Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2021 and 2020, and
For the years ended December 31, 2021 and 2020
1. General Information
1.1 Company Overview
Samsung Electronics Co., Ltd. (“SEC”) was incorporated under the laws of the Republic of Korea in 1969 and listed its shares
on the Korea Stock Exchange in 1975. SEC and its subsidiaries (collectively referred to as the “Company”) operate four
business divisions: Consumer Electronics (“CE”), Information technology & Mobile communications (“IM”), Device
Solutions (“DS”) and Harman. CE division includes digital TVs, monitors, air conditioners and refrigerators and IM division
includes mobile phones, communication systems, and computers. DS division includes semiconductor products such as
memory, foundry, and system LSI (“Semiconductor”), and display products such as LCD and OLED panels (“DP”). Harman
division includes connected car systems, audio and visual products, enterprise automation solutions and connected services.
The Company is domiciled in the Republic of Korea and is located in Suwon, the Republic of Korea.
These consolidated financial statements have been prepared in accordance with Korean International Financial Reporting
Standards (“Korean IFRS”) 1110, Consolidated Financial Statements. SEC, as the controlling Company, consolidates its 228
subsidiaries, including Samsung Display and Samsung Electronics America. The Company also applies the equity method of
accounting for its 41 associates and joint ventures, including Samsung Electro-Mechanics Co., Ltd.
1.2 Consolidated Subsidiaries
The consolidated subsidiaries as of December 31, 2021 are as follows:
Area Subsidiaries Industry
Percentage of
ownership (%)
1
America
Samsung Electronics America, Inc. (SEA) Sale of electronic devices 100.0
Samsung International, Inc. (SII) Manufacture of electronic devices 100.0
Samsung Mexicana S.A. de C.V (SAMEX) Manufacture of electronic devices 100.0
Samsung Electronics Home Appliances America, LLC (SEHA) Manufacture of home appliances 100.0
Samsung Research America, Inc. (SRA) R&D 100.0
Samsung Next LLC (SNX) Management of overseas subsidiaries 100.0
Samsung Next Fund LLC (SNXF) Technology business, venture capital investments 100.0
NeuroLogica Corp. Manufacture and sale of medical equipment 100.0
Samsung HVAC America, LLC Sale of air conditioning products 100.0
Joyent, Inc. Cloud services 100.0
Dacor Holdings, Inc. Management of overseas subsidiaries 100.0
Dacor, Inc. Manufacture and sale of home appliances 100.0
Dacor Canada Co. Sale of home appliances 100.0
SmartThings, Inc. Sale of smart home electronics 100.0
TeleWorld Solutions, Inc. (TWS) Installation & optimization of network devices 100.0
1
Ownership represents the Company’s ownership of the voting rights in each entity, including subsidiaries’ ownerships.
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Area Subsidiaries Industry
Percentage of
ownership (%)
1
America
Samsung Semiconductor, Inc. (SSI) Sale of semiconductor and display panels 100.0
Samsung Austin Semiconductor LLC (SAS) Manufacture of semiconductors 100.0
Samsung Oak Holdings, Inc. (SHI) Management of overseas subsidiaries 100.0
SEMES America, Inc. Semiconductor equipment services 100.0
Samsung Electronics Canada, Inc. (SECA) Sale of electronic devices 100.0
AdGear Technologies Inc. Digital advertising platforms 100.0
Samsung Eletronica da Amazonia Ltda. (SEDA) Manufacture and sale of electronic devices 100.0
Samsung Electronics Mexico S.A. de C.V. (SEM) Sale of electronic devices 100.0
Samsung Electronics Digital Appliance Mexico, S.A. de C.V. (SEDAM) Manufacture of home appliances 100.0
Samsung Electronics Latinoamerica(Zona Libre), S. A. (SELA) Sale of electronic devices 100.0
Samsung Electronics Latinoamerica Miami, Inc. (SEMI) Sale of electronic devices 100.0
Samsung Electronica Colombia S.A. (SAMCOL) Sale of electronic devices 100.0
Samsung Electronics Argentina S.A. (SEASA) Marketing and services 100.0
Samsung Electronics Chile Limitada (SECH) Sale of electronic devices 100.0
Samsung Electronics Peru S.A.C. (SEPR) Sale of electronic devices 100.0
Samsung Electronics Venezuela, C.A. (SEVEN) Marketing and services 100.0
Samsung Electronics Panama. S.A. (SEPA) Consulting 100.0
Harman International Industries, Inc. Holding company 100.0
Harman Becker Automotive Systems, Inc. Manufacture and sale of audio products, R&D 100.0
Harman Connected Services, Inc. Connected service provider 100.0
Harman Connected Services Engineering Corp. Connected service provider 100.0
Harman da Amazonia Industria Eletronica e Participacoes Ltda. Manufacture and sale of audio products 100.0
Harman de Mexico, S. de R.L. de C.V. Manufacture of audio products 100.0
Harman do Brasil Industria Eletronica e Participacoes Ltda. Sale of audio products, R&D 100.0
Harman Financial Group LLC Management company 100.0
Harman International Industries Canada Ltd. Sale of audio products 100.0
Harman International Mexico, S. de R.L. de C.V. Sale of audio products 100.0
Harman KG Holding, LLC Management of overseas subsidiaries 100.0
Harman Professional, Inc. Sale of audio products, R&D 100.0
Beijing Integrated Circuit Industry International Fund, L.P Venture capital investments 61.4
China Materialia New Materials 2016 Limited Partnership Venture capital investments 99.0
1
Ownership represents the Company’s ownership of the voting rights in each entity, including subsidiaries’ ownerships.
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Area Subsidiaries Industry
Percentage of
ownership (%)
1
Europe/CIS
Samsung Electronics (UK) Ltd. (SEUK) Sale of electronic devices 100.0
Samsung Electronics Ltd. (SEL) Management of overseas subsidiaries 100.0
Samsung Semiconductor Europe Limited (SSEL) Sale of semiconductor and display panels 100.0
Samsung Electronics GmbH (SEG) Sale of electronic devices 100.0
Samsung Electronics Holding GmbH (SEHG) Management of overseas subsidiaries 100.0
Samsung Semiconductor Europe GmbH (SSEG) Sale of semiconductor and display panels 100.0
Samsung Electronics France S.A.S (SEF) Sale of electronic devices 100.0
Samsung Electronics Italia S.P.A. (SEI) Sale of electronic devices 100.0
Samsung Electronics Iberia, S.A. (SESA) Sale of electronic devices 100.0
Samsung Electronics Portuguesa, Unipessoal, Lda. (SEP) Sale of electronic devices 100.0
Samsung Electronics Hungarian Private Co., Ltd. (SEH) Manufacture and sale of electronic devices 100.0
Samsung Electronics Europe Logistics B.V. (SELS) Logistics 100.0
Samsung Electronics Benelux B.V. (SEBN) Sale of electronic devices 100.0
Samsung Electronics Europe Holding Cooperatief U.A. (SEEH) Management of overseas subsidiaries 100.0
Samsung Electronics Nordic Aktiebolag (SENA) Sale of electronic devices 100.0
Samsung Electronics Slovakia s.r.o. (SESK) Manufacture of TV and monitors 100.0
Samsung Display Slovakia s.r.o. (SDSK) Toll processing of display panels 100.0
Samsung Electronics Polska, SP.Zo.o (SEPOL) Sale of electronic devices 100.0
Samsung Electronics Poland Manufacturing SP.Zo.o (SEPM) Manufacture of home appliances 100.0
Samsung Electronics Romania LLC (SEROM) Sale of electronic devices 100.0
Samsung Electronics Austria GmbH (SEAG) Sale of electronic devices 100.0
Samsung Electronics Switzerland GmbH (SESG) Sale of electronic devices 100.0
Samsung Electronics Czech and Slovak s.r.o. (SECZ) Sale of electronic devices 100.0
Samsung Electronics Baltics SIA (SEB) Sale of electronic devices 100.0
Samsung Electronics Greece S.M.S.A (SEGR) Sale of electronic devices 100.0
Samsung Electronics Air Conditioner Europe B.V. (SEACE) Sale of air conditioning products 100.0
Samsung Nanoradio Design Center (SNDC) R&D 100.0
Samsung Denmark Research Center ApS (SDRC) R&D 100.0
Samsung Cambridge Solution Centre Limited (SCSC) R&D 100.0
Zhilabs, S.L. Development and sale of network solutions 100.0
Foodient Ltd. R&D 100.0
Samsung Electronics Rus Company LLC (SERC) Sale of electronic devices 100.0
Samsung Electronics Rus Kaluga LLC (SERK) Manufacture of TV 100.0
Samsung Electronics Ukraine Company LLC (SEUC) Sale of electronic devices 100.0
Samsung Electronics Central Eurasia LLP (SECE) Sale of electronic devices 100.0
Samsung Electronics Overseas B.V. (SEO) Sale of electronic devices 100.0
Samsung R&D Institute Rus LLC (SRR) R&D 100.0
Samsung Electronics Caucasus Co., Ltd. (SECC) Marketing 100.0
1
Ownership represents the Company’s ownership of the voting rights in each entity, including subsidiaries’ ownerships.
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Area Subsidiaries Industry
Percentage of
ownership (%)
1
Europe/CIS
AKG Acoustics GmbH Manufacture and sale of audio products 100.0
AMX UK Limited Sale of audio products 100.0
Harman Audio Iberia Espana Sociedad Limitada Sale of audio products 100.0
Harman Automotive UK Limited Manufacture of audio products 100.0
Harman Becker Automotive Systems GmbH Manufacture and sale of audio products, R&D 100.0
Harman Becker Automotive Systems Italy S.R.L. Sale of audio products 100.0
Harman Becker Automotive Systems Manufacturing Kft Manufacture of audio products, R&D 100.0
Harman Belgium SA Sale of audio products 100.0
Harman Connected Services AB. Connected service provider 100.0
Harman Finland Oy Connected service provider 100.0
Harman Connected Services GmbH Connected service provider 100.0
Harman Connected Services Poland Sp.Zo.o Connected service provider 100.0
Harman Connected Services UK Ltd. Connected service provider 100.0
Harman Consumer Nederland B.V. Sale of audio products 100.0
Harman Deutschland GmbH Sale of audio products 100.0
Harman Finance International GP S.a.r.l Management of overseas subsidiaries 100.0
Harman France SNC Sale of audio products 100.0
Harman Holding GmbH & Co. KG Management company 100.0
Harman Hungary Financing Ltd. Financing company 100.0
Harman Inc. & Co. KG Management of overseas subsidiaries 100.0
Harman International Estonia OU R&D 100.0
Harman International Industries Limited Sale of audio products, R&D 100.0
Harman International Romania SRL R&D 100.0
Harman Finance International, SCA Financing company 100.0
Harman International s.r.o. Manufacture of audio products 100.0
Harman Management GmbH Management of overseas subsidiaries 100.0
Harman Professional Kft Manufacture of audio products, R&D 100.0
Harman Professional Denmark ApS Sale of audio products, R&D 100.0
Red Bend Software Ltd. Software design 100.0
Red Bend Software S.A.S Software design 100.0
Studer Professional Audio GmbH Sale of audio products, R&D 100.0
Harman Connected Services OOO Connected service provider 100.0
Harman RUS CIS LLC Sale of audio products 100.0
1
Ownership represents the Company’s ownership of the voting rights in each entity, including subsidiaries’ ownerships.
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Area Subsidiaries Industry
Percentage of
ownership (%)
1
Middle East
& Africa
Samsung Gulf Electronics Co., Ltd. (SGE) Sale of electronic devices 100.0
Samsung Electronics Turkey (SETK) Sale of electronic devices 100.0
Samsung Electronics Industry and Commerce Ltd. (SETK-P) Manufacture of electronic devices 100.0
Samsung Electronics Levant Co.,Ltd. (SELV) Sale of electronic devices 100.0
Samsung Electronics Maghreb Arab (SEMAG) Sale of electronic devices 100.0
Samsung Electronics Egypt S.A.E (SEEG) Manufacture and sale of electronic devices 100.0
Samsung Electronics Israel Ltd. (SEIL) Marketing 100.0
Samsung Electronics Tunisia S.A.R.L (SETN) Marketing 100.0
Samsung Electronics Pakistan (Private) Ltd. (SEPAK) Marketing 100.0
Samsung Electronics Saudi Arabia Ltd. (SESAR) Sale of electronic devices 100.0
Samsung Semiconductor Israel R&D Center, Ltd. (SIRC) R&D 100.0
Corephotonics Ltd. R&D 100.0
Samsung Electronics South Africa (Pty) Ltd. (SSA) Sale of electronic devices 100.0
Samsung Electronics South Africa Production (Pty) Ltd. (SSAP) Manufacture of TV and monitors 100.0
Samsung Electronics West Africa Ltd. (SEWA) Marketing 100.0
Samsung Electronics East Africa Ltd. (SEEA) Marketing 100.0
Global Symphony Technology Group Private Ltd. Management of overseas subsidiaries 100.0
Harman Connected Services Morocco Connected service provider 100.0
Harman Industries Holdings Mauritius Ltd. Management of overseas subsidiaries 100.0
Red Bend Ltd. Manufacture of audio products 100.0
Asia
(Excluding
China)
Samsung Asia Pte. Ltd. (SAPL) Management of overseas subsidiaries 100.0
Samsung Electronics Singapore Pte. Ltd. (SESP) Sale of electronic devices 100.0
Samsung Malaysia Electronics (SME) Sdn. Bhd. (SME) Sale of electronic devices 100.0
Samsung Electronics Display (M) Sdn. Bhd. (SDMA) Manufacture of electronic devices 100.0
Samsung Electronics (M) Sdn. Bhd. (SEMA) Manufacture of home appliances 100.0
Samsung Vina Electronics Co., Ltd. (SAVINA) Sale of electronic devices 100.0
Samsung Electronics Vietnam Co., Ltd. (SEV) Manufacture of electronic devices 100.0
Samsung Electronics Vietnam THAINGUYEN Co., Ltd. (SEVT) Manufacture of communication equipment 100.0
Samsung Electronics HCMC CE Complex Co., Ltd. (SEHC) Manufacture and sale of electronic devices 100.0
Samsung Display Vietnam Co., Ltd. (SDV) Manufacture of display panels 100.0
PT Samsung Electronics Indonesia (SEIN) Manufacture and sale of electronic devices 100.0
PT Samsung Telecommunications Indonesia (STIN) Sale of electronic devices and services 100.0
Thai Samsung Electronics Co., Ltd. (TSE) Manufacture and sale of electronic devices 91.8
Laos Samsung Electronics Sole Co., Ltd. (LSE) Marketing 100.0
Samsung Electronics Philippines Corporation (SEPCO) Sale of electronic devices 100.0
Samsung Electronics Australia Pty. Ltd. (SEAU) Sale of electronic devices 100.0
Samsung Electronics New Zealand Limited (SENZ) Sale of electronic devices 100.0
Samsung India Electronics Private Ltd. (SIEL) Manufacture and sale of electronic devices 100.0
Samsung Display Noida Private Limited (SDN) Manufacture of display panels 100.0
Samsung R&D Institute India-Bangalore Private Limited (SRI-B) R&D 100.0
Samsung R&D Institute BanglaDesh Limited (SRBD) R&D 100.0
Samsung Nepal Services Pvt, Ltd. (SNSL) Service 100.0
Samsung Japan Corporation (SJC) Sale of semiconductor and display panels 100.0
Samsung R&D Institute Japan Co., Ltd. (SRJ) R&D 100.0
Samsung Electronics Japan Co., Ltd. (SEJ) Sale of electronic devices 100.0
1
Ownership represents the Company’s ownership of the voting rights in each entity, including subsidiaries’ ownerships.
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Area Subsidiaries Industry
Percentage of
ownership (%)
1
Asia
(Excluding
China)
Harman Connected Services Corp. India Pvt. Ltd. Connected service provider 100.0
Harman International (India) Private Limited Sale of audio products, R&D 100.0
Harman International Industries Pty Ltd. Management of overseas subsidiaries 100.0
Harman International Japan Co., Ltd. Sale of audio products, R&D 100.0
Harman Singapore Pte. Ltd. Sale of audio products 100.0
China
Samsung (CHINA) Investment Co., Ltd. (SCIC) Sale of electronic devices 100.0
Samsung Electronics Hong Kong Co., Ltd. (SEHK) Sale of electronic devices 100.0
Samsung Electronics Taiwan Co., Ltd. (SET) Sale of electronic devices 100.0
Tianjin Samsung Electronics Co., Ltd. (TSEC) Manufacture of TV and monitors 91.2
Suzhou Samsung Electronics Co., Ltd. (SSEC) Manufacture of home appliances 88.3
Samsung Suzhou Electronics Export Co., Ltd. (SSEC-E) Manufacture of home appliances 100.0
Samsung Electronics Suzhou Computer Co., Ltd. (SESC) Manufacture of electronic devices, R&D 100.0
Tianjin Samsung Telecom Technology Co., Ltd. (TSTC) Manufacture of communication equipment 90.0
Beijing Samsung Telecom R&D Center (SRC-Beijing) R&D 100.0
Samsung Electronics China R&D Center (SRC-Nanjing) R&D 100.0
Samsung Mobile R&D Center China-Guangzhou (SRC-Guangzhou) R&D 100.0
Samsung R&D Institute China-Shenzhen (SRC-Shenzhen) R&D 100.0
Shanghai Samsung Semiconductor Co., Ltd. (SSS) Sale of semiconductor and display panels 100.0
Samsung (China) Semiconductor Co., Ltd. (SCS) Manufacture of semiconductors 100.0
Samsung SemiConductor Xian Co., Ltd. (SSCX) Sale of semiconductor and display panels 100.0
Samsung Electronics Suzhou Semiconductor Co., Ltd. (SESS) Toll processing of semiconductors 100.0
Tianjin Samsung LED Co., Ltd. (TSLED) Manufacture of LED 100.0
Samsung Semiconductor (China) R&D Co., Ltd. (SSCR) R&D 100.0
Samsung Display Dongguan Co., Ltd. (SDD) Manufacture of display panels 100.0
Samsung Display Tianjin Co., Ltd. (SDT) Manufacture of display panels 95.0
SEMES (XIAN) Co., Ltd. Semiconductor equipment services 100.0
Samsung Semiconductor Investment L.P. І Technology business, Venture capital investments 99.0
Harman (China) Technologies Co., Ltd. Manufacture of audio products 100.0
Harman (Suzhou) Audio and Infotainment Systems Co., Ltd. Sale of audio products 100.0
Harman Automotive Electronic Systems (Suzhou) Co., Ltd. Manufacture of audio products, R&D 100.0
Harman Commercial (Shanghai) Co., Ltd. Sale of audio products 100.0
Harman Connected Services Solutions (Chengdu) Co., Ltd. Connected service provider 100.0
Harman Holding Limited Sale of audio products 100.0
Harman International (China) Holdings Co., Ltd. Sale of audio products, R&D 100.0
Harman Technology (Shenzhen) Co., Ltd. Sale of audio products, R&D 100.0
1
Ownership represents the Company’s ownership of the voting rights in each entity, including subsidiaries’ ownerships.
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Area Subsidiaries Industry
Percentage of
ownership (%)
1
Domestic
Samsung Display Co., Ltd. Manufacture and sale of display panels 84.8
SU Materials Manufacture of display components 50.0
STECO Co., Ltd. Manufacture of semiconductor components 70.0
SEMES Co., Ltd. Manufacture and sale of semiconductor/FPD 91.5
Samsung Electronics Service Co., Ltd. Repair services for electronic devices 99.3
Samsung Electronics Service Customer Satisfaction Co., Ltd. Call center for repair services for electronic devices 100.0
Samsung Electronics Sales Co., Ltd. Sale of electronic devices 100.0
Samsung Electronics Logitech Co., Ltd. General logistics agency 100.0
Samsung Medison Co., Ltd. Manufacture and sale of medical equipment 68.5
Mirero System Co., Ltd. Development and supply of semiconductor
p
rocess defect and quality control software
99.9
Dowooinssys Co., Ltd. Manufacture of display components
69.0
Gf-System Co., Ltd. Manufacture of display components 100.0
Harman International Korea Software development and supply, etc. 100.0
Samsung Venture Capital Union #21 Technology business, Venture capital investments 99.0
Samsung Venture Capital Union #22 Technology business, Venture capital investments 99.0
Samsung Venture Capital Union #26 Technology business, Venture capital investments 99.0
Samsung Venture Capital Union #28 Technology business, Venture capital investments 99.0
Samsung Venture Capital Union #29 Technology business, Venture capital investments 99.0
Samsung Venture Capital Union #32 Technology business, Venture capital investments 99.0
Samsung Venture Capital Union #33 Technology business, Venture capital investments 99.0
Samsung Venture Capital Union #37 Technology business, Venture capital investments 99.0
Samsung Venture Capital Union #40 Technology business, Venture capital investments 99.0
Samsung Venture Capital Union #42 Technology business, Venture capital investments 99.0
Samsung Venture Capital Union #43 Technology business, Venture capital investments 99.0
Samsung Venture Capital Union #45 Technology business, Venture capital investments 99.0
Samsung Venture Capital Union #48 Technology business, Venture capital investments 99.0
Samsung Venture Capital Union #52 Technology business, Venture capital investments 99.0
Samsung Venture Capital Union #55 Technology business, Venture capital investments 99.0
Samsung Venture Capital Union #56 Technology business, Venture capital investments 99.0
Growth type private equity trust specialized in semiconductors Investment on semiconductor industry 66.7
System LSI Mutual benefit private equity trust Investment on semiconductor industry 62.5
1
Ownership represents the Company’s ownership of the voting rights in each entity, including subsidiaries’ ownerships.
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1.3 Summary of Financial Data of Major Consolidated Subsidiaries
Summary of financial data of major consolidated subsidiaries is as follows:
(1) 2021
(
In millions o
f
Korean won
)
As of December 31, 2021 For the year ended December 31, 2021
Ma
j
or subsidiaries
1
Assets Liabilities Sales
Profit (loss)
for the year
Samsung Display 54,967,156 9,081,737 28,755,975 2,770,060
Samsung Electronics America, Inc. (SEA) 42,982,054 19,246,751 42,325,524 823,914
Samsung (China) Semiconductor Co., Ltd. (SCS) 19,049,536 5,168,738 7,341,018 1,708,832
Samsung Electronics Vietnam THAINGUYEN Co., Ltd. (SEVT) 17,521,446 3,425,127 32,184,024 2,298,273
Harman and its subsidiaries
2
15,887,380 6,104,012 10,015,092 357,612
Samsung Asia Pte. Ltd. (SAPL) 14,683,789 58,381 - 4,668,478
Samsung Electronics Europe Holding Cooperatief U.A. (SEEH) 14,651,496 8,998,502 - 24,527
Samsung Semiconductor, Inc. (SSI) 13,744,799 7,955,060 33,895,805 74,531
Samsung (CHINA) Investment Co., Ltd. (SCIC) 13,599,093 9,685,278 2,615,685 451,062
Samsung Electronics Vietnam Co., Ltd. (SEV) 13,023,272 2,085,411 21,583,038 1,455,704
Samsung Austin Semiconductor LLC (SAS) 8,705,085 958,537 3,703,472 759,206
Shanghai Samsung Semiconductor Co., Ltd. (SSS) 7,765,126 5,799,690 31,326,186 325,397
Samsung India Electronics Private Ltd. (SIEL) 7,765,019 3,236,745 12,222,643 522,672
Samsung Display Vietnam Co., Ltd. (SDV) 6,821,066 2,486,703 21,722,446 981,311
Samsung Eletronica da Amazonia Ltda. (SEDA) 4,589,505 1,671,097 6,020,523 490,202
Samsung Electronics HCMC CE Complex Co., Ltd. (SEHC) 3,129,104 919,721 6,551,242 472,666
Thai Samsung Electronics Co., Ltd. (TSE) 3,018,358 474,223 4,443,031 142,191
Samsung Electronics (UK) Ltd. (SEUK) 2,925,062 1,992,367 5,621,922 241,403
Samsung Electronics Benelux B.V. (SEBN) 2,612,357 766,034 2,569,603 284,816
Samsung Electronics Hungarian Private Co., Ltd. (SEH) 2,504,075 641,004 4,357,137 157,616
Samsung Electronics Europe Logistics B.V. (SELS) 2,305,275 2,144,805 14,700,517 13,943
Samsung Electronics GmbH (SEG) 2,289,391 2,228,650 6,385,080 2,158
Samsung Display Dongguan Co., Ltd. (SDD) 2,149,277 339,425 3,987,674 163,637
Samsung International, Inc. (SII) 2,125,719 1,041,168 7,948,982 105,444
Samsung Electronics Taiwan Co., Ltd. (SET) 2,033,992 1,459,353 5,638,204 50,966
1
Summary of condensed financial information is based on separate financial statements of each subsidiary.
2
Consolidated financial data of an intermediate company that includes Harman International Industries, Inc. and its subsidiaries.
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(2) 2020
(
In millions o
f
Korean won
)
As of December 31, 2020 For the year ended December 31, 2020
Ma
j
or subsidiaries
1
Assets Liabilities Sales
Profit (loss)
for the year
Samsung Display
50,039,755 7,612,332 27,149,102 1,798,100
Samsung Electronics America, Inc. (SEA) 36,765,070 15,828,083 35,237,365 1,623,555
Samsung Electronics Vietnam THAINGUYEN Co., Ltd. (SEVT)
15,500,024 2,574,442 28,284,397 2,066,842
Samsung (CHINA) Investment Co., Ltd. (SCIC) 15,438,819 12,358,881 2,475,454 127,051
Harman and its subsidiaries
2
14,702,005 5,776,884 9,161,142 (735,426)
Samsung (China) Semiconductor Co., Ltd. (SCS) 14,348,735 3,511,003 5,321,312 1,100,619
Samsung Electronics Vietnam Co., Ltd. (SEV) 12,623,956 1,805,326 19,952,957 1,408,088
Samsung Electronics Europe Holding Cooperatief U.A. (SEEH) 11,495,430 7,641,709 - 16,150
Samsung Semiconductor, Inc. (SSI) 9,669,349 4,427,701 23,562,962 182,290
Samsung Asia Pte. Ltd. (SAPL) 9,552,755 523,402 1,634,692 968,504
Shanghai Samsung Semiconductor Co., Ltd. (SSS) 7,678,989 5,010,041 25,829,119 271,691
Samsung Display Vietnam Co., Ltd. (SDV) 7,400,563 4,354,887 19,209,100 559,006
Samsung Austin Semiconductor LLC. (SAS) 6,912,610 538,288 3,913,100 922,007
Samsung Eletronica da Amazonia Ltda. (SEDA) 6,280,131 1,556,057 6,390,696 819,561
Samsung India Electronics Private Ltd. (SIEL) 6,250,492 2,523,027 10,943,343 611,571
Thai Samsung Electronics Co., Ltd. (TSE) 2,920,299 451,055 3,744,080 160,264
Samsung Electronics (UK) Ltd. (SEUK) 2,767,563 1,886,447 4,987,522 133,016
Samsung Electronics GmbH (SEG) 2,687,535 2,626,979 6,306,675 605
Samsung Electronics HCMC CE Complex Co., Ltd. (SEHC) 2,609,150 1,026,901 6,273,162 419,313
Samsung Electronics Hungarian Private Co., Ltd. (SEH) 2,230,457 504,952 3,665,360 148,056
Samsung Electronics Benelux B.V. (SEBN) 2,145,488 736,480 2,324,308 58,579
Samsung Display Dongguan Co., Ltd. (SDD) 1,767,663 300,080 2,947,506 110,194
Samsung Electronics Europe Logistics B.V. (SELS) 1,700,033 1,550,350 13,444,960 20,623
Samsung Electronics France S.A.S (SEF) 1,688,580 1,207,359 3,464,937 61,596
Samsung Japan Corporation (SJC) 1,668,902 1,381,443 3,317,644 7,684
1
Summary of condensed financial information is based on separate financial statements of each subsidiary.
2
Consolidated financial data of an intermediate company that includes Harman International Industries, Inc. and its subsidiaries.
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1.4 Changes in Consolidation Scope
Changes in consolidation scope during the year ended December 31, 2021 are as follows:
Change Area Subsidiary Description
Included
Middle East
& Africa
Samsung Electronics Industry and Commerce Ltd. (SETK-P) Establishment
China Samsung Semiconductor Investment L.P. І Establishment
Domestic
Samsung Venture Capital Union #52 Establishment
Samsung Venture Capital Union #55 Establishment
Samsung Venture Capital Union #56 Establishment
Excluded
America
Viv Labs, Inc. Merger
Prismview, LLC Merger
Stellus Technologies, Inc. Liquidation
SigMast Communications Inc. Liquidation
Zhilabs Inc. Liquidation
TWS LATAM B, LLC Liquidation
TWS LATAM S, LLC Liquidation
SNB Technologies, Inc. Mexico, S.A. de C.V Liquidation
RT SV CO-INVEST, LP Liquidation
Europe / CIS
Arcam Limited Liquidation
A&R Cambridge Limited Liquidation
Harman Connected Services Limited Liquidation
Martin Manufacturing (UK) Ltd Liquidation
China
Samsung Suzhou Module Co., Ltd. (SSM) Sale of business
Samsung Suzhou LCD Co., Ltd. (SSL) Sale of business
Samsung Electronics Huizhou Co., Ltd.(SEHZ) Liquidation
Shenzhen Samsung Electronics Telecommunication Co., Ltd.(SSET) Liquidation
Domestic Samsung Venture Capital Union #27 Liquidation
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2. Significant Accounting Policies
2.1 Basis of Presentation
The principal accounting policies used to prepare the consolidated financial statements are set out below. Except for the effect
of the amendments to the Korean IFRS and new interpretations set out below, the principal accounting policies used to prepare
the consolidated financial statements as of and for the year ended December 31, 2021 are consistent with those used to prepare
the consolidated financial statements as of and for the year ended December 31, 2020.
The Company maintains its accounting records in Korean won and prepares the statutory financial statements in Korean
language (Hangul) in accordance with International Financial Reporting Standards as adopted by the Republic of Korea
(“Korean IFRS”). The accompanying consolidated financial statements have been condensed, restructured, and translated into
English from the Korean language financial statements.
Certain information attached to the Korean language financial statements that are not required for a fair presentation of the
Company’s financial position, financial performance or cash flows, are not presented in the accompanying consolidated
financial statements.
The consolidated financial statements of the Company have been prepared in accordance with Korean IFRS. These are the
standards, subsequent amendments and related interpretations issued by the International Accounting Standards Board (IASB)
that have been adopted by the Republic of Korea.
Korean IFRS permits the use of critical accounting estimates in the preparation of the consolidated financial statements and
requires management judgments in applying the accounting policies. The areas involving a higher degree of judgment or
complexity, or areas where assumptions and estimates are significant to the consolidated financial statements, are disclosed in
Note 3.
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2.2 Changes in Accounting Policies and Disclosures
(A) New and amended standards adopted by the Company
The Company applied the following amended and/or enacted standards for the first time for their annual reporting period
commencing on January 1, 2021:
Amendments to Korean IFRS 1116, Lease
The amendments introduced a practical expedient that simplifies the lessee’s accounting treatments for COVID-19 related
rent concessions, and through such expedient a lessee may elect not to assess whether the rent concessions granted as a direct
consequence of the COVID-19 pandemic are lease modifications. A lessee that makes this election shall account for any
changes in lease payments resulting from the rent concessions the same way as prescribed by this standard if the changes were
not considered as lease modifications. The application of amendments does not have a significant impact on the year-end
consolidated financial statements.
(B) New and amended standards not yet adopted by the Company
The amended accounting standard issued that is not mandatory for the annual reporting period commencing on January 1,
2021 and has not been early adopted by the Company is as follows:
Amendments to Korean IFRS 1116, Lease
During the year ended December 31, 2020, the amendments to Korean IFRS 1116 introduced a practical expedient that
provided practical relief to lessees in accounting for rent concessions occurring as a direct consequence of COVID-19. The
amendments extend the practical expedient to apply to reduction in lease payments originally due on or before 30 June 2022.
The amendments are effective for annual reporting periods beginning on or after April 1, 2021, with early application
permitted.
Amendments to Korean IFRS 1103, Business Combinations
The amendments add to Korean IFRS 1103 a requirement that, for obligations within the scope of IAS 37, an acquirer applies
Korean IFRS 1037 or Korean IFRS 2121 Levies to determine whether at the acquisition date a present obligation exists as a
result of the past events. The amendments also add an explicit statement that an acquirer does not recognize contingent assets
acquired in a business combination. The amendments are effective for business combinations for which the date of acquisition
is on or after the beginning of the first annual period beginning on or after January 1, 2022, with early application permitted
.
Amendments to Korean IFRS 1016 Property, Plant and Equipment
The amendments prohibit deducting from the cost of an item of property, plant and equipment any proceeds from selling items
produced while bringing that asset to the location and condition necessary for it to be capable of operating in the manner
intended by management. Instead, an entity recognizes the proceeds from selling such items, and the cost of producing those
items, in profit or loss. The amendments are effective for annual reporting periods beginning on or after January 1, 2022, with
early application permitted.
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Amendments to Korean IFRS 1037 Provisions, Contingent Liabilities and Contingent Assets
The amendments specify that the ‘cost of fulfilling’ a contract comprises the ‘costs that relate directly to the contract’. Costs
that relate directly to a contract consist of both the incremental costs of fulfilling that contract and an allocation of other costs
that relate directly to fulfilling the contract. The amendments are effective for annual periods beginning on or after January 1,
2022, with early application permitted.
Amendments to Korean IFRS 1001 Presentation of Financial Statements
The amendments clarify that the classification of liabilities as current or non-current is based on rights that are in existence at
the end of the reporting period, specify that classification is unaffected by expectations about whether an entity will exercise
its right to defer settlement of a liability, and elucidate that settlement refers to the transfer to the counterparty of cash, equity
instruments, other assets or services. The amendments are applied retrospectively for annual periods beginning on or after
January 1, 2023, with early application permitted.
Amendments to Korean IFRS 1001 Presentation of Financial Statements
The amendments define the term ‘material accounting policy information’, and develop guidance and examples in IFRS
Practice Statement 2 to explain and demonstrate the application of ‘materiality’. The amendments are effective for annual
periods beginning on or after January 1, 2023, with earlier application permitted and are applied prospectively.
Amendments to Korean IFRS 1008 Accounting Policies, Changes in Accounting Estimates and Errors
The amendments define accounting estimates, and clarify that it is different from changes in accounting policies. The
amendments are effective for annual periods beginning on or after January 1, 2023, to changes in accounting policies and
changes in accounting estimates that occur on or after the beginning of the same period, with earlier application permitted.
Amendments to Korean IFRS 1012, Income Taxes
The amendments introduce a further exception to the initial recognition exemption. Under the amendments, an entity does not
apply the initial recognition exemption for transactions that give rise to equal taxable and deductible temporary differences.
The amendments are effective for annual reporting periods beginning on or after January 1, 2023, with earlier application
permitted.
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2.3 Consolidation
The Company prepares the consolidated financial statements in accordance with Korean IFRS 1110 Consolidated Financial
Statements.
(A) Subsidiaries
Subsidiaries are all entities (including the special purpose entities) over which the Company has control. The Company
controls the corresponding investee when it is exposed, or has rights, to variable returns from its involvement with the investee
and has the ability to affect those returns through its power over the investee. Consolidation of a subsidiary begins from the
date the Company obtains control of a subsidiary and ceases when the Company loses control of the subsidiary.
The Company applies the acquisition method to account for business combinations. The consideration transferred is measured
at the fair values of the assets transferred, and identifiable assets acquired and liabilities and contingent liabilities assumed in
a business combination are initially measured at their fair values at the acquisition date. The Company recognizes any non-
controlling interest in the acquiree on an acquisition-by-acquisition basis in the event of liquidation at the non-controlling
interest’s proportionate share of the recognized amounts of acquiree’s identifiable net assets. Acquisition-related costs are
expensed as incurred.
The excess of consideration transferred, of any non-controlling interest in the acquired entity, and acquisition-date fair value
of any previous equity interest in the acquired entity over the fair value of the net identifiable assets acquired is recorded as
goodwill. If those amounts are less than the fair value of the net identifiable assets of the business acquired, the difference is
recognized directly in the profit or loss as a bargain purchase.
Balances of receivables and payables, income and expenses and unrealized gains or losses on transactions between the entities
within the Company are eliminated. Accounting policies of subsidiaries are changed where necessary to ensure consistency
with the policies adopted by the Company.
(B) Changes in ownership interests in subsidiaries without change of control
Transactions with non-controlling interests that do not result in loss of control are accounted for as equity transactions – that
is, as transactions with the owners in their capacity as owners. The difference between the fair value of any consideration paid
and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on
disposals of non-controlling interests are also recorded in equity.
(C) Disposal of subsidiaries
If the Company loses control of a subsidiary, any investment continuously retained in the subsidiary is re-measured at its fair
value at the date when control is lost and any resulting differences are recognized in profit or loss. Such fair value becomes
the initial carrying amount for the subsequent measurement of the retained interest accounted for as an associate, joint venture,
or financial asset. In addition, any amounts previously recognized in other comprehensive income in respect of such entity are
accounted as if the Company had directly disposed of the related assets or liabilities. As a result, the previously recognized
other comprehensive income are reclassified into profit or loss or equity.
(D
) No
n-controlling interests
Each component of profit or loss and other comprehensive income is attributed to owners of the parent and to non-controlling
interests. Total comprehensive income is attributed to owners of the parent and to non-controlling interests even if this results
in a negative balance of non-controlling interests.
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(E) Associates
Associates are all entities over which the Company has significant influence but does not have control, generally investees of
which from 20% to 50% voting shares are owned by the Company. Investments in associates are accounted for using the
equity method of accounting, after initially being recognized at cost. Unrealized gains on transactions between the Company
and its associates are eliminated to the extent of the Company’s interest in the associates. If the Company’s share of losses of
an associate equals or exceeds its interest in the associate (including long-term interests that, in substance, form part of the
Company’s net investment in the associate), the Company discontinues recognizing its share of further losses. After the
Company’s interest is reduced to zero, additional losses are provided for, and a liability is recognized, only to the extent that
the Company has incurred legal or constructive obligations or made payments on behalf of the associate. If there is objective
evidence of impairment for the investment in the associate, the Company recognizes the difference between the recoverable
amount of the associate and its carrying amount as an impairment loss. If an associate uses accounting policies other than
those of the Company for like transactions and events in similar circumstances, adjustments shall be made, if necessary, to
make the associate’s accounting policies conform to those of the Company when the associate’s financial statements are used
by the entity in applying the equity method.
(F) Joint arrangements
A joint arrangement of which two or more parties have joint control is classified as either a joint operation or a joint venture.
A joint operator has rights to the assets, and obligations for the liabilities, relating to the joint operation and recognizes the
assets, liabilities, revenues and expenses relating to its interest in a joint operation. A joint venturer has rights to the net assets
relating to the joint venture and accounts for that investment using the equity method.
2.4 Foreign Currency Translation
(A) Functional and presentation currency
Items included in the consolidated financial statements of each of the Company’s entities are measured using the currency of
the primary economic environment in which each entity operates (the “functional currency”). The consolidated financial
statements are presented in Korean won, which is the parent company’s functional and presentation currency.
(B) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the
transactions or valuation where items are re-measured. Foreign exchange gains and losses resulting from the settlement of
such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign
currencies are recognized in profit or loss. Exchange differences arising on non-monetary financial assets and liabilities such
as equity instruments at fair value through profit or loss and equity instruments at fair value through other comprehensive
income are recognized in profit or loss and other comprehensive income, respectively, as part of the fair value gain or loss.
(C) Tran
slation into the presentation currency
Th
e results and financial position of all the foreign entities that have a functional currency different from the presentation
currency of the Company are translated into the presentation currency as follows:
Assets and liabilities for each consolidated statement of financial position presented are translated at the closing rate at
the end of the reporting date.
Income and expenses for each consolidated statement of profit or loss are translated at average exchange rates, unless
this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates,
in which case income and expenses are translated at the as-of rate on the dates of the transactions.
All resulting exchange differences are recognized in other comprehensive income.
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2.5 Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits held at call with banks, and other short-term investment assets with
high liquidity that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.
2.6 Financial Assets
(A) Classification
From January 1, 2018, the initial application date for Korean IFRS 1109 Financial Instruments, the Company classifies its
financial assets in the following measurement categories:
- Financial assets measured at fair value (changes in fair value recognized in either other comprehensive income, or profit or loss)
- Financial assets measured at amortized cost.
The classification depends on the Company’s business model for managing the financial assets and the contractual terms of
the cash flows.
For financial assets measured at fair value, gains and losses will either be recorded in profit or loss or other comprehensive
income. For investments in debt instruments, this will depend on the business model in which the investment is held. The
Company reclassifies debt investments only when its business model for managing those assets changes.
For investments in equity instruments that are not held for trading, classification will depend on whether the Company has
made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other
comprehensive income. Changes in fair value of the investments in equity instruments that are not elected to be accounted for
as other comprehensive income are recognized in profit or loss.
(B) Measurement
At initial recognition, the Company measures a financial asset at its fair value. In the case of financial asset not measured at
fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset or the
issuance of the financial liabilities are added to its fair value. Transaction costs of financial assets carried at fair value through
profit or loss are expensed in profit or loss.
Hybrid (combined) contracts with embedded derivatives are considered in their entirety when determining whether their cash
flows solely consist of the payments of principal and interest.
a) Debt instruments
Subsequent measurement of debt instruments depends on the Company’s business model for managing the asset and the cash
flow characteristics of the asset. The Company classifies its debt instruments into one of the following three measurement
categories:
① Financial assets measured at amortized cost
Assets that are held for collection of contractual cash flows where those cash flows represent solely the payments of principal
and interest are measured at amortized cost. A gain or loss on a debt investment that is subsequently measured at amortized
cost and is not part of a hedging relationship is recognized in profit or loss when the asset is derecognized or impaired. Interest
income from these financial assets is included in ‘financial income’ using the effective interest rate method.
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
② Financial assets measured at fair value through other comprehensive income
Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets’ cash flows
represent solely the payments of principal and interest, are measured at fair value through other comprehensive income.
Movements in the carrying amount are taken through other comprehensive income, except for the recognition of impairment
loss (reversal of impairment loss), interest income and foreign exchange gains and losses which are recognized in profit or
loss. When the financial assets are derecognized, the cumulative gain or loss previously recognized in other comprehensive
income is reclassified from equity to profit or loss. Interest income from these financial assets is included in ‘financial income’
using the effective interest rate method. Foreign exchange gains and losses are presented in ‘financial income’ or ‘financial
expenses’ and impairment losses are presented in ‘other non-operating expenses’.
③ Financial assets measured at fair value through profit or loss
Assets that do not meet the criteria for amortized cost or fair value through other comprehensive income are measured at fair
value through profit or loss. A gain or loss on a debt investment that is subsequently measured at fair value through profit or
loss and is not part of a hedging relationship is recognized in profit or loss and presented in the consolidated statement of
profit or loss within ‘other non-operating income’ or ‘other non-operating expenses’ in the year in which it arises.
b) Equity instruments
The Company subsequently measures all equity investments at fair value. Where the Company’s management has elected to
present fair value gains and losses on equity investments in other comprehensive income, there is no subsequent
reclassification of fair value gains and losses to profit or loss following the derecognition of the investment. When the financial
asset is derecognized, the cumulative gain or loss on valuation of financial assets at fair value through other comprehensive
income recognized in equity is reclassified to retained earnings. Dividend income from such investments continue to be
recognized in profit or loss as ‘other non-operating income’ when the right to receive the payments is established.
Changes in the fair value of financial assets at fair value through profit or loss are recognized in ‘other non-operating income’
or ‘other non-operating expenses’ in the consolidated statements of profit or loss as applicable.
(C) Impairment
The Company assesses on a forward-looking basis the expected credit losses associated with its debt instruments carried at
amortized cost and fair value through other comprehensive income. The impairment methodology applied depends on whether
there has been a significant increase in credit risk. For trade receivables, the Company applies the simplified approach, which
requires expected lifetime losses to be recognized from initial recognition of the receivables.
(D) Recognition and derecognition
Regular way purchases and sales of financial assets are recognized or derecognized on a trade date basis. Financial assets are
derecognized when the rights to receive cash flows from the financial assets have expired or have been transferred and the
Company has transferred substantially all the risks and rewards of ownership. If a transfer does not result in derecognition
because the Company has retained substantially all the risks and rewards of ownership of the transferred asset, the Company
continues to recognize the transferred asset in its entirety and recognizes a financial liability for the consideration received.
The Company classifies the financial liability as ‘borrowings’ in the consolidated statement of financial position.
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(E) Offsetting of financial instruments
Financial assets and liabilities are offset and the net amount is reported in the statements of financial position when there is a
legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the assets
and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be
enforceable in the normal course of business, even in the event of default, insolvency or bankruptcy of the Company or the
counterparty.
2.7 Trade Receivables
Trade receivables are amounts due from customers for inventories sold or services performed in the ordinary course of business.
If collection is expected within one year or less, they are classified as current assets. If collection is expected beyond one year,
they are presented as non-current assets. Trade receivables are recognized initially at transaction price and subsequently
measured at amortized cost using the effective interest method, less loss allowance, unless the trade receivables bear significant
financial component.
2.8 Inventories
Inventories are stated at the lower of cost and net realizable value. Cost is determined using the average cost method, except
for materials in transit. The cost of finished goods and work in progress comprises raw materials, direct labor, other direct
costs and related production overheads (based on normal operating capacity). It excludes costs of idle plant and abnormal
waste. Net realizable value is the estimated selling price in the ordinary course of business, less applicable variable selling
expenses.
The Company regularly estimates the changes in future customer demand in the products that may cause a significant change
in the valuation allowance and recognizes the valuation allowance if there is any case such as excess, obsolescence and decline
in market value. Loss on valuation of inventories is recorded as cost of sales.
2.9 Property, Plant and Equipment
Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses. Historical
cost includes expenditures that are directly attributable to the acquisition. Subsequent costs are included in the asset’s carrying
amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated
with the cost will flow to the Company and the cost can be measured reliably. The carrying amount of the replaced parts are
derecognized and the repairs and maintenance expenses are recognized in profit or loss in the period they are incurred.
Depreciation on tangible assets is calculated using the straight-line method to allocate the difference between their cost and
their residual values over their estimated useful lives. Land is not depreciated. Costs that are directly attributable to the
acquisition, construction or production of a qualifying asset, including capitalized interest costs, form part of the cost of that
asset and are amortized over the estimated useful lives.
The Company’s policy is that property, plant and equipment should be depreciated over the following estimated useful lives:
Estimated useful lives
Buildings and structures 15, 30 years
Machinery and equipment 5 years
Other 5 years
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The depreciation method, residual values and useful lives of property, plant and equipment are reviewed, and adjusted if
appropriate, at the end of each reporting period. An asset’s carrying amount is written down immediately to its recoverable
amount if the asset’s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are
determined by comparing the proceeds with the carrying amount and are recognized within the consolidated statement of
profit or loss as ‘other non-operating income’ or ‘other non-operating expenses’.
2.10 Borrowing Costs
General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying
asset are capitalized during the period of time that is required to complete and prepare the asset for its intended use. Investment
income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted
from the borrowing costs eligible for capitalization. Other borrowing costs are expensed in the period in which they are
incurred.
2.11 Intangible Assets
Goodwill represents the excess of the cost of acquisition over the fair value of the Company’s share of the net identifiable
assets of the acquired subsidiaries, associates, joint ventures and businesses at the date of acquisition. Goodwill on an
acquisition of subsidiaries’ businesses is included in intangible assets and goodwill on an acquisition of associates and joint
ventures’ shares is included in the investments in associates and joint ventures.
Intangible assets, except for goodwill, are initially recognized at their historical cost and carried at cost less accumulated
amortization and accumulated impairment losses.
Internally generated development costs are the aggregate costs recognized after meeting the asset recognition criteria,
including technical feasibility, and determined to have future economic benefits. Membership rights and certain trademarks
are regarded as intangible assets with an indefinite useful life and not amortized because there is no foreseeable limit to the
period over which the assets are expected to be utilized. However, the Company records impairment based on its reasonable
estimation of the benefits associated with the membership rights and assessment of impairment indicators, such as a decline
in the market value. Intangible assets with definite useful lives such as trademarks, licenses, and other intangible assets, are
amortized using the straight-line method over their estimated useful lives.
The Company’s policy is that intangible assets should be amortized over the following estimated useful lives:
Estimated useful lives
Development costs 2 years
Trademarks, licenses and other intangible assets 3 - 25 years
2.12 Impairment of Non-Financial Assets
Goodwill or intangible assets with indefinite useful lives are not subject to amortization and are tested annually for impairment.
Assets that are subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that
the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the asset’s carrying
amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and
value in use. For the purposes of assessing impairment, assets are grouped at the lowest level for which there are separately
identifiable cash flows (cash-generating units). Non-financial assets other than goodwill that suffered an impairment are
reviewed for possible reversal of the impairment at the end of each reporting period.
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2.13 Assets Held-for-Sale (Disposal Group)
Non-current assets (or disposal groups) are classified as assets held-for-sale when their carrying amount is to be recovered
principally through a sale transaction and the sale is considered highly probable. The assets are measured at the lower of their
carrying amount and the fair value less costs to sell. Gain or loss on disposal is determined by comparing the proceeds with
the carrying amount of relevant assets, and is recognized in the statements of profit or loss as ‘other non-operating income’ or
‘other non-operating expenses’.
2.14 Financial Liabilities
(A) Classification and measurement
The Company shall classify all financial liabilities as financial liabilities measured subsequently at amortized cost, except for
the following:
- Financial liabilities at fair value through profit or loss. Such liabilities, including derivatives that are liabilities, shall be
subsequently measured at fair value.
- Financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition or when the continuing
involvement approach applies. Such financial liabilities are measured based on the methodology described in Note 2.6
Financial Assets.
- Financial guarantee contracts. After the initial recognition, an issuer of such a contract shall subsequently measure it at
the higher of:
(a) The amount of the loss allowance determined based on the expected credit losses.
(b) The amount initially recognized less the cumulative amount of income recognized in accordance with the principles
of Korean IFRS 1115 Revenue from Contracts with Customers, when appropriate.
- Commitments to provide loan at below-market interest rate. An issuer of such a commitment shall subsequently measure
it at the higher of:
(a) The amount of the loss allowance determined based on the expected credit losses.
(b) The amount initially recognized less the cumulative amount of income recognized in accordance with the principles
of Korean IFRS 1115 Revenue from Contracts with Customers, when appropriate.
- Contingent consideration recognized by an acquirer in a business combination to which Korean IFRS 1103 Business
Combinations applies. Such contingent consideration shall subsequently be measured at fair value with changes
recognized in profit or loss.
(B) Derecognition
Financial liabilities are removed from the consolidated statements of financial position when it is extinguished; for example,
when the obligation specified in the contract is discharged or can
celled
or expired or when the terms of an existing financial
liability are substantially modified. The difference between the carrying amount of a financial liability extinguished or
transferred to another party and the consideration paid (including any non-cash assets transferred or liabilities assumed) is
recognized in profit or loss.
2.15 Trade Payables
Trade payables are amounts due to suppliers for inventories purchased or services received in the ordinary course of business.
If payment is expected to be made within 12 months, they are classified as current liabilities. If not, they are presented as non-
current liabilities. Non-current trade payables are recognized initially at fair value and subsequently measured at amortized
cost using the effective interest method.
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2.16 Borrowings
Borrowings are recognized initially at fair value, net of transaction costs, and are subsequently measured at amortized cost.
Any difference between cost and the redemption value is recognized in the consolidated statement of profit or loss over the
period of the borrowings using the effective interest method. If the Company has an indefinite right to defer payment for a
period longer than 12 months after the end of the reporting date, such liabilities are recorded as non-current liabilities,
otherwise, they are recorded as current liabilities.
2.17 Provisions and Contingent Liabilities
A provision is recognized when the Company has a present legal or constructive obligation as a result of a past event, it is
probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable
estimate can be made of the amount of the obligation. Provisions are not recognized for future operating losses.
Provisions are measured at present value of the expenditures expected to be required to settle the obligation using a pre-tax
rate that reflects the current market assessments of the time value of money and the risks specific to the obligation. The increase
in the provision due to the passage of time is recognized as interest expense.
The Company discloses a contingent liability if there is a possible obligation from past events in which the existence may only
be identified through the occurrence of uncertain future events; or there is a present obligations that the possibility on the
outflow of economic resources is uncertain; or the amount of economic resources required to settle the present obligation
cannot be reasonably estimated.
2.18 Employee Benefits
The Company has a variety of retirement pension plans including a defined benefit plan and a defined contribution plans.
A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate fund. The
Company has no legal or constructive obligation to pay further contributions if the fund does not hold sufficient assets to pay
all employees the benefits relating to employee service received in the current and prior periods. For a defined contribution
plans, the Company pays contributions to annuity plans that are managed either publicly or privately on a mandatory,
contractual or voluntary basis. The Company has no further future payment obligations once the contributions have been paid.
The contributions are recognized as employee benefit expense when they are due. Prepaid contributions are recognized as an
asset to the extent that a cash refund or a reduction in the future payments is available.
A defined benefit plan is a pension plan that is not a defined contribution plan. Typically, a defined benefit plan establishes
an amount of pension benefit that an employee will receive upon retirement, usually dependent on one or more factors such
as age, years of service and compensation. The liability (asset) recognized in the consolidated statement of financial position
with respect to the defined benefit pension plan is the present value of the defined benefit obligation at the end of the reporting
period less the fair value of plan assets. The defined benefit obligation is calculated annually by independent actuaries using
the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated
future cash outflows using the interest rates of high-quality corporate bonds that are denominated in the currency in which the
benefits will be paid and that have the terms to maturity approximating to the terms of the related pension obligation.
Actuarial gains and losses resulting from the changes in actuarial assumptions, and the differences between the previous
actuarial assumptions and what has actually occurred, are recognized in other comprehensive income in the period in which
they were incurred. When plan amendments, curtailments and settl
e
ments occur, past service costs or gain or loss from
settlements are immediately recognized in profit or loss.
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2.19 Financial Guarantee Contract
Financial guarantee contracts are contracts that require the issuer to make specified payments to reimburse the holder for a
loss it incurs because a specified debtor fails to make payments when due.
The liability is initially measured at fair value and then subsequently measured at the higher of the following, and is recognized
in the consolidated statements of financial position within ‘other financial liabilities’:
- the amount determined in accordance with the expected credit loss model under Korean IFRS 1109 Financial Instruments and
- the amount initially recognized less the cumulative amount of income recognized in accordance with Korean IFRS 1115
Revenue from Contracts with Customers, where appropriate.
2.20 Current and Deferred Tax
The tax expense for the year comprises current and deferred tax. Current and deferred tax is recognized in profit or loss, except
to the extent that it relates to the items recognized in other comprehensive income or directly in equity. The tax expense is
calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period.
Deferred tax is recognized for temporary differences arising between the tax bases of assets and liabilities and their carrying
amounts as expected tax consequences at the recovery or settlement of the carrying amounts of those assets and liabilities.
However, deferred tax assets and liabilities are not recognized if they arise from initial recognition of an asset or liability in a
transaction other than a business combination that, at the time of the transaction, affects neither the accounting nor taxable
profit. Deferred tax assets are recognized only to the extent that it is probable that a future taxable profit will be available
against which the temporary differences can be utilized.
A deferred tax liability is recognized for taxable temporary differences associated with investments in subsidiaries, associates,
and interests in joint ventures, except to the extent that the Company is able to control the timing of the reversal of the
temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. In addition, a
deferred tax asset is recognized for deductible temporary differences arising from such investments to the extent that it is
probable the temporary difference will reverse in the foreseeable future and taxable profit will be available against which the
temporary difference can be utilized.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset the current tax assets against the
current tax liabilities and when the deferred income tax assets and liabilities relate to income taxes levied by the same taxation
authority on either the same taxable entity or different taxable entities with an intention to settle the balances on a net basis.
2.21 Derivative Instruments
The Company initially recognizes rights and obligations from derivative contracts as assets and liabilities at fair value. Gain
or loss arising from these contracts are recognized in profit or loss. Qualified hedged amount from cash flow hedge and hedge
of a net investment in a foreign operation is deferred in equity.
The Company applies cash flow hedge accounting to hedge the pri
ce risk associated with inventory purchase and other. The
effectiv
e
portion of changes in fair value of derivatives that are designated and qualify as cash flow hedges is recognized in
other comprehensive income, and the ineffective portion is recognized in financial income or expenses.
2.22 Dividend
Dividend is recognized as a liability when approved by the Company’s shareholders.
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2.23 Share Capital
Ordinary shares and preference shares with no repayment obligations are classified as equity. When the Company or a
subsidiary acquires the Company’s ordinary shares, the acquisition costs, including direct transaction costs, are deducted from
equity until the redemption or reissuance as treasury shares. Consideration received on the reissuance of treasury shares is
credited to equity attributable to owners of the parent company.
2.24 Revenue Recognition
Revenue mainly comprises the fair value of the consideration received or receivable for the sale of goods in the ordinary
course of the Company’s activities. Revenue is shown net of value-added tax, returns, sales incentives and discounts and after
eliminating intercompany transactions.
The Company applied Korean IFRS 1115 Revenue from Contracts with Customers to the annual period beginning January 1,
2018. The Company shall recognize revenue in accordance with Korean IFRS 1115 Revenue from Contracts with Customers
by applying the following 5 steps: ① Identify the contracts with the customers, ② Identify the separate performance
obligations, ③ Determine the transaction price of the contract, ④ Allocate the transaction price to each of the separate
performance obligations, and ⑤ Recognize the revenue as each performance obligation is satisfied.
(A) Identification of performance obligations
The Company exports various products and merchandise in accordance with Incoterms Group C trading conditions (Incoterms
CIF and other). According to Korean IFRS 1115 Revenue from Contracts with Customers since the seller provides the shipping
service after the control of the product or merchandise has been transferred to the customer, the shipping service (including
insurance) is recognized as a separate performance obligation.
(B) Performance obligations satisfied over time
The Company delivers products to customers and installs them in accordance with the system air conditioner contracts awarded
by the Public Procurement Service. According to Korean IFRS 1115 Revenue from Contracts with Customers the Company
should recognize revenue over time if the Company creates or enhances an asset (for example, work in progress) that the
customer controls as the asset is created or enhanced. The Company recognizes the revenue from system air conditioner
installation over time as the customer controls the outcome of the service.
(C) Variable consideration
The Company estimates amount of variable consideration by using the ‘expected value method’ or the ‘most likely amount
method’, depending on which method the Company expects to better predict the amount of consideration. The Company
recognizes revenue only to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue
recognized will not occur, and classifies the amount which the Company does not expect to be entitled as contract liabilities.
The Company measures refund liability at the amount of consideration received for which the Company does not expect to be
entitled. The Company has a right to recover the product from the customer when the customer exercises his right of return
and recognizes an asset and a corresponding adjustment to cost
of sales. The asset is measured with reference to the former
car
ry
ing amount of the product less the costs to recover the products.
(D) Allocation of the transaction price
The transaction price in an arrangement must be allocated to each separate performance obligation based on the relative
standalone selling prices of the goods or services being provided to a customer. The Company determines the standalone
selling price for each separate performance obligation by using methods such as the ‘adjusted market assessment approach’.
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2.25 Leases
A lease is a contract, whereby the lessor conveys to the lessee, the right to control the use of an identified asset for a period
of time in exchange for consideration.
At inception of a contract, the Company assesses whether the contract is, or contains, a lease. However, the Company did not
reassess all contracts at initial application of Korean IFRS 1116 Leases because the Company applied the practical expedient
to contracts entered into before January 1, 2019.
For a contract that is, or contains, a lease, both lessee and lessor account for each lease component within the contract as a
lease separately from the non-lease components of the contract. In lessee accounting, however, the Company does not account
for them separately but instead applies the practical expedient to account for each lease component and any associated non-
lease components as a single lease component.
(A) Lessee accounting
The Company recognizes a right-of-use asset representing its right to use the underlying leased asset and a lease liability
representing its obligation to make lease payments at the commencement date of the lease.
The right-of-use asset is initially measured at cost and subsequently measured at cost less accumulated depreciation and
accumulated impairment losses, adjusted for the remeasurement of lease liability. The right-of-use asset is depreciated over
the shorter of the asset’s useful life and the lease term from the commencement date of the lease and is classified as ‘property,
plant and equipment’ in the consolidated financial statements.
At the commencement date, the lease liability is measured at the present value of the lease payments that are not paid at that
date. When measuring the present value, the lease payments are discounted using the interest rate implicit in the lease. If such
implicit rate cannot be readily determined, the Company uses the Company’s incremental borrowing rate. The lease liability
is subsequently increased by the amount of interest expenses recognized on the lease liability and reduced by the lease
payments made. Lease liabilities are remeasured when the future lease payments are changed due to the following:
Changes in an index or rate
Changes in amounts expected to be payable by the lessee under the residual value guarantees
Changes in the assessment of whether a purchase option or an option to renew is reasonably certain to be exercised, or
Changes in the assessment of whether it is reasonably certain that an option to terminate the lease will not be exercised.
Lease liabilities are classified as ‘current portion of long-term liabilities’ and/or ‘long-term borrowings’ in the consolidated
financial statements.
The Company elected the practical expedient for short-term leases (leases that have a lease term of 12 months or less at the
commencement date) and leases of low-value assets (leases for which the underlying asset is valued at USD 5,000 or less),
for which the lease payments are recognized as an expense on a straight-line basis over the lease term.
(B) Lessor accounting
The
ac
counting treatment as a lessor did not change significantly from the Korean IFRS 1116 Leases initially applied on
January 1, 2019.
The Company classifies a lease as a finance lease if it transfers substantially all the risks and rewards incidental to ownership
at the inception of the lease. A lease other than a finance lease is classified as an operating lease. Lease income from operating
leases is recognized in income on a straight-line basis over the lease term. Initial direct costs incurred by the lessor in
negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognized as an expense
over the lease term on the same basis as the lease income.
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2.26 Government Grants
Government grants are recognized at their fair values when there is reasonable assurance that the grant will be received and
the Company will comply with the conditions attached to it. Government grants relating to costs are deferred and recognized
in the consolidated statements of profit or loss over the period necessary to match the costs they are intended to compensate.
Government grants relating to assets are recognized in liabilities as deferred income government grants, and depreciated over
the expected lives of the related assets, and are credited to the consolidated statements of profit or loss.
2.27 Earnings per Share
Basic earnings per share is calculated by dividing the net profit for the period available to the ordinary shareholders by the
weighted-average number of ordinary shares outstanding during the year.
Diluted earnings per share is calculated by dividing the profit for the year attributable to owners of the parent company from
the consolidated statements of profit or loss by the weighted-average number of ordinary shares outstanding and potential
dilutive shares. Potential dilutive shares are used in the calculation of dilutive earnings per share only when they have dilutive
effects.
2.28 Reportable Segments
Reportable segments are disclosed in a manner consistent with the reporting provided to the chief operating decision-maker.
The chief operating decision-maker is responsible for making strategic decisions on resource allocation and assessing
performance of the reportable segments. The Management Committee, which makes strategic decisions, is regarded as the
chief operating decision-maker.
2.29 Convenience Translation into United States Dollar Amounts
The Company operates primarily in Korean won and its official accounting records are maintained in Korean won. The US
dollar amounts provided in the consolidated financial statements represent supplementary information solely for the
convenience of the reader. All Korean won amounts are expressed in US dollar at the rate of W 1,144.1 to USD 1, the average
exchange rate for the year ended December 31, 2021. Such presentation is not in accordance with generally accepted
accounting principles, and should not be construed as a representation that the Korean won amounts shown could be readily
converted, realized or settled in US dollar at this or at any other rate.
2.30 Approval of the Consolidated Financial Statements
These consolidated financial statements were approved by the Board of Directors on January 27, 2022, and may be modified
and approved at the Annual General Shareholders’ Meetings.
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3. Critical Accounting Estimates and Assumptions
The Company makes estimates and assumptions concerning the future. The estimates and assumptions are continuously
assessed, considering historical experience and other factors, including expectations of future events that are believed to be
reasonable under the circumstances. The resulting accounting estimates will, by definition, seldom equal the related actual
results. In particular, the recent spread of COVID-19 during the year ended December 31, 2021 may result in changes to the
Company’s assumptions and estimates but its potential financial impact cannot be reasonably estimated as of the reporting
date.
The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets
and liabilities within the next financial year are addressed below.
(A) Revenue recognition
A refund liability and a right to the returned goods are recognized for the products expected to be returned at the time of sale.
Accumulative experience is used to estimate such returns at the time of sale at a portfolio level (through expected value
method), and the Company’s revenue is affected by the changes in expected return rate.
Sales of goods are recognized based on the considerations specified in the contract, net of sales incentives, when control of
the products has transferred. The sales deduction, which affects the Company’s revenue, is reasonably estimated based on the
historical experience and past contracts.
(B) Provision for warranty
The Company recognizes provision for warranty on products sold. The Company accrues provision for warranty based on the
best estimate of amounts necessary to settle future and existing claims at the end of each reporting period. The amounts are
estimated based on the past experience.
(C) Fair value of financial instruments
The fair value of financial instruments that are not traded in an active market is determined by using a variety of methods and
assumptions that are mainly based on market conditions existing at the end of each reporting period.
(D) Impairment of financial assets
The loss allowance for financial assets are based on assumptions about risk of default and expected loss rates. The Company
uses judgement in making these assumptions and selecting the inputs to the impairment calculation based on the Company’s
past history, existing market conditions as well as forward looking estimates at the end of each reporting period.
(E) Lease
In determining the lease term, the Company considers all facts and circumstances that create an economic incentive to exercise
an extension option, or not to exercise a termination option. Extension options (or periods after termination options) are only
included in the lease term if the lease is reasonably certain to be extended (or not terminated).
The lease term is reassessed if an option is actually exercised (or not exercised) or the Company becomes obliged to exercise
(or not exercise) it. The Company reassesses whether it is reasonably certain to exercise an extension option (or not to exercise
such option) upon the occurrence of either a significant event or a significant change in circumstances that is within the control
of the lessee.
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(F) Net defined benefit liabilities (assets)
The net defined benefit liabilities (assets) depend on a number of factors that are determined on an actuarial basis using a
number of assumptions including the discount rate. Any changes in these assumptions will impact the carrying amount of the
net defined benefit liability. The Company, in consideration of the interest rates of high-quality corporate bonds, determines
the appropriate discount rate at the end of each year. This is the interest rate that is used to determine the present value of
estimated future cash outflows expected to be required to settle the net defined benefit liabilities (assets). The principal
actuarial assumptions associated with the net defined benefit liabilities (assets) are based on the current market expectations.
(G) Impairment of goodwill and intangible assets that have an indefinite useful life
At the end of each reporting period, the Company tests whether goodwill and intangible assets that have an indefinite useful
life have become impaired by comparing the carrying amounts of assets or cash-generating units to the recoverable amounts.
The recoverable amounts of assets or cash-generating units have been determined based on value-in-use calculations, and
these calculations are based on estimates.
(H) Income taxes
Income taxes on the Company’s taxable income from operating activities are subject to various tax laws and determinations
of each tax authority across various countries throughout the world. There is uncertainty in determining the eventual tax effects
on the taxable income from operating activities. The Company has recognized current tax and deferred tax at the end of the
fiscal year based on the best estimate of future taxes payable as a result of operating activities. However, the resulting deferred
income tax assets and liabilities may not equal the actual future taxes payable and such difference may impact the current tax
and deferred income tax assets and liabilities upon the determination of eventual tax effects.
Regarding taxes payable in Korea, if a certain portion of taxable income is not used for investments or for increases in wages
or dividends, in accordance with the Tax System For Recirculation of Corporate Income, the Company is liable to pay
additional income tax calculated based on the Korean tax law. The current and deferred tax at the end of the fiscal year are
based on the best estimate of future taxes payable, which can differ from the actual future taxes payable as a result of changes
in investments, wages and dividends; this results in an additional uncertainty in measuring the final tax effects.
The Company assesses uncertainty over a tax treatment. When the Company concludes it is not probable that the taxation
authority will accept an uncertain tax treatment, the Company will reflect the effect of uncertainty for each uncertain tax
treatment by using either of the following methods, depending on which method the Company expects to better predict the
resolution of the uncertainty:
- The most likely amount: the single most likely amount in a range of possible outcomes.
- The expected value: the sum of the probability-weighted amounts in a range of possible outcomes.
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
4. Financial Instruments by Category
(A) Categorizations of financial assets and liabilities as of December 31, 2021 and 2020 are as follows:
(1) As of December 31, 2021
(In millions of Korean won)
Financial assets
measured at
amortized cost
Financial assets
measured at fair
value through
other
comprehensive
income
Financial assets
measured at fair
value through
profit or loss
Other
financial assets
1
Total
Financial assets
Cash and cash equivalents
39,031,415 - - - 39,031,415
Short-term financial instruments
81,708,986 - - - 81,708,986
Short-term financial assets at
amortized cos
t
3,369,034 - - - 3,369,034
Short-term financial assets at
fair value through profit or loss - - 40,757 - 40,757
Trade receivables
40,713,415 - - - 40,713,415
Financial assets at fair value through
other comprehensive income - 13,965,839 - - 13,965,839
Financial assets at fair value through
p
rofit or loss - - 1,525,344 - 1,525,344
Other
8,711,973 - 279,127 49,089 9,040,189
Total
173,534,823 13,965,839 1,845,228 49,089 189,394,979
1
Other financial assets include derivatives designated as hedging instruments which are not subject to categorizations.
(
In millions o
f
Korean won
)
Financial liabilities
measured at
amortized cost
Financial liabilities
measured at
fair value through
p
rofit or loss
Other financial
liabilities
1
Total
Financial liabilities
Trade payables
13,453,351 - - 13,453,351
Short-term borrowings
2,131,692 - 11,556,101 13,687,793
Other payables
14,126,970 - - 14,126,970
Current portion of long-term liabilities
518,065 - 811,903 1,329,968
Debentures
508,232 - - 508,232
Long-term borrowings
1,500 - 2,864,656 2,866,156
Long-term other payables
2,562,158 - - 2,562,158
Other
10,444,290 323,526 13,868 10,781,684
Total
43,746,258 323,526 15,246,528 59,316,312
1
Other financial liabilities include collateralized borrowings, lease liabilities and derivatives designated as hedging instruments,
which are not subject to categorizations.
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(2) As of December 31, 2020
(
In millions o
f
Korean won
)
Financial assets
measured at
amortized cost
Financial assets
measured at
fair value
through other
comprehensive
income
Financial assets
measured at
fair value
through profit
or loss
Other
financial assets
1
Total
Financial assets
Cash and cash equivalents 29,382,578 - - - 29,382,578
Short-term financial instruments
92,441,703 - - - 92,441,703
Short-term financial assets at
amortized cos
t
2,757,111 - - - 2,757,111
Short-term financial assets at
fair value through profit or loss
- - 71,451 - 71,451
Trade receivables
30,965,058 - - - 30,965,058
Financial assets at fair value through
other comprehensive income
- 12,575,216 - - 12,575,216
Financial assets at fair value through
p
rofit or loss - - 1,202,969 - 1,202,969
Other
6,395,766 - 215,797 23,310 6,634,873
Total
161,942,216 12,575,216 1,490,217 23,310 176,030,959
1
Other financial assets include derivatives designated as hedging instruments which are not subject to categorizations.
(
In millions o
f
Korean won
)
Financial liabilities
measured at
amortized cost
Financial liabilities
measured at
fair value through
p
rofit or loss
Other financial
liabilities
1
Total
Financial liabilities
Trade payables 9,739,222 - - 9,739,222
Short-term borrowings
2,278,386 - 14,275,043 16,553,429
Other payables
10,645,637 - - 10,645,637
Current portion of long-term liabilities
5,318 - 710,781 716,099
Debentures
948,137 - - 948,137
Long-term borrowings
- - 1,999,716 1,999,716
Long-term other payables
1,272,128 2,176 - 1,274,304
Others
9,354,624 242,698 41,930 9,639,252
Total
34,243,452 244,874 17,027,470 51,515,796
1
Other financial liabilities include collateralized borrowings, lease liabilities, and derivatives designated as hedging instruments,
which are not subject to categorizations.
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(B) Net gains or losses on each category of financial assets and liabilities for the years ended December 31, 2021 and 2020 are
as follows:
(1) 2021
(In millions of Korean won)
Financial assets
measured at
amortized cost
Financial assets
measured
at fair value
through other
comprehensive
income
Financial assets
measured
at fair value
through
profit or loss
Other financial
assets
1
Total
Financial assets
Gain (loss) on valuation
(
other com
p
rehensive income
)
- 2,980,896 - 27,715 3,008,611
Gain (loss) on valuation/disposal
(p
rofit or loss
)
(1,969) - 420,100 437 418,568
Reclassification from
other comprehensive income
to profit or loss
- - - (148) (148)
Interest income
1,278,051 - 227 - 1,278,278
Foreign exchange differences
(
p
rofit or loss
)
29,834 - - - 29,834
Dividend income
- 133,532 2,308 - 135,840
Impairment/reversal
(
p
rofit or loss)
(27,194) - - - (27,194)
1
Other financial assets include derivatives designated as hedging instruments which are not subject to categorizations.
(In millions of Korean won)
Financial liabilities
measured at
amortized cost
Financial liabilities
measured at
fair value through
profit or loss
Other financial
liabilities
1
Total
Financial liabilities
Gain (loss) on valuation
(
other com
p
rehensive income
)
- - 22,695 22,695
Gain (loss) on valuation/disposal
(
p
rofit or loss
)
- (65,368) - (65,368)
Reclassification from
other comprehensive income
to profit or loss
- - (121) (121)
Interest expense
(213,477) - (218,063) (431,540)
Foreign exchange differences
(
p
rofit or loss)
362,820 - 3,447 366,267
1
Other financial liabilities include collateralized borrowings, lease liabilities, and derivatives designated as hedging instruments,
which are not subject to categorizations.
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(2) 2020
(In millions of Korean won)
Financial assets
measured at
amortized cost
Financial assets
measured
at fair value
through other
comprehensive
income
Financial assets
measured
at fair value
through
profit or loss
Other financial
assets
1
Total
Financial assets
Gain (loss) on valuation
(other comprehensive income)
- 2,502,733 - (1,823) 2,500,910
Gain (loss) on valuation/disposal
(profit or loss)
(6,725) - 206,850 126 200,251
Reclassification from
other comprehensive income
to
p
rofit or loss
- - - 981 981
Interest income
1,974,141 - 317 - 1,974,458
Foreign exchange differences
(
p
rofit or loss
)
(886,631) - - - (886,631)
Dividend income
- 149,617 2,823 - 152,440
Impairment/reversal
(
p
rofit or loss)
(42,824) - - - (42,824)
1
Other financial assets include derivatives designated as hedging instruments which are not subject to categorizations.
(In millions of Korean won)
Financial liabilities
measured at
amortized cost
Financial liabilities
measured at
fair value through
profit or loss
Other financial
liabilities
1
Total
Financial liabilities
Gain on valuation
(other comprehensive loss)
- - (22,995) (22,995)
Gain (loss) on valuation/disposal
(
p
rofit or loss)
- 86,371 (154) 86,217
Reclassification from
other comprehensive income
to
p
rofit or loss
- - 12,368 12,368
Interest expense
(302,782) - (280,231) (583,013)
Foreign exchange differences
(
p
rofit or loss
)
180,110 - 9,730 189,840
1
Other financial liabilities include collateralized borrowings, lease liabilities, and derivatives designated as hedging instruments,
which are not subject to categorizations.
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
5. Transfer of Financial Assets
Trade receivables of the Company have been discounted through factoring agreements with banks during the years ended
December 31, 2021 and 2020. Trade receivables provided as collaterals in such factoring transactions do not meet the
requirements for asset derecognition as risks and rewards are not
substantially transferred in the event of a debtor default due
to the recourse obligation, etc. Financial liabilities recognized in relation to these transactions are included as ‘short-term
borrowings’ on the consolidated statements of financial position (refer to Note 12).
The following table presents a breakdown of discounted trade receivables as of December 31, 2021 and 2020:
(
In millions o
f
Korean won
)
December 31, 2021 December 31, 2020
Carrying amount of the discounted trade receivables
1
11,556,101 14,275,043
Carrying amount of the related borrowings 11,556,101 14,275,043
1
The discounted trade receivables include the intercompany balances.
6. Financial Assets at Fair Value
(A) Details of financial assets at fair value as of December 31, 2021 and 2020 are as follows:
(1) Financial assets at fair value through other comprehensive income
(In millions of Korean won) December 31, 2021 December 31, 2020
Non-current portion
Equity instruments
13,965,839
12,575,216
(2) Financial assets at fair value through profit or loss
(In millions of Korean won) December 31, 2021 December 31, 2020
Current portion
Debt instruments 40,757 71,451
Non-current portion
Equity instruments 905,094 819,144
Debt instruments 620,250 383,825
Subtotal 1,525,344 1,202,969
Total 1,566,101 1,274,420
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(B) Changes in financial assets at fair value for the years ended December 31, 2021 and 2020 are as follows:
(1) Financial assets at fair value through other comprehensive income
(In millions of Korean won) 2021 2020
Balance as of January 1 12,575,216 8,920,712
Acquisition 1,146,868 245,497
Disposal (3,551,604) (23,872)
Fair value valuation gain 3,653,253 3,423,908
Other 142,106 8,971
Balance as of December 31 13,965,839 12,575,216
(2) Financial assets at fair value through profit or loss
(
In millions o
f
Korean won
)
2021 2020
Balance as of January 1 1,202,969 1,049,004
Acquisition 208,262 84,184
Disposal (142,406) (37,554)
Fair value valuation gain 275,447 122,042
Other (18,928) (14,707)
Balance as of December 31 1,525,344 1,202,969
(C) Changes in gain on valuation of financial assets at fair value through other comprehensive income for the years ended
December 31, 2021 and 2020 are as follows:
(
In millions o
f
Korean won
)
2021 2020
Balance as of January 1 7,071,415 3,663,998
Fair value valuation gain 3,653,253 3,423,908
Reclassification to retained earnings due to disposals (4,501,688) (16,491)
Balance as of December 31 6,222,980 7,071,415
Income tax effects on equity and non-controlling interests (1,606,341) (2,095,659)
Total 4,616,639 4,975,756
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(D) Details of listed equity securities of financial assets at fair value as of December 31, 2021 and 2020 are as follows:
(In millions of Korean won,
number of shares and percentage)
December 31, 2021 December 31, 2020
Number of
shares owne
d
Percentage of
ownershi
p
1
(%) Ac
q
uisition cos
t
Carrying amount
(Market value
)
Carrying amount
(Market value
)
Samsung Heavy Industries 134,027,281 15.2 932,158 759,935 708,882
Hotel Shilla 2,004,717 5.1 13,957 156,368 164,988
iMarket Korea
647,320 1.9 324 6,926 5,658
SFA
3,644,000 10.2 38,262 131,366 140,658
Wonik Holdings
3,518,342 4.6 30,821 17,521 22,306
Wonik IPS
3,701,872 7.5 32,428 156,589 163,808
ASML Holding N.V
6,297,787 1.5 363,012 5,974,280 3,350,532
Wacom Co., Ltd
8,398,400 5.0 62,013 79,256 76,589
BYD Company Limited
2,380,100 0.1 79,049 118,862 1,695,488
Corning Incorporated
80,000,000 9.4 3,980,636 3,530,893 -
Other
535,628 1,155,113 1,012,825
Total
6,068,288 12,087,109 7,341,734
1
Ownership represents the Company’s ownership of the total ordinary shares issued by each entity.
7. Trade and Non-Trade Receivables
(A) Trade and non-trade receivables as of December 31, 2021 and 2020 are as follows:
December 31, 2021 December 31, 2020
(
In millions o
f
Korean won
)
Trade Non-trade Trade Non-trade
Receivables 41,250,034 5,572,176 31,369,364 4,065,404
Less: Loss allowance (310,880) (72,805) (318,731) (59,487)
Subtotal 40,939,154 5,499,371 31,050,633 4,005,917
Less: Non-current portion (225,739) (1,002,114) (85,575) (401,378)
Current portion 40,713,415 4,497,257 30,965,058 3,604,539
(B) Movements in the loss allowance for receivables for the years ended December 31, 2021 and 2020 are as follows:
2021 2020
(In millions of Korean won) Trade Non-trade Trade Non-trade
Balance as of January 1 318,731 59,487 340,410 58,666
Bad debt expense (reversal) 17,990 9,009 40,006 2,869
Write-off (19,095) (2,424) (40,384) (103)
Other (6,746) 6,733 (21,301) (1,945)
Balance as of December 31 310,880 72,805 318,731 59,487
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(C) The details of trade and non-trade receivables classified by past due date to measure expected credit losses as of December
31, 2021 and 2020 are as follows:
December 31, 2021 December 31, 2020
(In millions of Korean won) Trade Non-trade Trade Non-trade
Receivables not past due 39,677,264 5,125,414 29,395,528 3,585,376
Past due
1
:
Less than 31 days overdue 1,229,479 196,783 1,269,398 129,054
31 days to 90 days overdue 36,545 51,804 137,568 42,603
Over 90 days overdue 306,746 198,175 566,870 308,371
Subtotal 1,572,770 446,762 1,973,836 480,028
Total 41,250,034 5,572,176 31,369,364 4,065,404
1
The Company does not consider trade and non-trade receivables that are overdue for less than or equal to 31 days as impaired.
(D) The maximum exposure to current credit risk is equivalent to the carrying amount of receivables as of December 31, 2021.
The Company has in place insurance contracts covering the Company’s major receivables.
8. Inventories
Inventories as of December 31, 2021 and 2020 are as follows:
December 31, 2021 December 31, 2020
(In millions of Korean
won
)
Gross
amount
Valuation
allowance
Carrying
amount
Gross
amount
Valuation
allowance
Carrying
amount
Finished goods 13,000,200 (719,621) 12,280,579 9,711,668 (323,782) 9,387,886
Work in process 13,967,331 (493,713) 13,473,618 12,144,887 (326,797) 11,818,090
Raw materials and supplies 14,864,486 (679,645) 14,184,841 10,464,679 (673,913) 9,790,766
Materials in transit 1,445,366 - 1,445,366 1,046,403 - 1,046,403
Total 43,277,383 (1,892,979) 41,384,404 33,367,637 (1,324,492) 32,043,145
The inventories recognized as expense for the year ended December 31, 2021, amount to W 164,319,031 million
(2020: W 143,172,743 million). The amount includes loss on valuation of inventories.
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
9. Investments in Associates and Joint Ventures
(A) Changes in investments in associates and joint ventures for the years ended December 31, 2021 and 2020 are as
follows:
(In millions of Korean won) 2021 2020
Balance as of January 1 8,076,779 7,591,612
Acquisition 47,090 83,280
Disposal (34,664) -
Share of profit 729,614 506,530
Other
1
113,432 (104,643)
Balance as of December 31 8,932,251 8,076,779
1
Other consists of dividends, impairment, and reclassification.
(B) Major investments in associates and joint ventures as of December 31, 2021 are as follows:
(1) Investments in associates
Investee Nature of relationship with associate
Percentage of
ownership (%)
1
Principal
business
location
Fiscal
period-end
Samsung Electro-
Mechanics Co., Ltd.
Manufacture and supply electronic components
including passive components, circuit boards,
and modules
23.7 Korea December
Samsung SDS Co., Ltd.
Provide IT services including computer
programming, system integration and management
and logistical services
22.6 Korea December
Samsung Biologics Co., Ltd. New business investment 31.5 Korea December
Samsung SDI Co., Ltd.
2
Manufacture and supply electronic components
including secondary cell batteries
19.6 Korea December
Cheil Worldwide, Inc. Advertising agency 25.2 Korea December
1
Ownership represents the Company’s ownership of the total ordinary shares issued by each entity.
2
The Company’s ownership of ordinary shares outstanding is 20.6%.
(2) Investments in joint ventures
Investee Nature of relationship with joint venture
Percentage of
ownership (%)
1
Principal
business
location
Fiscal
period-end
Samsung Corning
Advanced Glass, LLC
Manufacture and supply industrial glass devices 50.0 Korea December
1
Ownership represents the Company’s ownership of the total ordinary shares issued by each entity.
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(C) Details of investments in associates and joint ventures as of December 31, 2021 and 2020 are as follows:
(1) Investments in associates
(In millions of Korean won) December 31, 2021
Investee Ac
q
uisition cost
Net asset value of
e
q
uit
y
shares
1
Carr
y
in
g
amount
Samsung Electro-Mechanics 359,237 1,573,570 1,556,386
Samsung SDS 147,963 1,632,847 1,652,155
Samsung Biologics 443,193 1,571,809 1,577,664
Samsung SDI 1,242,605 2,960,235 2,529,650
Cheil Worldwide 506,162 320,301 621,292
Other 644,903 578,547 793,748
Total 3,344,063 8,637,309 8,730,895
1
The Company’s portion of net asset value of associates is based on the Company’s percentage of ownership.
(In millions of Korean won) December 31, 2020
Investee Ac
q
uisition cost
Net asset value of
e
q
uit
y
shares
1
Carr
y
in
g
amount
Samsung Electro-Mechanics 359,237 1,351,864 1,333,819
Samsung SDS 147,963 1,506,421 1,525,857
Samsung Biologics 443,193 1,448,259 1,453,012
Samsung SDI 1,242,605 2,612,629 2,326,037
Cheil Worldwide 506,162 288,877 586,057
Other 620,233 458,182 666,506
Total 3,319,393 7,666,232 7,891,288
1
The Company’s portion of net asset value of associates is based on the Company’s percentage of ownership.
(2) Investments in joint ventures
(In millions of Korean won) December 31, 2021
Investee Ac
q
uisition cost
Net asset value of
e
q
uit
y
shares
1
Carr
y
in
g
amount
Samsung Corning Advanced Glass 215,000 135,584 135,580
Other 259,994 67,517 65,776
Total 474,994 203,101 201,356
1
The Company’s portion of net asset value of joint ventures is based on the Company’s percentage of ownership.
(In millions of Korean won) December 31, 2020
Investee Ac
q
uisition cost
Net asset value of
e
q
uit
y
shares
1
Carr
y
in
g
amount
Samsung Corning Advanced Glass 215,000 123,360 123,356
Other 259,994 68,875 62,135
Total 474,994 192,235 185,491
1
The Company’s portion of net asset value of joint ventures is based on the Company’s percentage of ownership.
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(D) Details of the valuation of investments in associates and joint ventures using the equity method are as follows:
(1) For the year ended December 31, 2021
(
In millions o
f
Korean won
)
Balance as of
Januar
y
1
Share of profit
(loss)
Share of other
comprehensive
income Other
1
Balance as of
December 31
Samsung Electro-Mechanics 1,333,819 207,949 51,702 (37,084) 1,556,386
Samsung SDS 1,525,857 137,926 30,305 (41,933) 1,652,155
Samsung Biologics 1,453,012 124,979 (327) - 1,577,664
Samsung SDI 2,326,037 128,483 88,594 (13,464) 2,529,650
Cheil Worldwide 586,057 47,619 12,008 (24,392) 621,292
Samsung Corning Advanced Glass 123,356 12,376 (129) (23) 135,580
Other 728,641 70,282 29,826 30,775 859,524
Total 8,076,779 729,614 211,979 (86,121) 8,932,251
1
Other consists of acquisitions, disposals, dividends, impairment and reclassification.
(2) For the year ended December 31, 2020
(
In millions o
f
Korean won
)
Balance as of
Januar
y
1 Share of
p
rofit
Share of other
comprehensive
income Other
1
Balance as of
December 31
Samsung Electro-Mechanics 1,152,734 199,249 1,298 (19,462) 1,333,819
Samsung SDS 1,499,571 100,231 (36,057) (37,888) 1,525,857
Samsung Biologics 1,377,043 73,135 2,834 - 1,453,012
Samsung SDI 2,233,516 62,106 43,878 (13,463) 2,326,037
Cheil Worldwide 570,215 44,433 (4,780) (23,811) 586,057
Samsung Corning Advanced Glass 173,742 (51,175) 789 - 123,356
Other 584,791 78,551 (51,259) 116,558 728,641
Total 7,591,612 506,530 (43,297) 21,934 8,076,779
1
Other consists of acquisitions, disposals, dividends, impairment, and reclassification.
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(E) Summary of the condensed financial information of major associates and joint ventures
(1) Summary of condensed financial information of major associates and dividends received from associates as of
December 31, 2021 and 2020, and for the years ended December 31, 2021 and 2020 are as follows:
2021
(In millions of Korean won)
Samsung
Electro-
Mechanics
Samsung
SDS
Samsung
Biologics
Samsung
SDI
Cheil
Worldwide
1. Condensed financial information
Condensed statements of financial position :
Current assets 4,598,269 7,575,968 2,823,175 7,444,907 2,018,598
Non-current assets 5,343,105 2,941,464 5,146,835 18,388,286 523,513
Current liabilities 2,234,657 2,370,290 1,107,295 6,461,286 1,224,222
Non-current liabilities 835,592 703,442 1,871,614 4,175,208 190,622
Non-controlling interests 152,177 214,980 - 492,435 10,125
Condensed statements of comprehensive income:
Revenue 9,675,036 13,630,002 1,568,007 13,553,220 3,325,712
Profit from continuing operations, net of tax
1
1,055,411 611,171 393,589 1,169,801 165,485
Profit from discontinued operation, net of tax
1
(162,966) - - - -
Other comprehensive income (loss)
1
151,809 134,163 (1,270) 623,792 32,535
Total comprehensive income
1
1,044,254 745,334 392,319 1,793,593 198,020
Details of adjustments from the carrying amount of investments in associates
Net assets (a)
6,718,948 7,228,720 4,991,101 14,704,264 1,117,142
Ownership percentage (b)
2
23.4% 22.6% 31.5% 20.1% 28.7%
Net assets of equity shares (a x b)
1,573,570 1,632,847 1,571,809 2,960,235 320,301
Goodwill
7,081 26,801 3,645 - 298,779
Intercompany transactions and other
3
(24,265) (7,493) 2,210 (430,585) 2,212
Carrying amount of associates
1,556,386 1,652,155 1,577,664 2,529,650 621,292
2. Dividends from associates
Dividends 24,770 41,933 - 13,463 24,392
1
Profit (loss) attributable to owners of the investee
2
Ownership percentage includes ordinary and preference shares.
3
Consists of unrealized gains and losses and other differences.
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2020
(In millions of Korean won)
Samsung
Electro-
Mechanics Samsung SDS
Samsung
Biologics
Samsung
SDI
Cheil
Worldwide
1. Condensed financial information
Condensed statements of financial position:
Current assets 4,150,303 6,581,153 1,751,347 5,657,405 1,742,270
Non-current assets 5,075,196 2,573,766 4,672,854 15,876,827 500,194
Current liabilities 1,914,880 1,720,757 589,301 4,983,633 1,046,224
Non-current liabilities 1,400,223 575,054 1,236,117 3,191,672 180,710
Non-controlling interests 138,107 190,081 - 381,311 7,988
Condensed statements of comprehensive income:
Revenue 8,208,738 11,017,432 1,164,777 11,294,770 2,747,922
Profit from continuing operations, net of tax
1
595,938 443,455 240,975 574,723 157,400
Profit from discontinued operation, net of tax
1
8,024 - - - -
Other comprehensive income (loss)
1
(33,475) (134,669) 3,354 144,901 (14,795)
Total comprehensive income
1
570,487 308,786 244,329 719,624 142,605
Details of adjustments from the carrying amount of investments in associates
Net assets (a)
5,772,289
6,669,027 4,598,783 12,977,616 1,007,542
Ownership percentage (b)
2
23.40%
22.60% 31.50% 20.10% 28.70%
Net assets of equity shares (a x b)
1,351,864
1,506,421 1,448,259 2,612,629 288,877
Goodwill
7,081
26,801 3,645 - 298,779
Intercompany transactions and other
3
(25,126)
(7,365) 1,108 (286,592) (1,599)
Carrying amount of associates
1,333,819
1,525,857 1,453,012 2,326,037 586,057
2. Dividends from associates
Dividends 19,462 41,933 - 13,463 23,811
1
Profit (loss) attributable to owners of the investee.
2
Ownership percentage includes ordinary and preference shares.
3
Consists of unrealized gains and losses and other differences.
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(2) Summary of condensed financial information of major joint ventures and dividends received from joint ventures as
of December 31, 2021 and 2020, and for the years ended December 31, 2021 and 2020 are as follows:
Samsung Corning Advanced Glass
(
In millions o
f
Korean won
)
2021 2020
Condensed financial information
Condensed statements of financial position:
Current assets 163,083 133,896
Non-current assets 141,411 153,792
Current liabilities 31,779 39,151
Non-current liabilities 1,547 1,817
Condensed statements of comprehensive income:
Revenue 204,130 144,016
Profit (loss) from continuing operations, net of tax
1
24,753 (12,668)
Profit (loss) from discontinued operations, net of tax
1
- (89,681)
Other comprehensive income
1
(305) 1,578
Total comprehensive income
1
24,448 (100,771)
Details of adjustments from the carrying amount of investments in joint ventures
Net assets (a) 271,168 246,720
Ownership percentage (b) 50.00% 50.00%
Net assets of equity shares (a x b) 135,584 123,360
Intercompany transactions and other
2
(4) (4)
Carrying amount of joint ventures 135,580 123,356
Dividends from joint ventures
Dividends - -
1
Profit (loss) attributable to owners of the parent company.
2
Consists of unrealized gains and losses and other differences.
(3) Profit (loss) attributable to owners of the parent company from associates and joint ventures which are not individually
material for the years ended December 31, 2021 and 2020 are as follows:
2021 2020
(In millions of Korean won) Associates Joint ventures Associates Joint ventures
Profit from continuing operations 68,646 1,636 77,296 1,255
Other comprehensive income (loss) 29,258 568 (49,185) (2,074)
Total comprehensive income (loss) 97,904 2,204 28,111 (819)
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(F) Details of marketable investments in associates as of December 31, 2021 and 2020 are as follows:
(In millions of Korean won
and number o
f
shares
)
December 31, 2021 December 31, 2020
Number of shares held Market value Market value
Samsung Electro-Mechanics 17,693,084 3,494,384 3,149,369
Samsung SDS 17,472,110 2,734,385 3,118,772
Samsung Biologics 20,836,832 18,815,659 17,211,223
Samsung SDI 13,462,673 8,818,051 8,454,559
Cheil Worldwide 29,038,075 663,520 598,184
(G) Other matters
On July 12, 2018, the Korea Securities and Futures Commission determined an initial measure following an investigation
relating to Samsung Biologics Co., Ltd., an associate of the Company, and its accounting for its investment in Samsung
Bioepis Co., Ltd, a joint venture between Biogen Therapeutics Inc. and Samsung Biologics Co., Ltd. This measure included
a recommendation to dismiss the director in charge, prosecution charges, and external auditor designation by the regulator,
on the basis that the Joint Venture Agreement was not disclosed in the notes to the financial statements. On November 14,
2018, the Korea Securities and Futures Commission determined a second measure which included a penalty of W
8,000
million, a recommendation to dismiss the CEO, a requirement to restate its financial statements, and further prosecution
charges.
To prove justification of its accounting treatment, Samsung Biologics Co., Ltd. filed a suit for cancellation of the
aforementioned measures to the Seoul Administrative Court, which is currently in progress. On September 24, 2020, the
Seoul Administrative Court announced a decision to cancel the first measure charged by the Korea Securities and Futures
Commission, and suspended its execution until the final rulings of the appeal. On October 16, 2020, the Korea Securities and
Futures Commission appealed and the litigation is in progress at Seoul High Court. Samsung Biologics Co., Ltd. also filed
for suspending the execution of the initial and second measures. On January 22, 2019 and February 19, 2019, the Seoul
Administrative Court pronounced decisions to suspend the second and initial measure, respectively, until the final rulings.
The Korea Securities and Futures Commission immediately appealed against the decisions but the appeals were dismissed
by the Seoul High Court on May 13, 2019 and May 24, 2019, in relation to the second and first measures, respectively. On
May 23, 2019 and June 10, 2019, The Korea Securities and Futures Commission re-appealed against the dismissals relating
to the second and first measures, respectively. On September 6, 2019 and October 11, 2019, the Supreme Court of Korea
dismissed the Korea Securities and Futures Commission’s re-appeal relating to the second and first measures, respectively,
and confirmed the decision to suspend the execution of these measures.
Although the future outcome of the administrative litigation cannot be estimated, should Samsung Biologics Co., Ltd. be
required to restate its financial statements to amend its historical accounting treatment relating to its investment in Samsung
Bioepis Co., Ltd., the Company’s share of profit or loss relating to its equity method investment, the amount of investment
in associates, and retained earnings, for the years ended December 31, 2015 and onwards, and the profit on disposal of
investment for the year ended December 31, 2016, may be impacted. Given the timing of completion and the final result of
the administrative litigation between Samsung Biologics Co., Ltd. and the Korea Securities and Futures Commission is
uncertain and cannot currently be estimated, it is not possible for the Company to recognize the effects of these proceedings
in the current period consolidated financial statements.
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
10. Property, Plant and Equipment
(A) Changes in property, plant and equipment for the years ended December 31, 2021 and 2020 are as follows:
2021
(In millions of Korean won) Land
Buildings and
structures
Machinery
and equipment
Construction in
progress Other Total
Balance as of January 1
9,772,156 34,552,004 60,994,130 20,175,917 3,458,685 128,952,892
Acquisition cost
9,850,942 55,026,369 233,056,501 20,175,917 10,496,584 328,606,313
Accumulated depreciation
and impairmen
t
(78,786) (20,474,365) (172,062,371) - (7,037,899) (199,653,421)
Acquisitions and capital
expenditures
1
117,933 6,608,620 43,862,769 (2,320,520) 1,696,362 49,965,164
Depreciation
(47,517) (3,174,672) (26,552,958) - (1,510,062) (31,285,209)
Disposals/scrap
(49,683) (91,964) (18,307) (469) (6,200) (166,623)
Impairment(reversal)
- (12,135) (131,985) - (7,082) (151,202)
Other
2
37,265 987,587 1,372,648 154,396 61,621 2,613,517
Balance as of December 31
9,830,154 38,869,440 79,526,297 18,009,324 3,693,324 149,928,539
Acquisition cost
9,943,570 62,651,459 274,909,571 18,009,324 11,958,070 377,471,994
Accumulated depreciation
and impairmen
t
(113,416) (23,782,019) (195,383,274) - (8,264,746) (227,543,455)
1
The capitalized borrowing costs are W 24,908 million and interest rate used to calculate the borrowing costs eligible for capitalization is 0.3%~1.1%.
2
Other includes effects of changes in foreign currency exchange rates and effects of the offset related to government grants.
2020
(In millions of Korean won) Land
Buildings and
structures
Machinery
and equipment
Construction in
progress Other Total
Balance as of January 1 9,774,554 30,469,620 52,149,936 23,930,019 3,501,345 119,825,474
Acquisition cost 9,828,309 48,839,439 211,416,021 23,930,019 10,061,981 304,075,769
Accumulated depreciation
and impairmen
t
(53,755) (18,369,819) (159,266,085) - (6,560,636) (184,250,295)
Acquisitions and capital
expenditures
1
141,197 8,524,794 32,907,696 (3,443,884) 1,281,811 39,411,614
Depreciation (45,707) (2,978,741) (22,780,113) - (1,311,174) (27,115,735)
Disposals, scrap (20,308) (276,235) (108,935) (618) (104,829) (510,925)
Impairment (reversal) - (3,627) (316,723) - (4,806) (325,156)
Reclassification to
assets hel
d
-fo
r
-sale (29,275) (540,258) (181,744) (8,947) (6,390) (766,614)
Other
2
(48,305) (643,549) (675,987) (300,653) 102,728 (1,565,766)
Balance as of December 31 9,772,156 34,552,004 60,994,130 20,175,917 3,458,685 128,952,892
Acquisition cost 9,850,942 55,026,369 233,056,501 20,175,917 10,496,584 328,606,313
Accumulated depreciation
and impairmen
t
(78,786) (20,474,365) (172,062,371) - (7,037,899) (199,653,421)
1
The capitalized borrowing costs are W 3,897 million and interest rate used to calculate the borrowing costs eligible for capitalization is 0.6%.
2
Other includes the cumulative effect of changes in accounting policies, effects of changes in foreign currency exchange rates and effects
of the offset related to government grants.
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(B) Changes in the right-of-use assets included in the property, plant and equipment for the years ended December 31, 2021
and 2020 are as follows:
2021
(In millions of Korean won) Land
Buildings and
structures
Machinery
and equipment Other Total
Balance as of January 1 441,603 2,105,360 109,372 313,538 2,969,873
Acquisition 112,419 1,326,322 136,680 173,490 1,748,911
Depreciation (57,699) (553,324) (54,233) (66,868) (732,124)
Disposals/scrap (398) (60,742) (1,265) (4,790) (67,195)
Other
1
30,029 24,354 505 (23,786) 31,102
Balance as of December 31 525,954 2,841,970 191,059 391,584 3,950,567
1
Other includes effects of changes in foreign currency exchange rates.
2020
(In millions of Korean won) Land
Buildings and
structures
Machinery
and equipment Other Total
Balance as of January 1
1
438,095 2,361,717 130,965 381,142 3,311,919
Acquisition 116,683 593,157 42,447 58,536 810,823
Depreciation (64,078) (715,950) (56,618) (97,886) (934,532)
Disposals/scrap (8,968) (160,267) (6,526) (24,720) (200,481)
Reclassification to
assets hel
d
-fo
r
-sale (29,275) - (9) (131) (29,415)
Other
2
(10,854) 26,703 (887) (3,403) 11,559
Balance as of December 31 441,603 2,105,360 109,372 313,538 2,969,873
1
The beginning balance is the financial lease assets recognized in accordance with previous accounting standard, Korean IFRS 1017 Lease
2
Other includes the cumulative effect of changes in accounting policies and effects of changes in foreign currency exchange rates.
(C) Details of depreciation of property, plant and equipment for the years ended December 31, 2021 and 2020 are as
follows:
(In millions of Korean won) 2021 2020
Cost of sales 27,868,090 23,824,208
Selling and administrative expenses, and etc. 3,417,119 3,291,527
Total 31,285,209 27,115,735
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
11. Intangible Assets
(A) Changes in intangible assets for the years ended December 31, 2021 and 2020 are as follows:
(In millions of Korean won)
2021
Intellectual
property rights
Development
cost Membership Goodwill Other Total
Balance as of January 1 4,033,904 371,391 229,987 5,673,642 8,159,578 18,468,502
External acquisitions 333,073 - 8,757 - 3,648,484 3,990,314
Internally generated/developed - 193,708 - - - 193,708
Amortization (278,288) (321,608) - - (2,362,256) (2,962,152)
Disposals/scrap (51,236) - (195) - (1,696) (53,127)
Impairment (reversal) (52,101) - (1,586) - - (53,687)
Other
1
167,884 (6,581) 4,256 170,617 316,510 652,686
Balance as of December 31 4,153,236 236,910 241,219 5,844,259 9,760,620 20,236,244
1
Other includes the cumulative effect of changes in foreign currency exchange rates and others.
(In millions of Korean won)
2020
Intellectual
property rights
Development
cost Membership Goodwill Other Total
Balance as of January 1
4,365,510 740,774 222,499 6,250,439 9,124,282 20,703,504
External acquisitions
300,399 - 1,785 - 1,356,267 1,658,451
Internally generated/developed
- 109,482 - - - 109,482
Amortization
(297,465) (455,990) - - (2,466,426) (3,219,881)
Disposals/scrap
(30,055) - (343) - (912) (31,310)
Impairment (reversal)
(189,155) (3,474) 7,091 (570,817) (161,739) (918,094)
Reclassification to
assets hel
d
-fo
r
-sale - - (313) - (1,108) (1,421)
Other
1
(115,330) (19,401) (732) (5,980) 309,214 167,771
Balance as of December 31
4,033,904 371,391 229,987 5,673,642 8,159,578 18,468,502
1
Other includes effects of reclassification of licenses and changes in foreign currency exchange rates.
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(B) Goodwill
Goodwill is allocated to each cash-generating unit. Details of goodwill as of December 31, 2021 and 2020 are as follows:
(In millions of Korean won) December 31, 2021 December 31, 2020
CE segment 529,979 524,383
IM segment 684,751 657,146
DS segment
Semiconductor 160,026 153,520
Display panel 138,061 138,754
Harman segment 4,330,139 4,199,334
Other 1,303 505
Total 5,844,259 5,673,642
Goodwill impairment reviews are performed annually, and the recoverable amounts of cash-generating units have been
determined based on the value-in-use calculations, etc. These calculations generally use the pre-tax cash flow projections
based on the financial budgets approved by management covering a five-year period, unless it is reasonable to use long-term
financial budgets longer than five years in the new technology business. Perpetual cash flows beyond the five-year period are
extrapolated using a constant growth rate assumption. The growth rate applied was capped at the long-term average growth
rate for the industry
.
(C) Details of amortization of intangible assets for the years ended December 31, 2021 and 2020 are as follows:
(In millions of Korean won) 2021 2020
Cost of sales 2,136,937 2,387,508
Selling and administrative expenses and other 825,215 832,373
Total 2,962,152 3,219,881
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
12. Borrowings
(A) Details of the carrying amounts of borrowings as of December 31, 2021 and 2020 are as follows:
(
In millions o
f
Korean won
)
Financial institutions
Interest rates (%)
as of Dec 31, 2021 December 31, 2021 December 31, 2020
Short-term borrowings
Collateralized borrowings
1
Woori Bank and others 0.0~13.3 11,556,101 14,275,043
Non-collateralized borrowings Citibank and others 0.0~30.0 2,131,692 2,278,386
Total 13,687,793 16,553,429
Current portion of long-term borrowings
Bank borrowings BNP 18.3~19.6 40,415 -
Lease liabilities
2
CSSD and others 3.3 811,902 710,781
Total 852,317 710,781
Long-term borrowings
Bank borrowings
Industrial Bank of Korea 1.5 1,500 -
Lease liabilities
2
CSSD and others 3.3 2,864,656 1,999,716
Total 2,866,156 1,999,716
1
Collateralized borrowings are secured by trade receivables.
2
Interest expenses arising from the lease liabilities for the years ended December 31, 2021 and 2020 amount to W 106,877 million and
W 109,040 million, respectively, which were determined using the weighted average incremental borrowing rate. The right-of-use assets
are pledged as collateral to the lessor in the event of default. Short-term lease payments and low- valued asset lease payments that are
not included in measurement of lease liabilities during the years ended December 31, 2021 and 2020 amount to W 129,686 million and
W 120,151 million, respectively.
(B) Maturities of
Long-term borrowings outstanding as of December 31, 2021 are as follows:
(In millions of Korean won) Long-term borrowings
Repayment terms
2022 40,415
2023 -
2024 -
2025 -
2026 and thereafter 1,500
Total 41,915
(C) Maturities of lease liabilities outstanding as of December 31, 2021 are as follows:
(In millions of Korean won) Lease liabilities
Repayment terms
2022 910,368
2023 748,573
2024 602,194
2025 471,056
2026 and thereafter 1,333,320
Total 4,065,511
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
13. Debentures
(A) Details of the carrying amounts of debentures as of December 31, 2021 and 2020 are as follows:
(
In millions o
f
Korean won
)
Issue date Due date
Interest rates (%)
as of Dec 31, 2021 December 31, 2021 December 31, 2020
US dollar denominated straight bonds
1
1997.10.2 2027.10.1 7.7
35,565 38,080
(
US$ 30 million
)
(
US$ 35 million
)
US dollar denominated debenture bonds
2
2015.5.11 2025.5.15 4.2
474,200 435,200
(
US$ 400 million
)
(
US$ 400 million
)
EURO denominated debenture bonds
3
2015.5.27 2022.5.27 2.0
469,819 468,383
(
EUR 350 million
)
(
EUR 350 million
)
Less: Discounts
(708) (853)
Add: Premium
7,007 12,645
Less: Current portion
(477,651) (5,318)
Total
508,232 948,137
1
US dollar denominated straight bonds are repaid annually for twenty years after a ten-year grace period from the date of issuance.
Interest is paid semi-annually.
2
Harman International Industries, Inc. issued US dollar denominated debenture bonds. These debentures are repaid on the date of 10 years
maturity and interest is paid semi-annually.
3
Harman Finance International, SCA issued Euro denominated debenture bonds. These debentures are repaid on the date of 7 years
maturity and interest is paid annually.
(B) Maturities of debentures outstanding as of December 31, 2021 are as follows:
(In millions of Korean won) Debentures
Repayment terms
2022 475,747
2023 5,928
2024 5,928
2025 480,128
2026 and thereafter 11,853
Total 979,584
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
14. Net Defined Benefit Liabilities (Assets)
(A) Details of net defined benefit liabilities (assets) recognized in the statements of financial position as of December 31,
2021 and 2020 are as follows:
(In millions of Korean won) December 31, 2021 December 31, 2020
Present value of funded defined benefit obligations 14,391,209 12,400,964
Present value of unfunded defined benefit obligations 266,976 548,035
Subtotal 14,658,185 12,948,999
Fair value of plan assets (17,001,891) (13,840,043)
Total (2,343,706) (891,044)
(B) The components of defined benefit costs recognized in profit or loss for the years ended December 31, 2021 and 2020
are as follows:
(In millions of Korean won) 2021 2020
Current service cost 1,247,857 1,131,355
Net interest income (38,326) (9,801)
Past service cost 2,718 2,377
Other 3,847 2,193
Total 1,216,096 1,126,124
The amount recognized as an expense of defined contribution plans for the years ended December 31, 2021 and 2020 are
W
144,248 million and W 164,055 million, respectively.
(C) The expenses related to the defined benefit plans recognized in the statements of profit or loss for the years ended
December 31, 2021 and 2020 are as follows:
(In millions of Korean won) 2021 2020
Cost of sales 480,331 498,006
Selling and administrative expenses and other 735,765 628,118
Total 1,216,096 1,126,124
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(D) Changes in the defined benefit obligations for the years ended December 31, 2021 and 2020 are as follows:
(In millions of Korean won) 2021 2020
Balance as of January 1 12,948,999 11,148,069
Current service cost 1,247,857 1,131,355
Interest cost 396,730 328,919
Past service cost 2,718 2,377
Remeasurement:
Actuarial gains or losses arising from changes in demographic assumptions (34,014) (19,030)
Actuarial gains or losses arising from changes in financial assumptions 126,297 622,647
Other 473,668 285,440
Benefits paid (519,043) (514,853)
Other
1
14,973 (35,925)
Balance as of December 31 14,658,185 12,948,999
1
Other includes effects of changes in foreign currency exchange rates and business combinations.
(E) Changes in the fair value of plan assets for the years ended December 31, 2021 and 2020 are as follows:
(In millions of Korean won) 2021 2020
Balance as of Januar
y
1
13,840,043 11,267,121
Interest income on plan assets
435,056 338,720
Remeasurement of plan assets
(146,239) (108,066)
Contributions by employe
r
3,263,765 2,623,122
Benefits
p
ai
d
(397,678) (295,520)
Othe
r
1
6,944 14,666
Balance as of December 31
17,001,891 13,840,043
1
Other includes effects of changes in foreign currency exchange rates and business combinations.
Expected contributions to post-employment benefit plans to be paid in 2022 for the year ended December 31, 2021 are
W 1,749,206 million.
(F) Plan assets as of December 31, 2021 and 2020 consist of the following:
(In millions of Korean won) December 31, 2021 December 31, 2020
Principal guaranteed fixed income financial instruments and other 16,935,143 13,799,119
Other 66,748 40,924
Total 17,001,891 13,840,043
Plan assets are mostly invested in instruments which have a quoted price in active markets.
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(G) The principal actuarial assumptions as of December 31, 2021 and 2020 are as follows:
(In percentage) December 31, 2021 December 31, 2020
Discount rate 0.2~7.2 0.2 ~ 7.2
Salary growth rate (including the effects of inflation) 1.5~10.0 1.5 ~ 10.0
(H) The sensitivity analysis of the defined benefit obligations as of December 31, 2021 and 2020 to changes in the weighted
principal assumptions is as follows:
(In percentage) December 31, 2021 December 31, 2020
Discount rate
1%p increase 91 91
1%p decrease 110 111
Salary growth rate
1%p increase 110 111
1%p decrease 91 91
(I) The weighted average maturity of the defined benefit obligations is 9.53 years as of December 31, 2021.
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
15. Provisions
Changes in provisions for the year ended December 31, 2021 are as follows:
(
In millions o
f
Korean won
)
Warrant
y
(A)
Royalty
ex
p
enses (B)
Long-term
incentives (C)
Other
(D, E) Total
Balance as of January 1 1,765,882 1,304,091 651,298 1,679,720 5,400,991
Charged to profit or loss 1,628,023 606,265 288,712 2,562,479 5,085,479
Payment (1,456,266) (464,463) (208,673) (1,093,757) (3,223,159)
Other
1
40,655 115,916 2,946 257,038 416,555
Balance as of December 31 1,978,294 1,561,809 734,283 3,405,480 7,679,866
1
Other includes effects of changes in foreign currency exchange rates.
(A) The Company accrues warranty reserves for estimated costs of quality assurance, exchanges, repairs, recalls, and future
services based on historical experience and terms of warranty programs.
(B) The Company recognizes provisions for the estimated royalty expenses that are under negotiation with counterparties.
The timing and amount of payment depend on the settlement of the negotiation.
(C) The Company has a long-term incentive plan for its executives based on a three-year management performance criteria
and recognizes a provision for the estimated incentive cost for the accrued period.
(D) The Company records provisions for future expenses expected to be incurred for products that have been discontinued
from manufacturing and sales.
(E) The Company makes provisions for the carrying amounts of emission rights held by the Company and the emission in
excess of the emission rights for the applicable years. Details of emission rights and liabilities as of December 31, 2021
are as follows:
(1) Allocated amount of emission permits and the estimated amount of emission as of December 31, 2021 are as follows:
(In ten thousand metric tons) December 31, 2021
Allocated emission permits 1,689
Estimated volume of emission 1,946
As of December 31, 2021, emission permits allocated to the Company for the remaining plan periods are 65,420 thousand tons.
(2) Changes in the emission permits rights for the year ended December 31, 2021 are as follows:
(In millions of Korean won) 2021
Balance as of January 1 44,865
Increase 1,422
Decrease (213)
Balance as of December 31 46,074
(3) Changes in emissions liabilities for the year ended December 31, 2021 are as follows:
(In millions of Korean won) 2021
Balance as of January 1 31,876
Charged to profit or loss 13,374
Submission (201)
Balance as of December 31 45,049
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
16. Commitments and Contingencies
(A) Litigation
The Company is involved in various claims, disputes, and investigations conducted by regulatory bodies, which arose during
the normal course of business with numerous entities. Although the outflow of resources and timing of these matters are
uncertain, as of the reporting date, the Company believes the outcome will not have a material impact on the financial position
of the Company.
(B) Other commitments
(1) As of December 31, 2021, the Company has trade financing agreements, trade notes receivable discounting facilities,
and loan facilities with accounts receivable pledged as collateral with 25 financial institutions including Woori Bank,
with a combined limit of up to W 20,836,952 million. In addition, the Company has a trade financing agreement (up
to W 14,513,419 million) with 19 financial institutions including Shinhan Bank and loan facilities with accounts
receivable pledged as collateral and other financial agreements (up to W 2,154,508 million).
(2) As of December 31, 2021, unfulfilled agreements relating to the acquisition of property, plant and equipment and
intangible assets amount to W 9,683,328 million.
17. Contract Liabilities
The Company has recognized contract liabilities related to contracts with customers as follows:
(In millions of Korean won) December 31, 2021 December 31, 2020
Contract liabilities
1
13,235,108
11,902,130
1
Contract liabilities include advances received, accrued expenses, other current liabilities and others.
The revenue recognized during the year ended December 31, 2021 in relation to carried-forward contract liabilities as of
January 1, 2021 amounts to W 969,300 million.
18. Share Capital
As of December 31, 2021, the Company’s total number of authorized shares is 25,000,000,000 shares (W 100 per share). The
Company has issued 5,969,782,550 shares of ordinary shares and 822,886,700 shares of preference shares as of December 31,
2021, excluding the retired shares. As of the December 31, 2021, the number of shares outstanding is the same as the number
of shares issued above, and no changes were made to the number of shares outstanding during the years ended December 31,
2021 and 2020. Due to the retirement of shares, the total par value of the shares issued is W 679,267 million (ordinary shares
of W 596,978 million and preference shares of W 82,289 million), which does not agree with paid-in capital of W 897,514
million.
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
19. Retained Earnings
(A) Retained earnings as of December 31, 2021 and 2020 consist of the following:
(In millions of Korean won) December 31, 2021 December 31, 2020
Discretionary reserve, etc. 170,814,107 174,739,565
Unappropriated retained earnings 122,250,656 96,328,646
Total 293,064,763 271,068,211
(B) Details of interim and year-end dividends are as follows:
(1) Interim dividends (Record date: March 31, 2021 and 2020, June 30, 2021 and 2020 and September 30, 2021 and
2020)
(In millions of Korean won and number of shares) 2021 2020
1
st
Quarter
Number of shares eligible for dividends
Ordinary shares 5,969,782,550 5,969,782,550
Preference shares 822,886,700 822,886,700
Dividend rate (based on par value) 361% 354%
Dividend amount
Ordinary shares 2,155,092 2,113,303
Preference shares 297,062 291,302
Total 2,452,154 2,404,605
2
nd
Quarter
Number of shares eligible for dividends
Ordinary shares 5,969,782,550 5,969,782,550
Preference shares 822,886,700 822,886,700
Dividend rate (based on par value) 361% 354%
Dividend amount
Ordinary shares 2,155,092 2,113,303
Preference shares 297,062 291,302
Total 2,452,154 2,404,605
3
rd
Quarter
Number of shares eligible for dividends
Ordinary shares 5,969,782,550 5,969,782,550
Preference shares 822,886,700 822,886,700
Dividend rate (based on par value) 361% 354%
Dividend amount
Ordinary shares 2,155,092 2,113,303
Preference shares 297,062 291,302
Total 2,452,154 2,404,605
(2) Year-end dividends (Record date: December 31, 2021 and 2020)
(
In millions o
f
Korean won and number o
f
shares
)
2021 2020
Number of shares eligible for dividends
Ordinary shares 5,969,782,550 5,969,782,550
Preference shares 822,886,700 822,886,700
Dividend rate (based on par value)
Ordinary shares 361% 1932%
Preference shares 362% 1933%
Dividend amount
Ordinary shares 2,155,092 11,533,620
Preference shares 297,884 1,590,640
Total 2,452,976 13,124,260
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
20. Other Components of Equity
Other components of equity as of December 31, 2021 and 2020 are as follows:
(In millions of Korean won) December 31, 2021 December 31, 2020
Gain on valuation of financial assets at fair value through other comprehensive income 4,616,639 4,975,756
Share of other comprehensive loss of associates and joint ventures 166,835 (58,629)
Loss on overseas business translation (3,824,733) (10,977,583)
Remeasurement of net defined benefit assets (3,173,977) (2,653,425)
Other 86,763 26,726
Total (2,128,473) (8,687,155)
21. Expenses by Nature
Expenses by nature for the years ended December 31, 2021 and 2020 consist of the following:
(In millions of Korean won) 2021 2020
Changes in finished goods, work in process, and other (4,517,560) (3,234,887)
Raw materials used, merchandise purchased, and other 95,625,437 81,792,130
Wages and salaries 28,207,782 25,054,684
Post-employment benefit 1,360,344 1,290,179
Depreciation 31,285,209 27,115,735
Amortization 2,962,152 3,219,881
Welfare 5,073,002 4,655,347
Utilities 4,928,929 4,717,553
Outsourcing 5,594,602 5,409,889
Advertising 5,376,015 4,269,043
Sales promotion expenses 6,286,159 5,861,954
Other 45,788,872 40,661,604
Total
1
227,970,943 200,813,112
1
Equal to the sum of cost of sales and selling and administrative expenses in the consolidated statements of profit or loss.
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
22. Selling and Administrative Expenses
Selling and administrative expenses for the years ended December 31, 2021 and 2020 are as follows:
(
In millions o
f
K
orean won
)
2021 2020
Selling and administrative expenses
Wages and salaries 7,245,981 6,763,143
Post-employment benefit 310,823 279,711
Commissions 6,192,568 5,678,703
Depreciation 1,529,507 1,593,365
Amortization 543,544 492,314
Advertising 5,376,015 4,269,043
Sales promotion expenses 6,286,159 5,861,954
Transportation 2,792,690 2,218,422
Service charges 4,039,642 3,368,401
Other 4,840,946 4,688,270
Subtotal 39,157,875 35,213,326
Research and development expenses
Total expenses 22,595,434 21,220,972
Capitalized expenses (193,708) (109,482)
Subtotal 22,401,726 21,111,490
Total 61,559,601 56,324,816
23. Other Non-Operating Income and Expenses
Details of other non-operating income and expenses for the years ended December 31, 2021 and 2020 are as follows:
(
In millions o
f
Korean won
)
2021 2020
Other non-operating income
Dividend income 135,840 152,440
Rental income 132,801 147,104
Gain on disposal of property, plant and equipment 340,400 154,249
Other 1,596,654 930,275
Total 2,205,695 1,384,068
(In millions of Korean won) 2021 2020
Other non-operating expenses
Loss on disposal of property, plant and equipment 75,586 87,673
Donations 270,927 311,421
Other 1,709,458 2,089,808
Total 2,055,971 2,488,902
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
24. Financial Income and Expenses
Details of financial income and expenses for the years ended December 31, 2021 and 2020 are as follows:
(In millions of Korean won) 2021 2020
Financial income
Interest income 1,278,278 1,974,458
Interest income from financial assets measured at amortized cost 1,278,051 1,974,141
Interest income from financial assets measured at fair value through profit or loss 227 317
Foreign exchange differences 6,525,676 9,270,039
Gains from derivatives 739,233 1,023,103
Total 8,543,187 12,267,600
(
In millions o
f
Korean won
)
2021 2020
Financial expenses
Interest expenses 431,540 583,013
Interest expenses from financial liabilities measured at amortized cost 213,477 302,782
Other financial liabilities 218,063 280,231
Foreign exchange differences 6,486,093 9,868,591
Losses from derivatives 786,921 866,451
Total 7,704,554 11,318,055
The Company recognizes foreign exchange gains and losses arising from foreign currency transactions and translation as
financial income and expenses.
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
25. Income Tax Expense
(A) Income tax expense for the years ended December 31, 2021 and 2020 consists of the following:
(In millions of Korean won) 2021 2020
Current taxes
Current tax on profits for the year 11,135,521 7,361,115
Adjustments recognize in the current year (195,237) 339,673
Subtotal 10,940,284 7,700,788
Deferred taxes
Changes in deferred taxes arising from unused tax credits (332,975) (325,880)
Changes in deferred taxes arising from temporary differences 2,172,312 2,312,926
Changes in deferred taxes arising from unused tax losses 507,313 264,349
Other 157,443 (14,898)
Subtotal 2,504,093 2,236,497
Items charged directly to equity - -
Income tax expense 13,444,377 9,937,285
(B) The tax on the Company’s profit before income tax differs from the theoretical amount that would arise using the
weighted-average statutory tax rate applicable to profits of the Company as follows:
(
In millions o
f
Korean won
)
2021 2020
Profit before income tax 53,351,827 36,345,117
Tax calculated at weighted average of applicable tax rates
1
15,760,775 8,972,156
Adjustments:
Permanent differences (464,839) (269,002)
Temporary differences for which no deferred income tax was recognized (80,250) (130,892)
Tax credits and exemptions (4,627,136) (1,902,680)
Results of interest in subsidiaries, etc. 2,267,026 2,774,410
Impact of changes in tax rates 8,691 (5,019)
Other 580,110 498,312
Subtotal (2,316,398) 965,129
Income tax expense 13,444,377 9,937,285
1
The weighted average of statutory tax rates are applied to the respective profits of the Company applicable to each tax authority as of
December 31, 2021 and 2020.
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(C) The movement in deferred income tax assets and liabilities resulting from the tax effect of temporary differences for
the years ended December 31, 2021 and 2020 are as follows:
(1) 2021
Temporary differences Deferred income tax assets (liabilities)
(In millions of Korean won)
Balance as of
January 1
Increase
(Decrease)
Balance as of
December 31
Balance as of
January 1
Increase
(Decrease)
Balance as of
December 31
Deferred tax arising from temporary differences
Revaluation of land (3,420,886) 14,261 (3,406,625) (940,744) 3,922 (936,822)
Investments in subsidiaries, associates and
joint ventures
1
(111,924,859) (14,891,920) (126,816,779) (19,172,409) (1,442,145) (20,614,554)
Accumulated depreciation and other (2,285,841) (1,528,757) (3,814,598) (992,777) (779,016) (1,771,793)
Accrued income (139,406) 117,253 (22,153) (31,486) 38,339 6,853
Provisions, accrued expenses and other 13,121,416 2,858,039 15,979,455 3,764,808 796,066 4,560,874
Foreign currency translation (24,683) 87,298 62,615 (10,077) 22,153 12,076
Asset impairment losses 1,855,765 (721,717) 1,134,048 453,486 (194,600) 258,886
Other 562,628 (1,054,853) (492,225) (21,726) (617,031) (638,757)
Subtotal (102,255,866) (15,120,396) (117,376,262) (16,950,925) (2,172,312) (19,123,237)
Deferred tax arising from tax losses
Unused tax losses 3,618,601 (1,603,153) 2,015,448 943,794 (507,313) 436,481
Deferred tax arising from tax credits
Unused tax credits 1,328,527 358,538 1,687,065 1,333,387 332,975 1,666,362
Deferred tax recognized in equity
Gain (loss) on valuation of financial assets
at fair value through other
comprehensive income and othe
r
(1,660,421) (1,914,673) (3,575,094) (909,176) (2,246,134) (3,155,310)
Remeasurement of
net defined benefit assets
3,735,320 712,190 4,447,510 1,047,075 191,638 1,238,713
Subtotal 2,074,899 (1,202,483) 872,416 137,899 (2,054,496) (1,916,597)
Deferred tax assets 4,275,000 (13,786) 4,261,214
Deferred tax liabilities (18,810,845) (4,387,360) (23,198,205)
Total (14,535,845) (4,401,146) (18,936,991)
1
Deferred tax assets are not recognized if it is probable that the temporary differences will not reverse in the foreseeable future for
investments in subsidiaries, associates and joint ventures.
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(2) 2020
Temporary differences Deferred income tax assets (liabilities)
(In millions of Korean won)
Balance as of
January 1
Increase
(Decrease)
Balance as of
December 31
Balance as of
January 1
Increase
(Decrease)
Balance as of
December 31
Deferred tax arising from temporary differences
Revaluation of land (3,417,804) (3,082) (3,420,886) (939,896) (848) (940,744)
Investments in subsidiaries, associates and
joint ventures
1
(96,397,199) (15,527,660) (111,924,859) (16,669,138) (2,503,271) (19,172,409)
Accumulated depreciation and other (4,529,334) 2,243,493 (2,285,841) (982,556) (10,221) (992,777)
Accrued income (248,662) 109,256 (139,406) (61,332) 29,846 (31,486)
Provisions, accrued expenses and other 12,251,647 869,769 13,121,416 3,282,747 482,061 3,764,808
Foreign currency translation (97,929) 73,246 (24,683) (30,227) 20,150 (10,077)
Asset impairment losses 1,790,729 65,036 1,855,765 492,332 (38,846) 453,486
Other 2,252,684 (1,690,056) 562,628 270,071 (291,797) (21,726)
Subtotal (88,395,868) (13,859,998) (102,255,866) (14,637,999) (2,312,926) (16,950,925)
Deferred tax arising from tax losses
Unused tax losses 4,563,095 (944,494) 3,618,601 1,208,143 (264,349) 943,794
Deferred tax arising from tax credits
Unused tax credits 1,311,498 17,029 1,328,527 1,007,507 325,880 1,333,387
Deferred tax recognized in equity
Loss on valuation of financial assets at
fair value through other comprehensive
income and othe
r
(2,928,550) 1,268,129 (1,660,421) (895,922) (13,254) (909,176)
Remeasurement of
net defined benefit assets 2,738,197 997,123 3,735,320 769,512 277,563 1,047,075
Subtotal (190,353) 2,265,252 2,074,899 (126,410) 264,309 137,899
Deferred tax assets 4,505,049 (230,049) 4,275,000
Deferred tax liabilities (17,053,808) (1,757,037) (18,810,845)
Total (12,548,759) (1,987,086) (14,535,845)
1
Deferred tax assets are not recognized if it is probable that the temporary differences will not reverse in the foreseeable future for
investments in subsidiaries, associates and joint ventures.
The Company assessed that the deferred tax asset is realizable as the estimated average annual taxable income in future years
exceeds the tax loss carry forwards and tax credit carry forwards to be reversed in each accounting period. Temporary
differences in which deferred tax effects were not recognized due to uncertainty regarding the ultimate realizability of such
assets as of December 31, 2021 and 2020 are as follows:
(In millions of Korean won) 2021 2020
Unused tax losses 706,512 751,255
Unused tax credits 47,929 37,816
Expected expiry dates of unused tax losses and credits for which no deferred tax asset is recognized are as follows:
(In millions of Korean won) 2021 2021 2022 2023 and after
Unused tax losses - 1,316 - 705,196
Unused tax credits 13,302 3,145 24,364 7,118
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(D) Details of the period when the deferred tax assets (liabilities) are recovered (settled) as of December 31, 2021 and 2020
are as follows:
(
In millions o
f
Korean won
)
December 31, 2021 December 31, 2020
Deferred tax assets
Deferred tax assets to be recovered within 12 months 2,999,046 2,839,030
Deferred tax assets to be recovered after more than 12 months 1,262,168 1,435,970
Subtotal 4,261,214 4,275,000
Deferred tax liabilities
Deferred tax liabilities to be settled after more than 12 months (23,198,205) (18,810,845)
Total (18,936,991) (14,535,845)
26. Earnings per Share
(A) Basic earnings per share
Basic earnings per share for the years ended December 31, 2021 and 2020 are calculated as follows:
(1) Ordinary shares
(
In millions o
f
Korean won, thousands o
f
number o
f
s
hare
s
)
2021 2020
Profit for the year attributable to owners of the parent company 39,243,791 26,090,846
Profit for the year available for ordinary shares 34,488,944 22,929,390
Weighted-average number of ordinary shares outstanding 5,969,783 5,969,783
Basic earnings per ordinary share (in Korean won) 5,777 3,841
(2) Preference shares
(In millions of Korean won, thousands of number of shares) 2021 2020
Profit for the year attributable to owners of the parent company 39,243,791 26,090,846
Profit for the year available for preference shares 4,754,847 3,161,456
Weighted-average number of preference shares outstanding 822,887 822,887
Basic earnings per preference share (in Korean won) 5,778 3,842
(B) Diluted earnings per share
The Company does not have dilutive potential ordinary shares and as a result, basic earnings per share and diluted earnings
per share are the same for the years ended December 31, 2021 and 2020.
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
27. Statements of Cash Flows
(A) The Company used the indirect method to present cash flows from operating activities. Adjustments and changes in assets
and liabilities arising from operating activities for the years ended December 31, 2021 and 2020 are as follows:
- Adjustments
(In millions of Korean won) 2021 2020
Adjustments:
Income tax expense 13,444,377 9,937,285
Financial income (2,485,679) (3,718,841)
Financial expenses 1,917,705 2,306,770
Post-employment benefits 1,360,344 1,290,179
Depreciation 31,285,209 27,115,735
Amortization 2,962,152 3,219,881
Bad debt expenses (reversal) 17,990 40,006
Dividend income (135,840) (152,440)
Share of profit of associates and joint ventures (729,614) (506,530)
Gain on disposal of property, plant and equipment (340,400) (154,249)
Loss on disposal of property, plant and equipment 75,586 87,673
Loss on valuation of inventories 1,735,741 1,000,763
Others (51,938) 1,152,322
Total 49,055,633 41,618,554
- Changes in assets and liabilities arising from operating activities
(In millions of Korean won) 2021 2020
Changes in assets and liabilities :
Decrease (increase) in trade receivables (7,302,604) 1,269,982
Decrease (increase) in non-trade receivables (204,348) 471,034
Increase in prepaid expenses (204,971) (16,429)
Decrease (increase) in inventories (9,712,379) (7,540,656)
Increase (decrease) in trade payables 1,027,017 3,885,742
Increase (decrease) in other payables 1,516,076 196,710
Increase (decrease) in advances received (24,371) 95,851
Increase (decrease) in withholdings 275,998 99,300
Increase (decrease) in accrued expenses 3,340,697 5,332,676
Increase (decrease) in provisions 1,862,320 944,417
Payment of post-employment benefits (606,870) (610,734)
Increase in plan assets (2,866,087) (2,327,602)
Other (3,387,362) (1,677,867)
Total (16,286,884) 122,424
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(B) Significant non-cash investing and financing transactions for the years ended December 31, 2021 and 2020 are as follows:
(
In millions o
f
Korean won
)
2021 2020
Valuation of financial assets at fair value through other comprehensive income 3,653,253 3,423,908
Valuation of investments in associates and joint ventures 211,979 43,297
Reclassification of construction in progress to property, plant and equipment 50,451,574 42,177,828
Acquisition of right-of-use assets (New lease contracts established) 1,748,911 810,823
Reclassification of current portion of debentures 477,651 5,318
Reclassification of current portion of long-term borrowings 852,317 710,781
(C) Changes in liabilities arising from financing activities for the years ended December 31, 2021 and 2020 are as follows:
(1) 2021
As of
January 1
Cash flows from
financing
activities
Non-cash transactions
As of
December 31
(In millions of Korean won)
New lease
contracts Other
1
Short-term borrowings 16,553,429 (2,616,943) - (248,693) 13,687,793
Debentures and long-term borrowings 3,663,952 (836,470) 1,748,912 127,962 4,704,356
Total 20,217,381 (3,453,413) 1,748,912 (120,731) 18,392,149
1
Other includes amortization and effects of changes in foreign currency exchange rates.
(2) 2020
As of
Januar
y
1
Cash flows from
financing
activities
Non-cash transactions
As of
December 31
(
In millions o
f
Korean won
)
New lease
contracts Other
1
Short-term borrowings 14,393,468 2,191,186 - (31,225) 16,553,429
Debentures and long-term borrowings 4,018,569 (850,452) 810,823 (314,988) 3,663,952
Total 18,412,037 1,340,734 810,823 (346,213) 20,217,381
1
Other includes amortization, effects of changes in foreign currency exchange rates, and the cumulative effect of changes in accounting
policies.
For the years ended December 31, 2021 and 2020, cash outflows from principal repayment (financial activities) amount to
W 876,437 million and W 823,935 million, respectively, and cash outflows due to interest expenses (operating activities)
in relation to the lease liabilities amount to W 106,880 million and W 109,040 million, respectively.
(D) The Company reported cash receipts and payments arising from transactions occurring frequently, of large gross amounts,
and with short-term maturities, such as short-term financial instruments, borrowings and other, on a net basis. As of
December 31, 2021, most of the Company’s cash and cash equivalents consist of bank deposits.
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
28. Financial Risk Management
The Company’s financial risk management focuses on minimizing the market risk, credit risk, and liquidity risk arising from
operating activities. To mitigate these risks, the Company implements and operates a financial risk policy and program that
closely monitors and manages such risks. In addition, the Company uses derivatives to hedge certain risk exposure.
The finance team mainly carries out the Company’s financial risk management. After implementing the global financial risk
management policies, the finance team periodically measures, evaluates, and hedges the financial risk and also establishes and
implements the global financial risk management policy.
The Company also manages the foreign exchange risk by monitoring foreign exchange rate fluctuations at local finance centers
across major regions (United States, United Kingdom, Singapore, China, Brazil, and Russia) and acting as an agent of foreign
exchange transactions. In addition, the Company manages the liquidity risk by utilizing a globally integrated finance structure.
The Company’s financial assets that are under the financial risk management are comprised of cash and cash equivalents,
short-term financial instruments, financial assets at amortized cost, trade receivables and others. The Company’s financial
liabilities under financial risk management are comprised of trade payables, borrowings, and others.
(A) Market risk
(1) Foreign exchange risk
The Company is exposed to the foreign exchange risk arising from its global operations performed in currencies other than
its functional currency. The major currencies that are exposed to the foreign exchange risk are the US dollar, Euro, and
Indian Rupee.
The Company focuses on minimizing the impact of the foreign exchange fluctuation by maintaining the equal amount of
assets and liabilities denominated in each foreign currency, irrespective of the foreign exchange fluctuation considerations.
To prevent the exchange position, the Company’s foreign exchange management policy requires the normal business
transactions, including imports and exports, as well as the financing transactions such as depositing and borrowing, to be in
local currency or for the cash-in currency to be matched up with the cash-out currency. Moreover, the Company periodically
evaluates and monitors the foreign exchange risk to efficiently mitigate such risk, and the speculative foreign exchange
transactions are strictly prohibited.
As of December 31, 2021 and 2020, when the currency rates change by 5%, the impact on profit or loss (before income tax
effects) arising from financial assets and liabilities denominated in foreign currencies other than the functional currency are
as follows:
(
In millions o
f
Korean won
)
December 31, 2021 December 31, 2020
Increase Decrease Increase Decrease
USD 250,489 (250,489) 174,400 (174,400)
EUR 107,519 (107,519) 112,244 (112,244)
INR 24,216 (24,216) 21,959 (21,959)
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(2) Interest rate risk
Risk of changes in interest rates for floating interest rate financial instruments is defined as the risk that the fair value of
components of the statements of financial position, and future cash flows of interest income (expenses) of a financial
instrument, will fluctuate because of the changes in market interest rates. The Company’s position with regard to interest
rate risk exposure is mainly driven by its floating interest rate debt obligations and interest-bearing deposits. The Company
implemented policies and operates to minimize uncertainty arising from changes in interest rates and financial expenses.
As of December 31, 2021 and 2020, changes in profit or loss (before income tax effects) as a result of a 1%p change in
interest rates on floating interest rate financial assets and liabilities are presented below:
(In millions of Korean won)
December 31, 2021 December 31, 2020
Increase Decrease Increase Decrease
Financial assets 71,131 (71,131) 81,013 (81,013)
Financial liabilities (18,779) 18,779 (2,195) 2,195
Net effect 52,352 (52,352) 78,818 (78,818)
(3) Price risk
The Company’s investment portfolio consists of direct and indirect investments in equity instruments classified as financial
assets at fair value through other comprehensive income and financial assets at fair value through profit or loss, which is in
line with the Company’s strategy.
As of December 31, 2021 and 2020, price fluctuation of marketable equity securities (listed stocks) by 1% would result in
changes in other comprehensive income (before income tax) of W 116,087 million and W 69,101 million, respectively, and
changes in profit before tax of W 4,784 million and W 4,316 million, respectively.
(B) Credit risk
Credit risk arises during the normal course of transactions and investing activities where clients or other parties fail to discharge
an obligation. The Company monitors and sets the client’s and the counterparty’s credit limit on a periodic basis based on the
client’s and counterparty’s financial conditions, default histories and other important factors. Adequate insurance coverage is
maintained for trade receivables related to the trading partners situated in higher risk countries.
Credit risk can arise from transactions with financial institutions which include financial instrument transactions such as cash
and cash equivalents, deposits, and derivative instruments. To minimize such risk, the Company transacts only with banks
which have strong international credit rating (S&P A and above), and all new transactions with financial institutions with no
prior transaction history are approved, managed and monitored by the Company’s finance team and the local finance center.
The Company generally enters into a financial agreement with no restrictions, such as debt ratio covenants, provision of
collateral and/or repayment of loans/ borrowings. The Company requires separate approvals for contracts with restrictions.
As of December 31, 2021 and December 31, 2020, the Company estimates that its maximum exposure to credit risk is the
carrying amount of its financial assets, net of impairment losses.
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(C) Liquidity risk
Due to large investments made by the Company, maintaining adequate levels of liquidity risk is critical. The Company strives
to achieve this goal by periodically forecasting its capital balance, estimating the required cash levels, and managing income
and expenses.
The Company manages its liquidity risk by periodically forecasting the projected cash flows. If abnormal signs are identified,
the Company works with the local finance center and provides liquidity support by utilizing a globally integrated finance
structure, such as Cash Pooling. In addition, the Company maintains a liquidity management process which provides an
additional financial support from the local finance center and the Company. The Cash Pooling program allows the sharing of
surplus funds among the entities and contributes to minimizing the liquidity risk and strengthening the Company’s competitive
position by reducing capital operation expenses and financial expenses.
For the need of large scale of liquidity, the Company secures the credit limit for overseas subsidiaries through payment
guarantees.
As of December 31, 2021 and 2020, the following table is an undiscounted cash flow analysis for financial liabilities according
to their remaining contractual maturity.
December 31, 2021
(In millions of
K
orean won)
Less than
3 months 4 - 6 months 7 – 12 months 1 - 5 years
More than
5 years
Financial liabilities 55,185,809 1,814,271 1,674,980 5,462,057 944,232
December 31, 2020
(In millions of
K
orean won)
Less than
3 months 4 – 6 months 7 - 12 months 1 - 5 years
More than
5 years
Financial liabilities 44,988,792 733,776 1,651,951 3,945,429 578,346
The table above shows the Company’s financial liabilities based on the remaining period at the consolidated statements of
financial position date until the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted
cash flows.
The Company’s derivative financial liabilities of W 113,590 million (December 31, 2020: W
47,704 million) has been
included within the less than 3 months bucket. These are the Company’s trading portfolio of derivative instruments, on a net
settlement term, of which the contractual maturities are not essential for understanding its cash flows. These contracts are
managed on a net fair value basis rather than by the maturity date. Net settled derivatives consist of forwards on currency rates
used by the Company to manage the exchange rate profile.
Derivatives that are settled on a gross basis by the delivery of underlying items, including derivatives for hedging, will be
settled within the next 60 months from the end of the reporting period. These derivative are not included in the table above.
There is no maximum liquidity risk exposure from those other than the above financial liabilities (e.g., payment and
performance guarantees) as of December 31, 2021.
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(D) Derivative financial instruments
The Company applies cash flow hedge accounting to hedge the foreign currency risk of forecasted transaction including
hedging the price risk associated with inventory. Details of derivative financial instruments that qualify as cash flow hedges
as of December 31, 2021 and 2020 are as follows:
(In millions of Korean won)
December 31, 2021 December 31, 2020
Assets Liabilities Assets Liabilities
Currency forward exchange contracts
Current items 34,075 11,090 11,311 22,236
Non-current items 16,790 3,280 11,999 19,694
Total 50,865 14,370 23,310 41,930
For the years ended December 31, 2021 and 2020, the Company recognizes the gains and losses relating to the effective
portion of changes in fair value of derivatives that are designated and qualify as cash flow hedges in other comprehensive
income, which amount to the gain of W 50,410 million (after tax) and loss of W 33,406 million (after tax), respectively, and
recognizes the gains and losses relating to the ineffective portion in profit or loss, which amount to the gain of W 451 million
(before tax) and loss of W 27 million (before tax), respectively. For the years ended December 31, 2021 and 2020, gains and
losses reclassified directly from other comprehensive income to profit or loss amount to the gain of W 1,117 million (after tax)
and the gain of W 4,664 million (after tax), respectively and the gains reclassified from other comprehensive income to the
carrying amount of inventory amount to the gain of W 1,539 million (after tax) and the gain of W 3,792 million (after tax),
respectively.
(E) Capital risk management
The purpose of capital management is to maintain a sound capital structure. The Company monitors capital on the basis of
credit ratings and debt ratio. Debt ratio is calculated by dividing the total liabilities by total equity in the financial statements.
The Company’s capital risk management policy has not changed since the prior reporting periods. The Company has
maintained an AA- and Aa3 credit ratings from S&P and Moody’s, respectively.
The total liabilities to equity ratios as of December 31, 2021 and 2020 are as follows:
(In millions of Korean won) December 31, 2021 December 31, 2020
Total liabilities 121,721,227 102,287,702
Total equity 304,899,931 275,948,016
Debt ratio 39.9% 37.1%
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(F) Fair value estimation
(1) Carrying amounts and fair values of financial instruments by category as of December 31, 2021 and 2020 are as
follows:
December 31, 2021 December 31, 2020
(In millions of Korean won) Carrying amount Fair value Carrying amount Fair value
Financial assets
Cash and cash equivalents 39,031,415
(*1)
29,382,578
(*1)
Short-term financial instruments 81,708,986
(*1)
92,441,703
(*1)
Short-term financial assets at amortized cost 3,369,034
(*1)
2,757,111
(*1)
Short-term financial assets at fair value
throu
g
h
p
rofit or loss 40,757 40,757 71,451 71,451
Trade receivables 40,713,415
(*1)
30,965,058
(*1)
Financial assets at fair value through
other com
p
rehensive income 13,965,839 13,965,839 12,575,216 12,575,216
Financial assets at fair value through
p
rofit or loss 1,525,344 1,525,344 1,202,969 1,202,969
Other
(
*
2)
9,040,189 328,216 6,634,873 239,107
Total financial assets 189,394,979 176,030,959
Financial liabilities
Trade payables 13,453,351
(*1)
9,739,222
(*1)
Short-term borrowings 13,687,793
(*1)
16,553,429
(*1)
Other payables 14,126,970
(*1)
10,645,637
(*1)
Current portion of long-term liabilities 1,329,968 554,106 716,099 5,318
- Current portion of long-term borrowing 852,317
(*1)(*3)
710,781
(*3)
- Current portion of debentures 477,651 554,106 5,318 5,318
Debentures 508,232 546,339 948,137 997,101
Long-term borrowings 2,866,156
(*1)(*3)
1,999,716
(*3)
Long-term other payables
(
*
2)
2,562,158
(*1)
1,274,304 2,176
Other
(
*
2)
10,781,684 337,394 9,639,252 284,628
Total financial liabilities 59,316,312 51,515,796
(*1)
Assets and liabilities whose carrying amount is a reasonable approximation of fair value are excluded from the fair value disclosures.
(*2)
Assets measured at the cost of W 8,711,973 million (December 31, 2020: W 6,395,766 million) and liabilities measured at the cost of
W 13,006,448 million (December 31, 2020: W 10,626,752 million) are excluded as the carrying amount is a reasonable estimation of fair
value.
(*3)
Lease liabilities, classified under the current portion of long-term liabilities and long-term borrowings, are excluded from the fair value
disclosures in accordance with Korean IFRS 1107.
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(2) Fair value hierarchy classifications of the financial instruments that are measured or disclosed at fair value as of
December 31, 2021 and 2020 are as follows:
December 31, 2021
(In millions of Korean won) Level 1 Level 2 Level 3 Total balance
1) Assets
Short-term financial assets at fair value
through profit or loss - 35,620 5,137 40,757
Financial assets at fair value through
other comprehensive income 11,608,708 - 2,357,131 13,965,839
Financial assets at fair value through
p
rofit or loss 478,401 - 1,046,943 1,525,344
Other
- 307,213 21,003 328,216
2) Liabilities
Current portion of debentures
- 554,106 - 554,106
Debentures
- 546,339 - 546,339
Other
- 331,956 5,438 337,394
December 31, 2020
(In millions of Korean won) Level 1 Level 2 Level 3 Total balance
1) Assets
Short-term financial assets at fair value
throu
g
h
p
rofit or loss - 58,763 12,688 71,451
Financial assets at fair value through
other com
p
rehensive income 6,910,108 - 5,665,108 12,575,216
Financial assets at fair value through
p
rofit or loss 431,626 - 771,343 1,202,969
Other
- 239,107 - 239,107
2) Liabilities
Current portion of debentures
- 5,318 - 5,318
Debentures
- 997,101 - 997,101
Long-term other payables
- - 2,176 2,176
Other
- 277,556 7,072 284,628
The levels of the fair value hierarchy and its application to financial assets and liabilities are described below.
ㆍ Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities
ㆍ Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly or indirectly
ㆍ Level 3: Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs)
The fair value of financial instruments traded in active markets is based on quoted market prices at the statements of financial
position date. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer,
broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring
market transactions on an arm’s length basis. The quoted market price used for financial assets held by the Company is the
current bid price. These instruments are included in Level 1. The instruments included in Level 1 are listed equity
investments, most of which are classified as financial assets at fair value through other comprehensive income.
The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is
determined by using valuation techniques. These valuation techniques maximize the use of observable market data where
it is available and rely as little as possible on the entity-specific estimates. If all significant inputs required for a fair value
of an instrument are observable, the instrument is included in Level 2.
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
If one or more of the significant inputs are not based on observable market data, the instrument is included in Level 3.
The Company performs the fair value measurements required for financial reporting purposes, including Level 3 fair values
and discusses valuation processes and results at least once every quarter in line with the Company’s quarterly reporting
dates. The Company’s policy is to recognize transfers between levels at the end of the reporting period, if corresponding
events or changes in circumstances have occurred.
Specific valuation techniques used to value financial instruments include:
ㆍ Quoted market prices or dealer quotes for similar instruments
ㆍThe fair value of forward foreign exchange contracts is determined using forward exchange rates at the statements of
financial position date, with the resulting value discounted back to present value
Other techniques, such as discounted cash flow analysis, are used to determine fair value for the remaining financial
instruments. For trade and other receivables that are classified as current assets, the book value approximates a reasonable
estimate of fair value.
(3) Valuation technique and the inputs
The Company utilizes a present value technique to discount future cash flows using a proper interest rate for corporate
bonds, government and public bonds, and bank debentures that are classified as Level 2 in the fair value hierarchy.
The following table presents the valuation technique and the inputs used for major financial instruments classified as Level
3 as of December 31, 2021.
(In millions of Korean won and percentage)
Classification
Fair
value
Valuation technique Level 3 inputs
Input range
(Wei
g
hted avera
g
e)
Financial assets at fair value through other comprehensive income
Samsung Venture Investment 22,198 Discounted cash flow
Permanent growth rate -1.0%~1.0%(0.0%)
Weighted average cost of capital 19.7%~21.7%(20.7%)
MiCo Ceramics Co., Ltd. 24,636 Discounted cash flow
Permanent growth rate -1.0%~1.0%(0.0%)
Weighted average cost of capital 14.7%~16.7%(15.7%)
TCL China Star Optoelectronics
Technology Co., Ltd. (CSOT)
1,309,315 Discounted cash flow
Permanent growth rate -1.0%~1.0%(0.0%)
Weighted average cost of capital 11.1%~13.1%(12.1%)
China Star Optoelectronics
Semiconductor Display
Technolo
gy
Ltd.
(
CSOSDT
)
418,040 Discounted cash flow
Permanent growth rate -1.0%~1.0%(0.0%)
Weighted average cost of capital
11.1%~13.1%(12.1%)
Others
Put option on equity instruments 21,003 Binomial model
Risk-free discount rate 0.8%~1.4%, 2.6%
Price volatility
17.7%~27.7%(22.7%)
23.6%~33.6%(28.6%)
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(4) Changes in Level 3 instruments for the years ended December 31, 2021 and 2020 are as follows:
(In millions of Korean won) 2021 2020
Financial assets
Balance as of January 1 6,449,139 7,407,684
Acquisitions 1,075,389 882,331
Disposals (402,782) (2,531,276)
Amount recognized in profit or loss 463,818 (55,103)
Amount recognized in other comprehensive income 1,543,511 829,764
Other (5,698,861) (84,261)
Balance as of December 31 3,430,214 6,449,139
(In millions of Korean won) 2021 2020
Financial liabilities
Balance as of January 1 9,248 2,316
Amount recognized in profit or loss (784) 196
Other (3,026) 6,736
Balance as of December 31 5,438 9,248
(5) Sensitivity analysis for recurring fair value measurements categorized within Level 3
Sensitivity analysis of financial instruments is performed to measure favorable and unfavorable changes in the fair value of
financial instruments which are affected by the unobservable parameters, using a statistical technique. When the fair value
is affected by more than two input parameters, the amounts represent the most favorable or unfavorable.
The results of the sensitivity analysis for the effect on profit or loss (before tax amount for other comprehensive income or
loss) from changes in inputs for major financial instruments which are categorized within Level 3 and subject to sensitivity
analysis are as follows:
(In millions of Korean won) Favorable changes Unfavorable changes
Classification Profit or loss Equity Profit or loss Equity
Financial assets at fair value through
other com
p
rehensive income
1
-150,377 -
(
109,915
)
Others
2
2,920 -
(
4,898
)
-
1
For equity securities, changes in fair value are calculated with the correlation between the growth rate (-1%~1%) and the discount rate,
which are significant unobservable inputs.
2
Changes were calculated based on the correlation between the fair value and price volatility (-5%~5%), which is a significant
unobservable input.
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
29. Segment Information
(A) Operating segment information
The chief operating decision-maker has been identified as the Management Committee. The Company determines operating
segments based on the units reported to the Management Committee. The Management Committee reviews the operating
profits of each operating segment in order to assess the performance and to make strategic decisions regarding the allocation
of resources to the segments.
Sales revenue consists mostly of product sales. The operating segments are product-based and are identified based on the
internal organization and revenue streams. As of the reporting date, the operating segments are comprised of CE, IM, DS
(Semiconductor and DP), Harman, and others.
The segment information for each reporting period is prepared after allocating the intercompany reconciliations to depreciation,
amortization of intangible assets and operating profits. Total assets and liabilities of each operating segment are excluded from
the disclosure as these have not been provided regularly to the Management Committee.
(1) For the year ended December 31, 2021
(In millions of
K
orean won) CE IM
DS
Harman Total
1
Total
1
Semi-
conductor DP
Net revenue 55,832,435 109,251,383 125,089,024 94,158,569 31,712,526 10,039,922 279,604,799
Depreciation 668,356 739,774 28,353,128 22,826,329 5,504,216 311,237 31,285,209
Amortization 74,182 1,264,152 1,179,743 930,002 239,821 229,772 2,962,152
Operating profit 3,645,721 13,647,575 33,734,199 29,199,292 4,457,365 599,097 51,633,856
1
Other operating segments are not separately disclosed.
(2) For the year ended December 31, 2020
(In millions of
K
orean won
)
CE IM
DS
Harman Total
1
Total
1
Semi-
conductor DP
Net revenue 48,173,324 99,587,493 103,036,146 72,857,803 30,585,715 9,183,748 236,806,988
Depreciation 582,929 855,573 24,330,737 18,124,847 6,183,077 264,928 27,115,735
Amortization 76,270 1,394,396 1,321,305 1,053,892 257,446 233,518 3,219,881
Operating profit 3,561,536 11,472,671 21,120,231 18,804,970 2,236,919 55,518 35,993,876
1
Other operating segments are not separately disclosed.
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(B) Regional information
The regional segment information provided to the Management Committee for the reportable segments as of and for the years
ended December 31, 2021 and 2020 are as follows:
(1) As of and for the year ended December 31, 2021
(In millions of Korean won) Korea America Europe
Asia
and Africa China
Intercompany
elimination Consolidated
Net revenue 43,971,631 97,903,868 50,323,287 41,834,609 45,571,404 - 279,604,799
Non-current assets
1
127,116,179 10,758,956 5,951,905 9,088,409 18,244,469 (995,135) 170,164,783
1
Financial instruments, deferred tax assets, investments in associates and joint ventures, and others are excluded from non-current assets.
(2) As of and for the year ended December 31, 2020
(In millions of Korean won) Korea America Europe
Asia
and Africa China
Intercompany
elimination Consolidated
Net revenue 37,035,377 78,305,571 45,967,097 37,692,286 37,806,657 - 236,806,988
Non-current assets
1
110,075,478 9,035,206 6,087,436 8,972,711 13,782,478 (531,915) 147,421,394
1
Financial instruments, deferred tax assets, investments in associates and joint ventures, and others are excluded from non-current assets.
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
30. Related Party Transactions
(A) Sale and purchase transactions
Sale and purchase transactions with related parties for the years ended December 31, 2021 and 2020 are as follows:
2021
(In millions of
K
orean won)
Name of com
p
an
y
1
Sales
Disposal of
non-current
assets Purchases
Purchase of
non-current
assets
Associates and
joint ventures
Samsung SDS 142,435 - 1,732,273 569,840
Samsung Electro-Mechanics 47,031 - 1,525,854 -
Samsung SDI 76,160 269 671,169 36,180
Cheil Worldwide 27,740 - 758,877 16
Other 1,288,094 68 12,361,130 118,099
Total 1,581,460 337 17,049,303 724,135
Other related
parties
Samsung C&T 79,183 32,705 334,386 4,045,297
Other 352,919 - 1,608,435 633,109
Total 432,102 32,705 1,942,821 4,678,406
Other
2
Samsung Engineering 787 - 48,284 2,404,314
S-1 13,819 - 469,979 35,762
Other 129,439 2,371 496,451 261,614
Total 144,045 2,371 1,014,714 2,701,690
1
Transactions with separate entities that are related parties of the Company.
2
Although these entities are not related parties of the Company in accordance with Korean IFRS 1024, they belong to the same large
enterprise group in accordance with the Monopoly Regulation and Fair Trade Act.
2020
(In millions of
K
orean won)
Name of com
p
an
y
1
Sales
Disposal of
non-current
assets Purchases
Purchase of
non-current
assets
Associates and
joint ventures
Samsung SDS 108,634 77 1,752,792 469,270
Samsung Electro-Mechanics 37,837 - 1,664,069 -
Samsung SDI 73,561 272 601,286 91,949
Cheil Worldwide 26,996 - 649,164 -
Other 1,059,045 30 10,556,776 166,842
Total 1,306,073 379 15,224,087 728,061
Other related
parties
Samsung C&T 94,736 43,214 328,484 4,057,233
Other 309,819 - 1,105,252 497,163
Total 404,555 43,214 1,433,736 4,554,396
Other
2
Samsung Engineering 4,104 - 70,073 1,946,409
S-1 17,199 - 436,211 43,336
Other 100,591 - 422,989 172,023
Total 121,894 - 929,273 2,161,768
1
Transactions with separate entities that are related parties of the Company.
2
Although these entities are not related parties of the Company in accordance with Korean IFRS 1024, they belong to the same large
enterprise group in accordance with the Monopoly Regulation and Fair Trade Act.
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(B) Balances of receivables and payables
Balances of receivables and payables arising from the sales and purchases of goods and services as of December 31, 2021
and 2020 are as follows:
December 31, 2021
(In millions of Korean won)
Name of company
1
Receivables Payables
2
Associates and
joint ventures
Samsung SDS 64,521 616,949
Samsung Electro-Mechanics 3,659 176,549
Samsung SDI 130,638 100,835
Cheil Worldwide 206 428,090
Other 397,709 1,361,554
Total 596,733 2,683,977
Other related parties
Samsung C&T 220,550 1,739,997
Other 20,306 251,766
Total 240,856 1,991,763
Other
3
Samsung Engineering 338 1,151,536
S-1 2,423 40,558
Other 48,703 185,256
Total 51,464 1,377,350
1
Balances due from and to separate entities that are related parties of the Company.
2
Payables and others include lease liabilities.
3
Although these entities are not related parties of the Company in accordance with Korean IFRS 1024, they belong to the same large
enterprise group in accordance with the Monopoly Regulation and Fair Trade Act.
December 31, 2020
(In millions of Korean won)
Name of company
1
Receivables Payables
2
Associates and
joint ventures
Samsung SDS 36,905 543,388
Samsung Electro-Mechanics 379 120,407
Samsung SDI 108,561 89,178
Cheil Worldwide 195 398,836
Other 253,921 1,154,549
Total 399,961 2,306,358
Other related parties
Samsung C&T 245,138 2,327,126
Other 20,484 172,726
Total 265,622 2,499,852
Other
3
Samsung Engineering 492 538,853
S-1 2,091 45,257
Other 11,344 55,053
Total 13,927 639,163
1
Balances due from and to separate entities that are related parties of the Company.
2
Payables and others include lease liabilities.
3
Although these entities are not related parties of the Company in accordance with Korean IFRS 1024, they belong to the same large
enterprise group in accordance with the Monopoly Regulation and Fair Trade Act.
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(C) For the years ended December 31, 2021 and 2020, the Company invested W 47,090 million and W 83,280 million,
respectively, in associates and joint ventures. In addition, the Company recovered W 19,169 million of investments in
associates and joint ventures for the year ended December 31, 2021, and there was no return of investments in associates
and joint ventures for the year ended December 31, 2020.
(D) For the year ended December 31, 2021, the Company declared W 3,527,449 million of dividends (W 1,659,962 million
for the year ended December 31, 2020) to the related parties. In addition, for the year ended December 31, 2021, the
Company declared W 267,738 million (W 125,744 million for the year ended December 31, 2020) of dividends to the
entities that are not related parties of the Company in accordance with Korean IFRS 1024, but belong to the same
conglomerate according to the Monopoly Regulation and Fair Trade Act. As of December 31, 2021 and 2020, there is
no dividend payables to the entities that are not in scope of Korean IFRS 1024.
(E) For the year ended December 31, 2021, the Company entered into lease agreements with its related parties amounted to
W 12,602 million, and the lease payments made to the related parties for the years ended December 31, 2021 and 2020
amounted to W 31,893 million and W 51,798 million, respectively.
(F) Key management compensation
The compensation paid or payable to key management (executive directors) for their services for the years ended December
31, 2021 and 2020 consists of:
(In millions of Korean won) 2021 2020
Short-term employee benefits 20,370 13,333
Post-employment benefits 886 987
Other long-term employee benefits 8,092 7,287
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
31. Information for Non-Controlling Interests
(A) Changes in accumulated non-controlling interests
The profit or loss allocated to non-controlling interests and accumulated non-controlling interests of subsidiaries that are
material to the Company for the years ended December 31, 2021 and 2020 are as follows:
(In millions of Korean won)
Samsung Display Co., Ltd. and its subsidiaries
2021 2020
Percentage of non-controlling interests 15.2% 15.2%
Balance as of January 1 7,723,784 7,427,228
Profit for the year 580,164 294,139
Dividends (3,123) (54,121)
Other (272,270) 56,538
Balance as of December 31 8,028,555 7,723,784
(B) The summarized financial information for each subsidiary with non-controlling interests that are material to the Company
before the intercompany eliminations for the years December 31, 2021 and 2020 are as follows:
(1) Summarized consolidated statements of financial position
(In millions of Korean won)
Samsung Display Co., Ltd. and its subsidiaries
December 31, 2021 December 31, 2020
Current assets 35,220,985 28,354,913
Non-current assets 24,773,119 26,904,627
Current liabilities 7,539,403 7,631,559
Non-current liabilities 1,359,478 841,323
Equity attributable to: 51,095,223 46,786,658
Owners of the parent company 51,012,895 46,282,988
Non-controlling interests 82,328 503,670
(2) Summarized consolidated statements of comprehensive income
(In millions of Korean won)
Samsung Display Co., Ltd. and its subsidiaries
2021 2020
Sales 31,557,504 30,474,830
Profit for the year 3,511,314 1,874,486
Other comprehensive income (loss) 1,256,904 408,022
Total comprehensive income attributable to: 4,768,218 2,282,508
Owners of the parent company 4,752,963 2,267,953
Non-controlling interests 15,255 14,555
Samsung Electronics Co., Ltd. and its subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(3) Summarized consolidated statements of cash flows
(In millions of Korean won)
Samsung Display Co., Ltd. and its subsidiaries
2021 2020
Cash flows from operating activities 10,943,029 7,800,766
Cash flows from investing activities (9,927,110) (6,933,401)
Cash flows from financing activities (1,284,749) (536,883)
Reclassification to assets held-for-sale - (139)
Effect of exchange rate changes on cash and cash equivalents 52,154 (27,688)
Increase (decrease) in cash and cash equivalents (216,676) 302,655
Cash and cash equivalents at beginning of the year 975,535 672,880
Cash and cash equivalents at end of year 758,859 975,535
32. Assets and Liabilities Held-for-Sale
(A) Sales of ownership interest in SSM and SSL
For the year ended December 31, 2020, the Company decided to sell its 100% ownership in Samsung Suzhou Module Co.,
Ltd. (“SSM”) and 60% ownership in Samsung Suzhou LCD Co., Ltd. (“SSL”) to TCL China Star Opto-electronics
Technologies Co., Ltd. (“CSOT”). The Company entered into the sales agreement on August 28, 2020, and the sales were
completed on April 1, 2021.
(B) Details of assets and liabilities classified as held-for-sale as of December 31, 2020 are as follows:
(In millions of Korean won) December 31, 2020
Assets held-for-sale
Cash and cash equivalents 139
Inventories 53,157
Other current assets 26,474
Property, plant and equipment 766,614
Intangible assets 1,421
Other non-current assets 81,627
Total 929,432
Liabilities held-for-sale
Current liabilities 337,032
Non-current liabilities 1,710
Total 338,742
(C) Details of accumulated other comprehensive income attributable to assets held-for-sale are as follows:
(In millions of Korean won) December 31, 2020
Loss on overseas business translation, net of tax
(12,132)
