The consolidated financial statements of L’Oréal and its subsidiaries (“the Group”) published for 2023, have been prepared in accordance with International Financial Reporting Standards (IFRS), as adopted in the European Union as of 31 December 2023.
On 8 February 2024, the Board of Directors closed the consolidated financial statements at 31 December 2023. The financial statements will not become final until they have been approved by the Annual General Meeting of shareholders to be held on 23 April 2024.
The Group did not anticipate any standards or interpretations not mandatorily applicable in 2023.
Established by the OECD and transposed in December 2023 in France, the Pillar 2 global tax reform aims to establish a minimum taxation of multinational groups at 15% and is applicable from the 2024 financial year. After analysis of the texts as stand current regulations and their consequences, the financial impact of this reform should be insignificant, due in particular to the consistency between the Group's tax footprint and its operational and geographic footprint.
In May 2023, the IASB amended IAS 12 Income Taxes by introducing a temporary exception to the recognition of deferred taxes arising from the Pillar 2 reform. The European Union adopted these amendments on 9 November 2023. The Group has implemented this exception as of 31 December 2023.
The preparation of the consolidated financial statements in accordance with international accounting standards requires that the Group make a certain number of estimates and assumptions that may affect the value of the Group’s assets, liabilities, equity and net profit (loss).
These estimates and assumptions mainly concern the measurement of goodwill and other intangible assets, operating lease terms, provisions, non-current tax liabilities, pension obligations, deferred taxes and share-based payments. Estimates used by the Group in relation to these different areas are made based on information available when the accounts are prepared and are described in detail in each specific associated note.
All companies included in the scope of consolidation have a financial year ending 31 December or close their accounts on that date.
All companies directly or indirectly controlled by the parent company L’Oréal have been fully consolidated.
Group companies that are jointly controlled with a limited number of other shareholders under a contractual agreement are consolidated under the equity method in accordance with IFRS 11.
Associates over which the Group has a significant influence have been accounted for by the equity method.
