013
\nFixed deposits (Note\u00a012)
64
53
42
\nTotal derivative financial instruments (Note\u00a013)
87
83
142
\nCurrent assets subject to credit risk
6,492
6,481
8,134
\nNon-current assets
\n2022
2021
2020
\n$m
$m\u00a0
$m
\nDerivative financial instruments (Note\u00a013)
74
102
171
\nNon-current assets subject to credit risk
74
102
171
\nThe majority of the Group\u2019s cash is invested in US dollar AAA rated money market liquidity funds. The money market liquidity fund portfolios are
\nmanaged by \ufb01ve external third-party fund managers to maintain an AAA rating. The Group\u2019s investments represent no more than 10% of each
\noverall fund value. There were no other signi\ufb01cant concentrations of \ufb01nancial credit risk at the reporting date.
\nAll \ufb01nancial derivatives are transacted with commercial banks, in line with standard market practice. The Group has agreements with some bank
\ncounterparties whereby the parties agree to post cash collateral, for the bene\ufb01t of the other, equivalent to the market valuation of the derivative
\npositions above a predetermined threshold. The carrying value of such cash collateral held by the Group at 31 December 2022 was $89m (2021: $93m;
\n2020: $288m) and the carrying value of such cash collateral posted by the Group at 31 December 2022 was $162m (2021: $47m; 2020: $11m).
\nThe impairment provision for other \ufb01nancial assets at 31 December 2022 was immaterial.
\nTrade receivables
\nTrade receivable exposures are managed locally in the operating units where they arise and credit limits are set as deemed appropriate for the
\ncustomer. The Group is exposed to customers ranging from government-backed agencies and large private wholesalers to privately owned pharmacies,
\nand the underlying local economic and sovereign risks vary throughout the world. Where appropriate, the Group endeavours to minimise risks by
\nthe use of trade \ufb01nance instruments such as letters of credit and insurance. The Group applies the expected credit loss approach to establish an
\nallowance for impairment that represents its estimate of expected losses in respect of Trade receivables.
\nThe Group applies the IFRS 9 simpli\ufb01ed approach to measuring expected credit losses which uses a lifetime expected loss allowance for all Trade
\nreceivables. To measure expected credit losses, Trade receivables have been grouped based on shared credit characteristics and the days past due.
\nThe expected loss rates are based on payment pro\ufb01les over a period of 36 months before 31 December 2022, 31 December 2021 or 31 December
\n2020 respectively and the corresponding historical credit losses experienced within this period. The historical loss rates are adjusted to re\ufb02ect current
\nand forward-looking information on macroeconomic factors affecting the ability of the customer to settle the receivables.
\nOn that basis, the loss allowance was determined as follows:
\n0-90 days
90-180 days
Over 180 days
\n31\u00a0December 2020
Current
past due
past due
past due
Total
\nExpected loss rate
0.1%
1.6%
19.4%
60.6%
\nGross carrying amount ($m)
3,659
124
21
25
3,829
\nLoss allowance ($m)
2
2
4
15
23
0-90 days
90-180 days
Over 180 days
\n31\u00a0December 2021
Current
past due
past due
past due
Total
\nExpected loss rate
0.1%
1.2%
22.6%
11.0%
\nGross carrying amount ($m)
5,617
328
18
91
6,054
\nLoss allowance ($m)
5
4
4
10
23
\n0-90 days
90-180 days
Over 180 days
\n31\u00a0December 2022
Current
past due
past due
past due
Total
\nExpected loss rate
0.03%
0.3%
32.0%
40.6%
\nGross carrying amount ($m)
6,791
331
50
99
7,271
\nLoss allowance ($m)
2
1
16
40
59
\nTrade receivables are written off where there is no reasonable expectation of recovery.
\nImpairment losses on Trade receivables are presented as net impairment losses within Operating pro\ufb01t, any subsequent recoveries are credited
\nagainst the same line.
\nIn the US, sales to three wholesalers accounted for approximately 73% of US sales (2021: three wholesalers accounted for approximately 94%;
\n2020: three wholesalers accounted for approximately 95%).
\nThe movements of the Group expected credit losses provision are follows:
\n2022
2021
2020
\n$m
$m
$m
\nAt 1\u00a0January
23
23
21
\nNet movement recognised in income statement
37
(2)
3
\nAmounts utilised, exchange and other movements
(1)
2
(1)
\nAt 31\u00a0December
59
23
23
\nGiven the pro\ufb01le of our customers, including large wholesalers and government-backed agencies, no further credit risk has been identi\ufb01ed with the
\nTrade receivables not past due other than those balances for which an allowance has been made. The income statement credit or charge is recorded
\nin Operating pro\ufb01t.
\nHedge accounting
\nThe Group uses foreign currency borrowings, foreign currency forwards and swaps, currency options, interest rate swaps and cross-currency interest
\nrate swaps for the purpose of hedging its foreign currency and interest rate risks. The Group may designate certain \ufb01nancial instruments as fair value
\nhedges, cash \ufb02ow hedges or net investment hedges in accordance with IFRS 9. Hedge effectiveness is determined at the inception of the hedge
\nrelationship, and through periodic prospective effectiveness assessments to ensure that an economic relationship exists between the hedged item
\nand hedging instrument. Sources of hedge effectiveness will depend on the hedge relationship designation but may include:
\n>
a signi\ufb01cant change in the credit risk of either party to the hedging relationship
\n>
a timing mismatch between the hedging instrument and the hedged item
\n>
movements in foreign currency basis spread for derivatives in a fair value hedge
\n>
a signi\ufb01cant change in the value of the foreign currency denominated net assets of the Group in a net investment hedge.
\nThe hedge ratio for each designation will be established by comparing the quantity of the hedging instrument and the quantity of the hedged item to
\ndetermine their relative weighting; for all of the Group\u2019s existing hedge relationships the hedge ratio has been determined as 1:1. Designated hedges
\nare expected to be effective and therefore the impact of ineffectiveness on pro\ufb01t is not expected to be material. The accounting treatment for fair
\nvalue hedges and debt designated as fair value through pro\ufb01t or loss is disclosed in the Group Accounting Policies section from page 142.
\nThe following table represents the Group\u2019s continuing designated hedge relationships under IFRS 9.
\n2020
\nOther comprehensive income
\nFair value
\nloss
\nOpening
Fair value
recycled
Closing
\nNominal
balance
(gain)/loss
to the
balance
Average
\namounts
Carrying
1\u00a0January
deferred
Income
31\u00a0December
Average
Average
pay
\nin local
value
2020
to OCI
statement
2020
maturity
USD FX
interest
\ncurrency
$m
$m
$m
$m
$m
year
rate
rate
\nFair value hedge \u2013 foreign currency and interest rate risk
\n1
\nUSD LIBOR
\n+ 1.27%
Cross currency interest rate swap \u2013 Euro bond
EUR 300m
43
\u2013
\u2013
\u2013
\u2013
2021
1.09
\nCash flow hedges \u2013 foreign currency and interest rate risk
\n2, 4, 5
\nCross currency interest rate swaps \u2013 Euro bonds
EUR 2,200m
150
(30)
(163)
239
46
2025
1.14
USD 2.69%
\nFX Forwards \u2212 short term FX risk
USD 618m
5
\u2013
(20)
15
(5)
2021
\u2013
\u2013
\nNet investment hedge \u2013 foreign exchange risk
\n3, 4
\nTransactions matured pre-2020
\u2013
(565)
\u2013
\u2013
(565)
\u2013
\u2013
\u2013
\nCross currency interest rate swap \u2013 JPY investment
JPY 58.5bn
19
(4)
(15)
\u2013
(19)
2029
108.03
JPY 1.53%
\nCross currency interest rate swap \u2013 CNY investment
CNY 458m
(2)
1
1
\u2013
2
2026
6.68
CNY 4.80%
\nForeign currency borrowing \u2013 GBP investment
GBP 350m
(475)
(251)
18
\u2013
(233)
2031
n/a
GBP 5.75%
\nForeign currency borrowing \u2013 EUR investment
\n6
\nEUR 450m
(548)
34
51
\u2013
85
2021
n/a
EUR 0.88%
\nContingent consideration liabilities and Acerta Pharma
\nput\u00a0option liability \u2013 AZUK and AZAB USD investments
USD 5,252m
(5,252)
2,053
(642)
\u2013
1,411
\u2013
\u2013
\u2013
2021
\nOther comprehensive income
\nFair value
\nloss
\nOpening
Fair value
recycled
Closing
\nNominal
balance
(gain)/loss
to the
balance
Average
\namounts
Carrying
1\u00a0January
deferred
Income
31\u00a0December
Average
Average
pay
\nin local
value
2021
to OCI
statement
2021
maturity
USD FX
interest
\ncurrency
$m
$m
$m
$m
$m
year
rate
rate
\nCash flow hedges \u2013 foreign currency and interest rate risk
\n2, 4, 5
\nCross currency interest rate swaps \u2013 Euro bonds
EUR 1,700m
(43)
46
182
(201)
27
2026
1.14
USD 2.85%
\nFX Forwards \u2212 short term FX risk
USD 1,220m
12
(5)
\u2013
(7)
(12)
2022
\u2013
\u2013
\nNet investment hedge \u2013 foreign exchange risk
\n3, 4
\nTransactions matured pre-2021
\u2013
(565)
\u2013
\u2013
(565)
\u2013
\u2013
\u2013
\nCross currency interest rate swap \u2013 JPY investment
JPY 58.3bn
62
(19)
(43)
\u2013
(62)
2029
108.03
JPY 1.53%
\nCross currency interest rate swap \u2013 CNY investment
CNY 458m
(2)
2
\u2013
\u2013
2
2026
6.68
CNY 4.80%
\nForeign currency borrowing \u2013 GBP investment
GBP 350m
470
(233)
(5)
\u2013
(238)
2031
n/a
GBP 5.75%
\nForeign currency borrowing \u2013 EUR investment
\n6
\nEUR 450m
\u2013
85
(47)
\u2013
38
2021
n/a
EUR 0.88%
\nForeign currency borrowing \u2013 EUR investment
\n7
\nEUR 800m
898
\u2013
(50)
\u2013
(50)
2029
n/a
EUR 0.38%
\nContingent consideration liabilities and Acerta Pharma share
\npurchase liability \u2013 AZUK and AZAB USD investments
USD 2,658m
(2,658)
1,411
421
\u2013
1,832
\u2013
\u2013
\u2013
\n2022
\nOther comprehensive income
\nFair value
\n(gain)/loss
\nOpening
Fair value
recycled
Closing
\nNominal
balance
(gain)/loss
to the
balance
Average
\namounts
Carrying
1\u00a0January
deferred
Income
31\u00a0December
Average
Average
pay
\nin local
value
2022
to OCI
statement
2022
maturity
USD FX
interest
\ncurrency
$m
$m
$m
$m
$m
year
rate
rate
\nCash flow hedges \u2013 foreign currency and interest rate risk
\n2, 4, 5
\nCross currency interest rate swaps \u2013 Euro bonds
EUR 1,700m
(160)
27
118
(111)
34
2026
1.14
USD 2.85%
\nFX Forwards \u2212 short term FX risk
USD 1,126m
(12)
(12)
(14)
38
12
2023
\u2013
\u2013
\nNet investment hedge \u2013 foreign exchange risk
\n3, 4
\nTransactions matured pre-2022
\u2013
(527)
\u2013
\u2013
(527)
\u2013
\u2013
\u2013
\nCross currency interest rate swap \u2013 JPY investment
JPY 58.3bn
55
(62)
7
\u2013
(55)
2029
108.03
JPY 1.53%
\nCross currency interest rate swap \u2013 CNY investment
CNY 458m
(4)
2
2
\u2013
4
2026
6.68
CNY 4.80%
\nForeign currency borrowing \u2013 GBP investment
GBP 350m
420
(238)
(50)
\u2013
(288)
2031
n/a
GBP 5.75%
\nForeign currency borrowing \u2013 EUR investment
\n7
\nEUR 800m
846
(50)
(52)
\u2013
(102)
2029
n/a
EUR 0.38%
\nContingent consideration liabilities and Acerta Pharma
\nshare\u00a0purchase liability \u2013 AZUK and AZAB USD investments
USD 2,093m
(2,093)
1,832
384
\u2013
2,216
\u2013
\u2013
\u2013
\n1
Swaps designated in a fair value hedge matured on 24 November 2021 and hedge ineffectiveness during 2022 was $nil (2021: $nil; 2020: gain of $1m).
\n2
Hedge ineffectiveness recognised on swaps designated in a cash flow hedge during the period was $nil (2021: $nil; 2020: $nil).
\n3
Hedge ineffectiveness recognised on swaps designated in a net investment hedge during the period was $nil (2021: $nil; 2020: $nil).
\n4
Fair value movements on cross-currency interest rate swaps in cash flow hedge and net investment hedge relationships are shown inclusive of the impact of costs of hedging.
\n5
Nominal amount of FX forwards in a cash flow hedge of $1,710m represents the USD equivalent notional of the FX forwards. By currency, the nominal amounts were SEK 8,148m at FX rate
\n10.4568, JPY 18,963m at 132.15, GBP 455m at 0.8288 and EUR 224m at 0.9389. All FX forwards in a cash flow hedge mature on 25 January 2023.
\n6
The EUR 450m NIH matured in November 2021, when the hedging instrument, a EUR bond matured.
\n7
On 3 June 2021, upon issuance of the EUR 800m 0.375% 2029 Non-callable bond, EUR 550m was designated in a net investment hedge of the foreign currency exposure in relation of an equivalent
\namount of EUR-denominated net assets. The remaining EUR 250m was subsequently designated in a net investment hedge upon maturity of the EUR 450m bond on 24 November 2021.
\nKey controls applied to transactions in derivative \ufb01nancial instruments are to use only instruments where good market liquidity exists, to revalue all
\n\ufb01nancial instruments regularly using current market rates and to sell options only to offset previously purchased options or as part of a risk management
\nstrategy. The Group is not a net seller of options, and does not use derivative \ufb01nancial instruments for speculative purposes. The Group held no
\noptions during the reporting period.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfFinancialInstrumentsAtFairValueThroughProfitOrLossExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f25992": {
"value": "2 Operating pro\ufb01t \nOperating pro\ufb01t includes the following signi\ufb01cant items:
\nCost of sales
\nIn 2022, Cost of sales includes a charge of $3,484m (2021: charge of $2,198m) in relation to the release, in line with sales, of fair value uplift to inventory
\nthat was recognised under IFRS 3 \u2018Business Combinations\u2019 upon the acquisition of Alexion (see Note 27).
\nDuring the year no government grants were recognised within Cost of sales (2021: $290m; 2020: $nil). The grants recognised in 2021 related to
\nfunding of manufactured
Vaxzevria
product for the US government, which expired prior to being accepted by the FDA.
\nSelling, general and administrative expense
\nIn 2022, Selling, general and administrative expense includes a charge of $182m (2021: charge of $42m; 2020: credit of $51m) resulting from changes
\nin the fair value of contingent consideration arising from the acquisition of the diabetes alliance from BMS. These adjustments re\ufb02ect revised estimates
\nfor future sales performance for the products acquired and, as a result, revised estimates for future royalties payable.
\nIn 2022, Selling, general and administrative costs includes a credit of $49m (2021: charge of $5m; 2020: credit of $143m) resulting from changes in
\nthe fair value of contingent consideration arising from the acquisition of Almirall\u2019s respiratory business. These adjustments re\ufb02ect revised estimates
\nfor future sales performance for the products acquired and, as a result, revised estimates for future milestones payable.
\nIn 2022, Selling, general and administrative expense also includes a charge of $789m (2021: charge of $48m; 2020: credit of $9m) relating to a number
\nof legal proceedings including settlements in various jurisdictions in relation to several marketed products (see Note 30).
\nResearch and development expense: Government grants
\nDuring the year $113m (2021: $531m; 2020: $222m) of government grants were recognised within Research and development expense. The grants
\nrecognised relate to funding for research and development and related expenses for
Evusheld
of $112m (2021: $222m; 2020: $61m) and
Vaxzevria
\nof $1m (2021: $309m; 2020: $161m).
\nNotes to the Group Financial Statements
\ncontinued
\n150
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
Other operating income and expense
\n2022
2021
2020
\n$m
$m\u00a0
$m
\nRoyalty income
59
62
147
\nGains on disposal of intangible assets
104
513
1,030
\nGains on disposal of investments in associates and joint ventures
\u2013
776
\u2013
\nNet gains/(losses) on disposal of other non-current assets
112
(4)
25
\nImpairment of property, plant and equipment
\u2013
\u2013
(12)
\nOther income
\n1
\n439
453
406
\nOther expense
(200)
(308)
(68)
\nOther operating income and expense
514
1,492
1,528
\n1
Other income in 2022 includes $138m of payments from Allergan in respect of the development of brazikumab (2021: $99m; 2020: $107m).
\nGains on disposal of intangible assets in 2021 includes $317m on disposal of rights to
Crestor
in over 30 countries in Europe, except in the UK and Spain.
\nGains on disposal of intangible assets in 2020 includes $350m on disposal of global rights excluding US, India and Japan to established hypertension
\nmedicines to Atnahs Pharma, $400m on disposal of rights in over 70 countries to
Atacand
to Cheplapharm and $120m on the sale of an FDA Priority
\nReview Voucher.
\nNet gains/(losses) on disposal of other non-current assets in 2022 includes a $125m gain in respect of the Waltham R&D site sale and leaseback in
\nMA, US (see Note 8).
\nGains on disposal of investments in associates and joint ventures in 2021 relates to the disposal of the 26.7% ownership in Viela Bio, as part of the
\nacquisition of Viela by Horizon Therapeutics plc. AstraZeneca received cash proceeds and pro\ufb01t of $776m upon closing, with the pro\ufb01t recorded as
\nOther operating income.
\nAs part of the total consideration received in respect of the agreement to sell US rights to
Synagis
in 2019, $210m in total has been received related
\nto the rights to participate in the future cash \ufb02ows from the US pro\ufb01ts or losses for nirsevimab. The full amount has been recognised as a \ufb01nancial
\nliability as the Group has not fully transferred the risks and rewards of the underlying cash \ufb02ows arising from nirsevimab to Sobi. This liability is
\npresented in Other payables within Non-current liabilities. The associated cash \ufb02ow is presented within investing activities as the Group has received
\nthe cash in exchange for agreeing to transfer future cash \ufb02ows relating to an intangible asset. In 2021, as a result of the Probability of Technical/
\nRegulatory Success unwind, an increase of $114m to the Pro\ufb01t Participation Liability was recorded in Other operating expense.
\nRestructuring costs
\nIn conjunction with the acquisition of Alexion in 2021, the enlarged Group initiated a comprehensive Post Alexion Acquisition Group Review, aimed
\nat integrating systems, structure and processes, optimising the global footprint and prioritising resource allocations and investments. These activities
\nare expected to be substantially complete by the end of 2025, with a number of planned activities having commenced in late 2021 and during 2022.
\nThe Group has also continued to progress other legacy restructuring programmes.
\nDuring 2022, the Group has incurred $717m of restructuring costs, of which $675m resulted from activities that are part of the Post Alexion Acquisition
\nGroup Review, bringing the cumulative charges under this programme to $1,705m. Costs in 2022 included $266m within Cost of sales due to the
\nrationalisation of our manufacturing capacity and footprint across certain production sites, $152m within Selling, general and administrative expenses
\nin relation to the transfer of Alexion\u2019s distribution contracts with third parties to AstraZeneca Group companies, and $83m in Selling, general and
\nadministrative expenses related to rationalisation of commercial teams in China.
\nTotal restructuring costs in 2022 include impairment reversal of Property, plant and equipment of $4m (2021: charge of $343m; 2020: charge of $7m)
\nand impairment reversal of Intangible assets (software development costs) of $17m (2021: charge of $16m; 2020: $nil).
\nThe tables below show the costs that have been charged in respect of restructuring programmes by cost category and type. Severance provisions
\nare detailed in Note 21.
\n2022
2021
2020
\n$m
$m
$m
\nCost of sales
266
722
53
\nDistribution expense
2
\u2013
\u2013
\nResearch and development expense
111
223
35
\nSelling, general and administrative expense
405
338
162
\nOther operating income and expense
(67)
\u2013
1
\nTotal charge
717
1,283
251
\n2022
2021
2020
\n$m
$m
$m
\nSeverance costs
187
217
26
\nAccelerated depreciation and impairment charges
135
371
17
\nOther
\n1
\n395
695
208
\nTotal charge
717
1,283
251
\n1
Other costs are those incurred in designing and implementing the Group\u2019s various restructuring initiatives, including costs of integrating systems, structure and processes as part of our
\nPost Alexion Acquisition Group Review, costs relating to the Alexion acquisition, internal project costs and external consultancy fees.
\n151
AstraZeneca Annual Report & Form 20-F Information 2022
Notes to the Group Financial Statements
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
2 Operating pro\ufb01t
continued
\nFinancial instruments
\nIncluded within Operating pro\ufb01t are the following net gains and losses on \ufb01nancial instruments:
\n2022
2021
2020
\n$m
$m
$m
\nGains/(losses) on forward foreign exchange contracts
150
(21)
(86)
\n(Losses)/gains on receivables and payables
(203)
(42)
89
\nTotal
(53)
(63)
3
\nImpairment charges
\nDetails of impairment charges for 2022, 2021 and 2020 are included in Notes 7, 8 and 10.",
"dimensions": {
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"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f25993": {
"value": "2 Operating pro\ufb01t \nOperating pro\ufb01t includes the following signi\ufb01cant items:
\nCost of sales
\nIn 2022, Cost of sales includes a charge of $3,484m (2021: charge of $2,198m) in relation to the release, in line with sales, of fair value uplift to inventory
\nthat was recognised under IFRS 3 \u2018Business Combinations\u2019 upon the acquisition of Alexion (see Note 27).
\nDuring the year no government grants were recognised within Cost of sales (2021: $290m; 2020: $nil). The grants recognised in 2021 related to
\nfunding of manufactured
Vaxzevria
product for the US government, which expired prior to being accepted by the FDA.
\nSelling, general and administrative expense
\nIn 2022, Selling, general and administrative expense includes a charge of $182m (2021: charge of $42m; 2020: credit of $51m) resulting from changes
\nin the fair value of contingent consideration arising from the acquisition of the diabetes alliance from BMS. These adjustments re\ufb02ect revised estimates
\nfor future sales performance for the products acquired and, as a result, revised estimates for future royalties payable.
\nIn 2022, Selling, general and administrative costs includes a credit of $49m (2021: charge of $5m; 2020: credit of $143m) resulting from changes in
\nthe fair value of contingent consideration arising from the acquisition of Almirall\u2019s respiratory business. These adjustments re\ufb02ect revised estimates
\nfor future sales performance for the products acquired and, as a result, revised estimates for future milestones payable.
\nIn 2022, Selling, general and administrative expense also includes a charge of $789m (2021: charge of $48m; 2020: credit of $9m) relating to a number
\nof legal proceedings including settlements in various jurisdictions in relation to several marketed products (see Note 30).
\nResearch and development expense: Government grants
\nDuring the year $113m (2021: $531m; 2020: $222m) of government grants were recognised within Research and development expense. The grants
\nrecognised relate to funding for research and development and related expenses for
Evusheld
of $112m (2021: $222m; 2020: $61m) and
Vaxzevria
\nof $1m (2021: $309m; 2020: $161m).
\nNotes to the Group Financial Statements
\ncontinued
\n150
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
Other operating income and expense
\n2022
2021
2020
\n$m
$m\u00a0
$m
\nRoyalty income
59
62
147
\nGains on disposal of intangible assets
104
513
1,030
\nGains on disposal of investments in associates and joint ventures
\u2013
776
\u2013
\nNet gains/(losses) on disposal of other non-current assets
112
(4)
25
\nImpairment of property, plant and equipment
\u2013
\u2013
(12)
\nOther income
\n1
\n439
453
406
\nOther expense
(200)
(308)
(68)
\nOther operating income and expense
514
1,492
1,528
\n1
Other income in 2022 includes $138m of payments from Allergan in respect of the development of brazikumab (2021: $99m; 2020: $107m).
\nGains on disposal of intangible assets in 2021 includes $317m on disposal of rights to
Crestor
in over 30 countries in Europe, except in the UK and Spain.
\nGains on disposal of intangible assets in 2020 includes $350m on disposal of global rights excluding US, India and Japan to established hypertension
\nmedicines to Atnahs Pharma, $400m on disposal of rights in over 70 countries to
Atacand
to Cheplapharm and $120m on the sale of an FDA Priority
\nReview Voucher.
\nNet gains/(losses) on disposal of other non-current assets in 2022 includes a $125m gain in respect of the Waltham R&D site sale and leaseback in
\nMA, US (see Note 8).
\nGains on disposal of investments in associates and joint ventures in 2021 relates to the disposal of the 26.7% ownership in Viela Bio, as part of the
\nacquisition of Viela by Horizon Therapeutics plc. AstraZeneca received cash proceeds and pro\ufb01t of $776m upon closing, with the pro\ufb01t recorded as
\nOther operating income.
\nAs part of the total consideration received in respect of the agreement to sell US rights to
Synagis
in 2019, $210m in total has been received related
\nto the rights to participate in the future cash \ufb02ows from the US pro\ufb01ts or losses for nirsevimab. The full amount has been recognised as a \ufb01nancial
\nliability as the Group has not fully transferred the risks and rewards of the underlying cash \ufb02ows arising from nirsevimab to Sobi. This liability is
\npresented in Other payables within Non-current liabilities. The associated cash \ufb02ow is presented within investing activities as the Group has received
\nthe cash in exchange for agreeing to transfer future cash \ufb02ows relating to an intangible asset. In 2021, as a result of the Probability of Technical/
\nRegulatory Success unwind, an increase of $114m to the Pro\ufb01t Participation Liability was recorded in Other operating expense.
\nRestructuring costs
\nIn conjunction with the acquisition of Alexion in 2021, the enlarged Group initiated a comprehensive Post Alexion Acquisition Group Review, aimed
\nat integrating systems, structure and processes, optimising the global footprint and prioritising resource allocations and investments. These activities
\nare expected to be substantially complete by the end of 2025, with a number of planned activities having commenced in late 2021 and during 2022.
\nThe Group has also continued to progress other legacy restructuring programmes.
\nDuring 2022, the Group has incurred $717m of restructuring costs, of which $675m resulted from activities that are part of the Post Alexion Acquisition
\nGroup Review, bringing the cumulative charges under this programme to $1,705m. Costs in 2022 included $266m within Cost of sales due to the
\nrationalisation of our manufacturing capacity and footprint across certain production sites, $152m within Selling, general and administrative expenses
\nin relation to the transfer of Alexion\u2019s distribution contracts with third parties to AstraZeneca Group companies, and $83m in Selling, general and
\nadministrative expenses related to rationalisation of commercial teams in China.
\nTotal restructuring costs in 2022 include impairment reversal of Property, plant and equipment of $4m (2021: charge of $343m; 2020: charge of $7m)
\nand impairment reversal of Intangible assets (software development costs) of $17m (2021: charge of $16m; 2020: $nil).
\nThe tables below show the costs that have been charged in respect of restructuring programmes by cost category and type. Severance provisions
\nare detailed in Note 21.
\n2022
2021
2020
\n$m
$m
$m
\nCost of sales
266
722
53
\nDistribution expense
2
\u2013
\u2013
\nResearch and development expense
111
223
35
\nSelling, general and administrative expense
405
338
162
\nOther operating income and expense
(67)
\u2013
1
\nTotal charge
717
1,283
251
\n2022
2021
2020
\n$m
$m
$m
\nSeverance costs
187
217
26
\nAccelerated depreciation and impairment charges
135
371
17
\nOther
\n1
\n395
695
208
\nTotal charge
717
1,283
251
\n1
Other costs are those incurred in designing and implementing the Group\u2019s various restructuring initiatives, including costs of integrating systems, structure and processes as part of our
\nPost Alexion Acquisition Group Review, costs relating to the Alexion acquisition, internal project costs and external consultancy fees.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfExpensesExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f25998": {
"value": "Cost of sales \nIn 2022, Cost of sales includes a charge of $3,484m (2021: charge of $2,198m) in relation to the release, in line with sales, of fair value uplift to inventory
\nthat was recognised under IFRS 3 \u2018Business Combinations\u2019 upon the acquisition of Alexion (see Note 27).
\nDuring the year no government grants were recognised within Cost of sales (2021: $290m; 2020: $nil). The grants recognised in 2021 related to
\nfunding of manufactured
Vaxzevria
product for the US government, which expired prior to being accepted by the FDA.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfCostOfSalesExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f26008": {
"value": "Selling, general and administrative expense \nIn 2022, Selling, general and administrative expense includes a charge of $182m (2021: charge of $42m; 2020: credit of $51m) resulting from changes
\nin the fair value of contingent consideration arising from the acquisition of the diabetes alliance from BMS. These adjustments re\ufb02ect revised estimates
\nfor future sales performance for the products acquired and, as a result, revised estimates for future royalties payable.
\nIn 2022, Selling, general and administrative costs includes a credit of $49m (2021: charge of $5m; 2020: credit of $143m) resulting from changes in
\nthe fair value of contingent consideration arising from the acquisition of Almirall\u2019s respiratory business. These adjustments re\ufb02ect revised estimates
\nfor future sales performance for the products acquired and, as a result, revised estimates for future milestones payable.
\nIn 2022, Selling, general and administrative expense also includes a charge of $789m (2021: charge of $48m; 2020: credit of $9m) relating to a number
\nof legal proceedings including settlements in various jurisdictions in relation to several marketed products (see Note 30).",
"dimensions": {
"concept": "ifrs-full:DisclosureOfGeneralAndAdministrativeExpenseExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f26020": {
"value": "Research and development expense: Government grants \nDuring the year $113m (2021: $531m; 2020: $222m) of government grants were recognised within Research and development expense. The grants
\nrecognised relate to funding for research and development and related expenses for
Evusheld
of $112m (2021: $222m; 2020: $61m) and
Vaxzevria
\nof $1m (2021: $309m; 2020: $161m).",
"dimensions": {
"concept": "ifrs-full:DisclosureOfResearchAndDevelopmentExpenseExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f26021": {
"value": "Research and development expense: Government grants \nDuring the year $113m (2021: $531m; 2020: $222m) of government grants were recognised within Research and development expense. The grants
\nrecognised relate to funding for research and development and related expenses for
Evusheld
of $112m (2021: $222m; 2020: $61m) and
Vaxzevria
\nof $1m (2021: $309m; 2020: $161m).",
"dimensions": {
"concept": "ifrs-full:DisclosureOfGovernmentGrantsExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f26054": {
"value": "Other operating income and expense \n2022
2021
2020
\n$m
$m\u00a0
$m
\nRoyalty income
59
62
147
\nGains on disposal of intangible assets
104
513
1,030
\nGains on disposal of investments in associates and joint ventures
\u2013
776
\u2013
\nNet gains/(losses) on disposal of other non-current assets
112
(4)
25
\nImpairment of property, plant and equipment
\u2013
\u2013
(12)
\nOther income
\n1
\n439
453
406
\nOther expense
(200)
(308)
(68)
\nOther operating income and expense
514
1,492
1,528
\n1
Other income in 2022 includes $138m of payments from Allergan in respect of the development of brazikumab (2021: $99m; 2020: $107m).
\nGains on disposal of intangible assets in 2021 includes $317m on disposal of rights to
Crestor
in over 30 countries in Europe, except in the UK and Spain.
\nGains on disposal of intangible assets in 2020 includes $350m on disposal of global rights excluding US, India and Japan to established hypertension
\nmedicines to Atnahs Pharma, $400m on disposal of rights in over 70 countries to
Atacand
to Cheplapharm and $120m on the sale of an FDA Priority
\nReview Voucher.
\nNet gains/(losses) on disposal of other non-current assets in 2022 includes a $125m gain in respect of the Waltham R&D site sale and leaseback in
\nMA, US (see Note 8).
\nGains on disposal of investments in associates and joint ventures in 2021 relates to the disposal of the 26.7% ownership in Viela Bio, as part of the
\nacquisition of Viela by Horizon Therapeutics plc. AstraZeneca received cash proceeds and pro\ufb01t of $776m upon closing, with the pro\ufb01t recorded as
\nOther operating income.
\nAs part of the total consideration received in respect of the agreement to sell US rights to
Synagis
in 2019, $210m in total has been received related
\nto the rights to participate in the future cash \ufb02ows from the US pro\ufb01ts or losses for nirsevimab. The full amount has been recognised as a \ufb01nancial
\nliability as the Group has not fully transferred the risks and rewards of the underlying cash \ufb02ows arising from nirsevimab to Sobi. This liability is
\npresented in Other payables within Non-current liabilities. The associated cash \ufb02ow is presented within investing activities as the Group has received
\nthe cash in exchange for agreeing to transfer future cash \ufb02ows relating to an intangible asset. In 2021, as a result of the Probability of Technical/
\nRegulatory Success unwind, an increase of $114m to the Pro\ufb01t Participation Liability was recorded in Other operating expense.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfOtherOperatingIncomeExpenseExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f26055": {
"value": "Other operating income and expense \n2022
2021
2020
\n$m
$m\u00a0
$m
\nRoyalty income
59
62
147
\nGains on disposal of intangible assets
104
513
1,030
\nGains on disposal of investments in associates and joint ventures
\u2013
776
\u2013
\nNet gains/(losses) on disposal of other non-current assets
112
(4)
25
\nImpairment of property, plant and equipment
\u2013
\u2013
(12)
\nOther income
\n1
\n439
453
406
\nOther expense
(200)
(308)
(68)
\nOther operating income and expense
514
1,492
1,528
\n1
Other income in 2022 includes $138m of payments from Allergan in respect of the development of brazikumab (2021: $99m; 2020: $107m).
\nGains on disposal of intangible assets in 2021 includes $317m on disposal of rights to
Crestor
in over 30 countries in Europe, except in the UK and Spain.
\nGains on disposal of intangible assets in 2020 includes $350m on disposal of global rights excluding US, India and Japan to established hypertension
\nmedicines to Atnahs Pharma, $400m on disposal of rights in over 70 countries to
Atacand
to Cheplapharm and $120m on the sale of an FDA Priority
\nReview Voucher.
\nNet gains/(losses) on disposal of other non-current assets in 2022 includes a $125m gain in respect of the Waltham R&D site sale and leaseback in
\nMA, US (see Note 8).
\nGains on disposal of investments in associates and joint ventures in 2021 relates to the disposal of the 26.7% ownership in Viela Bio, as part of the
\nacquisition of Viela by Horizon Therapeutics plc. AstraZeneca received cash proceeds and pro\ufb01t of $776m upon closing, with the pro\ufb01t recorded as
\nOther operating income.
\nAs part of the total consideration received in respect of the agreement to sell US rights to
Synagis
in 2019, $210m in total has been received related
\nto the rights to participate in the future cash \ufb02ows from the US pro\ufb01ts or losses for nirsevimab. The full amount has been recognised as a \ufb01nancial
\nliability as the Group has not fully transferred the risks and rewards of the underlying cash \ufb02ows arising from nirsevimab to Sobi. This liability is
\npresented in Other payables within Non-current liabilities. The associated cash \ufb02ow is presented within investing activities as the Group has received
\nthe cash in exchange for agreeing to transfer future cash \ufb02ows relating to an intangible asset. In 2021, as a result of the Probability of Technical/
\nRegulatory Success unwind, an increase of $114m to the Pro\ufb01t Participation Liability was recorded in Other operating expense.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfOtherOperatingIncomeExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f26056": {
"value": "Other operating income and expense \n2022
2021
2020
\n$m
$m\u00a0
$m
\nRoyalty income
59
62
147
\nGains on disposal of intangible assets
104
513
1,030
\nGains on disposal of investments in associates and joint ventures
\u2013
776
\u2013
\nNet gains/(losses) on disposal of other non-current assets
112
(4)
25
\nImpairment of property, plant and equipment
\u2013
\u2013
(12)
\nOther income
\n1
\n439
453
406
\nOther expense
(200)
(308)
(68)
\nOther operating income and expense
514
1,492
1,528
\n1
Other income in 2022 includes $138m of payments from Allergan in respect of the development of brazikumab (2021: $99m; 2020: $107m).
\nGains on disposal of intangible assets in 2021 includes $317m on disposal of rights to
Crestor
in over 30 countries in Europe, except in the UK and Spain.
\nGains on disposal of intangible assets in 2020 includes $350m on disposal of global rights excluding US, India and Japan to established hypertension
\nmedicines to Atnahs Pharma, $400m on disposal of rights in over 70 countries to
Atacand
to Cheplapharm and $120m on the sale of an FDA Priority
\nReview Voucher.
\nNet gains/(losses) on disposal of other non-current assets in 2022 includes a $125m gain in respect of the Waltham R&D site sale and leaseback in
\nMA, US (see Note 8).
\nGains on disposal of investments in associates and joint ventures in 2021 relates to the disposal of the 26.7% ownership in Viela Bio, as part of the
\nacquisition of Viela by Horizon Therapeutics plc. AstraZeneca received cash proceeds and pro\ufb01t of $776m upon closing, with the pro\ufb01t recorded as
\nOther operating income.
\nAs part of the total consideration received in respect of the agreement to sell US rights to
Synagis
in 2019, $210m in total has been received related
\nto the rights to participate in the future cash \ufb02ows from the US pro\ufb01ts or losses for nirsevimab. The full amount has been recognised as a \ufb01nancial
\nliability as the Group has not fully transferred the risks and rewards of the underlying cash \ufb02ows arising from nirsevimab to Sobi. This liability is
\npresented in Other payables within Non-current liabilities. The associated cash \ufb02ow is presented within investing activities as the Group has received
\nthe cash in exchange for agreeing to transfer future cash \ufb02ows relating to an intangible asset. In 2021, as a result of the Probability of Technical/
\nRegulatory Success unwind, an increase of $114m to the Pro\ufb01t Participation Liability was recorded in Other operating expense.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfOtherOperatingExpenseExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f26217": {
"value": "Financial instruments
\nIncluded within Operating pro\ufb01t are the following net gains and losses on \ufb01nancial instruments:
\n2022
2021
2020
\n$m
$m
$m
\nGains/(losses) on forward foreign exchange contracts
150
(21)
(86)
\n(Losses)/gains on receivables and payables
(203)
(42)
89
\nTotal
(53)
(63)
3
13 Derivative \ufb01nancial instruments
\nNon-current
Current
Current
Non-current
\nassets
assets
liabilities
liabilities
Total
\n$m
$m
$m
$m
$m
\nInterest rate swaps related to instruments designated at fair value through profit and loss
45
\u2013
\u2013
\u2013
45
\nCross currency swaps designated in a net investment hedge
19
\u2013
\u2013
(2)
17
\nCross currency swaps designated in a cash flow hedge
107
43
\u2013
\u2013
150
\nCross currency swaps designated in a fair value hedge
\n1
\n\u2013
43
\u2013
\u2013
43
\nForward FX designated in a cash flow hedge
\n2
\n\u2013
8
(3)
\u2013
5
\nOther derivatives
\u2013
48
(30)
\u2013
18
\n31\u00a0December 2020
171
142
(33)
(2)
278
\nNon-current
Current
Current
Non-current
\nassets
assets
liabilities
liabilities
Total
\n$m
$m
$m
$m
$m
\nInterest rate swaps related to instruments designated at fair value through profit and loss
25
\u2013
\u2013
\u2013
25
\nCross currency swaps designated in a net investment hedge
62
\u2013
\u2013
(2)
60
\nCross currency swaps designated in a cash flow hedge
\u2013
\u2013
\u2013
(43)
(43)
\nForward FX designated in a cash flow hedge
\n2
\n\u2013
13
\u2013
\u2013
13
\nOther derivatives
15
70
(79)
\u2013
6
\n31\u00a0December 2021
102
83
(79)
(45)
61
\nNon-current
Current
Current
Non-current
\nassets
assets
liabilities
liabilities
Total
\n$m
$m
$m
$m
$m
\nInterest rate swaps related to instruments designated at fair value through profit and loss
\u2013
1
\u2013
\u2013
1
\nCross currency swaps designated in a net investment hedge
55
\u2013
\u2013
(4)
51
\nCross currency swaps designated in a cash flow hedge
\u2013
\u2013
\u2013
(160)
(160)
\nForward FX designated in a cash flow hedge
\n2
\n\u2013
1
(13)
\u2013
(12)
\nOther derivatives
19
85
(80)
\u2013
24
\n31\u00a0December 2022
74
87
(93)
(164)
(96)
\n1
Cross currency swaps designated in a fair value hedge refers to a cross currency interest rate swap that hedges a designated euro 300m portion of our euro 750m 0.875% 2021 Non-callable
\nbond against exposure to movements in the euro:US dollar exchange rate. The swap matured in November 2021 when the related bond matured.
\n2
Forward FX designated in a cash flow hedge relates to contracts hedging anticipated CNY, EUR, GBP, JPY and SEK transactions occurring in the quarter immediately after the balance
\nsheet date.
\nAll derivatives are held at fair value and fall within Level 2 of the fair value hierarchy as de\ufb01ned in Note 12, except for an equity warrant which falls
\nwithin Level 3 (valued at $19m (2021: $15m), held within Non-current assets). None of the derivatives have been reclassi\ufb01ed in the year.
\nThe fair value of interest rate swaps and cross currency swaps is estimated using appropriate zero coupon curve valuation techniques to discount
\nfuture contractual cash \ufb02ows based on rates at the current year end.
\nThe fair value of forward foreign exchange contracts and currency options are estimated by cash \ufb02ow accounting models using appropriate yield
\ncurves based on market forward foreign exchange rates at the year end. The majority of forward foreign exchange contracts for existing transactions
\nhad maturities of less than one month from year end.
\nThe interest rates used to discount future cash \ufb02ows for fair value adjustments, where applicable, are based on market swap curves at the reporting
\ndate, and were as follows:
\n2022
2021
2020
\nDerivatives
0.1% to 4.7%
(0.5)% to 3.6%
(0.5)% to 2.4%
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfFinancialInstrumentsExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f26242": {
"value": "3 Finance income and expense \n2022
2021
2020
\n$m
$m
$m
\nFinance income
\nReturns on deposits and equity securities
78
12
41
\nFair value gains on debt and interest rate swaps
14
\u2013
4
\nDiscount unwind on other long-term assets
\u2013
\u2013
6
\nInterest income on income tax balances
3
31
36
\nTotal
95
43
87
\nFinance expense
\nInterest on debt, leases and other financing costs
(889)
(774)
(736)
\nNet interest on post-employment defined benefit plan net liabilities (Note\u00a022)
(29)
(26)
(37)
\nNet exchange losses
(16)
(20)
(34)
\nDiscount unwind on contingent consideration arising from business combinations (Note\u00a020)
(168)
(226)
(278)
\nDiscount unwind on other long-term liabilities
\n1
\n(216)
(248)
(219)
\nFair value losses on debt and interest rate swaps
\u2013
(4)
\u2013
\nInterest expense on income tax balances
(28)
(2)
(2)
\nTotal
(1,346)
(1,300)
(1,306)
\nNet finance expense
(1,251)
(1,257)
(1,219)
\n1
Included within Discount unwind on other long-term liabilities is $108m relating to the Acerta Pharma share purchase liability (2021: $161m; 2020: $151m), see Note 20 for further details.
\nThere was no interest capitalised during the year.
\nFinancial instruments
\nIncluded within \ufb01nance income and expense are the following net gains and losses on \ufb01nancial instruments:
\n2022
2021
2020
\n$m
$m
$m
\nInterest and fair value adjustments in respect of debt designated at fair value through profit or loss, net of derivatives
(9)
(5)
(8)
\nInterest and changes in carrying values of debt designated as hedged items in fair value hedges, net of derivatives
\u2013
(9)
(6)
\nInterest and fair value changes on fixed and short-term deposits, equity securities, other derivatives and tax balances
54
16
42
\nInterest on debt, commercial paper, overdrafts and lease liabilities held at amortised cost
(837)
(738)
(660)
\nThe interest rate fair value hedges were closed in 2021. Fair value gain or loss of $nil (2021: loss of $33m; 2020: gain of $33m) on interest rate fair value
\nhedging instruments and $nil fair value gain or loss (2021: gain of $29m; 2020: loss of $32m) on the related hedged items have been included within
\nInterest and changes in carrying values of debt designated as hedged items, net of derivatives.
\nFair value loss of $25m (2021: loss of $19m; 2020: gain of $2m) on derivatives related to debt instruments designated at fair value through pro\ufb01t or
\nloss and $26m fair value gain (2021: gain of $19m; 2020: loss of $3m) on debt instruments designated at fair value through pro\ufb01t or loss have been
\nincluded within Interest and fair value adjustments in respect of debt designated at fair value through pro\ufb01t or loss, net of derivatives.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfFinanceIncomeExpenseExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f26243": {
"value": "3 Finance income and expense \n2022
2021
2020
\n$m
$m
$m
\nFinance income
\nReturns on deposits and equity securities
78
12
41
\nFair value gains on debt and interest rate swaps
14
\u2013
4
\nDiscount unwind on other long-term assets
\u2013
\u2013
6
\nInterest income on income tax balances
3
31
36
\nTotal
95
43
87
\nFinance expense
\nInterest on debt, leases and other financing costs
(889)
(774)
(736)
\nNet interest on post-employment defined benefit plan net liabilities (Note\u00a022)
(29)
(26)
(37)
\nNet exchange losses
(16)
(20)
(34)
\nDiscount unwind on contingent consideration arising from business combinations (Note\u00a020)
(168)
(226)
(278)
\nDiscount unwind on other long-term liabilities
\n1
\n(216)
(248)
(219)
\nFair value losses on debt and interest rate swaps
\u2013
(4)
\u2013
\nInterest expense on income tax balances
(28)
(2)
(2)
\nTotal
(1,346)
(1,300)
(1,306)
\nNet finance expense
(1,251)
(1,257)
(1,219)
\n1
Included within Discount unwind on other long-term liabilities is $108m relating to the Acerta Pharma share purchase liability (2021: $161m; 2020: $151m), see Note 20 for further details.
\nThere was no interest capitalised during the year.
\nFinancial instruments
\nIncluded within \ufb01nance income and expense are the following net gains and losses on \ufb01nancial instruments:
\n2022
2021
2020
\n$m
$m
$m
\nInterest and fair value adjustments in respect of debt designated at fair value through profit or loss, net of derivatives
(9)
(5)
(8)
\nInterest and changes in carrying values of debt designated as hedged items in fair value hedges, net of derivatives
\u2013
(9)
(6)
\nInterest and fair value changes on fixed and short-term deposits, equity securities, other derivatives and tax balances
54
16
42
\nInterest on debt, commercial paper, overdrafts and lease liabilities held at amortised cost
(837)
(738)
(660)
\nThe interest rate fair value hedges were closed in 2021. Fair value gain or loss of $nil (2021: loss of $33m; 2020: gain of $33m) on interest rate fair value
\nhedging instruments and $nil fair value gain or loss (2021: gain of $29m; 2020: loss of $32m) on the related hedged items have been included within
\nInterest and changes in carrying values of debt designated as hedged items, net of derivatives.
\nFair value loss of $25m (2021: loss of $19m; 2020: gain of $2m) on derivatives related to debt instruments designated at fair value through pro\ufb01t or
\nloss and $26m fair value gain (2021: gain of $19m; 2020: loss of $3m) on debt instruments designated at fair value through pro\ufb01t or loss have been
\nincluded within Interest and fair value adjustments in respect of debt designated at fair value through pro\ufb01t or loss, net of derivatives.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfFinanceIncomeExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f26244": {
"value": "3 Finance income and expense \n2022
2021
2020
\n$m
$m
$m
\nFinance income
\nReturns on deposits and equity securities
78
12
41
\nFair value gains on debt and interest rate swaps
14
\u2013
4
\nDiscount unwind on other long-term assets
\u2013
\u2013
6
\nInterest income on income tax balances
3
31
36
\nTotal
95
43
87
\nFinance expense
\nInterest on debt, leases and other financing costs
(889)
(774)
(736)
\nNet interest on post-employment defined benefit plan net liabilities (Note\u00a022)
(29)
(26)
(37)
\nNet exchange losses
(16)
(20)
(34)
\nDiscount unwind on contingent consideration arising from business combinations (Note\u00a020)
(168)
(226)
(278)
\nDiscount unwind on other long-term liabilities
\n1
\n(216)
(248)
(219)
\nFair value losses on debt and interest rate swaps
\u2013
(4)
\u2013
\nInterest expense on income tax balances
(28)
(2)
(2)
\nTotal
(1,346)
(1,300)
(1,306)
\nNet finance expense
(1,251)
(1,257)
(1,219)
\n1
Included within Discount unwind on other long-term liabilities is $108m relating to the Acerta Pharma share purchase liability (2021: $161m; 2020: $151m), see Note 20 for further details.
\nThere was no interest capitalised during the year.
\nFinancial instruments
\nIncluded within \ufb01nance income and expense are the following net gains and losses on \ufb01nancial instruments:
\n2022
2021
2020
\n$m
$m
$m
\nInterest and fair value adjustments in respect of debt designated at fair value through profit or loss, net of derivatives
(9)
(5)
(8)
\nInterest and changes in carrying values of debt designated as hedged items in fair value hedges, net of derivatives
\u2013
(9)
(6)
\nInterest and fair value changes on fixed and short-term deposits, equity securities, other derivatives and tax balances
54
16
42
\nInterest on debt, commercial paper, overdrafts and lease liabilities held at amortised cost
(837)
(738)
(660)
\nThe interest rate fair value hedges were closed in 2021. Fair value gain or loss of $nil (2021: loss of $33m; 2020: gain of $33m) on interest rate fair value
\nhedging instruments and $nil fair value gain or loss (2021: gain of $29m; 2020: loss of $32m) on the related hedged items have been included within
\nInterest and changes in carrying values of debt designated as hedged items, net of derivatives.
\nFair value loss of $25m (2021: loss of $19m; 2020: gain of $2m) on derivatives related to debt instruments designated at fair value through pro\ufb01t or
\nloss and $26m fair value gain (2021: gain of $19m; 2020: loss of $3m) on debt instruments designated at fair value through pro\ufb01t or loss have been
\nincluded within Interest and fair value adjustments in respect of debt designated at fair value through pro\ufb01t or loss, net of derivatives.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfFinanceCostExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f26245": {
"value": "3 Finance income and expense \n2022
2021
2020
\n$m
$m
$m
\nFinance income
\nReturns on deposits and equity securities
78
12
41
\nFair value gains on debt and interest rate swaps
14
\u2013
4
\nDiscount unwind on other long-term assets
\u2013
\u2013
6
\nInterest income on income tax balances
3
31
36
\nTotal
95
43
87
\nFinance expense
\nInterest on debt, leases and other financing costs
(889)
(774)
(736)
\nNet interest on post-employment defined benefit plan net liabilities (Note\u00a022)
(29)
(26)
(37)
\nNet exchange losses
(16)
(20)
(34)
\nDiscount unwind on contingent consideration arising from business combinations (Note\u00a020)
(168)
(226)
(278)
\nDiscount unwind on other long-term liabilities
\n1
\n(216)
(248)
(219)
\nFair value losses on debt and interest rate swaps
\u2013
(4)
\u2013
\nInterest expense on income tax balances
(28)
(2)
(2)
\nTotal
(1,346)
(1,300)
(1,306)
\nNet finance expense
(1,251)
(1,257)
(1,219)
\n1
Included within Discount unwind on other long-term liabilities is $108m relating to the Acerta Pharma share purchase liability (2021: $161m; 2020: $151m), see Note 20 for further details.
\nThere was no interest capitalised during the year.
\nFinancial instruments
\nIncluded within \ufb01nance income and expense are the following net gains and losses on \ufb01nancial instruments:
\n2022
2021
2020
\n$m
$m
$m
\nInterest and fair value adjustments in respect of debt designated at fair value through profit or loss, net of derivatives
(9)
(5)
(8)
\nInterest and changes in carrying values of debt designated as hedged items in fair value hedges, net of derivatives
\u2013
(9)
(6)
\nInterest and fair value changes on fixed and short-term deposits, equity securities, other derivatives and tax balances
54
16
42
\nInterest on debt, commercial paper, overdrafts and lease liabilities held at amortised cost
(837)
(738)
(660)
\nThe interest rate fair value hedges were closed in 2021. Fair value gain or loss of $nil (2021: loss of $33m; 2020: gain of $33m) on interest rate fair value
\nhedging instruments and $nil fair value gain or loss (2021: gain of $29m; 2020: loss of $32m) on the related hedged items have been included within
\nInterest and changes in carrying values of debt designated as hedged items, net of derivatives.
\nFair value loss of $25m (2021: loss of $19m; 2020: gain of $2m) on derivatives related to debt instruments designated at fair value through pro\ufb01t or
\nloss and $26m fair value gain (2021: gain of $19m; 2020: loss of $3m) on debt instruments designated at fair value through pro\ufb01t or loss have been
\nincluded within Interest and fair value adjustments in respect of debt designated at fair value through pro\ufb01t or loss, net of derivatives.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfBorrowingCostsExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f26246": {
"value": "3 Finance income and expense \n2022
2021
2020
\n$m
$m
$m
\nFinance income
\nReturns on deposits and equity securities
78
12
41
\nFair value gains on debt and interest rate swaps
14
\u2013
4
\nDiscount unwind on other long-term assets
\u2013
\u2013
6
\nInterest income on income tax balances
3
31
36
\nTotal
95
43
87
\nFinance expense
\nInterest on debt, leases and other financing costs
(889)
(774)
(736)
\nNet interest on post-employment defined benefit plan net liabilities (Note\u00a022)
(29)
(26)
(37)
\nNet exchange losses
(16)
(20)
(34)
\nDiscount unwind on contingent consideration arising from business combinations (Note\u00a020)
(168)
(226)
(278)
\nDiscount unwind on other long-term liabilities
\n1
\n(216)
(248)
(219)
\nFair value losses on debt and interest rate swaps
\u2013
(4)
\u2013
\nInterest expense on income tax balances
(28)
(2)
(2)
\nTotal
(1,346)
(1,300)
(1,306)
\nNet finance expense
(1,251)
(1,257)
(1,219)
\n1
Included within Discount unwind on other long-term liabilities is $108m relating to the Acerta Pharma share purchase liability (2021: $161m; 2020: $151m), see Note 20 for further details.
\nThere was no interest capitalised during the year.
\nFinancial instruments
\nIncluded within \ufb01nance income and expense are the following net gains and losses on \ufb01nancial instruments:
\n2022
2021
2020
\n$m
$m
$m
\nInterest and fair value adjustments in respect of debt designated at fair value through profit or loss, net of derivatives
(9)
(5)
(8)
\nInterest and changes in carrying values of debt designated as hedged items in fair value hedges, net of derivatives
\u2013
(9)
(6)
\nInterest and fair value changes on fixed and short-term deposits, equity securities, other derivatives and tax balances
54
16
42
\nInterest on debt, commercial paper, overdrafts and lease liabilities held at amortised cost
(837)
(738)
(660)
\nThe interest rate fair value hedges were closed in 2021. Fair value gain or loss of $nil (2021: loss of $33m; 2020: gain of $33m) on interest rate fair value
\nhedging instruments and $nil fair value gain or loss (2021: gain of $29m; 2020: loss of $32m) on the related hedged items have been included within
\nInterest and changes in carrying values of debt designated as hedged items, net of derivatives.
\nFair value loss of $25m (2021: loss of $19m; 2020: gain of $2m) on derivatives related to debt instruments designated at fair value through pro\ufb01t or
\nloss and $26m fair value gain (2021: gain of $19m; 2020: loss of $3m) on debt instruments designated at fair value through pro\ufb01t or loss have been
\nincluded within Interest and fair value adjustments in respect of debt designated at fair value through pro\ufb01t or loss, net of derivatives.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfInterestExpenseExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f26247": {
"value": "3 Finance income and expense \n2022
2021
2020
\n$m
$m
$m
\nFinance income
\nReturns on deposits and equity securities
78
12
41
\nFair value gains on debt and interest rate swaps
14
\u2013
4
\nDiscount unwind on other long-term assets
\u2013
\u2013
6
\nInterest income on income tax balances
3
31
36
\nTotal
95
43
87
\nFinance expense
\nInterest on debt, leases and other financing costs
(889)
(774)
(736)
\nNet interest on post-employment defined benefit plan net liabilities (Note\u00a022)
(29)
(26)
(37)
\nNet exchange losses
(16)
(20)
(34)
\nDiscount unwind on contingent consideration arising from business combinations (Note\u00a020)
(168)
(226)
(278)
\nDiscount unwind on other long-term liabilities
\n1
\n(216)
(248)
(219)
\nFair value losses on debt and interest rate swaps
\u2013
(4)
\u2013
\nInterest expense on income tax balances
(28)
(2)
(2)
\nTotal
(1,346)
(1,300)
(1,306)
\nNet finance expense
(1,251)
(1,257)
(1,219)
\n1
Included within Discount unwind on other long-term liabilities is $108m relating to the Acerta Pharma share purchase liability (2021: $161m; 2020: $151m), see Note 20 for further details.
\nThere was no interest capitalised during the year.
\nFinancial instruments
\nIncluded within \ufb01nance income and expense are the following net gains and losses on \ufb01nancial instruments:
\n2022
2021
2020
\n$m
$m
$m
\nInterest and fair value adjustments in respect of debt designated at fair value through profit or loss, net of derivatives
(9)
(5)
(8)
\nInterest and changes in carrying values of debt designated as hedged items in fair value hedges, net of derivatives
\u2013
(9)
(6)
\nInterest and fair value changes on fixed and short-term deposits, equity securities, other derivatives and tax balances
54
16
42
\nInterest on debt, commercial paper, overdrafts and lease liabilities held at amortised cost
(837)
(738)
(660)
\nThe interest rate fair value hedges were closed in 2021. Fair value gain or loss of $nil (2021: loss of $33m; 2020: gain of $33m) on interest rate fair value
\nhedging instruments and $nil fair value gain or loss (2021: gain of $29m; 2020: loss of $32m) on the related hedged items have been included within
\nInterest and changes in carrying values of debt designated as hedged items, net of derivatives.
\nFair value loss of $25m (2021: loss of $19m; 2020: gain of $2m) on derivatives related to debt instruments designated at fair value through pro\ufb01t or
\nloss and $26m fair value gain (2021: gain of $19m; 2020: loss of $3m) on debt instruments designated at fair value through pro\ufb01t or loss have been
\nincluded within Interest and fair value adjustments in respect of debt designated at fair value through pro\ufb01t or loss, net of derivatives.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfInterestIncomeExpenseExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f26248": {
"value": "3 Finance income and expense \n2022
2021
2020
\n$m
$m
$m
\nFinance income
\nReturns on deposits and equity securities
78
12
41
\nFair value gains on debt and interest rate swaps
14
\u2013
4
\nDiscount unwind on other long-term assets
\u2013
\u2013
6
\nInterest income on income tax balances
3
31
36
\nTotal
95
43
87
\nFinance expense
\nInterest on debt, leases and other financing costs
(889)
(774)
(736)
\nNet interest on post-employment defined benefit plan net liabilities (Note\u00a022)
(29)
(26)
(37)
\nNet exchange losses
(16)
(20)
(34)
\nDiscount unwind on contingent consideration arising from business combinations (Note\u00a020)
(168)
(226)
(278)
\nDiscount unwind on other long-term liabilities
\n1
\n(216)
(248)
(219)
\nFair value losses on debt and interest rate swaps
\u2013
(4)
\u2013
\nInterest expense on income tax balances
(28)
(2)
(2)
\nTotal
(1,346)
(1,300)
(1,306)
\nNet finance expense
(1,251)
(1,257)
(1,219)
\n1
Included within Discount unwind on other long-term liabilities is $108m relating to the Acerta Pharma share purchase liability (2021: $161m; 2020: $151m), see Note 20 for further details.
\nThere was no interest capitalised during the year.
\nFinancial instruments
\nIncluded within \ufb01nance income and expense are the following net gains and losses on \ufb01nancial instruments:
\n2022
2021
2020
\n$m
$m
$m
\nInterest and fair value adjustments in respect of debt designated at fair value through profit or loss, net of derivatives
(9)
(5)
(8)
\nInterest and changes in carrying values of debt designated as hedged items in fair value hedges, net of derivatives
\u2013
(9)
(6)
\nInterest and fair value changes on fixed and short-term deposits, equity securities, other derivatives and tax balances
54
16
42
\nInterest on debt, commercial paper, overdrafts and lease liabilities held at amortised cost
(837)
(738)
(660)
\nThe interest rate fair value hedges were closed in 2021. Fair value gain or loss of $nil (2021: loss of $33m; 2020: gain of $33m) on interest rate fair value
\nhedging instruments and $nil fair value gain or loss (2021: gain of $29m; 2020: loss of $32m) on the related hedged items have been included within
\nInterest and changes in carrying values of debt designated as hedged items, net of derivatives.
\nFair value loss of $25m (2021: loss of $19m; 2020: gain of $2m) on derivatives related to debt instruments designated at fair value through pro\ufb01t or
\nloss and $26m fair value gain (2021: gain of $19m; 2020: loss of $3m) on debt instruments designated at fair value through pro\ufb01t or loss have been
\nincluded within Interest and fair value adjustments in respect of debt designated at fair value through pro\ufb01t or loss, net of derivatives.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfInterestIncomeExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f26375": {
"value": "4 Taxation \nTaxation charge/(credit) recognised in the Consolidated Statement of Comprehensive Income is as follows:
\n2022
2021
2020
\n$m
$m
$m
\nCurrent tax
\nCurrent year
1,823
1,200
981
\nAdjustment to prior years
(187)
(5)
(10)
\nTotal
1,636
1,195
971
\nDeferred tax
\nOrigination and reversal of temporary differences
(2,563)
(1,417)
(178)
\nAdjustment to prior years
135
(158)
(21)
\nTotal
(2,428)
(1,575)
(199)
\nTaxation (credit)/charge recognised in the profit for the period
(792)
(380)
772
\nTaxation (charge)/credit recognised in Other comprehensive income is as follows:
\n2022
2021
2020
\n$m
$m
$m
\nCurrent and deferred tax
\nItems that will not be reclassified to profit or loss:
\u00a0
\nRemeasurement of the defined benefit liability
(231)
(117)
36
\nEquity investments measured at fair value through Other comprehensive income
15
27
(180)
\nMovement in deferred taxes relating to changes in tax rates
\u2013
195
63
\nTotal
(216)
105
(81)
\nItems that may be reclassified subsequently to profit or loss:
\nForeign exchange arising on designated liabilities in net investment hedges
\n1
\n73
43
(61)
\nFair value movement on cash flow hedges
\n2
\n\u2013
(5)
22
\nMovement in deferred taxes relating to changes in tax rates
\u2013
8
\u2013
\nTotal
73
46
(39)
\nTaxation (charge)/credit recognised in Other comprehensive income
(143)
151
(120)
\n1
Previously reported as Foreign exchange arising on consolidation.
\n2
Previously reported within Foreign exchange arising on designated liabilities in net investment hedges.
\nThe reported tax rate in the year was (32)% and included a one-time favourable net adjustment of $876m to deferred taxes arising from an internal
\nreorganisation to integrate the Alexion organisation which took place in the year. The internal legal entity reorganisation did not result in any corporate
\nincome tax becoming payable in the year, however it did result in a one-off deferred tax adjustment of $876m to the income statement and a further
\n$49m credit included in Other comprehensive income. Following the reorganisation, it was necessary to re-measure certain deferred tax balances
\nto re\ufb02ect the tax rates applicable on their reversal, as under the revised structure there is a change in the income \ufb02ows to the relevant territories.
\nThe 2022 reported tax rate also bene\ufb01ted from Intellectual Property incentive regimes, geographical mix of pro\ufb01ts and favourable adjustments to
\nprior year tax liabilities in a number of major jurisdictions, many of which were one-time items.
\nThe income tax paid for the year was $1,623m.
\nTaxation has been provided at current rates on the pro\ufb01ts earned for the periods covered by the Group Financial Statements. The 2022 prior period
\ncurrent tax adjustment relates mainly to tax accrual to tax return adjustments and updates to liabilities for uncertain tax positions. The 2021 prior
\nperiod current tax adjustment relates mainly to tax accrual to tax return adjustments. The 2020 prior period current tax adjustment relates mainly
\nto net reductions in liabilities for uncertain tax positions and tax accrual to tax return adjustments.
\nThe 2022 prior period deferred tax adjustments relate mainly to tax accrual to tax return adjustments and updates to liabilities for uncertain tax
\npositions. The 2021 prior period deferred tax adjustments relate mainly to tax accrual to tax return adjustments and updates to estimates of prior
\nperiod tax liabilities following settlements with tax authorities. The 2020 prior period deferred tax adjustments relate mainly to tax accrual to tax
\nreturn adjustments offset by net increases in liabilities for uncertain tax positions.
\nTo the extent that dividends remitted from overseas subsidiaries, joint ventures and associates are expected to result in additional taxes, appropriate
\namounts have been provided for. Unremitted earnings or differences in the carrying value and tax basis of investments may be liable to additional
\ntaxes if distributed as dividends or on a liquidation event. Deferred tax is provided for such differences in relation to Group entities where management
\nis intending to remit earnings in the foreseeable future. The aggregate amount of gross temporary differences associated with investments in
\nsubsidiaries, partnerships and branches for which deferred tax liabilities have not been recognised totalled approximately $5,454m at 31 December
\n2022, $2,113m of which has a corresponding deductible temporary difference of the same gross value which is not recognised as it is not probable
\nof reversing in the foreseeable future but on which different tax rates apply.
\n153
AstraZeneca Annual Report & Form 20-F Information 2022
Notes to the Group Financial Statements
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
\n\n\n4 Taxation
continued
\nFactors affecting future tax charges
\nAs a Group with worldwide operations, AstraZeneca is subject to several factors that may affect future tax charges, principally the levels and mix
\nof pro\ufb01tability in different jurisdictions, transfer pricing regulations, tax rates imposed and tax regime reforms. In 2021, the UK Government enacted
\nlegislation to increase the main rate of UK statutory Corporation Tax to 25% effective 1 April 2023. In December 2021, the OECD issued model rules
\nfor a new global minimum tax framework (Pillar Two) and in 2022, the UK released draft legislation including the intention to bring these into effect
\nfor accounting periods commencing after 31 December 2023. AstraZeneca expects to fall within the global minimum tax framework which requires
\ncalculation of a new measure of effective tax rate by legal entity. It is possible that this may result in top-up taxes in some territories in which
\nAstraZeneca operates. Whilst the UK released draft legislation that has not been substantively enacted at 31 December 2022, we are continuing
\nto review the draft rules, and the IASB\u2019s staff paper and initial consideration, published in November 2022, to understand any potential impacts.
\nTax reconciliation to UK statutory rate
\nThe table below reconciles the UK statutory tax charge to the Group\u2019s total tax (credit)/charge:
\n2022
2021
2020
\n$m
$m
$m
\nProfit/(loss) before tax
2,501
(265)
3,916
\nNotional taxation charge at UK corporation tax rate of 19%
475
(50)
744
\nDifferences in effective overseas tax rates
(59)
1
(49)
\nDeferred tax (credit)/charge relating to change in tax rates
\n1
\n(108)
54
138
\nUnrecognised deferred tax asset
\n2
\n68
32
3
\nItems not deductible for tax purposes
90
208
71
\nItems not chargeable for tax purposes
\u2013
(163)
(4)
\nIntellectual Property incentive regimes
\n3
\n(265)
\u2013
(35)
\nOther items
\n4
\n(941)
(299)
(65)
\nAdjustments in respect of prior periods
\n5
\n(52)
(163)
(31)
\nTotal tax (credit)/charge for the period
(792)
(380)
772
\n1
The 2022 item relates to the impact of the US state tax rate change and the impact of the difference in the UK current tax and deferred tax rates during 2022. The 2021 item relates to substantive
\nenactment of the increase in UK Corporation Tax rate from 19% to 25% effective 1 April 2023 (debit of $12m), the increase in the Dutch Corporate Income Tax rate from 25% to 25.8% effective
\n1 January 2022 (debit of $39m) and other (debit of $3m). The 2020 item relates to the increase in the 2020 substantively enacted Dutch Corporate Income Tax rate (debit of $151m) and other (debit
\nof $5m). In 2020, it was substantively enacted that the planned reduction in the Dutch Corporate Income Tax rate to 21.7% from 25% effective 1 January 2021 would not take place. In addition, the
\nplanned reduction in the UK corporation tax rate to 17% was not enacted with the corporation tax rate remaining at 19% (credit of $18m).
\n2
The 2022 item relates to the derecognition of previously recognised deferred tax assets. The 2021 item includes a $15m debit arising on derecognition of previously recognised deferred tax assets.
\nThe 2020 item includes a $22m credit arising on recognition of previously unrecognised deferred tax assets.
\n3
Previously reported within Items not deductible for tax purposes.
\n4
Other items in 2022 relate to the aforementioned one-time favourable net adjustment of $876m to deferred taxes arising from an internal reorganisation to integrate the Alexion organisation which
\ntook place in 2022 and a credit of $65m relating to the reduction of tax liabilities arising from adjustments on expiry of the relevant statute of limitations. Other items in 2021 relate to a net credit of
\n$299m relating to the reduction of tax liabilities arising from updates to estimates of prior period tax liabilities following settlements with tax authorities and on expiry of the relevant statute
\nof limitations partially offset by a provision for transfer pricing and other uncertain tax treatments. Other items in 2020 relate to a net credit of $65m relating to the release of tax liabilities
\nfollowing the expiry of the relevant statute of limitations partially offset by a provision for transfer pricing and other uncertain tax treatments.
\n5
Further details explaining the adjustments in respect of prior periods are set out on page 153.
\nAstraZeneca is domiciled in the UK but operates in other countries where the tax rates and laws are different to those in the UK. The impact on
\ndifferences in effective overseas tax rates on the Group\u2019s overall tax charge is noted above. Pro\ufb01ts arising from our manufacturing operation in
\nPuerto Rico are granted special status and are taxed at a reduced rate compared with the normal rate of tax in that territory under a tax incentive
\ngrant continuing until 2031. The Group receives tax incentives in relation to Intellectual Property incentives in certain jurisdictions, resulting in a
\nreduction to the tax charge in the income statement of $265m in 2022.
\nNotes to the Group Financial Statements
\ncontinued
\n154
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
Deferred tax
\nThe total movement in the net deferred tax balance in the year was $2,195m. The movements are as follows:
\nIntangibles,
Pension and
Elimination of
Losses and
Accrued
\nproperty,\u00a0plant
post-retirement
unrealised profit
Untaxed
tax credits
expenses
\nand equipment
\n1
\nbenefits
on inventory
reserves
\n2
\ncarried forward
and other
Total
\n$m
$m
$m
$m
$m
$m
$m
\nNet deferred tax balance at 1\u00a0January 2020
(2,265)
561
1,293
(598)
546
691
228
\nIncome statement
(226)
(64)
444
(92)
136
1
199
\nOther comprehensive income
(78)
101
\u2013
(1)
\u2013
72
94
\nEquity
\u2013
\u2013
\u2013
\u2013
\u2013
(16)
(16)
\nExchange
(58)
58
70
(110)
32
23
15
\nNet deferred tax balance at 31\u00a0December 2020
(2,627)
656
1,807
(801)
714
771
520
\nIncome statement
782
(166)
(59)
(139)
307
850
1,575
\nOther comprehensive income
52
83
\u2013
\u2013
\u2013
40
175
\nEquity
\u2013
\u2013
\u2013
\u2013
\u2013
14
14
\nAdditions through business combinations
\n3
\n(3,744)
13
166
\u2013
507
(1,116)
(4,174)
\nExchange
57
(33)
(53)
78
(10)
(25)
14
\nNet deferred tax balance at 31\u00a0December 2021
(5,480)
553
1,861
(862)
1,518
534
(1,876)
\nIncome statement
\n4
\n1,414
(55)
274
38
(126)
883
2,428
\nOther comprehensive income
72
(231)
\u2013
\u2013
\u2013
16
(143)
\nEquity
\u2013
\u2013
\u2013
\u2013
\u2013
38
38
\nExchange
63
(36)
(111)
108
(134)
(18)
(128)
\nNet deferred tax balance at 31\u00a0December 2022
\n5
\n(3,931)
231
2,024
(716)
1,258
1,453
319
\n1
Includes deferred tax of $281m on contingent consideration liabilities in respect of intangibles.
\n2
Untaxed reserves relate to taxable profits where the tax liability is deferred to later periods.
\n3
The deferred tax liability of $4,174m relates to deferred tax on purchase accounting adjustments arising from the acquisition of Alexion (Note 27). Accrued expenses and other includes the
\ndeferred tax on the purchase accounting of inventory.
\n4
The income statement movement in 2022 includes the aforementioned net adjustment to deferred taxes of $876m arising on the internal legal entity reorganisation to integrate the Alexion organisation,
\nthe majority of which arises on Intangibles, property, plant and equipment.
\n5
The Group recognises deferred tax assets to the extent that there are either taxable temporary differences or that it is probable that sufficient future taxable profits will arise, against which these
\ndeductible temporary differences can be utilised. The US includes a net deferred tax asset of $283m and the UK includes a net deferred tax asset of $503m as at 31 December 2022 which include
\ntax losses and other deductible temporary differences. The Group has performed an assessment of recovery of deferred tax assets and for these entities, the Group has forecasted future taxable
\nprofits and considers that it is probable that sufficient future taxable profits will arise against which these deductible temporary differences can be utilised. In arriving at these forecasts, the
\nGroup has reviewed the Group-level budgets and forecasts and the ability of those entities to generate future income from developing and commercialising products, including local tax laws
\nand the scheduling of reversal of deductible temporary differences. Deferred tax assets are recognised on the basis there is sufficient forecast future taxable profits arising from the performance
\nof on-market products and pipeline assets, including
Imfinzi
. For the UK, losses are forecast to be utilised within five years. For the US, recognised deferred taxes on losses and other items are
\nforecast to be utilised within 15 years. It is considered that these sources of income are sufficiently predictable or diversified to support a recognition period in excess of five years. A sensitivity
\nassessment has been performed which shows that a change in profit of 10% results in an immaterial adjustment to the amount of deferred tax asset recognised. Assessing the availability of
\nfuture taxable income to support recognition of deferred tax assets relies upon our Group forecasts and changes in these Group forecasts will impact the recoverability of deferred tax assets.
\nTo the extent that there are neither taxable temporary differences nor sufficient taxable profits, no deferred tax asset is recognised and details of unrecognised deferred tax assets are included
\nin the table below.
\nThe net deferred tax balance, before the offset of balances within countries, consists of:
\nIntangibles,
Pension and
Elimination of
Losses and
Accrued
\nproperty,\u00a0plant
post-retirement
unrealised profit
Untaxed
tax credits
expenses
\nand equipment
benefits
on inventory
reserves
carried forward
and other
Total
\n$m
$m
$m
$m
$m
$m
$m
\nDeferred tax assets at 31\u00a0December 2020
1,061
690
2,286
\u2013
852
1,130
6,019
\nDeferred tax liabilities at 31\u00a0December 2020
(3,688)
(34)
(479)
(801)
(138)
(359)
(5,499)
\nNet deferred tax balance at 31\u00a0December 2020
(2,627)
656
1,807
(801)
714
771
520
\nDeferred tax assets at 31\u00a0December 2021
1,476
574
1,910
\u2013
1,571
1,735
7,266
\nDeferred tax liabilities at 31\u00a0December 2021
(6,956)
(21)
(49)
(862)
(53)
(1,201)
(9,142)
\nNet deferred tax balance at 31\u00a0December 2021
(5,480)
553
1,861
(862)
1,518
534
(1,876)
\nDeferred tax assets at 31\u00a0December 2022
1,499
276
2,048
\u2013
1,274
1,614
6,711
\nDeferred tax liabilities at 31\u00a0December 2022
(5,430)
(45)
(24)
(716)
(16)
(161)
(6,392)
\nNet deferred tax balance at 31\u00a0December 2022
(3,931)
231
2,024
(716)
1,258
1,453
319
\n155
AstraZeneca Annual Report & Form 20-F Information 2022
Notes to the Group Financial Statements
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
\n\n4 Taxation
continued
\nAnalysed in the Consolidated Statement of Financial Position, after offset of balances within countries, as follows:
\n2022
2021
2020
\n$m
$m
$m
\nDeferred tax assets
3,263
4,330
3,438
\nDeferred tax liabilities
(2,944)
(6,206)
(2,918)
\nNet deferred tax balance
319
(1,876)
520
\nUnrecognised deferred tax assets
\nDeferred tax assets (DTA) of $807m (2021: $719m; 2020: $428m) have not been recognised in respect of deductible temporary differences because
\nit is not probable that future taxable pro\ufb01t will be available against which the Group can utilise the bene\ufb01ts therefrom.
\n2022
2022
2021
2021
2020
2020
\nTemporary
Unrecognised
Temporary
Unrecognised
Temporary
Unrecognised
\ndifferences
DTA
differences
DTA
differences
DTA
\n$m
$m
$m
$m
$m
$m
\nTrading and capital losses expiring:
\nWithin 10 years
104
26
4
1
2
\u2013
\nMore than 10 years
153
32
53
11
\u2013
\u2013
\nIndefinite
686
163
300
79
234
63
\n943
221
357
91
236
63
\nTax credits and State tax losses expiring:
\nWithin 10 years
115
101
36
\nMore than 10 years
384
441
255
\nIndefinite
87
86
74
\n586
628
365
\nTotal
807
719
428",
"dimensions": {
"concept": "ifrs-full:DisclosureOfIncomeTaxExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f26376": {
"value": "4 Taxation \nTaxation charge/(credit) recognised in the Consolidated Statement of Comprehensive Income is as follows:
\n2022
2021
2020
\n$m
$m
$m
\nCurrent tax
\nCurrent year
1,823
1,200
981
\nAdjustment to prior years
(187)
(5)
(10)
\nTotal
1,636
1,195
971
\nDeferred tax
\nOrigination and reversal of temporary differences
(2,563)
(1,417)
(178)
\nAdjustment to prior years
135
(158)
(21)
\nTotal
(2,428)
(1,575)
(199)
\nTaxation (credit)/charge recognised in the profit for the period
(792)
(380)
772
\nTaxation (charge)/credit recognised in Other comprehensive income is as follows:
\n2022
2021
2020
\n$m
$m
$m
\nCurrent and deferred tax
\nItems that will not be reclassified to profit or loss:
\u00a0
\nRemeasurement of the defined benefit liability
(231)
(117)
36
\nEquity investments measured at fair value through Other comprehensive income
15
27
(180)
\nMovement in deferred taxes relating to changes in tax rates
\u2013
195
63
\nTotal
(216)
105
(81)
\nItems that may be reclassified subsequently to profit or loss:
\nForeign exchange arising on designated liabilities in net investment hedges
\n1
\n73
43
(61)
\nFair value movement on cash flow hedges
\n2
\n\u2013
(5)
22
\nMovement in deferred taxes relating to changes in tax rates
\u2013
8
\u2013
\nTotal
73
46
(39)
\nTaxation (charge)/credit recognised in Other comprehensive income
(143)
151
(120)
\n1
Previously reported as Foreign exchange arising on consolidation.
\n2
Previously reported within Foreign exchange arising on designated liabilities in net investment hedges.
\nThe reported tax rate in the year was (32)% and included a one-time favourable net adjustment of $876m to deferred taxes arising from an internal
\nreorganisation to integrate the Alexion organisation which took place in the year. The internal legal entity reorganisation did not result in any corporate
\nincome tax becoming payable in the year, however it did result in a one-off deferred tax adjustment of $876m to the income statement and a further
\n$49m credit included in Other comprehensive income. Following the reorganisation, it was necessary to re-measure certain deferred tax balances
\nto re\ufb02ect the tax rates applicable on their reversal, as under the revised structure there is a change in the income \ufb02ows to the relevant territories.
\nThe 2022 reported tax rate also bene\ufb01ted from Intellectual Property incentive regimes, geographical mix of pro\ufb01ts and favourable adjustments to
\nprior year tax liabilities in a number of major jurisdictions, many of which were one-time items.
\nThe income tax paid for the year was $1,623m.
\nTaxation has been provided at current rates on the pro\ufb01ts earned for the periods covered by the Group Financial Statements. The 2022 prior period
\ncurrent tax adjustment relates mainly to tax accrual to tax return adjustments and updates to liabilities for uncertain tax positions. The 2021 prior
\nperiod current tax adjustment relates mainly to tax accrual to tax return adjustments. The 2020 prior period current tax adjustment relates mainly
\nto net reductions in liabilities for uncertain tax positions and tax accrual to tax return adjustments.
\nThe 2022 prior period deferred tax adjustments relate mainly to tax accrual to tax return adjustments and updates to liabilities for uncertain tax
\npositions. The 2021 prior period deferred tax adjustments relate mainly to tax accrual to tax return adjustments and updates to estimates of prior
\nperiod tax liabilities following settlements with tax authorities. The 2020 prior period deferred tax adjustments relate mainly to tax accrual to tax
\nreturn adjustments offset by net increases in liabilities for uncertain tax positions.
\nTo the extent that dividends remitted from overseas subsidiaries, joint ventures and associates are expected to result in additional taxes, appropriate
\namounts have been provided for. Unremitted earnings or differences in the carrying value and tax basis of investments may be liable to additional
\ntaxes if distributed as dividends or on a liquidation event. Deferred tax is provided for such differences in relation to Group entities where management
\nis intending to remit earnings in the foreseeable future. The aggregate amount of gross temporary differences associated with investments in
\nsubsidiaries, partnerships and branches for which deferred tax liabilities have not been recognised totalled approximately $5,454m at 31 December
\n2022, $2,113m of which has a corresponding deductible temporary difference of the same gross value which is not recognised as it is not probable
\nof reversing in the foreseeable future but on which different tax rates apply.
\n153
AstraZeneca Annual Report & Form 20-F Information 2022
Notes to the Group Financial Statements
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
\n\n\n4 Taxation
continued
\nFactors affecting future tax charges
\nAs a Group with worldwide operations, AstraZeneca is subject to several factors that may affect future tax charges, principally the levels and mix
\nof pro\ufb01tability in different jurisdictions, transfer pricing regulations, tax rates imposed and tax regime reforms. In 2021, the UK Government enacted
\nlegislation to increase the main rate of UK statutory Corporation Tax to 25% effective 1 April 2023. In December 2021, the OECD issued model rules
\nfor a new global minimum tax framework (Pillar Two) and in 2022, the UK released draft legislation including the intention to bring these into effect
\nfor accounting periods commencing after 31 December 2023. AstraZeneca expects to fall within the global minimum tax framework which requires
\ncalculation of a new measure of effective tax rate by legal entity. It is possible that this may result in top-up taxes in some territories in which
\nAstraZeneca operates. Whilst the UK released draft legislation that has not been substantively enacted at 31 December 2022, we are continuing
\nto review the draft rules, and the IASB\u2019s staff paper and initial consideration, published in November 2022, to understand any potential impacts.
\nTax reconciliation to UK statutory rate
\nThe table below reconciles the UK statutory tax charge to the Group\u2019s total tax (credit)/charge:
\n2022
2021
2020
\n$m
$m
$m
\nProfit/(loss) before tax
2,501
(265)
3,916
\nNotional taxation charge at UK corporation tax rate of 19%
475
(50)
744
\nDifferences in effective overseas tax rates
(59)
1
(49)
\nDeferred tax (credit)/charge relating to change in tax rates
\n1
\n(108)
54
138
\nUnrecognised deferred tax asset
\n2
\n68
32
3
\nItems not deductible for tax purposes
90
208
71
\nItems not chargeable for tax purposes
\u2013
(163)
(4)
\nIntellectual Property incentive regimes
\n3
\n(265)
\u2013
(35)
\nOther items
\n4
\n(941)
(299)
(65)
\nAdjustments in respect of prior periods
\n5
\n(52)
(163)
(31)
\nTotal tax (credit)/charge for the period
(792)
(380)
772
\n1
The 2022 item relates to the impact of the US state tax rate change and the impact of the difference in the UK current tax and deferred tax rates during 2022. The 2021 item relates to substantive
\nenactment of the increase in UK Corporation Tax rate from 19% to 25% effective 1 April 2023 (debit of $12m), the increase in the Dutch Corporate Income Tax rate from 25% to 25.8% effective
\n1 January 2022 (debit of $39m) and other (debit of $3m). The 2020 item relates to the increase in the 2020 substantively enacted Dutch Corporate Income Tax rate (debit of $151m) and other (debit
\nof $5m). In 2020, it was substantively enacted that the planned reduction in the Dutch Corporate Income Tax rate to 21.7% from 25% effective 1 January 2021 would not take place. In addition, the
\nplanned reduction in the UK corporation tax rate to 17% was not enacted with the corporation tax rate remaining at 19% (credit of $18m).
\n2
The 2022 item relates to the derecognition of previously recognised deferred tax assets. The 2021 item includes a $15m debit arising on derecognition of previously recognised deferred tax assets.
\nThe 2020 item includes a $22m credit arising on recognition of previously unrecognised deferred tax assets.
\n3
Previously reported within Items not deductible for tax purposes.
\n4
Other items in 2022 relate to the aforementioned one-time favourable net adjustment of $876m to deferred taxes arising from an internal reorganisation to integrate the Alexion organisation which
\ntook place in 2022 and a credit of $65m relating to the reduction of tax liabilities arising from adjustments on expiry of the relevant statute of limitations. Other items in 2021 relate to a net credit of
\n$299m relating to the reduction of tax liabilities arising from updates to estimates of prior period tax liabilities following settlements with tax authorities and on expiry of the relevant statute
\nof limitations partially offset by a provision for transfer pricing and other uncertain tax treatments. Other items in 2020 relate to a net credit of $65m relating to the release of tax liabilities
\nfollowing the expiry of the relevant statute of limitations partially offset by a provision for transfer pricing and other uncertain tax treatments.
\n5
Further details explaining the adjustments in respect of prior periods are set out on page 153.
\nAstraZeneca is domiciled in the UK but operates in other countries where the tax rates and laws are different to those in the UK. The impact on
\ndifferences in effective overseas tax rates on the Group\u2019s overall tax charge is noted above. Pro\ufb01ts arising from our manufacturing operation in
\nPuerto Rico are granted special status and are taxed at a reduced rate compared with the normal rate of tax in that territory under a tax incentive
\ngrant continuing until 2031. The Group receives tax incentives in relation to Intellectual Property incentives in certain jurisdictions, resulting in a
\nreduction to the tax charge in the income statement of $265m in 2022.
\nNotes to the Group Financial Statements
\ncontinued
\n154
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
Deferred tax
\nThe total movement in the net deferred tax balance in the year was $2,195m. The movements are as follows:
\nIntangibles,
Pension and
Elimination of
Losses and
Accrued
\nproperty,\u00a0plant
post-retirement
unrealised profit
Untaxed
tax credits
expenses
\nand equipment
\n1
\nbenefits
on inventory
reserves
\n2
\ncarried forward
and other
Total
\n$m
$m
$m
$m
$m
$m
$m
\nNet deferred tax balance at 1\u00a0January 2020
(2,265)
561
1,293
(598)
546
691
228
\nIncome statement
(226)
(64)
444
(92)
136
1
199
\nOther comprehensive income
(78)
101
\u2013
(1)
\u2013
72
94
\nEquity
\u2013
\u2013
\u2013
\u2013
\u2013
(16)
(16)
\nExchange
(58)
58
70
(110)
32
23
15
\nNet deferred tax balance at 31\u00a0December 2020
(2,627)
656
1,807
(801)
714
771
520
\nIncome statement
782
(166)
(59)
(139)
307
850
1,575
\nOther comprehensive income
52
83
\u2013
\u2013
\u2013
40
175
\nEquity
\u2013
\u2013
\u2013
\u2013
\u2013
14
14
\nAdditions through business combinations
\n3
\n(3,744)
13
166
\u2013
507
(1,116)
(4,174)
\nExchange
57
(33)
(53)
78
(10)
(25)
14
\nNet deferred tax balance at 31\u00a0December 2021
(5,480)
553
1,861
(862)
1,518
534
(1,876)
\nIncome statement
\n4
\n1,414
(55)
274
38
(126)
883
2,428
\nOther comprehensive income
72
(231)
\u2013
\u2013
\u2013
16
(143)
\nEquity
\u2013
\u2013
\u2013
\u2013
\u2013
38
38
\nExchange
63
(36)
(111)
108
(134)
(18)
(128)
\nNet deferred tax balance at 31\u00a0December 2022
\n5
\n(3,931)
231
2,024
(716)
1,258
1,453
319
\n1
Includes deferred tax of $281m on contingent consideration liabilities in respect of intangibles.
\n2
Untaxed reserves relate to taxable profits where the tax liability is deferred to later periods.
\n3
The deferred tax liability of $4,174m relates to deferred tax on purchase accounting adjustments arising from the acquisition of Alexion (Note 27). Accrued expenses and other includes the
\ndeferred tax on the purchase accounting of inventory.
\n4
The income statement movement in 2022 includes the aforementioned net adjustment to deferred taxes of $876m arising on the internal legal entity reorganisation to integrate the Alexion organisation,
\nthe majority of which arises on Intangibles, property, plant and equipment.
\n5
The Group recognises deferred tax assets to the extent that there are either taxable temporary differences or that it is probable that sufficient future taxable profits will arise, against which these
\ndeductible temporary differences can be utilised. The US includes a net deferred tax asset of $283m and the UK includes a net deferred tax asset of $503m as at 31 December 2022 which include
\ntax losses and other deductible temporary differences. The Group has performed an assessment of recovery of deferred tax assets and for these entities, the Group has forecasted future taxable
\nprofits and considers that it is probable that sufficient future taxable profits will arise against which these deductible temporary differences can be utilised. In arriving at these forecasts, the
\nGroup has reviewed the Group-level budgets and forecasts and the ability of those entities to generate future income from developing and commercialising products, including local tax laws
\nand the scheduling of reversal of deductible temporary differences. Deferred tax assets are recognised on the basis there is sufficient forecast future taxable profits arising from the performance
\nof on-market products and pipeline assets, including
Imfinzi
. For the UK, losses are forecast to be utilised within five years. For the US, recognised deferred taxes on losses and other items are
\nforecast to be utilised within 15 years. It is considered that these sources of income are sufficiently predictable or diversified to support a recognition period in excess of five years. A sensitivity
\nassessment has been performed which shows that a change in profit of 10% results in an immaterial adjustment to the amount of deferred tax asset recognised. Assessing the availability of
\nfuture taxable income to support recognition of deferred tax assets relies upon our Group forecasts and changes in these Group forecasts will impact the recoverability of deferred tax assets.
\nTo the extent that there are neither taxable temporary differences nor sufficient taxable profits, no deferred tax asset is recognised and details of unrecognised deferred tax assets are included
\nin the table below.
\nThe net deferred tax balance, before the offset of balances within countries, consists of:
\nIntangibles,
Pension and
Elimination of
Losses and
Accrued
\nproperty,\u00a0plant
post-retirement
unrealised profit
Untaxed
tax credits
expenses
\nand equipment
benefits
on inventory
reserves
carried forward
and other
Total
\n$m
$m
$m
$m
$m
$m
$m
\nDeferred tax assets at 31\u00a0December 2020
1,061
690
2,286
\u2013
852
1,130
6,019
\nDeferred tax liabilities at 31\u00a0December 2020
(3,688)
(34)
(479)
(801)
(138)
(359)
(5,499)
\nNet deferred tax balance at 31\u00a0December 2020
(2,627)
656
1,807
(801)
714
771
520
\nDeferred tax assets at 31\u00a0December 2021
1,476
574
1,910
\u2013
1,571
1,735
7,266
\nDeferred tax liabilities at 31\u00a0December 2021
(6,956)
(21)
(49)
(862)
(53)
(1,201)
(9,142)
\nNet deferred tax balance at 31\u00a0December 2021
(5,480)
553
1,861
(862)
1,518
534
(1,876)
\nDeferred tax assets at 31\u00a0December 2022
1,499
276
2,048
\u2013
1,274
1,614
6,711
\nDeferred tax liabilities at 31\u00a0December 2022
(5,430)
(45)
(24)
(716)
(16)
(161)
(6,392)
\nNet deferred tax balance at 31\u00a0December 2022
(3,931)
231
2,024
(716)
1,258
1,453
319
\n155
AstraZeneca Annual Report & Form 20-F Information 2022
Notes to the Group Financial Statements
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
\n\n4 Taxation
continued
\nAnalysed in the Consolidated Statement of Financial Position, after offset of balances within countries, as follows:
\n2022
2021
2020
\n$m
$m
$m
\nDeferred tax assets
3,263
4,330
3,438
\nDeferred tax liabilities
(2,944)
(6,206)
(2,918)
\nNet deferred tax balance
319
(1,876)
520
\nUnrecognised deferred tax assets
\nDeferred tax assets (DTA) of $807m (2021: $719m; 2020: $428m) have not been recognised in respect of deductible temporary differences because
\nit is not probable that future taxable pro\ufb01t will be available against which the Group can utilise the bene\ufb01ts therefrom.
\n2022
2022
2021
2021
2020
2020
\nTemporary
Unrecognised
Temporary
Unrecognised
Temporary
Unrecognised
\ndifferences
DTA
differences
DTA
differences
DTA
\n$m
$m
$m
$m
$m
$m
\nTrading and capital losses expiring:
\nWithin 10 years
104
26
4
1
2
\u2013
\nMore than 10 years
153
32
53
11
\u2013
\u2013
\nIndefinite
686
163
300
79
234
63
\n943
221
357
91
236
63
\nTax credits and State tax losses expiring:
\nWithin 10 years
115
101
36
\nMore than 10 years
384
441
255
\nIndefinite
87
86
74
\n586
628
365
\nTotal
807
719
428",
"dimensions": {
"concept": "ifrs-full:DisclosureOfTaxReceivablesAndPayablesExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f26619": {
"value": "Deferred tax \nThe total movement in the net deferred tax balance in the year was $2,195m. The movements are as follows:
\nIntangibles,
Pension and
Elimination of
Losses and
Accrued
\nproperty,\u00a0plant
post-retirement
unrealised profit
Untaxed
tax credits
expenses
\nand equipment
\n1
\nbenefits
on inventory
reserves
\n2
\ncarried forward
and other
Total
\n$m
$m
$m
$m
$m
$m
$m
\nNet deferred tax balance at 1\u00a0January 2020
(2,265)
561
1,293
(598)
546
691
228
\nIncome statement
(226)
(64)
444
(92)
136
1
199
\nOther comprehensive income
(78)
101
\u2013
(1)
\u2013
72
94
\nEquity
\u2013
\u2013
\u2013
\u2013
\u2013
(16)
(16)
\nExchange
(58)
58
70
(110)
32
23
15
\nNet deferred tax balance at 31\u00a0December 2020
(2,627)
656
1,807
(801)
714
771
520
\nIncome statement
782
(166)
(59)
(139)
307
850
1,575
\nOther comprehensive income
52
83
\u2013
\u2013
\u2013
40
175
\nEquity
\u2013
\u2013
\u2013
\u2013
\u2013
14
14
\nAdditions through business combinations
\n3
\n(3,744)
13
166
\u2013
507
(1,116)
(4,174)
\nExchange
57
(33)
(53)
78
(10)
(25)
14
\nNet deferred tax balance at 31\u00a0December 2021
(5,480)
553
1,861
(862)
1,518
534
(1,876)
\nIncome statement
\n4
\n1,414
(55)
274
38
(126)
883
2,428
\nOther comprehensive income
72
(231)
\u2013
\u2013
\u2013
16
(143)
\nEquity
\u2013
\u2013
\u2013
\u2013
\u2013
38
38
\nExchange
63
(36)
(111)
108
(134)
(18)
(128)
\nNet deferred tax balance at 31\u00a0December 2022
\n5
\n(3,931)
231
2,024
(716)
1,258
1,453
319
\n1
Includes deferred tax of $281m on contingent consideration liabilities in respect of intangibles.
\n2
Untaxed reserves relate to taxable profits where the tax liability is deferred to later periods.
\n3
The deferred tax liability of $4,174m relates to deferred tax on purchase accounting adjustments arising from the acquisition of Alexion (Note 27). Accrued expenses and other includes the
\ndeferred tax on the purchase accounting of inventory.
\n4
The income statement movement in 2022 includes the aforementioned net adjustment to deferred taxes of $876m arising on the internal legal entity reorganisation to integrate the Alexion organisation,
\nthe majority of which arises on Intangibles, property, plant and equipment.
\n5
The Group recognises deferred tax assets to the extent that there are either taxable temporary differences or that it is probable that sufficient future taxable profits will arise, against which these
\ndeductible temporary differences can be utilised. The US includes a net deferred tax asset of $283m and the UK includes a net deferred tax asset of $503m as at 31 December 2022 which include
\ntax losses and other deductible temporary differences. The Group has performed an assessment of recovery of deferred tax assets and for these entities, the Group has forecasted future taxable
\nprofits and considers that it is probable that sufficient future taxable profits will arise against which these deductible temporary differences can be utilised. In arriving at these forecasts, the
\nGroup has reviewed the Group-level budgets and forecasts and the ability of those entities to generate future income from developing and commercialising products, including local tax laws
\nand the scheduling of reversal of deductible temporary differences. Deferred tax assets are recognised on the basis there is sufficient forecast future taxable profits arising from the performance
\nof on-market products and pipeline assets, including
Imfinzi
. For the UK, losses are forecast to be utilised within five years. For the US, recognised deferred taxes on losses and other items are
\nforecast to be utilised within 15 years. It is considered that these sources of income are sufficiently predictable or diversified to support a recognition period in excess of five years. A sensitivity
\nassessment has been performed which shows that a change in profit of 10% results in an immaterial adjustment to the amount of deferred tax asset recognised. Assessing the availability of
\nfuture taxable income to support recognition of deferred tax assets relies upon our Group forecasts and changes in these Group forecasts will impact the recoverability of deferred tax assets.
\nTo the extent that there are neither taxable temporary differences nor sufficient taxable profits, no deferred tax asset is recognised and details of unrecognised deferred tax assets are included
\nin the table below.
\nThe net deferred tax balance, before the offset of balances within countries, consists of:
\nIntangibles,
Pension and
Elimination of
Losses and
Accrued
\nproperty,\u00a0plant
post-retirement
unrealised profit
Untaxed
tax credits
expenses
\nand equipment
benefits
on inventory
reserves
carried forward
and other
Total
\n$m
$m
$m
$m
$m
$m
$m
\nDeferred tax assets at 31\u00a0December 2020
1,061
690
2,286
\u2013
852
1,130
6,019
\nDeferred tax liabilities at 31\u00a0December 2020
(3,688)
(34)
(479)
(801)
(138)
(359)
(5,499)
\nNet deferred tax balance at 31\u00a0December 2020
(2,627)
656
1,807
(801)
714
771
520
\nDeferred tax assets at 31\u00a0December 2021
1,476
574
1,910
\u2013
1,571
1,735
7,266
\nDeferred tax liabilities at 31\u00a0December 2021
(6,956)
(21)
(49)
(862)
(53)
(1,201)
(9,142)
\nNet deferred tax balance at 31\u00a0December 2021
(5,480)
553
1,861
(862)
1,518
534
(1,876)
\nDeferred tax assets at 31\u00a0December 2022
1,499
276
2,048
\u2013
1,274
1,614
6,711
\nDeferred tax liabilities at 31\u00a0December 2022
(5,430)
(45)
(24)
(716)
(16)
(161)
(6,392)
\nNet deferred tax balance at 31\u00a0December 2022
(3,931)
231
2,024
(716)
1,258
1,453
319
\n155
AstraZeneca Annual Report & Form 20-F Information 2022
Notes to the Group Financial Statements
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
\n\n\n\n\n4 Taxation
continued
\nAnalysed in the Consolidated Statement of Financial Position, after offset of balances within countries, as follows:
\n2022
2021
2020
\n$m
$m
$m
\nDeferred tax assets
3,263
4,330
3,438
\nDeferred tax liabilities
(2,944)
(6,206)
(2,918)
\nNet deferred tax balance
319
(1,876)
520",
"dimensions": {
"concept": "ifrs-full:DisclosureOfDeferredTaxesExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f27036": {
"value": "5 Earnings per $0.25 Ordinary Share \n2022
2021
2020
\nProfit for the year attributable to equity holders ($m)
3,288
112
3,196
\nBasic earnings per Ordinary Share
$2.12
$0.08
$2.44
\nDiluted earnings per Ordinary Share
$2.11
$0.08
$2.44
\nWeighted average number of Ordinary Shares in issue for basic earnings (millions)
1,548
1,418
1,312
\nDilutive impact of share options outstanding (millions)
12
9
1
\nDiluted weighted average number of Ordinary Shares in issue (millions)
1,560
1,427
1,313
\nThe earnings \ufb01gures used in the calculations above are post-tax. The weighted average number of Ordinary Shares in issue is calculated by taking
\nthe number of Ordinary Shares outstanding each day weighted by the number of days that those shares were outstanding.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfEarningsPerShareExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f27082": {
"value": "6 Segment information \nThe Group has reviewed its assessment of reportable segments under IFRS 8 \u2018Operating Segments\u2019 and concluded that the Group continues to
\nhave one reportable segment.
\nThis determination is considered to be a Key Judgement and this judgement has been taken with reference to the following factors:
\n1 The level of integration across the different functions of the Group\u2019s pharmaceutical business:
\nAstraZeneca is engaged in a single business activity of pharmaceuticals and the Group does not have multiple operating segments. AstraZeneca\u2019s
\npharmaceuticals business consists of the discovery and development of new products, which are then manufactured, marketed and sold. All of these
\nfunctional activities take place (and are managed) globally on a highly integrated basis. These individual functional areas are not managed separately.
\n2 The identi\ufb01cation of the Chief Operating Decision Maker (CODM) and the nature and extent of the \ufb01nancial information reviewed by the CODM:
\nThe SET, established and chaired by the CEO, is the vehicle through which the CEO exercises the authority delegated to him from the Board for the
\nmanagement, development and performance of AstraZeneca as a whole. It is considered that the SET is AstraZeneca\u2019s Chief Operating Decision
\nMaking body (as de\ufb01ned by IFRS 8). The operation of the SET is principally driven by the management of the Commercial operations, R&D,
\nmanufacturing and supply and enabling functions. All signi\ufb01cant operating decisions are undertaken by the SET. While members of the SET have
\nresponsibility for implementation of decisions in their respective areas, operating decision making is at SET level as a whole. Where necessary, these
\nare implemented through cross-functional sub-committees that consider the Group-wide impact of a new decision. For example, product launch
\ndecisions would be initially considered by the SET and, on approval, passed to an appropriate sub team for implementation. The ability of the
\nenterprise to develop, produce, deliver and commercialise a wide range of pharmaceutical products are central to the SET decision-making process.
\nIn assessing performance, the SET reviews \ufb01nancial information on an integrated basis for the Group as a whole, substantially in the form of, and
\non the same basis as, the Group\u2019s IFRS Financial Statements. The high upfront cost of discovering and developing new products, coupled with
\nthe relatively insigni\ufb01cant and stable unit cost of production, means that there is not the clear link that exists in many manufacturing businesses
\nbetween the revenue generated on an individual product sale and the associated cost and hence margin generated on a product. Consequently,
\nthe pro\ufb01tability of individual drugs or classes of drugs is not considered a key measure of performance for the business and is not monitored by
\nthe SET. The focus of additional \ufb01nancial information reviewed is at brand sales and gross margin level within speci\ufb01c geographies. Expenditure
\nanalysis is completed for the science units, operations and enabling functions; there is no allocation of these centrally managed Group costs to
\nthe individual product or brands. The bonus of SET members\u2019 continues to be derived from the Group scorecard outcome as discussed in our
\nDirectors\u2019 Remuneration Report.
\n3 How resources are allocated:
\nResources are allocated on a Group-wide basis according to need. In particular, capital expenditure, in-licensing, and R&D resources are allocated
\nbetween activities on merit, based on overall therapeutic considerations and strategy under the aegis of the Group\u2019s Early-Stage Product Committees
\nand Late-Stage Product Committees.
\nGeographic areas
\nThe following table shows information for Total Revenue by geographic area and material countries. The additional tables show the Operating pro\ufb01t
\nand Pro\ufb01t before tax made by companies located in that area, together with Non-current assets, Total assets, assets acquired, net operating assets,
\nand Property, plant and equipment owned by the same companies. Product Sales by geographic market are included in the area/country where
\nthe legal entity resides and from which those sales were made.
\nTotal Revenue
\n2022
2021
2020
\n$m
$m
$m
\nUK
3,117
3,245
1,741
\nRest of Europe
\nFrance
1,107
915
653
\nGermany
1,902
1,486
937
\nItaly
735
577
431
\nSpain
738
578
398
\nSweden
1,721
2,322
1,026
\nOthers
2,706
1,949
1,391
\n8,909
7,827
4,836
\nThe Americas
\nCanada
1,166
772
596
\nUS
17,278
12,047
8,955
\nOthers
1,175
1,203
761
\n19,619
14,022
10,312
\nAsia, Africa & Australasia
\nAustralia
571
547
282
\nChina
5,743
6,002
5,345
\nJapan
3,986
3,395
2,567
\nOthers
2,406
2,379
1,534
\n12,706
12,323
9,728
\nTotal Revenue
44,351
37,417
26,617
\nTotal Revenue outside of the UK totalled $41,234m for the year ended 31 December 2022 (2021: $34,172m; 2020: $24,876m).
\n157
AstraZeneca Annual Report & Form 20-F Information 2022
Notes to the Group Financial Statements
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
\n\n\n\n\n6 Segment information
continued
\nOperating profit/(loss)
Profit/(loss) before tax
\n2022
2021
2020
2022
2021
2020
\n$m
$m
$m
$m
$m
$m
\nUK
1,120
(950)
824
272
(1,477)
518
\nRest of Europe
2,945
2,999
2,838
2,709
2,682
2,356
\nThe Americas
(954)
(1,936)
758
(1,140)
(2,401)
297
\nAsia, Africa & Australasia
646
943
742
660
931
745
\nContinuing operations
3,757
1,056
5,162
2,501
(265)
3,916
\nNon-current assets
\n1
\nTotal assets
\n2022
2021
2020
2022
2021
2020
\n$m
$m
$m
$m
$m
$m
\nUK
8,635
7,692
7,900
16,786
16,615
17,851
\nRest of Europe
35,093
39,171
15,821
40,669
48,383
19,738
\nThe Americas
25,736
26,570
18,501
32,990
34,301
23,640
\nAsia, Africa & Australasia
1,089
1,254
1,354
6,038
6,064
5,500
\nContinuing operations
70,553
74,687
43,576
96,483
105,363
66,729
\nAssets acquired
\n2
\nNet operating assets
\n3
\n2022
2021
2020
2022
2021
2020
\n$m
$m
$m
$m
$m
$m
\nUK
2,301
810
1,611
3,863
3,239
5,244
\nRest of Europe
522
26,527
505
32,726
40,161
10,242
\nThe Americas
421
10,810
286
23,290
24,786
15,697
\nAsia, Africa & Australasia
51
94
116
1,895
736
607
\nContinuing operations
3,295
38,241
2,518
61,774
68,922
31,790
\n1
Non-current assets exclude Deferred tax assets and Derivative financial instruments.
\n2
Included in Assets acquired are those assets that are expected to be used during more than one period (Property, plant and equipment, Goodwill and Intangible assets) and include those
\nacquired through business combinations (Note 27).
\n3
Net operating assets exclude short-term investments, cash, short-term borrowings, loans, Derivative financial instruments, Retirement benefit obligations and non-operating receivables
\nand payables.
\nProperty, plant and equipment
\n2022
2021
2020
\n$m
$m
$m
\nUK
2,526
2,542
2,227
\nIreland
1,040
969
\u2013
\nSweden
1,472
1,593
1,755
\nUS
2,176
2,660
2,662
\nRest of the world
1,293
1,419
1,607
\nContinuing operations
8,507
9,183
8,251
\nGeographic markets
\nThe table below shows Product Sales in each geographic market in which customers are located.
\n2022
2021
2020
\n$m
$m\u00a0
$m
\nUK
996
1,206
611
\nRest of Europe
7,503
6,792
4,446
\nThe Americas
20,126
14,893
10,004
\nAsia, Africa & Australasia
14,373
13,650
10,829
\nContinuing operations
42,998
36,541
25,890
\nProduct Sales are recognised when control of the goods has been transferred to a third party. A signi\ufb01cant proportion of this is upon delivery of the
\nproducts to wholesalers. One wholesaler (2021: one; 2020: one) individually represented greater than 10% of Product Sales. The value of Product Sales
\nto this wholesaler was $5,387m (2021: $4,862m; 2020: $3,321m).",
"dimensions": {
"concept": "ifrs-full:DisclosureOfEntitysReportableSegmentsExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f27089": {
"value": "AstraZeneca\u2019s pharmaceuticals business consists of the discovery and development of new products, which are then manufactured, marketed and sold.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfNatureOfEntitysOperationsAndPrincipalActivities",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f27116": {
"value": "Geographic areas \nThe following table shows information for Total Revenue by geographic area and material countries. The additional tables show the Operating pro\ufb01t
\nand Pro\ufb01t before tax made by companies located in that area, together with Non-current assets, Total assets, assets acquired, net operating assets,
\nand Property, plant and equipment owned by the same companies. Product Sales by geographic market are included in the area/country where
\nthe legal entity resides and from which those sales were made.
\nTotal Revenue
\n2022
2021
2020
\n$m
$m
$m
\nUK
3,117
3,245
1,741
\nRest of Europe
\nFrance
1,107
915
653
\nGermany
1,902
1,486
937
\nItaly
735
577
431
\nSpain
738
578
398
\nSweden
1,721
2,322
1,026
\nOthers
2,706
1,949
1,391
\n8,909
7,827
4,836
\nThe Americas
\nCanada
1,166
772
596
\nUS
17,278
12,047
8,955
\nOthers
1,175
1,203
761
\n19,619
14,022
10,312
\nAsia, Africa & Australasia
\nAustralia
571
547
282
\nChina
5,743
6,002
5,345
\nJapan
3,986
3,395
2,567
\nOthers
2,406
2,379
1,534
\n12,706
12,323
9,728
\nTotal Revenue
44,351
37,417
26,617
\nTotal Revenue outside of the UK totalled $41,234m for the year ended 31 December 2022 (2021: $34,172m; 2020: $24,876m).
\n157
AstraZeneca Annual Report & Form 20-F Information 2022
Notes to the Group Financial Statements
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
\n\n\n\n\n6 Segment information
continued
\nOperating profit/(loss)
Profit/(loss) before tax
\n2022
2021
2020
2022
2021
2020
\n$m
$m
$m
$m
$m
$m
\nUK
1,120
(950)
824
272
(1,477)
518
\nRest of Europe
2,945
2,999
2,838
2,709
2,682
2,356
\nThe Americas
(954)
(1,936)
758
(1,140)
(2,401)
297
\nAsia, Africa & Australasia
646
943
742
660
931
745
\nContinuing operations
3,757
1,056
5,162
2,501
(265)
3,916
\nNon-current assets
\n1
\nTotal assets
\n2022
2021
2020
2022
2021
2020
\n$m
$m
$m
$m
$m
$m
\nUK
8,635
7,692
7,900
16,786
16,615
17,851
\nRest of Europe
35,093
39,171
15,821
40,669
48,383
19,738
\nThe Americas
25,736
26,570
18,501
32,990
34,301
23,640
\nAsia, Africa & Australasia
1,089
1,254
1,354
6,038
6,064
5,500
\nContinuing operations
70,553
74,687
43,576
96,483
105,363
66,729
\nAssets acquired
\n2
\nNet operating assets
\n3
\n2022
2021
2020
2022
2021
2020
\n$m
$m
$m
$m
$m
$m
\nUK
2,301
810
1,611
3,863
3,239
5,244
\nRest of Europe
522
26,527
505
32,726
40,161
10,242
\nThe Americas
421
10,810
286
23,290
24,786
15,697
\nAsia, Africa & Australasia
51
94
116
1,895
736
607
\nContinuing operations
3,295
38,241
2,518
61,774
68,922
31,790
\n1
Non-current assets exclude Deferred tax assets and Derivative financial instruments.
\n2
Included in Assets acquired are those assets that are expected to be used during more than one period (Property, plant and equipment, Goodwill and Intangible assets) and include those
\nacquired through business combinations (Note 27).
\n3
Net operating assets exclude short-term investments, cash, short-term borrowings, loans, Derivative financial instruments, Retirement benefit obligations and non-operating receivables
\nand payables.
\nProperty, plant and equipment
\n2022
2021
2020
\n$m
$m
$m
\nUK
2,526
2,542
2,227
\nIreland
1,040
969
\u2013
\nSweden
1,472
1,593
1,755
\nUS
2,176
2,660
2,662
\nRest of the world
1,293
1,419
1,607
\nContinuing operations
8,507
9,183
8,251",
"dimensions": {
"concept": "ifrs-full:DisclosureOfGeographicalAreasExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f27462": {
"value": "7 Property, plant and equipment
\nAssets in
Total property,
\nLand and
Plant and
course of
plant and
\nbuildings
equipment
construction
equipment
\n$m
$m
$m
$m
\nCost
\nAt 1\u00a0January 2020
5,532
7,383
2,086
15,001
\nCapital expenditure
10
42
874
926
\nTransfer of assets into use
137
462
(599)
\u2013
\nDisposals and other movements
(48)
(615)
(18)
(681)
\nExchange adjustments
220
466
135
821
\nAt 31\u00a0December 2020
5,851
7,738
2,478
16,067
\nAdditions through business combinations (Note\u00a027)
542
339
254
1,135
\nCapital expenditure
9
31
1,112
1,152
\nTransfer of assets into use
236
611
(847)
\u2013
\nDisposals and other movements
(92)
(469)
(200)
(761)
\nExchange adjustments
(169)
(347)
(69)
(585)
\nAt 31\u00a0December 2021
6,377
7,903
2,728
17,008
\nCapital expenditure
5
19
1,042
1,066
\nTransfer of assets into use
226
683
(909)
\u2013
\nTransferred to Assets held for sale (Note 18)
(434)
(293)
\u2013
(727)
\nDisposals and other movements
(425)
(146)
28
(543)
\nExchange adjustments
(309)
(610)
(236)
(1,155)
\nAt 31\u00a0December 2022
5,440
7,556
2,653
15,649
\nDepreciation and impairment
\nAt 1\u00a0January 2020
2,505
4,808
\u2013
7,313
\nDepreciation charge for the year
227
462
\u2013
689
\nImpairment (reversal)/charge
(1)
2
12
13
\nDisposals and other movements
(42)
(606)
(12)
(660)
\nExchange adjustments
137
324
\u2013
461
\nAt 31\u00a0December 2020
2,826
4,990
\u2013
7,816
\nDepreciation charge for the year
231
493
\u2013
724
\nImpairment (reversal)/charge
(1)
121
223
343
\nDisposals and other movements
(74)
(428)
(223)
(725)
\nExchange adjustments
(105)
(228)
\u2013
(333)
\nAt 31\u00a0December 2021
2,877
4,948
\u2013
7,825
\nDepreciation charge for the year
286
566
\u2013
852
\nImpairment charge/(reversal)
20
8
(28)
\u2013
\nTransferred to Assets held for sale (Note 18)
(300)
(277)
\u2013
(577)
\nDisposals and other movements
(227)
(188)
28
(387)
\nExchange adjustments
(167)
(404)
\u2013
(571)
\nAt 31\u00a0December 2022
2,489
4,653
\u2013
7,142
\nNet book value
\nAt 31\u00a0December 2020
3,025
2,748
2,478
8,251
\nAt 31\u00a0December 2021
3,500
2,955
2,728
9,183
\nAt 31\u00a0December 2022
2,951
2,903
2,653
8,507
\nImpairment charges in 2021 totalling $343m were recognised for Plant and equipment and Assets in course of construction due to the rationalisation
\nof our manufacturing capacity and footprint across certain production sites as a result of restructuring programmes, including the Post Alexion
\nAcquisition Group Review (see Note 2). These charges were recognised in Cost of sales. The revised carrying value of the impacted assets is nil,
\nunder fair value less costs to sell.
\n2022
2021
2020
\n$m
$m
$m
\nThe net book value of land and buildings comprised:
\nFreeholds
2,555
2,985
2,583
\nLeaseholds
396
515
442
8 Leases
\nRight-of-use assets
\nTotal right-
\nLand and
Motor
of-use
\nbuildings
vehicles
Other
assets
\n$m
$m
$m
$m
\nCost
\nAt 1\u00a0January 2020
627
202
22
851
\nAdditions \u2013 separately acquired
87
89
15
191
\nDisposals and other movements
\u2013
(27)
(2)
(29)
\nExchange adjustments
21
8
1
30
\nAt 31\u00a0December 2020
735
272
36
1,043
\nAdditions through business combinations (Note\u00a027)
255
8
\u2013
263
\nAdditions \u2013 separately acquired
145
98
2
245
\nDisposals and other movements
25
(44)
(4)
(23)
\nExchange adjustments
(27)
(13)
(1)
(41)
\nAt 31\u00a0December 2021
1,133
321
33
1,487
\nAdditions through business combinations
4
\u2013
\u2013
4
\nAdditions \u2013 separately acquired
140
81
14
235
\nDisposals and other movements
(33)
(58)
(13)
(104)
\nExchange adjustments
(62)
(15)
(2)
(79)
\nAt 31\u00a0December 2022
1,182
329
32
1,543
\nDepreciation and impairment
\nAt 1\u00a0January 2020
132
64
8
204
\nDepreciation charge for the year
131
75
9
215
\nDisposals and other movements
(24)
(26)
(4)
(54)
\nExchange adjustments
8
4
\u2013
12
\nAt 31\u00a0December 2020
247
117
13
377
\nDepreciation charge for the year
144
85
6
235
\nDisposals and other movements
(54)
(42)
\u2013
(96)
\nExchange adjustments
(11)
(6)
\u2013
(17)
\nAt 31\u00a0December 2021
326
154
19
499
\nDepreciation charge for the year
160
80
6
246
\nImpairment charge
2
\u2013
\u2013
2
\nDisposals and other movements
(54)
(50)
(10)
(114)
\nExchange adjustments
(23)
(8)
(1)
(32)
\nAt 31\u00a0December 2022
411
176
14
601
\nNet book value
\nAt 31\u00a0December 2020
488
155
23
666
\nAt 31\u00a0December 2021
807
167
14
988
\nAt 31\u00a0December 2022
771
153
18
942
\nLease Liability
\n2022
2021
2020
\n$m
$m
$m
\nThe present value of lease liabilities is as follows:
\nWithin one year
(228)
(233)
(192)
\nLater than one year and not later than five years
(549)
(544)
(389)
\nLater than five years
(176)
(210)
(100)
\nTotal lease liabilities
(953)
(987)
(681)
\nThe interest expense on lease liabilities included within \ufb01nance costs was $24m (2021: $22m; 2020: $21m).
\nThe total cash out\ufb02ow for leases in 2022 was $268m (2021: $262m; 2020: $228m).
\nThe discount rates used for calculating the present value of lease liabilities range from 0% to 63%.
\nThe Group has entered into lease contracts that have not yet commenced. The nominal value of estimated future lease payments under these lease
\ncontracts approximates $1,460m as of 31 December 2022. Of this value, $1,349m relates to a property lease in the US which is expected to commence
\nin 2026 with a lease term of 15 years.
\nThe Group entered into a sale and leaseback agreement in relation to the Waltham R&D site in MA, US in 2022. Prior to the sale, the carrying value
\nof the Property, plant and equipment was $124m. Cash proceeds of $265m have been received, recorded within Disposal of property, plant and
\nequipment within the Consolidated Statement of Cash Flows, and a gain on disposal of $125m has been recorded within Other operating income and
\nexpense within the Consolidated Statement of Comprehensive Income. A lease liability and a corresponding right-of-use asset have been
\nrecorded of $28m and $13m, respectively.
10 Intangible assets
\nProduct,
Software
\nmarketing and
Other
development
\ndistribution rights
intangibles
costs
Total
\n$m
$m
$m
$m
\nCost
\nAt 1\u00a0January 2020
40,654
2,649
1,781
45,084
\nAdditions \u2013 separately acquired
1,454
2
136
1,592
\nDisposals
(970)
(66)
(636)
(1,672)
\nExchange and other adjustments
1,539
57
7
1,603
\nAt 31\u00a0December 2020
42,677
2,642
1,288
46,607
\nAdditions through business combinations (Note\u00a027)
26,455
430
70
26,955
\nAdditions \u2013 separately acquired
587
6
119
712
\nTransferred to Assets held for sale (Note\u00a018)
(1,266)
(47)
\u2013
(1,313)
\nDisposals
(801)
(402)
(23)
(1,226)
\nExchange and other adjustments
(1,062)
(18)
(22)
(1,102)
\nAt 31\u00a0December 2021
66,590
2,611
1,432
70,633
\nAdditions through business combinations (Note 27)
\u2013
46
\u2013
46
\nAdditions \u2013 separately acquired
2,051
12
105
2,168
\nDisposals
(57)
(105)
(36)
(198)
\nExchange and other adjustments
(1,799)
(122)
(106)
(2,027)
\nAt 31\u00a0December 2022
66,785
2,442
1,395
70,622
\nAmortisation and impairment losses
\nAt 1\u00a0January 2020
20,605
2,097
1,549
24,251
\nAmortisation for year
1,872
59
61
1,992
\nImpairment charges
405
\u2013
\u2013
405
\nImpairment reversals
(165)
\u2013
\u2013
(165)
\nDisposals
(899)
(66)
(636)
(1,601)
\nExchange and other adjustments
746
38
(6)
778
\nAt 31\u00a0December 2020
22,564
2,128
968
25,660
\nAmortisation for year
2,908
172
63
3,143
\nImpairment charges
2,067
\u2013
18
2,085
\nTransferred to Assets held for sale (Note\u00a018)
(931)
(14)
\u2013
(945)
\nDisposals
(797)
(402)
(21)
(1,220)
\nExchange and other adjustments
(535)
(21)
(26)
(582)
\nAt 31\u00a0December 2021
25,276
1,863
1,002
28,141
\nAmortisation for year
3,899
181
76
4,156
\nImpairment charges
236
82
\u2013
318
\nImpairment reversals
(77)
\u2013
(17)
(94)
\nDisposals
(55)
(105)
(20)
(180)
\nExchange and other adjustments
(887)
(76)
(63)
(1,026)
\nAt 31\u00a0December 2022
28,392
1,945
978
31,315
\nNet book value
\nAt 31\u00a0December 2020
20,113
514
320
20,947
\nAt 31\u00a0December 2021
41,314
748
430
42,492
\nAt 31\u00a0December 2022
38,393
497
417
39,307
2022
2021
2020
\n$m
$m
$m
\nNet book value
\nCurrent intangible assets
\u2013
105
\u2013
\nNon-current intangible assets
39,307
42,387
20,947
\nAt 31\u00a0December
39,307
42,492
20,947
\nOther intangibles consist mainly of research and device technologies and the Alexion brand name. Included within Software development costs are
\nassets currently in development that will commence amortisation when ready for use.
\nIncluded within Additions \u2212 separately acquired are amounts of $1,135m (2021: $124m; 2020: $835m), relating to deferred payments and other non-cash
\nconsideration for the acquisition of Product, marketing and distribution rights, which are not re\ufb02ected in the current year Consolidated Statement of
\nCash Flows. Disposals include amounts related to fully depreciated assets that are no longer in use by the Group.
\nAmortisation charges are recognised in pro\ufb01t as follows:
\nProduct,
Software
\nmarketing and
Other
development
\ndistribution rights
intangibles
costs
Total
\n$m
$m
$m
$m
\nYear ended 31\u00a0December 2020
\nCost of sales
66
\u2013
\u2013
66
\nResearch and development expense
\u2013
29
\u2013
29
\nSelling, general and administrative expense
1,806
28
61
1,895
\nOther operating income and expense
\u2013
2
\u2013
2
\nTotal
1,872
59
61
1,992
\nYear ended 31\u00a0December 2021
\nCost of sales
66
\u2013
\u2013
66
\nResearch and development expense
\u2013
33
\u2013
33
\nSelling, general and administrative expense
2,842
138
63
3,043
\nOther operating income and expense
\u2013
1
\u2013
1
\nTotal
2,908
172
63
3,143
\nYear ended 31\u00a0December 2022
\nCost of sales
32
\u2013
\u2013
32
\nResearch and development expense
\u2013
30
\u2013
30
\nSelling, general and administrative expense
3,867
151
76
4,094
\nTotal
3,899
181
76
4,156
\nNet impairment charges are recognised in pro\ufb01t as follows:
\nProduct,
Software
\nmarketing and
Other
development
\ndistribution rights
intangibles
costs
Total
\n$m
$m
$m
$m
\nYear ended 31\u00a0December 2020
\nResearch and development expense
55
\u2013
\u2013
55
\nSelling, general and administrative expense
185
\u2013
\u2013
185
\nTotal
240
\u2013
\u2013
240
\nYear ended 31\u00a0December 2021
\nResearch and development expense
1,464
\u2013
\u2013
1,464
\nSelling, general and administrative expense
603
\u2013
18
621
\nTotal
2,067
\u2013
18
2,085
\nYear ended 31\u00a0December 2022
\nResearch and development expense
95
\u2013
\u2013
95
\nSelling, general and administrative expense
64
82
(17)
129
\nTotal
159
82
(17)
224
\nImpairment charges and reversals
\nWe perform a rigorous impairment trigger assessment for all our intangible assets. Intangible assets under development and not available for use
\nare tested annually for impairment and other intangible assets are tested when there is an indication of impairment loss or reversal. Where testing
\nis required, the recoverable amount of the assets is estimated in order to determine the extent of the impairment loss or reversal. Where it is not
\npossible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the Cash Generating Unit (CGU)
\nto which it belongs. The Group considers that as the intangible assets are linked to individual products and that product cash \ufb02ows are considered
\nto be largely independent of other product cash \ufb02ows, the CGU for intangibles is at the product level. Group level budgets and forecasts include
\nforecast capital investment and operational impacts related to sustainability projects, as well as in\ufb02ationary impacts, and form the basis for the
\nvalue in use models used for impairment testing.
An asset\u2019s recoverable amount is determined as the higher of an asset\u2019s or CGU\u2019s fair value less costs to sell or value in use, in both cases using
\ndiscounted cash \ufb02ow calculations where the asset\u2019s expected post-tax cash \ufb02ows are risk-adjusted over their estimated remaining period of expected
\neconomic bene\ufb01t. Where the value in use approach is used, the post-tax risk-adjusted cash \ufb02ows are discounted using AstraZeneca\u2019s post-tax
\nweighted average cost of capital (7% for 2022, 2021 and 2020), which is a nominal rate. There is no material difference in the approach taken to using
\npre-tax cash \ufb02ows and a pre-tax rate compared to post-tax cash \ufb02ows and a post-tax rate, as required by IAS 36. Where fair value less costs to sell
\nis used to determine recoverable value, the discount rate is assessed with reference to a market participant; this is not usually materially different to
\nthe AstraZeneca post-tax weighted average cost of capital rate of 7%. Legacy Alexion assets have been tested for impairment at risk-adjusted post-tax
\ndiscount rates ranging between 8.5% to 10.5% as they are integrated into the Group. No impairments have been recognised on these assets.
\nThe estimates used in calculating the recoverable amount are considered signi\ufb01cant estimates, highly sensitive and depend on assumptions
\nspeci\ufb01c to the nature of the Group\u2019s activities including:
\n>
outcome of R&D activities
\n>
probability of technical and regulatory success
\n>
market volume, share and pricing (to derive peak year sales)
\n>
amount and timing of projected future cash \ufb02ows
\n>
sales erosion curves following patent expiry.
\nFor assets held at fair value less costs to sell, we make appropriate adjustments to re\ufb02ect market participant assessments.
\nIn 2022, the Group recorded impairment charges of $146m in respect of launched products. Impairment charges recorded against products in
\ndevelopment totalled $172m due to decisions made to terminate the related activities.
\nIn 2021, the Group recorded impairment charges of $603m in respect of launched products, including
Bydureon
($469m, revised carrying amount
\nof $50m) under value in use model, roxadustat ($121m, revised carrying amount of $215m) under value in use model and other launched products
\ntotalling $13m.
\nImpairment charges recorded against products in development in 2021, based on fair value less costs to sell, totalled $1,464m, principally Ardea
\n($1,172m) which was fully impaired following the decision to discontinue development of verinurad. The remaining impairments relate to full impairments
\nof various products in development, due to either management\u2019s decision to discontinue development as part of a Group-wide portfolio prioritisation
\nreview, or due to the outcome of research activities.
\nIn 2020, the Group recorded impairment charges of $350m in respect of launched products, including
Duaklir
($200m, revised carrying amount of
\n$210m) under fair value less costs to sell,
Bydureon
($102m, revised carrying amount of $581m) under value in use model, and other launched products
\ntotalling $48m. The fair value less costs to sell valuation model for
Duaklir
was based on discounted cash \ufb02ows, and was categorised at Level 3 in
\nthe fair value hierarchy. Key assumptions in this model were forecast future revenue and costs of production. Impairment charges recorded against
\nproducts in development totalled $55m.
\nThe Group has performed an assessment on assets which have had impairments recorded in previous periods to determine if any reversals of
\nimpairments were required. Impairment reversals of $94m were recorded in 2022, including $77m in respect of products in development. No impairment
\nreversals were recorded in 2021. Impairment reversals of $165m were recorded in 2020 in respect of launched products, including
FluMist
($147m,
\nrevised carrying amount of $300m, driven by expanded vaccination efforts increasing global demand), and other launched products of $18m.
\nWhen launched products, such as the ones detailed above, are partially impaired, the carrying values of these assets in future periods are particularly
\nsensitive to changes in forecast assumptions, including those assumptions set out above, as the asset is impaired down to its recoverable amount.
\nSigni\ufb01cant assets
\nCarrying value
\nRemaining
\namortisation
\n$m
period
\nC5 franchise (
Soliris/Ultomiris
) intangible assets arising from the acquisition of Alexion
16,040
5 to 13 years
\nIntangible assets arising from the acquisition of Acerta Pharma
4,817
10 years
\nStrensiq, Kanuma
and
Andexxa
intangible assets arising from the acquisition of Alexion
4,583
10 to 16 years
\nEnhertu
intangible assets acquired from Daiichi Sankyo
2,960
11 years
\nIntangible asset products in development arising from the acquisition of Alexion
\n1
\n2,760
Not amortised
\nIntangible assets arising from the acquisition of ZS Pharma
2,012
9 years
\nOther intangible assets (DS-1062) acquired from Daiichi Sankyo
\n1
\n937
Not amortised
\nIntangible assets arising from the restructuring of a historical joint venture with MSD
569
4 to 7 years
\nFarxiga
/
Forxiga
intangible assets acquired from BMS
528
4 years
\nIntangible assets arising from the acquisition of Pearl Therapeutics
462
6 to 7 years
\nRSV franchise assets arising from the acquisition of MedImmune
458
3 years
\nMonalizumab intangible assets acquired from Innate Pharma
\n1
\n350
Not amortised
\n1
Assets in development are not amortised but are tested annually for impairment.
\nThe acquisition of intangible assets relating to DS-1062 in 2020 was assessed under the optional concentration test in IFRS 3 and was determined
\nto be an asset acquisition, as substantially all of the value of the gross assets acquired was concentrated in a single asset.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfDepreciationAndAmortisationExpenseExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f27464": {
"value": "7 Property, plant and equipment \nAssets in
Total property,
\nLand and
Plant and
course of
plant and
\nbuildings
equipment
construction
equipment
\n$m
$m
$m
$m
\nCost
\nAt 1\u00a0January 2020
5,532
7,383
2,086
15,001
\nCapital expenditure
10
42
874
926
\nTransfer of assets into use
137
462
(599)
\u2013
\nDisposals and other movements
(48)
(615)
(18)
(681)
\nExchange adjustments
220
466
135
821
\nAt 31\u00a0December 2020
5,851
7,738
2,478
16,067
\nAdditions through business combinations (Note\u00a027)
542
339
254
1,135
\nCapital expenditure
9
31
1,112
1,152
\nTransfer of assets into use
236
611
(847)
\u2013
\nDisposals and other movements
(92)
(469)
(200)
(761)
\nExchange adjustments
(169)
(347)
(69)
(585)
\nAt 31\u00a0December 2021
6,377
7,903
2,728
17,008
\nCapital expenditure
5
19
1,042
1,066
\nTransfer of assets into use
226
683
(909)
\u2013
\nTransferred to Assets held for sale (Note 18)
(434)
(293)
\u2013
(727)
\nDisposals and other movements
(425)
(146)
28
(543)
\nExchange adjustments
(309)
(610)
(236)
(1,155)
\nAt 31\u00a0December 2022
5,440
7,556
2,653
15,649
\nDepreciation and impairment
\nAt 1\u00a0January 2020
2,505
4,808
\u2013
7,313
\nDepreciation charge for the year
227
462
\u2013
689
\nImpairment (reversal)/charge
(1)
2
12
13
\nDisposals and other movements
(42)
(606)
(12)
(660)
\nExchange adjustments
137
324
\u2013
461
\nAt 31\u00a0December 2020
2,826
4,990
\u2013
7,816
\nDepreciation charge for the year
231
493
\u2013
724
\nImpairment (reversal)/charge
(1)
121
223
343
\nDisposals and other movements
(74)
(428)
(223)
(725)
\nExchange adjustments
(105)
(228)
\u2013
(333)
\nAt 31\u00a0December 2021
2,877
4,948
\u2013
7,825
\nDepreciation charge for the year
286
566
\u2013
852
\nImpairment charge/(reversal)
20
8
(28)
\u2013
\nTransferred to Assets held for sale (Note 18)
(300)
(277)
\u2013
(577)
\nDisposals and other movements
(227)
(188)
28
(387)
\nExchange adjustments
(167)
(404)
\u2013
(571)
\nAt 31\u00a0December 2022
2,489
4,653
\u2013
7,142
\nNet book value
\nAt 31\u00a0December 2020
3,025
2,748
2,478
8,251
\nAt 31\u00a0December 2021
3,500
2,955
2,728
9,183
\nAt 31\u00a0December 2022
2,951
2,903
2,653
8,507
\nImpairment charges in 2021 totalling $343m were recognised for Plant and equipment and Assets in course of construction due to the rationalisation
\nof our manufacturing capacity and footprint across certain production sites as a result of restructuring programmes, including the Post Alexion
\nAcquisition Group Review (see Note 2). These charges were recognised in Cost of sales. The revised carrying value of the impacted assets is nil,
\nunder fair value less costs to sell.
\n2022
2021
2020
\n$m
$m
$m
\nThe net book value of land and buildings comprised:
\nFreeholds
2,555
2,985
2,583
\nLeaseholds
396
515
442",
"dimensions": {
"concept": "ifrs-full:DisclosureOfPropertyPlantAndEquipmentExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f27674": {
"value": "Impairment charges in 2021 totalling $343m were recognised for Plant and equipment and Assets in course of construction due to the rationalisation \nof our manufacturing capacity and footprint across certain production sites as a result of restructuring programmes, including the Post Alexion
\nAcquisition Group Review (see Note 2). These charges were recognised in Cost of sales. The revised carrying value of the impacted assets is nil,
\nunder fair value less costs to sell.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfImpairmentOfAssetsExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f27713": {
"value": "8 Leases \nRight-of-use assets
\nTotal right-
\nLand and
Motor
of-use
\nbuildings
vehicles
Other
assets
\n$m
$m
$m
$m
\nCost
\nAt 1\u00a0January 2020
627
202
22
851
\nAdditions \u2013 separately acquired
87
89
15
191
\nDisposals and other movements
\u2013
(27)
(2)
(29)
\nExchange adjustments
21
8
1
30
\nAt 31\u00a0December 2020
735
272
36
1,043
\nAdditions through business combinations (Note\u00a027)
255
8
\u2013
263
\nAdditions \u2013 separately acquired
145
98
2
245
\nDisposals and other movements
25
(44)
(4)
(23)
\nExchange adjustments
(27)
(13)
(1)
(41)
\nAt 31\u00a0December 2021
1,133
321
33
1,487
\nAdditions through business combinations
4
\u2013
\u2013
4
\nAdditions \u2013 separately acquired
140
81
14
235
\nDisposals and other movements
(33)
(58)
(13)
(104)
\nExchange adjustments
(62)
(15)
(2)
(79)
\nAt 31\u00a0December 2022
1,182
329
32
1,543
\nDepreciation and impairment
\nAt 1\u00a0January 2020
132
64
8
204
\nDepreciation charge for the year
131
75
9
215
\nDisposals and other movements
(24)
(26)
(4)
(54)
\nExchange adjustments
8
4
\u2013
12
\nAt 31\u00a0December 2020
247
117
13
377
\nDepreciation charge for the year
144
85
6
235
\nDisposals and other movements
(54)
(42)
\u2013
(96)
\nExchange adjustments
(11)
(6)
\u2013
(17)
\nAt 31\u00a0December 2021
326
154
19
499
\nDepreciation charge for the year
160
80
6
246
\nImpairment charge
2
\u2013
\u2013
2
\nDisposals and other movements
(54)
(50)
(10)
(114)
\nExchange adjustments
(23)
(8)
(1)
(32)
\nAt 31\u00a0December 2022
411
176
14
601
\nNet book value
\nAt 31\u00a0December 2020
488
155
23
666
\nAt 31\u00a0December 2021
807
167
14
988
\nAt 31\u00a0December 2022
771
153
18
942
\nLease Liability
\n2022
2021
2020
\n$m
$m
$m
\nThe present value of lease liabilities is as follows:
\nWithin one year
(228)
(233)
(192)
\nLater than one year and not later than five years
(549)
(544)
(389)
\nLater than five years
(176)
(210)
(100)
\nTotal lease liabilities
(953)
(987)
(681)
\nThe interest expense on lease liabilities included within \ufb01nance costs was $24m (2021: $22m; 2020: $21m).
\nThe total cash out\ufb02ow for leases in 2022 was $268m (2021: $262m; 2020: $228m).
\nThe discount rates used for calculating the present value of lease liabilities range from 0% to 63%.
\nThe Group has entered into lease contracts that have not yet commenced. The nominal value of estimated future lease payments under these lease
\ncontracts approximates $1,460m as of 31 December 2022. Of this value, $1,349m relates to a property lease in the US which is expected to commence
\nin 2026 with a lease term of 15 years.
\nThe Group entered into a sale and leaseback agreement in relation to the Waltham R&D site in MA, US in 2022. Prior to the sale, the carrying value
\nof the Property, plant and equipment was $124m. Cash proceeds of $265m have been received, recorded within Disposal of property, plant and
\nequipment within the Consolidated Statement of Cash Flows, and a gain on disposal of $125m has been recorded within Other operating income and
\nexpense within the Consolidated Statement of Comprehensive Income. A lease liability and a corresponding right-of-use asset have been
\nrecorded of $28m and $13m, respectively.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfLeasesExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f27714": {
"value": "8 Leases \nRight-of-use assets
\nTotal right-
\nLand and
Motor
of-use
\nbuildings
vehicles
Other
assets
\n$m
$m
$m
$m
\nCost
\nAt 1\u00a0January 2020
627
202
22
851
\nAdditions \u2013 separately acquired
87
89
15
191
\nDisposals and other movements
\u2013
(27)
(2)
(29)
\nExchange adjustments
21
8
1
30
\nAt 31\u00a0December 2020
735
272
36
1,043
\nAdditions through business combinations (Note\u00a027)
255
8
\u2013
263
\nAdditions \u2013 separately acquired
145
98
2
245
\nDisposals and other movements
25
(44)
(4)
(23)
\nExchange adjustments
(27)
(13)
(1)
(41)
\nAt 31\u00a0December 2021
1,133
321
33
1,487
\nAdditions through business combinations
4
\u2013
\u2013
4
\nAdditions \u2013 separately acquired
140
81
14
235
\nDisposals and other movements
(33)
(58)
(13)
(104)
\nExchange adjustments
(62)
(15)
(2)
(79)
\nAt 31\u00a0December 2022
1,182
329
32
1,543
\nDepreciation and impairment
\nAt 1\u00a0January 2020
132
64
8
204
\nDepreciation charge for the year
131
75
9
215
\nDisposals and other movements
(24)
(26)
(4)
(54)
\nExchange adjustments
8
4
\u2013
12
\nAt 31\u00a0December 2020
247
117
13
377
\nDepreciation charge for the year
144
85
6
235
\nDisposals and other movements
(54)
(42)
\u2013
(96)
\nExchange adjustments
(11)
(6)
\u2013
(17)
\nAt 31\u00a0December 2021
326
154
19
499
\nDepreciation charge for the year
160
80
6
246
\nImpairment charge
2
\u2013
\u2013
2
\nDisposals and other movements
(54)
(50)
(10)
(114)
\nExchange adjustments
(23)
(8)
(1)
(32)
\nAt 31\u00a0December 2022
411
176
14
601
\nNet book value
\nAt 31\u00a0December 2020
488
155
23
666
\nAt 31\u00a0December 2021
807
167
14
988
\nAt 31\u00a0December 2022
771
153
18
942
\nLease Liability
\n2022
2021
2020
\n$m
$m
$m
\nThe present value of lease liabilities is as follows:
\nWithin one year
(228)
(233)
(192)
\nLater than one year and not later than five years
(549)
(544)
(389)
\nLater than five years
(176)
(210)
(100)
\nTotal lease liabilities
(953)
(987)
(681)
\nThe interest expense on lease liabilities included within \ufb01nance costs was $24m (2021: $22m; 2020: $21m).
\nThe total cash out\ufb02ow for leases in 2022 was $268m (2021: $262m; 2020: $228m).
\nThe discount rates used for calculating the present value of lease liabilities range from 0% to 63%.
\nThe Group has entered into lease contracts that have not yet commenced. The nominal value of estimated future lease payments under these lease
\ncontracts approximates $1,460m as of 31 December 2022. Of this value, $1,349m relates to a property lease in the US which is expected to commence
\nin 2026 with a lease term of 15 years.
\nThe Group entered into a sale and leaseback agreement in relation to the Waltham R&D site in MA, US in 2022. Prior to the sale, the carrying value
\nof the Property, plant and equipment was $124m. Cash proceeds of $265m have been received, recorded within Disposal of property, plant and
\nequipment within the Consolidated Statement of Cash Flows, and a gain on disposal of $125m has been recorded within Other operating income and
\nexpense within the Consolidated Statement of Comprehensive Income. A lease liability and a corresponding right-of-use asset have been
\nrecorded of $28m and $13m, respectively.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfLeasePrepaymentsExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f27944": {
"value": "9 Goodwill \n2022
2021
2020
\n$m
$m
$m
\nCost
\nAt 1\u00a0January
20,311
12,164
11,982
\nAdditions through business combinations (Note\u00a027)
15
8,287
\u2013
\nExchange and other adjustments
(195)
(140)
182
\nAt 31\u00a0December
20,131
20,311
12,164
\nAmortisation and impairment losses
\nAt 1\u00a0January
314
319
314
\nExchange and other adjustments
(3)
(5)
5
\nAt 31\u00a0December
311
314
319
\nNet book value
\nAt 31\u00a0December
19,820
19,997
11,845
\nGoodwill is tested for impairment at the operating segment level, this being the level at which goodwill is monitored for internal management purposes.
\nAs detailed in Note 6, the Group does not have multiple operating segments and is engaged in a single business activity of pharmaceuticals.
\nRecoverable amount is determined on a fair value less costs to sell basis using the market value of the Company\u2019s outstanding Ordinary Shares.
\nOur market capitalisation is compared to the book value of the Group\u2019s net assets and this indicates a signi\ufb01cant surplus at 31 December 2022
\n(and 31 December 2021 and 31 December 2020). No goodwill impairment was identi\ufb01ed.
\n10 Intangible assets
\nProduct,
Software
\nmarketing and
Other
development
\ndistribution rights
intangibles
costs
Total
\n$m
$m
$m
$m
\nCost
\nAt 1\u00a0January 2020
40,654
2,649
1,781
45,084
\nAdditions \u2013 separately acquired
1,454
2
136
1,592
\nDisposals
(970)
(66)
(636)
(1,672)
\nExchange and other adjustments
1,539
57
7
1,603
\nAt 31\u00a0December 2020
42,677
2,642
1,288
46,607
\nAdditions through business combinations (Note\u00a027)
26,455
430
70
26,955
\nAdditions \u2013 separately acquired
587
6
119
712
\nTransferred to Assets held for sale (Note\u00a018)
(1,266)
(47)
\u2013
(1,313)
\nDisposals
(801)
(402)
(23)
(1,226)
\nExchange and other adjustments
(1,062)
(18)
(22)
(1,102)
\nAt 31\u00a0December 2021
66,590
2,611
1,432
70,633
\nAdditions through business combinations (Note 27)
\u2013
46
\u2013
46
\nAdditions \u2013 separately acquired
2,051
12
105
2,168
\nDisposals
(57)
(105)
(36)
(198)
\nExchange and other adjustments
(1,799)
(122)
(106)
(2,027)
\nAt 31\u00a0December 2022
66,785
2,442
1,395
70,622
\nAmortisation and impairment losses
\nAt 1\u00a0January 2020
20,605
2,097
1,549
24,251
\nAmortisation for year
1,872
59
61
1,992
\nImpairment charges
405
\u2013
\u2013
405
\nImpairment reversals
(165)
\u2013
\u2013
(165)
\nDisposals
(899)
(66)
(636)
(1,601)
\nExchange and other adjustments
746
38
(6)
778
\nAt 31\u00a0December 2020
22,564
2,128
968
25,660
\nAmortisation for year
2,908
172
63
3,143
\nImpairment charges
2,067
\u2013
18
2,085
\nTransferred to Assets held for sale (Note\u00a018)
(931)
(14)
\u2013
(945)
\nDisposals
(797)
(402)
(21)
(1,220)
\nExchange and other adjustments
(535)
(21)
(26)
(582)
\nAt 31\u00a0December 2021
25,276
1,863
1,002
28,141
\nAmortisation for year
3,899
181
76
4,156
\nImpairment charges
236
82
\u2013
318
\nImpairment reversals
(77)
\u2013
(17)
(94)
\nDisposals
(55)
(105)
(20)
(180)
\nExchange and other adjustments
(887)
(76)
(63)
(1,026)
\nAt 31\u00a0December 2022
28,392
1,945
978
31,315
\nNet book value
\nAt 31\u00a0December 2020
20,113
514
320
20,947
\nAt 31\u00a0December 2021
41,314
748
430
42,492
\nAt 31\u00a0December 2022
38,393
497
417
39,307
\n161
AstraZeneca Annual Report & Form 20-F Information 2022
Notes to the Group Financial Statements
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
10 Intangible assets
continued
\n2022
2021
2020
\n$m
$m
$m
\nNet book value
\nCurrent intangible assets
\u2013
105
\u2013
\nNon-current intangible assets
39,307
42,387
20,947
\nAt 31\u00a0December
39,307
42,492
20,947
\nOther intangibles consist mainly of research and device technologies and the Alexion brand name. Included within Software development costs are
\nassets currently in development that will commence amortisation when ready for use.
\nIncluded within Additions \u2212 separately acquired are amounts of $1,135m (2021: $124m; 2020: $835m), relating to deferred payments and other non-cash
\nconsideration for the acquisition of Product, marketing and distribution rights, which are not re\ufb02ected in the current year Consolidated Statement of
\nCash Flows. Disposals include amounts related to fully depreciated assets that are no longer in use by the Group.
\nAmortisation charges are recognised in pro\ufb01t as follows:
\nProduct,
Software
\nmarketing and
Other
development
\ndistribution rights
intangibles
costs
Total
\n$m
$m
$m
$m
\nYear ended 31\u00a0December 2020
\nCost of sales
66
\u2013
\u2013
66
\nResearch and development expense
\u2013
29
\u2013
29
\nSelling, general and administrative expense
1,806
28
61
1,895
\nOther operating income and expense
\u2013
2
\u2013
2
\nTotal
1,872
59
61
1,992
\nYear ended 31\u00a0December 2021
\nCost of sales
66
\u2013
\u2013
66
\nResearch and development expense
\u2013
33
\u2013
33
\nSelling, general and administrative expense
2,842
138
63
3,043
\nOther operating income and expense
\u2013
1
\u2013
1
\nTotal
2,908
172
63
3,143
\nYear ended 31\u00a0December 2022
\nCost of sales
32
\u2013
\u2013
32
\nResearch and development expense
\u2013
30
\u2013
30
\nSelling, general and administrative expense
3,867
151
76
4,094
\nTotal
3,899
181
76
4,156
\nNet impairment charges are recognised in pro\ufb01t as follows:
\nProduct,
Software
\nmarketing and
Other
development
\ndistribution rights
intangibles
costs
Total
\n$m
$m
$m
$m
\nYear ended 31\u00a0December 2020
\nResearch and development expense
55
\u2013
\u2013
55
\nSelling, general and administrative expense
185
\u2013
\u2013
185
\nTotal
240
\u2013
\u2013
240
\nYear ended 31\u00a0December 2021
\nResearch and development expense
1,464
\u2013
\u2013
1,464
\nSelling, general and administrative expense
603
\u2013
18
621
\nTotal
2,067
\u2013
18
2,085
\nYear ended 31\u00a0December 2022
\nResearch and development expense
95
\u2013
\u2013
95
\nSelling, general and administrative expense
64
82
(17)
129
\nTotal
159
82
(17)
224
\nImpairment charges and reversals
\nWe perform a rigorous impairment trigger assessment for all our intangible assets. Intangible assets under development and not available for use
\nare tested annually for impairment and other intangible assets are tested when there is an indication of impairment loss or reversal. Where testing
\nis required, the recoverable amount of the assets is estimated in order to determine the extent of the impairment loss or reversal. Where it is not
\npossible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the Cash Generating Unit (CGU)
\nto which it belongs. The Group considers that as the intangible assets are linked to individual products and that product cash \ufb02ows are considered
\nto be largely independent of other product cash \ufb02ows, the CGU for intangibles is at the product level. Group level budgets and forecasts include
\nforecast capital investment and operational impacts related to sustainability projects, as well as in\ufb02ationary impacts, and form the basis for the
\nvalue in use models used for impairment testing.
\nNotes to the Group Financial Statements
\ncontinued
\n162
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
An asset\u2019s recoverable amount is determined as the higher of an asset\u2019s or CGU\u2019s fair value less costs to sell or value in use, in both cases using
\ndiscounted cash \ufb02ow calculations where the asset\u2019s expected post-tax cash \ufb02ows are risk-adjusted over their estimated remaining period of expected
\neconomic bene\ufb01t. Where the value in use approach is used, the post-tax risk-adjusted cash \ufb02ows are discounted using AstraZeneca\u2019s post-tax
\nweighted average cost of capital (7% for 2022, 2021 and 2020), which is a nominal rate. There is no material difference in the approach taken to using
\npre-tax cash \ufb02ows and a pre-tax rate compared to post-tax cash \ufb02ows and a post-tax rate, as required by IAS 36. Where fair value less costs to sell
\nis used to determine recoverable value, the discount rate is assessed with reference to a market participant; this is not usually materially different to
\nthe AstraZeneca post-tax weighted average cost of capital rate of 7%. Legacy Alexion assets have been tested for impairment at risk-adjusted post-tax
\ndiscount rates ranging between 8.5% to 10.5% as they are integrated into the Group. No impairments have been recognised on these assets.
\nThe estimates used in calculating the recoverable amount are considered signi\ufb01cant estimates, highly sensitive and depend on assumptions
\nspeci\ufb01c to the nature of the Group\u2019s activities including:
\n>
outcome of R&D activities
\n>
probability of technical and regulatory success
\n>
market volume, share and pricing (to derive peak year sales)
\n>
amount and timing of projected future cash \ufb02ows
\n>
sales erosion curves following patent expiry.
\nFor assets held at fair value less costs to sell, we make appropriate adjustments to re\ufb02ect market participant assessments.
\nIn 2022, the Group recorded impairment charges of $146m in respect of launched products. Impairment charges recorded against products in
\ndevelopment totalled $172m due to decisions made to terminate the related activities.
\nIn 2021, the Group recorded impairment charges of $603m in respect of launched products, including
Bydureon
($469m, revised carrying amount
\nof $50m) under value in use model, roxadustat ($121m, revised carrying amount of $215m) under value in use model and other launched products
\ntotalling $13m.
\nImpairment charges recorded against products in development in 2021, based on fair value less costs to sell, totalled $1,464m, principally Ardea
\n($1,172m) which was fully impaired following the decision to discontinue development of verinurad. The remaining impairments relate to full impairments
\nof various products in development, due to either management\u2019s decision to discontinue development as part of a Group-wide portfolio prioritisation
\nreview, or due to the outcome of research activities.
\nIn 2020, the Group recorded impairment charges of $350m in respect of launched products, including
Duaklir
($200m, revised carrying amount of
\n$210m) under fair value less costs to sell,
Bydureon
($102m, revised carrying amount of $581m) under value in use model, and other launched products
\ntotalling $48m. The fair value less costs to sell valuation model for
Duaklir
was based on discounted cash \ufb02ows, and was categorised at Level 3 in
\nthe fair value hierarchy. Key assumptions in this model were forecast future revenue and costs of production. Impairment charges recorded against
\nproducts in development totalled $55m.
\nThe Group has performed an assessment on assets which have had impairments recorded in previous periods to determine if any reversals of
\nimpairments were required. Impairment reversals of $94m were recorded in 2022, including $77m in respect of products in development. No impairment
\nreversals were recorded in 2021. Impairment reversals of $165m were recorded in 2020 in respect of launched products, including
FluMist
($147m,
\nrevised carrying amount of $300m, driven by expanded vaccination efforts increasing global demand), and other launched products of $18m.
\nWhen launched products, such as the ones detailed above, are partially impaired, the carrying values of these assets in future periods are particularly
\nsensitive to changes in forecast assumptions, including those assumptions set out above, as the asset is impaired down to its recoverable amount.
\nSigni\ufb01cant assets
\nCarrying value
\nRemaining
\namortisation
\n$m
period
\nC5 franchise (
Soliris/Ultomiris
) intangible assets arising from the acquisition of Alexion
16,040
5 to 13 years
\nIntangible assets arising from the acquisition of Acerta Pharma
4,817
10 years
\nStrensiq, Kanuma
and
Andexxa
intangible assets arising from the acquisition of Alexion
4,583
10 to 16 years
\nEnhertu
intangible assets acquired from Daiichi Sankyo
2,960
11 years
\nIntangible asset products in development arising from the acquisition of Alexion
\n1
\n2,760
Not amortised
\nIntangible assets arising from the acquisition of ZS Pharma
2,012
9 years
\nOther intangible assets (DS-1062) acquired from Daiichi Sankyo
\n1
\n937
Not amortised
\nIntangible assets arising from the restructuring of a historical joint venture with MSD
569
4 to 7 years
\nFarxiga
/
Forxiga
intangible assets acquired from BMS
528
4 years
\nIntangible assets arising from the acquisition of Pearl Therapeutics
462
6 to 7 years
\nRSV franchise assets arising from the acquisition of MedImmune
458
3 years
\nMonalizumab intangible assets acquired from Innate Pharma
\n1
\n350
Not amortised
\n1
Assets in development are not amortised but are tested annually for impairment.
\nThe acquisition of intangible assets relating to DS-1062 in 2020 was assessed under the optional concentration test in IFRS 3 and was determined
\nto be an asset acquisition, as substantially all of the value of the gross assets acquired was concentrated in a single asset.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfIntangibleAssetsAndGoodwillExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f27945": {
"value": "9 Goodwill \n2022
2021
2020
\n$m
$m
$m
\nCost
\nAt 1\u00a0January
20,311
12,164
11,982
\nAdditions through business combinations (Note\u00a027)
15
8,287
\u2013
\nExchange and other adjustments
(195)
(140)
182
\nAt 31\u00a0December
20,131
20,311
12,164
\nAmortisation and impairment losses
\nAt 1\u00a0January
314
319
314
\nExchange and other adjustments
(3)
(5)
5
\nAt 31\u00a0December
311
314
319
\nNet book value
\nAt 31\u00a0December
19,820
19,997
11,845
\nGoodwill is tested for impairment at the operating segment level, this being the level at which goodwill is monitored for internal management purposes.
\nAs detailed in Note 6, the Group does not have multiple operating segments and is engaged in a single business activity of pharmaceuticals.
\nRecoverable amount is determined on a fair value less costs to sell basis using the market value of the Company\u2019s outstanding Ordinary Shares.
\nOur market capitalisation is compared to the book value of the Group\u2019s net assets and this indicates a signi\ufb01cant surplus at 31 December 2022
\n(and 31 December 2021 and 31 December 2020). No goodwill impairment was identi\ufb01ed.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfGoodwillExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f27997": {
"value": "10 Intangible assets \nProduct,
Software
\nmarketing and
Other
development
\ndistribution rights
intangibles
costs
Total
\n$m
$m
$m
$m
\nCost
\nAt 1\u00a0January 2020
40,654
2,649
1,781
45,084
\nAdditions \u2013 separately acquired
1,454
2
136
1,592
\nDisposals
(970)
(66)
(636)
(1,672)
\nExchange and other adjustments
1,539
57
7
1,603
\nAt 31\u00a0December 2020
42,677
2,642
1,288
46,607
\nAdditions through business combinations (Note\u00a027)
26,455
430
70
26,955
\nAdditions \u2013 separately acquired
587
6
119
712
\nTransferred to Assets held for sale (Note\u00a018)
(1,266)
(47)
\u2013
(1,313)
\nDisposals
(801)
(402)
(23)
(1,226)
\nExchange and other adjustments
(1,062)
(18)
(22)
(1,102)
\nAt 31\u00a0December 2021
66,590
2,611
1,432
70,633
\nAdditions through business combinations (Note 27)
\u2013
46
\u2013
46
\nAdditions \u2013 separately acquired
2,051
12
105
2,168
\nDisposals
(57)
(105)
(36)
(198)
\nExchange and other adjustments
(1,799)
(122)
(106)
(2,027)
\nAt 31\u00a0December 2022
66,785
2,442
1,395
70,622
\nAmortisation and impairment losses
\nAt 1\u00a0January 2020
20,605
2,097
1,549
24,251
\nAmortisation for year
1,872
59
61
1,992
\nImpairment charges
405
\u2013
\u2013
405
\nImpairment reversals
(165)
\u2013
\u2013
(165)
\nDisposals
(899)
(66)
(636)
(1,601)
\nExchange and other adjustments
746
38
(6)
778
\nAt 31\u00a0December 2020
22,564
2,128
968
25,660
\nAmortisation for year
2,908
172
63
3,143
\nImpairment charges
2,067
\u2013
18
2,085
\nTransferred to Assets held for sale (Note\u00a018)
(931)
(14)
\u2013
(945)
\nDisposals
(797)
(402)
(21)
(1,220)
\nExchange and other adjustments
(535)
(21)
(26)
(582)
\nAt 31\u00a0December 2021
25,276
1,863
1,002
28,141
\nAmortisation for year
3,899
181
76
4,156
\nImpairment charges
236
82
\u2013
318
\nImpairment reversals
(77)
\u2013
(17)
(94)
\nDisposals
(55)
(105)
(20)
(180)
\nExchange and other adjustments
(887)
(76)
(63)
(1,026)
\nAt 31\u00a0December 2022
28,392
1,945
978
31,315
\nNet book value
\nAt 31\u00a0December 2020
20,113
514
320
20,947
\nAt 31\u00a0December 2021
41,314
748
430
42,492
\nAt 31\u00a0December 2022
38,393
497
417
39,307
\n161
AstraZeneca Annual Report & Form 20-F Information 2022
Notes to the Group Financial Statements
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
10 Intangible assets
continued
\n2022
2021
2020
\n$m
$m
$m
\nNet book value
\nCurrent intangible assets
\u2013
105
\u2013
\nNon-current intangible assets
39,307
42,387
20,947
\nAt 31\u00a0December
39,307
42,492
20,947
\nOther intangibles consist mainly of research and device technologies and the Alexion brand name. Included within Software development costs are
\nassets currently in development that will commence amortisation when ready for use.
\nIncluded within Additions \u2212 separately acquired are amounts of $1,135m (2021: $124m; 2020: $835m), relating to deferred payments and other non-cash
\nconsideration for the acquisition of Product, marketing and distribution rights, which are not re\ufb02ected in the current year Consolidated Statement of
\nCash Flows. Disposals include amounts related to fully depreciated assets that are no longer in use by the Group.
\nAmortisation charges are recognised in pro\ufb01t as follows:
\nProduct,
Software
\nmarketing and
Other
development
\ndistribution rights
intangibles
costs
Total
\n$m
$m
$m
$m
\nYear ended 31\u00a0December 2020
\nCost of sales
66
\u2013
\u2013
66
\nResearch and development expense
\u2013
29
\u2013
29
\nSelling, general and administrative expense
1,806
28
61
1,895
\nOther operating income and expense
\u2013
2
\u2013
2
\nTotal
1,872
59
61
1,992
\nYear ended 31\u00a0December 2021
\nCost of sales
66
\u2013
\u2013
66
\nResearch and development expense
\u2013
33
\u2013
33
\nSelling, general and administrative expense
2,842
138
63
3,043
\nOther operating income and expense
\u2013
1
\u2013
1
\nTotal
2,908
172
63
3,143
\nYear ended 31\u00a0December 2022
\nCost of sales
32
\u2013
\u2013
32
\nResearch and development expense
\u2013
30
\u2013
30
\nSelling, general and administrative expense
3,867
151
76
4,094
\nTotal
3,899
181
76
4,156
\nNet impairment charges are recognised in pro\ufb01t as follows:
\nProduct,
Software
\nmarketing and
Other
development
\ndistribution rights
intangibles
costs
Total
\n$m
$m
$m
$m
\nYear ended 31\u00a0December 2020
\nResearch and development expense
55
\u2013
\u2013
55
\nSelling, general and administrative expense
185
\u2013
\u2013
185
\nTotal
240
\u2013
\u2013
240
\nYear ended 31\u00a0December 2021
\nResearch and development expense
1,464
\u2013
\u2013
1,464
\nSelling, general and administrative expense
603
\u2013
18
621
\nTotal
2,067
\u2013
18
2,085
\nYear ended 31\u00a0December 2022
\nResearch and development expense
95
\u2013
\u2013
95
\nSelling, general and administrative expense
64
82
(17)
129
\nTotal
159
82
(17)
224
\nImpairment charges and reversals
\nWe perform a rigorous impairment trigger assessment for all our intangible assets. Intangible assets under development and not available for use
\nare tested annually for impairment and other intangible assets are tested when there is an indication of impairment loss or reversal. Where testing
\nis required, the recoverable amount of the assets is estimated in order to determine the extent of the impairment loss or reversal. Where it is not
\npossible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the Cash Generating Unit (CGU)
\nto which it belongs. The Group considers that as the intangible assets are linked to individual products and that product cash \ufb02ows are considered
\nto be largely independent of other product cash \ufb02ows, the CGU for intangibles is at the product level. Group level budgets and forecasts include
\nforecast capital investment and operational impacts related to sustainability projects, as well as in\ufb02ationary impacts, and form the basis for the
\nvalue in use models used for impairment testing.
\nNotes to the Group Financial Statements
\ncontinued
\n162
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
An asset\u2019s recoverable amount is determined as the higher of an asset\u2019s or CGU\u2019s fair value less costs to sell or value in use, in both cases using
\ndiscounted cash \ufb02ow calculations where the asset\u2019s expected post-tax cash \ufb02ows are risk-adjusted over their estimated remaining period of expected
\neconomic bene\ufb01t. Where the value in use approach is used, the post-tax risk-adjusted cash \ufb02ows are discounted using AstraZeneca\u2019s post-tax
\nweighted average cost of capital (7% for 2022, 2021 and 2020), which is a nominal rate. There is no material difference in the approach taken to using
\npre-tax cash \ufb02ows and a pre-tax rate compared to post-tax cash \ufb02ows and a post-tax rate, as required by IAS 36. Where fair value less costs to sell
\nis used to determine recoverable value, the discount rate is assessed with reference to a market participant; this is not usually materially different to
\nthe AstraZeneca post-tax weighted average cost of capital rate of 7%. Legacy Alexion assets have been tested for impairment at risk-adjusted post-tax
\ndiscount rates ranging between 8.5% to 10.5% as they are integrated into the Group. No impairments have been recognised on these assets.
\nThe estimates used in calculating the recoverable amount are considered signi\ufb01cant estimates, highly sensitive and depend on assumptions
\nspeci\ufb01c to the nature of the Group\u2019s activities including:
\n>
outcome of R&D activities
\n>
probability of technical and regulatory success
\n>
market volume, share and pricing (to derive peak year sales)
\n>
amount and timing of projected future cash \ufb02ows
\n>
sales erosion curves following patent expiry.
\nFor assets held at fair value less costs to sell, we make appropriate adjustments to re\ufb02ect market participant assessments.
\nIn 2022, the Group recorded impairment charges of $146m in respect of launched products. Impairment charges recorded against products in
\ndevelopment totalled $172m due to decisions made to terminate the related activities.
\nIn 2021, the Group recorded impairment charges of $603m in respect of launched products, including
Bydureon
($469m, revised carrying amount
\nof $50m) under value in use model, roxadustat ($121m, revised carrying amount of $215m) under value in use model and other launched products
\ntotalling $13m.
\nImpairment charges recorded against products in development in 2021, based on fair value less costs to sell, totalled $1,464m, principally Ardea
\n($1,172m) which was fully impaired following the decision to discontinue development of verinurad. The remaining impairments relate to full impairments
\nof various products in development, due to either management\u2019s decision to discontinue development as part of a Group-wide portfolio prioritisation
\nreview, or due to the outcome of research activities.
\nIn 2020, the Group recorded impairment charges of $350m in respect of launched products, including
Duaklir
($200m, revised carrying amount of
\n$210m) under fair value less costs to sell,
Bydureon
($102m, revised carrying amount of $581m) under value in use model, and other launched products
\ntotalling $48m. The fair value less costs to sell valuation model for
Duaklir
was based on discounted cash \ufb02ows, and was categorised at Level 3 in
\nthe fair value hierarchy. Key assumptions in this model were forecast future revenue and costs of production. Impairment charges recorded against
\nproducts in development totalled $55m.
\nThe Group has performed an assessment on assets which have had impairments recorded in previous periods to determine if any reversals of
\nimpairments were required. Impairment reversals of $94m were recorded in 2022, including $77m in respect of products in development. No impairment
\nreversals were recorded in 2021. Impairment reversals of $165m were recorded in 2020 in respect of launched products, including
FluMist
($147m,
\nrevised carrying amount of $300m, driven by expanded vaccination efforts increasing global demand), and other launched products of $18m.
\nWhen launched products, such as the ones detailed above, are partially impaired, the carrying values of these assets in future periods are particularly
\nsensitive to changes in forecast assumptions, including those assumptions set out above, as the asset is impaired down to its recoverable amount.
\nSigni\ufb01cant assets
\nCarrying value
\nRemaining
\namortisation
\n$m
period
\nC5 franchise (
Soliris/Ultomiris
) intangible assets arising from the acquisition of Alexion
16,040
5 to 13 years
\nIntangible assets arising from the acquisition of Acerta Pharma
4,817
10 years
\nStrensiq, Kanuma
and
Andexxa
intangible assets arising from the acquisition of Alexion
4,583
10 to 16 years
\nEnhertu
intangible assets acquired from Daiichi Sankyo
2,960
11 years
\nIntangible asset products in development arising from the acquisition of Alexion
\n1
\n2,760
Not amortised
\nIntangible assets arising from the acquisition of ZS Pharma
2,012
9 years
\nOther intangible assets (DS-1062) acquired from Daiichi Sankyo
\n1
\n937
Not amortised
\nIntangible assets arising from the restructuring of a historical joint venture with MSD
569
4 to 7 years
\nFarxiga
/
Forxiga
intangible assets acquired from BMS
528
4 years
\nIntangible assets arising from the acquisition of Pearl Therapeutics
462
6 to 7 years
\nRSV franchise assets arising from the acquisition of MedImmune
458
3 years
\nMonalizumab intangible assets acquired from Innate Pharma
\n1
\n350
Not amortised
\n1
Assets in development are not amortised but are tested annually for impairment.
\nThe acquisition of intangible assets relating to DS-1062 in 2020 was assessed under the optional concentration test in IFRS 3 and was determined
\nto be an asset acquisition, as substantially all of the value of the gross assets acquired was concentrated in a single asset.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfIntangibleAssetsExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f28402": {
"value": "Impairment charges and reversals \nWe perform a rigorous impairment trigger assessment for all our intangible assets. Intangible assets under development and not available for use
\nare tested annually for impairment and other intangible assets are tested when there is an indication of impairment loss or reversal. Where testing
\nis required, the recoverable amount of the assets is estimated in order to determine the extent of the impairment loss or reversal. Where it is not
\npossible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the Cash Generating Unit (CGU)
\nto which it belongs. The Group considers that as the intangible assets are linked to individual products and that product cash \ufb02ows are considered
\nto be largely independent of other product cash \ufb02ows, the CGU for intangibles is at the product level. Group level budgets and forecasts include
\nforecast capital investment and operational impacts related to sustainability projects, as well as in\ufb02ationary impacts, and form the basis for the
\nvalue in use models used for impairment testing.
\nNotes to the Group Financial Statements
\ncontinued
\n162
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
An asset\u2019s recoverable amount is determined as the higher of an asset\u2019s or CGU\u2019s fair value less costs to sell or value in use, in both cases using
\ndiscounted cash \ufb02ow calculations where the asset\u2019s expected post-tax cash \ufb02ows are risk-adjusted over their estimated remaining period of expected
\neconomic bene\ufb01t. Where the value in use approach is used, the post-tax risk-adjusted cash \ufb02ows are discounted using AstraZeneca\u2019s post-tax
\nweighted average cost of capital (7% for 2022, 2021 and 2020), which is a nominal rate. There is no material difference in the approach taken to using
\npre-tax cash \ufb02ows and a pre-tax rate compared to post-tax cash \ufb02ows and a post-tax rate, as required by IAS 36. Where fair value less costs to sell
\nis used to determine recoverable value, the discount rate is assessed with reference to a market participant; this is not usually materially different to
\nthe AstraZeneca post-tax weighted average cost of capital rate of 7%. Legacy Alexion assets have been tested for impairment at risk-adjusted post-tax
\ndiscount rates ranging between 8.5% to 10.5% as they are integrated into the Group. No impairments have been recognised on these assets.
\nThe estimates used in calculating the recoverable amount are considered signi\ufb01cant estimates, highly sensitive and depend on assumptions
\nspeci\ufb01c to the nature of the Group\u2019s activities including:
\n>
outcome of R&D activities
\n>
probability of technical and regulatory success
\n>
market volume, share and pricing (to derive peak year sales)
\n>
amount and timing of projected future cash \ufb02ows
\n>
sales erosion curves following patent expiry.
\nFor assets held at fair value less costs to sell, we make appropriate adjustments to re\ufb02ect market participant assessments.
\nIn 2022, the Group recorded impairment charges of $146m in respect of launched products. Impairment charges recorded against products in
\ndevelopment totalled $172m due to decisions made to terminate the related activities.
\nIn 2021, the Group recorded impairment charges of $603m in respect of launched products, including
Bydureon
($469m, revised carrying amount
\nof $50m) under value in use model, roxadustat ($121m, revised carrying amount of $215m) under value in use model and other launched products
\ntotalling $13m.
\nImpairment charges recorded against products in development in 2021, based on fair value less costs to sell, totalled $1,464m, principally Ardea
\n($1,172m) which was fully impaired following the decision to discontinue development of verinurad. The remaining impairments relate to full impairments
\nof various products in development, due to either management\u2019s decision to discontinue development as part of a Group-wide portfolio prioritisation
\nreview, or due to the outcome of research activities.
\nIn 2020, the Group recorded impairment charges of $350m in respect of launched products, including
Duaklir
($200m, revised carrying amount of
\n$210m) under fair value less costs to sell,
Bydureon
($102m, revised carrying amount of $581m) under value in use model, and other launched products
\ntotalling $48m. The fair value less costs to sell valuation model for
Duaklir
was based on discounted cash \ufb02ows, and was categorised at Level 3 in
\nthe fair value hierarchy. Key assumptions in this model were forecast future revenue and costs of production. Impairment charges recorded against
\nproducts in development totalled $55m.
\nThe Group has performed an assessment on assets which have had impairments recorded in previous periods to determine if any reversals of
\nimpairments were required. Impairment reversals of $94m were recorded in 2022, including $77m in respect of products in development. No impairment
\nreversals were recorded in 2021. Impairment reversals of $165m were recorded in 2020 in respect of launched products, including
FluMist
($147m,
\nrevised carrying amount of $300m, driven by expanded vaccination efforts increasing global demand), and other launched products of $18m.
\nWhen launched products, such as the ones detailed above, are partially impaired, the carrying values of these assets in future periods are particularly
\nsensitive to changes in forecast assumptions, including those assumptions set out above, as the asset is impaired down to its recoverable amount.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfImpairmentLossAndReversalOfImpairmentLossExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f28559": {
"value": "11 Investments in associates and joint ventures \n2022
2021
2020
\n$m
$m
$m
\nAt 1\u00a0January
69
39
58
\nAdditions
26
92
8
\nShare of after tax losses
(5)
(64)
(27)
\nExchange and other adjustments
(14)
2
\u2013
\nAt 31\u00a0December
76
69
39
\nOn 29 January 2021, AstraZeneca entered into an agreement with IHP Holdings Limited to create and run an online platform (iHospital) offering
\nconsultations with physicians, repeat prescriptions and e-pharmacy in China. The agreement resulted in the formation of a new entity, IHP HK
\nHoldings Limited. AstraZeneca contributed $30m in initial funds and holds a 50% interest in the associate entity.
\nOn 1 December 2020, AstraZeneca and China International Capital Corporation (CICC) entered into an agreement to set up a Global Healthcare
\nIndustrial Fund to drive healthcare system innovation by leveraging local capital and accelerating China-related innovation incubation. The agreement
\nresulted in the formation of a new entity, Wuxi AstraZeneca-CICC Venture Capital Partnership (Limited Partnership). AstraZeneca holds a 22%
\ninterest in the associate entity and contributed $1m in initial funds in 2020, with contributions of $45m and $21m made in 2021 and 2022 respectively.
\nOn 23 September 2021, AstraZeneca entered into an agreement with VaxEquity Limited to collaborate and develop self-amplifying RNA technology
\nwith the aim of generating treatments for target diseases. AstraZeneca contributed $14m in initial funds and holds a 40% interest in the associate entity.
\nOn 23 February 2018, AstraZeneca entered into an agreement with a consortium of investors to form a new, US-domiciled standalone company
\ncalled Viela Bio. In February 2021, AstraZeneca agreed to divest its 26.7% ownership in Viela Bio, as part of the acquisition of Viela by Horizon
\nTherapeutics plc. AstraZeneca received cash proceeds and pro\ufb01t of $776m upon closing with the pro\ufb01t recorded as Other operating income. In 2021,
\nprior to divestment, the Group provided transitional research and development services to Viela Bio, comprising $nil (2020: $3m) of services provided
\ndirectly by the Group and $1m (2020: $15m) of passed-through third-party costs incurred by the Group on behalf of Viela Bio.
\nOn 27 November 2017, AstraZeneca entered into a joint venture agreement with Chinese Future Industry Investment Fund (FIIF), to discover, develop
\nand commercialise potential new medicines to help address unmet medical needs globally, and to bring innovative new medicines to patients in
\nChina more quickly. The agreement resulted in the formation of a joint venture entity based in China, Dizal (Jiangsu) Pharmaceutical Co., Limited
\n(Dizal). Since its establishment, AstraZeneca has contributed $80m in cash to the joint venture entity and has a 27% interest in the joint venture.
\nOn 1 December 2015, AstraZeneca entered into a joint venture agreement with Fuji\ufb01lm Kyowa Kirin Biologics Co., Ltd. to develop a biosimilar using
\nthe combined capabilities of the two parties. The agreement resulted in the formation of a joint venture entity based in the UK, Centus Biotherapeutics
\nLimited (Centus). Since its establishment, AstraZeneca has contributed $135m in cash to the joint venture entity and has a 50% interest in the
\njoint venture.
\nOn 30 April 2014, AstraZeneca entered into a joint venture agreement with Samsung Biologics Co., Ltd. which resulted in the formation of a joint
\nventure entity based in the UK, Archigen Biotech Limited (Archigen). On 31 March 2022, Archigen entered a voluntary liquidation process.
\nAll investments are accounted for using the equity method. At 31 December 2022, unrecognised losses in associates and joint ventures totalled
\n$92m (2021: $73m; 2020: $56m) which have not been recognised due to the investment carrying value reaching $nil value.
\nAggregated summarised \ufb01nancial information for the associate and joint venture entities is set out below:
\n2022
2021
2020
\n$m
$m
$m
\nNon-current assets
290
215
324
\nCurrent assets
300
506
552
\nTotal liabilities
(72)
(99)
(105)
\nNet assets
518
622
771
\nAmount attributable to AstraZeneca
91
65
38
\nExchange adjustments
(15)
4
1
\nCarrying value of investments in associates and joint ventures
76
69
39
\nA joint contractual arrangement was entered into between AstraZeneca and Daiichi Sankyo Company Limited (Daiichi Sankyo) in March 2019 for
\nthe co-development and co-commercialisation of
Enhertu
. Each party shares global pre-tax net income from the collaboration on a 50:50 basis
\n(with the exception of Japan where Daiichi Sankyo maintains exclusive rights and AstraZeneca receives a royalty). The joint operation is not
\nstructured through a separate legal entity, and it operates from AstraZeneca and Daiichi Sankyo\u2019s respective principal places of business.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfJointVenturesExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f28560": {
"value": "11 Investments in associates and joint ventures \n2022
2021
2020
\n$m
$m
$m
\nAt 1\u00a0January
69
39
58
\nAdditions
26
92
8
\nShare of after tax losses
(5)
(64)
(27)
\nExchange and other adjustments
(14)
2
\u2013
\nAt 31\u00a0December
76
69
39
\nOn 29 January 2021, AstraZeneca entered into an agreement with IHP Holdings Limited to create and run an online platform (iHospital) offering
\nconsultations with physicians, repeat prescriptions and e-pharmacy in China. The agreement resulted in the formation of a new entity, IHP HK
\nHoldings Limited. AstraZeneca contributed $30m in initial funds and holds a 50% interest in the associate entity.
\nOn 1 December 2020, AstraZeneca and China International Capital Corporation (CICC) entered into an agreement to set up a Global Healthcare
\nIndustrial Fund to drive healthcare system innovation by leveraging local capital and accelerating China-related innovation incubation. The agreement
\nresulted in the formation of a new entity, Wuxi AstraZeneca-CICC Venture Capital Partnership (Limited Partnership). AstraZeneca holds a 22%
\ninterest in the associate entity and contributed $1m in initial funds in 2020, with contributions of $45m and $21m made in 2021 and 2022 respectively.
\nOn 23 September 2021, AstraZeneca entered into an agreement with VaxEquity Limited to collaborate and develop self-amplifying RNA technology
\nwith the aim of generating treatments for target diseases. AstraZeneca contributed $14m in initial funds and holds a 40% interest in the associate entity.
\nOn 23 February 2018, AstraZeneca entered into an agreement with a consortium of investors to form a new, US-domiciled standalone company
\ncalled Viela Bio. In February 2021, AstraZeneca agreed to divest its 26.7% ownership in Viela Bio, as part of the acquisition of Viela by Horizon
\nTherapeutics plc. AstraZeneca received cash proceeds and pro\ufb01t of $776m upon closing with the pro\ufb01t recorded as Other operating income. In 2021,
\nprior to divestment, the Group provided transitional research and development services to Viela Bio, comprising $nil (2020: $3m) of services provided
\ndirectly by the Group and $1m (2020: $15m) of passed-through third-party costs incurred by the Group on behalf of Viela Bio.
\nOn 27 November 2017, AstraZeneca entered into a joint venture agreement with Chinese Future Industry Investment Fund (FIIF), to discover, develop
\nand commercialise potential new medicines to help address unmet medical needs globally, and to bring innovative new medicines to patients in
\nChina more quickly. The agreement resulted in the formation of a joint venture entity based in China, Dizal (Jiangsu) Pharmaceutical Co., Limited
\n(Dizal). Since its establishment, AstraZeneca has contributed $80m in cash to the joint venture entity and has a 27% interest in the joint venture.
\nOn 1 December 2015, AstraZeneca entered into a joint venture agreement with Fuji\ufb01lm Kyowa Kirin Biologics Co., Ltd. to develop a biosimilar using
\nthe combined capabilities of the two parties. The agreement resulted in the formation of a joint venture entity based in the UK, Centus Biotherapeutics
\nLimited (Centus). Since its establishment, AstraZeneca has contributed $135m in cash to the joint venture entity and has a 50% interest in the
\njoint venture.
\nOn 30 April 2014, AstraZeneca entered into a joint venture agreement with Samsung Biologics Co., Ltd. which resulted in the formation of a joint
\nventure entity based in the UK, Archigen Biotech Limited (Archigen). On 31 March 2022, Archigen entered a voluntary liquidation process.
\nAll investments are accounted for using the equity method. At 31 December 2022, unrecognised losses in associates and joint ventures totalled
\n$92m (2021: $73m; 2020: $56m) which have not been recognised due to the investment carrying value reaching $nil value.
\nAggregated summarised \ufb01nancial information for the associate and joint venture entities is set out below:
\n2022
2021
2020
\n$m
$m
$m
\nNon-current assets
290
215
324
\nCurrent assets
300
506
552
\nTotal liabilities
(72)
(99)
(105)
\nNet assets
518
622
771
\nAmount attributable to AstraZeneca
91
65
38
\nExchange adjustments
(15)
4
1
\nCarrying value of investments in associates and joint ventures
76
69
39
\nA joint contractual arrangement was entered into between AstraZeneca and Daiichi Sankyo Company Limited (Daiichi Sankyo) in March 2019 for
\nthe co-development and co-commercialisation of
Enhertu
. Each party shares global pre-tax net income from the collaboration on a 50:50 basis
\n(with the exception of Japan where Daiichi Sankyo maintains exclusive rights and AstraZeneca receives a royalty). The joint operation is not
\nstructured through a separate legal entity, and it operates from AstraZeneca and Daiichi Sankyo\u2019s respective principal places of business.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfSignificantInvestmentsInAssociatesExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f28561": {
"value": "11 Investments in associates and joint ventures \n2022
2021
2020
\n$m
$m
$m
\nAt 1\u00a0January
69
39
58
\nAdditions
26
92
8
\nShare of after tax losses
(5)
(64)
(27)
\nExchange and other adjustments
(14)
2
\u2013
\nAt 31\u00a0December
76
69
39
\nOn 29 January 2021, AstraZeneca entered into an agreement with IHP Holdings Limited to create and run an online platform (iHospital) offering
\nconsultations with physicians, repeat prescriptions and e-pharmacy in China. The agreement resulted in the formation of a new entity, IHP HK
\nHoldings Limited. AstraZeneca contributed $30m in initial funds and holds a 50% interest in the associate entity.
\nOn 1 December 2020, AstraZeneca and China International Capital Corporation (CICC) entered into an agreement to set up a Global Healthcare
\nIndustrial Fund to drive healthcare system innovation by leveraging local capital and accelerating China-related innovation incubation. The agreement
\nresulted in the formation of a new entity, Wuxi AstraZeneca-CICC Venture Capital Partnership (Limited Partnership). AstraZeneca holds a 22%
\ninterest in the associate entity and contributed $1m in initial funds in 2020, with contributions of $45m and $21m made in 2021 and 2022 respectively.
\nOn 23 September 2021, AstraZeneca entered into an agreement with VaxEquity Limited to collaborate and develop self-amplifying RNA technology
\nwith the aim of generating treatments for target diseases. AstraZeneca contributed $14m in initial funds and holds a 40% interest in the associate entity.
\nOn 23 February 2018, AstraZeneca entered into an agreement with a consortium of investors to form a new, US-domiciled standalone company
\ncalled Viela Bio. In February 2021, AstraZeneca agreed to divest its 26.7% ownership in Viela Bio, as part of the acquisition of Viela by Horizon
\nTherapeutics plc. AstraZeneca received cash proceeds and pro\ufb01t of $776m upon closing with the pro\ufb01t recorded as Other operating income. In 2021,
\nprior to divestment, the Group provided transitional research and development services to Viela Bio, comprising $nil (2020: $3m) of services provided
\ndirectly by the Group and $1m (2020: $15m) of passed-through third-party costs incurred by the Group on behalf of Viela Bio.
\nOn 27 November 2017, AstraZeneca entered into a joint venture agreement with Chinese Future Industry Investment Fund (FIIF), to discover, develop
\nand commercialise potential new medicines to help address unmet medical needs globally, and to bring innovative new medicines to patients in
\nChina more quickly. The agreement resulted in the formation of a joint venture entity based in China, Dizal (Jiangsu) Pharmaceutical Co., Limited
\n(Dizal). Since its establishment, AstraZeneca has contributed $80m in cash to the joint venture entity and has a 27% interest in the joint venture.
\nOn 1 December 2015, AstraZeneca entered into a joint venture agreement with Fuji\ufb01lm Kyowa Kirin Biologics Co., Ltd. to develop a biosimilar using
\nthe combined capabilities of the two parties. The agreement resulted in the formation of a joint venture entity based in the UK, Centus Biotherapeutics
\nLimited (Centus). Since its establishment, AstraZeneca has contributed $135m in cash to the joint venture entity and has a 50% interest in the
\njoint venture.
\nOn 30 April 2014, AstraZeneca entered into a joint venture agreement with Samsung Biologics Co., Ltd. which resulted in the formation of a joint
\nventure entity based in the UK, Archigen Biotech Limited (Archigen). On 31 March 2022, Archigen entered a voluntary liquidation process.
\nAll investments are accounted for using the equity method. At 31 December 2022, unrecognised losses in associates and joint ventures totalled
\n$92m (2021: $73m; 2020: $56m) which have not been recognised due to the investment carrying value reaching $nil value.
\nAggregated summarised \ufb01nancial information for the associate and joint venture entities is set out below:
\n2022
2021
2020
\n$m
$m
$m
\nNon-current assets
290
215
324
\nCurrent assets
300
506
552
\nTotal liabilities
(72)
(99)
(105)
\nNet assets
518
622
771
\nAmount attributable to AstraZeneca
91
65
38
\nExchange adjustments
(15)
4
1
\nCarrying value of investments in associates and joint ventures
76
69
39
\nA joint contractual arrangement was entered into between AstraZeneca and Daiichi Sankyo Company Limited (Daiichi Sankyo) in March 2019 for
\nthe co-development and co-commercialisation of
Enhertu
. Each party shares global pre-tax net income from the collaboration on a 50:50 basis
\n(with the exception of Japan where Daiichi Sankyo maintains exclusive rights and AstraZeneca receives a royalty). The joint operation is not
\nstructured through a separate legal entity, and it operates from AstraZeneca and Daiichi Sankyo\u2019s respective principal places of business.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfInvestmentsAccountedForUsingEquityMethodExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f28611": {
"value": "UK",
"dimensions": {
"concept": "ifrs-full:PrincipalPlaceOfBusiness",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f28612": {
"value": "UK",
"dimensions": {
"concept": "ifrs-full:DomicileOfEntity",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f28677": {
"value": "12 Other investments
\n2022
2021
2020
\n$m
$m\u00a0
$m
\nNon-current investments
\nEquity securities at fair value through Other comprehensive income
1,056
1,168
1,108
\nFixed income securities at fair value through profit and loss
10
\u2013
\u2013
\nTotal
1,066
1,168
1,108
\nCurrent investments
\nFixed income securities at fair value through profit and loss
13
16
118
\nCash collateral pledged to counterparties
162
\u2013
\u2013
\nFixed deposits
64
53
42
\nTotal
239
69
160
\nOther investments held at fair value through Other comprehensive income include equity securities which are not held for trading and which the
\nGroup has irrevocably elected at initial recognition to recognise in this category. Other investments held at fair value through pro\ufb01t and loss mainly
\ncomprise \ufb01xed income securities that the Group holds to sell.
\nThe fair value of listed investments is based on year end quoted market prices. Fixed deposits and Cash collateral pledged to counterparties are
\nheld at amortised cost with carrying value being a reasonable approximation of fair value given their short-term nature.
\nCash collateral pledged to counterparties relates to collateral pledged on derivatives entered into to hedge the Group\u2019s risk exposures. In 2022,
\nfollowing signi\ufb01cant foreign currency volatility increasing the collateral requirements, the Group revised its presentation to Other investments.
\nPrior year amounts of $47m in 2021 and $11m in 2020 are presented within Cash and cash equivalents.
\nFair value hierarchy
\nThe table below analyses equity securities and bonds, contained within Other investments and carried at fair value, by valuation method. The different
\nlevels have been de\ufb01ned as follows:
\n>
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
\n>
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or
\nindirectly (i.e. derived from prices)
\n>
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
\n2022
2022
2021
2021
2020
2020
\nFVPL
FVOCI
FVPL
FVOCI
FVPL
FVOCI
\n$m
$m
$m\u00a0
$m
$m
$m
\nLevel 1
13
880
16
1,064
118
891
\nLevel 2
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\nLevel 3
10
176
\u2013
104
\u2013
217
\nTotal
23
1,056
16
1,168
118
1,108
\nDuring 2020, AstraZeneca sold a proportion of its equity portfolio receiving consideration of $1,381m, a large proportion of which related to the
\ndisposal of its full holding in Moderna Therapeutics, Inc. All related gains were accounted through Other comprehensive income.
\nEquity securities that are analysed at Level 3 include investments in private biotech companies. In the absence of speci\ufb01c market data, these
\nunlisted investments are held at fair value based on the cost of investment and adjusting as necessary for impairments and revaluations on new
\nfunding rounds, which approximates to fair value. Movements in Level 3 investments are detailed below:
\n2022
2022
2021
2020
\nFVPL
FVOCI
FVOCI
FVOCI
\n$m
$m\u00a0
$m
$m
\nAt 1 January
\u2013
104
217
227
\nAdditions
10
32
1
96
\nRevaluations
\u2013
50
\u2013
63
\nNet transfers out
\u2013
(4)
(113)
(103)
\nDisposals
\u2013
(5)
\u2013
(86)
\nImpairments and exchange adjustments
\u2013
(1)
(1)
20
\nAt 31\u00a0December
10
176
104
217
\nAssets are transferred in or out of Level 3 on the date of the event or change in circumstances that caused the transfer.
19 Interest-bearing loans and borrowings
\nRepayment
2022
2021
2020
\ndates
$m
$m
$m
\nCurrent liabilities
\nBank overdrafts
On demand
183
291
286
\nOther short-term borrowings excluding overdrafts
78
3
84
\nCollateral received from derivative counterparties
89
93
288
\nLease liabilities
228
233
192
\n0.25% Callable bond
euros
2021
\u2013
\u2013
614
\n0.875% Non-callable bond
euros
2021
\u2013
\u2013
919
\nFloating rate notes
US dollars
2022
\u2013
250
\u2013
\n2.375% Callable bond
US dollars
2022
\u2013
999
\u2013
\n0.3% Callable bond
US dollars
2023
1,399
\u2013
\u2013
\n2023 Floating bank loan
US dollars
2023
2,000
\u2013
\u2013
\nFloating rate notes
US dollars
2023
400
\u2013
\u2013
\n3.5% Callable bond
US dollars
2023
849
\u2013
\u2013
\n7% Guaranteed debentures
US dollars
2023
294
\u2013
\u2013
\nOther loans (including commercial paper)
Within one year
22
24
3
\nTotal
5,542
1,893
2,386
\nNon-current liabilities
\nLease liabilities
725
754
489
\nFloating rate notes
US dollars
2022
\u2013
\u2013
250
\n2.375% Callable bond
US dollars
2022
\u2013
\u2013
996
\n0.3% Callable bond
US dollars
2023
\u2013
1,397
\u2013
\n2023 Floating rate bank loan
US dollars
2023
\u2013
1,998
\u2013
\nFloating rate notes
US dollars
2023
\u2013
400
400
\n3.5% Callable bond
US dollars
2023
\u2013
848
847
\n7% Guaranteed debentures
US dollars
2023
\u2013
320
339
\n0.75% Callable bond
euros
2024
957
1,014
1,102
\n0.7% Callable bond
US dollars
2024
1,598
1,598
\u2013
\n2024 Floating rate bank loan
US dollars
2024
1,998
1,997
\u2013
\n3.375% Callable bond
US dollars
2025
1,992
1,988
1,985
\n0.7% Callable bond
US dollars
2026
1,195
1,193
1,192
\n1.2% Callable bond
US dollars
2026
1,246
1,245
\u2013
\n3.125% Callable bond
US dollars
2027
746
745
744
\n1.25% Callable bond
euros
2028
845
896
973
\n1.75% Callable bond
US dollars
2028
1,245
1,244
\u2013
\n4% Callable bond
US dollars
2029
995
994
993
\n0.375% Callable bond
euros
2029
846
898
\u2013
\n1.375% Callable bond
US dollars
2030
1,293
1,292
1,291
\n2.25% Callable bond
US dollars
2031
747
746
\u2013
\n5.75% Non-callable bond
pounds sterling
2031
420
470
475
\n6.45% Callable bond
US dollars
2037
2,724
2,724
2,722
\n4% Callable bond
US dollars
2042
988
988
988
\n4.375% Callable bond
US dollars
2045
981
980
980
\n4.375% Callable bond
US dollars
2048
737
737
737
\n2.125% Callable bond
US dollars
2050
487
486
486
\n3% Callable bond
US dollars
2051
735
734
\u2013
\nOther loans
US dollars
190
202
5
\nTotal
23,690
28,888
17,994
\nTotal interest-bearing loans and borrowings
\n1, 2
\n29,232
30,781
20,380
\n1
All loans and borrowings above are unsecured apart from $22m (2021: $24m) of current and $181m (2021: $188m) of non-current in 2022, both included within Other loans.
\n2
The $2bn USD 2023 floating rate bank loan and $2bn USD 2024 floating rate bank loan pay interest linked to 1 month USD LIBOR. The Group has the right to switch these loans to compounded
\ndaily USD Secured Overnight Funding Rate (SOFR) with five days notice. The loans will automatically switch to compounded SOFR on 30 June 2023 if the Group has not already switched
\nbefore this date. All other floating rate debt is not impacted by LIBOR reference as it either uses non-LIBOR fixings or will mature before the relevant LIBOR rate is withdrawn.
Total loans and
Total loans and
Total loans and
\nborrowings
borrowings
borrowings
\n2022
2021
2020
\n$m
$m
$m
\nAt 1\u00a0January
30,781
20,380
18,227
\nChanges from financing cash flows
\nIssue of loans and borrowings
\u2013
12,929
2,968
\nRepayment of loans and borrowings
(1,271)
(4,759)
(1,609)
\nMovement in short-term borrowings
74
(276)
288
\nRepayment of obligations under leases
(244)
(240)
(207)
\nTotal changes in cash flows arising on financing activities from borrowings
(1,441)
7,654
1,440
\nMovement in overdrafts
(85)
31
138
\nNew lease liabilities
253
503
174
\nAdditions through business combinations
5
2,523
\u2013
\nExchange
(287)
(378)
363
\nOther movements
6
68
38
\nAt 31\u00a0December
29,232
30,781
20,380
\nAlso included within cash \ufb02ows arising from \ufb01nancing activities within the Consolidated Statement of Cash Flows is a $920m cash out\ufb02ow (2021: $nil;
\n2020: $nil) related to the Acerta Pharma share purchase liability which has a closing liability at 31 December 2022 of $1,646m (2021: $2,458m; 2020:
\n$2,297m) within Trade and other payables (see Note 20 and Note 26).
\nSet out below is a comparison by category of carrying values and fair values of all the Group\u2019s interest-bearing loans and borrowings:
\nInstruments in a
Instruments
Instruments
Total
\nfair value hedge
designated
designated in
Amortised
carrying
Fair
\nrelationship
\n1
\nat fair value
\n2
\ncash flow hedge
\n3
\ncost
value
value
\n$m
$m
$m
$m
$m
$m
\n2020
\nOverdrafts
\u2013
\u2013
\u2013
286
286
286
\nLease liabilities due within one year
\u2013
\u2013
\u2013
192
192
192
\nLease liabilities due after more than one year
\u2013
\u2013
\u2013
489
489
489
\nLoans and borrowings due within one year
371
\u2013
614
923
1,908
1,922
\nLoans and borrowings due after more than one year
\u2013
339
2,075
15,091
17,505
20,936
\nTotal at 31\u00a0December 2020
371
339
2,689
16,981
20,380
23,825
\n2021
\nOverdrafts
\u2013
\u2013
\u2013
291
291
291
\nLease liabilities due within one year
\u2013
\u2013
\u2013
233
233
233
\nLease liabilities due after more than one year
\u2013
\u2013
\u2013
754
754
754
\nLoans and borrowings due within one year
\u2013
\u2013
\u2013
1,369
1,369
1,378
\nLoans and borrowings due after more than one year
\u2013
320
1,910
25,904
28,134
30,596
\nTotal at 31\u00a0December 2021
\u2013
320
1,910
28,551
30,781
33,252
\n2022
\nOverdrafts
\u2013
\u2013
\u2013
183
183
183
\nLease liabilities due within one year
\u2013
\u2013
\u2013
228
228
228
\nLease liabilities due after more than one year
\u2013
\u2013
\u2013
725
725
725
\nLoans and borrowings due within one year
\u2013
294
\u2013
4,837
5,131
5,105
\nLoans and borrowings due after more than one year
\u2013
\u2013
1,802
21,163
22,965
21,657
\nTotal at 31\u00a0December 2022
\u2013
294
1,802
27,136
29,232
27,898
\n1
Instruments designated as hedged items in a fair value hedge relationship relate to a designated euro 300m portion of our euro 750m 0.875% 2021 Non-callable bond which matured on
\n24 November 2021. The accumulated amount of fair value hedge adjustments to the bond was a loss of $10m.
\n2
Instruments designated at fair value through profit or loss include the US dollar 7% guaranteed debentures repayable in 2023.
\n3
Instruments designated in cash flow hedges are our euro 500m 0.25% Callable bond which matured in 2021, our euro 900m 0.75% 2024 Callable bond and our euro 800m 1.25% 2028
\nCallable bond.
\nThe fair value of \ufb01xed-rate publicly traded debt is based on year end quoted market prices; the fair value of \ufb02oating rate debt is nominal value, as
\nmark-to-market differences would be minimal given the frequency of resets. The carrying value of loans designated at fair value through pro\ufb01t or loss
\nis the fair value; this falls within the Level 1 valuation method as de\ufb01ned in Note 12. For loans designated in a fair value hedge relationship, carrying
\nvalue is initially measured at fair value and remeasured for fair value changes in respect of the hedged risk at each reporting date. All other loans
\nare held at amortised cost. Fair values, as disclosed in the table above, are all determined using the Level 1 valuation method as de\ufb01ned in Note 12,
\nwith the exception of overdrafts and lease liabilities, where fair value approximates to carrying values.
A gain of $2m was made during the year on the fair value of bonds designated as fair value through pro\ufb01t or loss, due to increased credit risk. A gain
\nof $31m has been made on these bonds since designation due to increased credit risk. Under IFRS 9, the Group records the component of fair value
\nchanges relating to the component of own credit risk through Other comprehensive income. Changes in credit risk had no material effect on any
\nother \ufb01nancial assets and liabilities recognised at fair value in the Group Financial Statements. The change in fair value attributable to changes in
\ncredit risk is calculated as the change in fair value not attributable to market risk. The amount payable at maturity on bonds designated at fair value
\nthrough pro\ufb01t or loss is $287m.
\nThe interest rates used to discount future cash \ufb02ows for fair value adjustments, where applicable, are based on market swap curves at the reporting
\ndate, and were as follows:
\n2022
2021
2020
\nLoans and borrowings
4.3% to 4.9%
0.1% to 0.6%
(0.5)% to 0.1%
28 Financial risk management objectives and policies
\nThe Group\u2019s principal \ufb01nancial instruments, other than derivatives, comprise bank overdrafts, loans and other borrowings, lease liabilities, current
\nand non-current investments, cash and short-term deposits. The main purpose of these \ufb01nancial instruments is to manage the Group\u2019s funding and
\nliquidity requirements. The Group has other \ufb01nancial assets and liabilities such as trade receivables and trade payables, which arise directly from
\nits operations.
\nThe principal \ufb01nancial risks to which the Group is exposed are those of liquidity, interest rate, foreign currency and credit. Each of these is managed
\nin accordance with Board-approved policies. These policies, together with the Group\u2019s approach to capital management, are set out below.
\nCapital management
\nThe capital structure of the Group consists of Shareholders\u2019 equity (Note 24), Debt (Note 19), Other current investments (Note 12) and Cash (Note 17).
\nFor the foreseeable future, the Board will maintain a capital structure that supports the Group\u2019s strategic objectives through:
\n>
managing funding and liquidity risk
\n> optimising shareholder return
\n>
maintaining a strong, investment-grade credit rating.
\nThe Group utilises factoring arrangements for selected trade receivables. These factoring arrangements qualify for full derecognition of the associated
\ntrade receivables under IFRS 9. Amounts due on invoices that have not been factored at year end, from customers that are subject to factoring
\narrangements are disclosed in Note 16.
\nFunding and liquidity risk are reviewed regularly by the Board and managed in accordance with policies described below.
\nThe Board regularly reviews its shareholders\u2019 distribution policy, which comprises a regular cash dividend and potentially a share repurchase
\ncomponent. No share repurchases have been made since 2012.
\nThe Group\u2019s net debt position (loans and borrowings net of Cash and cash equivalents, Other investments and Derivative \ufb01nancial instruments) has
\ndecreased by $1,399m from a net debt position of $24,322m at the beginning of the year to a net debt position of $22,923m at 31 December 2022.
\nGross debt reduced from $30,781m to $29,232m, principally due to the repayment of the $1,000m 2.75% bond and a $250m \ufb02oating rate note.
\nLiquidity risk
\nThe Board reviews the Group\u2019s ongoing liquidity risks annually as part of the planning process and on an ad hoc basis. The Board considers
\nshort-term requirements against available sources of funding, taking into account forecast cash \ufb02ows. The Group manages liquidity risk by maintaining
\naccess to a number of sources of funding which are suf\ufb01cient to meet anticipated funding requirements. Speci\ufb01cally, the Group uses US and
\nEuropean commercial paper, bank loans, committed bank facilities and cash resources to manage short-term liquidity and manages long-term
\nliquidity by raising funds through the capital markets. At 31 December 2022, the Group was assigned short-term credit ratings of P-2 by Moody\u2019s
\nand A-1 by Standard and Poor\u2019s. The Group\u2019s long-term credit rating was A3 Stable outlook by Moody\u2019s and A Stable outlook by Standard and Poor\u2019s.
\nIn addition to Cash and cash equivalents of $6,166m, short-term \ufb01xed income investments of $13m, \ufb01xed deposits of $64m, less overdrafts of $183m
\nat 31 December 2022, the Group has committed bank facilities of $4,875m available to manage liquidity. These committed bank facilities have no
\n\ufb01nancial covenants and mature in April 2026. The Group regularly monitors the credit standing of the banks providing the facilities and currently does
\nnot anticipate any issue with drawing on the committed facilities should this be necessary. Advances under these facilities currently bear an interest
\nrate per annum based on US dollar LIBOR (or other relevant benchmark rate) plus a margin. The facilities contain arrangements to switch to alternative
\nrisk free rate benchmarks before June 2023.
\nAt 31 December 2022, the Group has $3,068m outstanding from debt issued under a Euro Medium Term Note programme and $20,651m under an
\nSEC-registered programme. The funds made available under these facility agreements may be used for the general corporate purposes of the Group.
\nThe maturity pro\ufb01le of the anticipated future contractual cash \ufb02ows including interest in relation to the Group\u2019s \ufb01nancial liabilities, on an undiscounted
\nbasis and which, therefore, differs from both the carrying value and fair value, is as follows:
\nBank
Total
Derivative
Derivative
Total
\noverdrafts
Trade non-derivative
financial
financial
derivative
\nand other
Bonds and
Lease
and other
financial
instruments
instruments
financial
\nloans
bank loans
liability
payables
instruments
receivable
payable
instruments
Total
\n$m
$m
$m
$m
$m
$m
$m
$m
$m
\nWithin one year
667
2,136
207
15,812
18,822
(9,719)
9,620
(99)
18,723
\nIn one to two years
\u2013
1,839
168
2,584
4,591
(60)
67
7
4,598
\nIn two to three years
\u2013
2,101
120
1,658
3,879
(59)
67
8
3,887
\nIn three to four years
\u2013
1,617
82
1,728
3,427
(1,151)
1,080
(71)
3,356
\nIn four to five years
\u2013
2,502
53
722
3,277
(36)
40
4
3,281
\nIn more than five years
\u2013
16,921
108
1,435
18,464
(1,707)
1,652
(55)
18,409
\n667
27,116
738
23,939
52,460
(12,732)
12,526
(206)
52,254
\nEffect of interest
\u2013
(7,974)
\u2013
\u2013
(7,974)
379
(405)
(26)
(8,000)
\nEffect of discounting, fair values and issue costs
(1)
(109)
(57)
(2,070)
(2,237)
(70)
24
(46)
(2,283)
\n31\u00a0December\u00a02020
666
19,033
681
21,869
42,249
(12,423)
12,145
(278)
41,971
Bank
Total
Derivative
Derivative
Total
\noverdrafts
Trade non-derivative
financial
financial
derivative
\nand other
Bonds and
Lease
and other
financial
instruments
instruments
financial
\nloans
bank loans
liability
payables
instruments
receivable
payable
instruments
Total
\n$m
$m
$m
$m
$m
$m
$m
$m
$m
\nWithin one year
387
1,981
256
19,007
21,631
(11,766)
11,774
8
21,639
\nIn one to two years
\u2013
5,647
210
2,521
8,378
(55)
66
11
8,389
\nIn two to three years
\u2013
5,242
163
1,669
7,074
(1,060)
1,079
19
7,093
\nIn three to four years
\u2013
2,591
130
862
3,583
(35)
39
4
3,587
\nIn four to five years
\u2013
2,970
96
233
3,299
(118)
111
(7)
3,292
\nIn more than five years
\u2013
19,727
221
2,212
22,160
(1,521)
1,480
(41)
22,119
\n387
38,158
1,076
26,504
66,125
(14,555)
14,549
(6)
66,119
\nEffect of interest
\u2013
(8,609)
\u2013
\u2013
(8,609)
299
(325)
(26)
(8,635)
\nEffect of discounting, fair values and issue costs
\u2013
(142)
(89)
(2,633)
(2,864)
(36)
7
(29)
(2,893)
\n31\u00a0December\u00a02021
387
29,407
987
23,871
54,652
(14,292)
14,231
(61)
54,591
\nBank
Total
Derivative
Derivative
Total
\noverdrafts
Trade non-derivative
financial
financial
derivative
\nand other
Bonds and
Lease
and other
financial
instruments
instruments
financial
\nloans
bank loans
liability
payables
instruments
receivable
payable
instruments
Total
\n$m
$m
$m
$m
$m
$m
$m
$m
$m
\nWithin one year
365
5,777
249
19,065
25,456
(12,445)
12,478
33
25,489
\nIn one to two years
\u2013
5,233
208
2,086
7,527
(1,012)
1,078
66
7,593
\nIn two to three years
\u2013
2,608
172
872
3,652
(34)
38
4
3,656
\nIn three to four years
\u2013
2,983
128
595
3,706
(103)
103
\u2013
3,706
\nIn four to five years
\u2013
1,267
84
814
2,165
(32)
35
3
2,168
\nIn more than five years
\u2013
18,156
184
3,177
21,517
(1,436)
1,378
(58)
21,459
\n365
36,024
1,025
26,609
64,023
(15,062)
15,110
48
64,071
\nEffect of interest
(15)
(7,982)
\u2013
\u2013
(7,997)
227
(249)
(22)
(8,019)
\nEffect of discounting, fair values and issue costs
\u2013
(113)
(72)
(3,299)
(3,484)
63
7
70
(3,414)
\n31\u00a0December\u00a02022
350
27,929
953
23,310
52,542
(14,772)
14,868
96
52,638
\nWhere interest payments are on a \ufb02oating rate basis, it is assumed that rates will remain unchanged from the last business day of each year ended
\n31 December.
\nThe Group has $2bn of bank loans that mature in July 2023 and $2bn of bank loans that mature in July 2024, which the Group can repay before
\nmaturity at face value. Other than that, it is not expected that the cash \ufb02ows in the maturity pro\ufb01le could occur signi\ufb01cantly earlier or at signi\ufb01cantly
\ndifferent amounts, with the exception of $2,222m of contingent consideration held within Trade and other payables (see Note 20).
\nMarket risk
\nInterest rate risk
\nThe Group maintains a Board-approved mix of \ufb01xed and \ufb02oating rate debt and uses underlying debt, interest rate swaps and forward rate agreements
\nto manage this mix.
\nAt 31 December 2022, interest rate swaps with a notional value of $288m are fair valued through pro\ufb01t or loss and this has effectively converted the
\n7% guaranteed debentures payable in 2023 to \ufb02oating rates. No new interest rate swaps were entered into during 2022.
\nThe majority of surplus cash is currently invested in US dollar liquidity funds and investment-grade \ufb01xed income securities.
\nThe interest rate pro\ufb01le of the Group\u2019s interest-bearing \ufb01nancial instruments are set out below. In the case of current and non-current \ufb01nancial
\nliabilities, the classi\ufb01cation includes the impact of interest rate swaps which convert the debt to \ufb02oating rate.
\n2022
2021
2020
\nFixed rate
Floating rate
Total
Fixed rate
Floating rate
Total
Fixed rate
Floating rate
Total
\n$m
$m
$m
$m
$m
$m
$m
$m
$m
\nFinancial liabilities
\nInterest-bearing loans and borrowings
\nCurrent
2,476
3,066
5,542
1,232
661
1,893
1,357
1,029
2,386
\nNon-current
21,511
2,179
23,690
23,985
4,903
28,888
17,005
989
17,994
\nTotal
23,987
5,245
29,232
25,217
5,564
30,781
18,362
2,018
20,380
\nFinancial assets
\nFixed deposits
64
\u2013
64
53
\u2013
53
42
\u2013
42
\nCash collateral pledged to counterparties
\u2013
162
162
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\nCash and cash equivalents
250
5,916
6,166
\u2013
6,329
6,329
\u2013
7,832
7,832
\nTotal
314
6,078
6,392
53
6,329
6,382
42
7,832
7,874
\nIn addition to the \ufb01nancial assets above, there are $9,546m (2021: $8,765m; 2020: $6,328m) of other current and non-current asset investments
\nand other \ufb01nancial assets. Of these, $nil receive \ufb02oating rate interest (2021: $nil; 2020: $nil).
The Group is also exposed to market risk on other investments.
\n2022
2021
2020
\n$m
$m\u00a0
$m
\nEquity securities at fair value through Other comprehensive income (Note\u00a012)
1,056
1,168
1,108
\nNon-current fixed income securities at fair value through profit and loss (Note 12)
10
\u2013
\u2013
\nTotal
1,066
1,168
1,108
\nForeign currency risk
\nThe US dollar is the Group\u2019s most signi\ufb01cant currency. As a consequence, the Group results are presented in US dollars and exposures are managed
\nagainst US dollars accordingly.
\nTranslational
\nApproximately 61% of Group external sales in 2022 were denominated in currencies other than the US dollar, while a signi\ufb01cant proportion of
\nmanufacturing, and research and development costs were denominated in pounds sterling and Swedish krona. Surplus cash generated by business
\nunits is substantially converted to, and held centrally in, US dollars. As a result, operating pro\ufb01t and total cash \ufb02ow in US dollars will be affected
\nby movements in exchange rates.
\nThis currency exposure is managed centrally, based on forecast cash \ufb02ows. The impact of movements in exchange rates is mitigated signi\ufb01cantly
\nby the correlations which exist between the major currencies to which the Group is exposed and the US dollar. Monitoring of currency exposures
\nand correlations is undertaken on a regular basis and hedging is subject to pre-execution approval.
\nAs at 31 December 2022, before the impact of derivatives, 2% of interest-bearing loans and borrowings were denominated in pounds sterling and
\n9% were denominated in euros. Where there is non-US dollar debt and an underlying net investment of that amount in the same currency, the Group
\napplies net investment hedging. Exchange differences on the retranslation of debt designated as net investment hedges are recognised in Other
\ncomprehensive income to the extent that the hedge is effective. Any ineffectiveness is taken to pro\ufb01t. For details of non-US dollar debt in a
\ndesignated hedging relationship please see the Hedge accounting section within this Note 28 from page 188.
\nThe Group holds cross-currency swaps to hedge against the impact of \ufb02uctuations in foreign exchange rates. Fair value movements on the revaluation
\nof the cross-currency swaps are recognised in Other comprehensive income to the extent that the hedge is effective, with any ineffectiveness taken
\nto pro\ufb01t.
\nAs at 31 December 2022, the Group operates in three countries designated as hyperin\ufb02ationary, being Argentina, Venezuela and Turkey. The foreign
\nexchange risk of these markets has been assessed and deemed to be immaterial.
\nTransactional
\nThe Group aims to hedge all its forecasted major transactional currency exposures on working capital balances, which typically extend for up to three
\nmonths. Where practicable, these are hedged using forward foreign exchange contracts. In addition, external dividend payments in pounds sterling
\nto UK shareholders and in Swedish krona to Swedish shareholders are fully hedged from announcement date to payment date. Foreign exchange
\ngains and losses on forward contracts transacted for transactional hedging are taken to pro\ufb01t or to Other comprehensive income if the contract is
\nin a designated cash\ufb02ow hedge.
\nSensitivity analysis
\nThe sensitivity analysis set out below summarises the sensitivity of the market value of our \ufb01nancial instruments to hypothetical changes in market
\nrates and prices. The range of variables chosen for the sensitivity analysis re\ufb02ects our view of changes which are reasonably possible over a one-year
\nperiod. Market values are the present value of future cash \ufb02ows based on market rates and prices at the valuation date. For long-term debt, an
\nincrease in interest rates results in a decline in the fair value of debt.
\nThe sensitivity analysis assumes an instantaneous 100 basis point change in interest rates in all currencies from their levels at 31 December 2022,
\nwith all other variables held constant. Based on the composition of our long-term debt portfolio and cash reserves as at 31 December 2022, a 1%
\nincrease in interest rates would result in an additional $52m in interest expense on the debt and an additional $59m interest income on the cash
\nreserves. The exchange rate sensitivity analysis assumes an instantaneous 10% change in foreign currency exchange rates from their levels at
\n31 December 2022, with all other variables held constant. The +10% case assumes a 10% strengthening of the US dollar against all other currencies
\nand the -10% case assumes a 10% weakening of the US dollar.
\nEach incremental 10% movement in foreign currency exchange rates would have approximately the same effect as the initial 10% detailed in the
\ntable below and each incremental 1% change in interest rates would have approximately the same effect as the 1% detailed in the table below.
\nInterest rates
Exchange rates
\n31\u00a0December\u00a02020
+1%
-1%
+10%
-10%
\nIncrease/(decrease) in fair value of financial instruments ($m)
1,696
(1,758)
114
(132)
\nImpact on profit: (loss)/gain ($m)
\u2013
\u2013
(57)
74
\nImpact on equity: gain/(loss) ($m)
\u2013
\u2013
171
(206)
\nInterest rates
Exchange rates
\n31\u00a0December\u00a02021
+1%
-1%
+10%
-10%
\nIncrease/(decrease) in fair value of financial instruments ($m)
1,978
(2,106)
82
(85)
\nImpact on profit: gain/(loss) ($m)
\u2013
\u2013
24
(9)
\nImpact on equity: gain/(loss) ($m)
\u2013
\u2013
58
(76)
Interest rates
Exchange rates
\n31\u00a0December\u00a02022
+1%
-1%
+10%
-10%
\nIncrease/(decrease) in fair value of financial instruments ($m)
1,317
(1,490)
81
(89)
\nImpact on profit: gain/(loss) ($m)
\u2013
\u2013
26
(15)
\nImpact on equity: gain/(loss) ($m)
\u2013
\u2013
55
(74)
\nCredit risk
\nThe Group is exposed to credit risk on \ufb01nancial assets, such as cash investments, derivative instruments, and Trade and other receivables. The Group
\nis also exposed in its Net asset position to its own credit risk in respect of the 2023 debentures which are accounted for at fair value through pro\ufb01t
\nor loss. Under IFRS 9, the effect of the losses and gains arising from own credit risk on the fair value of bonds designated at fair value through pro\ufb01t
\nor loss are recorded in Other comprehensive income.
\nFinancial counterparty credit risk
\nThe majority of the AstraZeneca Group\u2019s cash is centralised within the Group treasury entity and is subject to counterparty risk on the principal
\ninvested. The level of the Group\u2019s cash investments and hence credit risk will depend on the cash \ufb02ow generated by the Group and the timing of
\nthe use of that cash. The credit risk is mitigated through a policy of prioritising security and liquidity over return and, as such, cash is only invested
\nin high credit-quality investments. Counterparty limits are set according to the assessed risk of each counterparty and exposures are monitored
\nagainst these limits on a regular basis.
\nThe Group\u2019s principal \ufb01nancial counterparty credit risks at 31 December 2022 were as follows:
\nCurrent assets
\n2022
2021
2020
\n$m
$m\u00a0
$m
\nCash at bank and in hand
1,411
1,461
1,182
\nMoney market liquidity funds
4,486
4,772
6,602
\nOther short-term cash equivalents
269
96
48
\nTotal Cash and cash equivalents (Note\u00a017)
6,166
6,329
7,832
\nFixed income securities at fair value through profit and loss (Note\u00a012)
13
16
118
\nCash collateral pledged to counterparties (Note 12)
162
\u2013
\u2013
\nFixed deposits (Note\u00a012)
64
53
42
\nTotal derivative financial instruments (Note\u00a013)
87
83
142
\nCurrent assets subject to credit risk
6,492
6,481
8,134
\nNon-current assets
\n2022
2021
2020
\n$m
$m\u00a0
$m
\nDerivative financial instruments (Note\u00a013)
74
102
171
\nNon-current assets subject to credit risk
74
102
171
\nThe majority of the Group\u2019s cash is invested in US dollar AAA rated money market liquidity funds. The money market liquidity fund portfolios are
\nmanaged by \ufb01ve external third-party fund managers to maintain an AAA rating. The Group\u2019s investments represent no more than 10% of each
\noverall fund value. There were no other signi\ufb01cant concentrations of \ufb01nancial credit risk at the reporting date.
\nAll \ufb01nancial derivatives are transacted with commercial banks, in line with standard market practice. The Group has agreements with some bank
\ncounterparties whereby the parties agree to post cash collateral, for the bene\ufb01t of the other, equivalent to the market valuation of the derivative
\npositions above a predetermined threshold. The carrying value of such cash collateral held by the Group at 31 December 2022 was $89m (2021: $93m;
\n2020: $288m) and the carrying value of such cash collateral posted by the Group at 31 December 2022 was $162m (2021: $47m; 2020: $11m).
\nThe impairment provision for other \ufb01nancial assets at 31 December 2022 was immaterial.
\nTrade receivables
\nTrade receivable exposures are managed locally in the operating units where they arise and credit limits are set as deemed appropriate for the
\ncustomer. The Group is exposed to customers ranging from government-backed agencies and large private wholesalers to privately owned pharmacies,
\nand the underlying local economic and sovereign risks vary throughout the world. Where appropriate, the Group endeavours to minimise risks by
\nthe use of trade \ufb01nance instruments such as letters of credit and insurance. The Group applies the expected credit loss approach to establish an
\nallowance for impairment that represents its estimate of expected losses in respect of Trade receivables.
\nThe Group applies the IFRS 9 simpli\ufb01ed approach to measuring expected credit losses which uses a lifetime expected loss allowance for all Trade
\nreceivables. To measure expected credit losses, Trade receivables have been grouped based on shared credit characteristics and the days past due.
\nThe expected loss rates are based on payment pro\ufb01les over a period of 36 months before 31 December 2022, 31 December 2021 or 31 December
\n2020 respectively and the corresponding historical credit losses experienced within this period. The historical loss rates are adjusted to re\ufb02ect current
\nand forward-looking information on macroeconomic factors affecting the ability of the customer to settle the receivables.
\nOn that basis, the loss allowance was determined as follows:
\n0-90 days
90-180 days
Over 180 days
\n31\u00a0December 2020
Current
past due
past due
past due
Total
\nExpected loss rate
0.1%
1.6%
19.4%
60.6%
\nGross carrying amount ($m)
3,659
124
21
25
3,829
\nLoss allowance ($m)
2
2
4
15
23
0-90 days
90-180 days
Over 180 days
\n31\u00a0December 2021
Current
past due
past due
past due
Total
\nExpected loss rate
0.1%
1.2%
22.6%
11.0%
\nGross carrying amount ($m)
5,617
328
18
91
6,054
\nLoss allowance ($m)
5
4
4
10
23
\n0-90 days
90-180 days
Over 180 days
\n31\u00a0December 2022
Current
past due
past due
past due
Total
\nExpected loss rate
0.03%
0.3%
32.0%
40.6%
\nGross carrying amount ($m)
6,791
331
50
99
7,271
\nLoss allowance ($m)
2
1
16
40
59
\nTrade receivables are written off where there is no reasonable expectation of recovery.
\nImpairment losses on Trade receivables are presented as net impairment losses within Operating pro\ufb01t, any subsequent recoveries are credited
\nagainst the same line.
\nIn the US, sales to three wholesalers accounted for approximately 73% of US sales (2021: three wholesalers accounted for approximately 94%;
\n2020: three wholesalers accounted for approximately 95%).
\nThe movements of the Group expected credit losses provision are follows:
\n2022
2021
2020
\n$m
$m
$m
\nAt 1\u00a0January
23
23
21
\nNet movement recognised in income statement
37
(2)
3
\nAmounts utilised, exchange and other movements
(1)
2
(1)
\nAt 31\u00a0December
59
23
23
\nGiven the pro\ufb01le of our customers, including large wholesalers and government-backed agencies, no further credit risk has been identi\ufb01ed with the
\nTrade receivables not past due other than those balances for which an allowance has been made. The income statement credit or charge is recorded
\nin Operating pro\ufb01t.
\nHedge accounting
\nThe Group uses foreign currency borrowings, foreign currency forwards and swaps, currency options, interest rate swaps and cross-currency interest
\nrate swaps for the purpose of hedging its foreign currency and interest rate risks. The Group may designate certain \ufb01nancial instruments as fair value
\nhedges, cash \ufb02ow hedges or net investment hedges in accordance with IFRS 9. Hedge effectiveness is determined at the inception of the hedge
\nrelationship, and through periodic prospective effectiveness assessments to ensure that an economic relationship exists between the hedged item
\nand hedging instrument. Sources of hedge effectiveness will depend on the hedge relationship designation but may include:
\n>
a signi\ufb01cant change in the credit risk of either party to the hedging relationship
\n>
a timing mismatch between the hedging instrument and the hedged item
\n>
movements in foreign currency basis spread for derivatives in a fair value hedge
\n>
a signi\ufb01cant change in the value of the foreign currency denominated net assets of the Group in a net investment hedge.
\nThe hedge ratio for each designation will be established by comparing the quantity of the hedging instrument and the quantity of the hedged item to
\ndetermine their relative weighting; for all of the Group\u2019s existing hedge relationships the hedge ratio has been determined as 1:1. Designated hedges
\nare expected to be effective and therefore the impact of ineffectiveness on pro\ufb01t is not expected to be material. The accounting treatment for fair
\nvalue hedges and debt designated as fair value through pro\ufb01t or loss is disclosed in the Group Accounting Policies section from page 142.
\nThe following table represents the Group\u2019s continuing designated hedge relationships under IFRS 9.
\n2020
\nOther comprehensive income
\nFair value
\nloss
\nOpening
Fair value
recycled
Closing
\nNominal
balance
(gain)/loss
to the
balance
Average
\namounts
Carrying
1\u00a0January
deferred
Income
31\u00a0December
Average
Average
pay
\nin local
value
2020
to OCI
statement
2020
maturity
USD FX
interest
\ncurrency
$m
$m
$m
$m
$m
year
rate
rate
\nFair value hedge \u2013 foreign currency and interest rate risk
\n1
\nUSD LIBOR
\n+ 1.27%
Cross currency interest rate swap \u2013 Euro bond
EUR 300m
43
\u2013
\u2013
\u2013
\u2013
2021
1.09
\nCash flow hedges \u2013 foreign currency and interest rate risk
\n2, 4, 5
\nCross currency interest rate swaps \u2013 Euro bonds
EUR 2,200m
150
(30)
(163)
239
46
2025
1.14
USD 2.69%
\nFX Forwards \u2212 short term FX risk
USD 618m
5
\u2013
(20)
15
(5)
2021
\u2013
\u2013
\nNet investment hedge \u2013 foreign exchange risk
\n3, 4
\nTransactions matured pre-2020
\u2013
(565)
\u2013
\u2013
(565)
\u2013
\u2013
\u2013
\nCross currency interest rate swap \u2013 JPY investment
JPY 58.5bn
19
(4)
(15)
\u2013
(19)
2029
108.03
JPY 1.53%
\nCross currency interest rate swap \u2013 CNY investment
CNY 458m
(2)
1
1
\u2013
2
2026
6.68
CNY 4.80%
\nForeign currency borrowing \u2013 GBP investment
GBP 350m
(475)
(251)
18
\u2013
(233)
2031
n/a
GBP 5.75%
\nForeign currency borrowing \u2013 EUR investment
\n6
\nEUR 450m
(548)
34
51
\u2013
85
2021
n/a
EUR 0.88%
\nContingent consideration liabilities and Acerta Pharma
\nput\u00a0option liability \u2013 AZUK and AZAB USD investments
USD 5,252m
(5,252)
2,053
(642)
\u2013
1,411
\u2013
\u2013
\u2013
2021
\nOther comprehensive income
\nFair value
\nloss
\nOpening
Fair value
recycled
Closing
\nNominal
balance
(gain)/loss
to the
balance
Average
\namounts
Carrying
1\u00a0January
deferred
Income
31\u00a0December
Average
Average
pay
\nin local
value
2021
to OCI
statement
2021
maturity
USD FX
interest
\ncurrency
$m
$m
$m
$m
$m
year
rate
rate
\nCash flow hedges \u2013 foreign currency and interest rate risk
\n2, 4, 5
\nCross currency interest rate swaps \u2013 Euro bonds
EUR 1,700m
(43)
46
182
(201)
27
2026
1.14
USD 2.85%
\nFX Forwards \u2212 short term FX risk
USD 1,220m
12
(5)
\u2013
(7)
(12)
2022
\u2013
\u2013
\nNet investment hedge \u2013 foreign exchange risk
\n3, 4
\nTransactions matured pre-2021
\u2013
(565)
\u2013
\u2013
(565)
\u2013
\u2013
\u2013
\nCross currency interest rate swap \u2013 JPY investment
JPY 58.3bn
62
(19)
(43)
\u2013
(62)
2029
108.03
JPY 1.53%
\nCross currency interest rate swap \u2013 CNY investment
CNY 458m
(2)
2
\u2013
\u2013
2
2026
6.68
CNY 4.80%
\nForeign currency borrowing \u2013 GBP investment
GBP 350m
470
(233)
(5)
\u2013
(238)
2031
n/a
GBP 5.75%
\nForeign currency borrowing \u2013 EUR investment
\n6
\nEUR 450m
\u2013
85
(47)
\u2013
38
2021
n/a
EUR 0.88%
\nForeign currency borrowing \u2013 EUR investment
\n7
\nEUR 800m
898
\u2013
(50)
\u2013
(50)
2029
n/a
EUR 0.38%
\nContingent consideration liabilities and Acerta Pharma share
\npurchase liability \u2013 AZUK and AZAB USD investments
USD 2,658m
(2,658)
1,411
421
\u2013
1,832
\u2013
\u2013
\u2013
\n2022
\nOther comprehensive income
\nFair value
\n(gain)/loss
\nOpening
Fair value
recycled
Closing
\nNominal
balance
(gain)/loss
to the
balance
Average
\namounts
Carrying
1\u00a0January
deferred
Income
31\u00a0December
Average
Average
pay
\nin local
value
2022
to OCI
statement
2022
maturity
USD FX
interest
\ncurrency
$m
$m
$m
$m
$m
year
rate
rate
\nCash flow hedges \u2013 foreign currency and interest rate risk
\n2, 4, 5
\nCross currency interest rate swaps \u2013 Euro bonds
EUR 1,700m
(160)
27
118
(111)
34
2026
1.14
USD 2.85%
\nFX Forwards \u2212 short term FX risk
USD 1,126m
(12)
(12)
(14)
38
12
2023
\u2013
\u2013
\nNet investment hedge \u2013 foreign exchange risk
\n3, 4
\nTransactions matured pre-2022
\u2013
(527)
\u2013
\u2013
(527)
\u2013
\u2013
\u2013
\nCross currency interest rate swap \u2013 JPY investment
JPY 58.3bn
55
(62)
7
\u2013
(55)
2029
108.03
JPY 1.53%
\nCross currency interest rate swap \u2013 CNY investment
CNY 458m
(4)
2
2
\u2013
4
2026
6.68
CNY 4.80%
\nForeign currency borrowing \u2013 GBP investment
GBP 350m
420
(238)
(50)
\u2013
(288)
2031
n/a
GBP 5.75%
\nForeign currency borrowing \u2013 EUR investment
\n7
\nEUR 800m
846
(50)
(52)
\u2013
(102)
2029
n/a
EUR 0.38%
\nContingent consideration liabilities and Acerta Pharma
\nshare\u00a0purchase liability \u2013 AZUK and AZAB USD investments
USD 2,093m
(2,093)
1,832
384
\u2013
2,216
\u2013
\u2013
\u2013
\n1
Swaps designated in a fair value hedge matured on 24 November 2021 and hedge ineffectiveness during 2022 was $nil (2021: $nil; 2020: gain of $1m).
\n2
Hedge ineffectiveness recognised on swaps designated in a cash flow hedge during the period was $nil (2021: $nil; 2020: $nil).
\n3
Hedge ineffectiveness recognised on swaps designated in a net investment hedge during the period was $nil (2021: $nil; 2020: $nil).
\n4
Fair value movements on cross-currency interest rate swaps in cash flow hedge and net investment hedge relationships are shown inclusive of the impact of costs of hedging.
\n5
Nominal amount of FX forwards in a cash flow hedge of $1,710m represents the USD equivalent notional of the FX forwards. By currency, the nominal amounts were SEK 8,148m at FX rate
\n10.4568, JPY 18,963m at 132.15, GBP 455m at 0.8288 and EUR 224m at 0.9389. All FX forwards in a cash flow hedge mature on 25 January 2023.
\n6
The EUR 450m NIH matured in November 2021, when the hedging instrument, a EUR bond matured.
\n7
On 3 June 2021, upon issuance of the EUR 800m 0.375% 2029 Non-callable bond, EUR 550m was designated in a net investment hedge of the foreign currency exposure in relation of an equivalent
\namount of EUR-denominated net assets. The remaining EUR 250m was subsequently designated in a net investment hedge upon maturity of the EUR 450m bond on 24 November 2021.
\nKey controls applied to transactions in derivative \ufb01nancial instruments are to use only instruments where good market liquidity exists, to revalue all
\n\ufb01nancial instruments regularly using current market rates and to sell options only to offset previously purchased options or as part of a risk management
\nstrategy. The Group is not a net seller of options, and does not use derivative \ufb01nancial instruments for speculative purposes. The Group held no
\noptions during the reporting period.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfCollateralExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f28679": {
"value": "12 Other investments \n2022
2021
2020
\n$m
$m\u00a0
$m
\nNon-current investments
\nEquity securities at fair value through Other comprehensive income
1,056
1,168
1,108
\nFixed income securities at fair value through profit and loss
10
\u2013
\u2013
\nTotal
1,066
1,168
1,108
\nCurrent investments
\nFixed income securities at fair value through profit and loss
13
16
118
\nCash collateral pledged to counterparties
162
\u2013
\u2013
\nFixed deposits
64
53
42
\nTotal
239
69
160
\nOther investments held at fair value through Other comprehensive income include equity securities which are not held for trading and which the
\nGroup has irrevocably elected at initial recognition to recognise in this category. Other investments held at fair value through pro\ufb01t and loss mainly
\ncomprise \ufb01xed income securities that the Group holds to sell.
\nThe fair value of listed investments is based on year end quoted market prices. Fixed deposits and Cash collateral pledged to counterparties are
\nheld at amortised cost with carrying value being a reasonable approximation of fair value given their short-term nature.
\nCash collateral pledged to counterparties relates to collateral pledged on derivatives entered into to hedge the Group\u2019s risk exposures. In 2022,
\nfollowing signi\ufb01cant foreign currency volatility increasing the collateral requirements, the Group revised its presentation to Other investments.
\nPrior year amounts of $47m in 2021 and $11m in 2020 are presented within Cash and cash equivalents.
\nFair value hierarchy
\nThe table below analyses equity securities and bonds, contained within Other investments and carried at fair value, by valuation method. The different
\nlevels have been de\ufb01ned as follows:
\n>
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
\n>
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or
\nindirectly (i.e. derived from prices)
\n>
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
\n2022
2022
2021
2021
2020
2020
\nFVPL
FVOCI
FVPL
FVOCI
FVPL
FVOCI
\n$m
$m
$m\u00a0
$m
$m
$m
\nLevel 1
13
880
16
1,064
118
891
\nLevel 2
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\nLevel 3
10
176
\u2013
104
\u2013
217
\nTotal
23
1,056
16
1,168
118
1,108
\nDuring 2020, AstraZeneca sold a proportion of its equity portfolio receiving consideration of $1,381m, a large proportion of which related to the
\ndisposal of its full holding in Moderna Therapeutics, Inc. All related gains were accounted through Other comprehensive income.
\nEquity securities that are analysed at Level 3 include investments in private biotech companies. In the absence of speci\ufb01c market data, these
\nunlisted investments are held at fair value based on the cost of investment and adjusting as necessary for impairments and revaluations on new
\nfunding rounds, which approximates to fair value. Movements in Level 3 investments are detailed below:
\n2022
2022
2021
2020
\nFVPL
FVOCI
FVOCI
FVOCI
\n$m
$m\u00a0
$m
$m
\nAt 1 January
\u2013
104
217
227
\nAdditions
10
32
1
96
\nRevaluations
\u2013
50
\u2013
63
\nNet transfers out
\u2013
(4)
(113)
(103)
\nDisposals
\u2013
(5)
\u2013
(86)
\nImpairments and exchange adjustments
\u2013
(1)
(1)
20
\nAt 31\u00a0December
10
176
104
217
\nAssets are transferred in or out of Level 3 on the date of the event or change in circumstances that caused the transfer.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfInvestmentsOtherThanInvestmentsAccountedForUsingEquityMethodExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f28680": {
"value": "12 Other investments \n2022
2021
2020
\n$m
$m\u00a0
$m
\nNon-current investments
\nEquity securities at fair value through Other comprehensive income
1,056
1,168
1,108
\nFixed income securities at fair value through profit and loss
10
\u2013
\u2013
\nTotal
1,066
1,168
1,108
\nCurrent investments
\nFixed income securities at fair value through profit and loss
13
16
118
\nCash collateral pledged to counterparties
162
\u2013
\u2013
\nFixed deposits
64
53
42
\nTotal
239
69
160
\nOther investments held at fair value through Other comprehensive income include equity securities which are not held for trading and which the
\nGroup has irrevocably elected at initial recognition to recognise in this category. Other investments held at fair value through pro\ufb01t and loss mainly
\ncomprise \ufb01xed income securities that the Group holds to sell.
\nThe fair value of listed investments is based on year end quoted market prices. Fixed deposits and Cash collateral pledged to counterparties are
\nheld at amortised cost with carrying value being a reasonable approximation of fair value given their short-term nature.
\nCash collateral pledged to counterparties relates to collateral pledged on derivatives entered into to hedge the Group\u2019s risk exposures. In 2022,
\nfollowing signi\ufb01cant foreign currency volatility increasing the collateral requirements, the Group revised its presentation to Other investments.
\nPrior year amounts of $47m in 2021 and $11m in 2020 are presented within Cash and cash equivalents.
\nFair value hierarchy
\nThe table below analyses equity securities and bonds, contained within Other investments and carried at fair value, by valuation method. The different
\nlevels have been de\ufb01ned as follows:
\n>
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
\n>
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or
\nindirectly (i.e. derived from prices)
\n>
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
\n2022
2022
2021
2021
2020
2020
\nFVPL
FVOCI
FVPL
FVOCI
FVPL
FVOCI
\n$m
$m
$m\u00a0
$m
$m
$m
\nLevel 1
13
880
16
1,064
118
891
\nLevel 2
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\nLevel 3
10
176
\u2013
104
\u2013
217
\nTotal
23
1,056
16
1,168
118
1,108
\nDuring 2020, AstraZeneca sold a proportion of its equity portfolio receiving consideration of $1,381m, a large proportion of which related to the
\ndisposal of its full holding in Moderna Therapeutics, Inc. All related gains were accounted through Other comprehensive income.
\nEquity securities that are analysed at Level 3 include investments in private biotech companies. In the absence of speci\ufb01c market data, these
\nunlisted investments are held at fair value based on the cost of investment and adjusting as necessary for impairments and revaluations on new
\nfunding rounds, which approximates to fair value. Movements in Level 3 investments are detailed below:
\n2022
2022
2021
2020
\nFVPL
FVOCI
FVOCI
FVOCI
\n$m
$m\u00a0
$m
$m
\nAt 1 January
\u2013
104
217
227
\nAdditions
10
32
1
96
\nRevaluations
\u2013
50
\u2013
63
\nNet transfers out
\u2013
(4)
(113)
(103)
\nDisposals
\u2013
(5)
\u2013
(86)
\nImpairments and exchange adjustments
\u2013
(1)
(1)
20
\nAt 31\u00a0December
10
176
104
217
\nAssets are transferred in or out of Level 3 on the date of the event or change in circumstances that caused the transfer.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfInterestsInOtherEntitiesExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f28857": {
"value": "13 Derivative \ufb01nancial instruments \nNon-current
Current
Current
Non-current
\nassets
assets
liabilities
liabilities
Total
\n$m
$m
$m
$m
$m
\nInterest rate swaps related to instruments designated at fair value through profit and loss
45
\u2013
\u2013
\u2013
45
\nCross currency swaps designated in a net investment hedge
19
\u2013
\u2013
(2)
17
\nCross currency swaps designated in a cash flow hedge
107
43
\u2013
\u2013
150
\nCross currency swaps designated in a fair value hedge
\n1
\n\u2013
43
\u2013
\u2013
43
\nForward FX designated in a cash flow hedge
\n2
\n\u2013
8
(3)
\u2013
5
\nOther derivatives
\u2013
48
(30)
\u2013
18
\n31\u00a0December 2020
171
142
(33)
(2)
278
\nNon-current
Current
Current
Non-current
\nassets
assets
liabilities
liabilities
Total
\n$m
$m
$m
$m
$m
\nInterest rate swaps related to instruments designated at fair value through profit and loss
25
\u2013
\u2013
\u2013
25
\nCross currency swaps designated in a net investment hedge
62
\u2013
\u2013
(2)
60
\nCross currency swaps designated in a cash flow hedge
\u2013
\u2013
\u2013
(43)
(43)
\nForward FX designated in a cash flow hedge
\n2
\n\u2013
13
\u2013
\u2013
13
\nOther derivatives
15
70
(79)
\u2013
6
\n31\u00a0December 2021
102
83
(79)
(45)
61
\nNon-current
Current
Current
Non-current
\nassets
assets
liabilities
liabilities
Total
\n$m
$m
$m
$m
$m
\nInterest rate swaps related to instruments designated at fair value through profit and loss
\u2013
1
\u2013
\u2013
1
\nCross currency swaps designated in a net investment hedge
55
\u2013
\u2013
(4)
51
\nCross currency swaps designated in a cash flow hedge
\u2013
\u2013
\u2013
(160)
(160)
\nForward FX designated in a cash flow hedge
\n2
\n\u2013
1
(13)
\u2013
(12)
\nOther derivatives
19
85
(80)
\u2013
24
\n31\u00a0December 2022
74
87
(93)
(164)
(96)
\n1
Cross currency swaps designated in a fair value hedge refers to a cross currency interest rate swap that hedges a designated euro 300m portion of our euro 750m 0.875% 2021 Non-callable
\nbond against exposure to movements in the euro:US dollar exchange rate. The swap matured in November 2021 when the related bond matured.
\n2
Forward FX designated in a cash flow hedge relates to contracts hedging anticipated CNY, EUR, GBP, JPY and SEK transactions occurring in the quarter immediately after the balance
\nsheet date.
\nAll derivatives are held at fair value and fall within Level 2 of the fair value hierarchy as de\ufb01ned in Note 12, except for an equity warrant which falls
\nwithin Level 3 (valued at $19m (2021: $15m), held within Non-current assets). None of the derivatives have been reclassi\ufb01ed in the year.
\nThe fair value of interest rate swaps and cross currency swaps is estimated using appropriate zero coupon curve valuation techniques to discount
\nfuture contractual cash \ufb02ows based on rates at the current year end.
\nThe fair value of forward foreign exchange contracts and currency options are estimated by cash \ufb02ow accounting models using appropriate yield
\ncurves based on market forward foreign exchange rates at the year end. The majority of forward foreign exchange contracts for existing transactions
\nhad maturities of less than one month from year end.
\nThe interest rates used to discount future cash \ufb02ows for fair value adjustments, where applicable, are based on market swap curves at the reporting
\ndate, and were as follows:
\n2022
2021
2020
\nDerivatives
0.1% to 4.7%
(0.5)% to 3.6%
(0.5)% to 2.4%",
"dimensions": {
"concept": "ifrs-full:DisclosureOfDerivativeFinancialInstrumentsExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f28858": {
"value": "13 Derivative \ufb01nancial instruments \nNon-current
Current
Current
Non-current
\nassets
assets
liabilities
liabilities
Total
\n$m
$m
$m
$m
$m
\nInterest rate swaps related to instruments designated at fair value through profit and loss
45
\u2013
\u2013
\u2013
45
\nCross currency swaps designated in a net investment hedge
19
\u2013
\u2013
(2)
17
\nCross currency swaps designated in a cash flow hedge
107
43
\u2013
\u2013
150
\nCross currency swaps designated in a fair value hedge
\n1
\n\u2013
43
\u2013
\u2013
43
\nForward FX designated in a cash flow hedge
\n2
\n\u2013
8
(3)
\u2013
5
\nOther derivatives
\u2013
48
(30)
\u2013
18
\n31\u00a0December 2020
171
142
(33)
(2)
278
\nNon-current
Current
Current
Non-current
\nassets
assets
liabilities
liabilities
Total
\n$m
$m
$m
$m
$m
\nInterest rate swaps related to instruments designated at fair value through profit and loss
25
\u2013
\u2013
\u2013
25
\nCross currency swaps designated in a net investment hedge
62
\u2013
\u2013
(2)
60
\nCross currency swaps designated in a cash flow hedge
\u2013
\u2013
\u2013
(43)
(43)
\nForward FX designated in a cash flow hedge
\n2
\n\u2013
13
\u2013
\u2013
13
\nOther derivatives
15
70
(79)
\u2013
6
\n31\u00a0December 2021
102
83
(79)
(45)
61
\nNon-current
Current
Current
Non-current
\nassets
assets
liabilities
liabilities
Total
\n$m
$m
$m
$m
$m
\nInterest rate swaps related to instruments designated at fair value through profit and loss
\u2013
1
\u2013
\u2013
1
\nCross currency swaps designated in a net investment hedge
55
\u2013
\u2013
(4)
51
\nCross currency swaps designated in a cash flow hedge
\u2013
\u2013
\u2013
(160)
(160)
\nForward FX designated in a cash flow hedge
\n2
\n\u2013
1
(13)
\u2013
(12)
\nOther derivatives
19
85
(80)
\u2013
24
\n31\u00a0December 2022
74
87
(93)
(164)
(96)
\n1
Cross currency swaps designated in a fair value hedge refers to a cross currency interest rate swap that hedges a designated euro 300m portion of our euro 750m 0.875% 2021 Non-callable
\nbond against exposure to movements in the euro:US dollar exchange rate. The swap matured in November 2021 when the related bond matured.
\n2
Forward FX designated in a cash flow hedge relates to contracts hedging anticipated CNY, EUR, GBP, JPY and SEK transactions occurring in the quarter immediately after the balance
\nsheet date.
\nAll derivatives are held at fair value and fall within Level 2 of the fair value hierarchy as de\ufb01ned in Note 12, except for an equity warrant which falls
\nwithin Level 3 (valued at $19m (2021: $15m), held within Non-current assets). None of the derivatives have been reclassi\ufb01ed in the year.
\nThe fair value of interest rate swaps and cross currency swaps is estimated using appropriate zero coupon curve valuation techniques to discount
\nfuture contractual cash \ufb02ows based on rates at the current year end.
\nThe fair value of forward foreign exchange contracts and currency options are estimated by cash \ufb02ow accounting models using appropriate yield
\ncurves based on market forward foreign exchange rates at the year end. The majority of forward foreign exchange contracts for existing transactions
\nhad maturities of less than one month from year end.
\nThe interest rates used to discount future cash \ufb02ows for fair value adjustments, where applicable, are based on market swap curves at the reporting
\ndate, and were as follows:
\n2022
2021
2020
\nDerivatives
0.1% to 4.7%
(0.5)% to 3.6%
(0.5)% to 2.4%",
"dimensions": {
"concept": "ifrs-full:DisclosureOfFairValueOfFinancialInstrumentsExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f28859": {
"value": "13 Derivative \ufb01nancial instruments \nNon-current
Current
Current
Non-current
\nassets
assets
liabilities
liabilities
Total
\n$m
$m
$m
$m
$m
\nInterest rate swaps related to instruments designated at fair value through profit and loss
45
\u2013
\u2013
\u2013
45
\nCross currency swaps designated in a net investment hedge
19
\u2013
\u2013
(2)
17
\nCross currency swaps designated in a cash flow hedge
107
43
\u2013
\u2013
150
\nCross currency swaps designated in a fair value hedge
\n1
\n\u2013
43
\u2013
\u2013
43
\nForward FX designated in a cash flow hedge
\n2
\n\u2013
8
(3)
\u2013
5
\nOther derivatives
\u2013
48
(30)
\u2013
18
\n31\u00a0December 2020
171
142
(33)
(2)
278
\nNon-current
Current
Current
Non-current
\nassets
assets
liabilities
liabilities
Total
\n$m
$m
$m
$m
$m
\nInterest rate swaps related to instruments designated at fair value through profit and loss
25
\u2013
\u2013
\u2013
25
\nCross currency swaps designated in a net investment hedge
62
\u2013
\u2013
(2)
60
\nCross currency swaps designated in a cash flow hedge
\u2013
\u2013
\u2013
(43)
(43)
\nForward FX designated in a cash flow hedge
\n2
\n\u2013
13
\u2013
\u2013
13
\nOther derivatives
15
70
(79)
\u2013
6
\n31\u00a0December 2021
102
83
(79)
(45)
61
\nNon-current
Current
Current
Non-current
\nassets
assets
liabilities
liabilities
Total
\n$m
$m
$m
$m
$m
\nInterest rate swaps related to instruments designated at fair value through profit and loss
\u2013
1
\u2013
\u2013
1
\nCross currency swaps designated in a net investment hedge
55
\u2013
\u2013
(4)
51
\nCross currency swaps designated in a cash flow hedge
\u2013
\u2013
\u2013
(160)
(160)
\nForward FX designated in a cash flow hedge
\n2
\n\u2013
1
(13)
\u2013
(12)
\nOther derivatives
19
85
(80)
\u2013
24
\n31\u00a0December 2022
74
87
(93)
(164)
(96)
\n1
Cross currency swaps designated in a fair value hedge refers to a cross currency interest rate swap that hedges a designated euro 300m portion of our euro 750m 0.875% 2021 Non-callable
\nbond against exposure to movements in the euro:US dollar exchange rate. The swap matured in November 2021 when the related bond matured.
\n2
Forward FX designated in a cash flow hedge relates to contracts hedging anticipated CNY, EUR, GBP, JPY and SEK transactions occurring in the quarter immediately after the balance
\nsheet date.
\nAll derivatives are held at fair value and fall within Level 2 of the fair value hierarchy as de\ufb01ned in Note 12, except for an equity warrant which falls
\nwithin Level 3 (valued at $19m (2021: $15m), held within Non-current assets). None of the derivatives have been reclassi\ufb01ed in the year.
\nThe fair value of interest rate swaps and cross currency swaps is estimated using appropriate zero coupon curve valuation techniques to discount
\nfuture contractual cash \ufb02ows based on rates at the current year end.
\nThe fair value of forward foreign exchange contracts and currency options are estimated by cash \ufb02ow accounting models using appropriate yield
\ncurves based on market forward foreign exchange rates at the year end. The majority of forward foreign exchange contracts for existing transactions
\nhad maturities of less than one month from year end.
\nThe interest rates used to discount future cash \ufb02ows for fair value adjustments, where applicable, are based on market swap curves at the reporting
\ndate, and were as follows:
\n2022
2021
2020
\nDerivatives
0.1% to 4.7%
(0.5)% to 3.6%
(0.5)% to 2.4%",
"dimensions": {
"concept": "ifrs-full:DisclosureOfFinancialInstrumentsDesignatedAtFairValueThroughProfitOrLossExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f29049": {
"value": "14 Non-current other receivables \n2022
2021
2020
\n$m
$m
$m
\nPrepayments
243
391
395
\nAccrued income
44
61
56
\nRetirement benefit scheme surpluses (Note 22)
90
\u2013
\u2013
\nOther receivables
458
443
269
\nNon-current other receivables
835
895
720
\nPrepayments include $nil (2021: $92m; 2020: $121m) in relation to our research collaboration with Moderna. Other receivables include $71m (2021:
\n$44m; 2020: $56m) owed by FibroGen for promotional activity in China pursuant to the roxadustat collaboration.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfOtherNoncurrentAssetsExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f29094": {
"value": "15 Inventories \n2022
2021
2020
\n$m
$m
$m
\nRaw materials and consumables
1,422
1,755
1,262
\nInventories in process
1,864
5,216
1,331
\nFinished goods and goods for resale
1,413
2,012
1,431
\nInventories
4,699
8,983
4,024
\nThe Group recognised $9,618m (2021: $9,640m; 2020: $3,110m) of inventories as an expense within Cost of sales during the year.
\nInventory write-offs in the year amounted to $479m (2021: $552m; 2020: $149m).",
"dimensions": {
"concept": "ifrs-full:DisclosureOfInventoriesExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f29122": {
"value": "16 Current trade and other receivables \n2022
2021
2020
\n$m
$m\u00a0
$m
\nTrade receivables
7,271
6,054
3,829
\nLess: Expected credit loss provision (Note\u00a028)
(59)
(23)
(23)
\n7,212
6,031
3,806
\nOther receivables
1,659
1,808
1,278
\nPrepayments
1,329
1,512
1,735
\nGovernment grants receivable
25
\u2013
53
\nAccrued income
296
293
150
\nTrade and other receivables
10,521
9,644
7,022
\nTrade receivables include $2,470m (2021: $1,865m; 2020: $1,250m) measured at FVOCI classi\ufb01ed \u2018hold to collect and sell\u2019 as they are due from
\ncustomers that the Group has the option to factor, or relate to bank acceptance drafts received in settlement of trade receivables per common
\npractice in China.
\nAll other \ufb01nancial assets included within Current trade and other receivables are held at amortised cost with carrying value being a reasonable
\napproximation of fair value.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfTradeAndOtherReceivablesExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f29123": {
"value": "16 Current trade and other receivables \n2022
2021
2020
\n$m
$m\u00a0
$m
\nTrade receivables
7,271
6,054
3,829
\nLess: Expected credit loss provision (Note\u00a028)
(59)
(23)
(23)
\n7,212
6,031
3,806
\nOther receivables
1,659
1,808
1,278
\nPrepayments
1,329
1,512
1,735
\nGovernment grants receivable
25
\u2013
53
\nAccrued income
296
293
150
\nTrade and other receivables
10,521
9,644
7,022
\nTrade receivables include $2,470m (2021: $1,865m; 2020: $1,250m) measured at FVOCI classi\ufb01ed \u2018hold to collect and sell\u2019 as they are due from
\ncustomers that the Group has the option to factor, or relate to bank acceptance drafts received in settlement of trade receivables per common
\npractice in China.
\nAll other \ufb01nancial assets included within Current trade and other receivables are held at amortised cost with carrying value being a reasonable
\napproximation of fair value.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfAllowanceForCreditLossesExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f29124": {
"value": "16 Current trade and other receivables \n2022
2021
2020
\n$m
$m\u00a0
$m
\nTrade receivables
7,271
6,054
3,829
\nLess: Expected credit loss provision (Note\u00a028)
(59)
(23)
(23)
\n7,212
6,031
3,806
\nOther receivables
1,659
1,808
1,278
\nPrepayments
1,329
1,512
1,735
\nGovernment grants receivable
25
\u2013
53
\nAccrued income
296
293
150
\nTrade and other receivables
10,521
9,644
7,022
\nTrade receivables include $2,470m (2021: $1,865m; 2020: $1,250m) measured at FVOCI classi\ufb01ed \u2018hold to collect and sell\u2019 as they are due from
\ncustomers that the Group has the option to factor, or relate to bank acceptance drafts received in settlement of trade receivables per common
\npractice in China.
\nAll other \ufb01nancial assets included within Current trade and other receivables are held at amortised cost with carrying value being a reasonable
\napproximation of fair value.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfOtherCurrentAssetsExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f29125": {
"value": "16 Current trade and other receivables \n2022
2021
2020
\n$m
$m\u00a0
$m
\nTrade receivables
7,271
6,054
3,829
\nLess: Expected credit loss provision (Note\u00a028)
(59)
(23)
(23)
\n7,212
6,031
3,806
\nOther receivables
1,659
1,808
1,278
\nPrepayments
1,329
1,512
1,735
\nGovernment grants receivable
25
\u2013
53
\nAccrued income
296
293
150
\nTrade and other receivables
10,521
9,644
7,022
\nTrade receivables include $2,470m (2021: $1,865m; 2020: $1,250m) measured at FVOCI classi\ufb01ed \u2018hold to collect and sell\u2019 as they are due from
\ncustomers that the Group has the option to factor, or relate to bank acceptance drafts received in settlement of trade receivables per common
\npractice in China.
\nAll other \ufb01nancial assets included within Current trade and other receivables are held at amortised cost with carrying value being a reasonable
\napproximation of fair value.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfPrepaymentsAndOtherAssetsExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f29177": {
"value": "17 Cash and cash equivalents \n2022
2021
2020
\n$m
$m\u00a0
$m
\nCash at bank and in hand
1,411
1,461
1,182
\nShort-term deposits
4,755
4,868
6,650
\nCash and cash equivalents
6,166
6,329
7,832
\nUnsecured bank overdrafts
(183)
(291)
(286)
\nCash and cash equivalents in the cash flow statement
5,983
6,038
7,546
\nAstraZeneca invests in constant net asset value funds and low-volatility net asset value funds with same day access for subscription and redemption.
\nThese investments fail the \u2018solely payments of principal and interest\u2019 test criteria under IFRS 9. They are therefore measured at fair value through
\npro\ufb01t and loss, although the fair value is materially the same as amortised cost.
\nNon-cash and other movements, within operating activities in the Consolidated Statement of Cash Flows, includes:
\n2022
2021
2020
\n$m
$m\u00a0
$m
\nShare-based payments charge for the period
619
615
277
\nSettlement of share plan awards
(592)
(570)
(349)
\nPension contributions
(205)
(174)
(172)
\nPension charges recorded in operating profit
101
136
84
\nLong-term provision charges recorded in operating profit
87
270
66
\nNon-cash intangible additions
\u2013
\u2013
(120)
\n(Gain)/loss on disposal of tangible assets
(112)
4
(25)
\nForeign exchange and other
\n1
\n(590)
(186)
(37)
\nTotal operating activities non-cash and other movements
(692)
95
(276)
\n1
Foreign exchange and other includes, among other items, the foreign exchange of intercompany transactions, including dividends, across Group entities and the related impact from hedging
\nthose transactions.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfCashAndCashEquivalentsExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f29178": {
"value": "17 Cash and cash equivalents \n2022
2021
2020
\n$m
$m\u00a0
$m
\nCash at bank and in hand
1,411
1,461
1,182
\nShort-term deposits
4,755
4,868
6,650
\nCash and cash equivalents
6,166
6,329
7,832
\nUnsecured bank overdrafts
(183)
(291)
(286)
\nCash and cash equivalents in the cash flow statement
5,983
6,038
7,546
\nAstraZeneca invests in constant net asset value funds and low-volatility net asset value funds with same day access for subscription and redemption.
\nThese investments fail the \u2018solely payments of principal and interest\u2019 test criteria under IFRS 9. They are therefore measured at fair value through
\npro\ufb01t and loss, although the fair value is materially the same as amortised cost.
\nNon-cash and other movements, within operating activities in the Consolidated Statement of Cash Flows, includes:
\n2022
2021
2020
\n$m
$m\u00a0
$m
\nShare-based payments charge for the period
619
615
277
\nSettlement of share plan awards
(592)
(570)
(349)
\nPension contributions
(205)
(174)
(172)
\nPension charges recorded in operating profit
101
136
84
\nLong-term provision charges recorded in operating profit
87
270
66
\nNon-cash intangible additions
\u2013
\u2013
(120)
\n(Gain)/loss on disposal of tangible assets
(112)
4
(25)
\nForeign exchange and other
\n1
\n(590)
(186)
(37)
\nTotal operating activities non-cash and other movements
(692)
95
(276)
\n1
Foreign exchange and other includes, among other items, the foreign exchange of intercompany transactions, including dividends, across Group entities and the related impact from hedging
\nthose transactions.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfCashAndBankBalancesAtCentralBanksExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f29275": {
"value": "18 Assets held for sale \nAssets held for sale amount to $150m (2021: $368m; 2020: $nil). Current year assets comprise Property, plant and equipment assets relating to the
\nWest Chester site in Ohio, US. AstraZeneca signed a contract on 29 November 2022 to sell the site to National Resilience, Inc. subject to anti-trust
\nclearance. The transaction closed on 30 January 2023.
\nIn 2021, Assets held for sale comprised Intangible assets relating to the rights to certain respiratory assets acquired from Almirall and Actavis (including
\nTudorza
and
Duaklir
). The transaction closed on 4 January 2022.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfNoncurrentAssetsOrDisposalGroupsClassifiedAsHeldForSaleExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f29289": {
"value": "19 Interest-bearing loans and borrowings \nRepayment
2022
2021
2020
\ndates
$m
$m
$m
\nCurrent liabilities
\nBank overdrafts
On demand
183
291
286
\nOther short-term borrowings excluding overdrafts
78
3
84
\nCollateral received from derivative counterparties
89
93
288
\nLease liabilities
228
233
192
\n0.25% Callable bond
euros
2021
\u2013
\u2013
614
\n0.875% Non-callable bond
euros
2021
\u2013
\u2013
919
\nFloating rate notes
US dollars
2022
\u2013
250
\u2013
\n2.375% Callable bond
US dollars
2022
\u2013
999
\u2013
\n0.3% Callable bond
US dollars
2023
1,399
\u2013
\u2013
\n2023 Floating bank loan
US dollars
2023
2,000
\u2013
\u2013
\nFloating rate notes
US dollars
2023
400
\u2013
\u2013
\n3.5% Callable bond
US dollars
2023
849
\u2013
\u2013
\n7% Guaranteed debentures
US dollars
2023
294
\u2013
\u2013
\nOther loans (including commercial paper)
Within one year
22
24
3
\nTotal
5,542
1,893
2,386
\nNon-current liabilities
\nLease liabilities
725
754
489
\nFloating rate notes
US dollars
2022
\u2013
\u2013
250
\n2.375% Callable bond
US dollars
2022
\u2013
\u2013
996
\n0.3% Callable bond
US dollars
2023
\u2013
1,397
\u2013
\n2023 Floating rate bank loan
US dollars
2023
\u2013
1,998
\u2013
\nFloating rate notes
US dollars
2023
\u2013
400
400
\n3.5% Callable bond
US dollars
2023
\u2013
848
847
\n7% Guaranteed debentures
US dollars
2023
\u2013
320
339
\n0.75% Callable bond
euros
2024
957
1,014
1,102
\n0.7% Callable bond
US dollars
2024
1,598
1,598
\u2013
\n2024 Floating rate bank loan
US dollars
2024
1,998
1,997
\u2013
\n3.375% Callable bond
US dollars
2025
1,992
1,988
1,985
\n0.7% Callable bond
US dollars
2026
1,195
1,193
1,192
\n1.2% Callable bond
US dollars
2026
1,246
1,245
\u2013
\n3.125% Callable bond
US dollars
2027
746
745
744
\n1.25% Callable bond
euros
2028
845
896
973
\n1.75% Callable bond
US dollars
2028
1,245
1,244
\u2013
\n4% Callable bond
US dollars
2029
995
994
993
\n0.375% Callable bond
euros
2029
846
898
\u2013
\n1.375% Callable bond
US dollars
2030
1,293
1,292
1,291
\n2.25% Callable bond
US dollars
2031
747
746
\u2013
\n5.75% Non-callable bond
pounds sterling
2031
420
470
475
\n6.45% Callable bond
US dollars
2037
2,724
2,724
2,722
\n4% Callable bond
US dollars
2042
988
988
988
\n4.375% Callable bond
US dollars
2045
981
980
980
\n4.375% Callable bond
US dollars
2048
737
737
737
\n2.125% Callable bond
US dollars
2050
487
486
486
\n3% Callable bond
US dollars
2051
735
734
\u2013
\nOther loans
US dollars
190
202
5
\nTotal
23,690
28,888
17,994
\nTotal interest-bearing loans and borrowings
\n1, 2
\n29,232
30,781
20,380
\n1
All loans and borrowings above are unsecured apart from $22m (2021: $24m) of current and $181m (2021: $188m) of non-current in 2022, both included within Other loans.
\n2
The $2bn USD 2023 floating rate bank loan and $2bn USD 2024 floating rate bank loan pay interest linked to 1 month USD LIBOR. The Group has the right to switch these loans to compounded
\ndaily USD Secured Overnight Funding Rate (SOFR) with five days notice. The loans will automatically switch to compounded SOFR on 30 June 2023 if the Group has not already switched
\nbefore this date. All other floating rate debt is not impacted by LIBOR reference as it either uses non-LIBOR fixings or will mature before the relevant LIBOR rate is withdrawn.
\nNotes to the Group Financial Statements
\ncontinued
\n168
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
Total loans and
Total loans and
Total loans and
\nborrowings
borrowings
borrowings
\n2022
2021
2020
\n$m
$m
$m
\nAt 1\u00a0January
30,781
20,380
18,227
\nChanges from financing cash flows
\nIssue of loans and borrowings
\u2013
12,929
2,968
\nRepayment of loans and borrowings
(1,271)
(4,759)
(1,609)
\nMovement in short-term borrowings
74
(276)
288
\nRepayment of obligations under leases
(244)
(240)
(207)
\nTotal changes in cash flows arising on financing activities from borrowings
(1,441)
7,654
1,440
\nMovement in overdrafts
(85)
31
138
\nNew lease liabilities
253
503
174
\nAdditions through business combinations
5
2,523
\u2013
\nExchange
(287)
(378)
363
\nOther movements
6
68
38
\nAt 31\u00a0December
29,232
30,781
20,380
\nAlso included within cash \ufb02ows arising from \ufb01nancing activities within the Consolidated Statement of Cash Flows is a $920m cash out\ufb02ow (2021: $nil;
\n2020: $nil) related to the Acerta Pharma share purchase liability which has a closing liability at 31 December 2022 of $1,646m (2021: $2,458m; 2020:
\n$2,297m) within Trade and other payables (see Note 20 and Note 26).
\nSet out below is a comparison by category of carrying values and fair values of all the Group\u2019s interest-bearing loans and borrowings:
\nInstruments in a
Instruments
Instruments
Total
\nfair value hedge
designated
designated in
Amortised
carrying
Fair
\nrelationship
\n1
\nat fair value
\n2
\ncash flow hedge
\n3
\ncost
value
value
\n$m
$m
$m
$m
$m
$m
\n2020
\nOverdrafts
\u2013
\u2013
\u2013
286
286
286
\nLease liabilities due within one year
\u2013
\u2013
\u2013
192
192
192
\nLease liabilities due after more than one year
\u2013
\u2013
\u2013
489
489
489
\nLoans and borrowings due within one year
371
\u2013
614
923
1,908
1,922
\nLoans and borrowings due after more than one year
\u2013
339
2,075
15,091
17,505
20,936
\nTotal at 31\u00a0December 2020
371
339
2,689
16,981
20,380
23,825
\n2021
\nOverdrafts
\u2013
\u2013
\u2013
291
291
291
\nLease liabilities due within one year
\u2013
\u2013
\u2013
233
233
233
\nLease liabilities due after more than one year
\u2013
\u2013
\u2013
754
754
754
\nLoans and borrowings due within one year
\u2013
\u2013
\u2013
1,369
1,369
1,378
\nLoans and borrowings due after more than one year
\u2013
320
1,910
25,904
28,134
30,596
\nTotal at 31\u00a0December 2021
\u2013
320
1,910
28,551
30,781
33,252
\n2022
\nOverdrafts
\u2013
\u2013
\u2013
183
183
183
\nLease liabilities due within one year
\u2013
\u2013
\u2013
228
228
228
\nLease liabilities due after more than one year
\u2013
\u2013
\u2013
725
725
725
\nLoans and borrowings due within one year
\u2013
294
\u2013
4,837
5,131
5,105
\nLoans and borrowings due after more than one year
\u2013
\u2013
1,802
21,163
22,965
21,657
\nTotal at 31\u00a0December 2022
\u2013
294
1,802
27,136
29,232
27,898
\n1
Instruments designated as hedged items in a fair value hedge relationship relate to a designated euro 300m portion of our euro 750m 0.875% 2021 Non-callable bond which matured on
\n24 November 2021. The accumulated amount of fair value hedge adjustments to the bond was a loss of $10m.
\n2
Instruments designated at fair value through profit or loss include the US dollar 7% guaranteed debentures repayable in 2023.
\n3
Instruments designated in cash flow hedges are our euro 500m 0.25% Callable bond which matured in 2021, our euro 900m 0.75% 2024 Callable bond and our euro 800m 1.25% 2028
\nCallable bond.
\nThe fair value of \ufb01xed-rate publicly traded debt is based on year end quoted market prices; the fair value of \ufb02oating rate debt is nominal value, as
\nmark-to-market differences would be minimal given the frequency of resets. The carrying value of loans designated at fair value through pro\ufb01t or loss
\nis the fair value; this falls within the Level 1 valuation method as de\ufb01ned in Note 12. For loans designated in a fair value hedge relationship, carrying
\nvalue is initially measured at fair value and remeasured for fair value changes in respect of the hedged risk at each reporting date. All other loans
\nare held at amortised cost. Fair values, as disclosed in the table above, are all determined using the Level 1 valuation method as de\ufb01ned in Note 12,
\nwith the exception of overdrafts and lease liabilities, where fair value approximates to carrying values.
\n169
AstraZeneca Annual Report & Form 20-F Information 2022
Notes to the Group Financial Statements
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
19 Interest-bearing loans and borrowings
continued
\nA gain of $2m was made during the year on the fair value of bonds designated as fair value through pro\ufb01t or loss, due to increased credit risk. A gain
\nof $31m has been made on these bonds since designation due to increased credit risk. Under IFRS 9, the Group records the component of fair value
\nchanges relating to the component of own credit risk through Other comprehensive income. Changes in credit risk had no material effect on any
\nother \ufb01nancial assets and liabilities recognised at fair value in the Group Financial Statements. The change in fair value attributable to changes in
\ncredit risk is calculated as the change in fair value not attributable to market risk. The amount payable at maturity on bonds designated at fair value
\nthrough pro\ufb01t or loss is $287m.
\nThe interest rates used to discount future cash \ufb02ows for fair value adjustments, where applicable, are based on market swap curves at the reporting
\ndate, and were as follows:
\n2022
2021
2020
\nLoans and borrowings
4.3% to 4.9%
0.1% to 0.6%
(0.5)% to 0.1%",
"dimensions": {
"concept": "ifrs-full:DisclosureOfBorrowingsExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f29290": {
"value": "19 Interest-bearing loans and borrowings \nRepayment
2022
2021
2020
\ndates
$m
$m
$m
\nCurrent liabilities
\nBank overdrafts
On demand
183
291
286
\nOther short-term borrowings excluding overdrafts
78
3
84
\nCollateral received from derivative counterparties
89
93
288
\nLease liabilities
228
233
192
\n0.25% Callable bond
euros
2021
\u2013
\u2013
614
\n0.875% Non-callable bond
euros
2021
\u2013
\u2013
919
\nFloating rate notes
US dollars
2022
\u2013
250
\u2013
\n2.375% Callable bond
US dollars
2022
\u2013
999
\u2013
\n0.3% Callable bond
US dollars
2023
1,399
\u2013
\u2013
\n2023 Floating bank loan
US dollars
2023
2,000
\u2013
\u2013
\nFloating rate notes
US dollars
2023
400
\u2013
\u2013
\n3.5% Callable bond
US dollars
2023
849
\u2013
\u2013
\n7% Guaranteed debentures
US dollars
2023
294
\u2013
\u2013
\nOther loans (including commercial paper)
Within one year
22
24
3
\nTotal
5,542
1,893
2,386
\nNon-current liabilities
\nLease liabilities
725
754
489
\nFloating rate notes
US dollars
2022
\u2013
\u2013
250
\n2.375% Callable bond
US dollars
2022
\u2013
\u2013
996
\n0.3% Callable bond
US dollars
2023
\u2013
1,397
\u2013
\n2023 Floating rate bank loan
US dollars
2023
\u2013
1,998
\u2013
\nFloating rate notes
US dollars
2023
\u2013
400
400
\n3.5% Callable bond
US dollars
2023
\u2013
848
847
\n7% Guaranteed debentures
US dollars
2023
\u2013
320
339
\n0.75% Callable bond
euros
2024
957
1,014
1,102
\n0.7% Callable bond
US dollars
2024
1,598
1,598
\u2013
\n2024 Floating rate bank loan
US dollars
2024
1,998
1,997
\u2013
\n3.375% Callable bond
US dollars
2025
1,992
1,988
1,985
\n0.7% Callable bond
US dollars
2026
1,195
1,193
1,192
\n1.2% Callable bond
US dollars
2026
1,246
1,245
\u2013
\n3.125% Callable bond
US dollars
2027
746
745
744
\n1.25% Callable bond
euros
2028
845
896
973
\n1.75% Callable bond
US dollars
2028
1,245
1,244
\u2013
\n4% Callable bond
US dollars
2029
995
994
993
\n0.375% Callable bond
euros
2029
846
898
\u2013
\n1.375% Callable bond
US dollars
2030
1,293
1,292
1,291
\n2.25% Callable bond
US dollars
2031
747
746
\u2013
\n5.75% Non-callable bond
pounds sterling
2031
420
470
475
\n6.45% Callable bond
US dollars
2037
2,724
2,724
2,722
\n4% Callable bond
US dollars
2042
988
988
988
\n4.375% Callable bond
US dollars
2045
981
980
980
\n4.375% Callable bond
US dollars
2048
737
737
737
\n2.125% Callable bond
US dollars
2050
487
486
486
\n3% Callable bond
US dollars
2051
735
734
\u2013
\nOther loans
US dollars
190
202
5
\nTotal
23,690
28,888
17,994
\nTotal interest-bearing loans and borrowings
\n1, 2
\n29,232
30,781
20,380
\n1
All loans and borrowings above are unsecured apart from $22m (2021: $24m) of current and $181m (2021: $188m) of non-current in 2022, both included within Other loans.
\n2
The $2bn USD 2023 floating rate bank loan and $2bn USD 2024 floating rate bank loan pay interest linked to 1 month USD LIBOR. The Group has the right to switch these loans to compounded
\ndaily USD Secured Overnight Funding Rate (SOFR) with five days notice. The loans will automatically switch to compounded SOFR on 30 June 2023 if the Group has not already switched
\nbefore this date. All other floating rate debt is not impacted by LIBOR reference as it either uses non-LIBOR fixings or will mature before the relevant LIBOR rate is withdrawn.
\nNotes to the Group Financial Statements
\ncontinued
\n168
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
Total loans and
Total loans and
Total loans and
\nborrowings
borrowings
borrowings
\n2022
2021
2020
\n$m
$m
$m
\nAt 1\u00a0January
30,781
20,380
18,227
\nChanges from financing cash flows
\nIssue of loans and borrowings
\u2013
12,929
2,968
\nRepayment of loans and borrowings
(1,271)
(4,759)
(1,609)
\nMovement in short-term borrowings
74
(276)
288
\nRepayment of obligations under leases
(244)
(240)
(207)
\nTotal changes in cash flows arising on financing activities from borrowings
(1,441)
7,654
1,440
\nMovement in overdrafts
(85)
31
138
\nNew lease liabilities
253
503
174
\nAdditions through business combinations
5
2,523
\u2013
\nExchange
(287)
(378)
363
\nOther movements
6
68
38
\nAt 31\u00a0December
29,232
30,781
20,380
\nAlso included within cash \ufb02ows arising from \ufb01nancing activities within the Consolidated Statement of Cash Flows is a $920m cash out\ufb02ow (2021: $nil;
\n2020: $nil) related to the Acerta Pharma share purchase liability which has a closing liability at 31 December 2022 of $1,646m (2021: $2,458m; 2020:
\n$2,297m) within Trade and other payables (see Note 20 and Note 26).
\nSet out below is a comparison by category of carrying values and fair values of all the Group\u2019s interest-bearing loans and borrowings:
\nInstruments in a
Instruments
Instruments
Total
\nfair value hedge
designated
designated in
Amortised
carrying
Fair
\nrelationship
\n1
\nat fair value
\n2
\ncash flow hedge
\n3
\ncost
value
value
\n$m
$m
$m
$m
$m
$m
\n2020
\nOverdrafts
\u2013
\u2013
\u2013
286
286
286
\nLease liabilities due within one year
\u2013
\u2013
\u2013
192
192
192
\nLease liabilities due after more than one year
\u2013
\u2013
\u2013
489
489
489
\nLoans and borrowings due within one year
371
\u2013
614
923
1,908
1,922
\nLoans and borrowings due after more than one year
\u2013
339
2,075
15,091
17,505
20,936
\nTotal at 31\u00a0December 2020
371
339
2,689
16,981
20,380
23,825
\n2021
\nOverdrafts
\u2013
\u2013
\u2013
291
291
291
\nLease liabilities due within one year
\u2013
\u2013
\u2013
233
233
233
\nLease liabilities due after more than one year
\u2013
\u2013
\u2013
754
754
754
\nLoans and borrowings due within one year
\u2013
\u2013
\u2013
1,369
1,369
1,378
\nLoans and borrowings due after more than one year
\u2013
320
1,910
25,904
28,134
30,596
\nTotal at 31\u00a0December 2021
\u2013
320
1,910
28,551
30,781
33,252
\n2022
\nOverdrafts
\u2013
\u2013
\u2013
183
183
183
\nLease liabilities due within one year
\u2013
\u2013
\u2013
228
228
228
\nLease liabilities due after more than one year
\u2013
\u2013
\u2013
725
725
725
\nLoans and borrowings due within one year
\u2013
294
\u2013
4,837
5,131
5,105
\nLoans and borrowings due after more than one year
\u2013
\u2013
1,802
21,163
22,965
21,657
\nTotal at 31\u00a0December 2022
\u2013
294
1,802
27,136
29,232
27,898
\n1
Instruments designated as hedged items in a fair value hedge relationship relate to a designated euro 300m portion of our euro 750m 0.875% 2021 Non-callable bond which matured on
\n24 November 2021. The accumulated amount of fair value hedge adjustments to the bond was a loss of $10m.
\n2
Instruments designated at fair value through profit or loss include the US dollar 7% guaranteed debentures repayable in 2023.
\n3
Instruments designated in cash flow hedges are our euro 500m 0.25% Callable bond which matured in 2021, our euro 900m 0.75% 2024 Callable bond and our euro 800m 1.25% 2028
\nCallable bond.
\nThe fair value of \ufb01xed-rate publicly traded debt is based on year end quoted market prices; the fair value of \ufb02oating rate debt is nominal value, as
\nmark-to-market differences would be minimal given the frequency of resets. The carrying value of loans designated at fair value through pro\ufb01t or loss
\nis the fair value; this falls within the Level 1 valuation method as de\ufb01ned in Note 12. For loans designated in a fair value hedge relationship, carrying
\nvalue is initially measured at fair value and remeasured for fair value changes in respect of the hedged risk at each reporting date. All other loans
\nare held at amortised cost. Fair values, as disclosed in the table above, are all determined using the Level 1 valuation method as de\ufb01ned in Note 12,
\nwith the exception of overdrafts and lease liabilities, where fair value approximates to carrying values.
\n169
AstraZeneca Annual Report & Form 20-F Information 2022
Notes to the Group Financial Statements
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
19 Interest-bearing loans and borrowings
continued
\nA gain of $2m was made during the year on the fair value of bonds designated as fair value through pro\ufb01t or loss, due to increased credit risk. A gain
\nof $31m has been made on these bonds since designation due to increased credit risk. Under IFRS 9, the Group records the component of fair value
\nchanges relating to the component of own credit risk through Other comprehensive income. Changes in credit risk had no material effect on any
\nother \ufb01nancial assets and liabilities recognised at fair value in the Group Financial Statements. The change in fair value attributable to changes in
\ncredit risk is calculated as the change in fair value not attributable to market risk. The amount payable at maturity on bonds designated at fair value
\nthrough pro\ufb01t or loss is $287m.
\nThe interest rates used to discount future cash \ufb02ows for fair value adjustments, where applicable, are based on market swap curves at the reporting
\ndate, and were as follows:
\n2022
2021
2020
\nLoans and borrowings
4.3% to 4.9%
0.1% to 0.6%
(0.5)% to 0.1%",
"dimensions": {
"concept": "ifrs-full:DisclosureOfDebtSecuritiesExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f29864": {
"value": "20 Trade and other payables \n2022
2021
2020
\n$m
$m
$m
\nCurrent liabilities
\nTrade payables
2,550
2,824
2,350
\nValue-added and payroll taxes and social security
468
463
390
\nRebates, chargebacks, returns and other revenue accruals
6,078
5,298
4,772
\nClinical trial accruals
1,417
1,047
699
\nOther accruals
5,551
5,649
3,905
\nCollaboration Revenue contract liabilities
12
12
12
\nVaccine contract liabilities
169
1,003
1,616
\nDeferred government grant income
1
67
253
\nContingent consideration
757
849
647
\nAcerta Pharma share purchase liability (Note\u00a026)
867
920
\u2013
\nOther payables
1,170
806
1,141
\nTotal
19,040
18,938
15,785
\nNon-current liabilities
\nAccruals
37
25
56
\nCollaboration Revenue contract liabilities
14
26
38
\nContingent consideration
1,465
2,016
2,676
\nAcerta Pharma share purchase liability (Note\u00a026)
779
1,538
2,297
\nOther payables
1,975
1,328
1,017
\nTotal
4,270
4,933
6,084
\nIncluded within Rebates, chargebacks, returns and other revenue accruals are contract liabilities of $87m (2021: $99m; 2020: $77m). The revenue
\nrecognised in the year for contract liabilities is $86m, comprising $74m relating to other revenue accruals and $12m Collaboration Revenue contract
\nliabilities. The major markets with Rebates, chargebacks, returns and other revenue accruals are the US where the liability at 31 December 2022
\namounted to $3,961m (2021: $3,172m; 2020: $3,126m), of which Rare Disease comprises $139m (2021: $127m), and China where the liability at
\n31 December 2022 amounted to $579m (2021: $814m; 2020: $740m).
\nTrade payables includes $67m (2021: $44m; 2020: $248m) due to suppliers that have signed up to a supply chain \ufb01nancing programme, under which
\nthe suppliers can elect on an invoice-by-invoice basis to receive a discounted early payment from the relationship bank rather than being paid in
\nline with the agreed payment terms. If the option is taken, the Group\u2019s liability is assigned by the supplier to be due to the relationship bank rather
\nthan the supplier. The value of the liability payable by the Group remains unchanged. The Group assesses the arrangement against indicators to
\nassess if debts which vendors have sold to the funder under the supplier \ufb01nancing scheme continue to meet the de\ufb01nition of trade payables or
\nshould be classi\ufb01ed as borrowings. At 31 December 2022, the payables met the criteria of Trade payables. The supply chain \ufb01nancing programme
\noperates in the US, UK, Sweden and Germany, and as at 31 December 2022, the programme had 420 suppliers enrolled across these countries.
\nVaccine contract liabilities relate to amounts received from customers, primarily government bodies, in advance of supply of product. Substantially
\nall of the Vaccine contract liabilities are expected to be recognised as revenue during the next \ufb01nancial year. The revenue recognised in the year
\nrelated to Vaccine contract liabilities held at the beginning of the year was $686m.
\nDeferred government grant income relates to government grants received or receivable but for which the related expenses have not been incurred.
\nIncluded within current Other payables are liabilities to Daiichi Sankyo totalling $100m (2021: $nil; 2020: $146m) resulting from the collaboration
\nagreement in relation to
Enhertu
entered into in March 2019 and $nil (2021: $324m; 2020: $324m) in relation to DS-1062 entered into in July 2020.
\nAdditionally, included within non-current Other payables are liabilities totalling $1,125m (2021: $100m; 2020: $100m) as a result of the
Enhertu
\ncollaboration agreement and $nil (2021: $nil; 2020: $323m) as a result of the DS-1062 collaboration agreement.
\nNotes to the Group Financial Statements
\ncontinued
\n170
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
\n\nIn November 2020,
Calquence
received marketing approval in the EU, which removed all remaining conditionality in respect of the Acerta Pharma
\nput and call options regarding the non-controlling interest; the option was exercised in April 2021 (see Note 26). In October 2019, an amendment
\nto the share purchase and option agreement (SPOA) with the sellers of Acerta Pharma (originally entered into in December 2015) came into effect,
\nchanging certain terms of the SPOA on both the timing and also reducing the maximum consideration that would be required to be made to acquire
\nthe remaining outstanding shares of Acerta Pharma if the options were exercised. The payments will be made in similar annual instalments in
\n2022 through to 2024, with the \ufb01rst payment of $920m made in 2022. The changes to the terms are re\ufb02ected in the assumptions used to calculate
\nthe amortised cost of the liability as at 31 December 2022 of $1,646m (2021: $2,458m; 2020: $2,297m). Interest arising from amortising the liability
\nis included within Finance Expense (see Note 3). The associated cash \ufb02ows are disclosed as \ufb01nancing activities within the Consolidated
\nStatement of Cash Flows.
\nWith the exception of Contingent consideration payables of $2,222m (2021: $2,865m; 2020: $3,323m) which are held at fair value within Level 3
\nof the fair value hierarchy as de\ufb01ned in Note 12, all other \ufb01nancial liabilities are held at amortised cost with carrying value being a reasonable
\napproximation of fair value.
\nContingent consideration
\n2022
2021
2020
\n$m
$m
$m
\nAt 1\u00a0January
2,865
3,323
4,139
\nSettlements
(772)
(643)
(822)
\nDisposals
\n1
\n(121)
\u2013
\u2013
\nRevaluations
82
14
(272)
\nReclassification to Other payables
\u2013
(55)
\u2013
\nDiscount unwind (Note\u00a03)
168
226
278
\nAt 31\u00a0December
2,222
2,865
3,323
\n1
On 4 January 2022, AstraZeneca completed the sale of the global rights to
Tudorza
and
Duaklir
to Covis Pharma GmbH. The divestment resulted in the remaining outstanding Contingent
\nconsideration payable of $121m related to these assets being extinguished on the basis that AstraZeneca is no longer obliged to make such payments to Almirall.
\nContingent consideration arising from business combinations is fair valued using decision-tree analysis, with key inputs including the probability
\nof success, consideration of potential delays and the expected levels of future revenues.
\nRevaluations of Contingent consideration are recognised in Selling, general and administrative expense and include an increase of $182m in 2022
\n(2021: an increase of $42m; 2020: a decrease of $51m) based on revised milestone probabilities, and revenue and royalty forecasts, relating to the
\nacquisition of BMS\u2019s share of the Global Diabetes Alliance. Discount unwind on the liability is included within Finance expense (see Note 3).
\nThe discount rate used for the Contingent consideration balances range from 3% to 9%. The most signi\ufb01cant Contingent consideration balance is
\nthe Global Diabetes Alliance which is discounted at 8% and is reviewed against comparable benchmarks on a regular basis.
\nManagement has identi\ufb01ed that reasonably possible changes in certain key assumptions, including the likelihood of achieving successful trial results,
\nobtaining regulatory approval, the projected market share of the therapy area and expected pricing for launched products, may cause the calculated
\nfair value of the above contingent consideration to vary materially in future years.
\nThe contingent consideration balance relating to BMS\u2019s share of Global Diabetes Alliance of $2,124m (2021: $2,544m; 2020: $2,932m) would increase/
\ndecrease by $212m with an increase/decrease in sales of 10% as compared with the current estimates.
\nThe maximum development and sales milestones payable under outstanding Contingent consideration arrangements arising on business combinations
\nare as follows:
\nNature of
Maximum future milestones
\nAcquisitions
Year
contingent consideration
$m
\nSpirogen
2013
Milestones
180
\nAmplimmune
2013
Milestones
150
\nAlmirall
\n1
\n2014
Milestones and royalties
345
\n1
These contingent consideration liabilities have been designated as the hedge instrument in a net investment hedge of foreign currency risk arising on the Group\u2019s underlying US dollar net
\ninvestments held in non-US dollar denominated subsidiaries. Exchange differences on the retranslation of the contingent consideration liability are recognised in Other comprehensive
\nincome to the extent that the hedge is effective. Any ineffectiveness is taken to profit.
\nThe amount of royalties payable under the arrangements is inherently uncertain and dif\ufb01cult to predict, given the direct link to future sales and the
\nrange of outcomes. The maximum amount of royalties payable in each year is with reference to net sales.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfTradeAndOtherPayablesExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f29865": {
"value": "20 Trade and other payables \n2022
2021
2020
\n$m
$m
$m
\nCurrent liabilities
\nTrade payables
2,550
2,824
2,350
\nValue-added and payroll taxes and social security
468
463
390
\nRebates, chargebacks, returns and other revenue accruals
6,078
5,298
4,772
\nClinical trial accruals
1,417
1,047
699
\nOther accruals
5,551
5,649
3,905
\nCollaboration Revenue contract liabilities
12
12
12
\nVaccine contract liabilities
169
1,003
1,616
\nDeferred government grant income
1
67
253
\nContingent consideration
757
849
647
\nAcerta Pharma share purchase liability (Note\u00a026)
867
920
\u2013
\nOther payables
1,170
806
1,141
\nTotal
19,040
18,938
15,785
\nNon-current liabilities
\nAccruals
37
25
56
\nCollaboration Revenue contract liabilities
14
26
38
\nContingent consideration
1,465
2,016
2,676
\nAcerta Pharma share purchase liability (Note\u00a026)
779
1,538
2,297
\nOther payables
1,975
1,328
1,017
\nTotal
4,270
4,933
6,084
\nIncluded within Rebates, chargebacks, returns and other revenue accruals are contract liabilities of $87m (2021: $99m; 2020: $77m). The revenue
\nrecognised in the year for contract liabilities is $86m, comprising $74m relating to other revenue accruals and $12m Collaboration Revenue contract
\nliabilities. The major markets with Rebates, chargebacks, returns and other revenue accruals are the US where the liability at 31 December 2022
\namounted to $3,961m (2021: $3,172m; 2020: $3,126m), of which Rare Disease comprises $139m (2021: $127m), and China where the liability at
\n31 December 2022 amounted to $579m (2021: $814m; 2020: $740m).
\nTrade payables includes $67m (2021: $44m; 2020: $248m) due to suppliers that have signed up to a supply chain \ufb01nancing programme, under which
\nthe suppliers can elect on an invoice-by-invoice basis to receive a discounted early payment from the relationship bank rather than being paid in
\nline with the agreed payment terms. If the option is taken, the Group\u2019s liability is assigned by the supplier to be due to the relationship bank rather
\nthan the supplier. The value of the liability payable by the Group remains unchanged. The Group assesses the arrangement against indicators to
\nassess if debts which vendors have sold to the funder under the supplier \ufb01nancing scheme continue to meet the de\ufb01nition of trade payables or
\nshould be classi\ufb01ed as borrowings. At 31 December 2022, the payables met the criteria of Trade payables. The supply chain \ufb01nancing programme
\noperates in the US, UK, Sweden and Germany, and as at 31 December 2022, the programme had 420 suppliers enrolled across these countries.
\nVaccine contract liabilities relate to amounts received from customers, primarily government bodies, in advance of supply of product. Substantially
\nall of the Vaccine contract liabilities are expected to be recognised as revenue during the next \ufb01nancial year. The revenue recognised in the year
\nrelated to Vaccine contract liabilities held at the beginning of the year was $686m.
\nDeferred government grant income relates to government grants received or receivable but for which the related expenses have not been incurred.
\nIncluded within current Other payables are liabilities to Daiichi Sankyo totalling $100m (2021: $nil; 2020: $146m) resulting from the collaboration
\nagreement in relation to
Enhertu
entered into in March 2019 and $nil (2021: $324m; 2020: $324m) in relation to DS-1062 entered into in July 2020.
\nAdditionally, included within non-current Other payables are liabilities totalling $1,125m (2021: $100m; 2020: $100m) as a result of the
Enhertu
\ncollaboration agreement and $nil (2021: $nil; 2020: $323m) as a result of the DS-1062 collaboration agreement.
\nNotes to the Group Financial Statements
\ncontinued
\n170
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
\n\nIn November 2020,
Calquence
received marketing approval in the EU, which removed all remaining conditionality in respect of the Acerta Pharma
\nput and call options regarding the non-controlling interest; the option was exercised in April 2021 (see Note 26). In October 2019, an amendment
\nto the share purchase and option agreement (SPOA) with the sellers of Acerta Pharma (originally entered into in December 2015) came into effect,
\nchanging certain terms of the SPOA on both the timing and also reducing the maximum consideration that would be required to be made to acquire
\nthe remaining outstanding shares of Acerta Pharma if the options were exercised. The payments will be made in similar annual instalments in
\n2022 through to 2024, with the \ufb01rst payment of $920m made in 2022. The changes to the terms are re\ufb02ected in the assumptions used to calculate
\nthe amortised cost of the liability as at 31 December 2022 of $1,646m (2021: $2,458m; 2020: $2,297m). Interest arising from amortising the liability
\nis included within Finance Expense (see Note 3). The associated cash \ufb02ows are disclosed as \ufb01nancing activities within the Consolidated
\nStatement of Cash Flows.
\nWith the exception of Contingent consideration payables of $2,222m (2021: $2,865m; 2020: $3,323m) which are held at fair value within Level 3
\nof the fair value hierarchy as de\ufb01ned in Note 12, all other \ufb01nancial liabilities are held at amortised cost with carrying value being a reasonable
\napproximation of fair value.
\nContingent consideration
\n2022
2021
2020
\n$m
$m
$m
\nAt 1\u00a0January
2,865
3,323
4,139
\nSettlements
(772)
(643)
(822)
\nDisposals
\n1
\n(121)
\u2013
\u2013
\nRevaluations
82
14
(272)
\nReclassification to Other payables
\u2013
(55)
\u2013
\nDiscount unwind (Note\u00a03)
168
226
278
\nAt 31\u00a0December
2,222
2,865
3,323
\n1
On 4 January 2022, AstraZeneca completed the sale of the global rights to
Tudorza
and
Duaklir
to Covis Pharma GmbH. The divestment resulted in the remaining outstanding Contingent
\nconsideration payable of $121m related to these assets being extinguished on the basis that AstraZeneca is no longer obliged to make such payments to Almirall.
\nContingent consideration arising from business combinations is fair valued using decision-tree analysis, with key inputs including the probability
\nof success, consideration of potential delays and the expected levels of future revenues.
\nRevaluations of Contingent consideration are recognised in Selling, general and administrative expense and include an increase of $182m in 2022
\n(2021: an increase of $42m; 2020: a decrease of $51m) based on revised milestone probabilities, and revenue and royalty forecasts, relating to the
\nacquisition of BMS\u2019s share of the Global Diabetes Alliance. Discount unwind on the liability is included within Finance expense (see Note 3).
\nThe discount rate used for the Contingent consideration balances range from 3% to 9%. The most signi\ufb01cant Contingent consideration balance is
\nthe Global Diabetes Alliance which is discounted at 8% and is reviewed against comparable benchmarks on a regular basis.
\nManagement has identi\ufb01ed that reasonably possible changes in certain key assumptions, including the likelihood of achieving successful trial results,
\nobtaining regulatory approval, the projected market share of the therapy area and expected pricing for launched products, may cause the calculated
\nfair value of the above contingent consideration to vary materially in future years.
\nThe contingent consideration balance relating to BMS\u2019s share of Global Diabetes Alliance of $2,124m (2021: $2,544m; 2020: $2,932m) would increase/
\ndecrease by $212m with an increase/decrease in sales of 10% as compared with the current estimates.
\nThe maximum development and sales milestones payable under outstanding Contingent consideration arrangements arising on business combinations
\nare as follows:
\nNature of
Maximum future milestones
\nAcquisitions
Year
contingent consideration
$m
\nSpirogen
2013
Milestones
180
\nAmplimmune
2013
Milestones
150
\nAlmirall
\n1
\n2014
Milestones and royalties
345
\n1
These contingent consideration liabilities have been designated as the hedge instrument in a net investment hedge of foreign currency risk arising on the Group\u2019s underlying US dollar net
\ninvestments held in non-US dollar denominated subsidiaries. Exchange differences on the retranslation of the contingent consideration liability are recognised in Other comprehensive
\nincome to the extent that the hedge is effective. Any ineffectiveness is taken to profit.
\nThe amount of royalties payable under the arrangements is inherently uncertain and dif\ufb01cult to predict, given the direct link to future sales and the
\nrange of outcomes. The maximum amount of royalties payable in each year is with reference to net sales.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfAccruedExpensesAndOtherLiabilitiesExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f29866": {
"value": "20 Trade and other payables \n2022
2021
2020
\n$m
$m
$m
\nCurrent liabilities
\nTrade payables
2,550
2,824
2,350
\nValue-added and payroll taxes and social security
468
463
390
\nRebates, chargebacks, returns and other revenue accruals
6,078
5,298
4,772
\nClinical trial accruals
1,417
1,047
699
\nOther accruals
5,551
5,649
3,905
\nCollaboration Revenue contract liabilities
12
12
12
\nVaccine contract liabilities
169
1,003
1,616
\nDeferred government grant income
1
67
253
\nContingent consideration
757
849
647
\nAcerta Pharma share purchase liability (Note\u00a026)
867
920
\u2013
\nOther payables
1,170
806
1,141
\nTotal
19,040
18,938
15,785
\nNon-current liabilities
\nAccruals
37
25
56
\nCollaboration Revenue contract liabilities
14
26
38
\nContingent consideration
1,465
2,016
2,676
\nAcerta Pharma share purchase liability (Note\u00a026)
779
1,538
2,297
\nOther payables
1,975
1,328
1,017
\nTotal
4,270
4,933
6,084
\nIncluded within Rebates, chargebacks, returns and other revenue accruals are contract liabilities of $87m (2021: $99m; 2020: $77m). The revenue
\nrecognised in the year for contract liabilities is $86m, comprising $74m relating to other revenue accruals and $12m Collaboration Revenue contract
\nliabilities. The major markets with Rebates, chargebacks, returns and other revenue accruals are the US where the liability at 31 December 2022
\namounted to $3,961m (2021: $3,172m; 2020: $3,126m), of which Rare Disease comprises $139m (2021: $127m), and China where the liability at
\n31 December 2022 amounted to $579m (2021: $814m; 2020: $740m).
\nTrade payables includes $67m (2021: $44m; 2020: $248m) due to suppliers that have signed up to a supply chain \ufb01nancing programme, under which
\nthe suppliers can elect on an invoice-by-invoice basis to receive a discounted early payment from the relationship bank rather than being paid in
\nline with the agreed payment terms. If the option is taken, the Group\u2019s liability is assigned by the supplier to be due to the relationship bank rather
\nthan the supplier. The value of the liability payable by the Group remains unchanged. The Group assesses the arrangement against indicators to
\nassess if debts which vendors have sold to the funder under the supplier \ufb01nancing scheme continue to meet the de\ufb01nition of trade payables or
\nshould be classi\ufb01ed as borrowings. At 31 December 2022, the payables met the criteria of Trade payables. The supply chain \ufb01nancing programme
\noperates in the US, UK, Sweden and Germany, and as at 31 December 2022, the programme had 420 suppliers enrolled across these countries.
\nVaccine contract liabilities relate to amounts received from customers, primarily government bodies, in advance of supply of product. Substantially
\nall of the Vaccine contract liabilities are expected to be recognised as revenue during the next \ufb01nancial year. The revenue recognised in the year
\nrelated to Vaccine contract liabilities held at the beginning of the year was $686m.
\nDeferred government grant income relates to government grants received or receivable but for which the related expenses have not been incurred.
\nIncluded within current Other payables are liabilities to Daiichi Sankyo totalling $100m (2021: $nil; 2020: $146m) resulting from the collaboration
\nagreement in relation to
Enhertu
entered into in March 2019 and $nil (2021: $324m; 2020: $324m) in relation to DS-1062 entered into in July 2020.
\nAdditionally, included within non-current Other payables are liabilities totalling $1,125m (2021: $100m; 2020: $100m) as a result of the
Enhertu
\ncollaboration agreement and $nil (2021: $nil; 2020: $323m) as a result of the DS-1062 collaboration agreement.
\nNotes to the Group Financial Statements
\ncontinued
\n170
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
\n\nIn November 2020,
Calquence
received marketing approval in the EU, which removed all remaining conditionality in respect of the Acerta Pharma
\nput and call options regarding the non-controlling interest; the option was exercised in April 2021 (see Note 26). In October 2019, an amendment
\nto the share purchase and option agreement (SPOA) with the sellers of Acerta Pharma (originally entered into in December 2015) came into effect,
\nchanging certain terms of the SPOA on both the timing and also reducing the maximum consideration that would be required to be made to acquire
\nthe remaining outstanding shares of Acerta Pharma if the options were exercised. The payments will be made in similar annual instalments in
\n2022 through to 2024, with the \ufb01rst payment of $920m made in 2022. The changes to the terms are re\ufb02ected in the assumptions used to calculate
\nthe amortised cost of the liability as at 31 December 2022 of $1,646m (2021: $2,458m; 2020: $2,297m). Interest arising from amortising the liability
\nis included within Finance Expense (see Note 3). The associated cash \ufb02ows are disclosed as \ufb01nancing activities within the Consolidated
\nStatement of Cash Flows.
\nWith the exception of Contingent consideration payables of $2,222m (2021: $2,865m; 2020: $3,323m) which are held at fair value within Level 3
\nof the fair value hierarchy as de\ufb01ned in Note 12, all other \ufb01nancial liabilities are held at amortised cost with carrying value being a reasonable
\napproximation of fair value.
\nContingent consideration
\n2022
2021
2020
\n$m
$m
$m
\nAt 1\u00a0January
2,865
3,323
4,139
\nSettlements
(772)
(643)
(822)
\nDisposals
\n1
\n(121)
\u2013
\u2013
\nRevaluations
82
14
(272)
\nReclassification to Other payables
\u2013
(55)
\u2013
\nDiscount unwind (Note\u00a03)
168
226
278
\nAt 31\u00a0December
2,222
2,865
3,323
\n1
On 4 January 2022, AstraZeneca completed the sale of the global rights to
Tudorza
and
Duaklir
to Covis Pharma GmbH. The divestment resulted in the remaining outstanding Contingent
\nconsideration payable of $121m related to these assets being extinguished on the basis that AstraZeneca is no longer obliged to make such payments to Almirall.
\nContingent consideration arising from business combinations is fair valued using decision-tree analysis, with key inputs including the probability
\nof success, consideration of potential delays and the expected levels of future revenues.
\nRevaluations of Contingent consideration are recognised in Selling, general and administrative expense and include an increase of $182m in 2022
\n(2021: an increase of $42m; 2020: a decrease of $51m) based on revised milestone probabilities, and revenue and royalty forecasts, relating to the
\nacquisition of BMS\u2019s share of the Global Diabetes Alliance. Discount unwind on the liability is included within Finance expense (see Note 3).
\nThe discount rate used for the Contingent consideration balances range from 3% to 9%. The most signi\ufb01cant Contingent consideration balance is
\nthe Global Diabetes Alliance which is discounted at 8% and is reviewed against comparable benchmarks on a regular basis.
\nManagement has identi\ufb01ed that reasonably possible changes in certain key assumptions, including the likelihood of achieving successful trial results,
\nobtaining regulatory approval, the projected market share of the therapy area and expected pricing for launched products, may cause the calculated
\nfair value of the above contingent consideration to vary materially in future years.
\nThe contingent consideration balance relating to BMS\u2019s share of Global Diabetes Alliance of $2,124m (2021: $2,544m; 2020: $2,932m) would increase/
\ndecrease by $212m with an increase/decrease in sales of 10% as compared with the current estimates.
\nThe maximum development and sales milestones payable under outstanding Contingent consideration arrangements arising on business combinations
\nare as follows:
\nNature of
Maximum future milestones
\nAcquisitions
Year
contingent consideration
$m
\nSpirogen
2013
Milestones
180
\nAmplimmune
2013
Milestones
150
\nAlmirall
\n1
\n2014
Milestones and royalties
345
\n1
These contingent consideration liabilities have been designated as the hedge instrument in a net investment hedge of foreign currency risk arising on the Group\u2019s underlying US dollar net
\ninvestments held in non-US dollar denominated subsidiaries. Exchange differences on the retranslation of the contingent consideration liability are recognised in Other comprehensive
\nincome to the extent that the hedge is effective. Any ineffectiveness is taken to profit.
\nThe amount of royalties payable under the arrangements is inherently uncertain and dif\ufb01cult to predict, given the direct link to future sales and the
\nrange of outcomes. The maximum amount of royalties payable in each year is with reference to net sales.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfDeferredIncomeExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f29867": {
"value": "20 Trade and other payables \n2022
2021
2020
\n$m
$m
$m
\nCurrent liabilities
\nTrade payables
2,550
2,824
2,350
\nValue-added and payroll taxes and social security
468
463
390
\nRebates, chargebacks, returns and other revenue accruals
6,078
5,298
4,772
\nClinical trial accruals
1,417
1,047
699
\nOther accruals
5,551
5,649
3,905
\nCollaboration Revenue contract liabilities
12
12
12
\nVaccine contract liabilities
169
1,003
1,616
\nDeferred government grant income
1
67
253
\nContingent consideration
757
849
647
\nAcerta Pharma share purchase liability (Note\u00a026)
867
920
\u2013
\nOther payables
1,170
806
1,141
\nTotal
19,040
18,938
15,785
\nNon-current liabilities
\nAccruals
37
25
56
\nCollaboration Revenue contract liabilities
14
26
38
\nContingent consideration
1,465
2,016
2,676
\nAcerta Pharma share purchase liability (Note\u00a026)
779
1,538
2,297
\nOther payables
1,975
1,328
1,017
\nTotal
4,270
4,933
6,084
\nIncluded within Rebates, chargebacks, returns and other revenue accruals are contract liabilities of $87m (2021: $99m; 2020: $77m). The revenue
\nrecognised in the year for contract liabilities is $86m, comprising $74m relating to other revenue accruals and $12m Collaboration Revenue contract
\nliabilities. The major markets with Rebates, chargebacks, returns and other revenue accruals are the US where the liability at 31 December 2022
\namounted to $3,961m (2021: $3,172m; 2020: $3,126m), of which Rare Disease comprises $139m (2021: $127m), and China where the liability at
\n31 December 2022 amounted to $579m (2021: $814m; 2020: $740m).
\nTrade payables includes $67m (2021: $44m; 2020: $248m) due to suppliers that have signed up to a supply chain \ufb01nancing programme, under which
\nthe suppliers can elect on an invoice-by-invoice basis to receive a discounted early payment from the relationship bank rather than being paid in
\nline with the agreed payment terms. If the option is taken, the Group\u2019s liability is assigned by the supplier to be due to the relationship bank rather
\nthan the supplier. The value of the liability payable by the Group remains unchanged. The Group assesses the arrangement against indicators to
\nassess if debts which vendors have sold to the funder under the supplier \ufb01nancing scheme continue to meet the de\ufb01nition of trade payables or
\nshould be classi\ufb01ed as borrowings. At 31 December 2022, the payables met the criteria of Trade payables. The supply chain \ufb01nancing programme
\noperates in the US, UK, Sweden and Germany, and as at 31 December 2022, the programme had 420 suppliers enrolled across these countries.
\nVaccine contract liabilities relate to amounts received from customers, primarily government bodies, in advance of supply of product. Substantially
\nall of the Vaccine contract liabilities are expected to be recognised as revenue during the next \ufb01nancial year. The revenue recognised in the year
\nrelated to Vaccine contract liabilities held at the beginning of the year was $686m.
\nDeferred government grant income relates to government grants received or receivable but for which the related expenses have not been incurred.
\nIncluded within current Other payables are liabilities to Daiichi Sankyo totalling $100m (2021: $nil; 2020: $146m) resulting from the collaboration
\nagreement in relation to
Enhertu
entered into in March 2019 and $nil (2021: $324m; 2020: $324m) in relation to DS-1062 entered into in July 2020.
\nAdditionally, included within non-current Other payables are liabilities totalling $1,125m (2021: $100m; 2020: $100m) as a result of the
Enhertu
\ncollaboration agreement and $nil (2021: $nil; 2020: $323m) as a result of the DS-1062 collaboration agreement.
\nNotes to the Group Financial Statements
\ncontinued
\n170
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
\n\nIn November 2020,
Calquence
received marketing approval in the EU, which removed all remaining conditionality in respect of the Acerta Pharma
\nput and call options regarding the non-controlling interest; the option was exercised in April 2021 (see Note 26). In October 2019, an amendment
\nto the share purchase and option agreement (SPOA) with the sellers of Acerta Pharma (originally entered into in December 2015) came into effect,
\nchanging certain terms of the SPOA on both the timing and also reducing the maximum consideration that would be required to be made to acquire
\nthe remaining outstanding shares of Acerta Pharma if the options were exercised. The payments will be made in similar annual instalments in
\n2022 through to 2024, with the \ufb01rst payment of $920m made in 2022. The changes to the terms are re\ufb02ected in the assumptions used to calculate
\nthe amortised cost of the liability as at 31 December 2022 of $1,646m (2021: $2,458m; 2020: $2,297m). Interest arising from amortising the liability
\nis included within Finance Expense (see Note 3). The associated cash \ufb02ows are disclosed as \ufb01nancing activities within the Consolidated
\nStatement of Cash Flows.
\nWith the exception of Contingent consideration payables of $2,222m (2021: $2,865m; 2020: $3,323m) which are held at fair value within Level 3
\nof the fair value hierarchy as de\ufb01ned in Note 12, all other \ufb01nancial liabilities are held at amortised cost with carrying value being a reasonable
\napproximation of fair value.
\nContingent consideration
\n2022
2021
2020
\n$m
$m
$m
\nAt 1\u00a0January
2,865
3,323
4,139
\nSettlements
(772)
(643)
(822)
\nDisposals
\n1
\n(121)
\u2013
\u2013
\nRevaluations
82
14
(272)
\nReclassification to Other payables
\u2013
(55)
\u2013
\nDiscount unwind (Note\u00a03)
168
226
278
\nAt 31\u00a0December
2,222
2,865
3,323
\n1
On 4 January 2022, AstraZeneca completed the sale of the global rights to
Tudorza
and
Duaklir
to Covis Pharma GmbH. The divestment resulted in the remaining outstanding Contingent
\nconsideration payable of $121m related to these assets being extinguished on the basis that AstraZeneca is no longer obliged to make such payments to Almirall.
\nContingent consideration arising from business combinations is fair valued using decision-tree analysis, with key inputs including the probability
\nof success, consideration of potential delays and the expected levels of future revenues.
\nRevaluations of Contingent consideration are recognised in Selling, general and administrative expense and include an increase of $182m in 2022
\n(2021: an increase of $42m; 2020: a decrease of $51m) based on revised milestone probabilities, and revenue and royalty forecasts, relating to the
\nacquisition of BMS\u2019s share of the Global Diabetes Alliance. Discount unwind on the liability is included within Finance expense (see Note 3).
\nThe discount rate used for the Contingent consideration balances range from 3% to 9%. The most signi\ufb01cant Contingent consideration balance is
\nthe Global Diabetes Alliance which is discounted at 8% and is reviewed against comparable benchmarks on a regular basis.
\nManagement has identi\ufb01ed that reasonably possible changes in certain key assumptions, including the likelihood of achieving successful trial results,
\nobtaining regulatory approval, the projected market share of the therapy area and expected pricing for launched products, may cause the calculated
\nfair value of the above contingent consideration to vary materially in future years.
\nThe contingent consideration balance relating to BMS\u2019s share of Global Diabetes Alliance of $2,124m (2021: $2,544m; 2020: $2,932m) would increase/
\ndecrease by $212m with an increase/decrease in sales of 10% as compared with the current estimates.
\nThe maximum development and sales milestones payable under outstanding Contingent consideration arrangements arising on business combinations
\nare as follows:
\nNature of
Maximum future milestones
\nAcquisitions
Year
contingent consideration
$m
\nSpirogen
2013
Milestones
180
\nAmplimmune
2013
Milestones
150
\nAlmirall
\n1
\n2014
Milestones and royalties
345
\n1
These contingent consideration liabilities have been designated as the hedge instrument in a net investment hedge of foreign currency risk arising on the Group\u2019s underlying US dollar net
\ninvestments held in non-US dollar denominated subsidiaries. Exchange differences on the retranslation of the contingent consideration liability are recognised in Other comprehensive
\nincome to the extent that the hedge is effective. Any ineffectiveness is taken to profit.
\nThe amount of royalties payable under the arrangements is inherently uncertain and dif\ufb01cult to predict, given the direct link to future sales and the
\nrange of outcomes. The maximum amount of royalties payable in each year is with reference to net sales.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfOtherCurrentLiabilitiesExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f29868": {
"value": "20 Trade and other payables \n2022
2021
2020
\n$m
$m
$m
\nCurrent liabilities
\nTrade payables
2,550
2,824
2,350
\nValue-added and payroll taxes and social security
468
463
390
\nRebates, chargebacks, returns and other revenue accruals
6,078
5,298
4,772
\nClinical trial accruals
1,417
1,047
699
\nOther accruals
5,551
5,649
3,905
\nCollaboration Revenue contract liabilities
12
12
12
\nVaccine contract liabilities
169
1,003
1,616
\nDeferred government grant income
1
67
253
\nContingent consideration
757
849
647
\nAcerta Pharma share purchase liability (Note\u00a026)
867
920
\u2013
\nOther payables
1,170
806
1,141
\nTotal
19,040
18,938
15,785
\nNon-current liabilities
\nAccruals
37
25
56
\nCollaboration Revenue contract liabilities
14
26
38
\nContingent consideration
1,465
2,016
2,676
\nAcerta Pharma share purchase liability (Note\u00a026)
779
1,538
2,297
\nOther payables
1,975
1,328
1,017
\nTotal
4,270
4,933
6,084
\nIncluded within Rebates, chargebacks, returns and other revenue accruals are contract liabilities of $87m (2021: $99m; 2020: $77m). The revenue
\nrecognised in the year for contract liabilities is $86m, comprising $74m relating to other revenue accruals and $12m Collaboration Revenue contract
\nliabilities. The major markets with Rebates, chargebacks, returns and other revenue accruals are the US where the liability at 31 December 2022
\namounted to $3,961m (2021: $3,172m; 2020: $3,126m), of which Rare Disease comprises $139m (2021: $127m), and China where the liability at
\n31 December 2022 amounted to $579m (2021: $814m; 2020: $740m).
\nTrade payables includes $67m (2021: $44m; 2020: $248m) due to suppliers that have signed up to a supply chain \ufb01nancing programme, under which
\nthe suppliers can elect on an invoice-by-invoice basis to receive a discounted early payment from the relationship bank rather than being paid in
\nline with the agreed payment terms. If the option is taken, the Group\u2019s liability is assigned by the supplier to be due to the relationship bank rather
\nthan the supplier. The value of the liability payable by the Group remains unchanged. The Group assesses the arrangement against indicators to
\nassess if debts which vendors have sold to the funder under the supplier \ufb01nancing scheme continue to meet the de\ufb01nition of trade payables or
\nshould be classi\ufb01ed as borrowings. At 31 December 2022, the payables met the criteria of Trade payables. The supply chain \ufb01nancing programme
\noperates in the US, UK, Sweden and Germany, and as at 31 December 2022, the programme had 420 suppliers enrolled across these countries.
\nVaccine contract liabilities relate to amounts received from customers, primarily government bodies, in advance of supply of product. Substantially
\nall of the Vaccine contract liabilities are expected to be recognised as revenue during the next \ufb01nancial year. The revenue recognised in the year
\nrelated to Vaccine contract liabilities held at the beginning of the year was $686m.
\nDeferred government grant income relates to government grants received or receivable but for which the related expenses have not been incurred.
\nIncluded within current Other payables are liabilities to Daiichi Sankyo totalling $100m (2021: $nil; 2020: $146m) resulting from the collaboration
\nagreement in relation to
Enhertu
entered into in March 2019 and $nil (2021: $324m; 2020: $324m) in relation to DS-1062 entered into in July 2020.
\nAdditionally, included within non-current Other payables are liabilities totalling $1,125m (2021: $100m; 2020: $100m) as a result of the
Enhertu
\ncollaboration agreement and $nil (2021: $nil; 2020: $323m) as a result of the DS-1062 collaboration agreement.
\nNotes to the Group Financial Statements
\ncontinued
\n170
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
\n\nIn November 2020,
Calquence
received marketing approval in the EU, which removed all remaining conditionality in respect of the Acerta Pharma
\nput and call options regarding the non-controlling interest; the option was exercised in April 2021 (see Note 26). In October 2019, an amendment
\nto the share purchase and option agreement (SPOA) with the sellers of Acerta Pharma (originally entered into in December 2015) came into effect,
\nchanging certain terms of the SPOA on both the timing and also reducing the maximum consideration that would be required to be made to acquire
\nthe remaining outstanding shares of Acerta Pharma if the options were exercised. The payments will be made in similar annual instalments in
\n2022 through to 2024, with the \ufb01rst payment of $920m made in 2022. The changes to the terms are re\ufb02ected in the assumptions used to calculate
\nthe amortised cost of the liability as at 31 December 2022 of $1,646m (2021: $2,458m; 2020: $2,297m). Interest arising from amortising the liability
\nis included within Finance Expense (see Note 3). The associated cash \ufb02ows are disclosed as \ufb01nancing activities within the Consolidated
\nStatement of Cash Flows.
\nWith the exception of Contingent consideration payables of $2,222m (2021: $2,865m; 2020: $3,323m) which are held at fair value within Level 3
\nof the fair value hierarchy as de\ufb01ned in Note 12, all other \ufb01nancial liabilities are held at amortised cost with carrying value being a reasonable
\napproximation of fair value.
\nContingent consideration
\n2022
2021
2020
\n$m
$m
$m
\nAt 1\u00a0January
2,865
3,323
4,139
\nSettlements
(772)
(643)
(822)
\nDisposals
\n1
\n(121)
\u2013
\u2013
\nRevaluations
82
14
(272)
\nReclassification to Other payables
\u2013
(55)
\u2013
\nDiscount unwind (Note\u00a03)
168
226
278
\nAt 31\u00a0December
2,222
2,865
3,323
\n1
On 4 January 2022, AstraZeneca completed the sale of the global rights to
Tudorza
and
Duaklir
to Covis Pharma GmbH. The divestment resulted in the remaining outstanding Contingent
\nconsideration payable of $121m related to these assets being extinguished on the basis that AstraZeneca is no longer obliged to make such payments to Almirall.
\nContingent consideration arising from business combinations is fair valued using decision-tree analysis, with key inputs including the probability
\nof success, consideration of potential delays and the expected levels of future revenues.
\nRevaluations of Contingent consideration are recognised in Selling, general and administrative expense and include an increase of $182m in 2022
\n(2021: an increase of $42m; 2020: a decrease of $51m) based on revised milestone probabilities, and revenue and royalty forecasts, relating to the
\nacquisition of BMS\u2019s share of the Global Diabetes Alliance. Discount unwind on the liability is included within Finance expense (see Note 3).
\nThe discount rate used for the Contingent consideration balances range from 3% to 9%. The most signi\ufb01cant Contingent consideration balance is
\nthe Global Diabetes Alliance which is discounted at 8% and is reviewed against comparable benchmarks on a regular basis.
\nManagement has identi\ufb01ed that reasonably possible changes in certain key assumptions, including the likelihood of achieving successful trial results,
\nobtaining regulatory approval, the projected market share of the therapy area and expected pricing for launched products, may cause the calculated
\nfair value of the above contingent consideration to vary materially in future years.
\nThe contingent consideration balance relating to BMS\u2019s share of Global Diabetes Alliance of $2,124m (2021: $2,544m; 2020: $2,932m) would increase/
\ndecrease by $212m with an increase/decrease in sales of 10% as compared with the current estimates.
\nThe maximum development and sales milestones payable under outstanding Contingent consideration arrangements arising on business combinations
\nare as follows:
\nNature of
Maximum future milestones
\nAcquisitions
Year
contingent consideration
$m
\nSpirogen
2013
Milestones
180
\nAmplimmune
2013
Milestones
150
\nAlmirall
\n1
\n2014
Milestones and royalties
345
\n1
These contingent consideration liabilities have been designated as the hedge instrument in a net investment hedge of foreign currency risk arising on the Group\u2019s underlying US dollar net
\ninvestments held in non-US dollar denominated subsidiaries. Exchange differences on the retranslation of the contingent consideration liability are recognised in Other comprehensive
\nincome to the extent that the hedge is effective. Any ineffectiveness is taken to profit.
\nThe amount of royalties payable under the arrangements is inherently uncertain and dif\ufb01cult to predict, given the direct link to future sales and the
\nrange of outcomes. The maximum amount of royalties payable in each year is with reference to net sales.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfOtherNoncurrentLiabilitiesExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f30127": {
"value": "21 Provisions \nEmployee
Other
\nSeverance
Environmental
benefits
Legal
provisions
Total
\n$m
$m
$m
$m
$m
$m
\nAt 1\u00a0January 2020
241
96
130
642
455
1,564
\nTransfers in
\u2013
\u2013
\u2013
\u2013
258
258
\nCharge for year
116
34
15
16
95
276
\nCash paid
(62)
(30)
(48)
(295)
(56)
(491)
\nReversals
(89)
\u2013
(2)
(14)
(27)
(132)
\nExchange and other movements
8
\u2013
33
(1)
45
85
\nAt 31\u00a0December 2020
214
100
128
348
770
1,560
\nAdditions through business combinations (Note\u00a027)
\u2013
\u2013
41
73
27
141
\nCharge for year
238
23
46
109
456
872
\nCash paid
(172)
(32)
(49)
(285)
(84)
(622)
\nReversals
(62)
\u2013
\u2013
(5)
(175)
(242)
\nExchange and other movements
(6)
(1)
29
(1)
(6)
15
\nAt 31\u00a0December 2021
212
90
195
239
988
1,724
\nCharge for year
227
61
1
830
365
1,484
\nCash paid
(223)
(19)
(41)
(814)
(185)
(1,282)
\nReversals
(43)
\u2013
(27)
(94)
(98)
(262)
\nExchange and other movements
(8)
(1)
15
\u2013
(52)
(46)
\nAt 31\u00a0December 2022
165
131
143
161
1,018
1,618
\n2022
2021
2020
\n$m
$m
$m
\nDue within one year
722
768
976
\nDue after more than one year
896
956
584
\nTotal
1,618
1,724
1,560
\nProvisions are often subject to substantial uncertainties with regard to the timing and \ufb01nal amounts of any payments. As such, once established,
\nthese amounts remain in Provisions until settlement is reached and uncertainty resolved, with no transfer to Trade and other payables prior to payment.
\nSeverance provisions arise predominantly in connection with global restructuring initiatives, including the Post Alexion Acquisition Group Review,
\nwhich involve rationalisation of the global supply chain, the sales and marketing organisation, IT and business support infrastructure, and R&D.
\nIn conjunction with the acquisition of Alexion in 2021, the enlarged Group initiated a comprehensive Post Alexion Acquisition Group Review, aimed
\nat integrating systems, structure and processes, optimising the global footprint and prioritising resource allocations and investments. The Group
\nhas also continued to progress other legacy restructuring programmes.
\nEmployee costs in connection with the initiatives are recognised in severance provisions when a detailed formal plan has been communicated to
\nthose employees affected. Final severance costs are often subject to the completion of the requisite consultations on the areas impacted, with the
\nmajority of the cost expected to be paid within one year. AstraZeneca endeavours to support employees affected by restructuring initiatives to
\nseek alternative roles within the organisation. Where the employee is successful, any severance provisions will be released.
\nDetails of the Environmental provisions totalling $131m (2021: $90m; 2020: $100m) and ongoing matters are provided in Note 30. The legal issues are
\noften subject to substantial uncertainties with regard to the timing and \ufb01nal amounts of any payments. A signi\ufb01cant proportion of the total legal
\nprovision relates to matters settled, but not paid, in previous periods. These uncertainties can also cause reversal in previously established provisions
\nonce \ufb01nal settlement is reached.
\nThe majority of Employee bene\ufb01t provisions relate to Executive Deferred Compensation Plans, which include uncertainty over the ultimate timing
\nand amount of payment to be made to the executives.
\nOther provisions comprise amounts relating to speci\ufb01c contractual or constructive obligations and disputes. Included within Other provisions are
\namounts associated with long-standing product liability settlements that arose prior to the merger of Astra and Zeneca, which given the nature of
\nthe provision, the amounts are expected to be settled over many years; the \ufb01nal settlement values and timings are uncertain. Also included in Other
\nprovisions is an amount of $165m (2021: $185m; 2020: $258m), in relation to third-party liability and other risks (including incurred but not yet reported
\nclaims); the claims are considered to be uncertain as to timing and amount. In 2022, charges to Other provisions included $301m in relation to
\ntermination fees and onerous contracts with contract manufacturing organisations and are expected to be settled within the next 12 months. Charges
\nto Other provisions in 2022 also included $12m (2021: $243m) in relation to the Post Alexion Acquisition Group Review restructuring programme, which
\nhas a closing provision of $143m (2021: $243m), including $95m (2021: $158m) held in non-current provisions expected to be settled over time by 2025.
\nNo provision has been released or applied for any purpose other than that for which it was established.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfProvisionsExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f30128": {
"value": "21 Provisions \nEmployee
Other
\nSeverance
Environmental
benefits
Legal
provisions
Total
\n$m
$m
$m
$m
$m
$m
\nAt 1\u00a0January 2020
241
96
130
642
455
1,564
\nTransfers in
\u2013
\u2013
\u2013
\u2013
258
258
\nCharge for year
116
34
15
16
95
276
\nCash paid
(62)
(30)
(48)
(295)
(56)
(491)
\nReversals
(89)
\u2013
(2)
(14)
(27)
(132)
\nExchange and other movements
8
\u2013
33
(1)
45
85
\nAt 31\u00a0December 2020
214
100
128
348
770
1,560
\nAdditions through business combinations (Note\u00a027)
\u2013
\u2013
41
73
27
141
\nCharge for year
238
23
46
109
456
872
\nCash paid
(172)
(32)
(49)
(285)
(84)
(622)
\nReversals
(62)
\u2013
\u2013
(5)
(175)
(242)
\nExchange and other movements
(6)
(1)
29
(1)
(6)
15
\nAt 31\u00a0December 2021
212
90
195
239
988
1,724
\nCharge for year
227
61
1
830
365
1,484
\nCash paid
(223)
(19)
(41)
(814)
(185)
(1,282)
\nReversals
(43)
\u2013
(27)
(94)
(98)
(262)
\nExchange and other movements
(8)
(1)
15
\u2013
(52)
(46)
\nAt 31\u00a0December 2022
165
131
143
161
1,018
1,618
\n2022
2021
2020
\n$m
$m
$m
\nDue within one year
722
768
976
\nDue after more than one year
896
956
584
\nTotal
1,618
1,724
1,560
\nProvisions are often subject to substantial uncertainties with regard to the timing and \ufb01nal amounts of any payments. As such, once established,
\nthese amounts remain in Provisions until settlement is reached and uncertainty resolved, with no transfer to Trade and other payables prior to payment.
\nSeverance provisions arise predominantly in connection with global restructuring initiatives, including the Post Alexion Acquisition Group Review,
\nwhich involve rationalisation of the global supply chain, the sales and marketing organisation, IT and business support infrastructure, and R&D.
\nIn conjunction with the acquisition of Alexion in 2021, the enlarged Group initiated a comprehensive Post Alexion Acquisition Group Review, aimed
\nat integrating systems, structure and processes, optimising the global footprint and prioritising resource allocations and investments. The Group
\nhas also continued to progress other legacy restructuring programmes.
\nEmployee costs in connection with the initiatives are recognised in severance provisions when a detailed formal plan has been communicated to
\nthose employees affected. Final severance costs are often subject to the completion of the requisite consultations on the areas impacted, with the
\nmajority of the cost expected to be paid within one year. AstraZeneca endeavours to support employees affected by restructuring initiatives to
\nseek alternative roles within the organisation. Where the employee is successful, any severance provisions will be released.
\nDetails of the Environmental provisions totalling $131m (2021: $90m; 2020: $100m) and ongoing matters are provided in Note 30. The legal issues are
\noften subject to substantial uncertainties with regard to the timing and \ufb01nal amounts of any payments. A signi\ufb01cant proportion of the total legal
\nprovision relates to matters settled, but not paid, in previous periods. These uncertainties can also cause reversal in previously established provisions
\nonce \ufb01nal settlement is reached.
\nThe majority of Employee bene\ufb01t provisions relate to Executive Deferred Compensation Plans, which include uncertainty over the ultimate timing
\nand amount of payment to be made to the executives.
\nOther provisions comprise amounts relating to speci\ufb01c contractual or constructive obligations and disputes. Included within Other provisions are
\namounts associated with long-standing product liability settlements that arose prior to the merger of Astra and Zeneca, which given the nature of
\nthe provision, the amounts are expected to be settled over many years; the \ufb01nal settlement values and timings are uncertain. Also included in Other
\nprovisions is an amount of $165m (2021: $185m; 2020: $258m), in relation to third-party liability and other risks (including incurred but not yet reported
\nclaims); the claims are considered to be uncertain as to timing and amount. In 2022, charges to Other provisions included $301m in relation to
\ntermination fees and onerous contracts with contract manufacturing organisations and are expected to be settled within the next 12 months. Charges
\nto Other provisions in 2022 also included $12m (2021: $243m) in relation to the Post Alexion Acquisition Group Review restructuring programme, which
\nhas a closing provision of $143m (2021: $243m), including $95m (2021: $158m) held in non-current provisions expected to be settled over time by 2025.
\nNo provision has been released or applied for any purpose other than that for which it was established.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfOtherProvisionsContingentLiabilitiesAndContingentAssetsExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f30331": {
"value": "22 Post-retirement and other de\ufb01ned bene\ufb01t schemes \nBackground
\nThis section predominantly covers de\ufb01ned bene\ufb01t arrangements like post retirement pension and medical plans which make up the vast bulk of the
\nGroup\u2019s liabilities. However, it also incorporates other bene\ufb01ts which fall under IAS 19 rules and which require an actuarial valuation, including but
\nnot limited to: Lump Sum plans, Long Service Awards and de\ufb01ned contribution pension plans which have some de\ufb01ned bene\ufb01t characteristics
\n(e.g. a minimum guaranteed level of bene\ufb01t). In total, over 50 plans in 28 countries are covered.
\nThe Group and most of its subsidiaries offer retirement plans which cover the majority of employees. The Group\u2019s policy is to provide de\ufb01ned
\ncontribution (DC) orientated pension provision to its employees unless otherwise compelled by local regulation. As a result, many of these retirement
\nplans are DC, where the Group contribution and resulting charge is \ufb01xed at a set level or is a set percentage of employees\u2019 pay. However, several
\nplans, mainly in the UK, the US and Sweden, are de\ufb01ned bene\ufb01t (DB), where bene\ufb01ts are based on employees\u2019 length of service and linked to their
\nsalary. The major DB plans are largely legacy arrangements as they have been closed to new entrants since 2000, apart from the collectively bargained
\nSwedish plan (which is still open to employees born before 1979). During 2010, following consultation with its UK employees\u2019 representatives, the
\nGroup introduced a freeze on pensionable pay at 30 June 2010 levels for DB members of the UK Pension Fund. The number of active members in
\nthe Fund continues to decline and is now 452 employees. In November 2017, the Group closed the quali\ufb01ed and non-quali\ufb01ed US DB pension plans
\nto future accrual (and removed any salary link) from 31 December 2017.
\nThe major DB plans are funded through separate, \ufb01duciary-administered assets. The cash funding of the plans, which may from time to time involve
\nspecial Group payments, is designed, in consultation with independent quali\ufb01ed actuaries, to ensure that the assets are suf\ufb01cient to meet future
\nobligations as and when they fall due. The funding level is monitored by the Group and local \ufb01duciaries, who take into account the strength of the
\nGroup\u2019s covenant, local regulation, cash \ufb02ows, and the solvency and maturity of the pension scheme.
\nWith a general improvement in funding solvency over the course of 2022, three of the Group\u2019s de\ufb01ned bene\ufb01t plans had surplus positions, with three
\nother plans close to full funding and therefore to surplus. As a result, the Group reviewed its policy on surplus recognition, paying particular attention
\nto the requirements of IFRIC 14 \u2018IAS 19 \u2013 The Limit on a De\ufb01ned Bene\ufb01t Asset, Minimum Funding Requirements and their Interaction\u2019. The Group
\nconcluded that in \ufb01ve instances, the surplus would be repayable, while a small surplus in Sweden was derecognised.
\nFinancing Principles and Funding Framework
\nEighty eight per cent of the Group\u2019s total DB obligations (or 56% of net obligations) at 31 December 2022 are in schemes within the UK, the US and
\nSweden. In these countries, the pension obligations are funded in line with the Group\u2019s \ufb01nancing principles, as disclosed in prior years. There were
\nno changes to these principles during 2022.
\nThe Group has developed a long-term funding framework to implement these principles. This framework targets either full funding on a low-risk
\nfunding measure, or buyout with an external insurer as the pension funds mature, with affordable long-term de-risking of investment strategy
\nalong the way. Unless local regulation dictates otherwise, this framework determines the cash contributions payable.
\nUK
\nThe UK Pension Fund represents approximately 59% of the Group\u2019s DB obligations at 31 December 2022. The \ufb01nancing principles are modi\ufb01ed in
\nlight of the UK regulatory requirements (summarised below) and resulting discussions with the Trustee.
\nRole of Trustee and Regulation
\nThe UK Pension Fund is governed and administered by a corporate Trustee which is legally separate from the Group. The Trustee Directors are
\ncomprised of representatives appointed by both the employer and employees and include an independent professional Trustee Director. The Trustee
\nDirectors are required by law to act in the interest of all relevant bene\ufb01ciaries and are responsible in particular for investment strategy and the
\nday-to-day administration of the bene\ufb01ts. They are also responsible for jointly agreeing with the employer the level of contributions due to the UK
\nPension Fund.
\nThe UK pensions market is regulated by The Pensions Regulator whose statutory objectives and regulatory powers are described on its website,
\nwww.thepensionsregulator.gov.uk.
\nThe Pension Scheme Act 2021 became effective in the UK from 1 October 2021. A section of this Act places additional legal requirements on
\ncompanies who sponsor UK de\ufb01ned bene\ufb01t pension schemes, to monitor and assess corporate activity, with a focus on the potential impact of
\nsuch activity on the ongoing security of these bene\ufb01ts. The Group has developed a framework to ensure it meets its responsibilities under the Act.
\nThere have been two UK High Court Rulings relating to Guaranteed Minimum Pensions (GMP) equalisation in 2018 and 2020. Following the publication
\nof guidance around implementation in 2021, the Trustee, with input from the Group, has made signi\ufb01cant progress in equalising bene\ufb01ts. Further
\ndetails are set out later on in this Note. An estimate of the impact of these changes has already been recognised in 2018 and 2020, and actual
\nexperience is in line with the estimates previously recognised.
\nFunding requirements
\nUK legislation requires that DB pension schemes are funded prudently. On a triennial basis, the Trustee and the Group must agree on a set of
\nassumptions used to value the liabilities as a part of an actuarial valuation. Together with the asset valuation, this facilitates the calculation of a
\nfunding level and of the contributions required (if any) to ensure the UK Pension Fund is fully funded over an appropriate time period and on a
\nsuitably prudent measure. The technical provisions assumptions used to value the liabilities for the triennial actuarial valuation are usually set more
\nprudently than the assumptions used to prepare an accounting valuation of the liabilities, which are set under IAS 19 rules to be a \u2018best estimate\u2019.
\n173
AstraZeneca Annual Report & Form 20-F Information 2022
Notes to the Group Financial Statements
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
\n\n\n22 Post-retirement and other de\ufb01ned bene\ufb01t schemes
continued
\nThe last full actuarial valuation of the UK Pension Fund was carried out by a quali\ufb01ed actuary as at 31 March 2019. It was \ufb01nalised in June 2020
\nand in early 2021, the Pensions Regulator acknowledged the outcome and no issues were raised. The funding assumptions used in this actuarial
\nvaluation were set out in the Group\u2019s 2020 report. The actuarial valuation as at 31 March 2022 is currently in progress, with a likely timescale for
\ncompletion during the second quarter of 2023. However, the value of the Fund\u2019s obligations disclosed at 31 December 2022 incorporates data
\nfrom this latest actuarial valuation including updated membership information and demographic assumptions.
\nAspects of the triennial actuarial valuation are governed by a long-term funding agreement, effective since October 2016 and which sets out a
\npath to full funding on a low-risk measure. Under this agreement, if a de\ufb01cit exists, the Group is required to provide security. A key element of this
\nsecurity is to grant a charge in favour of the Trustee over land and buildings on the Cambridge Biomedical Campus, required to be effective within
\nthree months of the practical completion of the site, or by 30 June 2023 (whichever is earlier). An extension was granted by the Trustee to this
\nbackstop date in 2022. This charge is not currently in force. When effective, the charge would only crystallise in the event of the Group\u2019s insolvency.
\nThis charge will provide long-term security in respect of future UK Pension Fund contributions and is capped at \u00a3350m.
\nIn relation to de\ufb01cit recovery contributions, a lump sum contribution of \u00a339m was made in March 2022, with a further \u00a339m contribution due before
\n31 March 2023. In addition, a contribution of \u00a330m was also made in March 2022, which was a \ufb01nal instalment of a separate deferred contribution
\nexplained below.
\nDuring 2017, the Group provided a letter of credit to the Trustee, to underwrite the deferral of an additional de\ufb01cit recovery contribution of approximately
\n\u00a3126m which was due in 2017. This contribution was paid in \ufb01ve instalments (with interest) from March 2018 to March 2022. The letter of credit
\nunderwriting these payments reduced in value as each annual payment was made and given all payments have been made, the letter of credit has
\nnow expired.
\nSubstantial progress was made over 2022 in equalising GMP for members of the UK Pension Fund. The method of equalisation adopted was to
\nconvert GMP to simplify the structure and administration of bene\ufb01ts. As at 31 December 2022, a majority of pensioner and dependent members
\nhave had their bene\ufb01ts equalised. Further work will be completed over 2023 to address equalisation for the remaining affected members. As part of
\nthe GMP equalisation project, a Pension Increase Exchange (\u201cPiE\u201d) option has also been provisionally made available to the majority of pensioner
\nmembers, at the Group\u2019s discretion. This option provides the member with a choice to opt for a higher pension right away, but with no (or fewer)
\nin\ufb02ation linked increases in the future. The PIE option element of the project is currently ongoing and if it proceeds, will not conclude until 2023.
\nUnder the governing documentation of the UK Pension Fund, any future surplus in the Fund would be returnable to the Group by refund assuming
\ngradual settlement of the liabilities over the lifetime of the Fund. In particular, the Trustee has no unilateral right to wind up the Fund without Company
\nconsent nor does it have the power to unilaterally use surplus to augment bene\ufb01ts prior to wind-up. As such, there are no adjustments required in
\nrespect of IFRIC 14 \u2018IAS 19 \u2013 The Limit on a De\ufb01ned Bene\ufb01t Asset, Minimum Funding Requirements and their Interaction\u2019.
\nOn current bases, it is expected that ongoing contributions (excluding those in respect of past service de\ufb01cit contributions) during the year ending
\n31 December 2023 for the UK scheme will be approximately $20m.
\nLiquidity and liability hedging
\nSigni\ufb01cant increases in UK Government bond yields over September and October created liquidity challenges for many UK de\ufb01ned bene\ufb01t schemes
\nwith liability hedging portfolios, who needed to post collateral quickly to meet margin calls on derivative holdings. The Group\u2019s UK Pension Fund
\nwas not adversely impacted over this period due to a combination of Group and Trustee oversight and a functioning risk management policy. The
\nUK Pension Fund did not require any \ufb01nancial support from the Group, was self-suf\ufb01cient and operated normally throughout this period. The Fund
\nmaintained its investment strategy and funding solvency materially improved over the year. Furthermore, with the UK Pension Fund ahead of its long
\nterm plan, this improvement allowed the Trustee, with support from the Group to de-risk investment strategy ahead of plan, reducing long term
\ninvestment risk both to the Group and members in an affordable manner.
\nUnited States and Sweden
\nThe US and Sweden plans account for 13% and 16%, respectively, of the Group\u2019s de\ufb01ned bene\ufb01t obligations. The US and Sweden pension plans
\nare governed by Fiduciary Bodies with responsibility for the investment of the assets. These plans are funded in line with the Group\u2019s \ufb01nancing
\nprinciples and local regulations.
\nThe US de\ufb01ned bene\ufb01t pension plans were actuarially revalued at 31 December 2022, when plan obligations were $907m and plan assets were $835m.
\nThis includes obligations in respect of the non-quali\ufb01ed plan which is unfunded. The quali\ufb01ed US pension plan is close to fully funded on an IAS 19
\nbasis and has a positive funding balance on the local statutory measure. As such, no contributions are required, and the investment strategy is
\nlargely de-risked. During 2022, the Group submitted the legal documentation required to terminate the plan and move to a full buy-out and settlement
\nof the liabilities. This process is currently ongoing and if the Group proceeds, it is not expected to complete until midway 2023 at the earliest.
\nThe Swedish de\ufb01ned bene\ufb01t pension plans were actuarially valued at 31 December 2022, when plan obligations were estimated to amount to
\n$1,312m and plan assets were $946m. The local Swedish GAAP funding position can in\ufb02uence contribution policy. Over 2022, for the main
\npension fund, the Group did not request a reimbursement of bene\ufb01t payments made throughout the year, which totalled approximately $44m.
\nOn current bases, it is expected that ongoing contributions (excluding those in respect of past service de\ufb01cit contributions) during the year ending
\n31 December 2023 for the United States and Sweden will be approximately $55m.
\nNotes to the Group Financial Statements
\ncontinued
\n174
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
Other de\ufb01ned bene\ufb01t plans
\nThe Group provides bene\ufb01t plans other than pensions which have to be reported under IAS 19. These include Lump Sum plans, Long Service Awards
\nand de\ufb01ned contribution pension plans which have a guaranteed minimum bene\ufb01t. However, the largest category of these \u2018other\u2019 non-pension plans
\nare healthcare bene\ufb01ts.
\nIn the US, and to a lesser extent in certain other countries, the Group\u2019s employment practices include the provision of healthcare and life assurance
\nbene\ufb01ts for eligible retired employees. As at 31 December 2022, some 3,393 retired employees and covered dependants currently bene\ufb01t from
\nthese provisions and some 2,339 current employees will be eligible on their retirement. The Group accrues for the present value of such retiree
\nobligations over the working life of the employee. In practice, these bene\ufb01ts will be funded with reference to the \ufb01nancing principles.
\nIn the US, the Post Retirement Welfare Plan which provides retiree medical bene\ufb01ts has a surplus of $62m. As a result, the investment strategy
\nhas been fully de-risked. The Group has concluded that under current legislation, the surplus would be repayable in the future to subsidise other
\nmedical bene\ufb01ts offered to employees. As such, there are no adjustments required in respect of IFRIC 14 \u2018IAS 19 \u2013 The limit on a De\ufb01ned Bene\ufb01t
\nAsset, Minimum Funding Requirements and their Interaction\u2019.
\nThe cost of post-retirement bene\ufb01ts other than pensions for the Group in 2022 was $1m (2021: $1m; 2020: $1m). Plan assets were $173m and plan
\nobligations were $129m at 31 December 2022. These bene\ufb01t plans have been included in the disclosure of post-retirement bene\ufb01ts under IAS 19.
\nFinancial assumptions
\nQuali\ufb01ed independent actuaries have updated the actuarial valuations under IAS 19 for the major de\ufb01ned bene\ufb01t schemes operated by the Group
\nto 31 December 2022. The assumptions used may not necessarily be borne out in practice, due to the inherent \ufb01nancial and demographic uncertainty
\nassociated with making long-term projections. These assumptions re\ufb02ect the changes which have the most material impact on the results of the
\nGroup and were as follows:
\n2021
\nUK
US
Sweden
Rest of Group
\n4
\nInflation assumption
3.3%
\u2013
2.3%
2.2%
\nRate of increase in salaries
\u2013
\n1
\n\u2013
3.8%
3.7%
\nRate of increase in pensions in payment
3.1%
\u2013
2.3%
2.2%
\nDiscount rate \u2013 defined benefit obligation
1.9%
2.8%
1.8%
1.2%
\nDiscount rate \u2013 interest cost
1.9%
2.2%
1.6%
1.0%
\nDiscount rate \u2013 service cost
1.9%
n/a
1.9%
1.4%
\n2022
\nUK
US
Sweden
Rest of Group
\n4
\nInflation assumption
3.2%
\u2013
1.9%
2.5%
\nRate of increase in salaries
\u2013
\n1
\n\u2013
3.4%
4.0%
\nRate of increase in pensions in payment
3.1%
\u2013
1.9%
2.5%
\nDiscount rate \u2013 defined benefit obligation
\n2
\n4.9%
5.0%
4.1%
3.7%
\nDiscount rate \u2013 interest cost
\n3
\n5.0%
4.9%
4.0%
3.8%
\nDiscount rate \u2013 service cost
\n3
\n4.8%
n/a
4.0%
3.7%
\n1
Pensionable pay frozen at 30 June 2010 levels following UK fund changes.
\n2
Group defined benefit obligation as at 31 December 2022 calculated using discount rates based on market conditions as at 31 December 2022.
\n3
2022 interest costs and service costs calculated using discount rates based on market conditions as at 31 December 2021.
\n4
Rest of Group reflects the assumptions in Germany as these have the most material impact on the Group.
\nThe weighted average duration of the post-retirement scheme obligations is approximately 12 years in the UK, 10 years in the US, 16 years in
\nSweden and 14 years for the Rest of the Group (including Germany).
\nDemographic assumptions
\nThe mortality assumptions are based on country-speci\ufb01c mortality tables. These are compared to actual experience and adjusted where suf\ufb01cient
\ndata are available. Additional allowance for future improvements in life expectancy is included for all major schemes where there is credible data
\nto support a continuing trend.
\nThe table below illustrates life expectancy assumptions at age 65 for male and female members retiring in 2022 and male and female members
\nexpected to retire in 2042 (2021: 2021 and 2041 respectively).
\nLife expectancy assumption for a male member retiring at age 65
Life expectancy assumption for a female member retiring at age 65
\nCountry
2022
2042
2021
2041
2022
2042
2021
2041
\nUK
22.2
23.2
22.5
23.7
23.8
24.9
23.9
25.2
\nUS
22.0
23.2
21.9
23.2
23.4
25.0
23.3
24.9
\nSweden
21.8
23.6
21.9
23.6
23.9
26.0
24.5
25.6
\nIn the UK, the Group updated the mortality tables used, re\ufb02ecting analysis carried out as part of the latest actuarial valuation and adopted the
\nCMI 2021 Mortality Projections Model with a 1% long-term improvement rate. Other demographic assumptions were updated based on analysis
\ncarried out as part of the 2022 actuarial valuation including the assumed age gap between members and their partners. The Group assumes that
\n25% of members (2021: 30%) will transfer out of the de\ufb01ned bene\ufb01t section of the AstraZeneca Pension Fund at the point of retirement.
\nIn the US and Sweden the Group continues to use the most recently published mortality tables. No update was published in the US in 2022 and
\nMP-2021 continues to be used, but a new table, DUS21, has been used in Sweden.
\n175
AstraZeneca Annual Report & Form 20-F Information 2022
Notes to the Group Financial Statements
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
22 Post-retirement and other de\ufb01ned bene\ufb01t schemes
continued
\nRisks associated with the Group\u2019s de\ufb01ned bene\ufb01t pension schemes
\nThe UK de\ufb01ned bene\ufb01t plan accounts for 59% of the Group\u2019s de\ufb01ned bene\ufb01t obligations and exposes the Group to a number of risks, the most
\nsigni\ufb01cant of which are:
\nRisk
Description
Mitigation
\nVolatile asset
\nreturns
\nThe De\ufb01ned Bene\ufb01t Obligation (DBO) is calculated using a discount rate
\nset with reference to AA-rated corporate bond yields; asset returns that
\ndiffer from the discount rate will create an element of volatility in the
\nsolvency ratio. Approximately 60% of the UK Pension Fund is invested in
\ngrowth assets. Although these growth assets are expected to outperform
\nAA-rated corporate bonds in the long term, they can lead to volatility and
\nmismatching risk in the short term. The allocation to growth assets is
\nmonitored to ensure it remains appropriate given the UK Pension Fund\u2019s
\nlong-term objectives.
\nIn order to mitigate investment risk, the Trustee invests in a suitably
\ndiversi\ufb01ed range of asset classes, return drivers and investment managers.
\nThe investment strategy will evolve to further improve the expected risk/
\nreturn pro\ufb01le as opportunities arise. De-risking of the investment strategy
\ntook place over 2022, as the Fund moved ahead of its long-term target, with
\nexposure to Growth Assets reducing from approximately 72.5% to 61.0%.
\nThe Trustee has hedged approximately 93% of unintended non-sterling,
\noverseas currency risk within the UK Pension Fund assets.
\nChanges in
\nbond yields
\nA decrease in corporate bond yields will increase the present value placed
\non the DBO for accounting purposes.
\nThe interest rate hedge of the UK Pension Fund is implemented via holding
\ngilts (and gilt repurchase agreements or \u201cgilt repo\u201d) of appropriate duration,
\nset to target a hedge ratio of approximately 100% of total assets. This hedge
\nprotects to a large degree against falls in long-term interest rates and the
\nUK Pension Fund is approximately 98% hedged as a percentage of assets
\nat the end of 2022. Furthermore, over 2022, the liability hedging benchmark
\nwas moved to a 100% gilt-based hedging strategy to reduce funding basis
\nrisk and almost all net swap exposure was removed. Nonetheless, there
\nremain differences in the bonds and instruments held by the UK Pension
\nFund to hedge interest rate risk on the statutory and long-term funding
\nbasis (gilts and gilt repo) and the bonds analysed to set the DBO discount
\nrate on an accounting basis (AA corporate bonds). As such, there remains
\nsome mismatching risk (albeit less than in previous years) on an accounting
\nbasis should yields on gilts diverge compared to AA corporate bonds.
\nInflation risk
The majority of the DBO is indexed in line with price in\ufb02ation (mainly
\nin\ufb02ation as measured by the UK Retail Price Index (RPI) but also for some
\nmembers a component of pensions is indexed by the UK Consumer Price
\nIndex (CPI)) and higher in\ufb02ation will lead to higher liabilities (although, in
\nmost cases, this is capped at an annual increase of 5%). It was con\ufb01rmed
\nin November 2020 the intention to align RPI with Consumer Price Index
\nincluding Housing (CPIH) from 2030. Other things being equal, this will
\nlead to lower liability valuations.
\nThe UK Pension Fund holds RPI index-linked gilts and gilt repo. As with
\nthe interest rate hedge, the liability benchmark was changed over 2022 to
\nfacilitate hedging solely with gilts rather than the previous mix of gilts and
\nswaps. The in\ufb02ation hedge of the UK Pension Fund protects to some degree
\nagainst higher-than-expected in\ufb02ation increases on the DBO (approximately
\n93% hedged as a percentage of assets at the end of 2022). There is a
\nframework in place to gradually increase the level of in\ufb02ation hedging to
\n100% of assets over time.
\nLife
\nexpectancy
\nThe majority of the UK Pension Fund\u2019s obligations are to provide bene\ufb01ts
\nfor the life of the member, so increases in life expectancy will result in an
\nincrease in the liabilities.
\nThe UK Pension Fund entered into a longevity swap during 2013 which
\nprovides hedging against the longevity risk of increasing life expectancy
\nover the next 75 years for around 10,000 of the UK Pension Fund\u2019s current
\npensioners and covers $1.9bn of the UK Pension Fund\u2019s liabilities.
\nA\u00a0one-year increase in life expectancy would result in a $191m increase in
\npension fund obligations, which would be partially offset by a $103m
\nincrease in the value of the longevity swap and hence the pension fund
\nassets. The impact of the COVID-19 pandemic on long-term mortality
\nassumptions is not yet known. The Group will conduct a mortality review
\nonce robust data is available.
\nOther risks
\nThere are a number of other risks of administering the UK Pension Fund which the Trustee manages with Group input. Some of the major risks
\ninclude counterparty risks from using derivatives and collateral management risk (mitigated by using a specialist investment manager to oversee a
\ndiversi\ufb01ed range of counterparties of high standing, ensuring positions are collateralised daily and having a robust collateral management policy).
\nFurthermore, there are operational risks (such as paying out the wrong bene\ufb01ts) and legislative risks (such as the pensions regulator introducing
\nnew legislation). These are mitigated so far as possible via the governance structure in place which oversees and administers the pension funds.
\nThe Group\u2019s pension plans in the US and Sweden also manage these key risks, where they are relevant, in a similar way, with the local \ufb01duciary
\nbodies investing in a diversi\ufb01ed manner and employing a framework to hedge interest rate risk.
\nLocal \ufb01duciary boards are aware of Environmental, Social and Governance (ESG) risks as they pertain to investment policy, and where local regulation
\nallows, have policies in place to monitor and manage such risks and comply with local legislation and disclosure requirements.
\nAssets and obligations of de\ufb01ned bene\ufb01t schemes
\nThe assets and obligations of the de\ufb01ned bene\ufb01t schemes operated by the Group at 31 December 2022, as calculated in accordance with IAS 19,
\nare shown below. The fair values of the schemes\u2019 assets are not intended to be realised in the short term and may be subject to signi\ufb01cant change
\nbefore they are realised. The present value of the schemes\u2019 obligations is derived from cash \ufb02ow projections over long periods and is therefore
\ninherently uncertain.
\nThere has been a material fall in both asset and liability valuations over 2022, predominantly due to signi\ufb01cant increases in long-term global bond
\nyields. This had the impact of lowering liability and asset valuations.
\nNotes to the Group Financial Statements
\ncontinued
\n176
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
Scheme assets
\n2021
\nUK
US
Sweden
Rest of Group
Total
\nQuoted
Unquoted
Quoted
Unquoted
Quoted
Unquoted
Quoted
Unquoted
Quoted
Unquoted
Total
\n$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
\nGovernment bonds
\n1
\n2,500
\u2013
303
\u2013
\u2013
\u2013
75
\u2013
2,878
\u2013
2,878
\nCorporate bonds
\n2
\n\u2013
\u2013
877
\u2013
\u2013
\u2013
16
\u2013
893
\u2013
893
\nDerivatives
\n3
\n\u2013
(237)
2
(1)
\u2013
259
(1)
\u2013
1
21
22
\nInvestment funds: Listed Equities
\n4
\n\u2013
1,427
\u2013
\u2013
\u2013
134
55
6
55
1,567
1,622
\nInvestment funds:
\nAbsolute Return/Multi\u00a0Strategy
\n4
\n\u2013
2,342
\u2013
\u2013
\u2013
647
8
\u2013
8
2,989
2,997
\nInvestment funds: Corporate Bonds/Credit
\n4
\n\u2013
1,006
\u2013
\u2013
\u2013
192
53
11
53
1,209
1,262
\nCash and cash equivalents
34
261
227
\u2013
\u2013
2
\u2013
2
261
265
526
\nOther
\u2013
\u2013
\u2013
5
\u2013
\u2013
1
358
1
363
364
\nTotal fair value of scheme assets
\n5
\n2,534
4,799
1,409
4
\u2013
1,234
207
377
4,150
6,414
10,564
\n2022
\nUK
US
Sweden
Rest of Group
Total
\nQuoted
Unquoted
Quoted
Unquoted
Quoted
Unquoted
Quoted
Unquoted
Quoted
Unquoted
Total
\n$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
\nGovernment bonds
\n1
\n1,931
\u2013
104
\u2013
\u2013
\u2013
60
\u2013
2,095
\u2013
2,095
\nCorporate bonds
\n2
\n\u2013
\u2013
622
\u2013
\u2013
\u2013
11
\u2013
633
\u2013
633
\nDerivatives
\n3
\n\u2013
(608)
(2)
(3)
\u2013
325
(2)
\u2013
(4)
(286)
(290)
\nInvestment funds: Listed Equities
\n4
\n\u2013
265
\u2013
\u2013
\u2013
\u2013
49
4
49
269
318
\nInvestment funds:
\nAbsolute Return/Multi Strategy
\n4
\n\u2013
1,701
\u2013
\u2013
\u2013
475
6
\u2013
6
2,176
2,182
\nInvestment funds: Corporate Bonds/Credit
\n4
\n\u2013
817
\u2013
\u2013
\u2013
144
49
10
49
971
1,020
\nCash and cash equivalents
52
415
285
\u2013
\u2013
2
\u2013
4
337
421
758
\nOther
\u2013
\u2013
\u2013
2
\u2013
\u2013
1
311
1
313
314
\nTotal fair value of scheme assets
\n5
\n1,983
2,590
1,009
(1)
\u2013
946
174
329
3,166
3,864
7,030
\n1
Predominantly developed markets in nature.
\n2
Predominantly developed markets in nature and investment grade (AAA-BBB).
\n3
Includes interest rate swaps, inflation swaps, longevity swap, equity total return swaps and other contracts. More detail is given in the section Risks associated with the Group\u2019s defined
\nbenefit pensions on page 176. Valuations are determined by independent third parties.
\n4
Investment Funds are pooled, commingled vehicles, whereby the pension scheme owns units in the fund, alongside other investors. The pension schemes invest in a number of Investment
\nFunds, including Listed Equities (primarily developed markets with some emerging markets), Corporate Bonds/Credit (a range of investment-grade and non investment-grade credit) and
\nAbsolute Return/Multi Strategy (multi-asset exposure both across and within traditional and alternative asset classes). The price of the funds is set by independent administrators/custodians
\nemployed by the investment managers and based on the value of the underlying assets held in the fund. Details of pricing methodology is set out within internal control reports provided for
\neach fund. Prices are updated daily, weekly or monthly depending upon the frequency of the fund\u2019s dealing.
\n5
Included in scheme assets is less than $1m of the Group\u2019s own assets (2021: $nil). The assets are AstraZeneca corporate debt held by the US qualified plan and amount to 0.05% of the plan\u2019s assets.
\nScheme obligations
\n2021
\nUK
US
Sweden
Rest of Group
Total
\n$m
$m
$m
$m
$m
\nPresent value of scheme obligations in respect of:
\nActive membership
(532)
(81)
(926)
(523)
(2,062)
\nDeferred membership
(1,709)
(693)
(718)
(465)
(3,585)
\nPensioners
(5,700)
(630)
(729)
(312)
(7,371)
\nTotal value of scheme obligations
(7,941)
(1,404)
(2,373)
(1,300)
(13,018)
\n2022
\nUK
US
Sweden
Rest of Group
Total
\n$m
$m
$m
$m
$m
\nPresent value of scheme obligations in respect of:
\nActive membership
(212)
(54)
(430)
(424)
(1,120)
\nDeferred membership
(804)
(437)
(369)
(299)
(1,909)
\nPensioners
(3,785)
(531)
(513)
(250)
(5,079)
\nTotal value of scheme obligations
(4,801)
(1,022)
(1,312)
(973)
(8,108)
\n177
AstraZeneca Annual Report & Form 20-F Information 2022
Notes to the Group Financial Statements
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
22 Post-retirement and other de\ufb01ned bene\ufb01t schemes
continued
\nNet (de\ufb01cit)/surplus in the scheme
\n2021
\nUK
US
Sweden
Rest of Group
Total
\n$m
$m
$m
$m
$m
\nTotal fair value of scheme assets
7,333
1,413
1,234
584
10,564
\nTotal value of scheme obligations
(7,941)
(1,404)
(2,373)
(1,300)
(13,018)
\nDeficit in the scheme as recognised in the
\nConsolidated Statement of Financial Position
(608)
9
(1,139)
(716)
(2,454)
\nIncluded in Non-current other receivables
\u2013
\u2013
\u2013
\u2013
\u2013
\nIncluded in Retirement benefit obligations
(608)
9
(1,139)
(716)
(2,454)
\n(608)
9
(1,139)
(716)
(2,454)
\n2022
\nUK
US
Sweden
Rest of Group
Total
\n$m
$m
$m
$m
$m
\nTotal fair value of scheme assets
4,573
1,008
946
503
7,030
\nTotal value of scheme obligations
(4,801)
(1,022)
(1,312)
(973)
(8,108)
\nDeficit in the scheme as recognised in the
\nConsolidated Statement of Financial Position
(228)
(14)
(366)
(470)
(1,078)
\nIncluded in Non-current other receivables
\u2013
62
\u2013
28
\n1
\n90
\nIncluded in Retirement benefit obligations
(228)
(76)
(366)
(498)
(1,168)
\n(228)
(14)
(366)
(470)
(1,078)
\n1
Surpluses were recognised in Ireland and Belgium.
\nFair value of scheme assets
\n2022
2021
\nUK
US
Sweden
Rest of Group
Total
UK
US
Sweden
Rest of Group
Total
\n$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
\nAt beginning of year
7,333
1,413
1,234
584
10,564
7,179
1,570
1,338
581
10,668
\nInterest income on scheme assets
123
29
18
5
175
75
27
12
4
118
\nExpenses
(5)
(2)
\u2013
\u2013
(7)
(7)
\u2013
\u2013
\u2013
(7)
\nActuarial gains/(losses)
(1,964)
(295)
(153)
(55)
(2,467)
372
(22)
62
3
415
\nExchange and other adjustments
(728)
\u2013
(152)
(34)
(914)
(77)
(5)
(132)
1
(213)
\nEmployer contributions
118
7
43
37
205
122
19
5
28
174
\nParticipant contributions
1
5
\u2013
5
11
2
\u2013
\u2013
2
4
\nBenefits paid
(305)
(149)
(44)
(39)
(537)
(333)
(176)
(51)
(35)
(595)
\nScheme assets\u2019 fair value at end of year
4,573
1,008
946
503
7,030
7,333
1,413
1,234
584
10,564
\nThe actual return on the plan assets was a loss of $2,292m (2021: gain of $533m). The asset loss was driven predominantly by a fall in the value of
\nthe liability hedging portfolio in the UK and to a lesser extent, in the US and Sweden as long term bond yields increased. The asset loss was more
\nthan offset by the fall in the liability value shown in the table below.
\nMovement in post-retirement scheme obligations
\n2022
2021
\nUK
US
Sweden
Rest of Group
Total
UK
US
Sweden
Rest of Group
Total
\n$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
\nPresent value of obligations in scheme at beginning of year
(7,941)
(1,404)
(2,373)
(1,300) (13,018)
(8,425)
(1,601)
(2,525)
(1,319) (13,870)
\nCurrent service cost
(14)
(1)
(35)
(38)
(88)
(18)
(2)
(69)
(34)
(123)
\nPast service (cost)/credit
(5)
\u2013
(4)
3
(6)
(4)
\u2013
(1)
\u2013
(5)
\nParticipant contributions
(1)
(4)
\u2013
(5)
(10)
(2)
\u2013
\u2013
(2)
(4)
\nBenefits paid
305
149
44
39
537
333
176
51
35
595
\nInterest expense on post-retirement scheme obligations
(132)
(29)
(31)
(12)
(204)
(87)
(28)
(22)
(8)
(145)
\nActuarial gains/(losses)
2,243
268
806
268
3,585
199
46
(43)
9
211
\nExchange and other adjustments
744
(1)
281
72
1,096
63
5
236
19
323
\nPresent value of obligations in scheme at end of year
(4,801)
(1,022)
(1,312)
(973)
(8,108)
(7,941)
(1,404)
(2,373)
(1,300)
(13,018)
\nThe obligations arise from over 50 plans in 28 countries:
\n2022
2021
\nUK
US
Sweden
Rest of Group
Total
UK
US
Sweden
Rest of Group
Total
\n$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
\nFunded \u2013 pension schemes
\n1
\n(4,787)
(851)
(1,310)
(842)
(7,790)
(7,927)
(1,178)
(2,371)
(1,160) (12,636)
\nFunded \u2013 post-retirement healthcare
\u2013
(111)
\u2013
\u2013
(111)
\u2013
(143)
\u2013
\u2013
(143)
\nUnfunded \u2013 pension schemes
\n1
\n\u2013
(60)
(2)
(122)
(184)
\u2013
(83)
(2)
(127)
(212)
\nUnfunded \u2013 post-retirement healthcare
(14)
\u2013
\u2013
(9)
(23)
(14)
\u2013
\u2013
(13)
(27)
\nTotal
(4,801)
(1,022)
(1,312)
(973)
(8,108)
(7,941)
(1,404)
(2,373)
(1,300)
(13,018)
\n1
Includes defined benefit pension schemes and other plans, such as Lump Sum, Long Service Award and DC plans with underpins.
\nNotes to the Group Financial Statements
\ncontinued
\n178
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
Consolidated Statement of Comprehensive Income disclosures
\nThe amounts that have been charged to the Consolidated Statement of Comprehensive Income, in respect of de\ufb01ned bene\ufb01t schemes for the
\nyear ended 31 December 2022, are set out below.
\n2022
2021
\nUK
US
Sweden
Rest of Group
Total
UK
US
Sweden
Rest of Group
Total
\n$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
\nOperating profit
\nCurrent service cost
(14)
(1)
(35)
(38)
(88)
(18)
(2)
(69)
(35)
(124)
\nPast service (cost)/credit
(5)
\u2013
(4)
3
(6)
(4)
\u2013
(1)
\u2013
(5)
\nExpenses
(5)
(2)
\u2013
\u2013
(7)
(7)
\u2013
\u2013
\u2013
(7)
\nTotal charge to Operating profit
(24)
(3)
(39)
(35)
(101)
(29)
(2)
(70)
(35)
(136)
\nFinance expense
\nInterest income on scheme assets
123
29
18
5
175
75
27
12
5
119
\nInterest expense on post-retirement scheme obligations
(132)
(29)
(31)
(12)
(204)
(87)
(28)
(22)
(8)
(145)
\nNet interest on post-employment defined benefit plan liabilities
(9)
\u2013
(13)
(7)
(29)
(12)
(1)
(10)
(3)
(26)
\nCharge before taxation
(33)
(3)
(52)
(42)
(130)
(41)
(3)
(80)
(38)
(162)
\nOther comprehensive income
\nDifference between the actual return and the
\nexpected return on the post-retirement scheme assets
(1,964)
(295)
(153)
(55)
(2,467)
372
(22)
62
3
415
\nExperience gains/(losses) arising on the
\npost-retirement scheme obligations
55
(16)
(99)
(6)
(66)
(43)
(9)
\u2013
74
22
\nChanges in financial assumptions underlying the
\npresent value of the post-retirement scheme obligations
2,272
284
896
275
3,727
239
59
(43)
(61)
194
\nChanges in demographic assumptions
(84)
\u2013
9
(1)
(76)
3
(4)
\u2013
(4)
(5)
\nRemeasurement of the defined benefit liability
279
(27)
653
213
1,118
571
24
19
12
626
\nPast service costs include granting early retirement in UK and Sweden.
\nTotal Group pension costs in respect of de\ufb01ned contribution and de\ufb01ned bene\ufb01t schemes during the year are set out below (see Note 29).
\n2022
2021
\n$m
$m
\nDefined contribution schemes
445
428
\nDefined benefit schemes \u2212 current service costs and expenses
95
131
\nDefined benefit schemes \u2212 past service cost
6
5
\nPension costs
546
564
\nRate sensitivities
\nThe following table shows the US dollar effect of a change in the signi\ufb01cant actuarial assumptions used to determine the retirement bene\ufb01ts
\nobligations in our three main de\ufb01ned bene\ufb01t pension obligation countries.
\n2022
2021
\n+0.5%
-0.5%
+0.5%
-0.5%
\nDiscount rate
\nUK ($m)
262
(289)
565
(634)
\nUS ($m)
46
(49)
79
(84)
\nSweden ($m)
95
(107)
197
(226)
\nTotal ($m)
403
(445)
841
(944)
\n2022
2021
\n+0.5%
-0.5%
+0.5%
-0.5%
\nInflation rate
\n1
\nUK ($m)
(173)
165
(386)
375
\nUS ($m)
n/a
n/a
n/a
n/a
\nSweden ($m)
(104)
93
(207)
196
\nTotal ($m)
(277)
258
(593)
571
\n2022
2021
\n+0.5%
-0.5%
+0.5%
-0.5%
\nRate of increase in salaries
\nUK ($m)
n/a
n/a
n/a
n/a
\nUS ($m)
n/a
n/a
n/a
n/a
\nSweden ($m)
(47)
43
(90)
82
\nTotal ($m)
(47)
43
(90)
82
\n179
AstraZeneca Annual Report & Form 20-F Information 2022
Notes to the Group Financial Statements
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
\n\n22 Post-retirement and other de\ufb01ned bene\ufb01t schemes
continued
\n2022
2021
\n+1 year
\u22121 year
+1 year
\u22121 year
\nMortality rate
\nUK ($m)
(191)
\n2
\n193
\n3
\n(390)
388
\nUS ($m)
(20)
20
(29)
29
\nSweden ($m)
(44)
44
(94)
93
\nTotal ($m)
(255)
257
(513)
510
\n1
Rate of increase in pensions in payment follows inflation.
\n2
Of the $191m increase, $103m is covered by the longevity swap.
\n3
Of the $193m decrease, $103m is covered by the longevity swap.
\nThe sensitivity to the \ufb01nancial assumptions shown above has been estimated taking into account the approximate duration of the liabilities and the
\noverall pro\ufb01le of the plan membership.
\nThe in\ufb02ation sensitivity allows for the impact of a change in in\ufb02ation on salary increases and pension increases (where these assumptions are
\nin\ufb02ation-linked).
\nThe salary increase sensitivity re\ufb02ects the impact of an increase of only salary relative to in\ufb02ation.
\nThe sensitivity to the life expectancy assumption is estimated based on a revised mortality assumption that extends/reduces the current life expectancy
\nby one year for a particular age.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfDefinedBenefitPlansExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f31925": {
"value": "23 Reserves \nRetained earnings
\nThe cumulative amount of goodwill written off directly to reserves resulting from acquisitions, net of disposals, amounted to $591m (2021: $615m;
\n2020: $636m) using year-end rates of exchange.
\nAt 31 December 2022, 1,671,446 shares, at a cost of $112m, have been deducted from Retained earnings (2021: 3,922,122 shares, at a cost of $239m;
\n2020: 556,108 shares, at a cost of $51m) to satisfy future vesting of employee share plans.
\nThere are no signi\ufb01cant statutory or contractual restrictions on the distribution of current pro\ufb01ts of subsidiaries; undistributed pro\ufb01ts of prior years
\nare, in the main, permanently employed in the businesses of these companies. The undistributed income of AstraZeneca companies overseas might
\nbe liable to overseas taxes and/or UK taxation (after allowing for double taxation relief) if they were to be distributed as dividends (see Note 4).
\n2022
2021
2020
\n$m
$m
$m
\nCumulative translation differences included within Retained earnings
\nAt 1\u00a0January
(1,934)
(1,143)
(2,189)
\nForeign exchange arising on consolidation
(1,446)
(483)
443
\nExchange adjustments on goodwill (recorded against other reserves)
(24)
(21)
22
\nForeign exchange arising on designated liabilities in net investment hedges
\n1
\n(282)
(321)
573
\nFair value movements on derivatives designated in net investment hedges
(8)
34
8
\nNet exchange movement in Retained earnings
(1,760)
(791)
1,046
\nAt 31\u00a0December
(3,694)
(1,934)
(1,143)
\n1
Foreign exchange arising on designated liabilities in net investment hedges includes $102m in respect of designated bonds and $(384)m in respect of designated contingent consideration and
\nother liabilities. The change in value of designated contingent consideration liabilities relates to $(369)m in respect of BMS\u2019 share of Global Diabetes Alliance, and $(15)m in respect of Almirall.
\nThe cumulative loss with respect to costs of hedging is $3m (2021: gain of $4m; 2020: gain of $9m) and the loss during the year was $7m (2021: loss
\nof $6m; 2020: gain of $9m).
\nThe balance remaining in the foreign currency translation reserve from net investment hedging relationships for which hedge accounting no longer
\napplied is a gain of $527m.
\nOther reserves
\nThe other reserves arose from the cancellation of \u00a31,255m of share premium account by the Company in 1993 and the redenomination of share
\ncapital of $157m in 1999. The reserves are available for writing off goodwill arising on consolidation and, subject to guarantees given to preserve
\ncreditors at the date of the court order, are available for distribution.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfReservesAndOtherEquityInterestExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f31926": {
"value": "23 Reserves \nRetained earnings
\nThe cumulative amount of goodwill written off directly to reserves resulting from acquisitions, net of disposals, amounted to $591m (2021: $615m;
\n2020: $636m) using year-end rates of exchange.
\nAt 31 December 2022, 1,671,446 shares, at a cost of $112m, have been deducted from Retained earnings (2021: 3,922,122 shares, at a cost of $239m;
\n2020: 556,108 shares, at a cost of $51m) to satisfy future vesting of employee share plans.
\nThere are no signi\ufb01cant statutory or contractual restrictions on the distribution of current pro\ufb01ts of subsidiaries; undistributed pro\ufb01ts of prior years
\nare, in the main, permanently employed in the businesses of these companies. The undistributed income of AstraZeneca companies overseas might
\nbe liable to overseas taxes and/or UK taxation (after allowing for double taxation relief) if they were to be distributed as dividends (see Note 4).
\n2022
2021
2020
\n$m
$m
$m
\nCumulative translation differences included within Retained earnings
\nAt 1\u00a0January
(1,934)
(1,143)
(2,189)
\nForeign exchange arising on consolidation
(1,446)
(483)
443
\nExchange adjustments on goodwill (recorded against other reserves)
(24)
(21)
22
\nForeign exchange arising on designated liabilities in net investment hedges
\n1
\n(282)
(321)
573
\nFair value movements on derivatives designated in net investment hedges
(8)
34
8
\nNet exchange movement in Retained earnings
(1,760)
(791)
1,046
\nAt 31\u00a0December
(3,694)
(1,934)
(1,143)
\n1
Foreign exchange arising on designated liabilities in net investment hedges includes $102m in respect of designated bonds and $(384)m in respect of designated contingent consideration and
\nother liabilities. The change in value of designated contingent consideration liabilities relates to $(369)m in respect of BMS\u2019 share of Global Diabetes Alliance, and $(15)m in respect of Almirall.
\nThe cumulative loss with respect to costs of hedging is $3m (2021: gain of $4m; 2020: gain of $9m) and the loss during the year was $7m (2021: loss
\nof $6m; 2020: gain of $9m).
\nThe balance remaining in the foreign currency translation reserve from net investment hedging relationships for which hedge accounting no longer
\napplied is a gain of $527m.
\nOther reserves
\nThe other reserves arose from the cancellation of \u00a31,255m of share premium account by the Company in 1993 and the redenomination of share
\ncapital of $157m in 1999. The reserves are available for writing off goodwill arising on consolidation and, subject to guarantees given to preserve
\ncreditors at the date of the court order, are available for distribution.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfEffectOfChangesInForeignExchangeRatesExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f31927": {
"value": "23 Reserves \nRetained earnings
\nThe cumulative amount of goodwill written off directly to reserves resulting from acquisitions, net of disposals, amounted to $591m (2021: $615m;
\n2020: $636m) using year-end rates of exchange.
\nAt 31 December 2022, 1,671,446 shares, at a cost of $112m, have been deducted from Retained earnings (2021: 3,922,122 shares, at a cost of $239m;
\n2020: 556,108 shares, at a cost of $51m) to satisfy future vesting of employee share plans.
\nThere are no signi\ufb01cant statutory or contractual restrictions on the distribution of current pro\ufb01ts of subsidiaries; undistributed pro\ufb01ts of prior years
\nare, in the main, permanently employed in the businesses of these companies. The undistributed income of AstraZeneca companies overseas might
\nbe liable to overseas taxes and/or UK taxation (after allowing for double taxation relief) if they were to be distributed as dividends (see Note 4).
\n2022
2021
2020
\n$m
$m
$m
\nCumulative translation differences included within Retained earnings
\nAt 1\u00a0January
(1,934)
(1,143)
(2,189)
\nForeign exchange arising on consolidation
(1,446)
(483)
443
\nExchange adjustments on goodwill (recorded against other reserves)
(24)
(21)
22
\nForeign exchange arising on designated liabilities in net investment hedges
\n1
\n(282)
(321)
573
\nFair value movements on derivatives designated in net investment hedges
(8)
34
8
\nNet exchange movement in Retained earnings
(1,760)
(791)
1,046
\nAt 31\u00a0December
(3,694)
(1,934)
(1,143)
\n1
Foreign exchange arising on designated liabilities in net investment hedges includes $102m in respect of designated bonds and $(384)m in respect of designated contingent consideration and
\nother liabilities. The change in value of designated contingent consideration liabilities relates to $(369)m in respect of BMS\u2019 share of Global Diabetes Alliance, and $(15)m in respect of Almirall.
\nThe cumulative loss with respect to costs of hedging is $3m (2021: gain of $4m; 2020: gain of $9m) and the loss during the year was $7m (2021: loss
\nof $6m; 2020: gain of $9m).
\nThe balance remaining in the foreign currency translation reserve from net investment hedging relationships for which hedge accounting no longer
\napplied is a gain of $527m.
\nOther reserves
\nThe other reserves arose from the cancellation of \u00a31,255m of share premium account by the Company in 1993 and the redenomination of share
\ncapital of $157m in 1999. The reserves are available for writing off goodwill arising on consolidation and, subject to guarantees given to preserve
\ncreditors at the date of the court order, are available for distribution.
\n24 Share capital
\nAllotted,\u00a0called-up and fully paid
\n2022
2021
2020
\n$m
$m
$m
\nIssued Ordinary Shares ($0.25 each)
387
387
328
\nRedeemable Preference Shares (\u00a31 each \u2013 \u00a350,000)
\u2013
\u2013
\u2013
\nAt 31\u00a0December
387
387
328
\nThe Redeemable Preference Shares carry limited class voting rights and no dividend rights. This class of shares is capable of redemption at par at
\nthe option of the Company on the giving of seven days\u2019 written notice to the registered holder of the shares.
\nNotes to the Group Financial Statements
\ncontinued
\n180
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
\n\n\nThe Company does not have a limited amount of authorised share capital.
\nThe movements in the number of Ordinary Shares during the year can be summarised as follows:
\nNo.\u00a0of\u00a0shares
\n2022
2021
2020
\nAt 1\u00a0January
1,549,400,665
1,312,668,724
1,312,137,976
\nIssue of share capital (business combinations)
\u2013
236,321,411
\u2013
\nIssue of shares (share schemes)
399,365
410,530
530,748
\nAt 31\u00a0December
1,549,800,030
1,549,400,665
1,312,668,724
\nShare issues
\nIssue of share capital (business combinations) represents share capital issued as part of the acquisition of Alexion (see Note 27).
\nShare repurchases
\nNo Ordinary Shares were repurchased by the Company in 2022 (2021: nil; 2020: nil).
\nShares held by subsidiaries
\nNo shares in the Company were held by subsidiaries in any year.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfShareCapitalReservesAndOtherEquityInterestExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f31989": {
"value": "24 Share capital \nAllotted,\u00a0called-up and fully paid
\n2022
2021
2020
\n$m
$m
$m
\nIssued Ordinary Shares ($0.25 each)
387
387
328
\nRedeemable Preference Shares (\u00a31 each \u2013 \u00a350,000)
\u2013
\u2013
\u2013
\nAt 31\u00a0December
387
387
328
\nThe Redeemable Preference Shares carry limited class voting rights and no dividend rights. This class of shares is capable of redemption at par at
\nthe option of the Company on the giving of seven days\u2019 written notice to the registered holder of the shares.
\nNotes to the Group Financial Statements
\ncontinued
\n180
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
\n\n\nThe Company does not have a limited amount of authorised share capital.
\nThe movements in the number of Ordinary Shares during the year can be summarised as follows:
\nNo.\u00a0of\u00a0shares
\n2022
2021
2020
\nAt 1\u00a0January
1,549,400,665
1,312,668,724
1,312,137,976
\nIssue of share capital (business combinations)
\u2013
236,321,411
\u2013
\nIssue of shares (share schemes)
399,365
410,530
530,748
\nAt 31\u00a0December
1,549,800,030
1,549,400,665
1,312,668,724
\nShare issues
\nIssue of share capital (business combinations) represents share capital issued as part of the acquisition of Alexion (see Note 27).
\nShare repurchases
\nNo Ordinary Shares were repurchased by the Company in 2022 (2021: nil; 2020: nil).
\nShares held by subsidiaries
\nNo shares in the Company were held by subsidiaries in any year.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfIssuedCapitalExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f32060": {
"value": "25 Dividends to shareholders \n2022
2021
2020
2022
2021
2020
\nPer\u00a0share
Per share
Per share
$m
$m
$m
\nSecond interim (March 2022)
$1.97
$1.90
$1.90
3,046
2,490
2,489
\nFirst interim (September 2022)
$0.93
$0.90
$0.90
1,440
1,392
1,180
\nTotal
$2.90
$2.80
$2.80
4,486
3,882
3,669
\nThe Company has exercised its authority in accordance with the provisions set out in the Company\u2019s Articles of Association, that the balance of
\nunclaimed dividends outstanding past 12 years be forfeited. Unclaimed dividends of $1m (2021: $nil; 2020: $1m) have been adjusted for in Retained
\nearnings in 2022.
\nThe 2021 second interim dividend of $1.97 per share was paid on 28 March 2022. The 2022 \ufb01rst interim dividend of $0.93 per share was paid on
\n12 September 2022.
\nReconciliation of dividends charged to equity to cash \ufb02ow statement:
\n2022
2021
2020
\n$m
$m
$m
\nDividends charged to equity
4,486
3,882
3,669
\nExchange losses on payment of dividend
5
3
4
\nHedge contracts relating to payment of dividends (cash flow statement)
(127)
(29)
(101)
\nDividends paid (cash flow statement)
4,364
3,856
3,572",
"dimensions": {
"concept": "ifrs-full:DisclosureOfDividendsExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f32099": {
"value": "0.0197",
"decimals": 4,
"dimensions": {
"concept": "ifrs-full:DividendsRecognisedAsDistributionsToOwnersPerShare",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-03-28T00:00:00/2022-03-29T00:00:00",
"unit": "iso4217:USD/xbrli:shares"
}
},
"f32100": {
"value": "0.0093",
"decimals": 4,
"dimensions": {
"concept": "ifrs-full:DividendsRecognisedAsDistributionsToOwnersPerShare",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-09-12T00:00:00/2022-09-13T00:00:00",
"unit": "iso4217:USD/xbrli:shares"
}
},
"f32127": {
"value": "26 Non-controlling interests \nThe Group Financial Statements at 31 December 2022 re\ufb02ect equity of $21m (2021: $19m; 2020: $16m) and total comprehensive income of $2m
\n(2021: $3m; 2020: $3m) attributable to the non-controlling interests in AstraZeneca Pharma India Limited, P.T. AstraZeneca Indonesia and Beijing
\nFalikang Pharmaceutical (China) Co. Limited.
\nIn addition to the non-controlling interests in AstraZeneca Pharma India Limited, P.T. AstraZeneca Indonesia and Beijing Falikang Pharmaceutical
\n(China) Co. Limited, the Group Financial Statements at 31 December 2022 also re\ufb02ect total comprehensive losses of $nil (2021: $nil; 2020: $55m)
\nattributable to the non-controlling interest in Acerta Pharma, resulting in reported total comprehensive income of $2m (2021: income of $3m,
\n2020: losses of $52m).
\nIn February 2016, AstraZeneca acquired a 55% controlling stake in Acerta Pharma where the non-controlling interest was subject to put and call
\noptions. The put option gave rise to a liability (see Note 20). The ability of the parties to exercise their respective put and call options, as well as
\nthe timing and amount of exercise, was dependent on certain conditions, the last of which was based on regulatory outcomes of
Calquence
in the EU.
\nIn November 2020,
Calquence
received marketing approval in the EU, which removed all remaining conditionality in respect of the options. From
\nNovember 2020, the minority shareholders were considered to have no further substantive variability in risk and reward related to their shares as it
\nwas considered highly likely that one of the options would be exercised, and the price of the options was \ufb01xed. Therefore, from November 2020, no
\nfurther amounts of the consolidated AstraZeneca result were attributed to the minority shareholders of Acerta Pharma. The Non-controlling interests
\nreserve relating to the minority shareholders of Acerta Pharma, totalling $1,401m, was reclassi\ufb01ed into Retained earnings (see Consolidated Statement
\nof Changes in Equity) in 2020. AstraZeneca exercised its option to acquire the remaining 45% of shares in Acerta Pharma in April 2021.
\nAs part of the acquisition of Alexion in July 2021, a pre-existing non-controlling interest in Caelum Biosciences was recognised (Note 27). This was
\nvalued at $150m, the agreed-upon exercise price for the exclusive option to acquire the remaining equity. The option was exercised on 28 September
\n2021 and the acquisition of Caelum Biosciences closed shortly thereafter on 5 October 2021.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfNoncontrollingInterestsExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f32169": {
"value": "27 Acquisition of business operations \nAcquisitions of business operations in 2022
\nOn 16 November 2022, AstraZeneca completed the acquisition of 100% of the issued shares of LogicBio Therapeutics, Inc. (LogicBio) based in
\nLexington, MA, US. LogicBio is a clinical-stage genetic medicine company pioneering genome editing and gene delivery platforms to address rare
\nand serious diseases from infancy through adulthood. The total consideration was $72m. Cash of $68m was paid on the completion date, with $4m
\nof outstanding options, which will be settled in cash, recorded in current Trade and other payables. Goodwill of $15m, assets of $82m, including $46m
\nof intangible assets, and liabilities of $25m were recognised on acquisition. LogicBio\u2019s results have been consolidated into the Group\u2019s results from
\n16 November 2022.
\nAcquisitions of business operations in 2021
\nOn 21 July 2021, AstraZeneca completed the acquisition of 100% of the issued shares of Alexion Pharmaceuticals, Inc (Alexion), based in Boston, MA,
\nUS. Alexion is a global biopharmaceutical company focused on serving patients and families affected by rare diseases and devastating conditions
\nthrough the discovery, development and commercialisation of life-changing medicines.
\nAt closing, Alexion shareholders received 2.1243 AstraZeneca American Depository Shares (ADSs) and $60 in cash for each of their Alexion shares.
\nUnvested Alexion employee share awards were converted to equivalent AstraZeneca share awards. The fair value of the purchase consideration
\nwas $41,058m, comprising AstraZeneca ADSs of $27,196m, cash of $13,349m and replacement employee share awards of $513m.
\nThe Group funded the cash element of the acquisition with $8bn of new long-term debt, issued in May and June 2021, $4bn of term loans drawn in
\nJuly 2021 under the $17.5bn committed bank facilities entered into in December 2020 to secure the acquisition \ufb01nancing, and existing cash balances.
\nThe Group cancelled the remaining $13.5bn of the facilities in June, July and October 2021. Loans and borrowings of $2.3bn acquired with Alexion
\nwere repaid in full shortly following completion of the acquisition.
\nThe acquisition was accounted for as a business combination using the acquisition method of accounting in accordance with IFRS 3 \u2018Business
\nCombinations\u2019 and consequently the Alexion assets acquired, and liabilities assumed were recorded by AstraZeneca at fair value, with the excess
\nof the purchase price over the fair value of the identi\ufb01able assets and liabilities being recognised as goodwill.
\nAs part of the Alexion acquisition in 2021, we identi\ufb01ed the assets (comprising principally launched products and IPR&D post pre-clinical stage)
\nand liabilities acquired. Attributing fair values to assets acquired and liabilities assumed as part of business combinations is considered to be a
\nkey judgement. The purchase price allocation was performed with assistance from an independent valuer to advise on the valuation techniques
\nand key assumptions in the valuation, in particular in respect of the valuation of the intangible assets and inventory.
\nThe fair values assigned to the Alexion business combination in 2021 were:
\nFair value
\n$m
\nNon-current assets
\nProperty, plant and equipment
1,135
\nRight-of-use assets
263
\nIntangible assets
26,855
\nOther non-current assets
301
\n28,554
\nCurrent assets
\nInventories
6,769
\nTrade and other receivables
2,096
\nIntangible assets
100
\nCash and cash equivalents
4,086
\n13,051
\nCurrent liabilities
\nInterest-bearing loans and borrowings
(2,336)
\nTrade and other payables
(1,192)
\nOther current liabilities
(40)
\n(3,568)
\nNon-current liabilities
\nLease liabilities
(228)
\nDeferred tax liabilities
(4,191)
\nOther non-current liabilities
(697)
\n(5,116)
\nTotal net assets acquired
32,921
\nLess: non-controlling interests
(150)
\nGoodwill
8,287
\nTotal fair value of consideration
41,058
\nLess: fair value of equity consideration
(27,196)
\nLess: fair value of replacement employee share awards
(513)
\nLess: cash and cash equivalents acquired
(4,086)
\nNet cash outflow
9,263
\nNotes to the Group Financial Statements
\ncontinued
\n182
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
\n\n\n\n\nThe estimated fair value and useful lives of intangible assets were as follows:
\nFair value
Useful lives
\n$m
Years
\nLaunched products \u2013 C5 franchise (
Soliris
/
Ultomiris
)
18,480
6 to 15
\nLaunched products \u2013
Strensiq
,
Kanuma
,
Andexxa
5,215
11 to 17
\nProducts in development
2,760
Not amortised
\nOther intangibles
500
5 to 10
\n26,955
\nThe fair value attributed to intangible assets was $26,955m and primarily represents intellectual property rights over launched products of $23,695m
\nand products under development of $2,760m. These were fair valued using the multi-period excess earnings method, which uses a number of estimates
\nregarding the amount and timing of future cash \ufb02ows. The key assumptions in the cash \ufb02ows are PTRS, peak year sales and revenue erosion curves.
\nIn accordance with the Group\u2019s policy on impairment assessments as set out on page 148, the assets were assessed for impairment in the \ufb01nal
\nquarter of 2022 and 2021. Future milestones have been included in the valuation of the intangible assets (as a deduction of cash \ufb02ows).
\nThe fair value of inventory, which includes raw materials, work in progress and \ufb01nished goods related to the launched products was estimated at
\n$6,769m, an uplift of $5,635m on the carrying value prior to the acquisition. The fair value adjustment relates only to work in progress and \ufb01nished
\ngoods and was calculated as the estimated selling price less costs to complete and sell the inventory, associated margins on these activities and
\nholding costs. The vast majority of the fair value uplift has been unwound by 31 December 2022, with the unwind of the remaining inventory fair value
\nuplift expected in 2023.
\nProperty, plant and equipment principally comprises the manufacturing facilities in Dublin and Athlone, Ireland and was fair valued using a cost
\napproach. The estimated fair value of $1,135m represents an uplift of $111m over carrying value.
\nThe estimated fair value of contingent liabilities was $76m, relating to various claims and disputes in each case where there is a possible, but not
\nprobable, future \ufb01nancial exposure, and involve an assessment of the likelihood of a number of scenarios in relation to those matters. This amount
\nhas been included within other non-current liabilities of $697m.
\nThe estimated fair value of trade and other receivables was $2,096m, which approximated the contractual cash \ufb02ows.
\nThe net deferred tax position re\ufb02ected an adjustment of $5,215m related to the deferred tax impact of the fair value uplifts on intangible assets,
\ninventories, property, plant and equipment and contingent liabilities as described above.
\nGoodwill amounting to $8,287m was recognised on acquisition and is underpinned by a number of elements, which individually could not be quanti\ufb01ed.
\nMost signi\ufb01cant among these is the premium attributable to a pre-existing, well-positioned business in the innovation-intensive, high-growth rare
\ndiseases market with a highly skilled workforce and established reputation. Other important elements include the potential unidenti\ufb01ed products that
\nfuture research and development may yield and the core technological capabilities and knowledge base of the company. Goodwill is not expected
\nto be deductible for tax purposes.
\nNon-controlling interests re\ufb02ect Alexion\u2019s pre-existing minority equity interest in Caelum Biosciences and have been valued at $150m, the agreed-
\nupon exercise price for the exclusive option to acquire the remaining equity. The option was exercised on 28 September 2021 and the acquisition
\nof Caelum Biosciences closed shortly thereafter on 5 October 2021 (Note 26).
\nAlexion\u2019s results have been consolidated into the Group\u2019s results from 21 July 2021. For the period from acquisition to 31 December 2021, before
\nre\ufb02ecting the fair value adjustments arising on the acquisition, Alexion\u2019s Total Revenues were $3,071m and Pro\ufb01t after tax was $889m. If the acquisition
\nhad taken effect at the beginning of the reporting period in which the acquisition occurred (1 January 2021), on a pro forma basis, after re\ufb02ecting
\nthe fair value adjustments arising on the acquisition, the Total Revenue of the combined Group for the year ended 31 December 2021 would have
\nbeen $41,132m and the Loss after tax would have been $1,152m. This pro forma information does not purport to represent the results of the combined
\nGroup that actually would have occurred had the acquisition taken place on 1 January 2021 and should not be taken to be representative of
\nfuture results.
\nTotal acquisition-related costs of $4m (2021: $171m) have been incurred by the Group, which include advisory, legal and other professional fees.
\nThese costs are presented in the Statement of Comprehensive Income within Selling, general and administrative expense.
\nThe terms of the acquisition include a retention bonus plan for legacy Alexion employees whereby up to $50m may be used for retention bonus awards
\nto employees at the level of Vice President or below. These bonuses vested and were paid six months after the acquisition, or earlier. In 2022, a cost
\nof $3m (2021: $24m) has been recorded in the Statement of Comprehensive Income.
\nUpon completion of the acquisition, all unvested Alexion employee share awards were converted into AstraZeneca restricted stock awards that
\ncontinue to have, and shall be subject to, the same terms and conditions as applied in the corresponding Alexion awards immediately prior to
\ncompletion. Alexion Performance Stock Plan (PSU) awards that included performance-based vesting conditions were converted using the greater
\nof the original target level and Alexion\u2019s assessment of the level of achievement immediately prior to completion (subject to a limit of 175 per cent.
\nfor the awards granted in 2019 and a limit of 150 per cent. for the awards granted in 2020). In the year, a cost of $257m (2021: $257m) has been
\nrecorded in the Statement of Comprehensive Income ($9m (2021: $9m)) in Cost of sales, $92m (2021: $73m) in Research and development expense
\nand $156m (2021: $175m) in Selling, general and administrative expense). Payments made to the Employee Bene\ufb01t Trust upon vesting of share
\nawards recognised as part of the consideration for the acquisition of Alexion are recognised within investing activities in the Group\u2019s Statement of
\nCash Flows as the cash payment relates to the settlement of the obligation that arose on the acquisition of Alexion that was included as part of the
\nconsideration for the acquisition.
\nThere were no acquisitions of business operations in 2020.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfBusinessCombinationsExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f32364": {
"value": "28 Financial risk management objectives and policies \nThe Group\u2019s principal \ufb01nancial instruments, other than derivatives, comprise bank overdrafts, loans and other borrowings, lease liabilities, current
\nand non-current investments, cash and short-term deposits. The main purpose of these \ufb01nancial instruments is to manage the Group\u2019s funding and
\nliquidity requirements. The Group has other \ufb01nancial assets and liabilities such as trade receivables and trade payables, which arise directly from
\nits operations.
\nThe principal \ufb01nancial risks to which the Group is exposed are those of liquidity, interest rate, foreign currency and credit. Each of these is managed
\nin accordance with Board-approved policies. These policies, together with the Group\u2019s approach to capital management, are set out below.
\nCapital management
\nThe capital structure of the Group consists of Shareholders\u2019 equity (Note 24), Debt (Note 19), Other current investments (Note 12) and Cash (Note 17).
\nFor the foreseeable future, the Board will maintain a capital structure that supports the Group\u2019s strategic objectives through:
\n>
managing funding and liquidity risk
\n> optimising shareholder return
\n>
maintaining a strong, investment-grade credit rating.
\nThe Group utilises factoring arrangements for selected trade receivables. These factoring arrangements qualify for full derecognition of the associated
\ntrade receivables under IFRS 9. Amounts due on invoices that have not been factored at year end, from customers that are subject to factoring
\narrangements are disclosed in Note 16.
\nFunding and liquidity risk are reviewed regularly by the Board and managed in accordance with policies described below.
\nThe Board regularly reviews its shareholders\u2019 distribution policy, which comprises a regular cash dividend and potentially a share repurchase
\ncomponent. No share repurchases have been made since 2012.
\nThe Group\u2019s net debt position (loans and borrowings net of Cash and cash equivalents, Other investments and Derivative \ufb01nancial instruments) has
\ndecreased by $1,399m from a net debt position of $24,322m at the beginning of the year to a net debt position of $22,923m at 31 December 2022.
\nGross debt reduced from $30,781m to $29,232m, principally due to the repayment of the $1,000m 2.75% bond and a $250m \ufb02oating rate note.
\nLiquidity risk
\nThe Board reviews the Group\u2019s ongoing liquidity risks annually as part of the planning process and on an ad hoc basis. The Board considers
\nshort-term requirements against available sources of funding, taking into account forecast cash \ufb02ows. The Group manages liquidity risk by maintaining
\naccess to a number of sources of funding which are suf\ufb01cient to meet anticipated funding requirements. Speci\ufb01cally, the Group uses US and
\nEuropean commercial paper, bank loans, committed bank facilities and cash resources to manage short-term liquidity and manages long-term
\nliquidity by raising funds through the capital markets. At 31 December 2022, the Group was assigned short-term credit ratings of P-2 by Moody\u2019s
\nand A-1 by Standard and Poor\u2019s. The Group\u2019s long-term credit rating was A3 Stable outlook by Moody\u2019s and A Stable outlook by Standard and Poor\u2019s.
\nIn addition to Cash and cash equivalents of $6,166m, short-term \ufb01xed income investments of $13m, \ufb01xed deposits of $64m, less overdrafts of $183m
\nat 31 December 2022, the Group has committed bank facilities of $4,875m available to manage liquidity. These committed bank facilities have no
\n\ufb01nancial covenants and mature in April 2026. The Group regularly monitors the credit standing of the banks providing the facilities and currently does
\nnot anticipate any issue with drawing on the committed facilities should this be necessary. Advances under these facilities currently bear an interest
\nrate per annum based on US dollar LIBOR (or other relevant benchmark rate) plus a margin. The facilities contain arrangements to switch to alternative
\nrisk free rate benchmarks before June 2023.
\nAt 31 December 2022, the Group has $3,068m outstanding from debt issued under a Euro Medium Term Note programme and $20,651m under an
\nSEC-registered programme. The funds made available under these facility agreements may be used for the general corporate purposes of the Group.
\nThe maturity pro\ufb01le of the anticipated future contractual cash \ufb02ows including interest in relation to the Group\u2019s \ufb01nancial liabilities, on an undiscounted
\nbasis and which, therefore, differs from both the carrying value and fair value, is as follows:
\nBank
Total
Derivative
Derivative
Total
\noverdrafts
Trade non-derivative
financial
financial
derivative
\nand other
Bonds and
Lease
and other
financial
instruments
instruments
financial
\nloans
bank loans
liability
payables
instruments
receivable
payable
instruments
Total
\n$m
$m
$m
$m
$m
$m
$m
$m
$m
\nWithin one year
667
2,136
207
15,812
18,822
(9,719)
9,620
(99)
18,723
\nIn one to two years
\u2013
1,839
168
2,584
4,591
(60)
67
7
4,598
\nIn two to three years
\u2013
2,101
120
1,658
3,879
(59)
67
8
3,887
\nIn three to four years
\u2013
1,617
82
1,728
3,427
(1,151)
1,080
(71)
3,356
\nIn four to five years
\u2013
2,502
53
722
3,277
(36)
40
4
3,281
\nIn more than five years
\u2013
16,921
108
1,435
18,464
(1,707)
1,652
(55)
18,409
\n667
27,116
738
23,939
52,460
(12,732)
12,526
(206)
52,254
\nEffect of interest
\u2013
(7,974)
\u2013
\u2013
(7,974)
379
(405)
(26)
(8,000)
\nEffect of discounting, fair values and issue costs
(1)
(109)
(57)
(2,070)
(2,237)
(70)
24
(46)
(2,283)
\n31\u00a0December\u00a02020
666
19,033
681
21,869
42,249
(12,423)
12,145
(278)
41,971
\nNotes to the Group Financial Statements
\ncontinued
\n184
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
Bank
Total
Derivative
Derivative
Total
\noverdrafts
Trade non-derivative
financial
financial
derivative
\nand other
Bonds and
Lease
and other
financial
instruments
instruments
financial
\nloans
bank loans
liability
payables
instruments
receivable
payable
instruments
Total
\n$m
$m
$m
$m
$m
$m
$m
$m
$m
\nWithin one year
387
1,981
256
19,007
21,631
(11,766)
11,774
8
21,639
\nIn one to two years
\u2013
5,647
210
2,521
8,378
(55)
66
11
8,389
\nIn two to three years
\u2013
5,242
163
1,669
7,074
(1,060)
1,079
19
7,093
\nIn three to four years
\u2013
2,591
130
862
3,583
(35)
39
4
3,587
\nIn four to five years
\u2013
2,970
96
233
3,299
(118)
111
(7)
3,292
\nIn more than five years
\u2013
19,727
221
2,212
22,160
(1,521)
1,480
(41)
22,119
\n387
38,158
1,076
26,504
66,125
(14,555)
14,549
(6)
66,119
\nEffect of interest
\u2013
(8,609)
\u2013
\u2013
(8,609)
299
(325)
(26)
(8,635)
\nEffect of discounting, fair values and issue costs
\u2013
(142)
(89)
(2,633)
(2,864)
(36)
7
(29)
(2,893)
\n31\u00a0December\u00a02021
387
29,407
987
23,871
54,652
(14,292)
14,231
(61)
54,591
\nBank
Total
Derivative
Derivative
Total
\noverdrafts
Trade non-derivative
financial
financial
derivative
\nand other
Bonds and
Lease
and other
financial
instruments
instruments
financial
\nloans
bank loans
liability
payables
instruments
receivable
payable
instruments
Total
\n$m
$m
$m
$m
$m
$m
$m
$m
$m
\nWithin one year
365
5,777
249
19,065
25,456
(12,445)
12,478
33
25,489
\nIn one to two years
\u2013
5,233
208
2,086
7,527
(1,012)
1,078
66
7,593
\nIn two to three years
\u2013
2,608
172
872
3,652
(34)
38
4
3,656
\nIn three to four years
\u2013
2,983
128
595
3,706
(103)
103
\u2013
3,706
\nIn four to five years
\u2013
1,267
84
814
2,165
(32)
35
3
2,168
\nIn more than five years
\u2013
18,156
184
3,177
21,517
(1,436)
1,378
(58)
21,459
\n365
36,024
1,025
26,609
64,023
(15,062)
15,110
48
64,071
\nEffect of interest
(15)
(7,982)
\u2013
\u2013
(7,997)
227
(249)
(22)
(8,019)
\nEffect of discounting, fair values and issue costs
\u2013
(113)
(72)
(3,299)
(3,484)
63
7
70
(3,414)
\n31\u00a0December\u00a02022
350
27,929
953
23,310
52,542
(14,772)
14,868
96
52,638
\nWhere interest payments are on a \ufb02oating rate basis, it is assumed that rates will remain unchanged from the last business day of each year ended
\n31 December.
\nThe Group has $2bn of bank loans that mature in July 2023 and $2bn of bank loans that mature in July 2024, which the Group can repay before
\nmaturity at face value. Other than that, it is not expected that the cash \ufb02ows in the maturity pro\ufb01le could occur signi\ufb01cantly earlier or at signi\ufb01cantly
\ndifferent amounts, with the exception of $2,222m of contingent consideration held within Trade and other payables (see Note 20).
\nMarket risk
\nInterest rate risk
\nThe Group maintains a Board-approved mix of \ufb01xed and \ufb02oating rate debt and uses underlying debt, interest rate swaps and forward rate agreements
\nto manage this mix.
\nAt 31 December 2022, interest rate swaps with a notional value of $288m are fair valued through pro\ufb01t or loss and this has effectively converted the
\n7% guaranteed debentures payable in 2023 to \ufb02oating rates. No new interest rate swaps were entered into during 2022.
\nThe majority of surplus cash is currently invested in US dollar liquidity funds and investment-grade \ufb01xed income securities.
\nThe interest rate pro\ufb01le of the Group\u2019s interest-bearing \ufb01nancial instruments are set out below. In the case of current and non-current \ufb01nancial
\nliabilities, the classi\ufb01cation includes the impact of interest rate swaps which convert the debt to \ufb02oating rate.
\n2022
2021
2020
\nFixed rate
Floating rate
Total
Fixed rate
Floating rate
Total
Fixed rate
Floating rate
Total
\n$m
$m
$m
$m
$m
$m
$m
$m
$m
\nFinancial liabilities
\nInterest-bearing loans and borrowings
\nCurrent
2,476
3,066
5,542
1,232
661
1,893
1,357
1,029
2,386
\nNon-current
21,511
2,179
23,690
23,985
4,903
28,888
17,005
989
17,994
\nTotal
23,987
5,245
29,232
25,217
5,564
30,781
18,362
2,018
20,380
\nFinancial assets
\nFixed deposits
64
\u2013
64
53
\u2013
53
42
\u2013
42
\nCash collateral pledged to counterparties
\u2013
162
162
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\nCash and cash equivalents
250
5,916
6,166
\u2013
6,329
6,329
\u2013
7,832
7,832
\nTotal
314
6,078
6,392
53
6,329
6,382
42
7,832
7,874
\nIn addition to the \ufb01nancial assets above, there are $9,546m (2021: $8,765m; 2020: $6,328m) of other current and non-current asset investments
\nand other \ufb01nancial assets. Of these, $nil receive \ufb02oating rate interest (2021: $nil; 2020: $nil).
\n185
AstraZeneca Annual Report & Form 20-F Information 2022
Notes to the Group Financial Statements
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
28 Financial risk management objectives and policies
continued
\nThe Group is also exposed to market risk on other investments.
\n2022
2021
2020
\n$m
$m\u00a0
$m
\nEquity securities at fair value through Other comprehensive income (Note\u00a012)
1,056
1,168
1,108
\nNon-current fixed income securities at fair value through profit and loss (Note 12)
10
\u2013
\u2013
\nTotal
1,066
1,168
1,108
\nForeign currency risk
\nThe US dollar is the Group\u2019s most signi\ufb01cant currency. As a consequence, the Group results are presented in US dollars and exposures are managed
\nagainst US dollars accordingly.
\nTranslational
\nApproximately 61% of Group external sales in 2022 were denominated in currencies other than the US dollar, while a signi\ufb01cant proportion of
\nmanufacturing, and research and development costs were denominated in pounds sterling and Swedish krona. Surplus cash generated by business
\nunits is substantially converted to, and held centrally in, US dollars. As a result, operating pro\ufb01t and total cash \ufb02ow in US dollars will be affected
\nby movements in exchange rates.
\nThis currency exposure is managed centrally, based on forecast cash \ufb02ows. The impact of movements in exchange rates is mitigated signi\ufb01cantly
\nby the correlations which exist between the major currencies to which the Group is exposed and the US dollar. Monitoring of currency exposures
\nand correlations is undertaken on a regular basis and hedging is subject to pre-execution approval.
\nAs at 31 December 2022, before the impact of derivatives, 2% of interest-bearing loans and borrowings were denominated in pounds sterling and
\n9% were denominated in euros. Where there is non-US dollar debt and an underlying net investment of that amount in the same currency, the Group
\napplies net investment hedging. Exchange differences on the retranslation of debt designated as net investment hedges are recognised in Other
\ncomprehensive income to the extent that the hedge is effective. Any ineffectiveness is taken to pro\ufb01t. For details of non-US dollar debt in a
\ndesignated hedging relationship please see the Hedge accounting section within this Note 28 from page 188.
\nThe Group holds cross-currency swaps to hedge against the impact of \ufb02uctuations in foreign exchange rates. Fair value movements on the revaluation
\nof the cross-currency swaps are recognised in Other comprehensive income to the extent that the hedge is effective, with any ineffectiveness taken
\nto pro\ufb01t.
\nAs at 31 December 2022, the Group operates in three countries designated as hyperin\ufb02ationary, being Argentina, Venezuela and Turkey. The foreign
\nexchange risk of these markets has been assessed and deemed to be immaterial.
\nTransactional
\nThe Group aims to hedge all its forecasted major transactional currency exposures on working capital balances, which typically extend for up to three
\nmonths. Where practicable, these are hedged using forward foreign exchange contracts. In addition, external dividend payments in pounds sterling
\nto UK shareholders and in Swedish krona to Swedish shareholders are fully hedged from announcement date to payment date. Foreign exchange
\ngains and losses on forward contracts transacted for transactional hedging are taken to pro\ufb01t or to Other comprehensive income if the contract is
\nin a designated cash\ufb02ow hedge.
\nSensitivity analysis
\nThe sensitivity analysis set out below summarises the sensitivity of the market value of our \ufb01nancial instruments to hypothetical changes in market
\nrates and prices. The range of variables chosen for the sensitivity analysis re\ufb02ects our view of changes which are reasonably possible over a one-year
\nperiod. Market values are the present value of future cash \ufb02ows based on market rates and prices at the valuation date. For long-term debt, an
\nincrease in interest rates results in a decline in the fair value of debt.
\nThe sensitivity analysis assumes an instantaneous 100 basis point change in interest rates in all currencies from their levels at 31 December 2022,
\nwith all other variables held constant. Based on the composition of our long-term debt portfolio and cash reserves as at 31 December 2022, a 1%
\nincrease in interest rates would result in an additional $52m in interest expense on the debt and an additional $59m interest income on the cash
\nreserves. The exchange rate sensitivity analysis assumes an instantaneous 10% change in foreign currency exchange rates from their levels at
\n31 December 2022, with all other variables held constant. The +10% case assumes a 10% strengthening of the US dollar against all other currencies
\nand the -10% case assumes a 10% weakening of the US dollar.
\nEach incremental 10% movement in foreign currency exchange rates would have approximately the same effect as the initial 10% detailed in the
\ntable below and each incremental 1% change in interest rates would have approximately the same effect as the 1% detailed in the table below.
\nInterest rates
Exchange rates
\n31\u00a0December\u00a02020
+1%
-1%
+10%
-10%
\nIncrease/(decrease) in fair value of financial instruments ($m)
1,696
(1,758)
114
(132)
\nImpact on profit: (loss)/gain ($m)
\u2013
\u2013
(57)
74
\nImpact on equity: gain/(loss) ($m)
\u2013
\u2013
171
(206)
\nInterest rates
Exchange rates
\n31\u00a0December\u00a02021
+1%
-1%
+10%
-10%
\nIncrease/(decrease) in fair value of financial instruments ($m)
1,978
(2,106)
82
(85)
\nImpact on profit: gain/(loss) ($m)
\u2013
\u2013
24
(9)
\nImpact on equity: gain/(loss) ($m)
\u2013
\u2013
58
(76)
\nNotes to the Group Financial Statements
\ncontinued
\n186
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
Interest rates
Exchange rates
\n31\u00a0December\u00a02022
+1%
-1%
+10%
-10%
\nIncrease/(decrease) in fair value of financial instruments ($m)
1,317
(1,490)
81
(89)
\nImpact on profit: gain/(loss) ($m)
\u2013
\u2013
26
(15)
\nImpact on equity: gain/(loss) ($m)
\u2013
\u2013
55
(74)
\nCredit risk
\nThe Group is exposed to credit risk on \ufb01nancial assets, such as cash investments, derivative instruments, and Trade and other receivables. The Group
\nis also exposed in its Net asset position to its own credit risk in respect of the 2023 debentures which are accounted for at fair value through pro\ufb01t
\nor loss. Under IFRS 9, the effect of the losses and gains arising from own credit risk on the fair value of bonds designated at fair value through pro\ufb01t
\nor loss are recorded in Other comprehensive income.
\nFinancial counterparty credit risk
\nThe majority of the AstraZeneca Group\u2019s cash is centralised within the Group treasury entity and is subject to counterparty risk on the principal
\ninvested. The level of the Group\u2019s cash investments and hence credit risk will depend on the cash \ufb02ow generated by the Group and the timing of
\nthe use of that cash. The credit risk is mitigated through a policy of prioritising security and liquidity over return and, as such, cash is only invested
\nin high credit-quality investments. Counterparty limits are set according to the assessed risk of each counterparty and exposures are monitored
\nagainst these limits on a regular basis.
\nThe Group\u2019s principal \ufb01nancial counterparty credit risks at 31 December 2022 were as follows:
\nCurrent assets
\n2022
2021
2020
\n$m
$m\u00a0
$m
\nCash at bank and in hand
1,411
1,461
1,182
\nMoney market liquidity funds
4,486
4,772
6,602
\nOther short-term cash equivalents
269
96
48
\nTotal Cash and cash equivalents (Note\u00a017)
6,166
6,329
7,832
\nFixed income securities at fair value through profit and loss (Note\u00a012)
13
16
118
\nCash collateral pledged to counterparties (Note 12)
162
\u2013
\u2013
\nFixed deposits (Note\u00a012)
64
53
42
\nTotal derivative financial instruments (Note\u00a013)
87
83
142
\nCurrent assets subject to credit risk
6,492
6,481
8,134
\nNon-current assets
\n2022
2021
2020
\n$m
$m\u00a0
$m
\nDerivative financial instruments (Note\u00a013)
74
102
171
\nNon-current assets subject to credit risk
74
102
171
\nThe majority of the Group\u2019s cash is invested in US dollar AAA rated money market liquidity funds. The money market liquidity fund portfolios are
\nmanaged by \ufb01ve external third-party fund managers to maintain an AAA rating. The Group\u2019s investments represent no more than 10% of each
\noverall fund value. There were no other signi\ufb01cant concentrations of \ufb01nancial credit risk at the reporting date.
\nAll \ufb01nancial derivatives are transacted with commercial banks, in line with standard market practice. The Group has agreements with some bank
\ncounterparties whereby the parties agree to post cash collateral, for the bene\ufb01t of the other, equivalent to the market valuation of the derivative
\npositions above a predetermined threshold. The carrying value of such cash collateral held by the Group at 31 December 2022 was $89m (2021: $93m;
\n2020: $288m) and the carrying value of such cash collateral posted by the Group at 31 December 2022 was $162m (2021: $47m; 2020: $11m).
\nThe impairment provision for other \ufb01nancial assets at 31 December 2022 was immaterial.
\nTrade receivables
\nTrade receivable exposures are managed locally in the operating units where they arise and credit limits are set as deemed appropriate for the
\ncustomer. The Group is exposed to customers ranging from government-backed agencies and large private wholesalers to privately owned pharmacies,
\nand the underlying local economic and sovereign risks vary throughout the world. Where appropriate, the Group endeavours to minimise risks by
\nthe use of trade \ufb01nance instruments such as letters of credit and insurance. The Group applies the expected credit loss approach to establish an
\nallowance for impairment that represents its estimate of expected losses in respect of Trade receivables.
\nThe Group applies the IFRS 9 simpli\ufb01ed approach to measuring expected credit losses which uses a lifetime expected loss allowance for all Trade
\nreceivables. To measure expected credit losses, Trade receivables have been grouped based on shared credit characteristics and the days past due.
\nThe expected loss rates are based on payment pro\ufb01les over a period of 36 months before 31 December 2022, 31 December 2021 or 31 December
\n2020 respectively and the corresponding historical credit losses experienced within this period. The historical loss rates are adjusted to re\ufb02ect current
\nand forward-looking information on macroeconomic factors affecting the ability of the customer to settle the receivables.
\nOn that basis, the loss allowance was determined as follows:
\n0-90 days
90-180 days
Over 180 days
\n31\u00a0December 2020
Current
past due
past due
past due
Total
\nExpected loss rate
0.1%
1.6%
19.4%
60.6%
\nGross carrying amount ($m)
3,659
124
21
25
3,829
\nLoss allowance ($m)
2
2
4
15
23
\n187
AstraZeneca Annual Report & Form 20-F Information 2022
Notes to the Group Financial Statements
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
28 Financial risk management objectives and policies
continued
\n0-90 days
90-180 days
Over 180 days
\n31\u00a0December 2021
Current
past due
past due
past due
Total
\nExpected loss rate
0.1%
1.2%
22.6%
11.0%
\nGross carrying amount ($m)
5,617
328
18
91
6,054
\nLoss allowance ($m)
5
4
4
10
23
\n0-90 days
90-180 days
Over 180 days
\n31\u00a0December 2022
Current
past due
past due
past due
Total
\nExpected loss rate
0.03%
0.3%
32.0%
40.6%
\nGross carrying amount ($m)
6,791
331
50
99
7,271
\nLoss allowance ($m)
2
1
16
40
59
\nTrade receivables are written off where there is no reasonable expectation of recovery.
\nImpairment losses on Trade receivables are presented as net impairment losses within Operating pro\ufb01t, any subsequent recoveries are credited
\nagainst the same line.
\nIn the US, sales to three wholesalers accounted for approximately 73% of US sales (2021: three wholesalers accounted for approximately 94%;
\n2020: three wholesalers accounted for approximately 95%).
\nThe movements of the Group expected credit losses provision are follows:
\n2022
2021
2020
\n$m
$m
$m
\nAt 1\u00a0January
23
23
21
\nNet movement recognised in income statement
37
(2)
3
\nAmounts utilised, exchange and other movements
(1)
2
(1)
\nAt 31\u00a0December
59
23
23
\nGiven the pro\ufb01le of our customers, including large wholesalers and government-backed agencies, no further credit risk has been identi\ufb01ed with the
\nTrade receivables not past due other than those balances for which an allowance has been made. The income statement credit or charge is recorded
\nin Operating pro\ufb01t.
\nHedge accounting
\nThe Group uses foreign currency borrowings, foreign currency forwards and swaps, currency options, interest rate swaps and cross-currency interest
\nrate swaps for the purpose of hedging its foreign currency and interest rate risks. The Group may designate certain \ufb01nancial instruments as fair value
\nhedges, cash \ufb02ow hedges or net investment hedges in accordance with IFRS 9. Hedge effectiveness is determined at the inception of the hedge
\nrelationship, and through periodic prospective effectiveness assessments to ensure that an economic relationship exists between the hedged item
\nand hedging instrument. Sources of hedge effectiveness will depend on the hedge relationship designation but may include:
\n>
a signi\ufb01cant change in the credit risk of either party to the hedging relationship
\n>
a timing mismatch between the hedging instrument and the hedged item
\n>
movements in foreign currency basis spread for derivatives in a fair value hedge
\n>
a signi\ufb01cant change in the value of the foreign currency denominated net assets of the Group in a net investment hedge.
\nThe hedge ratio for each designation will be established by comparing the quantity of the hedging instrument and the quantity of the hedged item to
\ndetermine their relative weighting; for all of the Group\u2019s existing hedge relationships the hedge ratio has been determined as 1:1. Designated hedges
\nare expected to be effective and therefore the impact of ineffectiveness on pro\ufb01t is not expected to be material. The accounting treatment for fair
\nvalue hedges and debt designated as fair value through pro\ufb01t or loss is disclosed in the Group Accounting Policies section from page 142.
\nThe following table represents the Group\u2019s continuing designated hedge relationships under IFRS 9.
\n2020
\nOther comprehensive income
\nFair value
\nloss
\nOpening
Fair value
recycled
Closing
\nNominal
balance
(gain)/loss
to the
balance
Average
\namounts
Carrying
1\u00a0January
deferred
Income
31\u00a0December
Average
Average
pay
\nin local
value
2020
to OCI
statement
2020
maturity
USD FX
interest
\ncurrency
$m
$m
$m
$m
$m
year
rate
rate
\nFair value hedge \u2013 foreign currency and interest rate risk
\n1
\nUSD LIBOR
\n+ 1.27%
Cross currency interest rate swap \u2013 Euro bond
EUR 300m
43
\u2013
\u2013
\u2013
\u2013
2021
1.09
\nCash flow hedges \u2013 foreign currency and interest rate risk
\n2, 4, 5
\nCross currency interest rate swaps \u2013 Euro bonds
EUR 2,200m
150
(30)
(163)
239
46
2025
1.14
USD 2.69%
\nFX Forwards \u2212 short term FX risk
USD 618m
5
\u2013
(20)
15
(5)
2021
\u2013
\u2013
\nNet investment hedge \u2013 foreign exchange risk
\n3, 4
\nTransactions matured pre-2020
\u2013
(565)
\u2013
\u2013
(565)
\u2013
\u2013
\u2013
\nCross currency interest rate swap \u2013 JPY investment
JPY 58.5bn
19
(4)
(15)
\u2013
(19)
2029
108.03
JPY 1.53%
\nCross currency interest rate swap \u2013 CNY investment
CNY 458m
(2)
1
1
\u2013
2
2026
6.68
CNY 4.80%
\nForeign currency borrowing \u2013 GBP investment
GBP 350m
(475)
(251)
18
\u2013
(233)
2031
n/a
GBP 5.75%
\nForeign currency borrowing \u2013 EUR investment
\n6
\nEUR 450m
(548)
34
51
\u2013
85
2021
n/a
EUR 0.88%
\nContingent consideration liabilities and Acerta Pharma
\nput\u00a0option liability \u2013 AZUK and AZAB USD investments
USD 5,252m
(5,252)
2,053
(642)
\u2013
1,411
\u2013
\u2013
\u2013
\nNotes to the Group Financial Statements
\ncontinued
\n188
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
2021
\nOther comprehensive income
\nFair value
\nloss
\nOpening
Fair value
recycled
Closing
\nNominal
balance
(gain)/loss
to the
balance
Average
\namounts
Carrying
1\u00a0January
deferred
Income
31\u00a0December
Average
Average
pay
\nin local
value
2021
to OCI
statement
2021
maturity
USD FX
interest
\ncurrency
$m
$m
$m
$m
$m
year
rate
rate
\nCash flow hedges \u2013 foreign currency and interest rate risk
\n2, 4, 5
\nCross currency interest rate swaps \u2013 Euro bonds
EUR 1,700m
(43)
46
182
(201)
27
2026
1.14
USD 2.85%
\nFX Forwards \u2212 short term FX risk
USD 1,220m
12
(5)
\u2013
(7)
(12)
2022
\u2013
\u2013
\nNet investment hedge \u2013 foreign exchange risk
\n3, 4
\nTransactions matured pre-2021
\u2013
(565)
\u2013
\u2013
(565)
\u2013
\u2013
\u2013
\nCross currency interest rate swap \u2013 JPY investment
JPY 58.3bn
62
(19)
(43)
\u2013
(62)
2029
108.03
JPY 1.53%
\nCross currency interest rate swap \u2013 CNY investment
CNY 458m
(2)
2
\u2013
\u2013
2
2026
6.68
CNY 4.80%
\nForeign currency borrowing \u2013 GBP investment
GBP 350m
470
(233)
(5)
\u2013
(238)
2031
n/a
GBP 5.75%
\nForeign currency borrowing \u2013 EUR investment
\n6
\nEUR 450m
\u2013
85
(47)
\u2013
38
2021
n/a
EUR 0.88%
\nForeign currency borrowing \u2013 EUR investment
\n7
\nEUR 800m
898
\u2013
(50)
\u2013
(50)
2029
n/a
EUR 0.38%
\nContingent consideration liabilities and Acerta Pharma share
\npurchase liability \u2013 AZUK and AZAB USD investments
USD 2,658m
(2,658)
1,411
421
\u2013
1,832
\u2013
\u2013
\u2013
\n2022
\nOther comprehensive income
\nFair value
\n(gain)/loss
\nOpening
Fair value
recycled
Closing
\nNominal
balance
(gain)/loss
to the
balance
Average
\namounts
Carrying
1\u00a0January
deferred
Income
31\u00a0December
Average
Average
pay
\nin local
value
2022
to OCI
statement
2022
maturity
USD FX
interest
\ncurrency
$m
$m
$m
$m
$m
year
rate
rate
\nCash flow hedges \u2013 foreign currency and interest rate risk
\n2, 4, 5
\nCross currency interest rate swaps \u2013 Euro bonds
EUR 1,700m
(160)
27
118
(111)
34
2026
1.14
USD 2.85%
\nFX Forwards \u2212 short term FX risk
USD 1,126m
(12)
(12)
(14)
38
12
2023
\u2013
\u2013
\nNet investment hedge \u2013 foreign exchange risk
\n3, 4
\nTransactions matured pre-2022
\u2013
(527)
\u2013
\u2013
(527)
\u2013
\u2013
\u2013
\nCross currency interest rate swap \u2013 JPY investment
JPY 58.3bn
55
(62)
7
\u2013
(55)
2029
108.03
JPY 1.53%
\nCross currency interest rate swap \u2013 CNY investment
CNY 458m
(4)
2
2
\u2013
4
2026
6.68
CNY 4.80%
\nForeign currency borrowing \u2013 GBP investment
GBP 350m
420
(238)
(50)
\u2013
(288)
2031
n/a
GBP 5.75%
\nForeign currency borrowing \u2013 EUR investment
\n7
\nEUR 800m
846
(50)
(52)
\u2013
(102)
2029
n/a
EUR 0.38%
\nContingent consideration liabilities and Acerta Pharma
\nshare\u00a0purchase liability \u2013 AZUK and AZAB USD investments
USD 2,093m
(2,093)
1,832
384
\u2013
2,216
\u2013
\u2013
\u2013
\n1
Swaps designated in a fair value hedge matured on 24 November 2021 and hedge ineffectiveness during 2022 was $nil (2021: $nil; 2020: gain of $1m).
\n2
Hedge ineffectiveness recognised on swaps designated in a cash flow hedge during the period was $nil (2021: $nil; 2020: $nil).
\n3
Hedge ineffectiveness recognised on swaps designated in a net investment hedge during the period was $nil (2021: $nil; 2020: $nil).
\n4
Fair value movements on cross-currency interest rate swaps in cash flow hedge and net investment hedge relationships are shown inclusive of the impact of costs of hedging.
\n5
Nominal amount of FX forwards in a cash flow hedge of $1,710m represents the USD equivalent notional of the FX forwards. By currency, the nominal amounts were SEK 8,148m at FX rate
\n10.4568, JPY 18,963m at 132.15, GBP 455m at 0.8288 and EUR 224m at 0.9389. All FX forwards in a cash flow hedge mature on 25 January 2023.
\n6
The EUR 450m NIH matured in November 2021, when the hedging instrument, a EUR bond matured.
\n7
On 3 June 2021, upon issuance of the EUR 800m 0.375% 2029 Non-callable bond, EUR 550m was designated in a net investment hedge of the foreign currency exposure in relation of an equivalent
\namount of EUR-denominated net assets. The remaining EUR 250m was subsequently designated in a net investment hedge upon maturity of the EUR 450m bond on 24 November 2021.
\nKey controls applied to transactions in derivative \ufb01nancial instruments are to use only instruments where good market liquidity exists, to revalue all
\n\ufb01nancial instruments regularly using current market rates and to sell options only to offset previously purchased options or as part of a risk management
\nstrategy. The Group is not a net seller of options, and does not use derivative \ufb01nancial instruments for speculative purposes. The Group held no
\noptions during the reporting period.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfFinancialRiskManagementExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f32365": {
"value": "28 Financial risk management objectives and policies \nThe Group\u2019s principal \ufb01nancial instruments, other than derivatives, comprise bank overdrafts, loans and other borrowings, lease liabilities, current
\nand non-current investments, cash and short-term deposits. The main purpose of these \ufb01nancial instruments is to manage the Group\u2019s funding and
\nliquidity requirements. The Group has other \ufb01nancial assets and liabilities such as trade receivables and trade payables, which arise directly from
\nits operations.
\nThe principal \ufb01nancial risks to which the Group is exposed are those of liquidity, interest rate, foreign currency and credit. Each of these is managed
\nin accordance with Board-approved policies. These policies, together with the Group\u2019s approach to capital management, are set out below.
\nCapital management
\nThe capital structure of the Group consists of Shareholders\u2019 equity (Note 24), Debt (Note 19), Other current investments (Note 12) and Cash (Note 17).
\nFor the foreseeable future, the Board will maintain a capital structure that supports the Group\u2019s strategic objectives through:
\n>
managing funding and liquidity risk
\n> optimising shareholder return
\n>
maintaining a strong, investment-grade credit rating.
\nThe Group utilises factoring arrangements for selected trade receivables. These factoring arrangements qualify for full derecognition of the associated
\ntrade receivables under IFRS 9. Amounts due on invoices that have not been factored at year end, from customers that are subject to factoring
\narrangements are disclosed in Note 16.
\nFunding and liquidity risk are reviewed regularly by the Board and managed in accordance with policies described below.
\nThe Board regularly reviews its shareholders\u2019 distribution policy, which comprises a regular cash dividend and potentially a share repurchase
\ncomponent. No share repurchases have been made since 2012.
\nThe Group\u2019s net debt position (loans and borrowings net of Cash and cash equivalents, Other investments and Derivative \ufb01nancial instruments) has
\ndecreased by $1,399m from a net debt position of $24,322m at the beginning of the year to a net debt position of $22,923m at 31 December 2022.
\nGross debt reduced from $30,781m to $29,232m, principally due to the repayment of the $1,000m 2.75% bond and a $250m \ufb02oating rate note.
\nLiquidity risk
\nThe Board reviews the Group\u2019s ongoing liquidity risks annually as part of the planning process and on an ad hoc basis. The Board considers
\nshort-term requirements against available sources of funding, taking into account forecast cash \ufb02ows. The Group manages liquidity risk by maintaining
\naccess to a number of sources of funding which are suf\ufb01cient to meet anticipated funding requirements. Speci\ufb01cally, the Group uses US and
\nEuropean commercial paper, bank loans, committed bank facilities and cash resources to manage short-term liquidity and manages long-term
\nliquidity by raising funds through the capital markets. At 31 December 2022, the Group was assigned short-term credit ratings of P-2 by Moody\u2019s
\nand A-1 by Standard and Poor\u2019s. The Group\u2019s long-term credit rating was A3 Stable outlook by Moody\u2019s and A Stable outlook by Standard and Poor\u2019s.
\nIn addition to Cash and cash equivalents of $6,166m, short-term \ufb01xed income investments of $13m, \ufb01xed deposits of $64m, less overdrafts of $183m
\nat 31 December 2022, the Group has committed bank facilities of $4,875m available to manage liquidity. These committed bank facilities have no
\n\ufb01nancial covenants and mature in April 2026. The Group regularly monitors the credit standing of the banks providing the facilities and currently does
\nnot anticipate any issue with drawing on the committed facilities should this be necessary. Advances under these facilities currently bear an interest
\nrate per annum based on US dollar LIBOR (or other relevant benchmark rate) plus a margin. The facilities contain arrangements to switch to alternative
\nrisk free rate benchmarks before June 2023.
\nAt 31 December 2022, the Group has $3,068m outstanding from debt issued under a Euro Medium Term Note programme and $20,651m under an
\nSEC-registered programme. The funds made available under these facility agreements may be used for the general corporate purposes of the Group.
\nThe maturity pro\ufb01le of the anticipated future contractual cash \ufb02ows including interest in relation to the Group\u2019s \ufb01nancial liabilities, on an undiscounted
\nbasis and which, therefore, differs from both the carrying value and fair value, is as follows:
\nBank
Total
Derivative
Derivative
Total
\noverdrafts
Trade non-derivative
financial
financial
derivative
\nand other
Bonds and
Lease
and other
financial
instruments
instruments
financial
\nloans
bank loans
liability
payables
instruments
receivable
payable
instruments
Total
\n$m
$m
$m
$m
$m
$m
$m
$m
$m
\nWithin one year
667
2,136
207
15,812
18,822
(9,719)
9,620
(99)
18,723
\nIn one to two years
\u2013
1,839
168
2,584
4,591
(60)
67
7
4,598
\nIn two to three years
\u2013
2,101
120
1,658
3,879
(59)
67
8
3,887
\nIn three to four years
\u2013
1,617
82
1,728
3,427
(1,151)
1,080
(71)
3,356
\nIn four to five years
\u2013
2,502
53
722
3,277
(36)
40
4
3,281
\nIn more than five years
\u2013
16,921
108
1,435
18,464
(1,707)
1,652
(55)
18,409
\n667
27,116
738
23,939
52,460
(12,732)
12,526
(206)
52,254
\nEffect of interest
\u2013
(7,974)
\u2013
\u2013
(7,974)
379
(405)
(26)
(8,000)
\nEffect of discounting, fair values and issue costs
(1)
(109)
(57)
(2,070)
(2,237)
(70)
24
(46)
(2,283)
\n31\u00a0December\u00a02020
666
19,033
681
21,869
42,249
(12,423)
12,145
(278)
41,971
\nNotes to the Group Financial Statements
\ncontinued
\n184
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
Bank
Total
Derivative
Derivative
Total
\noverdrafts
Trade non-derivative
financial
financial
derivative
\nand other
Bonds and
Lease
and other
financial
instruments
instruments
financial
\nloans
bank loans
liability
payables
instruments
receivable
payable
instruments
Total
\n$m
$m
$m
$m
$m
$m
$m
$m
$m
\nWithin one year
387
1,981
256
19,007
21,631
(11,766)
11,774
8
21,639
\nIn one to two years
\u2013
5,647
210
2,521
8,378
(55)
66
11
8,389
\nIn two to three years
\u2013
5,242
163
1,669
7,074
(1,060)
1,079
19
7,093
\nIn three to four years
\u2013
2,591
130
862
3,583
(35)
39
4
3,587
\nIn four to five years
\u2013
2,970
96
233
3,299
(118)
111
(7)
3,292
\nIn more than five years
\u2013
19,727
221
2,212
22,160
(1,521)
1,480
(41)
22,119
\n387
38,158
1,076
26,504
66,125
(14,555)
14,549
(6)
66,119
\nEffect of interest
\u2013
(8,609)
\u2013
\u2013
(8,609)
299
(325)
(26)
(8,635)
\nEffect of discounting, fair values and issue costs
\u2013
(142)
(89)
(2,633)
(2,864)
(36)
7
(29)
(2,893)
\n31\u00a0December\u00a02021
387
29,407
987
23,871
54,652
(14,292)
14,231
(61)
54,591
\nBank
Total
Derivative
Derivative
Total
\noverdrafts
Trade non-derivative
financial
financial
derivative
\nand other
Bonds and
Lease
and other
financial
instruments
instruments
financial
\nloans
bank loans
liability
payables
instruments
receivable
payable
instruments
Total
\n$m
$m
$m
$m
$m
$m
$m
$m
$m
\nWithin one year
365
5,777
249
19,065
25,456
(12,445)
12,478
33
25,489
\nIn one to two years
\u2013
5,233
208
2,086
7,527
(1,012)
1,078
66
7,593
\nIn two to three years
\u2013
2,608
172
872
3,652
(34)
38
4
3,656
\nIn three to four years
\u2013
2,983
128
595
3,706
(103)
103
\u2013
3,706
\nIn four to five years
\u2013
1,267
84
814
2,165
(32)
35
3
2,168
\nIn more than five years
\u2013
18,156
184
3,177
21,517
(1,436)
1,378
(58)
21,459
\n365
36,024
1,025
26,609
64,023
(15,062)
15,110
48
64,071
\nEffect of interest
(15)
(7,982)
\u2013
\u2013
(7,997)
227
(249)
(22)
(8,019)
\nEffect of discounting, fair values and issue costs
\u2013
(113)
(72)
(3,299)
(3,484)
63
7
70
(3,414)
\n31\u00a0December\u00a02022
350
27,929
953
23,310
52,542
(14,772)
14,868
96
52,638
\nWhere interest payments are on a \ufb02oating rate basis, it is assumed that rates will remain unchanged from the last business day of each year ended
\n31 December.
\nThe Group has $2bn of bank loans that mature in July 2023 and $2bn of bank loans that mature in July 2024, which the Group can repay before
\nmaturity at face value. Other than that, it is not expected that the cash \ufb02ows in the maturity pro\ufb01le could occur signi\ufb01cantly earlier or at signi\ufb01cantly
\ndifferent amounts, with the exception of $2,222m of contingent consideration held within Trade and other payables (see Note 20).
\nMarket risk
\nInterest rate risk
\nThe Group maintains a Board-approved mix of \ufb01xed and \ufb02oating rate debt and uses underlying debt, interest rate swaps and forward rate agreements
\nto manage this mix.
\nAt 31 December 2022, interest rate swaps with a notional value of $288m are fair valued through pro\ufb01t or loss and this has effectively converted the
\n7% guaranteed debentures payable in 2023 to \ufb02oating rates. No new interest rate swaps were entered into during 2022.
\nThe majority of surplus cash is currently invested in US dollar liquidity funds and investment-grade \ufb01xed income securities.
\nThe interest rate pro\ufb01le of the Group\u2019s interest-bearing \ufb01nancial instruments are set out below. In the case of current and non-current \ufb01nancial
\nliabilities, the classi\ufb01cation includes the impact of interest rate swaps which convert the debt to \ufb02oating rate.
\n2022
2021
2020
\nFixed rate
Floating rate
Total
Fixed rate
Floating rate
Total
Fixed rate
Floating rate
Total
\n$m
$m
$m
$m
$m
$m
$m
$m
$m
\nFinancial liabilities
\nInterest-bearing loans and borrowings
\nCurrent
2,476
3,066
5,542
1,232
661
1,893
1,357
1,029
2,386
\nNon-current
21,511
2,179
23,690
23,985
4,903
28,888
17,005
989
17,994
\nTotal
23,987
5,245
29,232
25,217
5,564
30,781
18,362
2,018
20,380
\nFinancial assets
\nFixed deposits
64
\u2013
64
53
\u2013
53
42
\u2013
42
\nCash collateral pledged to counterparties
\u2013
162
162
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\nCash and cash equivalents
250
5,916
6,166
\u2013
6,329
6,329
\u2013
7,832
7,832
\nTotal
314
6,078
6,392
53
6,329
6,382
42
7,832
7,874
\nIn addition to the \ufb01nancial assets above, there are $9,546m (2021: $8,765m; 2020: $6,328m) of other current and non-current asset investments
\nand other \ufb01nancial assets. Of these, $nil receive \ufb02oating rate interest (2021: $nil; 2020: $nil).
\n185
AstraZeneca Annual Report & Form 20-F Information 2022
Notes to the Group Financial Statements
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
28 Financial risk management objectives and policies
continued
\nThe Group is also exposed to market risk on other investments.
\n2022
2021
2020
\n$m
$m\u00a0
$m
\nEquity securities at fair value through Other comprehensive income (Note\u00a012)
1,056
1,168
1,108
\nNon-current fixed income securities at fair value through profit and loss (Note 12)
10
\u2013
\u2013
\nTotal
1,066
1,168
1,108
\nForeign currency risk
\nThe US dollar is the Group\u2019s most signi\ufb01cant currency. As a consequence, the Group results are presented in US dollars and exposures are managed
\nagainst US dollars accordingly.
\nTranslational
\nApproximately 61% of Group external sales in 2022 were denominated in currencies other than the US dollar, while a signi\ufb01cant proportion of
\nmanufacturing, and research and development costs were denominated in pounds sterling and Swedish krona. Surplus cash generated by business
\nunits is substantially converted to, and held centrally in, US dollars. As a result, operating pro\ufb01t and total cash \ufb02ow in US dollars will be affected
\nby movements in exchange rates.
\nThis currency exposure is managed centrally, based on forecast cash \ufb02ows. The impact of movements in exchange rates is mitigated signi\ufb01cantly
\nby the correlations which exist between the major currencies to which the Group is exposed and the US dollar. Monitoring of currency exposures
\nand correlations is undertaken on a regular basis and hedging is subject to pre-execution approval.
\nAs at 31 December 2022, before the impact of derivatives, 2% of interest-bearing loans and borrowings were denominated in pounds sterling and
\n9% were denominated in euros. Where there is non-US dollar debt and an underlying net investment of that amount in the same currency, the Group
\napplies net investment hedging. Exchange differences on the retranslation of debt designated as net investment hedges are recognised in Other
\ncomprehensive income to the extent that the hedge is effective. Any ineffectiveness is taken to pro\ufb01t. For details of non-US dollar debt in a
\ndesignated hedging relationship please see the Hedge accounting section within this Note 28 from page 188.
\nThe Group holds cross-currency swaps to hedge against the impact of \ufb02uctuations in foreign exchange rates. Fair value movements on the revaluation
\nof the cross-currency swaps are recognised in Other comprehensive income to the extent that the hedge is effective, with any ineffectiveness taken
\nto pro\ufb01t.
\nAs at 31 December 2022, the Group operates in three countries designated as hyperin\ufb02ationary, being Argentina, Venezuela and Turkey. The foreign
\nexchange risk of these markets has been assessed and deemed to be immaterial.
\nTransactional
\nThe Group aims to hedge all its forecasted major transactional currency exposures on working capital balances, which typically extend for up to three
\nmonths. Where practicable, these are hedged using forward foreign exchange contracts. In addition, external dividend payments in pounds sterling
\nto UK shareholders and in Swedish krona to Swedish shareholders are fully hedged from announcement date to payment date. Foreign exchange
\ngains and losses on forward contracts transacted for transactional hedging are taken to pro\ufb01t or to Other comprehensive income if the contract is
\nin a designated cash\ufb02ow hedge.
\nSensitivity analysis
\nThe sensitivity analysis set out below summarises the sensitivity of the market value of our \ufb01nancial instruments to hypothetical changes in market
\nrates and prices. The range of variables chosen for the sensitivity analysis re\ufb02ects our view of changes which are reasonably possible over a one-year
\nperiod. Market values are the present value of future cash \ufb02ows based on market rates and prices at the valuation date. For long-term debt, an
\nincrease in interest rates results in a decline in the fair value of debt.
\nThe sensitivity analysis assumes an instantaneous 100 basis point change in interest rates in all currencies from their levels at 31 December 2022,
\nwith all other variables held constant. Based on the composition of our long-term debt portfolio and cash reserves as at 31 December 2022, a 1%
\nincrease in interest rates would result in an additional $52m in interest expense on the debt and an additional $59m interest income on the cash
\nreserves. The exchange rate sensitivity analysis assumes an instantaneous 10% change in foreign currency exchange rates from their levels at
\n31 December 2022, with all other variables held constant. The +10% case assumes a 10% strengthening of the US dollar against all other currencies
\nand the -10% case assumes a 10% weakening of the US dollar.
\nEach incremental 10% movement in foreign currency exchange rates would have approximately the same effect as the initial 10% detailed in the
\ntable below and each incremental 1% change in interest rates would have approximately the same effect as the 1% detailed in the table below.
\nInterest rates
Exchange rates
\n31\u00a0December\u00a02020
+1%
-1%
+10%
-10%
\nIncrease/(decrease) in fair value of financial instruments ($m)
1,696
(1,758)
114
(132)
\nImpact on profit: (loss)/gain ($m)
\u2013
\u2013
(57)
74
\nImpact on equity: gain/(loss) ($m)
\u2013
\u2013
171
(206)
\nInterest rates
Exchange rates
\n31\u00a0December\u00a02021
+1%
-1%
+10%
-10%
\nIncrease/(decrease) in fair value of financial instruments ($m)
1,978
(2,106)
82
(85)
\nImpact on profit: gain/(loss) ($m)
\u2013
\u2013
24
(9)
\nImpact on equity: gain/(loss) ($m)
\u2013
\u2013
58
(76)
\nNotes to the Group Financial Statements
\ncontinued
\n186
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
Interest rates
Exchange rates
\n31\u00a0December\u00a02022
+1%
-1%
+10%
-10%
\nIncrease/(decrease) in fair value of financial instruments ($m)
1,317
(1,490)
81
(89)
\nImpact on profit: gain/(loss) ($m)
\u2013
\u2013
26
(15)
\nImpact on equity: gain/(loss) ($m)
\u2013
\u2013
55
(74)
\nCredit risk
\nThe Group is exposed to credit risk on \ufb01nancial assets, such as cash investments, derivative instruments, and Trade and other receivables. The Group
\nis also exposed in its Net asset position to its own credit risk in respect of the 2023 debentures which are accounted for at fair value through pro\ufb01t
\nor loss. Under IFRS 9, the effect of the losses and gains arising from own credit risk on the fair value of bonds designated at fair value through pro\ufb01t
\nor loss are recorded in Other comprehensive income.
\nFinancial counterparty credit risk
\nThe majority of the AstraZeneca Group\u2019s cash is centralised within the Group treasury entity and is subject to counterparty risk on the principal
\ninvested. The level of the Group\u2019s cash investments and hence credit risk will depend on the cash \ufb02ow generated by the Group and the timing of
\nthe use of that cash. The credit risk is mitigated through a policy of prioritising security and liquidity over return and, as such, cash is only invested
\nin high credit-quality investments. Counterparty limits are set according to the assessed risk of each counterparty and exposures are monitored
\nagainst these limits on a regular basis.
\nThe Group\u2019s principal \ufb01nancial counterparty credit risks at 31 December 2022 were as follows:
\nCurrent assets
\n2022
2021
2020
\n$m
$m\u00a0
$m
\nCash at bank and in hand
1,411
1,461
1,182
\nMoney market liquidity funds
4,486
4,772
6,602
\nOther short-term cash equivalents
269
96
48
\nTotal Cash and cash equivalents (Note\u00a017)
6,166
6,329
7,832
\nFixed income securities at fair value through profit and loss (Note\u00a012)
13
16
118
\nCash collateral pledged to counterparties (Note 12)
162
\u2013
\u2013
\nFixed deposits (Note\u00a012)
64
53
42
\nTotal derivative financial instruments (Note\u00a013)
87
83
142
\nCurrent assets subject to credit risk
6,492
6,481
8,134
\nNon-current assets
\n2022
2021
2020
\n$m
$m\u00a0
$m
\nDerivative financial instruments (Note\u00a013)
74
102
171
\nNon-current assets subject to credit risk
74
102
171
\nThe majority of the Group\u2019s cash is invested in US dollar AAA rated money market liquidity funds. The money market liquidity fund portfolios are
\nmanaged by \ufb01ve external third-party fund managers to maintain an AAA rating. The Group\u2019s investments represent no more than 10% of each
\noverall fund value. There were no other signi\ufb01cant concentrations of \ufb01nancial credit risk at the reporting date.
\nAll \ufb01nancial derivatives are transacted with commercial banks, in line with standard market practice. The Group has agreements with some bank
\ncounterparties whereby the parties agree to post cash collateral, for the bene\ufb01t of the other, equivalent to the market valuation of the derivative
\npositions above a predetermined threshold. The carrying value of such cash collateral held by the Group at 31 December 2022 was $89m (2021: $93m;
\n2020: $288m) and the carrying value of such cash collateral posted by the Group at 31 December 2022 was $162m (2021: $47m; 2020: $11m).
\nThe impairment provision for other \ufb01nancial assets at 31 December 2022 was immaterial.
\nTrade receivables
\nTrade receivable exposures are managed locally in the operating units where they arise and credit limits are set as deemed appropriate for the
\ncustomer. The Group is exposed to customers ranging from government-backed agencies and large private wholesalers to privately owned pharmacies,
\nand the underlying local economic and sovereign risks vary throughout the world. Where appropriate, the Group endeavours to minimise risks by
\nthe use of trade \ufb01nance instruments such as letters of credit and insurance. The Group applies the expected credit loss approach to establish an
\nallowance for impairment that represents its estimate of expected losses in respect of Trade receivables.
\nThe Group applies the IFRS 9 simpli\ufb01ed approach to measuring expected credit losses which uses a lifetime expected loss allowance for all Trade
\nreceivables. To measure expected credit losses, Trade receivables have been grouped based on shared credit characteristics and the days past due.
\nThe expected loss rates are based on payment pro\ufb01les over a period of 36 months before 31 December 2022, 31 December 2021 or 31 December
\n2020 respectively and the corresponding historical credit losses experienced within this period. The historical loss rates are adjusted to re\ufb02ect current
\nand forward-looking information on macroeconomic factors affecting the ability of the customer to settle the receivables.
\nOn that basis, the loss allowance was determined as follows:
\n0-90 days
90-180 days
Over 180 days
\n31\u00a0December 2020
Current
past due
past due
past due
Total
\nExpected loss rate
0.1%
1.6%
19.4%
60.6%
\nGross carrying amount ($m)
3,659
124
21
25
3,829
\nLoss allowance ($m)
2
2
4
15
23
\n187
AstraZeneca Annual Report & Form 20-F Information 2022
Notes to the Group Financial Statements
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
28 Financial risk management objectives and policies
continued
\n0-90 days
90-180 days
Over 180 days
\n31\u00a0December 2021
Current
past due
past due
past due
Total
\nExpected loss rate
0.1%
1.2%
22.6%
11.0%
\nGross carrying amount ($m)
5,617
328
18
91
6,054
\nLoss allowance ($m)
5
4
4
10
23
\n0-90 days
90-180 days
Over 180 days
\n31\u00a0December 2022
Current
past due
past due
past due
Total
\nExpected loss rate
0.03%
0.3%
32.0%
40.6%
\nGross carrying amount ($m)
6,791
331
50
99
7,271
\nLoss allowance ($m)
2
1
16
40
59
\nTrade receivables are written off where there is no reasonable expectation of recovery.
\nImpairment losses on Trade receivables are presented as net impairment losses within Operating pro\ufb01t, any subsequent recoveries are credited
\nagainst the same line.
\nIn the US, sales to three wholesalers accounted for approximately 73% of US sales (2021: three wholesalers accounted for approximately 94%;
\n2020: three wholesalers accounted for approximately 95%).
\nThe movements of the Group expected credit losses provision are follows:
\n2022
2021
2020
\n$m
$m
$m
\nAt 1\u00a0January
23
23
21
\nNet movement recognised in income statement
37
(2)
3
\nAmounts utilised, exchange and other movements
(1)
2
(1)
\nAt 31\u00a0December
59
23
23
\nGiven the pro\ufb01le of our customers, including large wholesalers and government-backed agencies, no further credit risk has been identi\ufb01ed with the
\nTrade receivables not past due other than those balances for which an allowance has been made. The income statement credit or charge is recorded
\nin Operating pro\ufb01t.
\nHedge accounting
\nThe Group uses foreign currency borrowings, foreign currency forwards and swaps, currency options, interest rate swaps and cross-currency interest
\nrate swaps for the purpose of hedging its foreign currency and interest rate risks. The Group may designate certain \ufb01nancial instruments as fair value
\nhedges, cash \ufb02ow hedges or net investment hedges in accordance with IFRS 9. Hedge effectiveness is determined at the inception of the hedge
\nrelationship, and through periodic prospective effectiveness assessments to ensure that an economic relationship exists between the hedged item
\nand hedging instrument. Sources of hedge effectiveness will depend on the hedge relationship designation but may include:
\n>
a signi\ufb01cant change in the credit risk of either party to the hedging relationship
\n>
a timing mismatch between the hedging instrument and the hedged item
\n>
movements in foreign currency basis spread for derivatives in a fair value hedge
\n>
a signi\ufb01cant change in the value of the foreign currency denominated net assets of the Group in a net investment hedge.
\nThe hedge ratio for each designation will be established by comparing the quantity of the hedging instrument and the quantity of the hedged item to
\ndetermine their relative weighting; for all of the Group\u2019s existing hedge relationships the hedge ratio has been determined as 1:1. Designated hedges
\nare expected to be effective and therefore the impact of ineffectiveness on pro\ufb01t is not expected to be material. The accounting treatment for fair
\nvalue hedges and debt designated as fair value through pro\ufb01t or loss is disclosed in the Group Accounting Policies section from page 142.
\nThe following table represents the Group\u2019s continuing designated hedge relationships under IFRS 9.
\n2020
\nOther comprehensive income
\nFair value
\nloss
\nOpening
Fair value
recycled
Closing
\nNominal
balance
(gain)/loss
to the
balance
Average
\namounts
Carrying
1\u00a0January
deferred
Income
31\u00a0December
Average
Average
pay
\nin local
value
2020
to OCI
statement
2020
maturity
USD FX
interest
\ncurrency
$m
$m
$m
$m
$m
year
rate
rate
\nFair value hedge \u2013 foreign currency and interest rate risk
\n1
\nUSD LIBOR
\n+ 1.27%
Cross currency interest rate swap \u2013 Euro bond
EUR 300m
43
\u2013
\u2013
\u2013
\u2013
2021
1.09
\nCash flow hedges \u2013 foreign currency and interest rate risk
\n2, 4, 5
\nCross currency interest rate swaps \u2013 Euro bonds
EUR 2,200m
150
(30)
(163)
239
46
2025
1.14
USD 2.69%
\nFX Forwards \u2212 short term FX risk
USD 618m
5
\u2013
(20)
15
(5)
2021
\u2013
\u2013
\nNet investment hedge \u2013 foreign exchange risk
\n3, 4
\nTransactions matured pre-2020
\u2013
(565)
\u2013
\u2013
(565)
\u2013
\u2013
\u2013
\nCross currency interest rate swap \u2013 JPY investment
JPY 58.5bn
19
(4)
(15)
\u2013
(19)
2029
108.03
JPY 1.53%
\nCross currency interest rate swap \u2013 CNY investment
CNY 458m
(2)
1
1
\u2013
2
2026
6.68
CNY 4.80%
\nForeign currency borrowing \u2013 GBP investment
GBP 350m
(475)
(251)
18
\u2013
(233)
2031
n/a
GBP 5.75%
\nForeign currency borrowing \u2013 EUR investment
\n6
\nEUR 450m
(548)
34
51
\u2013
85
2021
n/a
EUR 0.88%
\nContingent consideration liabilities and Acerta Pharma
\nput\u00a0option liability \u2013 AZUK and AZAB USD investments
USD 5,252m
(5,252)
2,053
(642)
\u2013
1,411
\u2013
\u2013
\u2013
\nNotes to the Group Financial Statements
\ncontinued
\n188
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
2021
\nOther comprehensive income
\nFair value
\nloss
\nOpening
Fair value
recycled
Closing
\nNominal
balance
(gain)/loss
to the
balance
Average
\namounts
Carrying
1\u00a0January
deferred
Income
31\u00a0December
Average
Average
pay
\nin local
value
2021
to OCI
statement
2021
maturity
USD FX
interest
\ncurrency
$m
$m
$m
$m
$m
year
rate
rate
\nCash flow hedges \u2013 foreign currency and interest rate risk
\n2, 4, 5
\nCross currency interest rate swaps \u2013 Euro bonds
EUR 1,700m
(43)
46
182
(201)
27
2026
1.14
USD 2.85%
\nFX Forwards \u2212 short term FX risk
USD 1,220m
12
(5)
\u2013
(7)
(12)
2022
\u2013
\u2013
\nNet investment hedge \u2013 foreign exchange risk
\n3, 4
\nTransactions matured pre-2021
\u2013
(565)
\u2013
\u2013
(565)
\u2013
\u2013
\u2013
\nCross currency interest rate swap \u2013 JPY investment
JPY 58.3bn
62
(19)
(43)
\u2013
(62)
2029
108.03
JPY 1.53%
\nCross currency interest rate swap \u2013 CNY investment
CNY 458m
(2)
2
\u2013
\u2013
2
2026
6.68
CNY 4.80%
\nForeign currency borrowing \u2013 GBP investment
GBP 350m
470
(233)
(5)
\u2013
(238)
2031
n/a
GBP 5.75%
\nForeign currency borrowing \u2013 EUR investment
\n6
\nEUR 450m
\u2013
85
(47)
\u2013
38
2021
n/a
EUR 0.88%
\nForeign currency borrowing \u2013 EUR investment
\n7
\nEUR 800m
898
\u2013
(50)
\u2013
(50)
2029
n/a
EUR 0.38%
\nContingent consideration liabilities and Acerta Pharma share
\npurchase liability \u2013 AZUK and AZAB USD investments
USD 2,658m
(2,658)
1,411
421
\u2013
1,832
\u2013
\u2013
\u2013
\n2022
\nOther comprehensive income
\nFair value
\n(gain)/loss
\nOpening
Fair value
recycled
Closing
\nNominal
balance
(gain)/loss
to the
balance
Average
\namounts
Carrying
1\u00a0January
deferred
Income
31\u00a0December
Average
Average
pay
\nin local
value
2022
to OCI
statement
2022
maturity
USD FX
interest
\ncurrency
$m
$m
$m
$m
$m
year
rate
rate
\nCash flow hedges \u2013 foreign currency and interest rate risk
\n2, 4, 5
\nCross currency interest rate swaps \u2013 Euro bonds
EUR 1,700m
(160)
27
118
(111)
34
2026
1.14
USD 2.85%
\nFX Forwards \u2212 short term FX risk
USD 1,126m
(12)
(12)
(14)
38
12
2023
\u2013
\u2013
\nNet investment hedge \u2013 foreign exchange risk
\n3, 4
\nTransactions matured pre-2022
\u2013
(527)
\u2013
\u2013
(527)
\u2013
\u2013
\u2013
\nCross currency interest rate swap \u2013 JPY investment
JPY 58.3bn
55
(62)
7
\u2013
(55)
2029
108.03
JPY 1.53%
\nCross currency interest rate swap \u2013 CNY investment
CNY 458m
(4)
2
2
\u2013
4
2026
6.68
CNY 4.80%
\nForeign currency borrowing \u2013 GBP investment
GBP 350m
420
(238)
(50)
\u2013
(288)
2031
n/a
GBP 5.75%
\nForeign currency borrowing \u2013 EUR investment
\n7
\nEUR 800m
846
(50)
(52)
\u2013
(102)
2029
n/a
EUR 0.38%
\nContingent consideration liabilities and Acerta Pharma
\nshare\u00a0purchase liability \u2013 AZUK and AZAB USD investments
USD 2,093m
(2,093)
1,832
384
\u2013
2,216
\u2013
\u2013
\u2013
\n1
Swaps designated in a fair value hedge matured on 24 November 2021 and hedge ineffectiveness during 2022 was $nil (2021: $nil; 2020: gain of $1m).
\n2
Hedge ineffectiveness recognised on swaps designated in a cash flow hedge during the period was $nil (2021: $nil; 2020: $nil).
\n3
Hedge ineffectiveness recognised on swaps designated in a net investment hedge during the period was $nil (2021: $nil; 2020: $nil).
\n4
Fair value movements on cross-currency interest rate swaps in cash flow hedge and net investment hedge relationships are shown inclusive of the impact of costs of hedging.
\n5
Nominal amount of FX forwards in a cash flow hedge of $1,710m represents the USD equivalent notional of the FX forwards. By currency, the nominal amounts were SEK 8,148m at FX rate
\n10.4568, JPY 18,963m at 132.15, GBP 455m at 0.8288 and EUR 224m at 0.9389. All FX forwards in a cash flow hedge mature on 25 January 2023.
\n6
The EUR 450m NIH matured in November 2021, when the hedging instrument, a EUR bond matured.
\n7
On 3 June 2021, upon issuance of the EUR 800m 0.375% 2029 Non-callable bond, EUR 550m was designated in a net investment hedge of the foreign currency exposure in relation of an equivalent
\namount of EUR-denominated net assets. The remaining EUR 250m was subsequently designated in a net investment hedge upon maturity of the EUR 450m bond on 24 November 2021.
\nKey controls applied to transactions in derivative \ufb01nancial instruments are to use only instruments where good market liquidity exists, to revalue all
\n\ufb01nancial instruments regularly using current market rates and to sell options only to offset previously purchased options or as part of a risk management
\nstrategy. The Group is not a net seller of options, and does not use derivative \ufb01nancial instruments for speculative purposes. The Group held no
\noptions during the reporting period.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfObjectivesPoliciesAndProcessesForManagingCapitalExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f32392": {
"value": "Liquidity risk \nThe Board reviews the Group\u2019s ongoing liquidity risks annually as part of the planning process and on an ad hoc basis. The Board considers
\nshort-term requirements against available sources of funding, taking into account forecast cash \ufb02ows. The Group manages liquidity risk by maintaining
\naccess to a number of sources of funding which are suf\ufb01cient to meet anticipated funding requirements. Speci\ufb01cally, the Group uses US and
\nEuropean commercial paper, bank loans, committed bank facilities and cash resources to manage short-term liquidity and manages long-term
\nliquidity by raising funds through the capital markets. At 31 December 2022, the Group was assigned short-term credit ratings of P-2 by Moody\u2019s
\nand A-1 by Standard and Poor\u2019s. The Group\u2019s long-term credit rating was A3 Stable outlook by Moody\u2019s and A Stable outlook by Standard and Poor\u2019s.
\nIn addition to Cash and cash equivalents of $6,166m, short-term \ufb01xed income investments of $13m, \ufb01xed deposits of $64m, less overdrafts of $183m
\nat 31 December 2022, the Group has committed bank facilities of $4,875m available to manage liquidity. These committed bank facilities have no
\n\ufb01nancial covenants and mature in April 2026. The Group regularly monitors the credit standing of the banks providing the facilities and currently does
\nnot anticipate any issue with drawing on the committed facilities should this be necessary. Advances under these facilities currently bear an interest
\nrate per annum based on US dollar LIBOR (or other relevant benchmark rate) plus a margin. The facilities contain arrangements to switch to alternative
\nrisk free rate benchmarks before June 2023.
\nAt 31 December 2022, the Group has $3,068m outstanding from debt issued under a Euro Medium Term Note programme and $20,651m under an
\nSEC-registered programme. The funds made available under these facility agreements may be used for the general corporate purposes of the Group.
\nThe maturity pro\ufb01le of the anticipated future contractual cash \ufb02ows including interest in relation to the Group\u2019s \ufb01nancial liabilities, on an undiscounted
\nbasis and which, therefore, differs from both the carrying value and fair value, is as follows:
\nBank
Total
Derivative
Derivative
Total
\noverdrafts
Trade non-derivative
financial
financial
derivative
\nand other
Bonds and
Lease
and other
financial
instruments
instruments
financial
\nloans
bank loans
liability
payables
instruments
receivable
payable
instruments
Total
\n$m
$m
$m
$m
$m
$m
$m
$m
$m
\nWithin one year
667
2,136
207
15,812
18,822
(9,719)
9,620
(99)
18,723
\nIn one to two years
\u2013
1,839
168
2,584
4,591
(60)
67
7
4,598
\nIn two to three years
\u2013
2,101
120
1,658
3,879
(59)
67
8
3,887
\nIn three to four years
\u2013
1,617
82
1,728
3,427
(1,151)
1,080
(71)
3,356
\nIn four to five years
\u2013
2,502
53
722
3,277
(36)
40
4
3,281
\nIn more than five years
\u2013
16,921
108
1,435
18,464
(1,707)
1,652
(55)
18,409
\n667
27,116
738
23,939
52,460
(12,732)
12,526
(206)
52,254
\nEffect of interest
\u2013
(7,974)
\u2013
\u2013
(7,974)
379
(405)
(26)
(8,000)
\nEffect of discounting, fair values and issue costs
(1)
(109)
(57)
(2,070)
(2,237)
(70)
24
(46)
(2,283)
\n31\u00a0December\u00a02020
666
19,033
681
21,869
42,249
(12,423)
12,145
(278)
41,971
\nNotes to the Group Financial Statements
\ncontinued
\n184
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
Bank
Total
Derivative
Derivative
Total
\noverdrafts
Trade non-derivative
financial
financial
derivative
\nand other
Bonds and
Lease
and other
financial
instruments
instruments
financial
\nloans
bank loans
liability
payables
instruments
receivable
payable
instruments
Total
\n$m
$m
$m
$m
$m
$m
$m
$m
$m
\nWithin one year
387
1,981
256
19,007
21,631
(11,766)
11,774
8
21,639
\nIn one to two years
\u2013
5,647
210
2,521
8,378
(55)
66
11
8,389
\nIn two to three years
\u2013
5,242
163
1,669
7,074
(1,060)
1,079
19
7,093
\nIn three to four years
\u2013
2,591
130
862
3,583
(35)
39
4
3,587
\nIn four to five years
\u2013
2,970
96
233
3,299
(118)
111
(7)
3,292
\nIn more than five years
\u2013
19,727
221
2,212
22,160
(1,521)
1,480
(41)
22,119
\n387
38,158
1,076
26,504
66,125
(14,555)
14,549
(6)
66,119
\nEffect of interest
\u2013
(8,609)
\u2013
\u2013
(8,609)
299
(325)
(26)
(8,635)
\nEffect of discounting, fair values and issue costs
\u2013
(142)
(89)
(2,633)
(2,864)
(36)
7
(29)
(2,893)
\n31\u00a0December\u00a02021
387
29,407
987
23,871
54,652
(14,292)
14,231
(61)
54,591
\nBank
Total
Derivative
Derivative
Total
\noverdrafts
Trade non-derivative
financial
financial
derivative
\nand other
Bonds and
Lease
and other
financial
instruments
instruments
financial
\nloans
bank loans
liability
payables
instruments
receivable
payable
instruments
Total
\n$m
$m
$m
$m
$m
$m
$m
$m
$m
\nWithin one year
365
5,777
249
19,065
25,456
(12,445)
12,478
33
25,489
\nIn one to two years
\u2013
5,233
208
2,086
7,527
(1,012)
1,078
66
7,593
\nIn two to three years
\u2013
2,608
172
872
3,652
(34)
38
4
3,656
\nIn three to four years
\u2013
2,983
128
595
3,706
(103)
103
\u2013
3,706
\nIn four to five years
\u2013
1,267
84
814
2,165
(32)
35
3
2,168
\nIn more than five years
\u2013
18,156
184
3,177
21,517
(1,436)
1,378
(58)
21,459
\n365
36,024
1,025
26,609
64,023
(15,062)
15,110
48
64,071
\nEffect of interest
(15)
(7,982)
\u2013
\u2013
(7,997)
227
(249)
(22)
(8,019)
\nEffect of discounting, fair values and issue costs
\u2013
(113)
(72)
(3,299)
(3,484)
63
7
70
(3,414)
\n31\u00a0December\u00a02022
350
27,929
953
23,310
52,542
(14,772)
14,868
96
52,638
\nWhere interest payments are on a \ufb02oating rate basis, it is assumed that rates will remain unchanged from the last business day of each year ended
\n31 December.
\nThe Group has $2bn of bank loans that mature in July 2023 and $2bn of bank loans that mature in July 2024, which the Group can repay before
\nmaturity at face value. Other than that, it is not expected that the cash \ufb02ows in the maturity pro\ufb01le could occur signi\ufb01cantly earlier or at signi\ufb01cantly
\ndifferent amounts, with the exception of $2,222m of contingent consideration held within Trade and other payables (see Note 20).",
"dimensions": {
"concept": "ifrs-full:DisclosureOfLiquidityRiskExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f32847": {
"value": "Market risk \nInterest rate risk
\nThe Group maintains a Board-approved mix of \ufb01xed and \ufb02oating rate debt and uses underlying debt, interest rate swaps and forward rate agreements
\nto manage this mix.
\nAt 31 December 2022, interest rate swaps with a notional value of $288m are fair valued through pro\ufb01t or loss and this has effectively converted the
\n7% guaranteed debentures payable in 2023 to \ufb02oating rates. No new interest rate swaps were entered into during 2022.
\nThe majority of surplus cash is currently invested in US dollar liquidity funds and investment-grade \ufb01xed income securities.
\nThe interest rate pro\ufb01le of the Group\u2019s interest-bearing \ufb01nancial instruments are set out below. In the case of current and non-current \ufb01nancial
\nliabilities, the classi\ufb01cation includes the impact of interest rate swaps which convert the debt to \ufb02oating rate.
\n2022
2021
2020
\nFixed rate
Floating rate
Total
Fixed rate
Floating rate
Total
Fixed rate
Floating rate
Total
\n$m
$m
$m
$m
$m
$m
$m
$m
$m
\nFinancial liabilities
\nInterest-bearing loans and borrowings
\nCurrent
2,476
3,066
5,542
1,232
661
1,893
1,357
1,029
2,386
\nNon-current
21,511
2,179
23,690
23,985
4,903
28,888
17,005
989
17,994
\nTotal
23,987
5,245
29,232
25,217
5,564
30,781
18,362
2,018
20,380
\nFinancial assets
\nFixed deposits
64
\u2013
64
53
\u2013
53
42
\u2013
42
\nCash collateral pledged to counterparties
\u2013
162
162
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\nCash and cash equivalents
250
5,916
6,166
\u2013
6,329
6,329
\u2013
7,832
7,832
\nTotal
314
6,078
6,392
53
6,329
6,382
42
7,832
7,874
\nIn addition to the \ufb01nancial assets above, there are $9,546m (2021: $8,765m; 2020: $6,328m) of other current and non-current asset investments
\nand other \ufb01nancial assets. Of these, $nil receive \ufb02oating rate interest (2021: $nil; 2020: $nil).
\n185
AstraZeneca Annual Report & Form 20-F Information 2022
Notes to the Group Financial Statements
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
28 Financial risk management objectives and policies
continued
\nThe Group is also exposed to market risk on other investments.
\n2022
2021
2020
\n$m
$m\u00a0
$m
\nEquity securities at fair value through Other comprehensive income (Note\u00a012)
1,056
1,168
1,108
\nNon-current fixed income securities at fair value through profit and loss (Note 12)
10
\u2013
\u2013
\nTotal
1,066
1,168
1,108",
"dimensions": {
"concept": "ifrs-full:DisclosureOfMarketRiskExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f33124": {
"value": "Credit risk \nThe Group is exposed to credit risk on \ufb01nancial assets, such as cash investments, derivative instruments, and Trade and other receivables. The Group
\nis also exposed in its Net asset position to its own credit risk in respect of the 2023 debentures which are accounted for at fair value through pro\ufb01t
\nor loss. Under IFRS 9, the effect of the losses and gains arising from own credit risk on the fair value of bonds designated at fair value through pro\ufb01t
\nor loss are recorded in Other comprehensive income.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfCreditRiskExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f33348": {
"value": "Hedge accounting \nThe Group uses foreign currency borrowings, foreign currency forwards and swaps, currency options, interest rate swaps and cross-currency interest
\nrate swaps for the purpose of hedging its foreign currency and interest rate risks. The Group may designate certain \ufb01nancial instruments as fair value
\nhedges, cash \ufb02ow hedges or net investment hedges in accordance with IFRS 9. Hedge effectiveness is determined at the inception of the hedge
\nrelationship, and through periodic prospective effectiveness assessments to ensure that an economic relationship exists between the hedged item
\nand hedging instrument. Sources of hedge effectiveness will depend on the hedge relationship designation but may include:
\n>
a signi\ufb01cant change in the credit risk of either party to the hedging relationship
\n>
a timing mismatch between the hedging instrument and the hedged item
\n>
movements in foreign currency basis spread for derivatives in a fair value hedge
\n>
a signi\ufb01cant change in the value of the foreign currency denominated net assets of the Group in a net investment hedge.
\nThe hedge ratio for each designation will be established by comparing the quantity of the hedging instrument and the quantity of the hedged item to
\ndetermine their relative weighting; for all of the Group\u2019s existing hedge relationships the hedge ratio has been determined as 1:1. Designated hedges
\nare expected to be effective and therefore the impact of ineffectiveness on pro\ufb01t is not expected to be material. The accounting treatment for fair
\nvalue hedges and debt designated as fair value through pro\ufb01t or loss is disclosed in the Group Accounting Policies section from page 142.
\nThe following table represents the Group\u2019s continuing designated hedge relationships under IFRS 9.
\n2020
\nOther comprehensive income
\nFair value
\nloss
\nOpening
Fair value
recycled
Closing
\nNominal
balance
(gain)/loss
to the
balance
Average
\namounts
Carrying
1\u00a0January
deferred
Income
31\u00a0December
Average
Average
pay
\nin local
value
2020
to OCI
statement
2020
maturity
USD FX
interest
\ncurrency
$m
$m
$m
$m
$m
year
rate
rate
\nFair value hedge \u2013 foreign currency and interest rate risk
\n1
\nUSD LIBOR
\n+ 1.27%
Cross currency interest rate swap \u2013 Euro bond
EUR 300m
43
\u2013
\u2013
\u2013
\u2013
2021
1.09
\nCash flow hedges \u2013 foreign currency and interest rate risk
\n2, 4, 5
\nCross currency interest rate swaps \u2013 Euro bonds
EUR 2,200m
150
(30)
(163)
239
46
2025
1.14
USD 2.69%
\nFX Forwards \u2212 short term FX risk
USD 618m
5
\u2013
(20)
15
(5)
2021
\u2013
\u2013
\nNet investment hedge \u2013 foreign exchange risk
\n3, 4
\nTransactions matured pre-2020
\u2013
(565)
\u2013
\u2013
(565)
\u2013
\u2013
\u2013
\nCross currency interest rate swap \u2013 JPY investment
JPY 58.5bn
19
(4)
(15)
\u2013
(19)
2029
108.03
JPY 1.53%
\nCross currency interest rate swap \u2013 CNY investment
CNY 458m
(2)
1
1
\u2013
2
2026
6.68
CNY 4.80%
\nForeign currency borrowing \u2013 GBP investment
GBP 350m
(475)
(251)
18
\u2013
(233)
2031
n/a
GBP 5.75%
\nForeign currency borrowing \u2013 EUR investment
\n6
\nEUR 450m
(548)
34
51
\u2013
85
2021
n/a
EUR 0.88%
\nContingent consideration liabilities and Acerta Pharma
\nput\u00a0option liability \u2013 AZUK and AZAB USD investments
USD 5,252m
(5,252)
2,053
(642)
\u2013
1,411
\u2013
\u2013
\u2013
\nNotes to the Group Financial Statements
\ncontinued
\n188
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
2021
\nOther comprehensive income
\nFair value
\nloss
\nOpening
Fair value
recycled
Closing
\nNominal
balance
(gain)/loss
to the
balance
Average
\namounts
Carrying
1\u00a0January
deferred
Income
31\u00a0December
Average
Average
pay
\nin local
value
2021
to OCI
statement
2021
maturity
USD FX
interest
\ncurrency
$m
$m
$m
$m
$m
year
rate
rate
\nCash flow hedges \u2013 foreign currency and interest rate risk
\n2, 4, 5
\nCross currency interest rate swaps \u2013 Euro bonds
EUR 1,700m
(43)
46
182
(201)
27
2026
1.14
USD 2.85%
\nFX Forwards \u2212 short term FX risk
USD 1,220m
12
(5)
\u2013
(7)
(12)
2022
\u2013
\u2013
\nNet investment hedge \u2013 foreign exchange risk
\n3, 4
\nTransactions matured pre-2021
\u2013
(565)
\u2013
\u2013
(565)
\u2013
\u2013
\u2013
\nCross currency interest rate swap \u2013 JPY investment
JPY 58.3bn
62
(19)
(43)
\u2013
(62)
2029
108.03
JPY 1.53%
\nCross currency interest rate swap \u2013 CNY investment
CNY 458m
(2)
2
\u2013
\u2013
2
2026
6.68
CNY 4.80%
\nForeign currency borrowing \u2013 GBP investment
GBP 350m
470
(233)
(5)
\u2013
(238)
2031
n/a
GBP 5.75%
\nForeign currency borrowing \u2013 EUR investment
\n6
\nEUR 450m
\u2013
85
(47)
\u2013
38
2021
n/a
EUR 0.88%
\nForeign currency borrowing \u2013 EUR investment
\n7
\nEUR 800m
898
\u2013
(50)
\u2013
(50)
2029
n/a
EUR 0.38%
\nContingent consideration liabilities and Acerta Pharma share
\npurchase liability \u2013 AZUK and AZAB USD investments
USD 2,658m
(2,658)
1,411
421
\u2013
1,832
\u2013
\u2013
\u2013
\n2022
\nOther comprehensive income
\nFair value
\n(gain)/loss
\nOpening
Fair value
recycled
Closing
\nNominal
balance
(gain)/loss
to the
balance
Average
\namounts
Carrying
1\u00a0January
deferred
Income
31\u00a0December
Average
Average
pay
\nin local
value
2022
to OCI
statement
2022
maturity
USD FX
interest
\ncurrency
$m
$m
$m
$m
$m
year
rate
rate
\nCash flow hedges \u2013 foreign currency and interest rate risk
\n2, 4, 5
\nCross currency interest rate swaps \u2013 Euro bonds
EUR 1,700m
(160)
27
118
(111)
34
2026
1.14
USD 2.85%
\nFX Forwards \u2212 short term FX risk
USD 1,126m
(12)
(12)
(14)
38
12
2023
\u2013
\u2013
\nNet investment hedge \u2013 foreign exchange risk
\n3, 4
\nTransactions matured pre-2022
\u2013
(527)
\u2013
\u2013
(527)
\u2013
\u2013
\u2013
\nCross currency interest rate swap \u2013 JPY investment
JPY 58.3bn
55
(62)
7
\u2013
(55)
2029
108.03
JPY 1.53%
\nCross currency interest rate swap \u2013 CNY investment
CNY 458m
(4)
2
2
\u2013
4
2026
6.68
CNY 4.80%
\nForeign currency borrowing \u2013 GBP investment
GBP 350m
420
(238)
(50)
\u2013
(288)
2031
n/a
GBP 5.75%
\nForeign currency borrowing \u2013 EUR investment
\n7
\nEUR 800m
846
(50)
(52)
\u2013
(102)
2029
n/a
EUR 0.38%
\nContingent consideration liabilities and Acerta Pharma
\nshare\u00a0purchase liability \u2013 AZUK and AZAB USD investments
USD 2,093m
(2,093)
1,832
384
\u2013
2,216
\u2013
\u2013
\u2013
\n1
Swaps designated in a fair value hedge matured on 24 November 2021 and hedge ineffectiveness during 2022 was $nil (2021: $nil; 2020: gain of $1m).
\n2
Hedge ineffectiveness recognised on swaps designated in a cash flow hedge during the period was $nil (2021: $nil; 2020: $nil).
\n3
Hedge ineffectiveness recognised on swaps designated in a net investment hedge during the period was $nil (2021: $nil; 2020: $nil).
\n4
Fair value movements on cross-currency interest rate swaps in cash flow hedge and net investment hedge relationships are shown inclusive of the impact of costs of hedging.
\n5
Nominal amount of FX forwards in a cash flow hedge of $1,710m represents the USD equivalent notional of the FX forwards. By currency, the nominal amounts were SEK 8,148m at FX rate
\n10.4568, JPY 18,963m at 132.15, GBP 455m at 0.8288 and EUR 224m at 0.9389. All FX forwards in a cash flow hedge mature on 25 January 2023.
\n6
The EUR 450m NIH matured in November 2021, when the hedging instrument, a EUR bond matured.
\n7
On 3 June 2021, upon issuance of the EUR 800m 0.375% 2029 Non-callable bond, EUR 550m was designated in a net investment hedge of the foreign currency exposure in relation of an equivalent
\namount of EUR-denominated net assets. The remaining EUR 250m was subsequently designated in a net investment hedge upon maturity of the EUR 450m bond on 24 November 2021.
\nKey controls applied to transactions in derivative \ufb01nancial instruments are to use only instruments where good market liquidity exists, to revalue all
\n\ufb01nancial instruments regularly using current market rates and to sell options only to offset previously purchased options or as part of a risk management
\nstrategy. The Group is not a net seller of options, and does not use derivative \ufb01nancial instruments for speculative purposes. The Group held no
\noptions during the reporting period.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfHedgeAccountingExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f33349": {
"value": "Hedge accounting \nThe Group uses foreign currency borrowings, foreign currency forwards and swaps, currency options, interest rate swaps and cross-currency interest
\nrate swaps for the purpose of hedging its foreign currency and interest rate risks. The Group may designate certain \ufb01nancial instruments as fair value
\nhedges, cash \ufb02ow hedges or net investment hedges in accordance with IFRS 9. Hedge effectiveness is determined at the inception of the hedge
\nrelationship, and through periodic prospective effectiveness assessments to ensure that an economic relationship exists between the hedged item
\nand hedging instrument. Sources of hedge effectiveness will depend on the hedge relationship designation but may include:
\n>
a signi\ufb01cant change in the credit risk of either party to the hedging relationship
\n>
a timing mismatch between the hedging instrument and the hedged item
\n>
movements in foreign currency basis spread for derivatives in a fair value hedge
\n>
a signi\ufb01cant change in the value of the foreign currency denominated net assets of the Group in a net investment hedge.
\nThe hedge ratio for each designation will be established by comparing the quantity of the hedging instrument and the quantity of the hedged item to
\ndetermine their relative weighting; for all of the Group\u2019s existing hedge relationships the hedge ratio has been determined as 1:1. Designated hedges
\nare expected to be effective and therefore the impact of ineffectiveness on pro\ufb01t is not expected to be material. The accounting treatment for fair
\nvalue hedges and debt designated as fair value through pro\ufb01t or loss is disclosed in the Group Accounting Policies section from page 142.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForHedgingExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f33818": {
"value": "29 Employee costs and share plans for employees \nEmployee costs
\nThe monthly average number of people, to the nearest hundred, employed by the Group is set out in the table below. In accordance with the Companies
\nAct 2006, this includes part-time employees.
\n2022
2021
2020
\nEmployees
\nUK
9,800
8,900
7,900
\nRest of Europe
20,600
18,300
16,600
\nThe Americas
20,900
18,800
17,300
\nAsia, Africa\u00a0& Australasia
30,700
33,600
33,000
\nContinuing operations
82,000
79,600
74,800
\nGeographical distribution described in the table above is by location of legal entity employing staff. Certain staff will undertake some or all of their
\nactivity in a different location.
\nThe number of people employed by the Group at the end of 2022 was 83,500 (2021: 83,100; 2020: 76,100).
\n189
AstraZeneca Annual Report & Form 20-F Information 2022
Notes to the Group Financial Statements
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
The costs incurred during the year in respect of these employees were:
\n2022
2021
2020
\n$m
$m
$m
\nWages and salaries
8,656
7,633
6,273
\nSocial security costs
991
886
726
\nPension costs
546
564
435
\nOther employment costs
1,338
1,192
813
\nTotal
11,531
10,275
8,247
\nSeverance costs of $227m are not included above (2021: $238m; 2020: $116m).
\nThe charge for share-based payments in respect of share plans is $619m (2021: $615m; 2020: $277m). Payments made to the Employee Bene\ufb01t
\nTrust upon vesting of share awards are recognised within operating cash \ufb02ows, re\ufb02ecting the substance of the arrangement in place between the
\ngroup and the Trust. The plans are equity settled.
\nThe Directors believe that, together with the basic salary system, the Group\u2019s employee incentive schemes provide competitive and market-related
\npackages to motivate employees. They should also align the interests of employees with those of shareholders, as a whole, through long-term share
\nownership in the Company. The Group\u2019s current US, UK and Swedish schemes are described below, other arrangements apply elsewhere.
\nBonus and share plans
\nUS
\nIn the US, there are two all-employee short-term or annual performance bonus plans in operation to differentiate and reward strong individual
\nperformance. Annual bonuses are paid in cash. There is also one senior staff long-term incentive scheme, under which 190 participants may be eligible
\nfor awards granted as AstraZeneca ADRs. AstraZeneca ADRs necessary to satisfy the awards are purchased in the market or funded via a share
\ntrust. The AstraZeneca Performance Share Plan and the AstraZeneca Global Restricted Stock Plan operate in respect of relevant employees in the US.
\nUK
\nThe AstraZeneca UK Performance Bonus Plan
\nEmployees of participating AstraZeneca UK companies are invited to participate in this bonus plan, which rewards strong individual performance.
\nBonuses are paid in cash.
\nThe AstraZeneca UK All-Employee Share Plan
\nThe Company offers UK employees the opportunity to buy Partnership Shares (Ordinary Shares). Employees may invest up to \u00a3150 a month to
\npurchase Partnership Shares in the Company at the current market value. In 2010, the Company introduced a Matching Share element, the \ufb01rst award
\nof which was made in 2011. Currently one Matching Share is awarded for every four Partnership Shares purchased. Partnership Shares and Matching
\nShares are held in the HM Revenue & Customs (HMRC)-approved All-Employee Share Plan. At the Company\u2019s AGM in 2002, shareholders approved
\nthe issue of new shares for the purposes of the All-Employee Share Plan.
\nSweden
\nIn Sweden, an all-employee performance bonus plan is in operation, which rewards strong individual performance. Bonuses are paid 50% into a
\nfund investing in AstraZeneca equities and 50% in cash. The AstraZeneca Executive Annual Bonus Scheme, the AstraZeneca Performance Share
\nPlan and the AstraZeneca Global Restricted Stock Plan all operate in respect of relevant AstraZeneca employees in Sweden.
\nOther bonus and share plans that operate across the Group are described below.
\nThe AstraZeneca Executive Annual Bonus Scheme
\nThis scheme is a performance bonus scheme for Directors and senior employees who do not participate in the AstraZeneca UK Performance Bonus
\nPlan. Annual bonuses are paid in cash and re\ufb02ect both corporate and individual performance measures. The Remuneration Committee has discretion
\nto reduce or withhold bonuses if business performance falls suf\ufb01ciently short of expectations in any year such as to make the payment of
\nbonuses inappropriate.
\nThe AstraZeneca Deferred Bonus Plan
\nThis plan was introduced in 2006 and is used to defer a portion of the bonus earned under the AstraZeneca Executive Annual Bonus Scheme into
\nOrdinary Shares in the Company for a period of three years. The plan currently operates only in respect of Executive Directors and members of
\nthe SET (with awards granted as AstraZeneca ADRs for members of SET employed within the US). Awards of shares under this plan are typically
\nmade in March each year, the \ufb01rst award having been made in February 2006.
\nThe AstraZeneca Performance Share Plan
\nThis plan was approved by shareholders in 2020 for a period of 10 years (subsequently amended by approval of shareholders in 2021) and replaces
\nthe 2014 AstraZeneca Performance Share Plan. Generally, awards can be granted at any time, but not during a closed period of the Company. The
\n\ufb01rst grant of Performance Share Plan awards was made in May 2014 under the 2014 AstraZeneca Performance Share Plan. Awards granted under
\nthe plan vest after three years, or in the case of Executive Directors and members of the SET, after an additional two-year holding period, and is
\nsubject to the achievement of performance conditions. For awards granted to all participants in 2022, vesting is subject to a combination of measures
\nfocused on science and innovation, revenue growth, \ufb01nancial performance and carbon reduction. The Remuneration Committee has responsibility
\nfor agreeing any awards under the plan and for setting the policy for the way in which the plan should be operated, including agreeing performance
\ntargets and which employees should be invited to participate.
\nNotes to the Group Financial Statements
\ncontinued
\n29 Employee costs and share plans for employees
continued
\n190
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
\n\nThe AstraZeneca Investment Plan
\nThis plan was introduced in 2010 and approved by shareholders at the 2010 AGM. The \ufb01nal grant of awards under this plan took place in March 2016.
\nAwards granted under the plan vest after eight years and are subject to performance conditions measured over a period of four years.
\nThe AstraZeneca Global Restricted Stock Plan
\nThis plan was introduced in 2010. This plan provides for the grant of restricted stock unit (RSU) awards to selected below SET-level employees and
\nis used in conjunction with the AstraZeneca Performance Share Plan to provide a mix of RSUs and performance shares. Awards typically vest on the
\nthird anniversary of the date of grant and are contingent on continued employment with the Company. The Remuneration Committee has responsibility
\nfor agreeing any awards under the plan and for setting the policy for the way in which the plan should be operated.
\nThe AstraZeneca Restricted Share Plan
\nThis plan was introduced in 2008 and provides for the grant of restricted share awards to key employees, excluding Executive Directors. Awards are
\nmade on an ad hoc basis with variable vesting dates. The plan has been used four times in 2022 to make awards to 112 employees. The Remuneration
\nCommittee has responsibility for agreeing any awards under the plan and for setting the policy for the way in which the plan should be operated.
\nThe AstraZeneca Extended Incentive Plan
\nThis plan was introduced in 2018 and provides for the grant of awards to key employees, excluding Executive Directors. Awards are made on an
\nad hoc basis and 50% of the award will normally vest on the \ufb01fth anniversary of grant, with the balance vesting on the tenth anniversary of grant.
\nThe award can be subject to the achievement of performance conditions. The Remuneration Committee has responsibility for agreeing any awards
\nunder the plan and for setting the policy for the way in which the plan should be operated, including agreeing performance targets (if any) and which
\nemployees should be invited to participate.
\nDetails of share options outstanding during the year for the main share plans are shown below.
\nThe AstraZeneca
\nPerformance Share Plan
\nThe AstraZeneca
\nGlobal Restricted Stock Plan
\nThe AstraZeneca
\nRestricted Share Plan
\nThe AstraZeneca
\nExtended Incentive Plan
\nOrdinary
\nShares
\nADR
\nShares
\nOrdinary
\nShares
\nADR
\nShares
\n1
\nOrdinary
\nShares
\nADR
\nShares
\nOrdinary
\nShares
\nADR
\nShares
\n\u2019000
\u2019000
\u2019000
\u2019000
\u2019000
\u2019000
\u2019000
\u2019000
\nOutstanding at 1 January 2020
2,859
5,206
1,328
9,770
176
649
282
65
\nGranted
932
1,767
689
3,671
80
295
18
\u2013
\nForfeited
(191)
(478)
(113)
(1,077)
(6)
(79)
\u2013
\u2013
\nCancelled
(3)
\u2013
\u2013
(9)
\u2013
\u2013
\u2013
\u2013
\nExercised
(552)
(1,704)
(278)
(3,180)
(89)
(359)
\u2013
\u2013
\nOutstanding at 31 December 2020
3,045
4,791
1,626
9,175
161
506
300
65
\nGranted
1,275
2,082
902
4,509
139
481
\u2013
175
\nForfeited
(220)
(494)
(158)
(1,254)
(18)
(42)
(18)
(45)
\nCancelled
(9)
\u2013
(1)
(8)
\u2013
\u2013
\u2013
\u2013
\nExercised
(632)
(1,201)
(341)
(2,881)
(27)
(182)
\u2013
\u2013
\nOutstanding at 31 December 2021
3,459
5,178
2,028
9,541
255
763
282
195
\nGranted
1,059
2,339
1,237
6,478
75
216
\u2013
\u2013
\nForfeited
(132)
(570)
(190)
(1,627)
(25)
(136)
(23)
\u2013
\nCancelled
\u2013
\u2013
\u2013
(3)
\u2013
\u2013
\u2013
\u2013
\nExercised
(756)
(1,223)
(606)
(2,706)
(72)
(165)
\u2013
\u2013
\nOutstanding at 31 December 2022
3,630
5,724
2,469
11,683
233
678
259
195
\n1
Shares issued to Alexion employees under the GRSP are covered under the Alexion employee share award below.
\nThe AstraZeneca
\nPerformance Share Plan
\nThe AstraZeneca
\nGlobal Restricted Stock Plan
\nThe AstraZeneca
\nRestricted Share Plan
\nThe AstraZeneca
\nExtended Incentive Plan
\nWAFV
\n1
\nWAFV
WAFV
WAFV
WAFV
WAFV
WAFV
WAFV
\npence
$
pence
$
pence
$
pence
$
\nWAFV of 2020 grants
6664
43.24
7408
47.71
7931
52.92
8386
\u2013
\nWAFV of 2021 grants
6012
41.56
6893
47.75
7415
53.96
\u2013
56.83
\nWAFV of 2022 grants
8328
55.73
9167
61.21
9894
63.35
\u2013
\u2013
\n1
Weighted average fair value.
\nAlexion employee share award plan
\nAt acquisition in 2021, Alexion employee share awards were converted into AstraZeneca restricted stock awards that continue to have, and shall be
\nsubject to, the same terms and conditions as applied in the corresponding Alexion awards immediately prior to completion. The fair value at the
\ngrant date was $57.54 and of the 15,220,000 ADR shares outstanding at 31 December 2021, 8,627,000 were exercised during 2022 and 980,000
\nwere forfeited. During 2022, Alexion employees had the option to defer awards due to vest in July 2022 until February 2023 when they would also
\nreceive an additional vest equivalent to 15% of the shares deferred. As a result, 1,780,000 shares were deferred, resulting in an additional 267,000
\nADR shares being issued under the Global Restricted Stock Plan, under original Alexion terms and conditions, with a grant date fair value of $65.62.
\nThe weighted average fair value for awards granted under the AstraZeneca Performance Share Plan is primarily based on the market price at the point
\nof grant adjusted for the market-based performance elements which are valued using a modi\ufb01ed version of the Monte Carlo method. The fair values
\nof all other plans are set using the market price at the point of award. These awards are settled in equity including dividends accumulated from the
\ndate of award to vesting.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfEmployeeBenefitsExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f33819": {
"value": "29 Employee costs and share plans for employees \nEmployee costs
\nThe monthly average number of people, to the nearest hundred, employed by the Group is set out in the table below. In accordance with the Companies
\nAct 2006, this includes part-time employees.
\n2022
2021
2020
\nEmployees
\nUK
9,800
8,900
7,900
\nRest of Europe
20,600
18,300
16,600
\nThe Americas
20,900
18,800
17,300
\nAsia, Africa\u00a0& Australasia
30,700
33,600
33,000
\nContinuing operations
82,000
79,600
74,800
\nGeographical distribution described in the table above is by location of legal entity employing staff. Certain staff will undertake some or all of their
\nactivity in a different location.
\nThe number of people employed by the Group at the end of 2022 was 83,500 (2021: 83,100; 2020: 76,100).
\n189
AstraZeneca Annual Report & Form 20-F Information 2022
Notes to the Group Financial Statements
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
The costs incurred during the year in respect of these employees were:
\n2022
2021
2020
\n$m
$m
$m
\nWages and salaries
8,656
7,633
6,273
\nSocial security costs
991
886
726
\nPension costs
546
564
435
\nOther employment costs
1,338
1,192
813
\nTotal
11,531
10,275
8,247
\nSeverance costs of $227m are not included above (2021: $238m; 2020: $116m).
\nThe charge for share-based payments in respect of share plans is $619m (2021: $615m; 2020: $277m). Payments made to the Employee Bene\ufb01t
\nTrust upon vesting of share awards are recognised within operating cash \ufb02ows, re\ufb02ecting the substance of the arrangement in place between the
\ngroup and the Trust. The plans are equity settled.
\nThe Directors believe that, together with the basic salary system, the Group\u2019s employee incentive schemes provide competitive and market-related
\npackages to motivate employees. They should also align the interests of employees with those of shareholders, as a whole, through long-term share
\nownership in the Company. The Group\u2019s current US, UK and Swedish schemes are described below, other arrangements apply elsewhere.
\nBonus and share plans
\nUS
\nIn the US, there are two all-employee short-term or annual performance bonus plans in operation to differentiate and reward strong individual
\nperformance. Annual bonuses are paid in cash. There is also one senior staff long-term incentive scheme, under which 190 participants may be eligible
\nfor awards granted as AstraZeneca ADRs. AstraZeneca ADRs necessary to satisfy the awards are purchased in the market or funded via a share
\ntrust. The AstraZeneca Performance Share Plan and the AstraZeneca Global Restricted Stock Plan operate in respect of relevant employees in the US.
\nUK
\nThe AstraZeneca UK Performance Bonus Plan
\nEmployees of participating AstraZeneca UK companies are invited to participate in this bonus plan, which rewards strong individual performance.
\nBonuses are paid in cash.
\nThe AstraZeneca UK All-Employee Share Plan
\nThe Company offers UK employees the opportunity to buy Partnership Shares (Ordinary Shares). Employees may invest up to \u00a3150 a month to
\npurchase Partnership Shares in the Company at the current market value. In 2010, the Company introduced a Matching Share element, the \ufb01rst award
\nof which was made in 2011. Currently one Matching Share is awarded for every four Partnership Shares purchased. Partnership Shares and Matching
\nShares are held in the HM Revenue & Customs (HMRC)-approved All-Employee Share Plan. At the Company\u2019s AGM in 2002, shareholders approved
\nthe issue of new shares for the purposes of the All-Employee Share Plan.
\nSweden
\nIn Sweden, an all-employee performance bonus plan is in operation, which rewards strong individual performance. Bonuses are paid 50% into a
\nfund investing in AstraZeneca equities and 50% in cash. The AstraZeneca Executive Annual Bonus Scheme, the AstraZeneca Performance Share
\nPlan and the AstraZeneca Global Restricted Stock Plan all operate in respect of relevant AstraZeneca employees in Sweden.
\nOther bonus and share plans that operate across the Group are described below.
\nThe AstraZeneca Executive Annual Bonus Scheme
\nThis scheme is a performance bonus scheme for Directors and senior employees who do not participate in the AstraZeneca UK Performance Bonus
\nPlan. Annual bonuses are paid in cash and re\ufb02ect both corporate and individual performance measures. The Remuneration Committee has discretion
\nto reduce or withhold bonuses if business performance falls suf\ufb01ciently short of expectations in any year such as to make the payment of
\nbonuses inappropriate.
\nThe AstraZeneca Deferred Bonus Plan
\nThis plan was introduced in 2006 and is used to defer a portion of the bonus earned under the AstraZeneca Executive Annual Bonus Scheme into
\nOrdinary Shares in the Company for a period of three years. The plan currently operates only in respect of Executive Directors and members of
\nthe SET (with awards granted as AstraZeneca ADRs for members of SET employed within the US). Awards of shares under this plan are typically
\nmade in March each year, the \ufb01rst award having been made in February 2006.
\nThe AstraZeneca Performance Share Plan
\nThis plan was approved by shareholders in 2020 for a period of 10 years (subsequently amended by approval of shareholders in 2021) and replaces
\nthe 2014 AstraZeneca Performance Share Plan. Generally, awards can be granted at any time, but not during a closed period of the Company. The
\n\ufb01rst grant of Performance Share Plan awards was made in May 2014 under the 2014 AstraZeneca Performance Share Plan. Awards granted under
\nthe plan vest after three years, or in the case of Executive Directors and members of the SET, after an additional two-year holding period, and is
\nsubject to the achievement of performance conditions. For awards granted to all participants in 2022, vesting is subject to a combination of measures
\nfocused on science and innovation, revenue growth, \ufb01nancial performance and carbon reduction. The Remuneration Committee has responsibility
\nfor agreeing any awards under the plan and for setting the policy for the way in which the plan should be operated, including agreeing performance
\ntargets and which employees should be invited to participate.
\nNotes to the Group Financial Statements
\ncontinued
\n29 Employee costs and share plans for employees
continued
\n190
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
\n\nThe AstraZeneca Investment Plan
\nThis plan was introduced in 2010 and approved by shareholders at the 2010 AGM. The \ufb01nal grant of awards under this plan took place in March 2016.
\nAwards granted under the plan vest after eight years and are subject to performance conditions measured over a period of four years.
\nThe AstraZeneca Global Restricted Stock Plan
\nThis plan was introduced in 2010. This plan provides for the grant of restricted stock unit (RSU) awards to selected below SET-level employees and
\nis used in conjunction with the AstraZeneca Performance Share Plan to provide a mix of RSUs and performance shares. Awards typically vest on the
\nthird anniversary of the date of grant and are contingent on continued employment with the Company. The Remuneration Committee has responsibility
\nfor agreeing any awards under the plan and for setting the policy for the way in which the plan should be operated.
\nThe AstraZeneca Restricted Share Plan
\nThis plan was introduced in 2008 and provides for the grant of restricted share awards to key employees, excluding Executive Directors. Awards are
\nmade on an ad hoc basis with variable vesting dates. The plan has been used four times in 2022 to make awards to 112 employees. The Remuneration
\nCommittee has responsibility for agreeing any awards under the plan and for setting the policy for the way in which the plan should be operated.
\nThe AstraZeneca Extended Incentive Plan
\nThis plan was introduced in 2018 and provides for the grant of awards to key employees, excluding Executive Directors. Awards are made on an
\nad hoc basis and 50% of the award will normally vest on the \ufb01fth anniversary of grant, with the balance vesting on the tenth anniversary of grant.
\nThe award can be subject to the achievement of performance conditions. The Remuneration Committee has responsibility for agreeing any awards
\nunder the plan and for setting the policy for the way in which the plan should be operated, including agreeing performance targets (if any) and which
\nemployees should be invited to participate.
\nDetails of share options outstanding during the year for the main share plans are shown below.
\nThe AstraZeneca
\nPerformance Share Plan
\nThe AstraZeneca
\nGlobal Restricted Stock Plan
\nThe AstraZeneca
\nRestricted Share Plan
\nThe AstraZeneca
\nExtended Incentive Plan
\nOrdinary
\nShares
\nADR
\nShares
\nOrdinary
\nShares
\nADR
\nShares
\n1
\nOrdinary
\nShares
\nADR
\nShares
\nOrdinary
\nShares
\nADR
\nShares
\n\u2019000
\u2019000
\u2019000
\u2019000
\u2019000
\u2019000
\u2019000
\u2019000
\nOutstanding at 1 January 2020
2,859
5,206
1,328
9,770
176
649
282
65
\nGranted
932
1,767
689
3,671
80
295
18
\u2013
\nForfeited
(191)
(478)
(113)
(1,077)
(6)
(79)
\u2013
\u2013
\nCancelled
(3)
\u2013
\u2013
(9)
\u2013
\u2013
\u2013
\u2013
\nExercised
(552)
(1,704)
(278)
(3,180)
(89)
(359)
\u2013
\u2013
\nOutstanding at 31 December 2020
3,045
4,791
1,626
9,175
161
506
300
65
\nGranted
1,275
2,082
902
4,509
139
481
\u2013
175
\nForfeited
(220)
(494)
(158)
(1,254)
(18)
(42)
(18)
(45)
\nCancelled
(9)
\u2013
(1)
(8)
\u2013
\u2013
\u2013
\u2013
\nExercised
(632)
(1,201)
(341)
(2,881)
(27)
(182)
\u2013
\u2013
\nOutstanding at 31 December 2021
3,459
5,178
2,028
9,541
255
763
282
195
\nGranted
1,059
2,339
1,237
6,478
75
216
\u2013
\u2013
\nForfeited
(132)
(570)
(190)
(1,627)
(25)
(136)
(23)
\u2013
\nCancelled
\u2013
\u2013
\u2013
(3)
\u2013
\u2013
\u2013
\u2013
\nExercised
(756)
(1,223)
(606)
(2,706)
(72)
(165)
\u2013
\u2013
\nOutstanding at 31 December 2022
3,630
5,724
2,469
11,683
233
678
259
195
\n1
Shares issued to Alexion employees under the GRSP are covered under the Alexion employee share award below.
\nThe AstraZeneca
\nPerformance Share Plan
\nThe AstraZeneca
\nGlobal Restricted Stock Plan
\nThe AstraZeneca
\nRestricted Share Plan
\nThe AstraZeneca
\nExtended Incentive Plan
\nWAFV
\n1
\nWAFV
WAFV
WAFV
WAFV
WAFV
WAFV
WAFV
\npence
$
pence
$
pence
$
pence
$
\nWAFV of 2020 grants
6664
43.24
7408
47.71
7931
52.92
8386
\u2013
\nWAFV of 2021 grants
6012
41.56
6893
47.75
7415
53.96
\u2013
56.83
\nWAFV of 2022 grants
8328
55.73
9167
61.21
9894
63.35
\u2013
\u2013
\n1
Weighted average fair value.
\nAlexion employee share award plan
\nAt acquisition in 2021, Alexion employee share awards were converted into AstraZeneca restricted stock awards that continue to have, and shall be
\nsubject to, the same terms and conditions as applied in the corresponding Alexion awards immediately prior to completion. The fair value at the
\ngrant date was $57.54 and of the 15,220,000 ADR shares outstanding at 31 December 2021, 8,627,000 were exercised during 2022 and 980,000
\nwere forfeited. During 2022, Alexion employees had the option to defer awards due to vest in July 2022 until February 2023 when they would also
\nreceive an additional vest equivalent to 15% of the shares deferred. As a result, 1,780,000 shares were deferred, resulting in an additional 267,000
\nADR shares being issued under the Global Restricted Stock Plan, under original Alexion terms and conditions, with a grant date fair value of $65.62.
\nThe weighted average fair value for awards granted under the AstraZeneca Performance Share Plan is primarily based on the market price at the point
\nof grant adjusted for the market-based performance elements which are valued using a modi\ufb01ed version of the Monte Carlo method. The fair values
\nof all other plans are set using the market price at the point of award. These awards are settled in equity including dividends accumulated from the
\ndate of award to vesting.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfInformationAboutEmployeesExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f33906": {
"value": "Bonus and share plans \nUS
\nIn the US, there are two all-employee short-term or annual performance bonus plans in operation to differentiate and reward strong individual
\nperformance. Annual bonuses are paid in cash. There is also one senior staff long-term incentive scheme, under which 190 participants may be eligible
\nfor awards granted as AstraZeneca ADRs. AstraZeneca ADRs necessary to satisfy the awards are purchased in the market or funded via a share
\ntrust. The AstraZeneca Performance Share Plan and the AstraZeneca Global Restricted Stock Plan operate in respect of relevant employees in the US.
\nUK
\nThe AstraZeneca UK Performance Bonus Plan
\nEmployees of participating AstraZeneca UK companies are invited to participate in this bonus plan, which rewards strong individual performance.
\nBonuses are paid in cash.
\nThe AstraZeneca UK All-Employee Share Plan
\nThe Company offers UK employees the opportunity to buy Partnership Shares (Ordinary Shares). Employees may invest up to \u00a3150 a month to
\npurchase Partnership Shares in the Company at the current market value. In 2010, the Company introduced a Matching Share element, the \ufb01rst award
\nof which was made in 2011. Currently one Matching Share is awarded for every four Partnership Shares purchased. Partnership Shares and Matching
\nShares are held in the HM Revenue & Customs (HMRC)-approved All-Employee Share Plan. At the Company\u2019s AGM in 2002, shareholders approved
\nthe issue of new shares for the purposes of the All-Employee Share Plan.
\nSweden
\nIn Sweden, an all-employee performance bonus plan is in operation, which rewards strong individual performance. Bonuses are paid 50% into a
\nfund investing in AstraZeneca equities and 50% in cash. The AstraZeneca Executive Annual Bonus Scheme, the AstraZeneca Performance Share
\nPlan and the AstraZeneca Global Restricted Stock Plan all operate in respect of relevant AstraZeneca employees in Sweden.
\nOther bonus and share plans that operate across the Group are described below.
\nThe AstraZeneca Executive Annual Bonus Scheme
\nThis scheme is a performance bonus scheme for Directors and senior employees who do not participate in the AstraZeneca UK Performance Bonus
\nPlan. Annual bonuses are paid in cash and re\ufb02ect both corporate and individual performance measures. The Remuneration Committee has discretion
\nto reduce or withhold bonuses if business performance falls suf\ufb01ciently short of expectations in any year such as to make the payment of
\nbonuses inappropriate.
\nThe AstraZeneca Deferred Bonus Plan
\nThis plan was introduced in 2006 and is used to defer a portion of the bonus earned under the AstraZeneca Executive Annual Bonus Scheme into
\nOrdinary Shares in the Company for a period of three years. The plan currently operates only in respect of Executive Directors and members of
\nthe SET (with awards granted as AstraZeneca ADRs for members of SET employed within the US). Awards of shares under this plan are typically
\nmade in March each year, the \ufb01rst award having been made in February 2006.
\nThe AstraZeneca Performance Share Plan
\nThis plan was approved by shareholders in 2020 for a period of 10 years (subsequently amended by approval of shareholders in 2021) and replaces
\nthe 2014 AstraZeneca Performance Share Plan. Generally, awards can be granted at any time, but not during a closed period of the Company. The
\n\ufb01rst grant of Performance Share Plan awards was made in May 2014 under the 2014 AstraZeneca Performance Share Plan. Awards granted under
\nthe plan vest after three years, or in the case of Executive Directors and members of the SET, after an additional two-year holding period, and is
\nsubject to the achievement of performance conditions. For awards granted to all participants in 2022, vesting is subject to a combination of measures
\nfocused on science and innovation, revenue growth, \ufb01nancial performance and carbon reduction. The Remuneration Committee has responsibility
\nfor agreeing any awards under the plan and for setting the policy for the way in which the plan should be operated, including agreeing performance
\ntargets and which employees should be invited to participate.
\nNotes to the Group Financial Statements
\ncontinued
\n29 Employee costs and share plans for employees
continued
\n190
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
\n\n\n\n\nThe AstraZeneca Investment Plan
\nThis plan was introduced in 2010 and approved by shareholders at the 2010 AGM. The \ufb01nal grant of awards under this plan took place in March 2016.
\nAwards granted under the plan vest after eight years and are subject to performance conditions measured over a period of four years.
\nThe AstraZeneca Global Restricted Stock Plan
\nThis plan was introduced in 2010. This plan provides for the grant of restricted stock unit (RSU) awards to selected below SET-level employees and
\nis used in conjunction with the AstraZeneca Performance Share Plan to provide a mix of RSUs and performance shares. Awards typically vest on the
\nthird anniversary of the date of grant and are contingent on continued employment with the Company. The Remuneration Committee has responsibility
\nfor agreeing any awards under the plan and for setting the policy for the way in which the plan should be operated.
\nThe AstraZeneca Restricted Share Plan
\nThis plan was introduced in 2008 and provides for the grant of restricted share awards to key employees, excluding Executive Directors. Awards are
\nmade on an ad hoc basis with variable vesting dates. The plan has been used four times in 2022 to make awards to 112 employees. The Remuneration
\nCommittee has responsibility for agreeing any awards under the plan and for setting the policy for the way in which the plan should be operated.
\nThe AstraZeneca Extended Incentive Plan
\nThis plan was introduced in 2018 and provides for the grant of awards to key employees, excluding Executive Directors. Awards are made on an
\nad hoc basis and 50% of the award will normally vest on the \ufb01fth anniversary of grant, with the balance vesting on the tenth anniversary of grant.
\nThe award can be subject to the achievement of performance conditions. The Remuneration Committee has responsibility for agreeing any awards
\nunder the plan and for setting the policy for the way in which the plan should be operated, including agreeing performance targets (if any) and which
\nemployees should be invited to participate.
\nDetails of share options outstanding during the year for the main share plans are shown below.
\nThe AstraZeneca
\nPerformance Share Plan
\nThe AstraZeneca
\nGlobal Restricted Stock Plan
\nThe AstraZeneca
\nRestricted Share Plan
\nThe AstraZeneca
\nExtended Incentive Plan
\nOrdinary
\nShares
\nADR
\nShares
\nOrdinary
\nShares
\nADR
\nShares
\n1
\nOrdinary
\nShares
\nADR
\nShares
\nOrdinary
\nShares
\nADR
\nShares
\n\u2019000
\u2019000
\u2019000
\u2019000
\u2019000
\u2019000
\u2019000
\u2019000
\nOutstanding at 1 January 2020
2,859
5,206
1,328
9,770
176
649
282
65
\nGranted
932
1,767
689
3,671
80
295
18
\u2013
\nForfeited
(191)
(478)
(113)
(1,077)
(6)
(79)
\u2013
\u2013
\nCancelled
(3)
\u2013
\u2013
(9)
\u2013
\u2013
\u2013
\u2013
\nExercised
(552)
(1,704)
(278)
(3,180)
(89)
(359)
\u2013
\u2013
\nOutstanding at 31 December 2020
3,045
4,791
1,626
9,175
161
506
300
65
\nGranted
1,275
2,082
902
4,509
139
481
\u2013
175
\nForfeited
(220)
(494)
(158)
(1,254)
(18)
(42)
(18)
(45)
\nCancelled
(9)
\u2013
(1)
(8)
\u2013
\u2013
\u2013
\u2013
\nExercised
(632)
(1,201)
(341)
(2,881)
(27)
(182)
\u2013
\u2013
\nOutstanding at 31 December 2021
3,459
5,178
2,028
9,541
255
763
282
195
\nGranted
1,059
2,339
1,237
6,478
75
216
\u2013
\u2013
\nForfeited
(132)
(570)
(190)
(1,627)
(25)
(136)
(23)
\u2013
\nCancelled
\u2013
\u2013
\u2013
(3)
\u2013
\u2013
\u2013
\u2013
\nExercised
(756)
(1,223)
(606)
(2,706)
(72)
(165)
\u2013
\u2013
\nOutstanding at 31 December 2022
3,630
5,724
2,469
11,683
233
678
259
195
\n1
Shares issued to Alexion employees under the GRSP are covered under the Alexion employee share award below.
\nThe AstraZeneca
\nPerformance Share Plan
\nThe AstraZeneca
\nGlobal Restricted Stock Plan
\nThe AstraZeneca
\nRestricted Share Plan
\nThe AstraZeneca
\nExtended Incentive Plan
\nWAFV
\n1
\nWAFV
WAFV
WAFV
WAFV
WAFV
WAFV
WAFV
\npence
$
pence
$
pence
$
pence
$
\nWAFV of 2020 grants
6664
43.24
7408
47.71
7931
52.92
8386
\u2013
\nWAFV of 2021 grants
6012
41.56
6893
47.75
7415
53.96
\u2013
56.83
\nWAFV of 2022 grants
8328
55.73
9167
61.21
9894
63.35
\u2013
\u2013
\n1
Weighted average fair value.
\nAlexion employee share award plan
\nAt acquisition in 2021, Alexion employee share awards were converted into AstraZeneca restricted stock awards that continue to have, and shall be
\nsubject to, the same terms and conditions as applied in the corresponding Alexion awards immediately prior to completion. The fair value at the
\ngrant date was $57.54 and of the 15,220,000 ADR shares outstanding at 31 December 2021, 8,627,000 were exercised during 2022 and 980,000
\nwere forfeited. During 2022, Alexion employees had the option to defer awards due to vest in July 2022 until February 2023 when they would also
\nreceive an additional vest equivalent to 15% of the shares deferred. As a result, 1,780,000 shares were deferred, resulting in an additional 267,000
\nADR shares being issued under the Global Restricted Stock Plan, under original Alexion terms and conditions, with a grant date fair value of $65.62.
\nThe weighted average fair value for awards granted under the AstraZeneca Performance Share Plan is primarily based on the market price at the point
\nof grant adjusted for the market-based performance elements which are valued using a modi\ufb01ed version of the Monte Carlo method. The fair values
\nof all other plans are set using the market price at the point of award. These awards are settled in equity including dividends accumulated from the
\ndate of award to vesting.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfSharebasedPaymentArrangementsExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f34254": {
"value": "30 Commitments, contingent liabilities and contingent assets \n2022
2021
2020
\nCommitments
$m
$m
$m
\nContracts placed for future capital expenditure on Property, plant and equipment and
\nsoftware development costs not provided for in these financial statements
502
388
689
\nGuarantees and contingencies arising in the ordinary course of business, for which no security has been given, are not expected to result in any
\nmaterial \ufb01nancial loss.
\nResearch and development collaboration payments
\nThe Group has various ongoing collaborations, including in-licensing and similar arrangements with development partners. Such collaborations may
\nrequire the Group to make payments on achievement of stages of development, launch or revenue milestones, although the Group generally has
\nthe right to terminate these agreements at no cost. The Group recognises research and development milestones as an intangible asset once it is
\ncommitted to payment, which is generally when the Group reaches set trigger points in the development cycle. Revenue-related milestones are
\nrecognised as intangible assets on product launch at a value based on the Group\u2019s long-term revenue forecasts for the related product. The table
\nbelow indicates potential development and revenue-related payments that the Group may be required to make under such collaborations.
\nYears 5
\nTotal
Under 1 year
Years 1 and 2
Years 3 and 4
and greater
\n$m
$m
$m
$m
$m
\nFuture potential research and development milestone payments
11,729
1,320
2,662
2,698
5,049
\nFuture potential revenue milestone payments
17,499
65
368
1,859
15,207
\nThe table includes all potential payments for achievement of milestones under ongoing research and development arrangements. Revenue-related
\nmilestone payments represent the maximum possible amount payable on achievement of speci\ufb01ed levels of revenue as set out in individual contract
\nagreements, but exclude variable payments that are based on unit sales (e.g. royalty-type payments) which are expensed as the associated sale is
\nrecognised. The table excludes any payments already capitalised in the Financial Statements for the year ended 31 December 2022.
\nThe future payments we disclose represent contracted payments and, as such, are not discounted and are not risk-adjusted. As detailed in the Risk
\nsection from page 56, the development of any pharmaceutical product candidate is a complex and risky process that may fail at any stage in the
\ndevelopment process due to a number of factors (including items such as failure to obtain regulatory approval, unfavourable data from key studies,
\nadverse reactions to the product candidate or indications of other safety concerns). The timing of the payments is based on the Group\u2019s current best
\nestimate of achievement of the relevant milestone.
\nNotes to the Group Financial Statements
\ncontinued
\nEnvironmental costs and liabilities
\nThe Group\u2019s expenditure on environmental
\nprotection, including both capital and revenue
\nitems, relates to costs that are necessary for
\nimplementing internal systems and programmes,
\nand meeting legal and regulatory requirements
\nfor processes and products. This includes
\ninvestment to conserve natural resources and
\notherwise minimise the impact of our activities
\non the environment.
\nThey are an integral part of normal ongoing
\nexpenditure for carrying out the Group\u2019s
\nresearch, manufacturing and commercial
\noperations and are not separated from overall
\noperating and development costs. There are
\nno known changes in legal, regulatory or other
\nrequirements resulting in material changes to
\nthe levels of expenditure for 2020, 2021 or 2022.
\nIn addition to expenditure for meeting current
\nand foreseen environmental protection
\nrequirements, the Group incurs costs in
\ninvestigating and cleaning up legacy land and
\ngroundwater contamination. In particular,
\nAstraZeneca has environmental liabilities at
\nsome currently or formerly owned, leased and
\nthird-party sites.
\nIn the US, Zeneca Inc., and/or its indemnitees,
\nhave been named as potentially responsible
\nparties (PRPs) or defendants at a number of
\nsites where Zeneca Inc. is likely to incur future
\nenvironmental investigation, remediation,
\noperation and maintenance costs under federal,
\nstate, statutory or common law environmental
\nliability allocation schemes (together, US
\nEnvironmental Consequences). Similarly,
\nStauffer Management Company LLC (SMC),
\nwhich was established in 1987 to own and
\nmanage certain assets of Stauffer Chemical
\nCompany acquired that year, and/or its
\nindemnitees, have been named as PRPs or
\ndefendants at a number of sites where SMC is
\nlikely to incur US Environmental Consequences.
\nAstraZeneca has also given indemnities to third
\nparties for a number of sites outside the US.
\nThese environmental liabilities arise from legacy
\noperations that are not currently part of the
\nGroup\u2019s business and, at most of these sites,
\nremediation, where required, is either completed
\nor in progress. AstraZeneca has made
\nprovisions for the estimated costs of future
\nenvironmental investigation, remediation,
\noperation and maintenance activity beyond
\nnormal ongoing expenditure for maintaining the
\nGroup\u2019s R&D and manufacturing capacity and
\nproduct ranges, where a present obligation
\nexists, it is probable that such costs will be
\nincurred and they can be estimated reliably. With
\nrespect to such estimated future costs, there
\nwere provisions at 31 December 2022 in the
\naggregate of $131m (2021: $90m; 2020: $100m),
\nmainly relating to the US. Where we are jointly
\nliable or otherwise have cost-sharing
\nagreements with third parties, we re\ufb02ect only
\nour share of the obligation. Where the liability is
\ninsured in part or in whole by insurance or other
\narrangements for reimbursement, an asset is
\nrecognised to the extent that this recovery is
\nvirtually certain.
\nIt is possible that AstraZeneca could incur
\nfuture environmental costs beyond the extent
\nof our current provisions. The extent of such
\npossible additional costs is inherently dif\ufb01cult
\nto estimate due to a number of factors, including:
\n(i) the nature and extent of claims that may be
\nasserted in the future; (ii) whether AstraZeneca
\nhas or will have any legal obligation with respect
\nto asserted or unasserted claims; (iii) the type of
\nremedial action, if any, that may be selected at
\nsites where the remedy is presently not known;
\n(iv) the potential for recoveries from or allocation
\nof liability to third parties; and (v) the length of
\ntime that the environmental investigation,
\nremediation and liability allocation process can
\ntake. As per our accounting policy on page
\n148, provisions for these costs are made when
\nthere is a present obligation and where it is
\nprobable that expenditure on remedial work will
\nbe required and a reliable estimate can be made
\nof the cost. Notwithstanding and subject to the
\nforegoing, we estimate the potential additional
\nloss for future environmental investigation,
\nremediation, remedial operation and
\nmaintenance activity above and beyond our
\nprovisions to be, in aggregate, between $113m
\nand $188m (2021: $99m and $165m; 2020: $95m
\nand $158m) which relates mainly to the US.
\nLegal proceedings
\nAstraZeneca is involved in various legal
\nproceedings considered typical to its business,
\nincluding actual or threatened litigation and
\nactual or potential government investigations
\nrelating to employment matters, product liability,
\ncommercial disputes, pricing, sales and
\n192
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
\n\n\nmarketing practices, infringement of IP rights,
\nand the validity of certain patents and
\ncompetition laws. The more signi\ufb01cant matters
\nare discussed below.
\nMost of the claims involve highly complex
\nissues. Often these issues are subject to
\nsubstantial uncertainties and, therefore, the
\nprobability of a loss, if any, being sustained
\nand/or an estimate of the amount of any loss
\nis dif\ufb01cult to ascertain.
\nThere is one matter, which is considered
\nprobable that an out\ufb02ow will be required, but
\nfor which we are unable to make an estimate
\nof the possible loss or range of possible losses
\nat this stage.
\nWe do not believe that disclosure of the
\namounts sought by plaintiffs, if known, would
\nbe meaningful with respect to these legal
\nproceedings. This is due to a number of factors,
\nincluding (i) the stage of the proceedings
\n(in many cases trial dates have not been set)
\nand the overall length and extent of pre-trial
\ndiscovery; (ii) the entitlement of the parties to
\nan action to appeal a decision; (iii) clarity as to
\ntheories of liability, damages and governing
\nlaw; (iv) uncertainties in timing of litigation;
\nand (v) the possible need for further legal
\nproceedings to establish the appropriate
\namount of damages, if any.
\nWhile there can be no assurance regarding the
\noutcome of any of the legal proceedings referred
\nto in this Note 30, based on management\u2019s
\ncurrent and considered view of each situation,
\nwe do not currently expect them to have a
\nmaterial adverse effect on our \ufb01nancial position
\nincluding within the next \ufb01nancial year. This
\nposition could of course change over time, not
\nleast because of the factors referred to above.
\nIn cases that have been settled or adjudicated,
\nor where quanti\ufb01able \ufb01nes and penalties have
\nbeen assessed and which are not subject to
\nappeal (or other similar forms of relief), or where
\na loss is probable and we are able to make a
\nreasonable estimate of the loss, we indicate
\nthe loss absorbed or make a provision for our
\nbest estimate of the expected loss.
\nWhere it is considered that the Group is more
\nlikely than not to prevail, legal costs involved
\nin defending the claim are charged to pro\ufb01t as
\nthey are incurred.
\nWhere it is considered that the Group has
\na valid contract which provides the right to
\nreimbursement (from insurance or otherwise)
\nof legal costs and/or all or part of any loss
\nincurred or for which a provision has been
\nestablished, and we consider recovery to
\nbe virtually certain, the best estimate of the
\namount expected to be received is recognised
\nas an asset.
\nAssessments as to whether or not to
\nrecognise provisions or assets, and of the
\namounts concerned, usually involve a series of
\ncomplex judgements about future events and
\ncan rely heavily on estimates and assumptions.
\nAstraZeneca believes that the provisions
\nrecorded are adequate based on currently
\navailable information and that the insurance
\nrecoveries recorded will be received. However,
\ngiven the inherent uncertainties involved in
\nassessing the outcomes of these cases, and
\nin estimating the amount of the potential losses
\nand the associated insurance recoveries, we
\ncould in the future incur judgments or insurance
\nsettlements that could have a material adverse
\neffect on our results in any particular period.
\nIP claims include challenges to the Group\u2019s
\npatents on various products or processes and
\nassertions of non-infringement of patents.
\nA loss in any of these cases could result in loss
\nof patent protection on the related product.
\nThe consequences of any such loss could be
\na signi\ufb01cant decrease in Product Sales, which
\ncould have a material adverse effect on our
\nresults. The lawsuits \ufb01led by AstraZeneca for
\npatent infringement against companies that
\nhave \ufb01led abbreviated new drug applications
\n(ANDAs) in the US, seeking to market generic
\nforms of products sold by the Group prior to the
\nexpiry of the applicable patents covering these
\nproducts, typically also involve allegations of
\nnon-infringement, invalidity and unenforceability
\nof these patents by the ANDA \ufb01lers. In the event
\nthat the Group is unsuccessful in these actions
\nor the statutory 30-month stay expires before
\na ruling is obtained, the ANDA \ufb01lers involved
\nwill also have the ability, subject to FDA
\napproval, to introduce generic versions of the
\nproduct concerned.
\nAstraZeneca has full con\ufb01dence in, and will
\nvigorously defend and enforce, its IP.
\nOver the course of the past several years,
\nincluding in 2022, a signi\ufb01cant number of
\ncommercial litigation claims in which
\nAstraZeneca is involved have been resolved,
\nparticularly in the US, thereby reducing potential
\ncontingent liability exposure arising from such
\nlitigation. Similarly, in part due to patent litigation
\nand settlement developments, greater certainty
\nhas been achieved regarding possible generic
\nentry dates with respect to some of our patented
\nproducts. At the same time, like other
\ncompanies in the pharmaceutical sector and
\nother industries, AstraZeneca continues to be
\nsubject to government investigations around
\nthe world.
\nPatent litigation
\nLegal proceedings brought against AstraZeneca
\nconsidered to be contingent liabilities
\nEnhertu
\nUS patent proceedings
\nIn October 2020, Seagen Inc. (Seagen) \ufb01led a
\ncomplaint against Daiichi Sankyo Company,
\nLimited in the US District Court for the Eastern
\nDistrict of Texas alleging that
Enhertu
infringes
\nUS Patent No. 10,808,039 (the \u2018039 patent).
\nAstraZeneca Pharmaceuticals LP co-
\ncommercialises
Enhertu
with Daiichi Sankyo,
\nInc. in the US. After trial in April 2022, the jury
\nfound that the patent was infringed and
\nawarded Seagen $41.82m in past damages.
\nIn July 2022, the District Court entered \ufb01nal
\njudgment and declined to enhance damages
\non the basis of willfulness. The parties await
\nconsideration of post-trial motions.
\nIn December 2020 and January 2021,
\nAstraZeneca and Daiichi Sankyo, Inc. \ufb01led
\npost-grant review (PGR) petitions with the US
\nPatent and Trademark Of\ufb01ce (USPTO) alleging,
\ninter alia, that the Seagen patent is invalid for
\nlack of written description and enablement.
\nThe USPTO initially declined to institute the
\nPGRs, but, in April 2022, the USPTO granted
\nthe rehearing requests, instituting both PGR
\npetitions. Seagen subsequently disclaimed all
\npatent claims at issue in one of the PGR
\nproceedings. In July 2022, the USPTO reversed
\nits institution decision and declined to institute
\nthe other PGR petition. AstraZeneca and Daiichi
\nSankyo, Inc. have requested reconsideration of
\nthe decision not to institute review of the patent.
\nIm\ufb01nzi
\nUS patent proceedings
\nIn March 2022, Bristol-Myers Squibb Co. and
\nE.R. Squibb & Sons, LLC \ufb01led a lawsuit in US
\nDistrict Court for the District of Delaware against
\nAstraZeneca alleging that AstraZeneca\u2019s
\nmarketing of
Im\ufb01nzi
infringes several of their
\npatents. Trial has been scheduled for April 2024.
\nPatent proceedings outside the US
\nIn February 2022, in Japan, Ono Pharmaceuticals
\n\ufb01led a lawsuit in Tokyo District Court, Civil
\nDivision against AstraZeneca alleging that
\nAstraZeneca\u2019s marketing of
Im\ufb01nzi
in Japan
\ninfringes several of their patents.
\nImjudo
\nUS patent proceedings
\nIn January 2023, Bristol-Myers Squibb Co. and
\nE.R. Squibb & Sons, LLC \ufb01led a lawsuit in US
\nDistrict Court for the District of Delaware
\nagainst AstraZeneca alleging that AstraZeneca\u2019s
\nmarketing of
Imjudo
infringes two of their patents.
\nTagrisso
\nUS patent proceedings
\nIn September 2021, Puma Biotechnology, Inc.
\nand Wyeth LLC \ufb01led a patent infringement
\nlawsuit in the US District Court for the District
\nof Delaware against AstraZeneca relating to
\nTagrisso
. Trial has been scheduled for May 2024.
\nMovantik
\nUS patent proceedings
\nIn March 2020, Aether Therapeutics, Inc. \ufb01led
\na patent infringement lawsuit in the US District
\nCourt for the District of Delaware against
\nAstraZeneca, Nektar Therapeutics and Daiichi
\nSankyo, Inc., relating to
Movantik
. Trial has
\nbeen scheduled for March 2023.
\n193
AstraZeneca Annual Report & Form 20-F Information 2022
Notes to the Group Financial Statements
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
30 Commitments, contingent liabilities and contingent assets
continued
\nLegal proceedings brought against
\nAstraZeneca which have been concluded
\nRoxadustat
\nUS patent proceedings
\nIn April 2021, Akebia Therapeutics, Inc. (Akebia)
\nand Otsuka America Pharmaceutical, Inc.
\n(Otsuka) served AstraZeneca with a complaint
\nseeking a declaration of invalidity and
\nnon-infringement for several of FibroGen, Inc\u2019s
\n(FibroGen) method of use patents related to
\nHIF prolylhydroxylase inhibitors. AstraZeneca
\nis the exclusive licensee of FibroGen in the
\nUnited States. In April 2022, this matter was
\ndismissed and is now concluded.
\nUltomiris
\nUS patent proceedings
\nIn November and December of 2018, Chugai
\nPharmaceutical Co., Ltd. (Chugai) \ufb01led lawsuits
\nagainst Alexion in the Delaware District Court
\nas well as in Tokyo District Court, alleging that
\nUltomiris
infringed US and Japanese patents
\nheld by Chugai. In March 2022, Alexion entered
\ninto a settlement agreement with Chugai for
\n$775m that resolved all patent disputes between
\nthe two companies related to
Ultomiris
. This
\nmatter is now concluded.
\nLegal proceedings brought by AstraZeneca
\nconsidered to be contingent assets
\nBrilinta
\nUS patent proceedings
\nIn 2015 and subsequently, in response to
\nParagraph IV notices from ANDA \ufb01lers,
\nAstraZeneca \ufb01led patent infringement lawsuits
\nin the US District Court for the District of
\nDelaware (the District Court) relating to patents
\nlisted in the FDA Orange Book with reference
\nto
Brilinta
. In 2022, AstraZeneca entered into
\nseveral separate settlements and the District
\nCourt entered consent judgments to dismiss
\neach of the corresponding litigations.
\nAdditional proceedings are ongoing in the
\nDistrict Court. No trial date has been set.
\nCalquence
\nUS patent proceedings
\nIn February 2022, in response to Paragraph IV
\nnotices from multiple ANDA \ufb01lers, AstraZeneca
\n\ufb01led patent infringement lawsuits in the US
\nDistrict Court for the District of Delaware. In its
\ncomplaint, AstraZeneca alleges that a generic
\nversion of
Calquence
, if approved and marketed,
\nwould infringe patents listed in the US FDA
\nOrange Book with reference to
Calquence
\nthat are owned or licensed by AstraZeneca.
\nTrial has been scheduled for March 2025.
\nIn February 2023, Sandoz Inc. \ufb01led a petition
\nfor inter partes review with the US Patent
\nand Trademark Of\ufb01ce (USPTO) of certain
\nCalquence
patent claims in US Patent No.
\n10,272,083 (the \u2018083 patent). AstraZeneca has
\nasserted claims for infringement of the \u2018083
\npatent against Sandoz and other defendants
\nin the US ANDA litigation. AstraZeneca is
\nconsidering its response to Sandoz\u2019s petition
\nbefore the USPTO.
\nDaliresp
\nUS patent proceedings
\nIn 2015 and subsequently, in response to
\nParagraph IV notices from ANDA \ufb01lers,
\nAstraZeneca \ufb01led patent infringement lawsuits
\nin the US District Court for the District of New
\nJersey (the District Court) relating to patents
\nlisted in the FDA Orange Book with reference
\nto
Daliresp
. In 2022, AstraZeneca entered
\ninto a settlement and the District Court
\nentered a consent judgment to dismiss the
\ncorresponding litigation. Additional ANDA
\nchallenges are pending.
\nFaslodex
\nPatent proceedings outside the US
\nIn 2021 in Japan, AstraZeneca received notice
\nfrom the Japan Patent Of\ufb01ce (JPO) that Sandoz
\nK.K. and Sun Pharma Japan Ltd. (Sun) were
\nseeking to invalidate the
Faslodex
formulation
\npatent. AstraZeneca defended the challenged
\npatent, and Sun withdrew from the JPO patent
\nchallenge. In May 2022, the JPO held the hearing
\nin the matter and issued its preliminary decision
\nin September 2022 upholding various claims
\nof the challenged patent and determining that
\nother patent claims were invalid. A \ufb01nal JPO
\ndecision is forthcoming.
\nTagrisso
\nPatent proceedings outside the US
\nIn Russia in October 2021, AstraZeneca \ufb01led a
\nlawsuit in the Arbitration Court of the Moscow
\nRegion (the Court) against Axelpharm, LLC
\nto prevent it from obtaining authorisation to
\nmarket a generic version of
Tagrisso
prior to the
\nexpiration of AstraZeneca\u2019s patents covering
\nTagrisso
. The lawsuit also names the Ministry
\nof Health of the Russian Federation as a third
\nparty. In March 2022, the Court dismissed
\nthe lawsuit. In June 2022, the dismissal was
\naf\ufb01rmed on appeal. In January 2023, the
\ndismissal was af\ufb01rmed on further appeal.
\nAstraZeneca is considering its option.
\nFarxiga
/
Forxiga
\nUS patent proceedings
\nIn 2018, in response to Paragraph IV notices,
\nAstraZeneca initiated ANDA litigation against
\nZydus Pharmaceuticals (USA) Inc. (Zydus) in the
\nUS District Court for the District of Delaware
\n(the District Court). In May 2021, trial against
\nZydus proceeded in the District Court and
\nin October 2021, the District Court issued
\na decision \ufb01nding the asserted claims of
\nAstraZeneca\u2019s patent as valid and infringed
\nby Zydus\u2019s ANDA product. In August 2022,
\nZydus appealed the District Court\u2019s decision.
\nIn November 2022, Zydus\u2019s appeal was
\ndismissed. Additional ANDA challenges
\nare pending.
\nLokelma
\nUS patent proceedings
\nIn August 2022, in response to Paragraph IV
\nnotices, AstraZeneca initiated ANDA litigation
\nagainst multiple generic \ufb01lers in the US District
\nCourt for the District of Delaware. Trial has
\nbeen scheduled for March 2025.
\nSymbicort
\nUS patent proceedings
\nAstraZeneca is involved in ongoing ANDA
\nlitigations with Mylan Pharmaceuticals Inc.
\n(Mylan) and Kindeva Drug Delivery L.P.
\n(Kindeva) brought in the US District Court
\nfor the Northern District of West Virginia
\n(the District Court). In the actions, AstraZeneca
\nalleges that the defendants\u2019 generic versions
\nof
Symbicort
, if approved and marketed,
\nwould infringe various AstraZeneca patents.
\nIn one of those matters, in November 2022,
\nthe District Court determined that the asserted
\npatent was invalid. In November 2022,
\nAstraZeneca appealed that decision to the
\nUnited States Court of Appeals for the Federal
\nCircuit (the Federal Circuit). With respect to
\nthe other matter, following a stipulation of
\ninfringement and validity by Mylan and Kindeva
\nthat was subject to certain appeal issues, in
\nDecember 2022, the District Court issued a Final
\nJudgment in favour of AstraZeneca. In December
\n2022, Mylan and Kindeva appealed the Final
\nJudgment to the Federal Circuit. Both appeals
\nare scheduled to be heard in March 2023.
\nLynparza
\nUS patent proceedings
\nIn December 2022, AstraZeneca received a
\nParagraph IV notice letter from an ANDA \ufb01ler
\nrelating to patents listed in the FDA Orange
\nBook with reference to
Lynparza
. AstraZeneca
\nis reviewing the notice letter.
\nLegal proceedings brought by AstraZeneca
\nwhich have been concluded
\nTagrisso
\nUS patent proceedings
\nIn February 2020, in response to Paragraph IV
\nnotices from multiple ANDA \ufb01lers, AstraZeneca
\n\ufb01led patent infringement lawsuits in the US
\nDistrict Court for the District of Delaware. In its
\ncomplaint, AstraZeneca alleges that a generic
\nversion of
Tagrisso
, if approved and marketed,
\nwould infringe a US Orange Book-listed
Tagrisso
\npatent. In the fourth quarter of 2021 and April
\n2022, AstraZeneca entered into settlement
\nagreements with Zydus Pharmaceuticals
\n(USA) Inc., Cadila Healthcare Limited, MSN
\nLaboratories Pvt. Ltd., MSN Pharmaceuticals
\nInc. and Alembic Pharmaceuticals Limited.
\nThese settlements resolve all US patent litigation
\nbetween the parties relating to
Tagrisso
.
\nProduct liability litigation
\nLegal proceedings brought against AstraZeneca
\nconsidered to be contingent liabilities
\nFarxiga
and
Xigduo
XR
\nUS proceedings
\nIn several jurisdictions in the US, AstraZeneca
\nhas been named as a defendant in lawsuits
\ninvolving plaintiffs claiming physical injury,
\nincluding Fournier\u2019s Gangrene and necrotising
\nfasciitis, from treatment with
Farxiga
and/or
\nXigduo
XR. A majority of these claims are \ufb01led
\nin Delaware state court and remain pending.
\nOne case, \ufb01led in state court in Minnesota, is
\nscheduled for trial in October 2023.
\nNotes to the Group Financial Statements
\ncontinued
\n194
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
Nexium
and
Losec
/
Prilosec
\nUS proceedings
\nIn the US, AstraZeneca is defending various
\nlawsuits brought in federal and state courts
\ninvolving multiple plaintiffs claiming that they
\nhave been diagnosed with various injuries
\nfollowing treatment with proton pump inhibitors
\n(PPIs), including
Nexium
and
Prilosec
. The vast
\nmajority of those lawsuits relate to allegations
\nof kidney injuries. In May 2017, counsel for a
\ngroup of such plaintiffs claiming that they have
\nbeen diagnosed with kidney injuries \ufb01led a
\nmotion with the Judicial Panel on Multidistrict
\nLitigation (JPML) seeking the transfer of any
\ncurrently pending federal court cases as well
\nas any similar, subsequently \ufb01led cases to
\na coordinated and consolidated pre-trial
\nmultidistrict litigation (MDL) proceeding. In
\nAugust 2017, the JPML granted the motion and
\nconsolidated the pending federal court cases
\nin an MDL proceeding in District Court in New
\nJersey for pre-trial purposes. A bellwether trial
\nhas been scheduled for June 2023, with
\nsubsequent bellwether trials scheduled for July
\nand September 2023. In addition to the MDL
\ncases, there are cases \ufb01led in several state
\ncourts around the US; a case that was
\npreviously set to go to trial in Delaware state
\ncourt was dismissed in October 2022.
\nIn addition, AstraZeneca has been defending
\nlawsuits involving allegations of gastric cancer
\nfollowing treatment with PPIs. One such claim
\nis \ufb01led in the US District Court for the Middle
\nDistrict of Louisiana and was scheduled to go
\nto trial in January 2023. That case has been
\npostponed and a new trial date has not yet
\nbeen set.
\nCanada proceedings
\nIn Canada, in July and August 2017, AstraZeneca
\nwas served with three putative class action
\nlawsuits. Two of the lawsuits have been
\ndismissed, one in 2019 and one in 2021. The
\nthird lawsuit seeks authorisation to represent
\nindividual residents in Canada who allegedly
\nsuffered kidney injuries from the use of proton
\npump inhibitors, including
Nexium
and
Losec
.
\nOnglyza
and
Kombiglyze
\nUS proceedings
\nIn the US, AstraZeneca is defending various
\nlawsuits alleging heart failure, cardiac injuries,
\nand/or death from treatment with
Onglyza
or
\nKombiglyze
. In February 2018, the Judicial
\nPanel on Multidistrict Litigation ordered the
\ntransfer of various pending federal actions to
\nthe US District Court for the Eastern District of
\nKentucky (the District Court) for consolidated
\npre-trial proceedings with the federal actions
\npending in the District Court. In the California
\nState Court coordinated proceeding,
\nAstraZeneca\u2019s motion for summary judgment
\nwas granted in March 2022. The District Court
\ngranted AstraZeneca\u2019s motion for summary
\njudgment in August 2022. Plaintiffs are in the
\nprocess of appealing both decisions.
\nLegal proceedings brought against AstraZeneca
\nwhich have been concluded
\nByetta
/
Bydureon
\nUS proceedings
\nIn the US, Amylin Pharmaceuticals, LLC
\n(a wholly owned subsidiary of AstraZeneca) and
\nAstraZeneca are among multiple defendants in
\nvarious lawsuits \ufb01led in federal and state courts
\ninvolving claims of physical injury from treatment
\nwith
Byetta
and/or
Bydureon
. The lawsuits allege
\nseveral types of injuries including pancreatic
\ncancer and thyroid cancer. A multidistrict
\nlitigation was established in the US District Court
\nfor the Southern District of California (the District
\nCourt) in regard to the alleged pancreatic cancer
\ncases in federal courts. Further, a coordinated
\nproceeding has been established in Superior
\nCourt in Los Angeles, California (the California
\nCourt) for cases in California state courts. In
\nMarch and April 2021, the District Court and
\nthe California Court respectively granted the
\nDefendants\u2019 summary judgment motions,
\ndismissing all cases alleging pancreatic cancer
\nwith prejudice. All remaining claims in both
\ncourts, including those alleging thyroid cancer,
\nhave since been dismissed. This matter is
\nnow concluded.
\nCommercial litigation
\nLegal proceedings brought against AstraZeneca
\nconsidered to be contingent liabilities
\nAlexion Shareholder Litigation (US)
\nIn December 2016, putative securities class
\naction lawsuits were \ufb01led in the US District Court
\nfor the District of Connecticut (the District
\nCourt) against Alexion and certain of\ufb01cers and
\ndirectors, on behalf of purchasers of Alexion
\npublicly traded securities during the period
\n30 January 2014 through 26 May 2017. The
\namended complaint alleges that defendants
\nengaged in securities fraud, including by making
\nmisrepresentations and omissions in its public
\ndisclosures concerning Alexion\u2019s
Soliris
sales
\npractices, management changes, and related
\ninvestigations. In August 2021, the District Court
\nissued a decision denying in part Defendants\u2019
\nmotion to dismiss the matter. Plaintiffs\u2019 motion
\nfor class certi\ufb01cation, which Alexion opposed
\nin April 2022, remains pending.
\nAnti-Terrorism Act Civil Lawsuit
\nIn the US, in October 2017, AstraZeneca and
\ncertain other pharmaceutical and/or medical
\ndevice companies were named as defendants
\nin a complaint \ufb01led in US District Court for the
\nDistrict of Columbia (the District Court) by US
\nnationals (or their estates, survivors, or heirs)
\nwho were killed or wounded in Iraq between
\n2005 and 2013. The plaintiffs allege that the
\ndefendants violated the US Anti-Terrorism Act
\nand various state laws by selling pharmaceuticals
\nand medical supplies to the Iraqi Ministry of
\nHealth. In July 2020, the District Court granted
\nAstraZeneca\u2019s and the other defendants\u2019 motion
\nand dismissed the lawsuit, and the plaintiffs
\nappealed to the DC Circuit Court of Appeals
\n(the Appellate Court). In January 2022, a panel
\nof the Appellate Court reversed the dismissal
\nand remanded the case back to the District
\nCourt. AstraZeneca and the other defendants
\nhave \ufb01led petitions requesting en banc review by
\nthe entire Appellate Court, which were denied
\nin February 2023.
\nAZD1222 Securities Litigation
\nIn January 2021, putative securities class action
\nlawsuits were \ufb01led in the US District Court for
\nthe Southern District of New York (the District
\nCourt) against AstraZeneca PLC and certain
\nof\ufb01cers, on behalf of purchasers of AstraZeneca
\npublicly traded securities during a period later
\namended to cover 15 June 2020 through
\n29 January 2021. The Amended Complaint
\nalleges that defendants made materially false
\nand misleading statements in connection with
\nthe development of AZD1222, AstraZeneca\u2019s
\nvaccine for the prevention of COVID-19. In
\nSeptember 2022, the District Court granted
\nAstraZeneca\u2019s motion to dismiss the Amended
\nComplaint with prejudice, disallowing any
\nfurther amendments. Plaintiffs have appealed
\nthis decision.
\nDe\ufb01niens
\nIn Germany, in July 2020, AstraZeneca received
\na notice of arbitration \ufb01led with the German
\nInstitution of Arbitration from the sellers of
\nDe\ufb01niens AG (the Sellers) regarding the 2014
\nShare Purchase Agreement (SPA) between
\nAstraZeneca and the Sellers. The Sellers claim
\nthat they are owed approximately $140m in
\nearn-outs under the SPA. The arbitration
\nhearing has been scheduled for March 2023.
\nEmployment Litigation (US)
\nIn December 2022, AstraZeneca was served
\nwith a lawsuit \ufb01led by seven former employees
\nin the US District Court for the District of
\nDelaware asserting age, religion, and disability
\ndiscrimination claims related to AstraZeneca\u2019s
\nCOVID-19 vaccine mandate. These claims are
\npled on a single-plaintiff and class action basis.
\nEquity Litigation (US)
\nAstraZeneca was defending a putative class
\nand collective action matter in the US District
\nCourt for the Northern District of Illinois brought
\nby three named plaintiffs, who are former
\nAstraZeneca pharmaceutical sales
\nrepresentatives. The case involved claims under
\nthe federal and Illinois Equal Pay Acts, with the
\nplaintiffs alleging they were paid less than male
\nemployees who performed substantially similar
\nand/or equal work. The plaintiffs sought various
\ndamages on behalf of themselves and the
\nputative class and/or collective, including
\nwithout limitation backpay, liquidated damages,
\ncompensatory and punitive damages,
\nattorneys\u2019 fees, and interest. In January 2023,
\nthe District Court granted AstraZeneca\u2019s
\nmotion to dismiss plaintiffs\u2019 complaint.
\n195
AstraZeneca Annual Report & Form 20-F Information 2022
Notes to the Group Financial Statements
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
30 Commitments, contingent liabilities and contingent assets
continued
\nPortola Shareholder Litigation
\nIn the US, in connection with Alexion\u2019s July 2020
\nacquisition of Portola Pharmaceuticals, Inc
\n(Portola), Alexion assumed litigation to which
\nPortola is a party. In January 2020, putative
\nsecurities class action lawsuits were \ufb01led in the
\nUS District Court for the Northern District of
\nCalifornia against Portola and certain of\ufb01cers
\nand directors, on behalf of purchasers of Portola
\npublicly traded securities during the period
\n8 January 2019 through 26 February 2020.
\nThe operative complaints allege that
\ndefendants made materially false and/or
\nmisleading statements or omissions with
\nregard to
Andexxa
. In June 2022, the parties
\nreached a settlement in principle of this
\nmatter, which is subject to court approval.
\nSeroquel
XR (Antitrust Litigation)
\nIn the US in 2019, AstraZeneca was named in
\nseveral related complaints brought in the US
\nDistrict Court for the Southern District of New
\nYork (the District Court), including several putative
\nclass action lawsuits that were purportedly
\nbrought on behalf of classes of direct purchasers
\nor end payors of
Seroquel XR
, that allege
\nAstraZeneca and generic drug manufacturers
\nviolated US antitrust laws when settling patent
\nlitigation related to
Seroquel XR
. In July 2022, in
\nresponse to AstraZeneca\u2019s motion, the District
\nCourt dismissed all claims relating to the
\nsettlement with one of the generic manufacturers
\nbut denied the motion with respect to all claims
\nrelating to the second generic manufacturer
\nand allowed those claims to proceed.
\nSyntimmune
\nIn connection with Alexion\u2019s prior acquisition of
\nSyntimmune, Inc., (Syntimmune) in December
\n2020, Alexion was served with a lawsuit \ufb01led by
\nthe stockholders\u2019 representative for Syntimmune
\nin Delaware State Court that alleged, among
\nother things, breaches of contractual obligations
\nrelating to the 2018 merger agreement. The
\nstockholders\u2019 representative alleges that Alexion
\nfailed to meet its obligations under the merger
\nagreement to use commercially reasonable
\nefforts to achieve the milestones. Alexion also
\n\ufb01led a claim for breach of the representations
\nin the 2018 merger agreement.
\nLegal proceedings brought against AstraZeneca
\nwhich have been concluded
\nArray BioPharma
\nIn December 2017, AstraZeneca was served
\nwith a complaint \ufb01led in New York State court by
\nArray BioPharma, Inc. (Array) alleging breaches
\nof contractual obligations relating to a 2003
\ncollaboration agreement between AstraZeneca
\nand Array. In May 2022, the parties resolved
\nthis dispute. This matter is now concluded.
\nLegal proceedings brought by AstraZeneca
\nconsidered to be contingent assets
\nPARP Inhibitor Royalty Dispute
\nIn October 2012, Tesaro, Inc. (now wholly owned
\nby GlaxoSmithKline plc, \u2018GSK\u2019) entered into
\ntwo worldwide, royalty-bearing patent license
\nagreements with AstraZeneca related to GSK\u2019s
\nproduct niraparib. In May 2021, AstraZeneca
\n\ufb01led a lawsuit against GSK in the Commercial
\nCourt of England and Wales alleging that GSK
\nhas failed to pay all of the royalties due on
\nniraparib sales under the license agreements.
\nThe case has been transferred to the Chancery
\nDivision and the trial has been scheduled for
\nMarch 2023.
\nGovernment investigations/proceedings
\nLegal proceedings brought against AstraZeneca
\nconsidered to be contingent liabilities
\nBrazilian tax assessment matter
\nIn connection with an ongoing matter, in August
\n2019, the Brazilian Federal Revenue Service
\nprovided a Notice of Tax and Description of
\nthe Facts (the Tax Assessment) to two Alexion
\nsubsidiaries (the Brazil Subsidiaries), as well as
\nto two additional entities, a logistics provider
\nutilised by Alexion and a distributor. The Tax
\nAssessment focuses on the importation of
\nSoliris
vials pursuant to Alexion\u2019s free drug
\nsupply to patients programme in Brazil.
\nAlexion prevailed in the \ufb01rst level of
\nadministrative appeals in the Brazilian federal
\nadministrative proceeding system based on
\na de\ufb01ciency in the Brazil Tax Assessment.
\nThe decision was subject to an automatic
\n(ex of\ufb01cio) appeal to the second level of the
\nadministrative courts, which is pending.
\nCOVID-19 vaccine supply and
\nmanufacturing\u00a0inquiries
\nIn February 2022, a Brazilian Public Prosecutor
\n\ufb01led a lawsuit against several defendants
\nincluding the Brazilian Federal Government,
\nAstraZeneca, and other COVID-19 vaccine
\nmanufacturers. In April 2022, a Brazilian Court
\nissued an order dismissing the lawsuit. An
\nappeal is pending.
\nTurkish Ministry of Health matter
\nIn Turkey, in July 2020, the Turkish Ministry
\nof Health (Ministry of Health) initiated an
\ninvestigation regarding payments to healthcare
\nproviders by Alexion Turkey and former
\nemployees and consultants. The investigation
\narose from Alexion\u2019s disclosure of a $21.5m civil
\nsettlement with the US Securities & Exchange
\nCommission (SEC) in July 2020 fully resolving
\nthe SEC\u2019s investigation into possible violations
\nof the FCPA. In September 2021, the Ministry of
\nHealth completed its draft investigation report,
\nand referred the matter to the Ankara Public
\nProsecutor\u2019s Of\ufb01ce with a recommendation
\nfor further proceedings against certain
\nformer employees.
\nTexas Qui Tam
\nUS proceedings
\nIn December 2022, AstraZeneca was served with
\nan unsealed civil lawsuit brought by a qui tam
\nrelator on behalf of the State of Texas in Texas
\nstate court, which alleges that AstraZeneca
\nengaged in unlawful marketing practices.
\nVermont US Attorney investigation
\nUS proceedings
\nIn April 2020, AstraZeneca received a Civil
\nInvestigative Demand from the US Attorney\u2019s
\nOf\ufb01ce in Vermont and the Department of
\nJustice, Civil Division, seeking documents and
\ninformation relating to AstraZeneca\u2019s
\nrelationships with electronic health-record
\nvendors. AstraZeneca is cooperating with
\nthis enquiry.
\nLegal proceedings brought against AstraZeneca
\nwhich have been concluded
\nBrazilian operations investigation
\nIn May 2017, Brazilian authorities seized records
\nand data from Alexion\u2019s Brazil of\ufb01ces as part of
\nan investigation being conducted into Alexion\u2019s
\nBrazilian operations. AstraZeneca cooperated
\nwith this enquiry. The prosecutor
\nrecommended discontinuance in September
\n2022 after determining that there was
\ninsuf\ufb01cient evidence to support a legal claim.
\nThe judicial authority approved discontinuance
\nof the investigation, without any further
\nenforcement action, in November 2022. This
\nmatter is now concluded.
\nCOVID-19 vaccine supply and
\nmanufacturing\u00a0inquiries
\nIn June 2021, Argentina\u2019s Federal Criminal
\nProsecutor\u2019s Of\ufb01ce (the Prosecutor) contacted
\nAstraZeneca Argentina seeking documents and
\nelectronic records in connection with a local
\ncriminal investigation relating to the public
\nprocurement and supply of
Vaxzevria
in that
\ncountry. In October 2021, the Prosecutor \ufb01led a
\nsubmission with the presiding court requesting
\ndismissal of the criminal investigation, and that
\nrequest was granted by the court in February
\n2022. This matter is now closed.
\nLegal proceedings brought by AstraZeneca
\nwhich have been concluded
\nCanadian pricing matter
\nIn October 2017, Alexion \ufb01led proceedings in the
\nFederal Court of Canada to seek judicial review
\nof a determination by the Canadian Patented
\nMedicine Prices Review Board (PMPRB) that
\nAlexion had excessively priced
Soliris
in a
\nmanner inconsistent with the Canadian
\npricing rules and guidelines. In June 2022,
\nthe parties resolved this matter. This matter is
\nnow concluded.
\nNotes to the Group Financial Statements
\ncontinued
\n196
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
Other
\nUS 340B litigations and proceedings
\nUS proceedings
\nAstraZeneca is involved in several matters
\nrelating to its contract pharmacy recognition
\npolicy under the 340B Drug Pricing Program in
\nthe US. AstraZeneca has sought to intervene in
\nthree lawsuits against several US government
\nagencies and their of\ufb01cials relating to the
\nappropriate interpretation of the governing
\nstatute for the 340B Drug Pricing Program.
\nTwo of the three cases are currently stayed
\npending further proceedings and the third
\ncase has been dismissed.
\nAdministrative Dispute Resolution proceedings
\nhave also been initiated against AstraZeneca
\nbefore the US Health Resources and
\nServices Administration.
\nAs previously disclosed, in January 2021,
\nAstraZeneca \ufb01led a separate lawsuit in the
\nUS District Court for the District of Delaware
\nalleging that an Advisory Opinion issued by
\nthe Department of Health and Human Services
\nviolates the Administrative Procedure Act.
\nIn June 2021, the District Court found in favour
\nof AstraZeneca, invalidating the Advisory
\nOpinion. Prior to the District Court\u2019s ruling,
\nhowever, in May 2021, the US government
\nissued new and separate letters to AstraZeneca
\n(and other companies) asserting that our
\ncontract pharmacy policy violates the 340B
\nstatute. AstraZeneca amended the complaint to
\ninclude allegations challenging the letter sent in
\nMay, and in February 2022, the District Court
\nruled in favour of AstraZeneca invalidating those
\nletters sent by the US Government. In January
\n2023, the Court of Appeals af\ufb01rmed the District
\nCourt decision in AstraZeneca\u2019s favour.
\nIn September 2021, AstraZeneca was served
\nwith a class-action antitrust complaint \ufb01led in
\nthe US District Court for the Western District of
\nNew York (the District Court) by Mosaic Health
\nalleging a conspiracy to restrict access to
\n340B discounts in the diabetes market through
\ncontract pharmacies. In September 2022, the
\nDistrict Court granted Defendants\u2019 motion to
\ndismiss the Complaint. Plaintiffs are now
\nseeking leave to amend their complaint.
\nAdditional government inquiries
\nAs is true for most, if not all, major prescription
\npharmaceutical companies, AstraZeneca is
\ncurrently involved in multiple inquiries into drug
\nmarketing and pricing practices. In addition to
\nthe investigations described above, various
\nlaw enforcement of\ufb01ces have, from time to
\ntime, requested information from the Group.
\nThere have been no material developments in
\nthose matters.
\nTax
\nAstraZeneca considers whether it is probable
\nthat a taxation authority will accept an uncertain
\ntax treatment. If it is concluded that it is not
\nprobable that the taxation authority will accept
\nan uncertain tax treatment, where tax exposures
\ncan be quanti\ufb01ed, a tax liability is recognised
\nbased on either the most likely amount method or
\nthe expected value method depending on which
\nmethod management expects to better predict
\nthe resolution of the uncertainty. Tax liabilities
\nfor uncertain tax treatments can be built up over
\na long period of time but the resolution of such
\ntax exposures usually occurs at a point in time,
\nand given the inherent uncertainties in assessing
\nthe outcomes of these exposures (which
\nsometimes can be binary in nature), we could, in
\nfuture periods, experience adjustments to the
\nliabilities recognised in respect of uncertain tax
\ntreatments that have a material positive or
\nnegative effect on our results in any particular
\nperiod. Details of the movements in relation to
\nmaterial uncertain tax treatments are
\ndiscussed below.
\nAstraZeneca faces a number of audits
\nand reviews in jurisdictions around the world
\nand, in some cases, is in dispute with the tax
\nauthorities. The issues under discussion are
\noften complex and can require many years to
\nresolve. Tax liabilities recognised for uncertain
\ntax treatments require management to make
\nkey judgements with respect to the outcome
\nof current and potential future tax audits, and
\nactual results could vary from these estimates.
\nThe total net tax liability recognised in the Group
\nFinancial Statements in respect of uncertain
\ntax positions is $830m (2021: $768m; 2020:
\n$1,014m). The net tax liability consists of $632m
\n(2021: $702m; 2020: $852m) included within
\nincome tax payable, $20m (2021: $17m; 2020:
\n$nil) included within deferred tax liability and
\n$291m (2021: $(33)m; 2020: $76m) included
\nwithin deferred tax asset, partially offset by
\n$113m (2021: additional $82m; 2020: additional
\n$86m) included within income tax receivable.
\nTransfer pricing
\nThe net tax liability included in the Group
\nFinancial Statements to cover the worldwide
\nexposure to uncertain tax treatments is $260m
\n(2021: $77m; 2020: $287m). These matters can
\nbe complex and judgemental. The liability
\nincludes uncertain tax treatments which are
\nestimated using the expected value method and
\ndepend on AstraZeneca\u2019s assessment of the
\nlikelihood of the approach taken by the tax
\nauthorities and could change in the future to
\nre\ufb02ect progress in tax authority reviews, the
\nextent that any tax authority challenge is
\nconcluded, or matters lapse including following
\nexpiry of the relevant statutes of limitation
\nresulting in a reduction in the tax charge in
\nfuture periods.
\nFor transfer pricing matters, including items
\nunder tax audit, AstraZeneca estimates the
\npotential for additional tax liabilities above the
\namount provided where the possibility of the
\nadditional liabilities falling due is more than
\nremote, to be up to $245m (2021: $48m; 2020:
\n$251m) including associated interest.
\nThere were no uncertain tax treatments
\nrelating to transfer pricing which give rise to
\npotential for additional tax liabilities where the
\npossibility of the additional liabilities falling
\ndue is more than remote.
\nManagement believes that it is unlikely that these
\nadditional liabilities will arise. It is possible that
\nsome of these contingencies may change in the
\nfuture to re\ufb02ect progress in tax authority reviews,
\nto the extent that any tax authority challenge is
\nconcluded, or matters lapse including following
\nexpiry of the relevant statutes of limitation
\nresulting in a reduction in the tax charge in
\nfuture periods. Management continues to
\nbelieve that AstraZeneca\u2019s positions on all its
\ntransfer pricing positions, audits and disputes
\nare robust, and that AstraZeneca has recognised
\nappropriate tax balances, including
\nconsideration of whether corresponding relief
\nwill be available under Mutual Agreement
\nprocedures or unilaterally.
\nThe increase in the net tax liability for uncertain
\ntax positions relating to transfer pricing of $183m
\ncompared with 2021 is mainly as a result of an
\nincrease of tax liabilities arising from updates
\nto estimates of prior period tax liabilities
\nfollowing progression of tax authority reviews.
\nOther uncertain tax treatments
\nIncluded in the net tax liability is $570m (2021:
\n$691m; 2020: $727m) relating to a number of
\nother uncertain tax treatments. The decrease
\nof $121m in the net tax liability relating to the
\nother uncertain tax treatments mainly relates to
\nreleases of tax liabilities following the expiry of
\nthe relevant statute of limitations and exchange
\nrate effects. The majority of the liability relates
\nto tax liabilities in respect of uncertain tax
\ntreatments which are estimated using the
\nexpected value method and depend on
\nAstraZeneca\u2019s assessment of the likelihood of
\nthe approach taken by the tax authorities and
\ncould change in the future to re\ufb02ect progress
\nin tax authority reviews, the extent that any
\ntax authority challenge is concluded, or
\nmatters lapse including following expiry of the
\nrelevant statutes of limitation resulting in a
\nreduction in the tax charge in future periods.
\nFor these other tax liabilities in respect of
\nuncertain tax treatments, AstraZeneca
\nestimates the potential for additional liabilities
\nabove the amount provided where the
\npossibility of the additional liabilities falling
\ndue is more than remote, to be up to $209m
\n(2021: $273m; 2020: $293m) including
\n197
AstraZeneca Annual Report & Form 20-F Information 2022
Notes to the Group Financial Statements
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
associated interest. It is possible that some
\nof these liabilities may reduce in the future if
\nany tax authority challenge is concluded or
\nmatters lapse following expiry of the relevant
\nstatutes of limitation, resulting in a reduction
\nin the tax charge in future periods.
\nFor uncertain tax treatments relating to other
\ntax matters for which no tax liability has been
\nrecognised, AstraZeneca estimates the potential
\nfor additional tax liabilities where the possibility
\nof the additional liabilities falling due is more
\nthan remote to be up to $280m (2021: $325m;
\n2020: $224m) including associated interest.
\nTiming of cash \ufb02ows and interest
\nThe Group is currently under audit in several
\ncountries and the timing of any resolution of
\nthese audits is uncertain.
\nIt is not possible to estimate the timing of tax
\ncash \ufb02ows in relation to each outcome. It is
\nanticipated that tax payments may be required
\nin relation to a number of signi\ufb01cant disputes
\nwhich may be resolved over the next one to two
\nyears. AstraZeneca considers the tax liabilities
\nset out above to appropriately re\ufb02ect the
\nexpected value of any \ufb01nal settlement. Some
\nof the items discussed above are not currently
\nwithin the scope of tax authority audits and
\nmay take longer to resolve.
\nIncluded within other payables is a net amount
\nof interest arising on tax contingencies of
\n$106m (2021: $85m; 2020: $82m).",
"dimensions": {
"concept": "ifrs-full:DisclosureOfCommitmentsAndContingentLiabilitiesExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f34255": {
"value": "30 Commitments, contingent liabilities and contingent assets \n2022
2021
2020
\nCommitments
$m
$m
$m
\nContracts placed for future capital expenditure on Property, plant and equipment and
\nsoftware development costs not provided for in these financial statements
502
388
689
\nGuarantees and contingencies arising in the ordinary course of business, for which no security has been given, are not expected to result in any
\nmaterial \ufb01nancial loss.
\nResearch and development collaboration payments
\nThe Group has various ongoing collaborations, including in-licensing and similar arrangements with development partners. Such collaborations may
\nrequire the Group to make payments on achievement of stages of development, launch or revenue milestones, although the Group generally has
\nthe right to terminate these agreements at no cost. The Group recognises research and development milestones as an intangible asset once it is
\ncommitted to payment, which is generally when the Group reaches set trigger points in the development cycle. Revenue-related milestones are
\nrecognised as intangible assets on product launch at a value based on the Group\u2019s long-term revenue forecasts for the related product. The table
\nbelow indicates potential development and revenue-related payments that the Group may be required to make under such collaborations.
\nYears 5
\nTotal
Under 1 year
Years 1 and 2
Years 3 and 4
and greater
\n$m
$m
$m
$m
$m
\nFuture potential research and development milestone payments
11,729
1,320
2,662
2,698
5,049
\nFuture potential revenue milestone payments
17,499
65
368
1,859
15,207
\nThe table includes all potential payments for achievement of milestones under ongoing research and development arrangements. Revenue-related
\nmilestone payments represent the maximum possible amount payable on achievement of speci\ufb01ed levels of revenue as set out in individual contract
\nagreements, but exclude variable payments that are based on unit sales (e.g. royalty-type payments) which are expensed as the associated sale is
\nrecognised. The table excludes any payments already capitalised in the Financial Statements for the year ended 31 December 2022.
\nThe future payments we disclose represent contracted payments and, as such, are not discounted and are not risk-adjusted. As detailed in the Risk
\nsection from page 56, the development of any pharmaceutical product candidate is a complex and risky process that may fail at any stage in the
\ndevelopment process due to a number of factors (including items such as failure to obtain regulatory approval, unfavourable data from key studies,
\nadverse reactions to the product candidate or indications of other safety concerns). The timing of the payments is based on the Group\u2019s current best
\nestimate of achievement of the relevant milestone.
\nNotes to the Group Financial Statements
\ncontinued
\nEnvironmental costs and liabilities
\nThe Group\u2019s expenditure on environmental
\nprotection, including both capital and revenue
\nitems, relates to costs that are necessary for
\nimplementing internal systems and programmes,
\nand meeting legal and regulatory requirements
\nfor processes and products. This includes
\ninvestment to conserve natural resources and
\notherwise minimise the impact of our activities
\non the environment.
\nThey are an integral part of normal ongoing
\nexpenditure for carrying out the Group\u2019s
\nresearch, manufacturing and commercial
\noperations and are not separated from overall
\noperating and development costs. There are
\nno known changes in legal, regulatory or other
\nrequirements resulting in material changes to
\nthe levels of expenditure for 2020, 2021 or 2022.
\nIn addition to expenditure for meeting current
\nand foreseen environmental protection
\nrequirements, the Group incurs costs in
\ninvestigating and cleaning up legacy land and
\ngroundwater contamination. In particular,
\nAstraZeneca has environmental liabilities at
\nsome currently or formerly owned, leased and
\nthird-party sites.
\nIn the US, Zeneca Inc., and/or its indemnitees,
\nhave been named as potentially responsible
\nparties (PRPs) or defendants at a number of
\nsites where Zeneca Inc. is likely to incur future
\nenvironmental investigation, remediation,
\noperation and maintenance costs under federal,
\nstate, statutory or common law environmental
\nliability allocation schemes (together, US
\nEnvironmental Consequences). Similarly,
\nStauffer Management Company LLC (SMC),
\nwhich was established in 1987 to own and
\nmanage certain assets of Stauffer Chemical
\nCompany acquired that year, and/or its
\nindemnitees, have been named as PRPs or
\ndefendants at a number of sites where SMC is
\nlikely to incur US Environmental Consequences.
\nAstraZeneca has also given indemnities to third
\nparties for a number of sites outside the US.
\nThese environmental liabilities arise from legacy
\noperations that are not currently part of the
\nGroup\u2019s business and, at most of these sites,
\nremediation, where required, is either completed
\nor in progress. AstraZeneca has made
\nprovisions for the estimated costs of future
\nenvironmental investigation, remediation,
\noperation and maintenance activity beyond
\nnormal ongoing expenditure for maintaining the
\nGroup\u2019s R&D and manufacturing capacity and
\nproduct ranges, where a present obligation
\nexists, it is probable that such costs will be
\nincurred and they can be estimated reliably. With
\nrespect to such estimated future costs, there
\nwere provisions at 31 December 2022 in the
\naggregate of $131m (2021: $90m; 2020: $100m),
\nmainly relating to the US. Where we are jointly
\nliable or otherwise have cost-sharing
\nagreements with third parties, we re\ufb02ect only
\nour share of the obligation. Where the liability is
\ninsured in part or in whole by insurance or other
\narrangements for reimbursement, an asset is
\nrecognised to the extent that this recovery is
\nvirtually certain.
\nIt is possible that AstraZeneca could incur
\nfuture environmental costs beyond the extent
\nof our current provisions. The extent of such
\npossible additional costs is inherently dif\ufb01cult
\nto estimate due to a number of factors, including:
\n(i) the nature and extent of claims that may be
\nasserted in the future; (ii) whether AstraZeneca
\nhas or will have any legal obligation with respect
\nto asserted or unasserted claims; (iii) the type of
\nremedial action, if any, that may be selected at
\nsites where the remedy is presently not known;
\n(iv) the potential for recoveries from or allocation
\nof liability to third parties; and (v) the length of
\ntime that the environmental investigation,
\nremediation and liability allocation process can
\ntake. As per our accounting policy on page
\n148, provisions for these costs are made when
\nthere is a present obligation and where it is
\nprobable that expenditure on remedial work will
\nbe required and a reliable estimate can be made
\nof the cost. Notwithstanding and subject to the
\nforegoing, we estimate the potential additional
\nloss for future environmental investigation,
\nremediation, remedial operation and
\nmaintenance activity above and beyond our
\nprovisions to be, in aggregate, between $113m
\nand $188m (2021: $99m and $165m; 2020: $95m
\nand $158m) which relates mainly to the US.
\nLegal proceedings
\nAstraZeneca is involved in various legal
\nproceedings considered typical to its business,
\nincluding actual or threatened litigation and
\nactual or potential government investigations
\nrelating to employment matters, product liability,
\ncommercial disputes, pricing, sales and
\n192
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
\n\n\nmarketing practices, infringement of IP rights,
\nand the validity of certain patents and
\ncompetition laws. The more signi\ufb01cant matters
\nare discussed below.
\nMost of the claims involve highly complex
\nissues. Often these issues are subject to
\nsubstantial uncertainties and, therefore, the
\nprobability of a loss, if any, being sustained
\nand/or an estimate of the amount of any loss
\nis dif\ufb01cult to ascertain.
\nThere is one matter, which is considered
\nprobable that an out\ufb02ow will be required, but
\nfor which we are unable to make an estimate
\nof the possible loss or range of possible losses
\nat this stage.
\nWe do not believe that disclosure of the
\namounts sought by plaintiffs, if known, would
\nbe meaningful with respect to these legal
\nproceedings. This is due to a number of factors,
\nincluding (i) the stage of the proceedings
\n(in many cases trial dates have not been set)
\nand the overall length and extent of pre-trial
\ndiscovery; (ii) the entitlement of the parties to
\nan action to appeal a decision; (iii) clarity as to
\ntheories of liability, damages and governing
\nlaw; (iv) uncertainties in timing of litigation;
\nand (v) the possible need for further legal
\nproceedings to establish the appropriate
\namount of damages, if any.
\nWhile there can be no assurance regarding the
\noutcome of any of the legal proceedings referred
\nto in this Note 30, based on management\u2019s
\ncurrent and considered view of each situation,
\nwe do not currently expect them to have a
\nmaterial adverse effect on our \ufb01nancial position
\nincluding within the next \ufb01nancial year. This
\nposition could of course change over time, not
\nleast because of the factors referred to above.
\nIn cases that have been settled or adjudicated,
\nor where quanti\ufb01able \ufb01nes and penalties have
\nbeen assessed and which are not subject to
\nappeal (or other similar forms of relief), or where
\na loss is probable and we are able to make a
\nreasonable estimate of the loss, we indicate
\nthe loss absorbed or make a provision for our
\nbest estimate of the expected loss.
\nWhere it is considered that the Group is more
\nlikely than not to prevail, legal costs involved
\nin defending the claim are charged to pro\ufb01t as
\nthey are incurred.
\nWhere it is considered that the Group has
\na valid contract which provides the right to
\nreimbursement (from insurance or otherwise)
\nof legal costs and/or all or part of any loss
\nincurred or for which a provision has been
\nestablished, and we consider recovery to
\nbe virtually certain, the best estimate of the
\namount expected to be received is recognised
\nas an asset.
\nAssessments as to whether or not to
\nrecognise provisions or assets, and of the
\namounts concerned, usually involve a series of
\ncomplex judgements about future events and
\ncan rely heavily on estimates and assumptions.
\nAstraZeneca believes that the provisions
\nrecorded are adequate based on currently
\navailable information and that the insurance
\nrecoveries recorded will be received. However,
\ngiven the inherent uncertainties involved in
\nassessing the outcomes of these cases, and
\nin estimating the amount of the potential losses
\nand the associated insurance recoveries, we
\ncould in the future incur judgments or insurance
\nsettlements that could have a material adverse
\neffect on our results in any particular period.
\nIP claims include challenges to the Group\u2019s
\npatents on various products or processes and
\nassertions of non-infringement of patents.
\nA loss in any of these cases could result in loss
\nof patent protection on the related product.
\nThe consequences of any such loss could be
\na signi\ufb01cant decrease in Product Sales, which
\ncould have a material adverse effect on our
\nresults. The lawsuits \ufb01led by AstraZeneca for
\npatent infringement against companies that
\nhave \ufb01led abbreviated new drug applications
\n(ANDAs) in the US, seeking to market generic
\nforms of products sold by the Group prior to the
\nexpiry of the applicable patents covering these
\nproducts, typically also involve allegations of
\nnon-infringement, invalidity and unenforceability
\nof these patents by the ANDA \ufb01lers. In the event
\nthat the Group is unsuccessful in these actions
\nor the statutory 30-month stay expires before
\na ruling is obtained, the ANDA \ufb01lers involved
\nwill also have the ability, subject to FDA
\napproval, to introduce generic versions of the
\nproduct concerned.
\nAstraZeneca has full con\ufb01dence in, and will
\nvigorously defend and enforce, its IP.
\nOver the course of the past several years,
\nincluding in 2022, a signi\ufb01cant number of
\ncommercial litigation claims in which
\nAstraZeneca is involved have been resolved,
\nparticularly in the US, thereby reducing potential
\ncontingent liability exposure arising from such
\nlitigation. Similarly, in part due to patent litigation
\nand settlement developments, greater certainty
\nhas been achieved regarding possible generic
\nentry dates with respect to some of our patented
\nproducts. At the same time, like other
\ncompanies in the pharmaceutical sector and
\nother industries, AstraZeneca continues to be
\nsubject to government investigations around
\nthe world.
\nPatent litigation
\nLegal proceedings brought against AstraZeneca
\nconsidered to be contingent liabilities
\nEnhertu
\nUS patent proceedings
\nIn October 2020, Seagen Inc. (Seagen) \ufb01led a
\ncomplaint against Daiichi Sankyo Company,
\nLimited in the US District Court for the Eastern
\nDistrict of Texas alleging that
Enhertu
infringes
\nUS Patent No. 10,808,039 (the \u2018039 patent).
\nAstraZeneca Pharmaceuticals LP co-
\ncommercialises
Enhertu
with Daiichi Sankyo,
\nInc. in the US. After trial in April 2022, the jury
\nfound that the patent was infringed and
\nawarded Seagen $41.82m in past damages.
\nIn July 2022, the District Court entered \ufb01nal
\njudgment and declined to enhance damages
\non the basis of willfulness. The parties await
\nconsideration of post-trial motions.
\nIn December 2020 and January 2021,
\nAstraZeneca and Daiichi Sankyo, Inc. \ufb01led
\npost-grant review (PGR) petitions with the US
\nPatent and Trademark Of\ufb01ce (USPTO) alleging,
\ninter alia, that the Seagen patent is invalid for
\nlack of written description and enablement.
\nThe USPTO initially declined to institute the
\nPGRs, but, in April 2022, the USPTO granted
\nthe rehearing requests, instituting both PGR
\npetitions. Seagen subsequently disclaimed all
\npatent claims at issue in one of the PGR
\nproceedings. In July 2022, the USPTO reversed
\nits institution decision and declined to institute
\nthe other PGR petition. AstraZeneca and Daiichi
\nSankyo, Inc. have requested reconsideration of
\nthe decision not to institute review of the patent.
\nIm\ufb01nzi
\nUS patent proceedings
\nIn March 2022, Bristol-Myers Squibb Co. and
\nE.R. Squibb & Sons, LLC \ufb01led a lawsuit in US
\nDistrict Court for the District of Delaware against
\nAstraZeneca alleging that AstraZeneca\u2019s
\nmarketing of
Im\ufb01nzi
infringes several of their
\npatents. Trial has been scheduled for April 2024.
\nPatent proceedings outside the US
\nIn February 2022, in Japan, Ono Pharmaceuticals
\n\ufb01led a lawsuit in Tokyo District Court, Civil
\nDivision against AstraZeneca alleging that
\nAstraZeneca\u2019s marketing of
Im\ufb01nzi
in Japan
\ninfringes several of their patents.
\nImjudo
\nUS patent proceedings
\nIn January 2023, Bristol-Myers Squibb Co. and
\nE.R. Squibb & Sons, LLC \ufb01led a lawsuit in US
\nDistrict Court for the District of Delaware
\nagainst AstraZeneca alleging that AstraZeneca\u2019s
\nmarketing of
Imjudo
infringes two of their patents.
\nTagrisso
\nUS patent proceedings
\nIn September 2021, Puma Biotechnology, Inc.
\nand Wyeth LLC \ufb01led a patent infringement
\nlawsuit in the US District Court for the District
\nof Delaware against AstraZeneca relating to
\nTagrisso
. Trial has been scheduled for May 2024.
\nMovantik
\nUS patent proceedings
\nIn March 2020, Aether Therapeutics, Inc. \ufb01led
\na patent infringement lawsuit in the US District
\nCourt for the District of Delaware against
\nAstraZeneca, Nektar Therapeutics and Daiichi
\nSankyo, Inc., relating to
Movantik
. Trial has
\nbeen scheduled for March 2023.
\n193
AstraZeneca Annual Report & Form 20-F Information 2022
Notes to the Group Financial Statements
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
30 Commitments, contingent liabilities and contingent assets
continued
\nLegal proceedings brought against
\nAstraZeneca which have been concluded
\nRoxadustat
\nUS patent proceedings
\nIn April 2021, Akebia Therapeutics, Inc. (Akebia)
\nand Otsuka America Pharmaceutical, Inc.
\n(Otsuka) served AstraZeneca with a complaint
\nseeking a declaration of invalidity and
\nnon-infringement for several of FibroGen, Inc\u2019s
\n(FibroGen) method of use patents related to
\nHIF prolylhydroxylase inhibitors. AstraZeneca
\nis the exclusive licensee of FibroGen in the
\nUnited States. In April 2022, this matter was
\ndismissed and is now concluded.
\nUltomiris
\nUS patent proceedings
\nIn November and December of 2018, Chugai
\nPharmaceutical Co., Ltd. (Chugai) \ufb01led lawsuits
\nagainst Alexion in the Delaware District Court
\nas well as in Tokyo District Court, alleging that
\nUltomiris
infringed US and Japanese patents
\nheld by Chugai. In March 2022, Alexion entered
\ninto a settlement agreement with Chugai for
\n$775m that resolved all patent disputes between
\nthe two companies related to
Ultomiris
. This
\nmatter is now concluded.
\nLegal proceedings brought by AstraZeneca
\nconsidered to be contingent assets
\nBrilinta
\nUS patent proceedings
\nIn 2015 and subsequently, in response to
\nParagraph IV notices from ANDA \ufb01lers,
\nAstraZeneca \ufb01led patent infringement lawsuits
\nin the US District Court for the District of
\nDelaware (the District Court) relating to patents
\nlisted in the FDA Orange Book with reference
\nto
Brilinta
. In 2022, AstraZeneca entered into
\nseveral separate settlements and the District
\nCourt entered consent judgments to dismiss
\neach of the corresponding litigations.
\nAdditional proceedings are ongoing in the
\nDistrict Court. No trial date has been set.
\nCalquence
\nUS patent proceedings
\nIn February 2022, in response to Paragraph IV
\nnotices from multiple ANDA \ufb01lers, AstraZeneca
\n\ufb01led patent infringement lawsuits in the US
\nDistrict Court for the District of Delaware. In its
\ncomplaint, AstraZeneca alleges that a generic
\nversion of
Calquence
, if approved and marketed,
\nwould infringe patents listed in the US FDA
\nOrange Book with reference to
Calquence
\nthat are owned or licensed by AstraZeneca.
\nTrial has been scheduled for March 2025.
\nIn February 2023, Sandoz Inc. \ufb01led a petition
\nfor inter partes review with the US Patent
\nand Trademark Of\ufb01ce (USPTO) of certain
\nCalquence
patent claims in US Patent No.
\n10,272,083 (the \u2018083 patent). AstraZeneca has
\nasserted claims for infringement of the \u2018083
\npatent against Sandoz and other defendants
\nin the US ANDA litigation. AstraZeneca is
\nconsidering its response to Sandoz\u2019s petition
\nbefore the USPTO.
\nDaliresp
\nUS patent proceedings
\nIn 2015 and subsequently, in response to
\nParagraph IV notices from ANDA \ufb01lers,
\nAstraZeneca \ufb01led patent infringement lawsuits
\nin the US District Court for the District of New
\nJersey (the District Court) relating to patents
\nlisted in the FDA Orange Book with reference
\nto
Daliresp
. In 2022, AstraZeneca entered
\ninto a settlement and the District Court
\nentered a consent judgment to dismiss the
\ncorresponding litigation. Additional ANDA
\nchallenges are pending.
\nFaslodex
\nPatent proceedings outside the US
\nIn 2021 in Japan, AstraZeneca received notice
\nfrom the Japan Patent Of\ufb01ce (JPO) that Sandoz
\nK.K. and Sun Pharma Japan Ltd. (Sun) were
\nseeking to invalidate the
Faslodex
formulation
\npatent. AstraZeneca defended the challenged
\npatent, and Sun withdrew from the JPO patent
\nchallenge. In May 2022, the JPO held the hearing
\nin the matter and issued its preliminary decision
\nin September 2022 upholding various claims
\nof the challenged patent and determining that
\nother patent claims were invalid. A \ufb01nal JPO
\ndecision is forthcoming.
\nTagrisso
\nPatent proceedings outside the US
\nIn Russia in October 2021, AstraZeneca \ufb01led a
\nlawsuit in the Arbitration Court of the Moscow
\nRegion (the Court) against Axelpharm, LLC
\nto prevent it from obtaining authorisation to
\nmarket a generic version of
Tagrisso
prior to the
\nexpiration of AstraZeneca\u2019s patents covering
\nTagrisso
. The lawsuit also names the Ministry
\nof Health of the Russian Federation as a third
\nparty. In March 2022, the Court dismissed
\nthe lawsuit. In June 2022, the dismissal was
\naf\ufb01rmed on appeal. In January 2023, the
\ndismissal was af\ufb01rmed on further appeal.
\nAstraZeneca is considering its option.
\nFarxiga
/
Forxiga
\nUS patent proceedings
\nIn 2018, in response to Paragraph IV notices,
\nAstraZeneca initiated ANDA litigation against
\nZydus Pharmaceuticals (USA) Inc. (Zydus) in the
\nUS District Court for the District of Delaware
\n(the District Court). In May 2021, trial against
\nZydus proceeded in the District Court and
\nin October 2021, the District Court issued
\na decision \ufb01nding the asserted claims of
\nAstraZeneca\u2019s patent as valid and infringed
\nby Zydus\u2019s ANDA product. In August 2022,
\nZydus appealed the District Court\u2019s decision.
\nIn November 2022, Zydus\u2019s appeal was
\ndismissed. Additional ANDA challenges
\nare pending.
\nLokelma
\nUS patent proceedings
\nIn August 2022, in response to Paragraph IV
\nnotices, AstraZeneca initiated ANDA litigation
\nagainst multiple generic \ufb01lers in the US District
\nCourt for the District of Delaware. Trial has
\nbeen scheduled for March 2025.
\nSymbicort
\nUS patent proceedings
\nAstraZeneca is involved in ongoing ANDA
\nlitigations with Mylan Pharmaceuticals Inc.
\n(Mylan) and Kindeva Drug Delivery L.P.
\n(Kindeva) brought in the US District Court
\nfor the Northern District of West Virginia
\n(the District Court). In the actions, AstraZeneca
\nalleges that the defendants\u2019 generic versions
\nof
Symbicort
, if approved and marketed,
\nwould infringe various AstraZeneca patents.
\nIn one of those matters, in November 2022,
\nthe District Court determined that the asserted
\npatent was invalid. In November 2022,
\nAstraZeneca appealed that decision to the
\nUnited States Court of Appeals for the Federal
\nCircuit (the Federal Circuit). With respect to
\nthe other matter, following a stipulation of
\ninfringement and validity by Mylan and Kindeva
\nthat was subject to certain appeal issues, in
\nDecember 2022, the District Court issued a Final
\nJudgment in favour of AstraZeneca. In December
\n2022, Mylan and Kindeva appealed the Final
\nJudgment to the Federal Circuit. Both appeals
\nare scheduled to be heard in March 2023.
\nLynparza
\nUS patent proceedings
\nIn December 2022, AstraZeneca received a
\nParagraph IV notice letter from an ANDA \ufb01ler
\nrelating to patents listed in the FDA Orange
\nBook with reference to
Lynparza
. AstraZeneca
\nis reviewing the notice letter.
\nLegal proceedings brought by AstraZeneca
\nwhich have been concluded
\nTagrisso
\nUS patent proceedings
\nIn February 2020, in response to Paragraph IV
\nnotices from multiple ANDA \ufb01lers, AstraZeneca
\n\ufb01led patent infringement lawsuits in the US
\nDistrict Court for the District of Delaware. In its
\ncomplaint, AstraZeneca alleges that a generic
\nversion of
Tagrisso
, if approved and marketed,
\nwould infringe a US Orange Book-listed
Tagrisso
\npatent. In the fourth quarter of 2021 and April
\n2022, AstraZeneca entered into settlement
\nagreements with Zydus Pharmaceuticals
\n(USA) Inc., Cadila Healthcare Limited, MSN
\nLaboratories Pvt. Ltd., MSN Pharmaceuticals
\nInc. and Alembic Pharmaceuticals Limited.
\nThese settlements resolve all US patent litigation
\nbetween the parties relating to
Tagrisso
.
\nProduct liability litigation
\nLegal proceedings brought against AstraZeneca
\nconsidered to be contingent liabilities
\nFarxiga
and
Xigduo
XR
\nUS proceedings
\nIn several jurisdictions in the US, AstraZeneca
\nhas been named as a defendant in lawsuits
\ninvolving plaintiffs claiming physical injury,
\nincluding Fournier\u2019s Gangrene and necrotising
\nfasciitis, from treatment with
Farxiga
and/or
\nXigduo
XR. A majority of these claims are \ufb01led
\nin Delaware state court and remain pending.
\nOne case, \ufb01led in state court in Minnesota, is
\nscheduled for trial in October 2023.
\nNotes to the Group Financial Statements
\ncontinued
\n194
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
Nexium
and
Losec
/
Prilosec
\nUS proceedings
\nIn the US, AstraZeneca is defending various
\nlawsuits brought in federal and state courts
\ninvolving multiple plaintiffs claiming that they
\nhave been diagnosed with various injuries
\nfollowing treatment with proton pump inhibitors
\n(PPIs), including
Nexium
and
Prilosec
. The vast
\nmajority of those lawsuits relate to allegations
\nof kidney injuries. In May 2017, counsel for a
\ngroup of such plaintiffs claiming that they have
\nbeen diagnosed with kidney injuries \ufb01led a
\nmotion with the Judicial Panel on Multidistrict
\nLitigation (JPML) seeking the transfer of any
\ncurrently pending federal court cases as well
\nas any similar, subsequently \ufb01led cases to
\na coordinated and consolidated pre-trial
\nmultidistrict litigation (MDL) proceeding. In
\nAugust 2017, the JPML granted the motion and
\nconsolidated the pending federal court cases
\nin an MDL proceeding in District Court in New
\nJersey for pre-trial purposes. A bellwether trial
\nhas been scheduled for June 2023, with
\nsubsequent bellwether trials scheduled for July
\nand September 2023. In addition to the MDL
\ncases, there are cases \ufb01led in several state
\ncourts around the US; a case that was
\npreviously set to go to trial in Delaware state
\ncourt was dismissed in October 2022.
\nIn addition, AstraZeneca has been defending
\nlawsuits involving allegations of gastric cancer
\nfollowing treatment with PPIs. One such claim
\nis \ufb01led in the US District Court for the Middle
\nDistrict of Louisiana and was scheduled to go
\nto trial in January 2023. That case has been
\npostponed and a new trial date has not yet
\nbeen set.
\nCanada proceedings
\nIn Canada, in July and August 2017, AstraZeneca
\nwas served with three putative class action
\nlawsuits. Two of the lawsuits have been
\ndismissed, one in 2019 and one in 2021. The
\nthird lawsuit seeks authorisation to represent
\nindividual residents in Canada who allegedly
\nsuffered kidney injuries from the use of proton
\npump inhibitors, including
Nexium
and
Losec
.
\nOnglyza
and
Kombiglyze
\nUS proceedings
\nIn the US, AstraZeneca is defending various
\nlawsuits alleging heart failure, cardiac injuries,
\nand/or death from treatment with
Onglyza
or
\nKombiglyze
. In February 2018, the Judicial
\nPanel on Multidistrict Litigation ordered the
\ntransfer of various pending federal actions to
\nthe US District Court for the Eastern District of
\nKentucky (the District Court) for consolidated
\npre-trial proceedings with the federal actions
\npending in the District Court. In the California
\nState Court coordinated proceeding,
\nAstraZeneca\u2019s motion for summary judgment
\nwas granted in March 2022. The District Court
\ngranted AstraZeneca\u2019s motion for summary
\njudgment in August 2022. Plaintiffs are in the
\nprocess of appealing both decisions.
\nLegal proceedings brought against AstraZeneca
\nwhich have been concluded
\nByetta
/
Bydureon
\nUS proceedings
\nIn the US, Amylin Pharmaceuticals, LLC
\n(a wholly owned subsidiary of AstraZeneca) and
\nAstraZeneca are among multiple defendants in
\nvarious lawsuits \ufb01led in federal and state courts
\ninvolving claims of physical injury from treatment
\nwith
Byetta
and/or
Bydureon
. The lawsuits allege
\nseveral types of injuries including pancreatic
\ncancer and thyroid cancer. A multidistrict
\nlitigation was established in the US District Court
\nfor the Southern District of California (the District
\nCourt) in regard to the alleged pancreatic cancer
\ncases in federal courts. Further, a coordinated
\nproceeding has been established in Superior
\nCourt in Los Angeles, California (the California
\nCourt) for cases in California state courts. In
\nMarch and April 2021, the District Court and
\nthe California Court respectively granted the
\nDefendants\u2019 summary judgment motions,
\ndismissing all cases alleging pancreatic cancer
\nwith prejudice. All remaining claims in both
\ncourts, including those alleging thyroid cancer,
\nhave since been dismissed. This matter is
\nnow concluded.
\nCommercial litigation
\nLegal proceedings brought against AstraZeneca
\nconsidered to be contingent liabilities
\nAlexion Shareholder Litigation (US)
\nIn December 2016, putative securities class
\naction lawsuits were \ufb01led in the US District Court
\nfor the District of Connecticut (the District
\nCourt) against Alexion and certain of\ufb01cers and
\ndirectors, on behalf of purchasers of Alexion
\npublicly traded securities during the period
\n30 January 2014 through 26 May 2017. The
\namended complaint alleges that defendants
\nengaged in securities fraud, including by making
\nmisrepresentations and omissions in its public
\ndisclosures concerning Alexion\u2019s
Soliris
sales
\npractices, management changes, and related
\ninvestigations. In August 2021, the District Court
\nissued a decision denying in part Defendants\u2019
\nmotion to dismiss the matter. Plaintiffs\u2019 motion
\nfor class certi\ufb01cation, which Alexion opposed
\nin April 2022, remains pending.
\nAnti-Terrorism Act Civil Lawsuit
\nIn the US, in October 2017, AstraZeneca and
\ncertain other pharmaceutical and/or medical
\ndevice companies were named as defendants
\nin a complaint \ufb01led in US District Court for the
\nDistrict of Columbia (the District Court) by US
\nnationals (or their estates, survivors, or heirs)
\nwho were killed or wounded in Iraq between
\n2005 and 2013. The plaintiffs allege that the
\ndefendants violated the US Anti-Terrorism Act
\nand various state laws by selling pharmaceuticals
\nand medical supplies to the Iraqi Ministry of
\nHealth. In July 2020, the District Court granted
\nAstraZeneca\u2019s and the other defendants\u2019 motion
\nand dismissed the lawsuit, and the plaintiffs
\nappealed to the DC Circuit Court of Appeals
\n(the Appellate Court). In January 2022, a panel
\nof the Appellate Court reversed the dismissal
\nand remanded the case back to the District
\nCourt. AstraZeneca and the other defendants
\nhave \ufb01led petitions requesting en banc review by
\nthe entire Appellate Court, which were denied
\nin February 2023.
\nAZD1222 Securities Litigation
\nIn January 2021, putative securities class action
\nlawsuits were \ufb01led in the US District Court for
\nthe Southern District of New York (the District
\nCourt) against AstraZeneca PLC and certain
\nof\ufb01cers, on behalf of purchasers of AstraZeneca
\npublicly traded securities during a period later
\namended to cover 15 June 2020 through
\n29 January 2021. The Amended Complaint
\nalleges that defendants made materially false
\nand misleading statements in connection with
\nthe development of AZD1222, AstraZeneca\u2019s
\nvaccine for the prevention of COVID-19. In
\nSeptember 2022, the District Court granted
\nAstraZeneca\u2019s motion to dismiss the Amended
\nComplaint with prejudice, disallowing any
\nfurther amendments. Plaintiffs have appealed
\nthis decision.
\nDe\ufb01niens
\nIn Germany, in July 2020, AstraZeneca received
\na notice of arbitration \ufb01led with the German
\nInstitution of Arbitration from the sellers of
\nDe\ufb01niens AG (the Sellers) regarding the 2014
\nShare Purchase Agreement (SPA) between
\nAstraZeneca and the Sellers. The Sellers claim
\nthat they are owed approximately $140m in
\nearn-outs under the SPA. The arbitration
\nhearing has been scheduled for March 2023.
\nEmployment Litigation (US)
\nIn December 2022, AstraZeneca was served
\nwith a lawsuit \ufb01led by seven former employees
\nin the US District Court for the District of
\nDelaware asserting age, religion, and disability
\ndiscrimination claims related to AstraZeneca\u2019s
\nCOVID-19 vaccine mandate. These claims are
\npled on a single-plaintiff and class action basis.
\nEquity Litigation (US)
\nAstraZeneca was defending a putative class
\nand collective action matter in the US District
\nCourt for the Northern District of Illinois brought
\nby three named plaintiffs, who are former
\nAstraZeneca pharmaceutical sales
\nrepresentatives. The case involved claims under
\nthe federal and Illinois Equal Pay Acts, with the
\nplaintiffs alleging they were paid less than male
\nemployees who performed substantially similar
\nand/or equal work. The plaintiffs sought various
\ndamages on behalf of themselves and the
\nputative class and/or collective, including
\nwithout limitation backpay, liquidated damages,
\ncompensatory and punitive damages,
\nattorneys\u2019 fees, and interest. In January 2023,
\nthe District Court granted AstraZeneca\u2019s
\nmotion to dismiss plaintiffs\u2019 complaint.
\n195
AstraZeneca Annual Report & Form 20-F Information 2022
Notes to the Group Financial Statements
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
30 Commitments, contingent liabilities and contingent assets
continued
\nPortola Shareholder Litigation
\nIn the US, in connection with Alexion\u2019s July 2020
\nacquisition of Portola Pharmaceuticals, Inc
\n(Portola), Alexion assumed litigation to which
\nPortola is a party. In January 2020, putative
\nsecurities class action lawsuits were \ufb01led in the
\nUS District Court for the Northern District of
\nCalifornia against Portola and certain of\ufb01cers
\nand directors, on behalf of purchasers of Portola
\npublicly traded securities during the period
\n8 January 2019 through 26 February 2020.
\nThe operative complaints allege that
\ndefendants made materially false and/or
\nmisleading statements or omissions with
\nregard to
Andexxa
. In June 2022, the parties
\nreached a settlement in principle of this
\nmatter, which is subject to court approval.
\nSeroquel
XR (Antitrust Litigation)
\nIn the US in 2019, AstraZeneca was named in
\nseveral related complaints brought in the US
\nDistrict Court for the Southern District of New
\nYork (the District Court), including several putative
\nclass action lawsuits that were purportedly
\nbrought on behalf of classes of direct purchasers
\nor end payors of
Seroquel XR
, that allege
\nAstraZeneca and generic drug manufacturers
\nviolated US antitrust laws when settling patent
\nlitigation related to
Seroquel XR
. In July 2022, in
\nresponse to AstraZeneca\u2019s motion, the District
\nCourt dismissed all claims relating to the
\nsettlement with one of the generic manufacturers
\nbut denied the motion with respect to all claims
\nrelating to the second generic manufacturer
\nand allowed those claims to proceed.
\nSyntimmune
\nIn connection with Alexion\u2019s prior acquisition of
\nSyntimmune, Inc., (Syntimmune) in December
\n2020, Alexion was served with a lawsuit \ufb01led by
\nthe stockholders\u2019 representative for Syntimmune
\nin Delaware State Court that alleged, among
\nother things, breaches of contractual obligations
\nrelating to the 2018 merger agreement. The
\nstockholders\u2019 representative alleges that Alexion
\nfailed to meet its obligations under the merger
\nagreement to use commercially reasonable
\nefforts to achieve the milestones. Alexion also
\n\ufb01led a claim for breach of the representations
\nin the 2018 merger agreement.
\nLegal proceedings brought against AstraZeneca
\nwhich have been concluded
\nArray BioPharma
\nIn December 2017, AstraZeneca was served
\nwith a complaint \ufb01led in New York State court by
\nArray BioPharma, Inc. (Array) alleging breaches
\nof contractual obligations relating to a 2003
\ncollaboration agreement between AstraZeneca
\nand Array. In May 2022, the parties resolved
\nthis dispute. This matter is now concluded.
\nLegal proceedings brought by AstraZeneca
\nconsidered to be contingent assets
\nPARP Inhibitor Royalty Dispute
\nIn October 2012, Tesaro, Inc. (now wholly owned
\nby GlaxoSmithKline plc, \u2018GSK\u2019) entered into
\ntwo worldwide, royalty-bearing patent license
\nagreements with AstraZeneca related to GSK\u2019s
\nproduct niraparib. In May 2021, AstraZeneca
\n\ufb01led a lawsuit against GSK in the Commercial
\nCourt of England and Wales alleging that GSK
\nhas failed to pay all of the royalties due on
\nniraparib sales under the license agreements.
\nThe case has been transferred to the Chancery
\nDivision and the trial has been scheduled for
\nMarch 2023.
\nGovernment investigations/proceedings
\nLegal proceedings brought against AstraZeneca
\nconsidered to be contingent liabilities
\nBrazilian tax assessment matter
\nIn connection with an ongoing matter, in August
\n2019, the Brazilian Federal Revenue Service
\nprovided a Notice of Tax and Description of
\nthe Facts (the Tax Assessment) to two Alexion
\nsubsidiaries (the Brazil Subsidiaries), as well as
\nto two additional entities, a logistics provider
\nutilised by Alexion and a distributor. The Tax
\nAssessment focuses on the importation of
\nSoliris
vials pursuant to Alexion\u2019s free drug
\nsupply to patients programme in Brazil.
\nAlexion prevailed in the \ufb01rst level of
\nadministrative appeals in the Brazilian federal
\nadministrative proceeding system based on
\na de\ufb01ciency in the Brazil Tax Assessment.
\nThe decision was subject to an automatic
\n(ex of\ufb01cio) appeal to the second level of the
\nadministrative courts, which is pending.
\nCOVID-19 vaccine supply and
\nmanufacturing\u00a0inquiries
\nIn February 2022, a Brazilian Public Prosecutor
\n\ufb01led a lawsuit against several defendants
\nincluding the Brazilian Federal Government,
\nAstraZeneca, and other COVID-19 vaccine
\nmanufacturers. In April 2022, a Brazilian Court
\nissued an order dismissing the lawsuit. An
\nappeal is pending.
\nTurkish Ministry of Health matter
\nIn Turkey, in July 2020, the Turkish Ministry
\nof Health (Ministry of Health) initiated an
\ninvestigation regarding payments to healthcare
\nproviders by Alexion Turkey and former
\nemployees and consultants. The investigation
\narose from Alexion\u2019s disclosure of a $21.5m civil
\nsettlement with the US Securities & Exchange
\nCommission (SEC) in July 2020 fully resolving
\nthe SEC\u2019s investigation into possible violations
\nof the FCPA. In September 2021, the Ministry of
\nHealth completed its draft investigation report,
\nand referred the matter to the Ankara Public
\nProsecutor\u2019s Of\ufb01ce with a recommendation
\nfor further proceedings against certain
\nformer employees.
\nTexas Qui Tam
\nUS proceedings
\nIn December 2022, AstraZeneca was served with
\nan unsealed civil lawsuit brought by a qui tam
\nrelator on behalf of the State of Texas in Texas
\nstate court, which alleges that AstraZeneca
\nengaged in unlawful marketing practices.
\nVermont US Attorney investigation
\nUS proceedings
\nIn April 2020, AstraZeneca received a Civil
\nInvestigative Demand from the US Attorney\u2019s
\nOf\ufb01ce in Vermont and the Department of
\nJustice, Civil Division, seeking documents and
\ninformation relating to AstraZeneca\u2019s
\nrelationships with electronic health-record
\nvendors. AstraZeneca is cooperating with
\nthis enquiry.
\nLegal proceedings brought against AstraZeneca
\nwhich have been concluded
\nBrazilian operations investigation
\nIn May 2017, Brazilian authorities seized records
\nand data from Alexion\u2019s Brazil of\ufb01ces as part of
\nan investigation being conducted into Alexion\u2019s
\nBrazilian operations. AstraZeneca cooperated
\nwith this enquiry. The prosecutor
\nrecommended discontinuance in September
\n2022 after determining that there was
\ninsuf\ufb01cient evidence to support a legal claim.
\nThe judicial authority approved discontinuance
\nof the investigation, without any further
\nenforcement action, in November 2022. This
\nmatter is now concluded.
\nCOVID-19 vaccine supply and
\nmanufacturing\u00a0inquiries
\nIn June 2021, Argentina\u2019s Federal Criminal
\nProsecutor\u2019s Of\ufb01ce (the Prosecutor) contacted
\nAstraZeneca Argentina seeking documents and
\nelectronic records in connection with a local
\ncriminal investigation relating to the public
\nprocurement and supply of
Vaxzevria
in that
\ncountry. In October 2021, the Prosecutor \ufb01led a
\nsubmission with the presiding court requesting
\ndismissal of the criminal investigation, and that
\nrequest was granted by the court in February
\n2022. This matter is now closed.
\nLegal proceedings brought by AstraZeneca
\nwhich have been concluded
\nCanadian pricing matter
\nIn October 2017, Alexion \ufb01led proceedings in the
\nFederal Court of Canada to seek judicial review
\nof a determination by the Canadian Patented
\nMedicine Prices Review Board (PMPRB) that
\nAlexion had excessively priced
Soliris
in a
\nmanner inconsistent with the Canadian
\npricing rules and guidelines. In June 2022,
\nthe parties resolved this matter. This matter is
\nnow concluded.
\nNotes to the Group Financial Statements
\ncontinued
\n196
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
Other
\nUS 340B litigations and proceedings
\nUS proceedings
\nAstraZeneca is involved in several matters
\nrelating to its contract pharmacy recognition
\npolicy under the 340B Drug Pricing Program in
\nthe US. AstraZeneca has sought to intervene in
\nthree lawsuits against several US government
\nagencies and their of\ufb01cials relating to the
\nappropriate interpretation of the governing
\nstatute for the 340B Drug Pricing Program.
\nTwo of the three cases are currently stayed
\npending further proceedings and the third
\ncase has been dismissed.
\nAdministrative Dispute Resolution proceedings
\nhave also been initiated against AstraZeneca
\nbefore the US Health Resources and
\nServices Administration.
\nAs previously disclosed, in January 2021,
\nAstraZeneca \ufb01led a separate lawsuit in the
\nUS District Court for the District of Delaware
\nalleging that an Advisory Opinion issued by
\nthe Department of Health and Human Services
\nviolates the Administrative Procedure Act.
\nIn June 2021, the District Court found in favour
\nof AstraZeneca, invalidating the Advisory
\nOpinion. Prior to the District Court\u2019s ruling,
\nhowever, in May 2021, the US government
\nissued new and separate letters to AstraZeneca
\n(and other companies) asserting that our
\ncontract pharmacy policy violates the 340B
\nstatute. AstraZeneca amended the complaint to
\ninclude allegations challenging the letter sent in
\nMay, and in February 2022, the District Court
\nruled in favour of AstraZeneca invalidating those
\nletters sent by the US Government. In January
\n2023, the Court of Appeals af\ufb01rmed the District
\nCourt decision in AstraZeneca\u2019s favour.
\nIn September 2021, AstraZeneca was served
\nwith a class-action antitrust complaint \ufb01led in
\nthe US District Court for the Western District of
\nNew York (the District Court) by Mosaic Health
\nalleging a conspiracy to restrict access to
\n340B discounts in the diabetes market through
\ncontract pharmacies. In September 2022, the
\nDistrict Court granted Defendants\u2019 motion to
\ndismiss the Complaint. Plaintiffs are now
\nseeking leave to amend their complaint.
\nAdditional government inquiries
\nAs is true for most, if not all, major prescription
\npharmaceutical companies, AstraZeneca is
\ncurrently involved in multiple inquiries into drug
\nmarketing and pricing practices. In addition to
\nthe investigations described above, various
\nlaw enforcement of\ufb01ces have, from time to
\ntime, requested information from the Group.
\nThere have been no material developments in
\nthose matters.
\nTax
\nAstraZeneca considers whether it is probable
\nthat a taxation authority will accept an uncertain
\ntax treatment. If it is concluded that it is not
\nprobable that the taxation authority will accept
\nan uncertain tax treatment, where tax exposures
\ncan be quanti\ufb01ed, a tax liability is recognised
\nbased on either the most likely amount method or
\nthe expected value method depending on which
\nmethod management expects to better predict
\nthe resolution of the uncertainty. Tax liabilities
\nfor uncertain tax treatments can be built up over
\na long period of time but the resolution of such
\ntax exposures usually occurs at a point in time,
\nand given the inherent uncertainties in assessing
\nthe outcomes of these exposures (which
\nsometimes can be binary in nature), we could, in
\nfuture periods, experience adjustments to the
\nliabilities recognised in respect of uncertain tax
\ntreatments that have a material positive or
\nnegative effect on our results in any particular
\nperiod. Details of the movements in relation to
\nmaterial uncertain tax treatments are
\ndiscussed below.
\nAstraZeneca faces a number of audits
\nand reviews in jurisdictions around the world
\nand, in some cases, is in dispute with the tax
\nauthorities. The issues under discussion are
\noften complex and can require many years to
\nresolve. Tax liabilities recognised for uncertain
\ntax treatments require management to make
\nkey judgements with respect to the outcome
\nof current and potential future tax audits, and
\nactual results could vary from these estimates.
\nThe total net tax liability recognised in the Group
\nFinancial Statements in respect of uncertain
\ntax positions is $830m (2021: $768m; 2020:
\n$1,014m). The net tax liability consists of $632m
\n(2021: $702m; 2020: $852m) included within
\nincome tax payable, $20m (2021: $17m; 2020:
\n$nil) included within deferred tax liability and
\n$291m (2021: $(33)m; 2020: $76m) included
\nwithin deferred tax asset, partially offset by
\n$113m (2021: additional $82m; 2020: additional
\n$86m) included within income tax receivable.
\nTransfer pricing
\nThe net tax liability included in the Group
\nFinancial Statements to cover the worldwide
\nexposure to uncertain tax treatments is $260m
\n(2021: $77m; 2020: $287m). These matters can
\nbe complex and judgemental. The liability
\nincludes uncertain tax treatments which are
\nestimated using the expected value method and
\ndepend on AstraZeneca\u2019s assessment of the
\nlikelihood of the approach taken by the tax
\nauthorities and could change in the future to
\nre\ufb02ect progress in tax authority reviews, the
\nextent that any tax authority challenge is
\nconcluded, or matters lapse including following
\nexpiry of the relevant statutes of limitation
\nresulting in a reduction in the tax charge in
\nfuture periods.
\nFor transfer pricing matters, including items
\nunder tax audit, AstraZeneca estimates the
\npotential for additional tax liabilities above the
\namount provided where the possibility of the
\nadditional liabilities falling due is more than
\nremote, to be up to $245m (2021: $48m; 2020:
\n$251m) including associated interest.
\nThere were no uncertain tax treatments
\nrelating to transfer pricing which give rise to
\npotential for additional tax liabilities where the
\npossibility of the additional liabilities falling
\ndue is more than remote.
\nManagement believes that it is unlikely that these
\nadditional liabilities will arise. It is possible that
\nsome of these contingencies may change in the
\nfuture to re\ufb02ect progress in tax authority reviews,
\nto the extent that any tax authority challenge is
\nconcluded, or matters lapse including following
\nexpiry of the relevant statutes of limitation
\nresulting in a reduction in the tax charge in
\nfuture periods. Management continues to
\nbelieve that AstraZeneca\u2019s positions on all its
\ntransfer pricing positions, audits and disputes
\nare robust, and that AstraZeneca has recognised
\nappropriate tax balances, including
\nconsideration of whether corresponding relief
\nwill be available under Mutual Agreement
\nprocedures or unilaterally.
\nThe increase in the net tax liability for uncertain
\ntax positions relating to transfer pricing of $183m
\ncompared with 2021 is mainly as a result of an
\nincrease of tax liabilities arising from updates
\nto estimates of prior period tax liabilities
\nfollowing progression of tax authority reviews.
\nOther uncertain tax treatments
\nIncluded in the net tax liability is $570m (2021:
\n$691m; 2020: $727m) relating to a number of
\nother uncertain tax treatments. The decrease
\nof $121m in the net tax liability relating to the
\nother uncertain tax treatments mainly relates to
\nreleases of tax liabilities following the expiry of
\nthe relevant statute of limitations and exchange
\nrate effects. The majority of the liability relates
\nto tax liabilities in respect of uncertain tax
\ntreatments which are estimated using the
\nexpected value method and depend on
\nAstraZeneca\u2019s assessment of the likelihood of
\nthe approach taken by the tax authorities and
\ncould change in the future to re\ufb02ect progress
\nin tax authority reviews, the extent that any
\ntax authority challenge is concluded, or
\nmatters lapse including following expiry of the
\nrelevant statutes of limitation resulting in a
\nreduction in the tax charge in future periods.
\nFor these other tax liabilities in respect of
\nuncertain tax treatments, AstraZeneca
\nestimates the potential for additional liabilities
\nabove the amount provided where the
\npossibility of the additional liabilities falling
\ndue is more than remote, to be up to $209m
\n(2021: $273m; 2020: $293m) including
\n197
AstraZeneca Annual Report & Form 20-F Information 2022
Notes to the Group Financial Statements
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
associated interest. It is possible that some
\nof these liabilities may reduce in the future if
\nany tax authority challenge is concluded or
\nmatters lapse following expiry of the relevant
\nstatutes of limitation, resulting in a reduction
\nin the tax charge in future periods.
\nFor uncertain tax treatments relating to other
\ntax matters for which no tax liability has been
\nrecognised, AstraZeneca estimates the potential
\nfor additional tax liabilities where the possibility
\nof the additional liabilities falling due is more
\nthan remote to be up to $280m (2021: $325m;
\n2020: $224m) including associated interest.
\nTiming of cash \ufb02ows and interest
\nThe Group is currently under audit in several
\ncountries and the timing of any resolution of
\nthese audits is uncertain.
\nIt is not possible to estimate the timing of tax
\ncash \ufb02ows in relation to each outcome. It is
\nanticipated that tax payments may be required
\nin relation to a number of signi\ufb01cant disputes
\nwhich may be resolved over the next one to two
\nyears. AstraZeneca considers the tax liabilities
\nset out above to appropriately re\ufb02ect the
\nexpected value of any \ufb01nal settlement. Some
\nof the items discussed above are not currently
\nwithin the scope of tax authority audits and
\nmay take longer to resolve.
\nIncluded within other payables is a net amount
\nof interest arising on tax contingencies of
\n$106m (2021: $85m; 2020: $82m).",
"dimensions": {
"concept": "ifrs-full:DisclosureOfCommitmentsExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f34256": {
"value": "30 Commitments, contingent liabilities and contingent assets \n2022
2021
2020
\nCommitments
$m
$m
$m
\nContracts placed for future capital expenditure on Property, plant and equipment and
\nsoftware development costs not provided for in these financial statements
502
388
689
\nGuarantees and contingencies arising in the ordinary course of business, for which no security has been given, are not expected to result in any
\nmaterial \ufb01nancial loss.
\nResearch and development collaboration payments
\nThe Group has various ongoing collaborations, including in-licensing and similar arrangements with development partners. Such collaborations may
\nrequire the Group to make payments on achievement of stages of development, launch or revenue milestones, although the Group generally has
\nthe right to terminate these agreements at no cost. The Group recognises research and development milestones as an intangible asset once it is
\ncommitted to payment, which is generally when the Group reaches set trigger points in the development cycle. Revenue-related milestones are
\nrecognised as intangible assets on product launch at a value based on the Group\u2019s long-term revenue forecasts for the related product. The table
\nbelow indicates potential development and revenue-related payments that the Group may be required to make under such collaborations.
\nYears 5
\nTotal
Under 1 year
Years 1 and 2
Years 3 and 4
and greater
\n$m
$m
$m
$m
$m
\nFuture potential research and development milestone payments
11,729
1,320
2,662
2,698
5,049
\nFuture potential revenue milestone payments
17,499
65
368
1,859
15,207
\nThe table includes all potential payments for achievement of milestones under ongoing research and development arrangements. Revenue-related
\nmilestone payments represent the maximum possible amount payable on achievement of speci\ufb01ed levels of revenue as set out in individual contract
\nagreements, but exclude variable payments that are based on unit sales (e.g. royalty-type payments) which are expensed as the associated sale is
\nrecognised. The table excludes any payments already capitalised in the Financial Statements for the year ended 31 December 2022.
\nThe future payments we disclose represent contracted payments and, as such, are not discounted and are not risk-adjusted. As detailed in the Risk
\nsection from page 56, the development of any pharmaceutical product candidate is a complex and risky process that may fail at any stage in the
\ndevelopment process due to a number of factors (including items such as failure to obtain regulatory approval, unfavourable data from key studies,
\nadverse reactions to the product candidate or indications of other safety concerns). The timing of the payments is based on the Group\u2019s current best
\nestimate of achievement of the relevant milestone.
\nNotes to the Group Financial Statements
\ncontinued
\nEnvironmental costs and liabilities
\nThe Group\u2019s expenditure on environmental
\nprotection, including both capital and revenue
\nitems, relates to costs that are necessary for
\nimplementing internal systems and programmes,
\nand meeting legal and regulatory requirements
\nfor processes and products. This includes
\ninvestment to conserve natural resources and
\notherwise minimise the impact of our activities
\non the environment.
\nThey are an integral part of normal ongoing
\nexpenditure for carrying out the Group\u2019s
\nresearch, manufacturing and commercial
\noperations and are not separated from overall
\noperating and development costs. There are
\nno known changes in legal, regulatory or other
\nrequirements resulting in material changes to
\nthe levels of expenditure for 2020, 2021 or 2022.
\nIn addition to expenditure for meeting current
\nand foreseen environmental protection
\nrequirements, the Group incurs costs in
\ninvestigating and cleaning up legacy land and
\ngroundwater contamination. In particular,
\nAstraZeneca has environmental liabilities at
\nsome currently or formerly owned, leased and
\nthird-party sites.
\nIn the US, Zeneca Inc., and/or its indemnitees,
\nhave been named as potentially responsible
\nparties (PRPs) or defendants at a number of
\nsites where Zeneca Inc. is likely to incur future
\nenvironmental investigation, remediation,
\noperation and maintenance costs under federal,
\nstate, statutory or common law environmental
\nliability allocation schemes (together, US
\nEnvironmental Consequences). Similarly,
\nStauffer Management Company LLC (SMC),
\nwhich was established in 1987 to own and
\nmanage certain assets of Stauffer Chemical
\nCompany acquired that year, and/or its
\nindemnitees, have been named as PRPs or
\ndefendants at a number of sites where SMC is
\nlikely to incur US Environmental Consequences.
\nAstraZeneca has also given indemnities to third
\nparties for a number of sites outside the US.
\nThese environmental liabilities arise from legacy
\noperations that are not currently part of the
\nGroup\u2019s business and, at most of these sites,
\nremediation, where required, is either completed
\nor in progress. AstraZeneca has made
\nprovisions for the estimated costs of future
\nenvironmental investigation, remediation,
\noperation and maintenance activity beyond
\nnormal ongoing expenditure for maintaining the
\nGroup\u2019s R&D and manufacturing capacity and
\nproduct ranges, where a present obligation
\nexists, it is probable that such costs will be
\nincurred and they can be estimated reliably. With
\nrespect to such estimated future costs, there
\nwere provisions at 31 December 2022 in the
\naggregate of $131m (2021: $90m; 2020: $100m),
\nmainly relating to the US. Where we are jointly
\nliable or otherwise have cost-sharing
\nagreements with third parties, we re\ufb02ect only
\nour share of the obligation. Where the liability is
\ninsured in part or in whole by insurance or other
\narrangements for reimbursement, an asset is
\nrecognised to the extent that this recovery is
\nvirtually certain.
\nIt is possible that AstraZeneca could incur
\nfuture environmental costs beyond the extent
\nof our current provisions. The extent of such
\npossible additional costs is inherently dif\ufb01cult
\nto estimate due to a number of factors, including:
\n(i) the nature and extent of claims that may be
\nasserted in the future; (ii) whether AstraZeneca
\nhas or will have any legal obligation with respect
\nto asserted or unasserted claims; (iii) the type of
\nremedial action, if any, that may be selected at
\nsites where the remedy is presently not known;
\n(iv) the potential for recoveries from or allocation
\nof liability to third parties; and (v) the length of
\ntime that the environmental investigation,
\nremediation and liability allocation process can
\ntake. As per our accounting policy on page
\n148, provisions for these costs are made when
\nthere is a present obligation and where it is
\nprobable that expenditure on remedial work will
\nbe required and a reliable estimate can be made
\nof the cost. Notwithstanding and subject to the
\nforegoing, we estimate the potential additional
\nloss for future environmental investigation,
\nremediation, remedial operation and
\nmaintenance activity above and beyond our
\nprovisions to be, in aggregate, between $113m
\nand $188m (2021: $99m and $165m; 2020: $95m
\nand $158m) which relates mainly to the US.
\nLegal proceedings
\nAstraZeneca is involved in various legal
\nproceedings considered typical to its business,
\nincluding actual or threatened litigation and
\nactual or potential government investigations
\nrelating to employment matters, product liability,
\ncommercial disputes, pricing, sales and
\n192
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
\n\n\nmarketing practices, infringement of IP rights,
\nand the validity of certain patents and
\ncompetition laws. The more signi\ufb01cant matters
\nare discussed below.
\nMost of the claims involve highly complex
\nissues. Often these issues are subject to
\nsubstantial uncertainties and, therefore, the
\nprobability of a loss, if any, being sustained
\nand/or an estimate of the amount of any loss
\nis dif\ufb01cult to ascertain.
\nThere is one matter, which is considered
\nprobable that an out\ufb02ow will be required, but
\nfor which we are unable to make an estimate
\nof the possible loss or range of possible losses
\nat this stage.
\nWe do not believe that disclosure of the
\namounts sought by plaintiffs, if known, would
\nbe meaningful with respect to these legal
\nproceedings. This is due to a number of factors,
\nincluding (i) the stage of the proceedings
\n(in many cases trial dates have not been set)
\nand the overall length and extent of pre-trial
\ndiscovery; (ii) the entitlement of the parties to
\nan action to appeal a decision; (iii) clarity as to
\ntheories of liability, damages and governing
\nlaw; (iv) uncertainties in timing of litigation;
\nand (v) the possible need for further legal
\nproceedings to establish the appropriate
\namount of damages, if any.
\nWhile there can be no assurance regarding the
\noutcome of any of the legal proceedings referred
\nto in this Note 30, based on management\u2019s
\ncurrent and considered view of each situation,
\nwe do not currently expect them to have a
\nmaterial adverse effect on our \ufb01nancial position
\nincluding within the next \ufb01nancial year. This
\nposition could of course change over time, not
\nleast because of the factors referred to above.
\nIn cases that have been settled or adjudicated,
\nor where quanti\ufb01able \ufb01nes and penalties have
\nbeen assessed and which are not subject to
\nappeal (or other similar forms of relief), or where
\na loss is probable and we are able to make a
\nreasonable estimate of the loss, we indicate
\nthe loss absorbed or make a provision for our
\nbest estimate of the expected loss.
\nWhere it is considered that the Group is more
\nlikely than not to prevail, legal costs involved
\nin defending the claim are charged to pro\ufb01t as
\nthey are incurred.
\nWhere it is considered that the Group has
\na valid contract which provides the right to
\nreimbursement (from insurance or otherwise)
\nof legal costs and/or all or part of any loss
\nincurred or for which a provision has been
\nestablished, and we consider recovery to
\nbe virtually certain, the best estimate of the
\namount expected to be received is recognised
\nas an asset.
\nAssessments as to whether or not to
\nrecognise provisions or assets, and of the
\namounts concerned, usually involve a series of
\ncomplex judgements about future events and
\ncan rely heavily on estimates and assumptions.
\nAstraZeneca believes that the provisions
\nrecorded are adequate based on currently
\navailable information and that the insurance
\nrecoveries recorded will be received. However,
\ngiven the inherent uncertainties involved in
\nassessing the outcomes of these cases, and
\nin estimating the amount of the potential losses
\nand the associated insurance recoveries, we
\ncould in the future incur judgments or insurance
\nsettlements that could have a material adverse
\neffect on our results in any particular period.
\nIP claims include challenges to the Group\u2019s
\npatents on various products or processes and
\nassertions of non-infringement of patents.
\nA loss in any of these cases could result in loss
\nof patent protection on the related product.
\nThe consequences of any such loss could be
\na signi\ufb01cant decrease in Product Sales, which
\ncould have a material adverse effect on our
\nresults. The lawsuits \ufb01led by AstraZeneca for
\npatent infringement against companies that
\nhave \ufb01led abbreviated new drug applications
\n(ANDAs) in the US, seeking to market generic
\nforms of products sold by the Group prior to the
\nexpiry of the applicable patents covering these
\nproducts, typically also involve allegations of
\nnon-infringement, invalidity and unenforceability
\nof these patents by the ANDA \ufb01lers. In the event
\nthat the Group is unsuccessful in these actions
\nor the statutory 30-month stay expires before
\na ruling is obtained, the ANDA \ufb01lers involved
\nwill also have the ability, subject to FDA
\napproval, to introduce generic versions of the
\nproduct concerned.
\nAstraZeneca has full con\ufb01dence in, and will
\nvigorously defend and enforce, its IP.
\nOver the course of the past several years,
\nincluding in 2022, a signi\ufb01cant number of
\ncommercial litigation claims in which
\nAstraZeneca is involved have been resolved,
\nparticularly in the US, thereby reducing potential
\ncontingent liability exposure arising from such
\nlitigation. Similarly, in part due to patent litigation
\nand settlement developments, greater certainty
\nhas been achieved regarding possible generic
\nentry dates with respect to some of our patented
\nproducts. At the same time, like other
\ncompanies in the pharmaceutical sector and
\nother industries, AstraZeneca continues to be
\nsubject to government investigations around
\nthe world.
\nPatent litigation
\nLegal proceedings brought against AstraZeneca
\nconsidered to be contingent liabilities
\nEnhertu
\nUS patent proceedings
\nIn October 2020, Seagen Inc. (Seagen) \ufb01led a
\ncomplaint against Daiichi Sankyo Company,
\nLimited in the US District Court for the Eastern
\nDistrict of Texas alleging that
Enhertu
infringes
\nUS Patent No. 10,808,039 (the \u2018039 patent).
\nAstraZeneca Pharmaceuticals LP co-
\ncommercialises
Enhertu
with Daiichi Sankyo,
\nInc. in the US. After trial in April 2022, the jury
\nfound that the patent was infringed and
\nawarded Seagen $41.82m in past damages.
\nIn July 2022, the District Court entered \ufb01nal
\njudgment and declined to enhance damages
\non the basis of willfulness. The parties await
\nconsideration of post-trial motions.
\nIn December 2020 and January 2021,
\nAstraZeneca and Daiichi Sankyo, Inc. \ufb01led
\npost-grant review (PGR) petitions with the US
\nPatent and Trademark Of\ufb01ce (USPTO) alleging,
\ninter alia, that the Seagen patent is invalid for
\nlack of written description and enablement.
\nThe USPTO initially declined to institute the
\nPGRs, but, in April 2022, the USPTO granted
\nthe rehearing requests, instituting both PGR
\npetitions. Seagen subsequently disclaimed all
\npatent claims at issue in one of the PGR
\nproceedings. In July 2022, the USPTO reversed
\nits institution decision and declined to institute
\nthe other PGR petition. AstraZeneca and Daiichi
\nSankyo, Inc. have requested reconsideration of
\nthe decision not to institute review of the patent.
\nIm\ufb01nzi
\nUS patent proceedings
\nIn March 2022, Bristol-Myers Squibb Co. and
\nE.R. Squibb & Sons, LLC \ufb01led a lawsuit in US
\nDistrict Court for the District of Delaware against
\nAstraZeneca alleging that AstraZeneca\u2019s
\nmarketing of
Im\ufb01nzi
infringes several of their
\npatents. Trial has been scheduled for April 2024.
\nPatent proceedings outside the US
\nIn February 2022, in Japan, Ono Pharmaceuticals
\n\ufb01led a lawsuit in Tokyo District Court, Civil
\nDivision against AstraZeneca alleging that
\nAstraZeneca\u2019s marketing of
Im\ufb01nzi
in Japan
\ninfringes several of their patents.
\nImjudo
\nUS patent proceedings
\nIn January 2023, Bristol-Myers Squibb Co. and
\nE.R. Squibb & Sons, LLC \ufb01led a lawsuit in US
\nDistrict Court for the District of Delaware
\nagainst AstraZeneca alleging that AstraZeneca\u2019s
\nmarketing of
Imjudo
infringes two of their patents.
\nTagrisso
\nUS patent proceedings
\nIn September 2021, Puma Biotechnology, Inc.
\nand Wyeth LLC \ufb01led a patent infringement
\nlawsuit in the US District Court for the District
\nof Delaware against AstraZeneca relating to
\nTagrisso
. Trial has been scheduled for May 2024.
\nMovantik
\nUS patent proceedings
\nIn March 2020, Aether Therapeutics, Inc. \ufb01led
\na patent infringement lawsuit in the US District
\nCourt for the District of Delaware against
\nAstraZeneca, Nektar Therapeutics and Daiichi
\nSankyo, Inc., relating to
Movantik
. Trial has
\nbeen scheduled for March 2023.
\n193
AstraZeneca Annual Report & Form 20-F Information 2022
Notes to the Group Financial Statements
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
30 Commitments, contingent liabilities and contingent assets
continued
\nLegal proceedings brought against
\nAstraZeneca which have been concluded
\nRoxadustat
\nUS patent proceedings
\nIn April 2021, Akebia Therapeutics, Inc. (Akebia)
\nand Otsuka America Pharmaceutical, Inc.
\n(Otsuka) served AstraZeneca with a complaint
\nseeking a declaration of invalidity and
\nnon-infringement for several of FibroGen, Inc\u2019s
\n(FibroGen) method of use patents related to
\nHIF prolylhydroxylase inhibitors. AstraZeneca
\nis the exclusive licensee of FibroGen in the
\nUnited States. In April 2022, this matter was
\ndismissed and is now concluded.
\nUltomiris
\nUS patent proceedings
\nIn November and December of 2018, Chugai
\nPharmaceutical Co., Ltd. (Chugai) \ufb01led lawsuits
\nagainst Alexion in the Delaware District Court
\nas well as in Tokyo District Court, alleging that
\nUltomiris
infringed US and Japanese patents
\nheld by Chugai. In March 2022, Alexion entered
\ninto a settlement agreement with Chugai for
\n$775m that resolved all patent disputes between
\nthe two companies related to
Ultomiris
. This
\nmatter is now concluded.
\nLegal proceedings brought by AstraZeneca
\nconsidered to be contingent assets
\nBrilinta
\nUS patent proceedings
\nIn 2015 and subsequently, in response to
\nParagraph IV notices from ANDA \ufb01lers,
\nAstraZeneca \ufb01led patent infringement lawsuits
\nin the US District Court for the District of
\nDelaware (the District Court) relating to patents
\nlisted in the FDA Orange Book with reference
\nto
Brilinta
. In 2022, AstraZeneca entered into
\nseveral separate settlements and the District
\nCourt entered consent judgments to dismiss
\neach of the corresponding litigations.
\nAdditional proceedings are ongoing in the
\nDistrict Court. No trial date has been set.
\nCalquence
\nUS patent proceedings
\nIn February 2022, in response to Paragraph IV
\nnotices from multiple ANDA \ufb01lers, AstraZeneca
\n\ufb01led patent infringement lawsuits in the US
\nDistrict Court for the District of Delaware. In its
\ncomplaint, AstraZeneca alleges that a generic
\nversion of
Calquence
, if approved and marketed,
\nwould infringe patents listed in the US FDA
\nOrange Book with reference to
Calquence
\nthat are owned or licensed by AstraZeneca.
\nTrial has been scheduled for March 2025.
\nIn February 2023, Sandoz Inc. \ufb01led a petition
\nfor inter partes review with the US Patent
\nand Trademark Of\ufb01ce (USPTO) of certain
\nCalquence
patent claims in US Patent No.
\n10,272,083 (the \u2018083 patent). AstraZeneca has
\nasserted claims for infringement of the \u2018083
\npatent against Sandoz and other defendants
\nin the US ANDA litigation. AstraZeneca is
\nconsidering its response to Sandoz\u2019s petition
\nbefore the USPTO.
\nDaliresp
\nUS patent proceedings
\nIn 2015 and subsequently, in response to
\nParagraph IV notices from ANDA \ufb01lers,
\nAstraZeneca \ufb01led patent infringement lawsuits
\nin the US District Court for the District of New
\nJersey (the District Court) relating to patents
\nlisted in the FDA Orange Book with reference
\nto
Daliresp
. In 2022, AstraZeneca entered
\ninto a settlement and the District Court
\nentered a consent judgment to dismiss the
\ncorresponding litigation. Additional ANDA
\nchallenges are pending.
\nFaslodex
\nPatent proceedings outside the US
\nIn 2021 in Japan, AstraZeneca received notice
\nfrom the Japan Patent Of\ufb01ce (JPO) that Sandoz
\nK.K. and Sun Pharma Japan Ltd. (Sun) were
\nseeking to invalidate the
Faslodex
formulation
\npatent. AstraZeneca defended the challenged
\npatent, and Sun withdrew from the JPO patent
\nchallenge. In May 2022, the JPO held the hearing
\nin the matter and issued its preliminary decision
\nin September 2022 upholding various claims
\nof the challenged patent and determining that
\nother patent claims were invalid. A \ufb01nal JPO
\ndecision is forthcoming.
\nTagrisso
\nPatent proceedings outside the US
\nIn Russia in October 2021, AstraZeneca \ufb01led a
\nlawsuit in the Arbitration Court of the Moscow
\nRegion (the Court) against Axelpharm, LLC
\nto prevent it from obtaining authorisation to
\nmarket a generic version of
Tagrisso
prior to the
\nexpiration of AstraZeneca\u2019s patents covering
\nTagrisso
. The lawsuit also names the Ministry
\nof Health of the Russian Federation as a third
\nparty. In March 2022, the Court dismissed
\nthe lawsuit. In June 2022, the dismissal was
\naf\ufb01rmed on appeal. In January 2023, the
\ndismissal was af\ufb01rmed on further appeal.
\nAstraZeneca is considering its option.
\nFarxiga
/
Forxiga
\nUS patent proceedings
\nIn 2018, in response to Paragraph IV notices,
\nAstraZeneca initiated ANDA litigation against
\nZydus Pharmaceuticals (USA) Inc. (Zydus) in the
\nUS District Court for the District of Delaware
\n(the District Court). In May 2021, trial against
\nZydus proceeded in the District Court and
\nin October 2021, the District Court issued
\na decision \ufb01nding the asserted claims of
\nAstraZeneca\u2019s patent as valid and infringed
\nby Zydus\u2019s ANDA product. In August 2022,
\nZydus appealed the District Court\u2019s decision.
\nIn November 2022, Zydus\u2019s appeal was
\ndismissed. Additional ANDA challenges
\nare pending.
\nLokelma
\nUS patent proceedings
\nIn August 2022, in response to Paragraph IV
\nnotices, AstraZeneca initiated ANDA litigation
\nagainst multiple generic \ufb01lers in the US District
\nCourt for the District of Delaware. Trial has
\nbeen scheduled for March 2025.
\nSymbicort
\nUS patent proceedings
\nAstraZeneca is involved in ongoing ANDA
\nlitigations with Mylan Pharmaceuticals Inc.
\n(Mylan) and Kindeva Drug Delivery L.P.
\n(Kindeva) brought in the US District Court
\nfor the Northern District of West Virginia
\n(the District Court). In the actions, AstraZeneca
\nalleges that the defendants\u2019 generic versions
\nof
Symbicort
, if approved and marketed,
\nwould infringe various AstraZeneca patents.
\nIn one of those matters, in November 2022,
\nthe District Court determined that the asserted
\npatent was invalid. In November 2022,
\nAstraZeneca appealed that decision to the
\nUnited States Court of Appeals for the Federal
\nCircuit (the Federal Circuit). With respect to
\nthe other matter, following a stipulation of
\ninfringement and validity by Mylan and Kindeva
\nthat was subject to certain appeal issues, in
\nDecember 2022, the District Court issued a Final
\nJudgment in favour of AstraZeneca. In December
\n2022, Mylan and Kindeva appealed the Final
\nJudgment to the Federal Circuit. Both appeals
\nare scheduled to be heard in March 2023.
\nLynparza
\nUS patent proceedings
\nIn December 2022, AstraZeneca received a
\nParagraph IV notice letter from an ANDA \ufb01ler
\nrelating to patents listed in the FDA Orange
\nBook with reference to
Lynparza
. AstraZeneca
\nis reviewing the notice letter.
\nLegal proceedings brought by AstraZeneca
\nwhich have been concluded
\nTagrisso
\nUS patent proceedings
\nIn February 2020, in response to Paragraph IV
\nnotices from multiple ANDA \ufb01lers, AstraZeneca
\n\ufb01led patent infringement lawsuits in the US
\nDistrict Court for the District of Delaware. In its
\ncomplaint, AstraZeneca alleges that a generic
\nversion of
Tagrisso
, if approved and marketed,
\nwould infringe a US Orange Book-listed
Tagrisso
\npatent. In the fourth quarter of 2021 and April
\n2022, AstraZeneca entered into settlement
\nagreements with Zydus Pharmaceuticals
\n(USA) Inc., Cadila Healthcare Limited, MSN
\nLaboratories Pvt. Ltd., MSN Pharmaceuticals
\nInc. and Alembic Pharmaceuticals Limited.
\nThese settlements resolve all US patent litigation
\nbetween the parties relating to
Tagrisso
.
\nProduct liability litigation
\nLegal proceedings brought against AstraZeneca
\nconsidered to be contingent liabilities
\nFarxiga
and
Xigduo
XR
\nUS proceedings
\nIn several jurisdictions in the US, AstraZeneca
\nhas been named as a defendant in lawsuits
\ninvolving plaintiffs claiming physical injury,
\nincluding Fournier\u2019s Gangrene and necrotising
\nfasciitis, from treatment with
Farxiga
and/or
\nXigduo
XR. A majority of these claims are \ufb01led
\nin Delaware state court and remain pending.
\nOne case, \ufb01led in state court in Minnesota, is
\nscheduled for trial in October 2023.
\nNotes to the Group Financial Statements
\ncontinued
\n194
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
Nexium
and
Losec
/
Prilosec
\nUS proceedings
\nIn the US, AstraZeneca is defending various
\nlawsuits brought in federal and state courts
\ninvolving multiple plaintiffs claiming that they
\nhave been diagnosed with various injuries
\nfollowing treatment with proton pump inhibitors
\n(PPIs), including
Nexium
and
Prilosec
. The vast
\nmajority of those lawsuits relate to allegations
\nof kidney injuries. In May 2017, counsel for a
\ngroup of such plaintiffs claiming that they have
\nbeen diagnosed with kidney injuries \ufb01led a
\nmotion with the Judicial Panel on Multidistrict
\nLitigation (JPML) seeking the transfer of any
\ncurrently pending federal court cases as well
\nas any similar, subsequently \ufb01led cases to
\na coordinated and consolidated pre-trial
\nmultidistrict litigation (MDL) proceeding. In
\nAugust 2017, the JPML granted the motion and
\nconsolidated the pending federal court cases
\nin an MDL proceeding in District Court in New
\nJersey for pre-trial purposes. A bellwether trial
\nhas been scheduled for June 2023, with
\nsubsequent bellwether trials scheduled for July
\nand September 2023. In addition to the MDL
\ncases, there are cases \ufb01led in several state
\ncourts around the US; a case that was
\npreviously set to go to trial in Delaware state
\ncourt was dismissed in October 2022.
\nIn addition, AstraZeneca has been defending
\nlawsuits involving allegations of gastric cancer
\nfollowing treatment with PPIs. One such claim
\nis \ufb01led in the US District Court for the Middle
\nDistrict of Louisiana and was scheduled to go
\nto trial in January 2023. That case has been
\npostponed and a new trial date has not yet
\nbeen set.
\nCanada proceedings
\nIn Canada, in July and August 2017, AstraZeneca
\nwas served with three putative class action
\nlawsuits. Two of the lawsuits have been
\ndismissed, one in 2019 and one in 2021. The
\nthird lawsuit seeks authorisation to represent
\nindividual residents in Canada who allegedly
\nsuffered kidney injuries from the use of proton
\npump inhibitors, including
Nexium
and
Losec
.
\nOnglyza
and
Kombiglyze
\nUS proceedings
\nIn the US, AstraZeneca is defending various
\nlawsuits alleging heart failure, cardiac injuries,
\nand/or death from treatment with
Onglyza
or
\nKombiglyze
. In February 2018, the Judicial
\nPanel on Multidistrict Litigation ordered the
\ntransfer of various pending federal actions to
\nthe US District Court for the Eastern District of
\nKentucky (the District Court) for consolidated
\npre-trial proceedings with the federal actions
\npending in the District Court. In the California
\nState Court coordinated proceeding,
\nAstraZeneca\u2019s motion for summary judgment
\nwas granted in March 2022. The District Court
\ngranted AstraZeneca\u2019s motion for summary
\njudgment in August 2022. Plaintiffs are in the
\nprocess of appealing both decisions.
\nLegal proceedings brought against AstraZeneca
\nwhich have been concluded
\nByetta
/
Bydureon
\nUS proceedings
\nIn the US, Amylin Pharmaceuticals, LLC
\n(a wholly owned subsidiary of AstraZeneca) and
\nAstraZeneca are among multiple defendants in
\nvarious lawsuits \ufb01led in federal and state courts
\ninvolving claims of physical injury from treatment
\nwith
Byetta
and/or
Bydureon
. The lawsuits allege
\nseveral types of injuries including pancreatic
\ncancer and thyroid cancer. A multidistrict
\nlitigation was established in the US District Court
\nfor the Southern District of California (the District
\nCourt) in regard to the alleged pancreatic cancer
\ncases in federal courts. Further, a coordinated
\nproceeding has been established in Superior
\nCourt in Los Angeles, California (the California
\nCourt) for cases in California state courts. In
\nMarch and April 2021, the District Court and
\nthe California Court respectively granted the
\nDefendants\u2019 summary judgment motions,
\ndismissing all cases alleging pancreatic cancer
\nwith prejudice. All remaining claims in both
\ncourts, including those alleging thyroid cancer,
\nhave since been dismissed. This matter is
\nnow concluded.
\nCommercial litigation
\nLegal proceedings brought against AstraZeneca
\nconsidered to be contingent liabilities
\nAlexion Shareholder Litigation (US)
\nIn December 2016, putative securities class
\naction lawsuits were \ufb01led in the US District Court
\nfor the District of Connecticut (the District
\nCourt) against Alexion and certain of\ufb01cers and
\ndirectors, on behalf of purchasers of Alexion
\npublicly traded securities during the period
\n30 January 2014 through 26 May 2017. The
\namended complaint alleges that defendants
\nengaged in securities fraud, including by making
\nmisrepresentations and omissions in its public
\ndisclosures concerning Alexion\u2019s
Soliris
sales
\npractices, management changes, and related
\ninvestigations. In August 2021, the District Court
\nissued a decision denying in part Defendants\u2019
\nmotion to dismiss the matter. Plaintiffs\u2019 motion
\nfor class certi\ufb01cation, which Alexion opposed
\nin April 2022, remains pending.
\nAnti-Terrorism Act Civil Lawsuit
\nIn the US, in October 2017, AstraZeneca and
\ncertain other pharmaceutical and/or medical
\ndevice companies were named as defendants
\nin a complaint \ufb01led in US District Court for the
\nDistrict of Columbia (the District Court) by US
\nnationals (or their estates, survivors, or heirs)
\nwho were killed or wounded in Iraq between
\n2005 and 2013. The plaintiffs allege that the
\ndefendants violated the US Anti-Terrorism Act
\nand various state laws by selling pharmaceuticals
\nand medical supplies to the Iraqi Ministry of
\nHealth. In July 2020, the District Court granted
\nAstraZeneca\u2019s and the other defendants\u2019 motion
\nand dismissed the lawsuit, and the plaintiffs
\nappealed to the DC Circuit Court of Appeals
\n(the Appellate Court). In January 2022, a panel
\nof the Appellate Court reversed the dismissal
\nand remanded the case back to the District
\nCourt. AstraZeneca and the other defendants
\nhave \ufb01led petitions requesting en banc review by
\nthe entire Appellate Court, which were denied
\nin February 2023.
\nAZD1222 Securities Litigation
\nIn January 2021, putative securities class action
\nlawsuits were \ufb01led in the US District Court for
\nthe Southern District of New York (the District
\nCourt) against AstraZeneca PLC and certain
\nof\ufb01cers, on behalf of purchasers of AstraZeneca
\npublicly traded securities during a period later
\namended to cover 15 June 2020 through
\n29 January 2021. The Amended Complaint
\nalleges that defendants made materially false
\nand misleading statements in connection with
\nthe development of AZD1222, AstraZeneca\u2019s
\nvaccine for the prevention of COVID-19. In
\nSeptember 2022, the District Court granted
\nAstraZeneca\u2019s motion to dismiss the Amended
\nComplaint with prejudice, disallowing any
\nfurther amendments. Plaintiffs have appealed
\nthis decision.
\nDe\ufb01niens
\nIn Germany, in July 2020, AstraZeneca received
\na notice of arbitration \ufb01led with the German
\nInstitution of Arbitration from the sellers of
\nDe\ufb01niens AG (the Sellers) regarding the 2014
\nShare Purchase Agreement (SPA) between
\nAstraZeneca and the Sellers. The Sellers claim
\nthat they are owed approximately $140m in
\nearn-outs under the SPA. The arbitration
\nhearing has been scheduled for March 2023.
\nEmployment Litigation (US)
\nIn December 2022, AstraZeneca was served
\nwith a lawsuit \ufb01led by seven former employees
\nin the US District Court for the District of
\nDelaware asserting age, religion, and disability
\ndiscrimination claims related to AstraZeneca\u2019s
\nCOVID-19 vaccine mandate. These claims are
\npled on a single-plaintiff and class action basis.
\nEquity Litigation (US)
\nAstraZeneca was defending a putative class
\nand collective action matter in the US District
\nCourt for the Northern District of Illinois brought
\nby three named plaintiffs, who are former
\nAstraZeneca pharmaceutical sales
\nrepresentatives. The case involved claims under
\nthe federal and Illinois Equal Pay Acts, with the
\nplaintiffs alleging they were paid less than male
\nemployees who performed substantially similar
\nand/or equal work. The plaintiffs sought various
\ndamages on behalf of themselves and the
\nputative class and/or collective, including
\nwithout limitation backpay, liquidated damages,
\ncompensatory and punitive damages,
\nattorneys\u2019 fees, and interest. In January 2023,
\nthe District Court granted AstraZeneca\u2019s
\nmotion to dismiss plaintiffs\u2019 complaint.
\n195
AstraZeneca Annual Report & Form 20-F Information 2022
Notes to the Group Financial Statements
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
30 Commitments, contingent liabilities and contingent assets
continued
\nPortola Shareholder Litigation
\nIn the US, in connection with Alexion\u2019s July 2020
\nacquisition of Portola Pharmaceuticals, Inc
\n(Portola), Alexion assumed litigation to which
\nPortola is a party. In January 2020, putative
\nsecurities class action lawsuits were \ufb01led in the
\nUS District Court for the Northern District of
\nCalifornia against Portola and certain of\ufb01cers
\nand directors, on behalf of purchasers of Portola
\npublicly traded securities during the period
\n8 January 2019 through 26 February 2020.
\nThe operative complaints allege that
\ndefendants made materially false and/or
\nmisleading statements or omissions with
\nregard to
Andexxa
. In June 2022, the parties
\nreached a settlement in principle of this
\nmatter, which is subject to court approval.
\nSeroquel
XR (Antitrust Litigation)
\nIn the US in 2019, AstraZeneca was named in
\nseveral related complaints brought in the US
\nDistrict Court for the Southern District of New
\nYork (the District Court), including several putative
\nclass action lawsuits that were purportedly
\nbrought on behalf of classes of direct purchasers
\nor end payors of
Seroquel XR
, that allege
\nAstraZeneca and generic drug manufacturers
\nviolated US antitrust laws when settling patent
\nlitigation related to
Seroquel XR
. In July 2022, in
\nresponse to AstraZeneca\u2019s motion, the District
\nCourt dismissed all claims relating to the
\nsettlement with one of the generic manufacturers
\nbut denied the motion with respect to all claims
\nrelating to the second generic manufacturer
\nand allowed those claims to proceed.
\nSyntimmune
\nIn connection with Alexion\u2019s prior acquisition of
\nSyntimmune, Inc., (Syntimmune) in December
\n2020, Alexion was served with a lawsuit \ufb01led by
\nthe stockholders\u2019 representative for Syntimmune
\nin Delaware State Court that alleged, among
\nother things, breaches of contractual obligations
\nrelating to the 2018 merger agreement. The
\nstockholders\u2019 representative alleges that Alexion
\nfailed to meet its obligations under the merger
\nagreement to use commercially reasonable
\nefforts to achieve the milestones. Alexion also
\n\ufb01led a claim for breach of the representations
\nin the 2018 merger agreement.
\nLegal proceedings brought against AstraZeneca
\nwhich have been concluded
\nArray BioPharma
\nIn December 2017, AstraZeneca was served
\nwith a complaint \ufb01led in New York State court by
\nArray BioPharma, Inc. (Array) alleging breaches
\nof contractual obligations relating to a 2003
\ncollaboration agreement between AstraZeneca
\nand Array. In May 2022, the parties resolved
\nthis dispute. This matter is now concluded.
\nLegal proceedings brought by AstraZeneca
\nconsidered to be contingent assets
\nPARP Inhibitor Royalty Dispute
\nIn October 2012, Tesaro, Inc. (now wholly owned
\nby GlaxoSmithKline plc, \u2018GSK\u2019) entered into
\ntwo worldwide, royalty-bearing patent license
\nagreements with AstraZeneca related to GSK\u2019s
\nproduct niraparib. In May 2021, AstraZeneca
\n\ufb01led a lawsuit against GSK in the Commercial
\nCourt of England and Wales alleging that GSK
\nhas failed to pay all of the royalties due on
\nniraparib sales under the license agreements.
\nThe case has been transferred to the Chancery
\nDivision and the trial has been scheduled for
\nMarch 2023.
\nGovernment investigations/proceedings
\nLegal proceedings brought against AstraZeneca
\nconsidered to be contingent liabilities
\nBrazilian tax assessment matter
\nIn connection with an ongoing matter, in August
\n2019, the Brazilian Federal Revenue Service
\nprovided a Notice of Tax and Description of
\nthe Facts (the Tax Assessment) to two Alexion
\nsubsidiaries (the Brazil Subsidiaries), as well as
\nto two additional entities, a logistics provider
\nutilised by Alexion and a distributor. The Tax
\nAssessment focuses on the importation of
\nSoliris
vials pursuant to Alexion\u2019s free drug
\nsupply to patients programme in Brazil.
\nAlexion prevailed in the \ufb01rst level of
\nadministrative appeals in the Brazilian federal
\nadministrative proceeding system based on
\na de\ufb01ciency in the Brazil Tax Assessment.
\nThe decision was subject to an automatic
\n(ex of\ufb01cio) appeal to the second level of the
\nadministrative courts, which is pending.
\nCOVID-19 vaccine supply and
\nmanufacturing\u00a0inquiries
\nIn February 2022, a Brazilian Public Prosecutor
\n\ufb01led a lawsuit against several defendants
\nincluding the Brazilian Federal Government,
\nAstraZeneca, and other COVID-19 vaccine
\nmanufacturers. In April 2022, a Brazilian Court
\nissued an order dismissing the lawsuit. An
\nappeal is pending.
\nTurkish Ministry of Health matter
\nIn Turkey, in July 2020, the Turkish Ministry
\nof Health (Ministry of Health) initiated an
\ninvestigation regarding payments to healthcare
\nproviders by Alexion Turkey and former
\nemployees and consultants. The investigation
\narose from Alexion\u2019s disclosure of a $21.5m civil
\nsettlement with the US Securities & Exchange
\nCommission (SEC) in July 2020 fully resolving
\nthe SEC\u2019s investigation into possible violations
\nof the FCPA. In September 2021, the Ministry of
\nHealth completed its draft investigation report,
\nand referred the matter to the Ankara Public
\nProsecutor\u2019s Of\ufb01ce with a recommendation
\nfor further proceedings against certain
\nformer employees.
\nTexas Qui Tam
\nUS proceedings
\nIn December 2022, AstraZeneca was served with
\nan unsealed civil lawsuit brought by a qui tam
\nrelator on behalf of the State of Texas in Texas
\nstate court, which alleges that AstraZeneca
\nengaged in unlawful marketing practices.
\nVermont US Attorney investigation
\nUS proceedings
\nIn April 2020, AstraZeneca received a Civil
\nInvestigative Demand from the US Attorney\u2019s
\nOf\ufb01ce in Vermont and the Department of
\nJustice, Civil Division, seeking documents and
\ninformation relating to AstraZeneca\u2019s
\nrelationships with electronic health-record
\nvendors. AstraZeneca is cooperating with
\nthis enquiry.
\nLegal proceedings brought against AstraZeneca
\nwhich have been concluded
\nBrazilian operations investigation
\nIn May 2017, Brazilian authorities seized records
\nand data from Alexion\u2019s Brazil of\ufb01ces as part of
\nan investigation being conducted into Alexion\u2019s
\nBrazilian operations. AstraZeneca cooperated
\nwith this enquiry. The prosecutor
\nrecommended discontinuance in September
\n2022 after determining that there was
\ninsuf\ufb01cient evidence to support a legal claim.
\nThe judicial authority approved discontinuance
\nof the investigation, without any further
\nenforcement action, in November 2022. This
\nmatter is now concluded.
\nCOVID-19 vaccine supply and
\nmanufacturing\u00a0inquiries
\nIn June 2021, Argentina\u2019s Federal Criminal
\nProsecutor\u2019s Of\ufb01ce (the Prosecutor) contacted
\nAstraZeneca Argentina seeking documents and
\nelectronic records in connection with a local
\ncriminal investigation relating to the public
\nprocurement and supply of
Vaxzevria
in that
\ncountry. In October 2021, the Prosecutor \ufb01led a
\nsubmission with the presiding court requesting
\ndismissal of the criminal investigation, and that
\nrequest was granted by the court in February
\n2022. This matter is now closed.
\nLegal proceedings brought by AstraZeneca
\nwhich have been concluded
\nCanadian pricing matter
\nIn October 2017, Alexion \ufb01led proceedings in the
\nFederal Court of Canada to seek judicial review
\nof a determination by the Canadian Patented
\nMedicine Prices Review Board (PMPRB) that
\nAlexion had excessively priced
Soliris
in a
\nmanner inconsistent with the Canadian
\npricing rules and guidelines. In June 2022,
\nthe parties resolved this matter. This matter is
\nnow concluded.
\nNotes to the Group Financial Statements
\ncontinued
\n196
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
Other
\nUS 340B litigations and proceedings
\nUS proceedings
\nAstraZeneca is involved in several matters
\nrelating to its contract pharmacy recognition
\npolicy under the 340B Drug Pricing Program in
\nthe US. AstraZeneca has sought to intervene in
\nthree lawsuits against several US government
\nagencies and their of\ufb01cials relating to the
\nappropriate interpretation of the governing
\nstatute for the 340B Drug Pricing Program.
\nTwo of the three cases are currently stayed
\npending further proceedings and the third
\ncase has been dismissed.
\nAdministrative Dispute Resolution proceedings
\nhave also been initiated against AstraZeneca
\nbefore the US Health Resources and
\nServices Administration.
\nAs previously disclosed, in January 2021,
\nAstraZeneca \ufb01led a separate lawsuit in the
\nUS District Court for the District of Delaware
\nalleging that an Advisory Opinion issued by
\nthe Department of Health and Human Services
\nviolates the Administrative Procedure Act.
\nIn June 2021, the District Court found in favour
\nof AstraZeneca, invalidating the Advisory
\nOpinion. Prior to the District Court\u2019s ruling,
\nhowever, in May 2021, the US government
\nissued new and separate letters to AstraZeneca
\n(and other companies) asserting that our
\ncontract pharmacy policy violates the 340B
\nstatute. AstraZeneca amended the complaint to
\ninclude allegations challenging the letter sent in
\nMay, and in February 2022, the District Court
\nruled in favour of AstraZeneca invalidating those
\nletters sent by the US Government. In January
\n2023, the Court of Appeals af\ufb01rmed the District
\nCourt decision in AstraZeneca\u2019s favour.
\nIn September 2021, AstraZeneca was served
\nwith a class-action antitrust complaint \ufb01led in
\nthe US District Court for the Western District of
\nNew York (the District Court) by Mosaic Health
\nalleging a conspiracy to restrict access to
\n340B discounts in the diabetes market through
\ncontract pharmacies. In September 2022, the
\nDistrict Court granted Defendants\u2019 motion to
\ndismiss the Complaint. Plaintiffs are now
\nseeking leave to amend their complaint.
\nAdditional government inquiries
\nAs is true for most, if not all, major prescription
\npharmaceutical companies, AstraZeneca is
\ncurrently involved in multiple inquiries into drug
\nmarketing and pricing practices. In addition to
\nthe investigations described above, various
\nlaw enforcement of\ufb01ces have, from time to
\ntime, requested information from the Group.
\nThere have been no material developments in
\nthose matters.
\nTax
\nAstraZeneca considers whether it is probable
\nthat a taxation authority will accept an uncertain
\ntax treatment. If it is concluded that it is not
\nprobable that the taxation authority will accept
\nan uncertain tax treatment, where tax exposures
\ncan be quanti\ufb01ed, a tax liability is recognised
\nbased on either the most likely amount method or
\nthe expected value method depending on which
\nmethod management expects to better predict
\nthe resolution of the uncertainty. Tax liabilities
\nfor uncertain tax treatments can be built up over
\na long period of time but the resolution of such
\ntax exposures usually occurs at a point in time,
\nand given the inherent uncertainties in assessing
\nthe outcomes of these exposures (which
\nsometimes can be binary in nature), we could, in
\nfuture periods, experience adjustments to the
\nliabilities recognised in respect of uncertain tax
\ntreatments that have a material positive or
\nnegative effect on our results in any particular
\nperiod. Details of the movements in relation to
\nmaterial uncertain tax treatments are
\ndiscussed below.
\nAstraZeneca faces a number of audits
\nand reviews in jurisdictions around the world
\nand, in some cases, is in dispute with the tax
\nauthorities. The issues under discussion are
\noften complex and can require many years to
\nresolve. Tax liabilities recognised for uncertain
\ntax treatments require management to make
\nkey judgements with respect to the outcome
\nof current and potential future tax audits, and
\nactual results could vary from these estimates.
\nThe total net tax liability recognised in the Group
\nFinancial Statements in respect of uncertain
\ntax positions is $830m (2021: $768m; 2020:
\n$1,014m). The net tax liability consists of $632m
\n(2021: $702m; 2020: $852m) included within
\nincome tax payable, $20m (2021: $17m; 2020:
\n$nil) included within deferred tax liability and
\n$291m (2021: $(33)m; 2020: $76m) included
\nwithin deferred tax asset, partially offset by
\n$113m (2021: additional $82m; 2020: additional
\n$86m) included within income tax receivable.
\nTransfer pricing
\nThe net tax liability included in the Group
\nFinancial Statements to cover the worldwide
\nexposure to uncertain tax treatments is $260m
\n(2021: $77m; 2020: $287m). These matters can
\nbe complex and judgemental. The liability
\nincludes uncertain tax treatments which are
\nestimated using the expected value method and
\ndepend on AstraZeneca\u2019s assessment of the
\nlikelihood of the approach taken by the tax
\nauthorities and could change in the future to
\nre\ufb02ect progress in tax authority reviews, the
\nextent that any tax authority challenge is
\nconcluded, or matters lapse including following
\nexpiry of the relevant statutes of limitation
\nresulting in a reduction in the tax charge in
\nfuture periods.
\nFor transfer pricing matters, including items
\nunder tax audit, AstraZeneca estimates the
\npotential for additional tax liabilities above the
\namount provided where the possibility of the
\nadditional liabilities falling due is more than
\nremote, to be up to $245m (2021: $48m; 2020:
\n$251m) including associated interest.
\nThere were no uncertain tax treatments
\nrelating to transfer pricing which give rise to
\npotential for additional tax liabilities where the
\npossibility of the additional liabilities falling
\ndue is more than remote.
\nManagement believes that it is unlikely that these
\nadditional liabilities will arise. It is possible that
\nsome of these contingencies may change in the
\nfuture to re\ufb02ect progress in tax authority reviews,
\nto the extent that any tax authority challenge is
\nconcluded, or matters lapse including following
\nexpiry of the relevant statutes of limitation
\nresulting in a reduction in the tax charge in
\nfuture periods. Management continues to
\nbelieve that AstraZeneca\u2019s positions on all its
\ntransfer pricing positions, audits and disputes
\nare robust, and that AstraZeneca has recognised
\nappropriate tax balances, including
\nconsideration of whether corresponding relief
\nwill be available under Mutual Agreement
\nprocedures or unilaterally.
\nThe increase in the net tax liability for uncertain
\ntax positions relating to transfer pricing of $183m
\ncompared with 2021 is mainly as a result of an
\nincrease of tax liabilities arising from updates
\nto estimates of prior period tax liabilities
\nfollowing progression of tax authority reviews.
\nOther uncertain tax treatments
\nIncluded in the net tax liability is $570m (2021:
\n$691m; 2020: $727m) relating to a number of
\nother uncertain tax treatments. The decrease
\nof $121m in the net tax liability relating to the
\nother uncertain tax treatments mainly relates to
\nreleases of tax liabilities following the expiry of
\nthe relevant statute of limitations and exchange
\nrate effects. The majority of the liability relates
\nto tax liabilities in respect of uncertain tax
\ntreatments which are estimated using the
\nexpected value method and depend on
\nAstraZeneca\u2019s assessment of the likelihood of
\nthe approach taken by the tax authorities and
\ncould change in the future to re\ufb02ect progress
\nin tax authority reviews, the extent that any
\ntax authority challenge is concluded, or
\nmatters lapse including following expiry of the
\nrelevant statutes of limitation resulting in a
\nreduction in the tax charge in future periods.
\nFor these other tax liabilities in respect of
\nuncertain tax treatments, AstraZeneca
\nestimates the potential for additional liabilities
\nabove the amount provided where the
\npossibility of the additional liabilities falling
\ndue is more than remote, to be up to $209m
\n(2021: $273m; 2020: $293m) including
\n197
AstraZeneca Annual Report & Form 20-F Information 2022
Notes to the Group Financial Statements
\nCorporate Governance
Additional Information
Financial Statements
Strategic Report
associated interest. It is possible that some
\nof these liabilities may reduce in the future if
\nany tax authority challenge is concluded or
\nmatters lapse following expiry of the relevant
\nstatutes of limitation, resulting in a reduction
\nin the tax charge in future periods.
\nFor uncertain tax treatments relating to other
\ntax matters for which no tax liability has been
\nrecognised, AstraZeneca estimates the potential
\nfor additional tax liabilities where the possibility
\nof the additional liabilities falling due is more
\nthan remote to be up to $280m (2021: $325m;
\n2020: $224m) including associated interest.
\nTiming of cash \ufb02ows and interest
\nThe Group is currently under audit in several
\ncountries and the timing of any resolution of
\nthese audits is uncertain.
\nIt is not possible to estimate the timing of tax
\ncash \ufb02ows in relation to each outcome. It is
\nanticipated that tax payments may be required
\nin relation to a number of signi\ufb01cant disputes
\nwhich may be resolved over the next one to two
\nyears. AstraZeneca considers the tax liabilities
\nset out above to appropriately re\ufb02ect the
\nexpected value of any \ufb01nal settlement. Some
\nof the items discussed above are not currently
\nwithin the scope of tax authority audits and
\nmay take longer to resolve.
\nIncluded within other payables is a net amount
\nof interest arising on tax contingencies of
\n$106m (2021: $85m; 2020: $82m).",
"dimensions": {
"concept": "ifrs-full:DisclosureOfContingentLiabilitiesExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f35062": {
"value": "PLC",
"dimensions": {
"concept": "ifrs-full:LegalFormOfEntity",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f35577": {
"value": "2022 2021
2020
\n$m
$m
$m
\nFees payable to PricewaterhouseCoopers LLP and its associates:
\nGroup audit fee
9.9
10.5
6.3
\nFees payable to PricewaterhouseCoopers LLP and its associates for other services:
\nThe audit of subsidiaries pursuant to legislation
15.1
15.2
10.8
\nAttestation under s404 of Sarbanes-Oxley Act 2002
3.1
2.0
2.0
\nAudit-related assurance services
0.7
4.5
0.7
\nOther assurance services
0.2
3.4
0.2
\nFees payable to PricewaterhouseCoopers Associates in respect of the Group\u2019s pension schemes:
\nThe audit of subsidiaries\u2019 pension schemes
0.3
0.3
0.3
\n29.3
35.9
20.3
\n$0.6m of fees payable in 2022 are in respect of the Group audit and audit of subsidiaries related to prior years (2021: $0.4m in respect of the Group
\naudit and audit of subsidiaries related to prior years).
\n$0.3m of 2021 Group audit fees and $0.7m of 2021 Audit-related assurance services and Other assurance services relate to pre-acquisition fees
\nincurred by Alexion.
\nIncluded in the 2021 Audit-related assurance services and Other assurance services are $6.1m of services provided in relation to the acquisition
\nof Alexion and related debt issuance.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfAuditorsRemunerationExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f35622": {
"value": "Related party transactions \nThe Group had no material related party transactions which might reasonably be expected to in\ufb02uence decisions made by the users of these
\nFinancial Statements.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfRelatedPartyExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f35623": {
"value": "Related party transactions \nThe Group had no material related party transactions which might reasonably be expected to in\ufb02uence decisions made by the users of these
\nFinancial Statements.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfTransactionsBetweenRelatedPartiesExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f35631": {
"value": "Key management personnel compensation \nKey management personnel are de\ufb01ned for the purpose of disclosure under IAS 24 \u2018Related Party Disclosures\u2019 as the members of the Board and
\nthe members of the SET.
\n2022
2021
2020
\n$\u2019000
$\u2019000
$\u2019000
\nShort-term employee benefits
38,632
32,985
29,126
\nPost-employment benefits
1,388
1,378
1,602
\nShare-based payments
56,297
45,234
27,666
\n96,317
79,597
58,394
\nTotal remuneration is included within employee costs (see Note 29).",
"dimensions": {
"concept": "ifrs-full:DisclosureOfInformationAboutKeyManagementPersonnelExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f35659": {
"value": "32 Subsequent events \nOn 9 January 2023, it was announced that AstraZeneca had entered into a de\ufb01nitive agreement to acquire CinCor Pharma, Inc. (CinCor), a US-based
\nclinical-stage biopharmaceutical company, focused on developing novel treatments for resistant and uncontrolled hypertension as well as chronic
\nkidney disease. On 23 January 2023, AstraZeneca initiated a tender offer to acquire all of CinCor\u2019s outstanding shares for a price of $26 per share in
\ncash at closing, plus a non-tradable contingent value right of $10 per share in cash payable upon a speci\ufb01ed regulatory submission of a baxdrostat
\nproduct. Combined, the upfront and maximum potential contingent value payments represent, if achieved, a transaction value of approximately $1.8bn.
\nAs part of the transaction, AstraZeneca will acquire the cash and marketable securities on CinCor\u2019s balance sheet, which totalled approximately
\n$522m as of 30 September 2022. The transaction is expected to close in the \ufb01rst quarter of 2023.
\nOn 16 January 2023, AstraZeneca completed the acquisition of Neogene Therapeutics Inc. (Neogene). AstraZeneca acquired all outstanding equity
\nof Neogene for a total consideration of up to $320m, on a cash and debt free basis. This includes an initial payment of $200m on deal closing, and
\na further up to $120m in both contingent milestones-based and non-contingent consideration.
\nOn 30 January 2023, AstraZeneca completed the sale of its West Chester site in Ohio, US, to National Resilience, Inc. On completion of the sale, the
\nProperty, plant and equipment assets associated with this transaction of $150m which were recorded as Assets held for sale as at 31 December
\n2022 have been disposed of, with no net impact recorded in the Consolidated Statement of Comprehensive Income.
\nOn 2 February 2023, the Group entered into an additional $2.0bn of two-year committed bank facilities.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfEventsAfterReportingPeriodExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f35689": {
"value": "Group Subsidiaries and Holdings
\nWholly owned subsidiaries
\nAlgeria
\nAAPM SARL
100%
\nNumber 20, Micro-Economic Zone,
\nHydra\u00a0Business Center, Dar\u00a0El\u00a0Medina,
\nAlgiers, Algeria
\nArgentina
\nAstraZeneca S.A.
100%
\nNicolas de Vedia 3616, Piso 8, Ciudad
\nAut\u00f3noma de Buenos Aires, Argentina
\nAlexion Pharma Argentina SRL
100%
\nAvenida Leandro N. Alem 592 Piso 6,
\nBuenos Aires, Argentina
\nAustralia
\nAstraZeneca Holdings Pty Limited
100%
\nAstraZeneca Pty Limited
100%
\nAlexion Pharmaceuticals Australasia Pty Ltd
100%
\n66 Talavera Road, Macquarie Park,
\nNSW\u00a02113, Australia
\nLogicBio Australia Pty Limited
100%
\nLevel 40, 2-26 Park Street, Sydney,
\nNSW\u00a02000, Australia
\nAustria
\nAstraZeneca \u00d6sterreich GmbH
100%
\nLandstra\u00dfer Hauptstra\u00dfe 1A, A-1030
\nWien,\u00a0Austria
\nAlexion Pharma Austria GmbH
100%
\nDonau-City-Stra\u00dfe 7, 30. Stock, DC Tower,
\nVienna 1220, Austria
\nPortola \u00d6sterreich GmbH (in liquidation)
100%
\nMooslackengasse 17, 1190 Wien, Austria
\nBelgium
\nAstraZeneca S.A. / N.V.
100%
\nAlfons Gossetlaan 40 bus 201 at 1702
\nGroot-Bijgaarden, Belgium
\nAlexion Pharma Belgium Sprl
100%
\nAlexion Services Europe Sprl
100%
\nde Mee\u00fbssquare 37, Bruxelles 1000,
\nBelgium
\nBermuda
\nAlexion Bermuda Holding ULC
100%
\nAlexion Bermuda Limited
100%
\nAlexion Bermuda Partners LP
100
%
\nCanon's Court, 22 Victoria St., Hamilton
\nBermuda
\nBrazil
\nAstraZeneca do Brasil Limitada
100%
\nRod. Raposo Tavares, KM 26, 9, Cotia, Brazil
\nAlexion Farmac\u00eautica Am\u00e9rica Latina
\nServi\u00e7os de Administra\u00e7\u00e3o de Vendas Ltda.
100%
\nAlexion Servi\u00e7os e Farmac\u00eautica do
\nBrasil\u00a0Ltda
100%
\nAv. Dr Chucri Zaidan, 1240, 15\u00b0 andar, CEP
\n04711-130, Ed. Morumbi Corporate \u2013\u00a0Golden
\nTower Vila S\u00e3o Francisco, S\u00e3o Paulo, Brazil
\nBulgaria
\nAstraZeneca Bulgaria EOOD
100%
\n1057 Sofia, Izgrev Region, 36 Dragan
\nTsankov Blvrd, Bulgaria
\nCanada
\nAstraZeneca Canada Inc.
\n1
\n100%
\nSuite 5000, 1004 Middlegate Road, Ontario,
\nL4Y 1M4, Canada
\nAlexion Pharma Canada Corporation
100%
\n1300-1969 ST Upper Water, Halifax,
\nNS\u00a0B3J3R7, Canada
\nCayman Islands
\nAZ Reinsurance Limited
100%
\n18 Forum Lane, 2nd Floor, Camana Bay,
\nGrand Cayman, P.O. BOX 69, Cayman Islands
\nChile
\nAstraZeneca S.A.
100%
\nAstraZeneca Farmaceutica Chile Limitada
100%
\nAv. Isidora Goyenechea 3477, 2nd Floor,
\nLas\u00a0Condes, Santiago, Chile
\nChina
\nAstraZeneca Pharmaceutical Co., Limited
100%
\nNo. 2, Huangshan Road, Wuxi,
\nJiangsu\u00a0Province, China
\nAstraZeneca (Wuxi) Trading Co. Ltd
100%
\nBuilding E, Huirong Plaza, Jinghui Road
\nEast, Xinwu District, Wuxi, Jiangsu Province,
\nChina
\nAstraZeneca Investment (China) Co., Ltd
100%
\n199 Liangjing Road, China (Shanghai) Pilot
\nFree Trade Zone, Shanghai, China
\nAstraZeneca Pharmaceutical (China) Co. Ltd
100%
\nNo 9 Medical Avenue, ,\u00a0Jiangsu Province,
\nTaizhou, China
\nAstraZeneca Pharmaceutical
\n(Beijing)\u00a0Co.,\u00a0Ltd
100%
\n1F, Building No.4, No.8 Courtyard,
\nNo.1\u00a0Kegu Street, Beijing Economic-
\nTechnological Development Area,
\nBeijing\u00a0100176, China
\nIn accordance with section 409 of the Companies Act 2006 a full list of subsidiaries, partnerships, associates, joint ventures and joint arrangements,
\nthe place of incorporation, registered of\ufb01ce address, and the effective percentage of equity owned as at 31 December 2022 are disclosed below.
\nUnless otherwise stated the share capital disclosed comprises ordinary shares which are indirectly held by AstraZeneca PLC.
\nUnless otherwise stated the accounting year ends of subsidiaries are 31 December. The Group Financial Statements consolidate the Financial
\nStatements of the Company and its subsidiaries at 31 December 2022.
\nAstraZeneca (Guangzhou)
\nPharmaceutical\u00a0Co., Ltd
100%
\nRoom 406-178, No. 1, Yichuang Street,
\n(China-Singapore Guangzhou Knowledge
\nCity) Huangpu District, Guangzhou City, China
\nAstraZeneca Investment Consulting
\n(Wuxi)\u00a0Co., Ltd
100%
\nRoom 808, 8F, Building 99-2 Linghu Avenue,
\nXinwu District, Wuxi, Jiangsu, China
\nAstraZeneca Pharmaceutical
\n(Hangzhou)\u00a0Co., Ltd
100%
\n12F & 14F, Building 1, Shuli Plaza, 758 Fei
\nJia Tang Road, Gongshu District, Hangzhou,
\nZhejiang Province, China
\nAstraZeneca Global R&D (China) Co., Ltd
100%
\n16F, 88 Xizang North Road, Jing\u2019an District,
\nShanghai, China
\nAstraZeneca Pharmaceutical
\n(Chengdu)\u00a0Co., Ltd.
100%
\n10th Floor, Building 11 (Building E11),
\nNo.\u00a0366, Hemin Street, Chengdu
\nHigh-tech\u00a0Zone, China (Sichuan) Pilot Free
\nTrade Zone, China
\nAstraZeneca Pharmaceutical
\n(Shanghai)\u00a0Co., Ltd
100%
\nB1F, 8F & 9F, 88 Xizang North Road,
\nJing\u2019an\u00a0District, Shanghai, China
\nAlexion Pharmaceuticals (Shanghai)
\nCompany Limited
100%
\nRoom 702 , No 1539 West Nanjing Road,
\nJing'an District, Shangai, China
\nColombia
\nAstraZeneca Colombia S.A.S.
100%
\nAv Carrera 9 No. 101-67 Office 601, Bogot\u00e1,
\n110231, Colombia
\nAlexion Pharma Colombia S.A.S.
100%
\nCarrera 9 # 115 - 06 /30 Edificio Tierra Firme
\nOficina 2904 Bogota D.C., Colombia
\nCosta Rica
\nAstraZeneca CAMCAR Costa Rica, S.A.
100%
\nSan Jos\u00e9, Escaz\u00fa, Roble Corporate Center,
\n5to piso, Costa Rica
\nCroatia
\nAstraZeneca d.o.o.
100%
\nRadnicka cesta 80, 10000 Zagreb, Croatia
\nCzech Republic
\nAstraZeneca Czech Republic, s.r.o.
100%
\nU Trezorky 921/2, 158 00 Prague 5,
\nCzech\u00a0Republic
\nAlexion Pharma Czech s.r.o.
100%
\nNovodvorsk\u00e1 994/138, Bran\u00edk, 142 00
\nPrague, Czech Republic
\nAt 31\u00a0December 2022
Group Interest
At 31\u00a0December 2022
Group Interest
At 31\u00a0December 2022
Group Interest
At 31\u00a0December 2022
Group Interest
At 31\u00a0December 2022
Group Interest
At 31\u00a0December 2022
Group Interest
\nDenmark
\nAstraZeneca A/S
100%
\nWorld Trade Center Ballerup, Borupvang 3,
\nDK- 2750 Ballerup, Denmark
\nEgypt
\nAstraZeneca Egypt for Pharmaceutical
\nIndustries SAE
100%
\n6th of October City, 6th Industrial Zone,
\nPlot\u00a02, Giza, Egypt
\nAstraZeneca Egypt LLC
100%
\n47 St. 270 New Maadi, Maddi, Cairo, Egypt
\nDrimex LLC
100%
\nPlot 133, Banks\u2019 District, 5th Settlement,
\nNew Cairo, Cairo, Egypt
\nEstonia
\nAstraZeneca Eesti O\u00dc
100%
\nHarju maakond, Tallinn, Lasnam\u00e4e linnaosa,
\nValukoja tn 8/1, 11415, Estonia
\nFinland
\nAstraZeneca OY.
100%
\nItsehallintokuja 4, Espoo, 02600, Finland
\nFrance
\nAstraZeneca S.A.S
100%
\nAstraZeneca Reims Production SAS
100%
\nTour Carpe Diem-31, Place des Corolles,
\n92400 Courbevoie, France
\nAstraZeneca Dunkerque Production SCS
100%
\n224 Avenue de la Dordogne,
\n59640\u00a0Dunkerque, France
\nAlexion Europe S.A.S.
100%
\nAlexion Pharma France S.A.S.
100%
\n103-105 Rue Anatole France 92300
\nLevallois-Perret, France
\nGermany
\nAstraZeneca Holding GmbH
100%
\nAstraZeneca GmbH
100%
\nFriesenweg 26, 22763, Hamburg, Germany
\nSofotec GmbH
100%
\nBenzstrasse 1-3, 61352, Bad Homburg v.d.
\nHohe, Germany
\nAstraZeneca Computational
\nPathology\u00a0GmbH
\n2
\n100%
\nBernhard-Wicki-Stra\u00dfe 5, 80636,
\nMunich,\u00a0Germany
\nPortola FRG GmbH
100%
\nFraunhoferstra\u00dfe 12, Planegg,
\n82152,\u00a0Germany
\nAlexion Pharma Germany GmbH
100%
\nLandsberger Stra\u00dfe 300, 80687
\nMunich,\u00a0Germany
\nGreece
\nAstraZeneca S.A.
100%
\nAgisilaou 6-8 Marousi, Athens, Greece
\nHong Kong
\nAstraZeneca Hong Kong Limited
100%
\nUnit 1 \u2013 3, 11/F., 18 King Wah Road,
\nNorth\u00a0Point, Hong Kong
\nHungary
\nAstraZeneca Kft
100%
\n1st floor, 4 building B, Al\u00edz str., Budapest,
\n1117, Hungary
\nIndia
\nAstraZeneca India Private Limited
\n3
\n100%
\nBlock A, Neville Tower, 11th Floor,
\nRamanujan IT SEZ, Taramani, Chennai,
\nTamil Nadu, PIN 600113, India
\nAlexion Business Services Private Limited
100%
\n9th Floor, Platina, G BlockPlot No. C-59,
\nBandra-Kurla Complex Bandra (East),
\nMumbai 400051, India
\nIran
\nAstraZeneca Pars Company
100%
\nSuite 1, 1st Floor No. 39, Alvand Ave.,
\nArgantin Sq., Tehran 1516673114, Iran
\nIreland
\nAstraZeneca Pharmaceuticals (Ireland)
\nDesignated Activity Company
100%
\n4th Floor, South Bank House, Barrow Street,
\nDublin, 4, Republic of Ireland
\nAlexion Pharma Holding Limited
100%
\nAlexion Pharma International
\nOperations\u00a0Limited
100%
\nAlexion Pharma Development Limited
100%
\nCollege Business & Technology Park
\nBlanchardstown Road North Dublin 15,
\nRepublic of Ireland
\nIsrael
\nAstraZeneca (Israel) Ltd
100%
\nAtirei Yeda 1, Building O-Tech 2, POB 8044,
\nKfar Saba, 4464301, Israel
\nAlexion Pharma Israel Ltd
100%
\n4 Weizmann Str., Tel-Aviv-Jaffa, Israel
\nItaly
\nSimesa SpA
100%
\nAstraZeneca SpA
100%
\nAlexion Pharma Italy Srl
100%
\nViale Decumano 39, 20157, Milan, Italy
\nJapan
\nAstraZeneca K.K.
100%
\nGrand Front Osaka Tower B, 3-1, Ofuka-cho,
\nKita-ku, Osaka, 530-0011, Japan
\nAlexion Pharma GK
100%
\nEbisu First Square, 18-14, Ebisu 1-chome,
\nShibuya-ku, Tokyo, Japan
\nKenya
\nAstraZeneca Pharmaceuticals Limited
100%
\nL.R. No.1/1327, Avenue 5, 1st Floor,
\nRose\u00a0Avenue, Nairobi, Kenya
\nLatvia
\nAstraZeneca Latvija SIA
100%
\nSkanstes iela 50, Riga, LV-1013, Latvia
\nLithuania
\nAstraZeneca Lietuva UAB
100%
\nSpaudos g., Vilnius, LT-05132, Lithuania
\nLuxembourg
\nAstraZeneca Luxembourg S.A.
100%
\nRue Nicolas Bov\u00e9 2A \u2013 L-1253, Luxembourg
\nMalaysia
\nAstraZeneca Asia-Pacific Business
\nServices Sdn Bhd
100%
\n12th Floor, Menara Symphony, No 5 Jalan
\nProf, Khoo Kay Kim, Seksyen 13, 46200
\nPetaling Jaya, Selangor Darul Ehsan, Malaysia
\nAstraZeneca Sdn Bhd
100%
\nNucleus Tower, Level 11 & 12, No. 10 Jalan
\nPJU 7/6, Mutiara Damansara, 47800 Petaling
\nJaya, Selangor Darul Ehsan, Malaysia
\nMexico
\nAstraZeneca Health Care Division,
\nS.A.\u00a0de\u00a0C.V.
100%
\nAstraZeneca, S.A. de C.V.
100%
\nAv. Periferico Sur 4305 interior 5, Colonia
\nJardines en la Monta\u00f1a, Mexico City,
\nTlalpan Distrito Federal, CP 14210, Mexico
\nAlexion Pharma Mexico S. de R.L. de C.V.
100%
\nPaseo de los Tamarindos 90, Torre 1 piso 6
\n- ACol., Bosques de la Lomas, CP 05120
\nD.F, Mexico
\nMorocco
\nAstraZeneca Maroc SARLAU
100%
\n92 Boulevard Anfa ETG 2, Casablanca 20000,
\nMorocco
\nThe Netherlands
\nAstraZeneca B.V.
100%
\nAstraZeneca Continent B.V.
100%
\nAstraZeneca Gamma B.V.
100%
\nAstraZeneca Holdings B.V.
100%
\nAstraZeneca Jota B.V.
100%
\nAstraZeneca Rho B.V.
100%
\nAstraZeneca Sigma B.V.
100%
\nAstraZeneca Treasury B.V.
100%
\nAstraZeneca Zeta B.V.
100%
\nPrinses Beatrixlaan 582, 2595BM,
\nThe\u00a0Hague, The Netherlands
\nAstraZeneca Nijmegen B.V.
100%
\nLagelandseweg 78, 6545 CG Nijmegen,
\nThe\u00a0Netherlands
\nAcerta Pharma B.V.
100%
\nAspire Therapeutics B.V.
100%
\nKloosterstraat 9, 5349 AB, Oss,
\nThe\u00a0Netherlands
\nPortola Netherlands B.V.
100%
\nPrins Bernhardplein 200JB
\nAmsterdam\u00a01097, The Netherlands
\nAlexion Pharma Netherlands B.V.
100%
\nHerengracht 282 Amsterdam 1016BX,
\nThe\u00a0Netherlands
\nAlexion Holding B.V.
100%
\nAlexion Pharma Foreign Holdings, B.V.
100%
\nPrinses Beatrixlaan 582, 5895 BM,
\nThe\u00a0Hague, The Netherlands
At 31\u00a0December 2022
Group Interest
At 31\u00a0December 2022
Group Interest
At 31\u00a0December 2022
Group Interest
\nNew Zealand
\nAstraZeneca Limited
100%
\nPharmacy Retailing (NZ) Limited
\nt/a\u00a0Healthcare Logistics, 58 Richard Pearse
\nDrive, Mangere, Auckland, 1142, New\u00a0Zealand
\nNigeria
\nAstraZeneca Nigeria Limited
100%
\n11A, Alfred Olaiya Street, Awuse Estate,
\nOff\u00a0Salvation Street, Opebi, Ikeja,
\nLagos,\u00a0Nigeria
\nNorway
\nAstraZeneca AS
100%
\nKarvesvingen 7, 0579 Oslo, Norway
\nPakistan
\nAstraZeneca Pharmaceuticals
\nPakistan\u00a0(Private) Limited
\n4
\n100%
\nOffice No 1, 2nd Floor, Sasi Arcade, Block 7,
\nMain Clifton Road, Karachi, Pakistan
\nPanama
\nAstraZeneca CAMCAR, S.A.
100%
\nBodega #1, Parque Logistico MIT,
\nCarretera\u00a0Hacia Coco Solo, Colon, Panama
\nPeru
\nAstraZeneca Peru S.A.
100%
\nCalle Las Orqu\u00eddeas N\u00b0 675, Int. 802,
\nEdificio Pacific Tower, San Isidro, Lima, Peru
\nPhilippines
\nAstraZeneca Pharmaceuticals (Phils.) Inc.
100%
\n16th Floor, Inoza Tower, 40th Street,
\nBonifacio Global City, Taguig 1634, Philippines
\nPoland
\nAstraZeneca Pharma Poland Sp.z.o.o.
100%
\nAlexion Pharma Poland Sp.z.o.o.
100%
\nPostepu 14, 02-676, Warszawa, Poland
\nPortugal
\nAstra Alpha Produtos Farmaceuticos Lda
100%
\nAstraZeneca Produtos Farmaceuticos Lda
100%
\nNovastra Promo\u00e7\u00e3o e Com\u00e9rcio
\nFarmac\u00eautico Lda
100%
\nNovastuart Produtos Farmaceuticos Lda
100%
\nStuart-Produtos Farmac\u00eauticos Lda
100%
\nZeneca Epsilon \u2013 Produtos
\nFarmac\u00eauticos\u00a0Lda
100%
\nZenecapharma Produtos Farmaceuticos,
\nUnipessoal Lda
100%
\nRua Humberto Madeira, No 7, Queluz de
\nBaixo, 2730-097, Barcarena, Portugal
\nPuerto Rico
\nIPR Pharmaceuticals, Inc.
100%
\nRoad 188, San Isidro Industrial Park,
\nCan\u00f3vanas, 00729, Puerto Rico
\nRomania
\nAstraZeneca Pharma S.R.L.
100%
\n12 Menuetului Street, Bucharest Business
\nPark, Building D, West Wing, 1st Floor,
\nSector 1, Bucharest, 013713, Romania
\nRussia
\nAstraZeneca Industries, LLC
100%
\n8 1st Vostochniy lane, Dobrino\u00a0village,
\nBorovskiy district, Kaluga region 249006,
\nRussian Federation
\nAstraZeneca Pharmaceuticals, LLC
100%
\nBuilding 1, 21 First Krasnogvardeyskiy lane,
\nfloor\u00a030,rooms 13 and 14, Moscow, 123112,
\nRussian Federation
\nAlexion Pharma OOO LLC
100%
\nBuilding 1, 21 First Krasnogvardeyskiy lane,
\nfloor 29, Moscow, 123112, Russian Federation
\nSingapore
\nAstraZeneca Singapore Pte Limited
100%
\n10 Kallang Avenue #12-10, Aperia Tower 2,
\n339510, Singapore
\nSouth Africa
\nAstraZeneca Pharmaceuticals (Pty) Limited
100%
\n17 Georgian Crescent West, Northdowns
\nOffice Park, Bryanston, 2191, South Africa
\nSouth Korea
\nAstraZeneca Korea Co. Ltd
100%
\n21st Floor, Asem Tower, 517, Yeongdong-
\ndaero, Gangnam-gu, Seoul, 06164,
\nRepublic\u00a0of Korea
\nAlexion Pharma Korea LLC
100%
\n41 FL.,152 Teheran-ro (Yeoksam-dong
\nGangam Finance Center), Gangnam-gu,
\nSeoul, Republic of Korea
\nSpain
\nAstraZeneca Farmaceutica
\nHolding\u00a0Spain,\u00a0S.A.
100%
\nAstraZeneca Farmaceutica Spain S.A.
100%
\nLaboratorio Beta, S.A.
100%
\nLaboratorio Lailan, S.A.
100%
\nLaboratorio Tau S.A.
100%
\nFundaci\u00f3n AstraZeneca
100%
\nParque Norte, Edificio \u00c1lamo, C/Serrano
\nGalvache no 56., 28033 Madrid, Spain
\nAlexion Pharma Spain S.L.
100%
\nAv Diagonal Num.601 P.1,
\nBarcelona\u00a008028,\u00a0Spain
\nSweden
\nAstra Export & Trading Aktiebolag
100%
\nAstra Lakemedel Aktiebolag
100%
\nAstraZeneca AB
100%
\nAstraZeneca Biotech AB
100%
\nAstraZeneca BioVentureHub AB
100%
\nAstraZeneca Holding Aktiebolag
\n5
\n100%
\nAstraZeneca International
\nHoldings\u00a0Aktiebolag
\n6
\n100%
\nAstraZeneca Nordic AB
100%
\nAstraZeneca Pharmaceuticals Aktiebolag
100%
\nAstraZeneca S\u00f6dert\u00e4lje 2 AB
100%
\nStuart Pharma Aktiebolag
100%
\nTika Lakemedel Aktiebolag
100%
\nSE-151 85 S\u00f6dert\u00e4lje, Sweden
\nAktiebolaget Hassle
100%
\nSymbicom Aktiebolag
\n6
\n100%
\n431 83 MoIndal, Sweden
\nAstra Tech International Aktiebolag
100%
\nBox 14, 431 21 MoIndal, Sweden
\nAlexion Pharma Nordics Holding AB
100%
\nAlexion Pharma Nordics AB
100%
\nKungsgatan 3, Stockholm 111 43, Sweden
\nSwitzerland
\nAstraZeneca AG
100%
\nNeuhofstrasse 34, 6340 Baar, Switzerland
\nSpirogen Sarl
\n6
\n100%
\nRue du Grand-Ch\u00eane 5, CH-1003
\nLausanne,\u00a0Switzerland
\nPortola Schweiz GmbH (in liquidation)
100%
\nc/o Tom Schaffner Sch\u00e4rer Rechtsanw\u00e4lte
\nHintere Bahnhofstrasse 6, 5000 Aarau,
\nSwitzerland
\nAlexion Pharma GmbH
100%
\nGiessh\u00fcbelstrasse 30, Z\u00fcrich 8045,
\nSwitzerland
\nTaiwan
\nAstraZeneca Taiwan Limited
100%
\n21st Floor, Taipei Metro Building 207,
\nTun\u00a0Hwa South Road, SEC 2 Taipei, Taiwan
\nAlexion Pharma Taiwan Ltd
100%
\nRoom 1153, 11F, No1, SongZhi Rd Taipei,
\n11047 Taiwan
\nThailand
\nAstraZeneca (Thailand) Limited
100%
\nAsia Centre 19th floor, 173/20, South
\nSathorn Rd, Khwaeng Thungmahamek,
\nKhet Sathorn, Bangkok, 10120, Thailand
\nTunisia
\nAstraZeneca Tunisie SaRL
100%
\nLot n\u00b01.5.5 les jardins du lac,
\nbloc B les berges du lac Tunis, Tunisia
\nTurkey
\nAstraZeneca Ilac Sanayi ve Ticaret
\nLimited\u00a0Sirketi
100%
\nYKB Plaza, B Blok, Kat:3-4, Levent/
\nBesiktas, Istanbul, Turkey
\nZeneca Ilac Sanayi Ve Ticaret
\nAnonim\u00a0Sirketi
100%
\nB\u00fcy\u00fckdere Cad., Y.K.B. Plaza, B Blok, Kat:4,
\nLevent/Besiktas, Istanbul, Turkey
\nAlexion Ilac Ticaret Limited Sirketi
100%
\nI\u00e7erenk\u00f6y Mahallesi Umut Sk. and Ofi SIT.
\nNo: 1012/73 Atasehir\u00a0Istanbul 10-12/73 Turkey
\nUkraine
\nAstraZeneca Ukraina LLC
100%
\n54 Simi Prakhovykh street, Kiev, 01033,
\nUkraine
\nUnited Arab Emirates
\nAstraZeneca FZ-LLC
100%
\nP.O. Box 505070, Block D, Dubai
\nHealthcare\u00a0City, Oud Mehta Road,
\nDubai,\u00a0United Arab Emirates
\nAlexion Pharma Middle East FZ-LLC
100%
\nDubai Science Park, 501, Floor 5, EIB
\nBuilding No. 2, Dubai, United Arab Emirates
At 31\u00a0December 2022
Group Interest
At 31\u00a0December 2022
Group Interest
At 31\u00a0December 2022
Group Interest
United Kingdom
\nArdea Biosciences Limited
100%
\nArrow Therapeutics Limited
100%
\nAstra Pharmaceuticals Limited
100%
\nAstraPharm
\n6
\n100%
\nAstraZeneca China UK Limited
100%
\nAstraZeneca Death In Service
\nTrustee\u00a0Limited
100%
\nAstraZeneca Employee
\nShare\u00a0Trust\u00a0Limited
100%
\nAstraZeneca Finance Limited
100%
\nAstraZeneca Intermediate
\nHoldings\u00a0Limited
\n5
\n100%
\nAstraZeneca Investments Limited
100%
\nAstraZeneca Japan Limited
100%
\nAstraZeneca Nominees Limited
100%
\nAstraZeneca Quest Limited
100%
\nAstraZeneca Share Trust Limited
100%
\nAstraZeneca Sweden Investments Limited
100%
\nAstraZeneca Treasury Limited
\n6
\n100%
\nAstraZeneca UK Limited
100%
\nAstraZeneca US Investments Limited
\n5
\n100%
\nAZENCO2 Limited
100%
\nAZENCO4 Limited
100%
\nCambridge Antibody Technology
\nGroup\u00a0Limited
100%
\nKuDOS Horsham Limited
100%
\nKuDOS Pharmaceuticals Limited
100%
\nZenco (No. 8) Limited
100%
\nZeneca Finance (Netherlands) Company
100%
\nMedImmune Limited
100%
\n1 Francis Crick Avenue, Cambridge
\nBiomedical Campus, Cambridge, CB2 0AA,
\nUnited Kingdom
\n100%
\nMedImmune U.K. Limited
100%
\nPlot 6, Renaissance Way, Boulevard Industry
\nPark, Liverpool, L24 9JW, United Kingdom
\nSyntimmune Limited
100%
\n21 Holborn Viaduct, London, EC1A 2DY
\nUnited Kingdom
\nAlexion Pharma UK Limited
100%
\nPortola Pharma UK Limited (in liquidation)
100%
\n3 Furzeground Way, Stockley Park, Uxbridge,
\nMiddlesex UB11 1EZ United\u00a0Kingdom
\nUnited States
\nAmylin Ohio LLC
\n7
\n100%
\nAmylin Pharmaceuticals, LLC
\n7
\n100%
\nAstraZeneca Collaboration Ventures, LLC
\n7
\n100%
\nAstraZeneca Pharmaceuticals LP
\n8
\n100%
\nAtkemix Nine Inc.
100%
\nAtkemix Ten Inc.
100%
\nBMS Holdco, Inc.
100%
\nCorpus Christi Holdings Inc.
100%
\nOmthera Pharmaceuticals, Inc.
100%
\nOptein, Inc.
100%
\nStauffer Management Company LLC
\n7
\n100%
\nZeneca Holdings Inc.
100%
\nZeneca Inc.
100%
\nZeneca Wilmington Inc.
\n5
\n100%
\nAstraZeneca Finance LLC
\n7
\n100%
\nAstraZeneca Finance and Holdings Inc.
100%
\nNamor Merger Sub, Inc
\n9
\n100%
\nArdea Biosciences, Inc
100%
\n1800 Concord Pike, Wilmington, DE 19803,
\nUnited States
\nZS Pharma Inc.
100%
\n1100 Park Place, Suite 300, San Mateo,
\nCA\u00a094403, United States
\nAlphaCore Pharma, LLC
\n7
\n100%
\n333 Parkland Plaza, Suite 5, Ann Arbor,
\nMI\u00a048103, United States
\nAZ-Mont Insurance Company
100%
\n76 St Paul Street, Suite 500, Burlington,
\nVT\u00a005401, United States
\nMedImmune, LLC
\n7
\n100%
\nMedImmune Ventures, Inc.
100%
\nOne MedImmune Way, Gaithersburg,
\nMD\u00a020878, United States
\nPearl Therapeutics, Inc.
100%
\n200 Cardinal Way, Redwood City, CA 94063,
\nUnited States
\nCaelum Biosciences Inc.
100%
\n1200 Florence Columbus Road, Bordentown,
\nNJ 08505, United States
\nAlexion Services Latin America Inc.
100%
\n600 Brickell Ave, Miami, FL 33131,
\nUnited\u00a0States
\nPortola USA, Inc
100%
\nPortola Pharmaceuticals LLC
100%
\n270 East Grand Avenue,\u00a0South San
\nFrancisco, CA 94080, United States
\nAchillion Pharmaceuticals Inc,
100%
\nAlexion Delaware Holding LLC
100%
\nAlexion Pharma LLC
100%
\nAlexion Pharmaceuticals, Inc.
100%
\nSyntimmune, Inc.
100%
\nAlexion US1 LLC
100%
\nSavoy Therapeutics Corp
100%
\nWilson Therapeutics USA, Inc.
100%
\nTeneoTwo, Inc
100%
\nLogicBio Therapeutics, Inc
100%
\n121 Seaport BoulevardBoston,
\nMA 02210, United States
\nAcerta Pharma LLC
\n7
\n100%
\n121 Oyster Point Boulevard, South San
\nFrancisco, CA 94080, United States
\nLogicBio Securities Corporation
100%
\n65 Hayden Avenue, Lexington, MA 92421,
\nUnited States
\nUruguay
\nAstraZeneca S.A.
100%
\nYaguar\u00f3n 1407 of 1205, 11.100,
\nMontevideo,\u00a0Uruguay
\nVenezuela
\nAstraZeneca Venezuela S.A.
100%
\nGotland Pharma S.A.
100%
\nAv. La Castellana, Torre La Castellana,
\nPiso\u00a05, Oficina 5-G, 5-H, 5-I, Urbanizaci\u00f3n
\nLa Castellana, Municipio Chacao, Estado
\nBolivariano de Miranda, Venezuela
\nVietnam
\nAstraZeneca Vietnam Company Limited
100%
\n18th Floor, A&B Tower, 76 Le Lai, Ben Thanh
\nWard, District 1, Ho Chi Minh City, Vietnam
At 31\u00a0December 2022
Group Interest
At 31\u00a0December 2022
Group Interest
At 31\u00a0December 2022
Group Interest
Subsidiaries where the effective interest
\nis less than 100%
\nIndia
\nAstraZeneca Pharma India Limited
\n3
\n75%
\nBlock N1, 12th Floor, Manyata Embassy
\nBusiness Park, Rachenahalli, Outer Ring
\nRoad, Bangalore-560 045, India
\nIndonesia
\nP.T. AstraZeneca Indonesia
95%
\nPerkantoran Hijau Arkadia Tower F,
\n3rd\u00a0Floor, JI. T.B. Simatupang Kav. 88,
\nSouth Jakarta, 12520, Indonesia
\nJoint Ventures
\nChina
\nWuXi MedImmune Biopharmaceutical
\nCo.,\u00a0Limited (in liquidation)
50%
\nRoom 1902, 19/F, Lee Garden One,
\n33\u00a0Hysan Avenue, Causeway Bay, Hong Kong
\nIHP HK Holdings Limited
50%
\nUnit 5805, 58/F., Two International Finance
\nCentre 8 Finance Street, Central, China
\nUnited Kingdom
\nArchigen Biotech Limited (in liquidation)
50%
\nCentus Biotherapeutics Limited
50%
\n1 Francis Crick Avenue, Cambridge
\nBiomedical Campus, Cambridge, CB2 0AA,
\nUnited Kingdom
\nIreland
\nCentus Biotherapeutics Europe Limited
\n(in\u00a0liquidation)
50%
\n6th Floor, South Bank House, Barrow Street,
\nDublin 4, Republic of Ireland
\nUnited States
\nMontrose Chemical Corporation
\nof\u00a0California
50%
\nSuite 380, 600 Ericksen Ave N/E,
\nBainbridge\u00a0Island, United States
\nSignificant Holdings
\nChina
\nDizal (Jiangsu) Pharmaceutical Co., Ltd.
26.95%
\n199 Liangjing Rd, Zhangjiang Hi-Tech Park,
\nPudong District, Shanghai, 201203, China
\nWuxi AstraZeneca-CICC Venture Capital
\nPartnership\u00a0(Limited Partnership)
22.13%
\nRoom 808, 8F, Building 99-2 Linghu Avenue,
\nXinwu District, Wuxi, Jiangsu, China
\nBeijing Falikang Pharmaceutical
\n(China)\u00a0Co. Ltd
49%
\nNo. 69 Fushi Road, Haidian District,
\nBeijing,\u00a0100143, China
\nUnited Kingdom
\nVaxEquity
40%
\nLab 4 Cambridge Science Park, Unit 204
\nMilton Road, Cambridge CB4 0GZ,
\nUnited Kingdom
\nUnited States
\nC.C. Global Chemicals Company
37.50%
\nPO Box 7, MS2901, Texas, TX76101-0007,
\nUnited States
\nAssociated Holdings
\nFrance
\nMedetia SAS
10%
\nInstitute Imagine 24, Boulevard du
\nMontparnasse 75015, Paris, France
\nIsrael
\nAION Labs
19.23%
\nOppenheimer 4 Rehovot, 7670104, Israel
\nSweden
\nSwedish Orphan Biovitrum AB (publ)
9.90%
\nTomtebodav\u00e4gen 23A, Stockholm, Sweden
\nOndosis
19.30%
\nBioVentureHub, Pepparedsleden 1, 431 83
\nM\u00f6lndal, Sweden
\nUnited Kingdom
\nNiox Group plc
16.97%
\nHayakawa Building, Edmund Halley Road,
\nOxford Science Park, Oxford, OX4\u00a04GB,
\nUnited Kingdom
\nUnited States
\nAbMed Corporation
18%
\n68 Cummings Park Drive,
\nWoburn, MA\u00a001801, United States
\nAristea Therapeutics, Inc.
11.85%
\n122770 High Bluff Drive, #380,
\nSan Diego, CA 92130, United States
\nBaergic Bio, Inc.
19.95%
\n1111 Kane Concourse, Suite 301
\nBay Harbor Islands, FL 33154, United States
\nRegio Biosciences
19.95%
\n2277 Research Blvd, Suite 225,
\nRockville,\u00a0MD 20850, United States
\nEmployee Benefit Trust
\nThe AstraZeneca Employee Benefit Trust
\n1
Ownership held in ordinary and class B special shares.
\n2
Ownership held in common shares, preferred shares 2003, preferred shares 2003 ex (A), preferred shares 2003 ex (B), preferred shares Series D, preferred shares Series E and preferred
\nshares Series F.
\n3
Accounting year end is 31 March.
\n4
Accounting year end is 30 June.
\n5
Directly held by AstraZeneca PLC.
\n6
Ownership held in Ordinary A shares and Ordinary B shares.
\n7
Ownership held as membership interest.
\n8
Ownership held as partnership interest.
\n9
With effect from 13 January 2023, Namor Merger Sub Inc. was merged with and into Neogene Therapeutics, Inc., with Neogene Therapeutics, Inc. being the surviving corporation.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfSignificantInvestmentsInSubsidiariesExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f36815": {
"value": "Company Balance Sheet \nat 31\u00a0December
\nAstraZeneca PLC
\n2022
2021
\nNotes
$m
$m
\nFixed assets
\nFixed asset investments
1
63,555
65,624
\n63,555
65,624
\nCurrent assets
\nDebtors \u2013 other
4
9
\nDebtors \u2013 amounts owed by Group undertakings
2,608
6,321
\n2,612
6,330
\nCreditors: Amounts falling due within one year
\nOther payables
2
(194)
(198)
\nAmounts owed to Group undertakings
3
(283)
\u2013
\nInterest-bearing loans and borrowings
3
(2,648)
(1,249)
\n(3,125)
(1,447)
\nNet current (liabilities)/assets
(513)
4,883
\nTotal assets less current liabilities
63,042
70,507
\nCreditors: Amounts falling due after more than one year
\nAmounts owed to Group undertakings
3
\u2013
(283)
\nInterest-bearing loans and borrowings
3
(17,939)
(20,781)
\nOther payables
2
(23)
(32)
\n(17,962)
(21,096)
\nNet assets
45,080
49,411
\nCapital and reserves
\nCalled-up share capital
4
387
387
\nShare premium account
35,155
35,126
\nCapital redemption reserve
153
153
\nOther reserves
1,927
2,182
\nProfit and loss account
7,458
11,563
\nShareholders\u2019 funds
45,080
49,411
\n$m means millions of US dollars.
\nThe Company\u2019s pro\ufb01t for the year was $380m (2021: $5,141m).
\nThe Company Financial Statements from pages 204 to 210 were approved by the Board and were signed on its behalf by
\nPascal Soriot
Aradhana Sarin
\nDirector
Director
\n9 February 2023
\nCompany\u2019s registered number 02723534
\n204
AstraZeneca Annual Report & Form 20-F Information 2022
Financial Statements
\n\n\n\n\nCompany Statement of Changes in Equity
\nfor the year ended 31\u00a0December
\nShare
Capital
\nShare
premium
redemption
Other
Profit and
Total
\ncapital
account
reserve
reserves
\n1
\nloss account
\n2
\nequity
\n$m
$m
$m
$m
$m
$m
\nAt 1\u00a0January 2021
328
7,971
153
2,382
10,304
21,138
\nTotal comprehensive income for the period
\nProfit for the period
\u2013
\u2013
\u2013
\u2013
5,141
5,141
\nTotal comprehensive income for the period
\u2013
\u2013
\u2013
\u2013
5,141
5,141
\nTransactions with owners, recorded directly in equity
\nDividends
\u2013
\u2013
\u2013
\u2013
(3,882)
(3,882)
\nCapital contributions for share-based payments
\u2013
\u2013
\u2013
(200)
\u2013
(200)
\nIssue of Ordinary Shares
59
27,155
\u2013
\u2013
\u2013
27,214
\nTotal contributions by and distributions to owners
59
27,155
\u2013
(200)
(3,882)
23,132
\nAt 31\u00a0December 2021
387
35,126
153
2,182
11,563
49,411
\nTotal comprehensive income for the period
\nProfit for the period
\u2013
\u2013
\u2013
\u2013
380
380
\nTotal comprehensive income for the period
\u2013
\u2013
\u2013
\u2013
380
380
\nTransactions with owners, recorded directly in equity
\nDividends
\u2013
\u2013
\u2013
\u2013
(4,485)
(4,485)
\nCapital contributions for share-based payments
\u2013
\u2013
\u2013
(255)
\u2013
(255)
\nIssue of Ordinary Shares
\u2013
29
\u2013
\u2013
\u2013
29
\nTotal contributions by and distributions to owners
\u2013
29
\u2013
(255)
(4,485)
(4,711)
\nAt 31\u00a0December 2022
387
35,155
153
1,927
7,458
45,080
\n1
The Other reserves arose from the cancellation of \u00a31,255m share premium by the Company in 1993 and the redenomination of share capital of $157m in 1999. Included within Other reserves
\nat 31 December 2022 is $86m (31 December 2021: $341m) in respect of cumulative share-based payment awards, which are not available for distribution.
\n2
At 31 December 2022, the Profit and loss account reserve of $7,458m (31 December 2021: $11,563m) was available for distribution, subject to filing these Financial Statements with Companies
\nHouse. When making a distribution to shareholders, the Directors determine profits available for distribution by reference to guidance on realised and distributable profits under the Companies
\nAct 2006 issued by the Institute of Chartered Accountants in England and Wales and the Institute of Chartered Accountants of Scotland in April 2017. The profits of the Company have been
\nreceived in the form of receivables due from subsidiaries. The availability of distributable reserves in the Company is dependent on those receivables meeting the definition of qualifying
\nconsideration within the guidance, and in particular on the ability of subsidiaries to settle those receivables within a reasonable period of time. The Directors consider that, based on the
\nnature of these receivables and the available cash resources of the Group and other accessible sources of funds, at 31 December 2022, all (31 December 2021: all) of the Company\u2019s profit and
\nloss reserves were available for distribution.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfConsolidatedAndSeparateFinancialStatementsExplanatory",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f39938": {
"value": "1 Francis Crick Avenue \nCambridge Biomedical Campus \nCambridge CB2 0AA \nUK",
"dimensions": {
"concept": "ifrs-full:AddressOfRegisteredOfficeOfEntity",
"language": "en",
"entity": "scheme:PY6ZZQWO2IZFZC3IOL08",
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