Table of Contents

 

 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

Form 6-K

 

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of March 2024

 

 

LG Display Co., Ltd.

(Translation of Registrant’s name into English)

 

 

LG Twin Towers, 128 Yeoui-dearo, Youngdungpo-gu, Seoul 07336, Republic of Korea

(Address of principal executive offices)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F ☒   Form 40-F ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submission to furnish a report or other document that the registration foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes ☐   No ☒

 

 

 


Table of Contents

Submission of Audit Report

 

1.

Name of external auditor: Samjong Accounting Corporation (KPMG)

 

2.

Date of receiving external audit report: March 7, 2024

 

3.

Auditor’s opinion

 

   FY 2023    FY 2022

Audit Report on Separate Financial Statements

   Unqualified    Unqualified

 

4.

Financial Highlights of Separate Financial Statements

 

Items

   FY 2023     FY 2022  

Total Assets

     29,732,412,226,019       29,259,038,774,363  

Total Liabilities

     24,050,857,799,308       21,908,600,089,288  

Total Shareholders’ Equity

     5,681,554,426,711       7,350,438,685,075  

Capital Stock

     1,789,078,500,000       1,789,078,500,000  

Revenues

     19,811,014,881,090       24,131,171,938,572  

Operating Income

     -3,884,121,296,089       -3,201,463,387,452  

Ordinary Income

     -2,632,114,468,426       -3,414,516,859,331  

Net Income

     -1,718,701,175,934       -3,191,386,595,440  

Total Shareholders’ Equity / Capital Stock

     318     411


Table of Contents

LG DISPLAY CO., LTD.

Separate Financial Statements

For the Years Ended December 31, 2023 and 2022

(With Independent Auditors’ Report Thereon)


Table of Contents


Table of Contents

Independent Auditors’ Report

Based on a report originally issued in Korean

To the Shareholders and Board of Directors

LG Display Co., Ltd.:

Opinion

We have audited the accompanying separate financial statements of LG Display Co., Ltd. (the “Company”), which comprise the separate statements of financial position of the Company as of December 31, 2023 and 2022, the related separate statements of comprehensive loss, changes in equity and cash flows for the years then ended, and notes to the separate financial statements comprising material accounting policies and other explanatory information.

In our opinion, the accompanying separate financial statements present fairly, in all material respects, the separate financial position of the Company as of December 31, 2023 and 2022, and its separate financial performance and its separate cash flows for the years then ended in accordance with Korean International Financial Reporting Standards (“K-IFRS”).

We also have audited, in accordance with the Korean Standards on Auditing, the Company’s Internal Control over Financial Reporting as of December 31, 2023, based on criteria established in Conceptual Framework for Designing and Operating Internal Control over Financial Reporting issued by the Operating Committee of Internal Control over Financial Reporting in Korea, and our report dated March 7, 2024 expressed an unmodified opinion on the effectiveness of the Company’s internal control over financial reporting.

Basis for Opinion

We conducted our audits in accordance with Korean Standards on Auditing. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Separate Financial Statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the separate financial statements in the Republic of Korea, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the separate financial statements as of and for the year ended December 31, 2023. These matters were addressed in the context of our audit of the separate financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

(i) Impairment assessment for Display CGU

As discussed in Notes 3(I)(ii) and 10(d) to the separate financial statements, the Company’s non-financial assets which consist of property, plant and equipment and intangible assets amount to W15,267,276 million as of December 31, 2023. As a result of the annual impairment assessment for Display CGU to which goodwill is allocated, the Company concluded that recoverable amount exceeds the carrying amount.

The recoverable amount used by the Company in impairment assessment of the Display CGU is value in use based on discounted cash flow model. Revenue and operating expenditures for the forecast period and discount rate used to estimate value in use for impairment assessment of Display CGU involve significant judgement and minor changes to those assumptions would have a significant effect on the results of the Company’s impairment assessment of Display CGU. Therefore, we identified impairment assessment for Display CGU as a key audit matter.

 

1


Table of Contents

The following are the primary procedures we performed to address this key audit matter.

 

   

We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s non-financial assets impairment assessment process, and development of revenue and operating expenditures forecasts and discount rate assumption for Display CGU.

 

   

For the impairment assessment of Display CGU, we compared the Company’s historical revenue and operating expenditures forecasts to actual results to assess the Company’s ability to reliably forecast.

 

   

We evaluated the revenue and operating expenditures forecasts used to determine the value in use by comparison with the financial budgets approved by the board of directors.

 

   

We performed sensitivity analysis over discount rate assumption used to estimate value in use for impairment assessment of Display CGU to assess the impact of changes in that assumption on the Company’s impairment assessment.

 

   

We involved our valuation professionals with specialized skills and knowledge who assisted us in the following:

 

   

testing discount rate by comparing it against independently developed rate using publicly available market data for comparable entities; and

 

   

testing revenue and operating expenditures forecasts by comparing them against industry reports and historical performance of the Company.

(ii) Assessment of recognition of deferred tax assets

As discussed in Notes 3(t) and 25 to the separate financial statements, the deferred tax assets are recognized to the extent that it is probable that future taxable income will be available against which the deductible temporary differences, unused tax losses and unrecognized tax credit carryforwards can be utilized. The Company had W3,499,601 million of deferred tax assets and W869,364 million of unrecognized tax credit carryforwards, as of December 31, 2023.

We identified the assessment of the recognition of deferred tax assets as a key audit matter because it involves high degree of subjective management judgment in estimating future taxable profits over the periods in which the above mentioned differences become deductible and within the periods before the unused tax losses and tax credit carryforwards expired. The subjectivity is primarily driven by the Company’s assumptions in revenue and operating expenditures, which are used to estimate the forecasted taxable income in the future.

The following are the primary procedures we performed to address the key audit matter.

 

   

We evaluated the design and tested the operating effectiveness of certain internal control related to the Company’s deferred tax assets recognition process, including control related to the development of assumptions in determining the future taxable income for each year.

 

   

We analyzed the Company’s estimates of future taxable income, including analyzing the Company’s forecasted revenue and operating expenditures by comparing them with the financial budgets approved by the Board of Directors and historical performance.

 

   

We compared the forecasts of taxable income and utilization of tax credit carryforwards made in 2022 with the actual results in 2023 to assess the Company’s ability to reliably forecast.

 

   

We evaluated the Company’s assessment on the history of realizing deferred tax assets in connection with the unused tax losses carryforwards.

 

2


Table of Contents

Other matter

The procedures and practices utilized in the Republic of Korea to audit such separate financial statements may differ from those generally accepted and applied in other countries.

Responsibilities of Management and Those Charged with Governance for the Separate Financial Statements

Management is responsible for the preparation and fair presentation of these separate financial statements in accordance with K-IFRS, and for such internal control as management determines is necessary to enable the preparation of separate financial statements that are free from material misstatement, whether due to fraud or error.

In preparing these separate financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Separate Financial Statements

Our objectives are to obtain reasonable assurance about whether these separate financial statements as a whole are free from material misstatements, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. ‘Reasonable assurance’ is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Korean Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these separate financial statements.

As part of an audit in accordance with Korean Standards on Auditing, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

 

   

Identify and assess the risks of material misstatement of the separate financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal control.

 

   

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances.

 

   

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

 

   

Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, then we are required to draw attention in our auditors’ report to the related disclosures in the separate financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Company to cease to continue as a going concern.

 

   

Evaluate the overall presentation, structure and content of the separate financial statements, including the disclosures, and whether the separate financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

 

3


Table of Contents

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the separate financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partner on the audit resulting in this independent auditors’ report is In Hye Kang.

KPMG Samjong Accounting Corp.

Seoul, Korea

March 7, 2024

 

This report is effective as of March 7, 2024, the audit report date. Certain subsequent events or circumstances, which may occur between the audit report date and the time of reading this report, could have a material impact on the accompanying separate financial statements and notes thereto. Accordingly, the readers of the audit report should understand that the above audit report has not been updated to reflect the impact of such subsequent events or circumstances, if any.

 

4


Table of Contents

LG DISPLAY CO., LTD.

Separate Statements of Financial Position

As of December 31, 2023 and 2022

 

(In millions of won)    Note      December 31, 2023      December 31, 2022  

Assets

        

Cash and cash equivalents

     4, 27      W 334,502        692,312

Deposits in banks

     4, 27        20,000      42,804

Trade accounts and notes receivable, net

     5, 15, 27, 30        3,077,901      2,475,920

Other accounts receivable, net

     5, 27        95,178      135,116

Other current financial assets

     6, 27        163,137      149,479

Inventories

     7        1,780,959      1,924,594

Prepaid income tax

        1,954      1,092

Other current assets

     5        116,851      205,860
     

 

 

    

 

 

 

Total current assets

        5,590,482      5,627,177

Deposits in banks

     4, 27        11      11

Investments

     8        4,932,063      4,837,704

Other non-current accounts receivable, net

     5, 27        13,833      13,364

Other non-current financial assets

     6, 27        80,793      190,067

Property, plant and equipment, net

     9, 28        13,584,247      14,044,844

Intangible assets, net

     10        1,683,029      1,635,181

Investment Property

     11, 28        32,995      28,269

Deferred tax assets

     25        3,387,504      2,413,563

Defined benefits assets, net

     13        407,212      447,521

Other non-current assets

        20,243      21,338
     

 

 

    

 

 

 

Total non-current assets

        24,141,930      23,631,862
     

 

 

    

 

 

 

Total assets

      W 29,732,412        29,259,039
     

 

 

    

 

 

 

Liabilities

        

Trade accounts and notes payable

     27, 30      W 8,993,964        8,391,251

Current financial liabilities

     12, 27, 28, 29        3,850,822      4,014,046

Other accounts payable

     27        2,334,289      2,813,350

Accrued expenses

        461,819      558,503

Provisions

     14        115,834      172,092

Advances received

     15, 27        608,044      28,184

Other current liabilities

        57,487      65,585
     

 

 

    

 

 

 

Total current liabilities

        16,422,259      16,043,011

Non-current financial liabilities

     12, 27, 28, 29, 30        5,985,874      5,119,695

Non-current provisions

     14        63,805      86,157

Long-term advances received

     15, 27        967,050      —   

Other non-current liabilities

     27        611,869      659,737
     

 

 

    

 

 

 

Total non-current liabilities

        7,628,598      5,865,589
     

 

 

    

 

 

 

Total liabilities

        24,050,857      21,908,600
     

 

 

    

 

 

 

Equity

        

Share capital

     16      W 1,789,079        1,789,079

Share premium

     16        2,251,113      2,251,113

Retained earnings

     17        1,641,363      3,310,247
     

 

 

    

 

 

 

Total equity

        5,681,555      7,350,439
     

 

 

    

 

 

 

Total liabilities and equity

      W 29,732,412        29,259,039
     

 

 

    

 

 

 

See accompanying notes to the separate financial statements.

 

5


Table of Contents

LG DISPLAY CO., LTD.

Separate Statements of Comprehensive Loss

For the years ended December 31, 2023 and 2022

 

(In millions of won, except earnings per share)    Note    2023     2022  

Revenue

   18, 30    W 19,811,015       24,131,172  

Cost of sales

   7, 19, 30      (21,446,905     (24,870,325
     

 

 

   

 

 

 

Gross loss

        (1,635,890     (739,153

Selling expenses

   19, 20      (280,262     (517,397

Administrative expenses

   19, 20      (600,587     (582,717

Research and development expenses

   19      (1,367,382     (1,362,196
     

 

 

   

 

 

 

Operating loss

        (3,884,121     (3,201,463
     

 

 

   

 

 

 

Finance income

   23      2,411,597       691,501  

Finance costs

   23      (877,350     (572,487

Other non-operating income

   22         995,791       2,266,820  

Other non-operating expenses

   19, 22      (1,278,031     (2,598,888
     

 

 

   

 

 

 

Loss before income tax

        (2,632,114     (3,414,517

Income tax benefit

   24      (913,413     (223,130
     

 

 

   

 

 

 

Loss for the year

        (1,718,701     (3,191,387
     

 

 

   

 

 

 

Other comprehensive income (loss)

       

Items that will never be reclassified to profit or loss

       

Remeasurements of net defined benefit liabilities

   13, 24      49,817       122,361  

Items that will be reclassified to profit or loss

       

Gain on valuation of derivative

   24      —        9,227  

Other comprehensive income (loss) for the year, net of income tax

        49,817       131,588  
     

 

 

   

 

 

 

Total comprehensive loss for the year

      W (1,668,884     (3,059,799
     

 

 

   

 

 

 

Loss per share (in won)

       

Basic loss per share

   26    W (4,803     (8,919

Diluted loss per share

   26    W (4,803     (8,919
     

 

 

   

 

 

 

See accompanying notes to the separate financial statements.

 

6


Table of Contents

LG DISPLAY CO., LTD.

Separate Statements of Changes in Equity

For the years ended December 31, 2023 and 2022

 

(In millions of won)    Share
capital
     Share
premium
     Retained
earnings
    Other
capital
    Total equity  

Balances at January 1, 2022

   W 1,789,079        2,251,113      6,611,853     (9,227     10,642,818
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Total comprehensive income (loss) for the year

            

Loss for the year

     —         —         (3,191,387     —        (3,191,387

Other comprehensive income (loss)

            

Remeasurements of net defined benefit liabilities, net of tax

     —         —         122,361     —        122,361

Gain on valuation of derivative

     —         —         —        9,227     9,227
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Total other comprehensive income (loss)

     —         —         122,361     9,227     131,588
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Total comprehensive loss for the year

   W —         —         (3,069,026     9,227     (3,059,799
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Transaction with owners, recognized directly in equity

            

Dividends to equity holders

   W —         —         (232,580     —        (232,580
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Balances at December 31, 2022

   W 1,789,079        2,251,113      3,310,247     —        7,350,439
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Balances at January 1, 2023

   W 1,789,079        2,251,113      3,310,247     —        7,350,439
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Total comprehensive loss for the year

            

Loss for the year

     —         —         (1,718,701     —        (1,718,701

Other comprehensive income (loss)

            

Remeasurements of net defined benefit liabilities, net of tax

     —         —         49,817     —        49,817
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Total comprehensive loss for the year

   W —         —         (1,668,884     —        (1,668,884
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Balances at December 31, 2023

   W 1,789,079        2,251,113      1,641,363     —        5,681,555
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

See accompanying notes to the separate financial statements.

 

7


Table of Contents

LG DISPLAY CO., LTD.

Separate Statements of Cash Flows

For the years ended December 31, 2023 and 2022

 

(In millions of won)     Note          2023       2022  

Cash flows from operating activities:

       

Loss for the year

      W (1,718,701     (3,191,387

Adjustments for:

       

Income tax benefit

     24        (913,413     (223,130

Depreciation and amortization

     9, 10, 11, 19        2,328,219     2,376,274

Gain on foreign currency translation

        (258,871     (636,163

Loss on foreign currency translation

        170,190     332,495

Expenses related to defined benefit plans

     13        147,537     166,479

Gain on disposal of property, plant and equipment

        (33,842     (27,361

Loss on disposal of property, plant and equipment

        102,297     53,904

Impairment loss on property, plant and equipment

        8,521     339,374

Gain on disposal of intangible assets

        (1,989     —   

Loss on disposal of intangible assets

        55     193

Impairment loss on intangible assets

        54,833     92,313

Reversal of impairment loss on intangible assets

        (242     (1,975

Impairment loss on investment property assets

        —        7,736

Expense on increase of provisions

        49,787     207,310

Finance income

        (2,371,466     (647,287

Finance costs

        861,067     550,634

Other income

        (6,659     (1,652
     

 

 

   

 

 

 
        136,024     2,589,144

Changes in:

       

Trade accounts and notes receivable

        (713,607     2,328,752

Other accounts receivable

        46,739     (85,754

Inventories

             143,635         206,403

Other current assets

        97,879     (12,128

Other non-current assets

        (189     (10,629

Trade accounts and notes payable

        811,210     2,440,822

Other accounts payable

        (80,411     (452,565

Accrued expenses

        (105,247     (469,540

Provisions

        (128,523     (213,868

Advances received

        (370     (1,875

Other current liabilities

        (29,774     (6,552

Defined benefit liabilities, net

        (42,593     (379,860

Long term Advanced Received

        1,580,222     —   

Other non-current liabilities

        33,891     166,893
     

 

 

   

 

 

 
        1,612,862     3,510,099

Cash generated from operating activities

        30,185     2,907,856

Income taxes refunded (paid)

        (76,208     57,834

Interests received

        15,400     11,142

Interests paid

        (610,152     (277,378
     

 

 

   

 

 

 

Net cash provided (used) by operating activities

      W (640,775     2,699,454
     

 

 

   

 

 

 

See accompanying notes to the separate financial statements. 

 

8


Table of Contents

LG DISPLAY CO., LTD.

Separate Statements of Cash Flows, Continued

For the years ended December 31, 2023 and 2022 

 

(In millions of won)    Note      2023     2022  

Cash flows from investing activities:

       

Dividends received

      W 1,887,196       126,553

Increase in deposits in banks

        (20,000     (42,804

Proceeds from withdrawal of deposits in banks

        42,804     76,914

Acquisition of financial asset at fair value through profit or loss

        —        (150

Acquisition of financial assets at fair value through other comprehensive income

        (3,000     (3,934

Proceeds from disposal of financial assets at fair value through other comprehensive income

        2,671     3,547

Acquisition of investments

        (98,740     (33,137

Proceeds from disposal of investments

        —        132,200

Acquisition of property, plant and equipment

                    (2,145,138     (3,820,388

Proceeds from disposal of property, plant and equipment

            488,194         181,610

Acquisition of intangible assets

        (650,877     (817,802

Proceeds from disposal of intangible assets

        6,328     11,392

Proceeds from settlement of derivatives, net

        178,610     49,145

Proceeds from collection of short-term loans

        27,411     9,608

Increase in short-term loans

        —        (9,643

Increase in long-term loans

        —        (54,033

Increase in deposits

        (354     (901

Decrease in deposits

        134     4,125

Proceeds from disposal of other assets

        6,659     1,464
     

 

 

   

 

 

 

Net cash used in investing activities

        (278,102     (4,186,234
     

 

 

   

 

 

 

Cash flows from financing activities:

     29       

Proceeds from short-term borrowings

        5,960,167     3,496,467

Repayments of short-term borrowings

        (6,488,262     (1,550,937

Proceeds from issuance of bonds

        469,266     443,230

Proceeds from long-term borrowings

        2,839,878     1,523,669

Repayments of current portion of long-term borrowings and bonds

        (2,212,164     (2,443,087

Payment guarantee fee received

        7,195     4,945

Payment guarantee fee paid

        (2,134     —   

Dividends paid

        —        (232,580

Repayments of lease liabilities

        (12,879     (13,462
     

 

 

   

 

 

 

Net cash provided by financing activities

        561,067     1,228,245
     

 

 

   

 

 

 

Net decrease in cash and cash equivalents

        (357,810     (258,535

Cash and cash equivalents at January 1

        692,312     950,847
     

 

 

   

 

 

 

Cash and cash equivalents at December 31

      W 334,502       692,312
     

 

 

   

 

 

 

See accompanying notes to the separate financial statements.

 

9


Table of Contents

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2023 and 2022

 

1.

Organization and Description of Business

LG Display Co., Ltd. (the “Company”) was incorporated in February 1985 and the Company is a public corporation listed in the Korea Exchange since 2004. The main business of the Company is to manufacture and sell displays and its related products. As of December 31, 2023, the Company is operating Thin Film Transistor Liquid Crystal Display (“TFT-LCD”) and Organic Light Emitting Diode (“OLED”) panel manufacturing plants in Gumi, Paju and China and TFT-LCD and OLED module manufacturing plants in Gumi, Paju, China and Vietnam. The Company is domiciled in the Republic of Korea with its address at 128 Yeouidae-ro, Yeongdeungpo-gu, Seoul, the Republic of Korea. As of December 31, 2023, LG Electronics Inc., a major shareholder of the Company, owns 37.9% (135,625,000 shares) of the Company’s common stock.

The Company’s common stock is listed on the Korea Exchange under the identifying code 034220. As of December 31, 2023, there are 357,815,700 shares of common stock outstanding. The Company’s common stock is also listed on the New York Stock Exchange in the form of American Depository Shares (“ADSs”) under the symbol “LPL”. One ADS represents one-half of one share of common stock. As of December 31, 2023, there are 18,672,956 ADSs outstanding.

 

2.

Basis of Presenting Financial Statements

 

  (a)

Statement of Compliance

In accordance with the Act on External Audits of Stock Companies, Etc., these separate financial statements have been prepared in accordance with Korean International Financial Reporting Standards (“K-IFRS”).

These financial statements are separate financial statements prepared in accordance with K-IFRS No.1027, Separate Financial Statements, presented by a parent, an investor in an associate or a venture in a joint ventures, in which the investments are accounted for on the basis of the direct equity interest rather than on the basis of the reported results and net assets of the investees.

The separate financial statements were authorized for issuance by the Board of Directors on January 24, 2024, which will be submitted for approval to the shareholders’ meeting to be held on March 22, 2024.

 

  (b)

Basis of Measurement

The separate financial statements have been prepared on the historical cost basis except for the following material items in the separate statement of financial position:

 

   

derivative financial instruments at fair value, financial assets at fair value through profit or loss(“FVTPL”), financial assets at fair value through other comprehensive income (“FVOCI”), financial liabilities at fair value through profit or loss(“FVTPL”), and

 

   

net defined benefit liabilities (defined benefit assets) recognized at the present value of defined benefit obligations less the fair value of plan assets

 

10


Table of Contents

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2023 and 2022

 

2.

Basis of Presenting Financial Statements, Continued

 

  (c)

Functional and Presentation Currency

The separate financial statements are presented in Korean won, which is the Company’s functional currency.

 

  (d)

Use of Estimates and Judgments

The preparation of the separate financial statements in conformity with K-IFRSs requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

Information about judgments made applying accounting policies that have the most significant effects on the amounts recognized in the separate financial statements is included in the following notes:

 

   

Financial instruments (Note 3(f))

 

   

Intangible assets (Impairment assessment of non-financial assets, including determination of cash generating unit) (Note 3(l), 10)

 

   

Deferred tax assets and liabilities (recognition of deferred tax assets) (Note 3(t), 25)

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next 12 months is included in the following notes:

 

   

Provisions (Note 3(n), 14)

 

   

Inventories (Note 3(e), 7)

 

   

Intangible assets (Impairment assessment of non-financial assets) (Note 10)

 

   

Employee benefits (Note 13)

 

   

Deferred tax assets and liabilities (estimation of future taxable income) (Note 3(t), 25)

 

11


Table of Contents

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2023 and 2022

 

3.

Material Accounting Policies

The Company has consistently applied the following accounting policies to all periods presented in these separate financial statements, except if mentioned otherwise.

 

  (a)

Changes in Material Accounting policies

i) Global Minimum Tax

The Company has applied the International Tax Reform – Pillar Two Model Rules (Amendments to K-IFRS No. 1012 ‘Corporate Tax’) published in December 2023. The amendments provide a temporary mandatory exception from deferred tax accounting for the global minimum tax, and require new disclosure about the Pillar Two exposure. (See Note 24)

ii) Material accounting policy information

The Company adopted Disclosure of Accounting Policies (Amendments to K-IFRS No. 1001 ‘Presentation of Financial Statements’) from January 1, 2023. Although the amendments did not result in any changes to the accounting polices themselves, they impacted the accounting policy information disclosed in the financial statements. The amendments require disclosure of ‘material’ rather than ‘significant’, accounting policies. The amendments also provide guidance on the application of materiality to disclosure of accounting policies, assisting entities to provide useful, entity-specific accounting policy information that users need to understand other information in the financial statements.

The Company has reviewed the accounting policies and has updated the information disclosed in Note 3 (2022: Summary of Significant Accounting Policies) accordingly.

 

  (b)

Interest in subsidiaries, associates and joint ventures

These separate financial statements are prepared and presented in accordance with K-IFRS No.1027, Separate Financial Statements. The Company applied the cost method to investments in subsidiaries, associates and joint ventures. Dividends from subsidiaries, associates or joint ventures are recognized in profit or loss when the right to receive the dividend is established.

 

12


Table of Contents

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2023 and 2022

 

3.

Material Accounting Policies, Continued

 

  (c)

Foreign Currency Transaction and Translation

Transactions in foreign currencies are translated to the functional currency of the Company at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are retranslated to the functional currency at the exchange rate on the reporting date. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was originally determined. Foreign currency differences arising on retranslation are recognized in profit or loss, except for differences arising on an investment in equity instruments designated as at FVOCI and a financial asset and liability designated as a cash flow hedge, which are recognized in other comprehensive income. Exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at which they were translated on initial recognition are recognized in profit or loss in the period in which they arise. Foreign currency differences arising from assets and liabilities in relation to the investing and financing activities including borrowings, bonds and cash and cash equivalents are recognized in finance income (costs) in the separate statement of comprehensive income (loss) and foreign currency differences arising from assets and liabilities in relation to activities other than investing and financing activities are recognized in other non-operating income (expense) in the separate statement of comprehensive income (loss). Foreign currency differences are presented in gross amounts in the separate statement of comprehensive income (loss)

 

  (d)

Cash and cash equivalents

Cash and cash equivalents include all cash balances and short-term highly liquid investments with an original maturity of three months or less that are readily convertible into known amounts of cash.

 

  (e)

Inventories

Inventories are measured at the lower of cost and net realizable value. The cost of inventories is based on the weighted-average method, and includes expenditures incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing them to their existing location and condition. Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated selling expenses. In the case of manufactured inventories and work-in-process, cost includes an appropriate share of production overheads based on the actual capacity of production facilities. However, the normal capacity is used for the allocation of fixed production overheads if the actual level of production is lower than the normal capacity.

 

13


Table of Contents

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2023 and 2022

 

3.

Material Accounting Policies, Continued

 

  (f)

Financial Instruments

(i) Non-derivative financial assets

Recognition and initial measurement

Trade receivables and debt instruments issued are initially recognized when they are originated. All other financial assets are recognized in statement of financial position when, and only when, the Company becomes a party to the contractual provisions of the instrument.

A financial asset (unless it is a trade receivable without a significant financing component) is initially measured at fair value plus, for an item not at FVTPL, transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price.

Classification and subsequent measurement

i) Financial assets

On initial recognition, a financial asset is classified as measured at: amortized cost; FVOCI – debt investment; FVOCI – equity investments; or FVTPL. Financial assets are not reclassified subsequent to their initial recognition unless the Company changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the subsequent reporting period following the change in the business model.

A financial asset is measured as at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:

 

   

it is held within a business model whose objective is to hold assets to collect contractual cash flows; and

 

   

its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:

 

   

it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and

 

   

the contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

On initial recognition of an equity investments that is not held for trading, the Company may irrevocably elect to present subsequent changes in the investment’s fair value in OCI. This election is made on an investment-by-investment basis.

All financial assets not classified as measured at amortized cost or FVOCI as described above are measured as at FVTPL. This includes all derivative financial assets. At initial recognition, the Company may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortized cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

 

14


Table of Contents

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2023 and 2022

 

3.

Material Accounting Policies, Continued

 

  (f)

Financial Instruments, Continued

ii) Financial assets: business model

The Company makes an assessment of the objective of the business model in which a financial asset is held at a portfolio level because this best reflects the way the business is managed and information is provided to management. The information considered includes:

 

   

the stated policies and objectives for the portfolio and the operation of those policies in practice (these include whether management’s strategy focuses on earning contractual interest income, maintaining a particular interest rate profile, matching the duration of the financial assets to the duration of any related liabilities or expected cash outflows or realizing cash flows through the sale of the assets);

 

   

how the performance of the portfolio is evaluated and reported to the Company’s management;

 

   

the risks that affect the performance of the business model (and the financial assets held within that business model) and how those risks are managed; and

 

   

the frequency, volume and timing of sales of financial assets in prior periods, the reasons for such sales and expectations about future sales activity.

Transfers of financial assets to third parties in transaction that do not qualify for derecognition are not considered sale for this purpose.

A financial asset that is held for trading or is managed and whose performance is evaluated on a fair value basis is measured at FVTPL.

iii) Financial assets: Assessment whether contractual cash flows are solely payments of principal and interest

For the purpose of the assessment, “principal” is defined as the fair value of the financial asset on initial recognition. ‘Interest’ is defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks and cost (e.g. liquidity risk and administrative costs), as well as profit margin.

In assessing whether the contractual cash flows are solely payments of principal and interest, the Company considers the contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet this condition. In making this assessment, the Company considers.

 

   

contingent events that would change the amount or timing of cash flows:

 

   

terms that may adjust the contractual coupon rate, including variable-rate features;

 

   

prepayment and extension features; and

 

   

terms that limit the Company’s claim to cash flows from specified assets (e.g. non-recourse features)

A prepayment feature is consistent with the solely payments of principal and interest criterion if the prepayment amount substantially represents unpaid amounts of principal and interest or the principal amount outstanding, which may include reasonable additional compensation for early termination of the contract.

 

15


Table of Contents

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2023 and 2022

 

3.

Material Accounting Policies, Continued

 

  (f)

Financial Instruments, Continued

 

Additionally, for a financial asset acquired at a discount or premium to its contractual par amount, a feature that permits or requires prepayment at an amount that substantially represents the contractual par amount plus accrued but unpaid contractual interest (which may also include reasonable additional compensation for early termination) is treated as consistent with this criterion if the fair value of the prepayment feature is insignificant at initial recognition.

iv) Financial assets: Subsequent measurement and gains and losses

 

Financial assets at

 FVTPL

   These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognized in profit or loss.

Financial assets at

 amortized cost

   These assets are subsequently measured at amortized cost using the effective interest method. The amortized cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.

Debt investments

 at FVOCI

   These assets are subsequently measured at fair value. Interest income calculated using the effective interest method, foreign exchange gains and losses and impairment are recognized in profit or loss. Other net gains and losses are recognized in OCI. On derecognition, gains and losses accumulated in OCI are reclassified to profit or loss.

Derecognition

The Company derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, it transfers the rights to receive the contractual cash flows of the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred, or it transfers or does not retain substantially all the risks and rewards of ownership of a transferred asset, and does not retain control of the transferred asset.

If the Company has retained substantially all the risks and rewards of ownership of the transferred asset, the Company continues to recognize the transferred asset.

 

16


Table of Contents

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2023 and 2022

 

3.

Material Accounting Policies, Continued

 

  (f)

Financial Instruments, Continued

 

(ii) Non-derivative financial liabilities

The Company classifies financial liabilities into two categories, financial liabilities at FVTPL and other financial liabilities in accordance with the substance of the contractual arrangement and the definitions of financial liabilities, and recognizes them in the separate statement of financial position when the Company becomes a party to the contractual provisions of the instrument.

Financial liabilities at FVTPL include financial liabilities held for trading or designated as such upon initial recognition at FVTPL. After initial recognition, financial liabilities at FVTPL are measured at fair value, and changes therein are recognized in profit or loss. Upon initial recognition, transaction costs that are directly attributable to the issuance of financial liabilities are recognized in profit or loss as incurred.

Non-derivative financial liabilities other than financial liabilities classified as at FVTPL are classified as other financial liabilities and measured initially at fair value minus transaction costs that are directly attributable to the issuance of financial liabilities. Subsequent to initial recognition, these financial liabilities are measured at amortized cost using the effective interest method. As of December 31, 2023, non-derivative financial liabilities comprise borrowings, bonds, trade accounts and notes payable, other accounts payable and others.

The Company derecognizes a financial liability when its contractual obligations are discharged, cancelled or expired.

(iii) Share Capital

The Company issued common stocks and they are classified as equity. Incremental costs directly attributable to the issuance of common stocks are recognized as a deduction from equity, net of tax effects. Capital contributed in excess of par value upon issuance of common stocks is classified as share premium within equity.

(iv) Derivative financial instruments

Derivatives are initially recognized at fair value. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are accounted for as described below.

 

17


Table of Contents

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2023 and 2022

 

3.

Material Accounting Policies, Continued

 

  (f)

Financial Instruments, Continued

 

Hedge Accounting

If necessary, the Company designates derivatives as hedging items to hedge the risk of changes in the fair value of assets, liabilities or firm commitments (a fair value hedge) and foreign currency risk of highly probable forecasted transactions or firm commitments (a cash flow hedge).

On initial designation of the hedge, the Company’s management formally designates and documents the relationship between the hedging instrument(s) and hedged item(s), including the risk management objectives and strategy in undertaking the hedge transaction, together with the methods that will be used to assess the effectiveness of the hedging relationship, both at the inception of the hedge relationship as well as on an ongoing basis.

i) Fair value hedges

Change in the fair value of a derivative hedging instrument designated as a fair value hedge and the hedged item is recognized in profit or loss, respectively. The gain or loss from remeasuring the hedging instrument at fair value and the gain or loss on the hedged item attributable to the hedged risk are recognized in profit or loss in the same line item of the statement of comprehensive income (loss). The Company discontinues fair value hedge accounting if it does not designate the derivative hedging instrument and the hedged item as the hedge relationship between them anymore; if the hedging instrument expires or is sold, terminated or exercised; or if the hedge no longer meets the criteria for hedge accounting.

ii) Cash flow hedges

When a derivative designated as a cash flow hedging instrument meets the criteria of cash flow hedge accounting, the effective portion of changes in the fair value of the derivative is recognized in other comprehensive income and the ineffective portion of changes in the fair value of the derivative is recognized in profit or loss. The Company discontinues cash flow hedge accounting if it does not designate the derivative hedging instrument and the hedged item as the hedge relationship between them anymore; if the hedging instruments expires or is sold, terminated or exercised; or if the hedge no longer meets the criteria for hedge accounting. The cumulative gain or loss on the hedging instrument that has been recognized in other comprehensive income is reclassified to profit or loss in the periods during which the forecasted transaction occurs. If the forecasted transaction is no longer expected to occur, then the balance in other comprehensive income is recognized immediately in profit or loss.

The Company is applying cash flow hedge accounting by designating expected foreign currency denominated sales arising from forecast export transactions as hedging items and the derivative instruments related to forward exchange as hedging instruments. The effective portion of changes in the fair value of the derivative is recognized in equity and the amount accumulated in equity is reclassified to revenue in the same period which forecast sales occur.

 

18


Table of Contents

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2023 and 2022

 

3.

Material Accounting Policies, Continued

 

  (f)

Financial Instruments, Continued

 

Embedded derivative

Embedded derivatives are separated from the host contract and accounted for separately if the host contract is not a financial asset and certain criteria are met.

Other derivative financial instruments

Other derivative financial instruments are measured at fair value and changes of their fair value are recognized in profit or loss.

 

  (g)

Property, Plant and Equipment

(i) Recognition and measurement

Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses. Cost includes an expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labor, any costs directly attributable to bringing the assets to a working condition for their intended use, the costs of dismantling and removing the items and restoring the site on which they are located and borrowing costs on qualifying assets.

The gain or loss arising from the derecognition of an item of property, plant and equipment is determined as the difference between the net disposal proceeds, if any, and the carrying amount of the item and recognized in other non-operating income or other non-operating expenses.

(ii) Subsequent costs

Subsequent expenditure on an item of property, plant and equipment is recognized as part of its cost only if it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The costs of the day-to-day servicing of property, plant and equipment are recognized in profit or loss as incurred.

(iii) Depreciation

Land is not depreciated and depreciation of other items of property, plant and equipment is recognized in profit or loss on a straight-line basis, reflecting the pattern in which the asset’s future economic benefits are expected to be consumed by the Company. The residual value of property, plant and equipment is zero.

Estimated useful lives of the assets are as follows:

 

     Estimated useful lives (years)

Buildings and structures

   20~40

Machinery

   4, 5

Furniture and fixtures

   4

Equipment, tools and vehicles

   2, 4, 12

Right-of-use assets

   (*)

 

19


Table of Contents

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2023 and 2022

 

3.

Material Accounting Policies, Continued

 

  (g)

Property, Plant and Equipment, Continued

 

 

  (*)

The Company depreciates the right-of-use assets from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term.

Depreciation methods, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate and any changes are accounted for as changes in accounting estimates.

 

  (h)

Borrowing Costs

The Company capitalizes borrowing costs, which includes interests and exchange differences arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs, directly attributable to the acquisition, construction or production of a qualifying asset as part of the cost of that asset. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use or sale. To the extent that the Company borrows funds specifically for the purpose of obtaining a qualifying asset, the Company determines the amount of borrowing costs eligible for capitalization as the actual borrowing costs incurred on that borrowing during the period less any investment income on the temporary investment of those borrowings. The Company immediately recognizes other borrowing costs as an expense.

 

  (i)

Government Grants

In case there is reasonable assurance that the Company will comply with the conditions attached to a government grant, the government grant is recognized as follows:

(i) Grants related to the purchase or construction of assets

A government grant related to the purchase or construction of assets is deducted in calculating the carrying amount of the asset. The grant is recognized in profit or loss over the life of a depreciable asset as a reduced depreciation expense and cash related to grant received is presented in investing activities in the statement of cash flows.

(ii) Grants for compensating the Company’s expenses incurred

A government grant that compensates the Company for expenses incurred is recognized in profit or loss as a deduction from relevant expenses on a systematic basis in the periods in which the expenses are recognized.

(iii) Other government grants

A government grant that becomes receivable for the purpose of giving immediate financial support to the Company with no compensation for expenses or losses already incurred or no future related costs is recognized as income of the period in which it becomes receivable.

 

20


Table of Contents

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2023 and 2022

 

3.

Material Accounting Policies, Continued

 

  (j)

Intangible Assets

Intangible assets are initially measured at cost. Subsequently, intangible assets are measured at cost less accumulated amortization and accumulated impairment losses.

(i) Goodwill

Goodwill arising from business combinations is recognized as the excess of the acquisition cost of a business over the net fair value of the identifiable assets acquired and liabilities assumed. Any deficit is a bargain purchase that is recognized in profit or loss. Goodwill is measured at cost less accumulated impairment losses.

(ii) Research and development

Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and understanding, is recognized in profit or loss as incurred.

Development activities involve a plan or design of the production of new or substantially improved products and processes. Development expenditure is capitalized as intangible assets only if the Company can demonstrate all of the following:

 

   

the technical feasibility of completing the intangible asset so that it will be available for use or sale,

 

   

its intention to complete the intangible asset and use or sell it,

 

   

its ability to use or sell the intangible asset,

 

   

how the intangible asset will generate probable future economic benefits (among other things, the Company can demonstrate the usefulness of the intangible asset by existence of a market for the output of the intangible asset or the intangible asset itself if it is to be used internally),

 

   

the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset, and

 

   

its ability to measure reliably the expenditure attributable to the intangible asset during its development.

Development projects are divided into research activities and development activities. Expenditures on research activities are recognized in profit or loss and qualifying development expenditures on development activities are capitalized.

The expenditure capitalized includes the cost of materials, direct labor and overhead costs that are directly attributable to preparing the asset for its intended use, and borrowing costs on qualifying assets.

(iii) Other intangible assets

Other intangible assets include intellectual property rights, software, customer relationships, technology, memberships and others. The Company currently has a number of patent license agreements related to product production. When the amount of payments for the entire contract period can be reliably determined, the total undiscounted amount is recognized as intangible assets as intellectual property rights and other account payables, respectively, and the intangible assets are amortized on a straight-line basis over the patent license period.

 

21


Table of Contents

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2023 and 2022

 

3.

Material Accounting Policies, Continued

 

  (j)

Intangible Assets, Continued

 

(iv) Subsequent costs

Subsequent expenditures are capitalized only when they increase the future economic benefits embodied in the specific intangible asset to which they relate. All other expenditures, including expenditures on internally generated goodwill and brands, are recognized in profit or loss as incurred.

(v) Amortization

Amortization is calculated on a straight-line basis over the estimated useful lives of intangible assets, other than goodwill, from the date that they are available for use. The residual value of intangible assets is zero. However, as there are no foreseeable limits to the periods over which condominium and golf club memberships are expected to be available for use, these intangible assets are regarded as having indefinite useful lives and not amortized.

 

     Estimated useful lives (years)

Intellectual property rights

   5, 10, (*1)

Rights to use electricity, water and gas supply facilities

   10

Software

   4, (*1)

Customer relationships

   7, 10

Technology

   10

Development costs

   (*2)

Condominium and golf club memberships

   Indefinite

 

  (*1)

Patent royalty (included in intellectual property rights) and software license are amortized over the useful lives considering the contract period.

 

  (*2)

Capitalized development costs are amortized over the useful lives considering the life cycle of the developed products. Amortization of capitalized development costs are recognized in research and development expenses in the separate statement of comprehensive income (loss).

Amortization periods and the amortization methods for intangible assets with finite useful lives are reviewed at each financial year-end. The useful lives of intangible assets with indefinite useful lives are reviewed at each financial year-end to determine whether events and circumstances continue to support indefinite useful life assessments for those assets. If appropriate, the changes are accounted for as changes in accounting estimates.

 

  (k)

Investment Property

Property held to earn rentals or for capital appreciation or both is classified as investment property. Investment properties are initially measured at cost, including transaction costs incurred at the time of acquisition, and subsequently, measured at cost less accumulated depreciation and accumulated impairment loss.

Subsequent expenditure on an item of investment property is recognized as part of its cost only if it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of those parts that are replaced is derecognized. All other subsequent expenditures are expensed in the period in which it is incurred.

 

22


Table of Contents

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2023 and 2022

 

3.

Material Accounting Policies, Continued

 

  (k)

Investment Property, Continued

 

Among investment properties, land is not depreciated, and investment properties except land are depreciated on a straight-line basis by applying 20 years of the building according to the economic depreciation period. Depreciation methods, useful lives and residual values of investment properties are reviewed at each reporting period-end and if appropriate, the changes are accounted for as changes in accounting estimates.

 

  (l)

Impairment

(i) Financial assets

Financial instruments and contract assets

The Company recognizes loss allowance for financial assets measured at amortized cost and debt investments at FVOCI at the ‘expected credit loss’ (ECL).

The Company recognizes a loss allowance for the life-time expected credit losses except for following, which are measured at 12-month ECLs:

 

   

debt instruments that are determined to have low credit risk at the reporting date; and

 

   

other debt instruments and bank deposits for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECLs, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both qualitative and quantitative information and analysis, based on the Company’s historical experience and informed credit assessment including forward-looking information.

Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument.

12-month ECLs are the portion of the ECLs that result from default events that are possible within the 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).

The maximum period considered when estimating ECLs is the maximum contractual period over which the Company is exposed to credit risk.

Estimation of expected credit losses

Expected credit losses are a probability-weighted estimate of credit losses. Credit losses are measured using the present value of the difference between the contractual cash flows and the expected contractual cash flows. The expected credit losses are discounted using effective interest rate of the financial assets.

 

23


Table of Contents

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2023 and 2022

 

3.

Material Accounting Policies, Continued

 

  (l)

Impairment, Continued

 

Credit-impaired financial assets

At each reporting period-end, the Company assesses whether financial assets carried at amortized cost and debt instruments at FVOCI are credit-impaired. A financial asset is ‘credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.

Evidence that a financial asset is credit-impaired includes the following observable data:

 

   

significant financial difficulty of the issuer or the borrower;

 

   

the lender(s) of the borrower, for economic or contractual reasons relating to the borrower’s financial difficulty, having granted to the borrower a concession(s) that the lender(s) would not otherwise consider;

 

   

it is probable that the borrower will enter bankruptcy or other financial reorganization; or

 

   

the disappearance of an active market for a security because of financial difficulties.

Presentation of loss allowance for ECL in the statement of financial position

Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets. For debt instruments at FVOCI, the loss allowance is charged to profit or loss and is recognized in OCI instead of reducing the carrying amount of financial assets in the separate statement of financial position.

Write-off

The gross carrying amount of a financial asset is written off when the Company has no reasonable expectations for recovering the financial asset in its entirety or a portion thereof. The Company assess whether there are reasonable expectations of recovering the contractual cash flows from customers and individually assess the timing and amount of write-off. The Company expects no significant recovery from the amount written-off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Company’s procedures for recovery of amounts due.

 

24


Table of Contents

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2023 and 2022

 

3.

Material Accounting Policies, Continued

 

  (l)

Impairment, Continued

 

(ii) Non-financial assets

The carrying amounts of the Company’s non-financial assets, other than assets arising from employee benefits, inventories and deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. For goodwill, and intangible assets that have indefinite useful lives or that are not yet available for use, irrespective of whether there is any indication of impairment, the recoverable amount is estimated each year.

Recoverable amount is estimated for the individual asset. If it is not possible to estimate the recoverable amount of the individual asset, the Company determines the recoverable amount of the cash-generating unit to which the asset belongs. The cash-generating unit (“CGU”) is the smallest group of assets that includes the asset and generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. In identifying whether cash inflows from an asset or group of assets are largely independent of the cash inflows from other assets or groups of assets, the Company considers various factors including how management monitors the entity’s operations or how management makes decisions about continuing or disposing of the entity’s assets and operations. In the Company’s separate financial statements, each CGU is comprised of a group of assets of the Company and its other subsidiaries, because the non-current assets of the Company generate independent cash inflows only in combination with certain assets of the subsidiary. In the separate financial statements, in general, investment in each subsidiary is considered to be individual CGUs. Goodwill arising from a business combination is allocated to CGUs or groups of CGUs that are expected to benefit from the synergies of the combination. The recoverable amount of an asset or cash-generating unit is determined as the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU. Fair value less costs to sell is based on the best information available to reflect the amount that the Company could obtain from the disposal of the asset in an arm’s length transaction between knowledgeable, willing parties, after deducting the costs of disposal.

An impairment loss is recognized if the carrying amount of an asset or its CGU exceeds its estimated recoverable amount. Impairment losses are recognized in profit or loss. Impairment losses recognized in respect of a CGU are allocated first to reduce the carrying amount of any goodwill allocated to the unit, and then to reduce the carrying amounts of the other assets in the unit on a pro rata basis.

In respect of assets other than goodwill, impairment losses recognized in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of accumulated depreciation or amortization, if no impairment loss had been recognized from the acquisition cost. An impairment loss in respect of goodwill is not reversed.

 

25


Table of Contents

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2023 and 2022

 

3.

Material Accounting Policies, Continued

 

  (m)

Leases

A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

(i) As a lessee

At commencement or on modification of a contract that contains a lease component, the Company allocates the consideration in the contract to each lease and non-lease component on the basis of its relative stand-alone price. For certain leases, the Company accounts for the lease and non-lease components as a single lease component by applying the practical expedient not to separate non-lease components.

The Company recognizes a right-of-use asset and lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at of before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Company by the end of the lease term or the cost of the right-of-use asset reflects that the Company will exercise a purchase option. In that case, the right-of-use asset will be depreciated over the useful life of the underlying asset, which is determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company’s incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate.

The Company determines its incremental borrowing rate by obtaining interest rates from various external financing sources and makes certain adjustments to reflect the terms of the lease and type of the asset leased.

 

26


Table of Contents

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2023 and 2022

 

3.

Material Accounting Policies, Continued

 

  (m)

Lease, Continued

 

Lease payments included in the measurement of the lease liability comprise the following:

 

   

fixed payments, including in-substance fixed payments;

 

   

variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;

 

   

amounts expected to be payable under a residual value guarantee; and

 

   

the exercise price under a purchase option that the Company is reasonably certain to exercise, lease payments in an optional renewal period if the Company is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the Company is reasonably certain not to terminate early.

The lease liability is measured at amortized cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Company’s estimate of the amount expected to be payable under a residual value guarantee, if the Company changes its assessment of whether it will exercise a purchase, extension or termination option or if there is a revised in-substance fixed lease payment.

When the lease liability is remeasured the Company recognizes the amount of the remeasurement of the lease liability as an adjustment to the right-of-use asset. However, if the carrying amount of the right-of-use asset is reduced to zero and there is a further reduction in the measurement of the lease liability, the Company recognizes any remaining amount of the remeasurement in profit or loss.

The Company presents right-of-use assets that do not meet the definition of investment property in ‘property, plant and equipment’ and lease liabilities in ‘financial liabilities’ in the separate statement of financial position.

The Company has elected not to recognize right-of-use assets and lease liabilities for leases of low-value assets and short-term leases. The Company recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

(ii) As a lessor

When the Company acts as a lessor, it determines at lease inception whether each lease is a finance lease or an operating lease.

To classify each lease, the Company makes an overall assessment of whether the lease transfers substantially all of the risks and rewards incidental to ownership of the underlying asset. If the lease transfers substantially all of the risks and rewards incidental to ownership of the underlying asset, then the lease is a finance lease; if not, then it is an operating lease. As part of this assessment, the Company considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

When the Company is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. It assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset. If a head lease is a short-term lease to which the Company applies the exemption described above, then it classifies the sub-lease as an operating lease.

 

27


Table of Contents

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2023 and 2022

 

3.

Material Accounting Policies, Continued

 

  (m)

Lease, Continued

 

If an arrangement contains lease and non-lease components, then the Company applies K-IFRS No. 1115 to allocate the consideration in the contract.

At the commencement date, the Company recognizes assets held under a finance lease in its statement of financial position and present them as a receivable at an amount equal to the net investment in the lease and recognize finance income over the lease term, based on a pattern reflecting a constant periodic rate of return on the lessor’s net investment in the lease.

The Company recognizes lease payments received under operating leases as income on a straight-line basis over the lease term as part of ‘other revenue’.

 

  (n)

Provisions

A provision is recognized, as a result of a past event, if the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.

The risks and uncertainties that inevitably surround events and circumstances are taken into account in reaching the best estimate of a provision. Where the effect of the time value of money is material, provisions are determined at the present value of the expected future cash flows. The unwinding of the discount is recognized as finance cost.

Provisions are reviewed at the end of each reporting period and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of resources embodying economic benefits will be required to settle the obligation, the provision is reversed.

The Company recognizes a liability for warranty obligations based on the estimated costs expected to be incurred under its basic limited warranty. This warranty covers defective products and is normally applicable for a warranty period from the date of purchase. These liabilities are accrued when product revenues are recognized. Factors that affect the Company’s warranty liability include historical and anticipated rates of warranty claims on those repairs and cost per claim to satisfy the Company’s warranty obligation. Warranty costs primarily include raw materials and labor costs. As these factors are impacted by actual experience and future expectations, management periodically assesses the adequacy of its recorded warranty liabilities and adjusts the amounts as necessary. Accrued warranty obligations are included in the current and non-current provisions.

Liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties and other sources, are recorded when it is probable that a liability has been incurred and the amount of the assessment and/or remediation can be reasonably estimated.

 

28


Table of Contents

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2023 and 2022

 

3.

Material Accounting Policies, Continued

 

  (o)

Non-current Assets Held for Sale

Non-current assets, or disposal groups comprising assets and liabilities, are classified as held-for-sale if it is highly probable that they will be recovered primarily from sale rather than through continuing use. In order to be classified as held for sale, the asset (or disposal group) is available for immediate sale in its present condition and its sale is highly probable. The assets (or disposal groups) that are classified as non-current assets held for sale are measured at the lower of their carrying amount and fair value less costs to sell on initial classification. The Company recognizes an impairment loss for any subsequent decrease in fair value of the asset (or disposal group) for which an impairment loss was recognized on initial classification as held-for-sale and a gain for any subsequent increase in fair value in profit or losses, up to the cumulative impairment loss previously recognized.

The Company does not depreciate a non-current asset while it is classified as held for sale or while it is part of a disposal group classified as held for sale.

 

  (p)

Employee Benefits

(i) Short-term employee benefits

Short-term employee benefits that are due to be settled within twelve months after the end of the period in which the employees render the related service are recognized in profit or loss on an undiscounted basis. The expected cost of profit-sharing and bonus plans and others are recognized when the Company has a present legal or constructive obligation to make payments as a result of past events and a reliable estimate of the obligation can be made.

(ii) Other long-term employee benefits

The Company’s net obligation in respect of long-term employee benefits other than pension plans is the amount of future benefit that employees have earned in return for their service in the current and prior periods.

(iii) Defined contribution plan

A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension plans are recognized as an employee benefit expense in profit or loss in the period during which services are rendered by employees.

 

29


Table of Contents

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2023 and 2022

 

3.

Material Accounting Policies, Continued

 

  (p)

Employee Benefits, continued

 

(iv) Defined benefit plan

A defined benefit plan is a post-employment benefit plan other than defined contribution plans. The Company’s net obligation in respect of its defined benefit plan is calculated by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value. The fair value of any plan assets is deducted.

The calculation is performed annually by an independent actuary using the projected unit credit method. The discount rate is the yield at the reporting date on high quality corporate bonds that have maturity dates approximating the terms of the Company’s obligations and that are denominated in the same currency in which the benefits are expected to be paid. The Company recognizes all actuarial gains and losses arising from defined benefit plans in retained earnings immediately.

The Company determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset), taking into account any changes in the net defined benefit liability (asset) during the period as a result of contributions and benefit payments. Consequently, the net interest on the net defined benefit liability (asset) now comprises: interest cost on the defined benefit obligation, interest income on plan assets, and interest on the effect on the asset ceiling.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognized immediately in profit or loss. The Company recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs.

(v) Termination benefits

The Company recognizes expense for termination benefits at the earlier of the date when the entity can no longer withdraw the offer of those benefits and when the entity recognizes costs for a restructuring involving the payment of termination benefits. If the termination benefits are not expected to be settled wholly before twelve months after the end of the annual reporting period, the Company measures the termination benefit with present value of future cash payments.

 

30


Table of Contents

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2023 and 2022

 

3.

Material Accounting Policies, Continued

 

  (q)

Revenue from contracts with customers

Revenue from the sale of goods in the course of ordinary activities is measured at the fair value of the consideration received or receivable, net of estimated returns, trade discounts, volume rebates and other cash incentives paid to customers.

The Company recognizes revenue according to the five-stage revenue recognition model (① Identifying the contractg② Identifying performance obligationsg③ Determining transaction priceg④ Allocating the transaction price to performance obligationsg⑤ Recognizing revenue for performance obligations).

The Company generates revenue primarily from sale of display panels. Product revenue is recognized when a customer obtains control over the Company’s products, which typically occurs upon shipment or delivery depending on the terms of the contracts with the customer.

The Company includes return option in the sales contract of display panels with its customers and the consideration receivable from the customer is subject to change due to returns. The Company estimates an amount of variable consideration by using the expected value method which the Company expects to better predict the amount of consideration. The Company includes in the transaction price an amount of variable consideration estimated only to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur during the return period when the uncertainty associated with the variable consideration is subsequently resolved. The Company recognizes a refund liability and an asset for its right to recover products from customers if the Company receives consideration from a customer and expects to refund some or all of that consideration to the customer. Sales taxes or value-added taxes collected from customers and remitted to governmental authorities are accounted for on a net basis and are excluded from revenues in the separate statement of comprehensive income (loss).

 

  (r)

Operating Segments

In accordance with K-IFRS No. 1108, Operating Segments, entity wide disclosures of geographic and product revenue information are provided in the consolidated financial statements.

 

  (s)

Finance Income and Finance Costs

Finance income comprises interest income on funds invested (including debt instruments measured at FVOCI), dividend income, gains on disposal of debt instruments measured at FVOCI and changes in fair value of financial instruments at FVTPL. Interest income is recognized as it accrues in profit or loss, using the effective interest method. Dividend income is recognized in profit or loss on the date that the Company’s right to receive payment is established.

 

31


Table of Contents

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2023 and 2022

 

3.

Material Accounting Policies, Continued

 

  (s)

Finance Income and Finance Costs, Continued

 

Finance costs comprise interest expense on borrowings, unwinding of the discount on provisions, gain and losses from financial instruments measured at FVTPL and impairment losses recognized on financial assets. Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of the cost of that asset.

 

  (t)

Income Tax

Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognized in profit or loss except to the extent that it relates to a business combination, or items recognized directly in equity or in other comprehensive income.

(i) Current tax

Current tax comprises the expected tax payable or receivable on the taxable profit or loss for the year, using tax rates enacted or substantively enacted at the reporting date and any adjustment to tax payable in respect of previous years. The amount of current tax payable or receivable is the best estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any. The taxable profit is different from the accounting profit for the period since the taxable profit is calculated excluding the temporary differences, which will be taxable or deductible in determining taxable profit (tax loss) of future periods, and non-taxable or non-deductible items from the accounting profit.

(ii) Deferred tax

Deferred tax is recognized, using the asset and liability method, in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and deferred tax assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

The Company recognizes a deferred tax liability for all 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 differences and it is probable that the temporary differences will not reverse in the foreseeable future. A deferred tax asset is recognized for all deductible temporary differences to the extent that it is probable that the differences relating to investments in subsidiaries, associates and joint ventures will reverse in the foreseeable future and taxable profit will be available against which the temporary difference can be utilized.

Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

The Company offsets deferred tax assets and deferred tax liabilities if, and only if, the Company has a legally enforceable right to set off current tax assets against current tax liabilities and the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority.

 

32


Table of Contents

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2023 and 2022

 

3.

Material Accounting Policies, Continued

 

  (u)

Earnings (Loss) Per Share

The Company presents basic and diluted earnings (loss) per share (“EPS”) data for its common shares. Basic EPS is calculated by dividing the profit or loss attributable to common shareholders of the Company by the weighted average number of common shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to common shareholders and the weighted average number of common shares outstanding, adjusted for the effects of all dilutive potential common shares such as convertible bonds and others.

 

  (v)

Accounting standards issued but not yet effective

A number of new accounting standards are effective for annual periods beginning after January 1, 2023 and earlier application is permitted; However, the Company has not early adopted the following new or amended accounting standards in preparing these separate financial statements.

 

  (i)

Classification of Liabilities as Current or Non-Current Liabilities with Covenants (Amendments to K-IFRS No. 1001 ‘Presentation of Financial Statements’)

The amendments aim to clarify the requirements the determining whether a liability is current or non-current and require new disclosure for non-current liabilities that are not subject to future covenants. The amendments are effective for annual reporting periods beginning on or after January 1, 2024.

The Company has borrowings that are subject to specific covenants. The Company is in the process of assessing the impact of the amendments to meet the new disclosure requirements.

 

  (ii)

Supplier Finance Arrangements (Amendments to K-IFRS No. 1007 ‘Statement of Cash Flow’ and K-IFRS No. 1107 ‘Financial Instruments: Disclosures’)

The amendments introduce new disclosure relating to supplier finance arrangements that assist users of the financial statements to assess the effects of these arrangements on an entity’s liabilities and cash flows and on the entity’s exposure to liquidity risk. The amendments are effective for annual reporting periods beginning on or after January 1, 2024.

The Company participates in supply chain financing arrangements for which the new disclosures will apply. The Company is in the process of assessing the impact of the amendments to meet the new disclosure requirements.

 

  (iii)

The following new and amended standards are not expected to have a significant impact onthe Company’s separate financial statements.

 

   

Lease Liability in a Sale and Leaseback (Amendments to K-IFRS No. 1116,Lease’.)

 

   

Lack of Exchangeability (Amendments to K-IFRS No. 1201, ‘The Effects of Changes in Foreign Exchange Rates’.)

 

33


Table of Contents

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2023 and 2022

 

4.

Cash and Cash Equivalents and Deposits in Banks

Cash and cash equivalents and deposits in banks as of December 31, 2023 and December 31, 2022 are as follows:

 

(In millions of won)              
     December 31, 2023      December 31, 2022  

Current assets

     

Cash and cash equivalents

     

Deposits

   W   334,502        692,312  

Deposits in banks

     

Restricted deposits (*)

   W 20,000        42,804  

Non-current assets

     

Deposits in banks

     

Restricted deposits (*)

   W 11        11  

 

  (*)

Includes funds deposited under agreements on mutually beneficial cooperation to aid LG Group companies’ suppliers.

 

34


Table of Contents

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2023 and 2022

 

5.

Trade Accounts and Notes Receivable, Other Accounts Receivable and Others

 

  (a)

Trade accounts and notes receivable as of December 31, 2023 and December 31, 2022 are as follows:

 

(In millions of won)              
     December 31, 2023      December 31, 2022  

Due from third parties

   W 172,109        173,644  

Due from related parties

     2,905,792        2,302,276  
  

 

 

    

 

 

 
   W 3,077,901        2,475,920  
  

 

 

    

 

 

 

 

  (b)

Other accounts receivable as of December 31, 2023 and December 31, 2022 are as follows:

 

(In millions of won)              
     December 31, 2023      December 31, 2022  

Current assets

     

Non-trade receivables, net

   W 94,936        133,991  

Accrued income

     242        1,125  
  

 

 

    

 

 

 
   W 95,178        135,116  
  

 

 

    

 

 

 

Non-current assets

     

Long-term non-trade receivables

   W 13,833        13,364  
  

 

 

    

 

 

 
   W 109,011        148,480  
  

 

 

    

 

 

 

Due from related parties included in other accounts receivable, as of December 31, 2023 and 2022 are W55,593 million and W51,948 million, respectively.

 

  (c)

The aging of trade accounts and notes receivable and other accounts receivable as of December 31, 2023 and December 31, 2022 are as follows:

 

(In millions of won)    December 31, 2023  
     Book value      Allowance for impairment  
     Trade accounts
and notes
receivable
     Other
accounts
receivable
     Trade accounts
and notes
receivable
     Other
accounts
receivable
 

Current

   W 3,074,502        105,816        (234      (62

1-15 days past due

     198        1,357        —         —   

16-30 days past due

     3,435        156        —         (2

31-60 days past due

     —         168        —         (2

More than 60 days past due

     —         1,592        —         (12
  

 

 

    

 

 

    

 

 

    

 

 

 
   W 3,078,135        109,089        (234      (78
  

 

 

    

 

 

    

 

 

    

 

 

 

 

35


Table of Contents

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2023 and 2022

 

5.

Trade Accounts and Notes Receivable, Other Accounts Receivable and Others, Continued

 

(In millions of won)    December 31, 2022  
     Book value      Allowance for impairment  
     Trade accounts
and notes
receivable
     Other
accounts
receivable
     Trade accounts
and notes
receivable
     Other
accounts
receivable
 

Current

   W 2,462,872        144,950        (200      (1,362

1-15 days past due

     922        933        —         (9

16-30 days past due

     —         —         —         —   

31-60 days past due

     —         79        —         —   

More than 60 days past due

     12,355        3,936        (29      (47
  

 

 

    

 

 

    

 

 

    

 

 

 
   W 2,476,149        149,898        (229      (1,418
  

 

 

    

 

 

    

 

 

    

 

 

 

The movement in the allowance for impairment in respect of trade accounts and notes receivable and other accounts receivable for the years ended December 31, 2023 and 2022 are as follows:

 

(In millions of won)    2023      2022  
     Trade accounts
and notes
receivable
     Other
accounts
receivable
     Trade accounts
and notes
receivable
     Other
accounts
receivable
 

Balance at the beginning of the year

   W 229        1,418        11        1,496  

(Reversal of) bad debt expense

            5        (8      218        (78

Write-off

     —         (1,332      —         —   
  

 

 

    

 

 

    

 

 

    

 

 

 

Balance at the end of the year

   W 234          78         229         1,418  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

  (d)

Other current assets as of December 31, 2023 and December 31, 2022 are as follows:

 

(In millions of won)              
     December 31, 2023      December 31, 2022  

Advanced payments

   W 1,220        21,658  

Prepaid expenses

     71,382        51,822  

Value added tax refundable

     39,128        124,225  

Right to recover returned goods

     5,121        8,155  
  

 

 

    

 

 

 
   W 116,851        205,860  
  

 

 

    

 

 

 

 

36


Table of Contents

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2023 and 2022

 

6.

Other Financial Assets

Other financial assets as of December 31, 2023 and 2022 are as follows:

 

(In millions of won)              
     December 31, 2023      December 31, 2022  

Current assets

     

Financial assets at fair value through profit or loss

     

Derivatives(*)

   W 136,762        119,417  
  

 

 

    

 

 

 

Financial assets carried at amortized cost

     

Short-term loans

   W 26,375        30,062  
  

 

 

    

 

 

 
   W 163,137        149,479  
  

 

 

    

 

 

 

Non-current assets

     

Financial assets at fair value through profit or loss

     

Equity instruments

   W 3,967        10,484  

Convertible securities

     1,838        1,797  

Derivatives(*)

     32,941        110,663  
  

 

 

    

 

 

 
   W 38,746        122,944  
  

 

 

    

 

 

 

Financial assets carried at amortized cost

     

Deposits

   W 8,538        8,317  

Long-term loans

     33,509        58,806  
  

 

 

    

 

 

 
   W 42,047        67,123  
  

 

 

    

 

 

 
   W 80,793        190,067  
  

 

 

    

 

 

 

 

  (*)

Represents cross currency interest rate swap contracts and others entered into by the Company to hedge currency and interest rate risks with respect to foreign currency denominated borrowings and bonds. The contracts are not designated as hedging instruments.

 

37


Table of Contents

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2023 and 2022

 

7.

Inventories

Inventories as of December 31, 2023 and December 31, 2022 are as follows:

 

(In millions of won)              
     December 31, 2023      December 31, 2022  

Finished goods

   W 279,483        215,526  

Work-in-process

     1,005,025        1,049,489  

Raw materials

     408,078        578,704  

Supplies

     88,373        80,875  
  

 

 

    

 

 

 
   W 1,780,959        1,924,594  
  

 

 

    

 

 

 

For the years ended December 31, 2023 and 2022, the amount of inventories recognized as cost of sales including inventory write-downs are as follows:

 

(In millions of won)              
     2023      2022  

Inventories recognized as cost of sales

   W 21,446,905        24,870,325  

Including: Inventory write-downs

     153,844        189,197  

There were no significant reversals of inventory write-downs recognized during the years ended December 31, 2023 and 2022.

 

38


Table of Contents

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2023 and 2022

 

8.

Investments

 

  (a)

Investments in subsidiaries consist of the following:

 

(In millions of won)             
            December 31, 2023      December 31, 2022  

Subsidiaries

 

Location

 

Business

  Percentage of
ownership
    Carrying
Amount
     Percentage of
ownership
    Carrying
Amount
 

LG Display America, Inc.

  San Jose, U.S.A.   Sell display products     100   W 36,815        100   W 36,815  

LG Display Germany GmbH

  Eschborn, Germany   Sell display products     100     19,373        100     19,373  

LG Display Japan Co., Ltd.

  Tokyo, Japan   Sell display products     100     15,686        100     15,686  

LG Display Taiwan Co., Ltd.

  Taipei, Taiwan   Sell display products     100     35,230        100     35,230  

LG Display Nanjing Co., Ltd.

  Nanjing, China   Manufacture display products     100     593,726        100     593,726  

LG Display Shanghai Co., Ltd.

  Shanghai, China   Sell display products     100     9,093        100     9,093  

LG Display Guangzhou Co., Ltd.

  Guangzhou, China   Manufacture display products     100     293,557        100     293,557  

LG Display Shenzhen Co., Ltd.

  Shenzhen, China   Sell display products     100     3,467        100     3,467  

LG Display Singapore Pte. Ltd.

  Singapore   Sell display products     100     1,250        100     1,250  

L&T Display Technology (Fujian) Limited

  Fujian, China   Manufacture and sell LCD module and LCD monitor sets     51     10,123        51     10,123  

LG Display Yantai Co., Ltd.

  Yantai, China   Manufacture display products     100     169,195        100     169,195  

Nanumnuri Co., Ltd.

  Gumi, South Korea   Provide janitorial services     100     800        100     800  

LG Display (China) Co., Ltd.

  Guangzhou, China   Manufacture and sell display products     51     723,086        51     723,086  

Unified Innovative Technology, LLC

  Wilmington, U.S.A.   Manage intellectual property     100     9,489        100     9,489  

LG Display Guangzhou Trading Co., Ltd.

  Guangzhou, China   Sell display products     100     218        100     218  

Global OLED Technology LLC

  Sterling, U.S.A   Manage OLED intellectual property     100     164,322        100     164,322  

LG Display Vietnam Haiphong Co., Ltd.

  Haiphong, Vietnam   Manufacture and sell display products     100     672,658        100     672,658  

Suzhou Lehui Display Co., Ltd.

  Suzhou, China   Manufacture and sell LCD module and LCD monitor sets     100     121,640        100     121,640  

LG DISPLAY FUND I LLC(*1)

  Wilmington, U.S.A   Invest in venture business and acquire technologies     100     91,105        100     85,266  

LG Display High-Tech (China) Co., Ltd.

  Guangzhou, China   Manufacture and sell display products     69     1,794,547        69     1,794,547  

MMT(Money Market Trust) (*2)

  Seoul, South Korea   Money market trust     100     92,900        —     
       

 

 

      

 

 

 
        W 4,858,280        W 4,759,541  
       

 

 

      

 

 

 

 

  (*1)

During 2023, the Company contributed W5,839 million in cash for the capital increase of LG DISPLAY FUND I LLC. There was no change in the Company’s ownership percentage in LG DISPLAY FUND I LLC as a result of this additional investment.

  (*2)

The balance of MMT(Money Market Trust) as of December 31, 2023 is W92,900 million.

 

39


Table of Contents

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2023 and 2022

 

8.

Investments, Continued

 

(b)

Investments in associates consist of the following:

 

(In millions of won)                             
               December 31, 2023    December 31, 2022

Associates

  

Location

  

Business

   Percentage of
ownership
    

Carrying
Amount

   Percentage of
ownership
    

Carrying
Amount

Paju Electric Glass
Co., Ltd.

  

Paju,

South Korea

   Manufacture glass for display      40    W45,089      40    W45,089

WooRee E&L Co., Ltd(*1).

  

Ansan,

South Korea

   Manufacture LED back light unit packages      13    7,106      13    11,424

YAS Co., Ltd.

  

Paju,

South Korea

   Develop and manufacture deposition equipment for OLEDs      16    10,000      15    10,000

AVATEC Co., Ltd.

  

Daegu,

South Korea

   Process and sell glass for display      14    8,000      14    8,000

Arctic Sentinel, Inc.

   Los Angeles, U.S.A.    Develop and manufacture tablet for kids      10    —       10    — 

Cynora GmbH

  

Bruchsal

Germany

   Develop organic emitting materials for displays and lighting devices      10    —       11    — 

Material Science Co., Ltd.(*2) (*3)

  

Seoul,

South Korea

   Develop, manufacture and sell materials for display      16    3,588      10    3,650
           

 

     

 

            W73,783       W78,163
           

 

     

 

 

  (*1)

During 2023, the Company recognized an impairment loss of W4,318 million as finance cost for the difference between the carrying amount and the recoverable amount of investments in WooRee E&L Co., Ltd.

  (*2)

During 2023, the Company recognized an impairment loss of W62 million as finance cost for the difference between the carrying amount and the recoverable amount of investments in Material Science Co., Ltd.

  (*3)

During 2023, due to the investee’s acquisition of treasury shares, the Company’s shareholding ratio increased from 10% to 16%.

Although the Company’s respective share interests in WooRee E&L Co., Ltd., YAS Co., Ltd., AVATEC Co., Ltd., Arctic Sentinel, Inc., Cynora GmbH and Material Science Co., Ltd. are below 20%, the Company is able to exercise significant influence through its right to appoint a director to the board of directors of each investee. Accordingly, the investments in these investees have been accounted for using the equity method.

Dividends income recognized from subsidiaries and associates for the years ended December 31, 2023 and 2022 amounted to W1,895,692 million and W122,303 million, respectively.

 

40


Table of Contents

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2023 and 2022

 

9.

Property, Plant and Equipment

 

  (a)

Changes in property, plant and equipment for the year ended December 31, 2023 are as follows:

 

(In millions of won)                                                 
     Land     Buildings
and
structures
    Machinery
and
equipment
    Furniture
and
fixtures
    Construction
-in-progress (*1)
    Right-of-use
asset
    Others
(*2)
    Total  

Acquisition cost as of January 1, 2023

   W 476,045       5,265,179       36,539,468       554,850       9,393,158       40,702       926,870       53,196,272  

Accumulated depreciation as of January 1, 2023

     —        (3,210,075     (33,383,114     (445,727     —        (34,895     (669,004     (37,742,815

Accumulated impairment loss as of January 1, 2023

     —        (180,864     (871,500     (5,919     (328,555     (347     (21,428     (1,408,613
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Book value as of January 1, 2023

   W 476,045       1,874,240       2,284,854       103,204       9,064,603       5,460       236,438       14,044,844  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Additions

     —        —        —        —        1,894,782       21,568       —        1,916,350  

Depreciation

     —        (225,364     (1,300,227     (44,680     —        (13,030     (219,406     (1,802,707

Disposals

     (330     (758     (507,869     (1,921     —        —        (43,635     (554,513

Impairment loss(*3)

     —        —        (2,022     (6     —        —        (6,493     (8,521

Others(*4)

     (2,902     1,416,828       3,290,481       28,186       (5,067,588     —        323,789       (11,206
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Book value as of December 31, 2023

   W 472,813       3,064,946       3,765,217       84,783       5,891,797       13,998       290,693       13,584,247  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Acquisition cost as of December 31, 2023

   W 472,813       6,674,304       37,381,457       563,966       6,148,883       38,260       1,063,452       52,343,135  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Accumulated depreciation as of December 31, 2023

   W —        (3,429,293     (32,682,474     (473,444     —        (24,040     (749,958     (37,359,209
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Accumulated impairment loss as of December 31, 2023

   W —        (180,065     (933,766     (5,739     (257,086     (222     (22,801     (1,399,679
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(*1)

As of December 31, 2023, construction-in-progress mainly relates to construction of manufacturing facilities.

(*2)

Others mainly consist of tools and equipment.

(*3)

Impairment losses of W8,521 million are recognized for the difference between the carrying amount and the recoverable amount of property, plant and equipment.

(*4)

Others mainly represent the reclassification of construction-in-progress to other property, plant and equipment.

 

41


Table of Contents

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2023 and 2022

 

9.

Property, Plant and Equipment, Continued

 

  (b)

Changes in property, plant and equipment for the year ended December 31, 2022 are as follows:

 

     Land     Buildings
and
structures
    Machinery
and
equipment
    Furniture
and
fixtures
    Construction-
in-progress (*1)
    Right-of-use
asset
    Others
(*2)
    Total  

Acquisition cost as of January 1, 2022

   W 433,847       5,150,686       36,476,141       546,221       6,632,832       32,999       842,082       50,114,808  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Accumulated depreciation as of January 1, 2022

     —        (3,073,483     (32,813,259     (435,666     —        (27,542     (599,171     (36,949,121

Accumulated impairment loss as of January 1, 2022

     —        (138,679     (914,857     (4,971     (76,069     (167     (20,086     (1,154,829

Book value as of January 1, 2022

   W 433,847       1,938,524       2,748,025       105,584       6,556,763       5,290       222,825       12,010,858  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Additions

     —        —        —        —        4,463,548       14,183       —        4,477,731  

Depreciation

     —        (208,409     (1,397,691     (43,137     —        (13,339     (197,717     (1,860,293

Disposals

     (3,573     —        (167,724     (381     —        —        (35,591     (207,269

Impairment loss(*3)

     —        (42,185     (33,230     (2,763     (252,486     (254     (8,456     (339,374

Others(*4)

     45,771       186,310       1,135,474       43,901       (1,703,222     (420     255,377       (36,809

Book value as of December 31, 2022

   W 476,045       1,874,240       2,284,854       103,204       9,064,603       5,460       236,438       14,044,844  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Acquisition cost as of December 31, 2022

   W 476,045       5,265,179       36,539,468       554,850       9,393,158       40,702       926,870       53,196,272  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Accumulated depreciation as of December 31, 2022

   W —        (3,210,075     (33,383,114     (445,727     —        (34,895     (669,004     (37,742,815
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Accumulated impairment loss as of December 31, 2022

   W —        (180,864     (871,500     (5,919     (328,555     (347     (21,428     (1,408,613
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(*1)

As of December 31, 2022, construction-in-progress mainly relates to construction of manufacturing facilities.

(*2)

Others mainly consist of tools and equipment.

(*3)

During 2022, Display (Large OLED) CGU were assessed for impairment, and impairment losses amounting to W333,547 million are recognized as other non-operating expenses.

(*4)

Others mainly represent the reclassification of construction-in-progress to other property, plant and equipment.

 

(c)

Capitalized borrowing costs and capitalization rate for the years ended December 31, 2023 and 2022 are as follows:

 

(In millions of won)       
     2023      2022  

Capitalized borrowing costs

   W 208,733        142,980  

Capitalization rate

     4.96%        3.12%  

 

(d)

The company provides a portion of property, plant and equipment as an operating lease. During 2023, rental income from property, plant and equipment is W1,886 million (2022: W2,066 million).

 

42


Table of Contents

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2023 and 2022

 

10.

Intangible Assets and Non-financial Assets Impairment

 

  (a)

Changes in intangible assets for the year ended December 31, 2023 are as follows:

 

(In millions of won)   Intellectual
property

rights
    Software     Member-
ships
    Develop-
ment costs
    Construction-
in-progress
    Customer
relationships
    Technology     Good
will
    Others
(*2)
    Total  

Acquisition cost as of January 1, 2023

  W 1,757,282       1,160,702       26,619       2,016,477       28,169       59,176       12,763       72,588       13,080       5,146,856  

Accumulated amortization as of January 1, 2023

    (878,767     (975,411     —        (1,358,446     —        (37,491     (11,411     —        (13,080     (3,274,606

Accumulated impairment loss as of January 1, 2023

    (48,598     (14,235     (1,701     (92,812     —        (21,685     (43     (57,995     —        (237,069
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Book value as of January 1, 2023

  W 829,917       171,056       24,918       565,219       28,169       —        1,309       14,593       —        1,635,181  

Additions - internally developed

    —        —        —        493,608       —        —        —        —        —        493,608  

Additions - external purchases

    118,343       —        —        —        98,585       —        —        —        —        216,928  

Amortization (*1)

    (156,128     (85,528     —        (363,162     —        —        (163     —        —        (604,981

Disposals

    (202     (396     (3,796     —        —        —        —        —        —        (4,394

Impairment loss (*3)

    (1,633     (425     —        (52,775     —        —        —        —        —        (54,833

Reversal of impairment loss

    —        —        242       —        —        —        —        —        —        242  

Transfer from construction-in-progress

    —        96,801       —        (1,429     (94,094     —        —        —        —        1,278  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Book value as of December 31, 2023

  W 790,297       181,508       21,364       641,461       32,660       —        1,146       14,593       —        1,683,029  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Acquisition cost as of December 31, 2023

  W 1,867,526       1,202,537       22,905       2,295,468       32,660       59,176       12,763       72,588       13,080       5,578,703  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Accumulated amortization as of December 31, 2023

  W (1,029,320)       (1,008,433     —        (1,509,575     —        (37,491     (11,574     —        (13,080)       (3,609,473
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Accumulated impairment loss as of December 31, 2023

  W (47,909)       (12,596     (1,541     (144,432     —        (21,685     (43     (57,995     —        (286,201
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(*1)

The Company has classified the amortization as manufacturing overhead costs, selling expenses, administrative expenses, and research and development expenses.

 

43


Table of Contents

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2023 and 2022

 

10.

Intangible Assets and Non-financial Assets Impairment, Continued

 

(*2)

Others mainly consist of rights to use electricity and gas supply facilities.

(*3)

The Company recognized an impairment loss amounting to W52,775 million for development projects which are not likely to generate revenue.

 

44


Table of Contents

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2023 and 2022

 

10.

Intangible Assets and Non-financial Assets Impairment, Continued

 

  (b)

Changes in intangible assets for the year ended December 31, 2022 are as follows:

 

(In millions of won)   Intellectual
property

rights
    Software     Member-
ships
    Development
costs
    Construction-
in-progress
    Customer
relationships
    Technology     Good
will
    Others
(*2)
    Total  

Acquisition cost as of January 1, 2022

  W 1,573,815       1,093,251       30,267       1,771,383       18,309       59,176       12,763       72,588       13,080       4,644,632  

Accumulated amortization as of January 1, 2022

    (718,807     (910,855     —        (1,318,476     —        (37,491     (11,243     —        (13,080     (3,009,952

Accumulated impairment loss as of January 1, 2022

    (21,484     (8,353     (1,659     (63,692     —        (21,685     —        (57,995     —        (174,868
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Book value as of January 1, 2022

  W 833,524       174,043       28,608       389,215       18,309       —        1,520       14,593       —        1,459,812  

Additions - internally developed

    —        —        —        502,755       —        —        —        —        —        502,755  

Additions - external purchases

    187,087       9,304       6,960       —        86,363       —        —        —        —        289,714  

Amortization (*1)

    (161,141     (81,766     —        (272,102     —        —        (168     —        —        (515,177

Disposals

    —        (977     (10,608     —        —        —        —        —        —        (11,585

Impairment loss (*3)(*4)

    (29,553     (6,051     (42     (54,649     —        —        (43     —        —        (90,338

Transfer from construction-in-progress

    —        76,503       —        —        (76,503     —        —        —        —        —   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Book value as of December 31, 2022

  W 829,917       171,056       24,918       565,219       28,169       —        1,309       14,593       —        1,635,181  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Acquisition cost as of December 31, 2022

  W 1,757,282       1,160,702       26,619       2,016,477       28,169       59,176       12,763       72,588       13,080       5,146,856  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Accumulated amortization as of December 31, 2022

  W (878,767)       (975,411     —        (1,358,446     —        (37,491     (11,411     —        (13,080     (3,274,606
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Accumulated impairment loss as of December 31, 2022

  W (48,598)       (14,235)       (1,701     (92,812     —        (21,685     (43     (57,995     —        (237,069
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(*1)

The Company has classified the amortization as manufacturing overhead costs, selling expenses, administrative expenses, and research and development expenses.

(*2)

Others mainly consist of rights to use electricity and gas supply facilities.

(*3)

During 2022, Display (Large OLED) CGU were assessed for impairment, and impairment losses amounting to W55,713 million are recognized as other non-operating expenses. The impairment amount is allocated to development costs, intellectual property rights and others.

(*4)

The Company recognized an impairment loss amounting to W33,386 million for development projects which are not likely to generate revenue.

 

45


Table of Contents

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2023 and 2022

 

10.

Intangible Assets and Non-financial Assets Impairment, Continued

 

  (c)

Development costs and Intellectual property rights as of December 31, 2023 and 2022 are as follows:

Development costs

 

  (i)

As of December 31, 2023

 

(In millions of won)

 

    


         

 

 

Classification

   Product type      Book Value  

Development completed

     TV      W 43,956  
     IT        63,049  
     Mobile and others        190,487  
     

 

 

 
      W 297,492  
     

 

 

 

Development in process

     TV      W 46,368  
     IT        175,023  
     Mobile and others        122,578  
     

 

 

 
      W 343,969  
     

 

 

 
   W 641,461  
     

 

 

 

(ii) As of December 31, 2022

 

(In millions of won)

 

    


         

 

 

Classification

   Product type      Book Value  

Development completed

     TV      W 55,187  
     IT        24,684  
     Mobile and others        199,552  
     

 

 

 
      W 279,423  
     

 

 

 

Development in process

     TV      W 60,376  
     IT        100,380  
     Mobile and others        125,040  
     

 

 

 
      W 285,796  
     

 

 

 
   W 565,219  
     

 

 

 

 

46


Table of Contents

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2023 and 2022

 

10.

Intangible Assets and Non-financial Assets Impairment, Continued

 

Intellectual property rights

 

  (i)

As of December 31, 2023

 

(In millions of won and in years)     

         

Classification

   Category      Book Value      Remaining
amortization
period (*1)
 

Patent

     Direct additions      W 214,143        7.1  
     Licenses agreement(*2)        573,810        5.7  
     

 

 

    
      W 787,953     
     

 

 

    

Other

        2,344        3.6  
     

 

 

    
      W 790,297     
     

 

 

    

 

  (*1)

Weighted average of the remaining useful life at the end of the reporting period as each patent has a different remaining amortization period.

  (*2)

The Company’s rights under contracts with the patent company.

 

  (ii)

As of December 31, 2022

 

(In millions of won and in years)     

         

Classification

   Category      Book Value      Remaining
amortization
period (*1)
 

Patent

     Direct additions      W 196,701        7.2  
     Licenses agreement(*2)        631,301        6.4  
     

 

 

    
      W 828,002     
     

 

 

    

Other

        1,915        3.6  
     

 

 

    
      W 829,917     
     

 

 

    

 

  (*1)

Weighted average of the remaining useful life at the end of the reporting period as each patent has a different remaining amortization period.

  (*2)

The Company’s rights under contracts with the patent company.

 

47


Table of Contents

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2023 and 2022

 

10.

Intangible Assets and Non-financial Assets Impairment, Continued

 

  (d)

Impairment assessment on CGU

As of December 31, 2023, the Company’s cash-generating units consist of Display CGU, Display (Large OLED) CGU and Display (AD PO) CGU. As of December 31, 2023, the Company performed impairment assessment to Display CGU. All the goodwill balance as of December 31, 2023 is allocated for the Display CGU

The recoverable amount of Display CGU is determined based on its value in use. Value in use is calculated using the estimated cash flow based on 5-year business plan approved by management. The estimated revenue and operating expenditures of the Company’s products used in the forecast was determined considering external sources and the Company’s historical experience. Management estimated the future cash flows based on its past performance and forecasts on market growth. The key assumptions used in the estimation of value in use for Display CGU include revenue and operating expenditures for the forecast period, and discount rate. Growth rate for subsequent years (“terminal growth rate) and the discount rate used in the estimation of value in use are as follows.

 

     Pre-tax
discount rate(*)
    Post-tax
discount rate(*)
    Terminal growth rate  

2023

                  

Display CGU

     10.9     9.0     1.0

2022

                  

Display CGU

     10.8     9.0     1.0

 

  (*)

The discount rate was calculated using the weighted average cost of equity capital and debt and the beta of equity capital was calculated as the average of five global listed companies in the same industry and the Company. Cost of debt was calculated using the yield rate of non-guaranteed corporate bond considering the Company’s credit rating and debt ratio was determined using the average of the debt ratios of the five global listed companies in the same industry and the Company. The Company calculates the value in use of the CGU using post-tax cash flows and a post-tax discount rate, and the result is not significantly different from the value in use calculated using pre-tax cash flows and pre-tax discount rate.

As a result of impairment assessment for Display CGU, the recoverable amount exceeded its carrying amount. The value in use determined for this CGU is sensitive to the discount rate used in the discounted cash flow model.

 

48


Table of Contents

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2023 and 2022

 

11.

Investment Property

 

  (a)

Changes in investment property for the year ended December 31, 2023 and 2022 are as follows:

 

(In millions of won)    2023      2022  

Book value as of January 1

   W 28,269        —   

Transfer from property, plant and equipment

     9,928        36,809  

Depreciation

     (4,962      (804

Impairment loss

     —         (7,736

Others

     (240      —   
  

 

 

    

 

 

 

Book value as of December 31

   W 32,995        28,269  
  

 

 

    

 

 

 

 

  (b)

During 2023, rental income from investment property is W5,478 million (2022: W2,066 million).

 

49


Table of Contents

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2023 and 2022

 

12.

Financial Liabilities

 

  (a)

Financial liabilities as of December 31, 2023 and 2022 are as follows:

 

(In millions of won)    December 31, 2023      December 31, 2022  

Current

     

Short-term borrowings

   W 1,428,213        1,952,289  

Current portion of long-term borrowings

     2,000,930        1,721,690  

Current portion of bonds

     369,716        316,648  

Current portion of payment guarantee

liabilities

     6,780        5,877  

Derivatives(*1)

     26,193        14,443  

Fair value hedging derivatives(*2)

     7,392        —   

Lease liabilities

     11,598        3,099  
  

 

 

    

 

 

 
   W 3,850,822        4,014,046  
  

 

 

    

 

 

 

Non-current

     

Long-term borrowings

   W 4,784,819        3,938,415  

Bonds

     1,118,427        1,132,098  

Payment guarantee liabilities

     13,833        13,364  

Derivatives(*1)

     37,333        32,965  

Fair value hedging derivatives (*2)

     28,660        —   

Lease liabilities

     2,802        2,853  
  

 

 

    

 

 

 
   W 5,985,874        5,119,695  
  

 

 

    

 

 

 

 

  (*1)

Represents cross currency interest rate swap contracts and others entered into by the Company to hedge currency and interest rate risks with respect to foreign currency denominated borrowings and bonds. The contracts are not designated as hedging instruments.

  (*2)

Represents forward exchange contracts entered into by the Company to hedge exchange rate risks with respect to advances received in foreign currency. The contracts are designated as hedging instruments.

 

  (b)

Short-term borrowings as of December 31, 2023 and 2022 are as follows.

 

(In millions of won, USD and CNY)                     

Lender

   Annual interest rate
as of
December 31, 2023 (%)
     December 31,
2023
     December 31,
2022
 

The Standard Chartered Bank of Korea Limited and others

     3.50~6.95      W 1,428,213        1,952,289  

Foreign currency equivalent

        USD 400        USD 901  
        CNY 345        —   

 

50


Table of Contents

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2023 and 2022

 

12.

Financial Liabilities, Continued

 

  (c)

Won denominated long-term borrowings as of December 31, 2023 and 2022 are as follows :

 

(In millions of won)

        

Lender

   Annual interest rate
as of
December 31, 2023 (%)
     December 31,
2023
     December 31,
2022
 

LG Electronics Inc.

     6.06      W 1,000,000        —   

Korea Development Bank and others

     1.90~7.50        3,490,967        2,986,102  

Less current portion of long-term borrowings

        (776,000      (1,341,500
     

 

 

    

 

 

 
      W 3,714,967        1,644,602  
     

 

 

    

 

 

 

 

  (d)

Foreign currency denominated long-term borrowings as of December 31, 2023 and 2022 are as follows :

 

(In millions of won and USD)

        

Lender

   Annual interest rate
as of
December 31, 2023 (%)
     December 31,
2023
     December 31,
2022
 

KEB Hana Bank and others

     1.82~8.60      W 2,294,782        2,674,003  
     

 

 

    

 

 

 

Foreign currency equivalent

      USD  1,780      USD  2,110  

Less current portion of long-term borrowings

        (1,224,930      (380,190
     

 

 

    

 

 

 
      W 1,069,852        2,293,813  
     

 

 

    

 

 

 

 

51


Table of Contents

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2023 and 2022

 

12.

Financial Liabilities, Continued

 

  (e)

Details of bonds issued and outstanding as of December 31, 2023 and 2022 are as follows :

 

(In millions of won and USD)

 

        
     Maturity      Annual interest rate
as of
December 31, 2023 (%)
     December 31,
2023
     December 31,
2022
 

Won denominated bonds at amortized cost(*1)

           

Publicly issued bonds

    

February 2024~

February 2027

 

 

     2.29~3.66      W 1,025,000        1,215,000  

Privately issued bonds

    

January 2025~

January 2026

 

 

     7.20~7.25        337,000        110,000  

Less discount on bonds

           (2,120      (2,927

Less current portion

           (369,716      (189,975
        

 

 

    

 

 

 
         W 990,164        1,132,098  
        

 

 

    

 

 

 

Foreign currency denominated bonds at amortized cost(*2)

           

Privately issued bonds

     April 2026        7.29      W 128,940        126,730  

Foreign currency equivalent (contractual par amount)

           USD 100        USD 100  

Less discount on bonds

           (677      (57

Foreign currency equivalent (discount on bonds)

           USD (1      USD (0

Less current portion

           —         (126,673
        

 

 

    

 

 

 
         W 128,263        —   
        

 

 

    

 

 

 
         W 1,118,427        1,132,098  
        

 

 

    

 

 

 

 

  (*1)

Principal of the won denominated bonds is to be repaid at maturity and interests are paid quarterly.

  (*2)

Principal of the foreign currency denominated bonds is to be repaid at maturity and interests are paid quarterly.

 

52


Table of Contents

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2023 and 2022

 

13.

Employee Benefits

The Company’s defined benefit plans provide a lump-sum payment to an employee based on final salary rates and length of service at the time the employee leaves the Company.

The defined benefit plans expose the Company to actuarial risks, such as the risk associated with expected periods of service, interest rate risk, market (investment) risk, and others.

 

  (a)

Net defined benefit liabilities (defined benefit assets) recognized as of December 31, 2023 and 2022 are as follows:

 

(In millions of won)              
     December 31, 2023      December 31, 2022  

Present value of partially funded defined benefit obligations

   W 1,482,976        1,595,629  

Fair value of plan assets

     (1,890,188      (2,043,150
  

 

 

    

 

 

 
   W (407,212)        (447,521
  

 

 

    

 

 

 

 

  (b)

Changes in the present value of the defined benefit obligations for the years ended December 31, 2023 and 2022 are as follows:

 

(In millions of won)              
     2023      2022  

Defined benefit obligations at January 1

   W 1,595,629        1,678,148  

Current service cost

     171,479        171,753  

Interest cost

     83,793        59,104  

Remeasurements (before tax)

     (65,505      (195,908

Benefit payments

     (285,869      (116,105

Net transfers from (to) related parties

     (16,551      (1,363
  

 

 

    

 

 

 

Defined benefit obligations at December 31

   W 1,482,976        1,595,629  
  

 

 

    

 

 

 

Weighted average remaining maturity of defined benefit obligations as of December 31, 2023 and 2022 are 12.20 years and 12.95 years, respectively.

 

53


Table of Contents

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2023 and 2022

 

13.

Employee Benefits, Continued

 

  (c)

Changes in fair value of plan assets for the years ended December 31, 2023 and 2022 are as follows:

 

(In millions of won)              
     2023      2022  

Fair value of plan assets at January 1

   W 2,043,150        1,746,424  

Expected return on plan assets

     107,735        64,378  

Remeasurements (before tax)

     (870      (30,044

Contributions by employer directly to plan assets

     —         370,000  

Benefit payments

     (259,609      (107,608

Net transfers from (to) related parties

     (218      —   
  

 

 

    

 

 

 

Fair value of plan assets at December 31

   W 1,890,188        2,043,150  
  

 

 

    

 

 

 

The estimated contributions payable in the following financial year is W180,902 million.

 

  (d)

Plan assets as of December 31, 2023 and 2022 are as follows:

 

(In millions of won)

     
     December 31, 2023      December 31, 2022  

Guaranteed deposits in banks

   W 1,890,188        2,043,150  

As of December 31, 2023, the Company maintains the plan assets primarily with Mirae Asset Securities Co., Ltd., KB Insurance Co., Ltd. and others.

 

  (e)

Expenses related to defined benefit plans recognized in profit or loss for the years ended December 31, 2023 and 2022 are as follows:

 

(In millions of won)

     
     2023      2022  

Current service cost

   W 171,479        171,753

Net interest cost

     (23,942      (5,274
  

 

 

    

 

 

 
   W   147,537          166,479  
  

 

 

    

 

 

 

Expenses are recognized in the separate statements of comprehensive income (loss) as follows:

 

(In millions of won)

     
     2023      2022  

Cost of sales

   W 114,226        128,706  

Selling expenses

     6,738        7,585  

Administrative expenses

     14,865         17,431   

Research and development expenses

     11,708        12,757  
  

 

 

    

 

 

 
   W   147,537          166,479  
  

 

 

    

 

 

 

 

54


Table of Contents

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2023 and 2022

 

13.

Employee Benefits, Continued

 

  (f)

Remeasurements of net defined benefit liabilities (assets) included in other comprehensive income (loss) for the years ended December 31, 2023 and 2022 are as follows:

 

(In millions of won)              
     2023      2022  

Balance at January 1

   W (2,806)        (125,167

Remeasurements

     

Actuarial profit or loss arising from:

     

Experience adjustment

     66,461        (83,376

Demographic assumptions

     (85      (8,020

Financial assumptions

     (871      287,304

Return on plan assets

     (870      (30,044
  

 

 

    

 

 

 
   W 64,635        165,864
  

 

 

    

 

 

 

Income tax

   W (14,818)        (43,503
  

 

 

    

 

 

 

Balance at December 31

   W 47,011        (2,806)  
  

 

 

    

 

 

 

 

  (g)

Principal actuarial assumptions as of December 31, 2023 and 2022 (expressed as weighted averages) are as follows:

 

     December 31, 2023     December 31, 2022  

Expected rate of salary increase

     4.0     4.7

Discount rate for defined benefit obligations

     4.6     5.4

Assumptions regarding future mortality are based on published statistics and mortality tables. The current mortality underlying the values of the liabilities in the defined benefit plans are as follows:

 

          December 31, 2023     December 31, 2022  

Teens

   Males      0.00     0.00
   Females      0.00     0.00

Twenties

   Males      0.01     0.01
   Females      0.00     0.00

Thirties

   Males      0.01     0.01
   Females      0.00     0.00

Forties

   Males      0.02     0.02
   Females      0.01     0.01

Fifties

   Males      0.04     0.04
   Females      0.02     0.02

 

55


Table of Contents

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2023 and 2022

 

13.

Employee Benefits, Continued

 

  (h)

Reasonably possible changes to respective relevant actuarial assumptions would have affected the defined benefit obligations by the following amounts as of December 31, 2023:

 

(In millions of won)       
     Defined benefit obligations  
     1% increase      1% decrease  

Discount rate for defined benefit obligations

   W (157,102)        184,374  

Expected rate of salary increase

     192,107        (165,703

 

14.

Provisions

 

  (a)

Changes in provisions for the year ended December 31, 2023 are as follows:

 

(In millions of won)                            
     Litigation and
claims
     Warranties (*)      Others      Total  

Balance at January 1, 2023

   W 1,680        248,137        8,432        258,249  

Additions (reversal)

     126        49,787        (2,552      47,361  

Usage

     —         (125,971      —         (125,971
  

 

 

    

 

 

    

 

 

    

 

 

 

Balance at December 31, 2023

   W 1,806        171,953        5,880        179,639  
  

 

 

    

 

 

    

 

 

    

 

 

 

Current

   W 1,806        108,148        5,880        115,834  

Non-current

   W —         63,805        —         63,805  

 

  (*)

Product warranties on defective products are normally applicable for warranty periods from the date of customer’s purchase. The provision is calculated by using historical and anticipated rates of warranty claims and costs per claim to satisfy the Company’s warranty obligation.

 

  (b)

Changes in provisions for the year ended December 31, 2022 are as follows:

 

(In millions of won)                            
     Litigation and
claims
     Warranties (*)      Others      Total  

Balance at January 1, 2022

   W —         255,560        9,247        264,807  

Additions (reversal)

     1,680        205,630        (815      206,495  

Usage

     —         (213,053      —         (213,053
  

 

 

    

 

 

    

 

 

    

 

 

 

Balance at December 31, 2022

   W 1,680        248,137        8,432        258,249  
  

 

 

    

 

 

    

 

 

    

 

 

 

Current

   W 1,680        161,980        8,432        172,092  

Non-current

   W —         86,157        —         86,157  

 

  (*)

Product warranties on defective products are normally applicable for warranty periods from the date of customer’s purchase. The provision is calculated by using historical and anticipated rates of warranty claims and costs per claim to satisfy the Company’s warranty obligation.

 

56


Table of Contents

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2023 and 2022

 

15.

Contingent Liabilities and Commitments

 

  (a)

Legal Proceedings

Anti-trust litigations

Some individual claimants filed “follow-on” damages claims against the Company and other TFT-LCD manufacturers alleging violations of EU competition law. While the Company continues its vigorous defense of the various pending proceedings described above, as of December 31, 2023, the Company cannot reliably estimate the timing and amount of outflows of resources embodying economic benefits relating to the proceedings.

Others

The Company is involved in various lawsuits and disputes in addition to the pending proceedings described above. The Company cannot reliably estimate the timing and amount of outflows of resources embodying economic benefits relating to the disputes.

 

  (b)

Commitments

Factoring and securitization of accounts receivable

The Company has agreements with Korea Development Bank and several other banks for accounts receivable sales negotiating facilities of up to an aggregate of USD 1,000 million (W1,289,400 million) in connection with the Company’s export sales transactions with its subsidiaries. As of December 31, 2023, there are no short-term borrowings that are outstanding but past due in connection with these agreements. In connection with all of the contracts in this paragraph, the Company has sold its accounts receivable with recourse.

The Company has a credit facility agreement with Sumitomo Mitsui Banking Corporation and several other banks pursuant to which the Company could sell its accounts receivables up to an aggregate of W328,797 million in connection with its domestic and export sales transactions and, as of December 31, 2023, W12,841 million accounts and notes receivable sold to Sumitomo Mitsui Banking Corporation were outstanding in connection with the agreement. In connection with the contract above, the Company has sold its accounts receivable without recourse.

 

57


Table of Contents

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2023 and 2022

 

15.

Contingent Liabilities and Commitments, Continued

 

Letters of credit

As of December 31, 2023, the Company entered into agreements with financial institutions in relation to the opening of letters of credit and the respective credit limits under the agreements are as follows:

 

(In millions of won and USD)              
     Contractual amount      KRW equivalent  

KEB Hana Bank

     USD 450      W 580,230  

Industrial Bank of Korea

     USD 450        580,230  

Industrial and Commercial Bank of China

     USD 200        257,880  

Shinhan Bank

     USD 70        90,258  

KB Kookmin Bank

     USD 700        902,580  

MUFG Bank

     USD 100        128,940  

The Export–Import Bank of Korea

     USD 100        128,940  
  

 

 

    

 

 

 
    
USD
2,070
 
 
   W 2,669,058  
  

 

 

    

 

 

 

Payment guarantees

The Company is providing payment guarantees to LG Display Vietnam Haiphong Co., Ltd. in connection with the principal amount of term loan credit facilities amounting to USD 1,462 million (W1,884,673 million).

The Company was provided with payment guarantees amounting to USD 1,200 million (W1,547,280 million) from KB Kookmin Bank and others for advances received related to the long-term supply agreements.

License agreements

As of December 31, 2023, the Company has technical license agreements with Hitachi Display, Ltd. and others in relation to its LCD business and patent license agreement with Universal Display Corporation and others in relation to its OLED business. Also, the Company has a trademark license agreement with LG Corp. and other intellectual property license agreements with various companies as of December 31, 2023.

Long-term supply agreement

As of December 31, 2023, in connection with long-term supply agreements with customers, the Company recognized USD 1,200 million (W1,547,280 million) in advances received. The advances received will be used to offset accounts receivable arising from future product sales after a specified period of time. The Company was provided with payment guarantees amounting to USD 1,200 million (W1,547,280 million) from KB Kookmin Bank and other various banks relating to advances received (see note 15(b)).

 

58


Table of Contents

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2023 and 2022

 

15.

Contingent Liabilities and Commitments, Continued

 

Pledged assets

The pledged assets has provided by the company are as follows:

 

(In millions of won)                          

Pledged Assets

   Carrying
amount
     Maximum
bond amount
    

Secured creditor

   Borrowing
amount
 

Property plant and equipment and others(*)

   W 507,234        1,200,000      LG Electronics Inc.      1,000,000  
     89,703        326,400      Korea Development Bank and others      272,000  
     264,335        780,000      Korea Development Bank and others      200,000  

 

  (*)

The property, plant and equipment amounting to W89,703 million are provided as collateral for borrowings of W272,000 million and W200,000 million to Korea Development Bank and others

The pledged assets provided is as follows:

 

(In millions of won)                          

Pledged Assets

   Carrying
amount
     Maximum
bond amount
    

Secured creditor

   Borrowing
amount
 

Deposits in banks and others(*)

     CNY 4,337        784,290      Shinhan Bank and others      USD 200  
              450,000  

 

  (*)

The Company receives Deposits in banks and others as pledged from LG Display Nanjing Co., Ltd.

Commitments for asset acquisition

The Company’s commitments in relation to capital expenditures on property, plant and equipment and intangible assets as of December 31, 2023 are W497,336 million. This commitment has not been recognized in these separate financial statements.

 

16.

Share Capital and Share Premium

The Company is authorized to issue 500,000,000 shares of capital stock (par value W5,000), and as of December 31, 2023 and December 31, 2022 the number of issued common shares is 357,815,700. There have been no changes in the capital stock from January 1, 2022 to December 31, 2023

The Company’s capital surplus consists of share premium. There have been no changes in share premium from January 1, 2022 to December 31, 2023

 

59


Table of Contents

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2023 and 2022

 

17.

Retained earnings and Reserves

 

  (a)

Retained earnings as of December 31, 2023 and 2022 are as follows:

 

(In millions of won)              
     December 31, 2023      December 31, 2022  

Legal reserve

   W 235,416        235,416  

Other reserve

     68,251        68,251  

Defined benefit plan actuarial income (loss)

     47,011        (2,806

Unappropriated retained earnings

     1,290,685        3,009,386  
  

 

 

    

 

 

 
   W 1,641,363        3,310,247  
  

 

 

    

 

 

 

 

  (b)

For the years ended December 31, 2023 and 2022, details of the Company’s appropriations of retained earnings are as follows:

 

(In millions of won, except for cash dividend per common stock)         
     2023      2022  

Retained earnings before appropriations

     

Unappropriated retained earnings carried over from prior year

   W 3,009,386        6,200,773

Loss for the year

     (1,718,701      (3,191,387
  

 

 

    

 

 

 
     1,290,685        3,009,386  

Unappropriated retained earnings carried forward to the following year

   W 1,290,685        3,009,386  
  

 

 

    

 

 

 

Expected date of appropriation for the year ended December 31, 2023 is March 22, 2024 and the date of appropriation for the year ended December 31, 2022 was March 21, 2023.

 

60


Table of Contents

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2023 and 2022

 

18.

Revenue

Details of revenue for the years ended December 31, 2023 and 2022 are as follows:

 

(In millions of won)              
     2023      2022  

Sales of goods

   W 19,761,198        24,312,253  

Royalties

     13,337        9,600  

Others

     36,480        22,275  

Hedging loss

     —         (212,956
  

 

 

    

 

 

 
   W 19,811,015        24,131,172  
  

 

 

    

 

 

 

 

19.

The Nature of Expenses and Others

The classification of expenses by nature for the years ended December 31, 2023 and 2022 are as follows:

 

(In millions of won)              
     2023      2022  

Changes in inventories

   W 143,635        206,403  

Purchases of raw materials, merchandise and others

     6,744,123        8,281,617  

Depreciation and amortization

     2,328,219        2,376,274  

Outsourcing

     8,985,108        10,480,070  

Labor

     2,508,950        2,566,328  

Supplies and others

     689,363        857,748  

Utility

     885,278        806,753  

Fees and commissions

     399,085        491,394  

Shipping

     39,300        55,892  

Advertising

     76,353        107,934  

Warranty

     49,787        205,630  

Travel

     57,654        59,774  

Taxes and dues

     66,698        71,901  

Others

     894,958        1,288,356  
  

 

 

    

 

 

 
   W 23,868,511        27,856,074  
  

 

 

    

 

 

 

Total expenses consist of cost of sales, selling, administrative, research and development expenses and other non-operating expenses, excluding foreign exchange differences.

 

61


Table of Contents

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2023 and 2022

 

20.

Selling and Administrative Expenses

Details of selling and administrative expenses for the years ended December 31, 2023 and 2022 are as follows:

 

(In millions of won)              
     2023      2022  

Salaries

   W