_364 2023 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN 5 FINANCIAL PERFORMANCE 2023 consolidated financial statements Amendment to IAS 12 – Deferred Tax related to Assets and Liabilities arising from a Single Transaction The amendment limits the scope of the initial recognition exemption by excluding transactions for which companies recognize both an asset and a liability, such as leases and decommissioning obligations. Companies will now be required to recognize deferred tax on these transactions. The amendment applies to qualifying transactions occurring on or after the opening date of the first comparative period presented (i.e., January 1, 2022 in the case of the Group). It has no material impact on the Group’s consolidated financial statements. Amendment to IAS 12 – International Tax Reform – Pillar Two Model Rules On December 14, 2022, the European Union adopted a directive implementing the OECD's Pillar Two reform. France voted for the transposition of this directive into domestic law as part of the Finance Bill for 2024. The Pillar Two rules therefore apply to all entities effectively controlled by Compagnie Générale des Etablissements Michelin. In May 2023, the IASB published an amendment to IAS 12 which includes a mandatory temporary exception for 2023 to the application of IAS 12 to Pillar Two calculations. This amendment was formally adopted by the European Union in November 2023 and is therefore fully applicable. The Group has not recorded any deferred taxes arising from the jurisdictional implementation of the Pillar Two model in its financial statements. At this stage of its work, the Group considers that although it will probably be subject to Pillar Two rules in certain jurisdictions from January 1, 2024, it does not expect this to have any significant tax effect on the financial statements. 2.4 New standards, amendments to existing standards and interpretations that are not yet effective The following new IFRS standards, amendments and interpretations, which were not applicable at December 31, 2023, are not expected to have a material impact on the consolidated financial statements at their application date: Amendment to IFRS 16 – lease liability in a sale and leaseback The amendment, which will be effective for annual periods beginning on or after January 1, 2024, clarifies the subsequent treatment of the right-of-use asset and lease liability arising from a leaseback transaction (notably in the case of a lease with variable payments not based on an index or a rate). Amendments to IAS 7 and IFRS 7 – Presentation of Financial Statements – Reverse Factoring – Supplier Finance Arrangements These amendments introduce new disclosure requirements for reverse factoring arrangements, to help assess the effects of these arrangements on the liabilities, cash flows and liquidity risk exposure of the preparer of the financial statements. Amendments to IAS 1 – Classification of Liabilities as Current or Non-current – Non-current Liabilities with Covenants The first amendment clarifies the principles to be applied to classify liabilities as current or non‑current. The second amendment specifies that covenants to be complied with after the reporting date do not affect the classification between current and non-current liabilities at the reporting date. It also aims to improve disclosures on long-term debt with covenants. Amendment to IAS 21 – Lack of Exchangeability The amendment specifies how to assess whether a currency is exchangeable and how to determine a spot exchange rate if it is not. It will be applicable for accounting periods beginning on or after January 1, 2025. There are no other new standards, updates or interpretations published but not yet effective whose impact could be material for the Group.
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