2020 Financial Statements

4. Notes to the IFRS Company Financial Statements / 4. Key Estimates and Judgements 5. Brexit The preparation of the Company Financial Statements requires the use of estimates and assumptions. In preparing these Financial Statements, management exercises its best judgement based upon its experience and the circumstances prevailing at that time. The estimates and assumptions are based on available information and conditions at the end of the financial period presented and are reviewed on an ongoing basis. The details regarding the use of estimates and judgements are described in “– Note 4: Key Estimates and Judgements” of the Consolidated Financial Statements. Key accounting estimates and judgements af fecting the assessment and measurement of impairment are included in “– Note 10: Investments in Subsidiaries, Associates and Participations” of the Company Financial Statements. On 29 March 2017, the UK triggered Article 50 of the Lisbon Treaty, the mechanism to leave the European Union (“Brexit”). In June 2018, the Company publ ished its Brexit Risk Assessment outlining its expectations regarding the material consequences and risks for the Company arising from the UK leaving the European Union without a deal. In September 2018, the Company launched a project to mitigate the risks and anticipate possible consequences associated with Brexit and its impact on the Company’s business and production activities. Significant progress was made in mitigating the identified risks through for example the modification of the Company’s customs and IT systems, and the stockpiling of parts associated with transportation and logistics. The UK left the European Union in an orderly manner on 31 January 2020 under the terms of the Withdrawal Agreement, opening a transition period until 31 December 2020. On 30 December 2020, the UK Parliament ratified the EU-UK Trade and Cooperation Agreement (“TCA”) but it still awaits ratification by the European Parliament and the Council of the European Union before final conclusion and entry into force. The TCA is expected to prevent the disruption a no-deal scenario would have created. Preliminary analysis confirms that although Brexit will result in a requirement for increased areas of vigilance, additional administrative work and reduced industrial flexibility, the continuity of the Company’s business operations and supply chain in particular are not materially threatened. A number of new or revised standards, amendments and improvements to standards as well as interpretations are not yet effective for the year ended 31 December 2020 and have not been applied in preparing these Financial Statements and early adoption is not planned: Standards and amendments IASB effective date for annual reporting periods beginning on or after Endorsement status Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 “Interest Rate Benchmark Reform – Phase 2” 1 January 2021 Endorsed Amendments to IFRS 4 “Extension of the Temporary Exemption from Applying IFRS 9” 1 January 2021 Not yet endorsed Amendments to IFRS 3 “Reference to the Conceptual Framework” 1 January 2022 Not yet endorsed Amendments to IAS 16 “Property, Plant and Equipment – Proceeds before Intended Use” 1 January 2022 Not yet endorsed Amendments to IAS 37 “Onerous Contracts – Cost of Fulfilling a Contract” 1 January 2022 Not yet endorsed Annual Improvements to IFRS Standards 2018–2020 1 January 2022 Not yet endorsed IFRS 17 “Insurance Contracts” 1 January 2023 Not yet endorsed Amendments to IAS 1 “Classification of Liabilities as Current or Non-current” 1 January 2023 Not yet endorsed Amendments to IAS 8 “Definition of Accounting Estimates” 1 January 2023 Not yet endorsed Amendments to IAS 1 “Disclosure of Accounting Policies” 1 January 2023 Not yet endorsed The information with regard to Capital Management is disclosed in Note 36, further information about Litigation and Claims refers to Note 39 and Events after the Reporting Date are disclosed in Note 41 of the Consolidated Financial Statements. Unless reference is made to the accounting policies described in the Consolidated Financial Statements, the main accounting policies applied in the preparation of these Company Financial Statements are described in each accounting area. These accounting policies have been consistently applied to all financial years presented, unless otherwise stated. 94 Airbus / Financial Statements 2020