UNITED STATES

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 2025

 

 

LG Display Co., Ltd.

(Translation of Registrant’s name into English)

 

 

LG Twin Towers, 128 Yeoui-daero, Yeongdeungpo-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 ☒

 

 

 

1.	Name of external auditor: Samil PricewaterhouseCoopers Accounting Corporation (PwC)

 

2.	Date of receiving external audit report: March 4, 2025

 

3.	Auditor’s opinion

 

4.	Financial Highlights of Consolidated Financial Statements

Audit Report on Consolidated Financial Statements

 

Items		FY 2024				FY 2023
Total Assets			32,859,565,603,472				35,759,297,833,297
Total Liabilities			24,786,759,041,251				26,988,754,065,870
Total Shareholders’ Equity			8,072,806,562,221				8,770,543,767,427
Capital Stock			2,500,000,000,000				1,789,078,500,000
Revenues			26,615,346,868,922				21,330,818,934,958
Operating Income			-560,596,289,460				-2,510,163,608,358
Ordinary Income			-2,191,539,696,036				-3,339,441,283,797
Net Income			-2,409,299,854,829				-2,576,729,162,648
Total Shareholders’ Equity / Capital Stock			323	%			4.9	%

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Consolidated Financial Statements

For the Year Ended December 31, 2024

(With Independent Auditor’s Report Thereon)

Contents

 

		Page
Independent Auditor’s Report			1
Consolidated Statements of Financial Position			5
Consolidated Statements of Comprehensive Loss			6
Consolidated Statements of Changes in Equity			7
Consolidated Statements of Cash Flows			8
Notes to the Consolidated Financial Statements			9
Independent Auditor’s Report on Internal Control over Financial Reporting for Consolidation Purposes			122
Management’s Report on the Effectiveness of Internal Control over Financial Reporting for Consolidation Purposes			124

Independent Auditor’s Report

(English Translation of a Report Originally Issued in Korean)

To the Board of Directors and Shareholders of

LG Display Co., Ltd.

Opinion

We have audited the consolidated financial statements of LG Display Co., Ltd. and its subsidiaries (collectively referred to as the “Group”) which comprise the consolidated statement of financial position as at December 31, 2024, and the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and notes to the consolidated financial statements, including material accounting policy information.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at December 31, 2024, and its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the Republic of Korea (Korean IFRS).

We have also audited, in accordance with Korean Standards on Auditing, the Group’s Internal Control over Financial Reporting for Consolidation Purposes as at December 31, 2024, based on Conceptual Framework for Designing and Operating Internal Control over Financial Reporting, and our report dated March 4, 2025 expressed an unqualified opinion.

Basis for Opinion

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

Key Audit Matters

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

(a) Impairment test of cash generating unit

Reasons why the matter was determined to be a key audit matter

As described in Note 9 and 10, the Group has classified the carrying amounts of property, plant, and equipment of 17,202,873 million and intangible assets of 1,558,407 million recognized as of the end of the reporting period into Display, Display (Large OLED), and Display (AD PO) cash generating units (CGUs). The Group identified indications of impairment due to the carrying amount of net assets being higher than market value as of the end of the reporting period and continuous operating losses due to competitive display market conditions. The Group performed an impairment test on the CGUs by evaluating the recoverable amount using the value in use calculated by applying the discounted cash flow model.

We determined the impairment test on the CGUs as a Key Audit Matter considering that significant judgment by management is involved in estimates such as cash flows and discount rates included in the Group’s impairment test.

 

1

How our audit addressed the Key Audit Matter

We have performed the following audit procedures to address the Key Audit Matter.

 

•

Understanding and evaluating the accounting policies and internal controls of the Group related to impairment testing

 

•

Testing internal controls such as the management’s review and approval of estimated business plan and significant assumptions for impairment testing

 

•

Evaluating the completeness and accuracy of underlying data used in management’s valuation model

 

•

Verifying whether future cash flow estimates are consistent with business plans approved by management

 

•

Evaluating the appropriateness of significant assumptions in valuation models including discount rates and growth rates by comparing them with external benchmarks within the industry and the Group’s past financial information

 

•

Evaluating the reasonableness of management’s business plan estimates by comparing business plans established for each CGU in prior periods with actual performance for the current period

 

•

Evaluating the competence and objectivity of independent external experts engaged by the Group

 

•

Performing sensitivity analysis to assess the magnitude of changes in significant assumptions applied in valuation models that can result in impairment loss

 

•

Evaluating the reasonableness of assumptions applied in a valuation model and discount rates used in the management’s evaluation by utilizing auditor’s valuation experts with professional skills and knowledge

(b) Assessment of recognition of deferred tax assets

Reasons why the matter was determined to be a key audit matter

As described in Note 24 to the financial statements, deferred tax assets recognized by the Group as of the end of the reporting period for temporary differences, tax loss carryforwards, and tax credit carryforwards amount to 3,504,177 million KRW. The Group evaluated the realizability of deferred tax assets considering the probability of generating taxable profit against which temporary differences, unused tax loss carryforwards, and tax credit carryforwards can be utilized.

We determined the assessment of realizability of deferred tax assets as a Key Audit Matter considering that significant judgment by management is involved in estimates such as expected taxable income and utilization of tax policy included in the Group’s realizability assessment.

How our audit addressed the Key Audit Matter

We have performed the following audit procedures to address the Key Audit Matter.

 

•

Understanding and evaluating the accounting policies and internal controls of the Group related to assessment of realizability of deferred tax assets

 

•

Testing internal controls such as management’s review and approval of significant assumptions in taxable profit forecasts and utilization of tax policy

 

•

Evaluating whether expected taxable profit estimates are based on approved business plans, past performance, transfer pricing, and dividend policies

 

•

Evaluating the appropriateness of management’s estimates on future taxable profit by comparing past estimated taxable income with actual performance for the current period

 

•

Evaluating the appropriateness of estimated timing for realization of temporary differences

 

•

Evaluating whether expected tax rates applied to measure the deferred tax assets are based on enacted or substantively enacted tax rates by the end of the reporting period and expected to apply to accounting periods when assets are realized

 

2

Other Matters

The consolidated financial statements of the Group for the year ended December 31, 2023, were audited by another auditor who expressed an unqualified opinion on those statements on March 7, 2023.

Auditing standards and their application in practice vary among countries. The procedures and practices used in the Republic of Korea to audit such consolidated financial statements may differ from those generally accepted and applied in other countries.

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

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

In preparing the consolidated financial statements, management is responsible for assessing the Group’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 Group or to cease operations.

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

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s 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 the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated 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 consolidated 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, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control.

 

•

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 Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated 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 auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.

 

•

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

 

•

Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion.

 

3

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 to 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 consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s 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 auditor’s report is Sang-Woo Nam, Certified Public Accountant.

Seoul, Korea

March 4, 2025

 

 

4

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Consolidated Statements of Financial Position

As of December 31, 2024 and 2023

 

(In millions of won)		Note		December 31, 2024				December 31, 2023
Assets
Cash and cash equivalents		4, 26			2,021,640				2,257,522
Deposits in banks		4, 26			600				905,971
Trade accounts and notes receivable, net		5, 15, 26, 29			3,624,477				3,218,093
Other accounts receivable, net		5, 26			250,029				126,985
Other current financial assets		6, 26			328,621				168,623
Inventories		7			2,671,242				2,527,728
Prepaid income taxes					12,774				44,505
Assets held for sale		30			983,317				—
Other current assets					230,337				253,759
Total current assets					10,123,037				9,503,186
Deposits in banks		4, 26			11				11
Investments in equity accounted investees		8			33,177				84,329
Other non-current financial assets		6, 26			232,652				173,626
Property, plant and equipment, net		9, 18			17,202,873				20,200,332
Intangible assets, net		10, 18			1,558,407				1,773,955
Investment Property		11, 18			27,911				32,995
Deferred tax assets		24			3,504,177				3,562,861
Defined benefits assets, net		13			160,752				407,438
Other non-current assets					16,569				20,565
Total non-current assets					22,736,529				26,256,112
Total assets					32,859,566				35,759,298
Liabilities
Trade accounts and notes payable		26, 29			4,156,149				4,175,064
Current financial liabilities		12, 26, 27, 28, 29			6,527,450				5,262,295
Other accounts payable		26			1,720,670				2,918,903
Accrued expenses					634,473				648,949
Income tax payable					65,366				52,237
Provisions		14			105,251				117,676
Advances received		15			904,628				625,838
Liabilities held for sale		30			1,656,841				—
Other current liabilities					88,256				84,066
Total current liabilities					15,859,084				13,885,028
Non-current financial liabilities		12, 26, 27, 28, 29			8,091,407				11,439,776
Non-current provisions		14			60,908				63,805
Defined benefit liabilities, net		13			1,093				1,559
Long-term advances received		15			220,500				967,050
Deferred tax liabilities		24			—				2,069
Other non-current liabilities		26			553,767				629,467
Total non-current liabilities					8,927,675				13,103,726
Total liabilities					24,786,759				26,988,754
Equity
Share capital		16			2,500,000				1,789,079
Share premium		16			2,773,587				2,251,113
Retained earnings					(18,512	)			2,676,014
Reserves		16			995,823				515,976
Accumulated other comprehensive income held for sale		30			291,363				—
Equity attributable to owners of the Parent					6,542,261				7,232,182
Non-controlling interests					1,530,546				1,538,362
Total equity					8,072,807				8,770,544
Total liabilities and equity					32,859,566				35,759,298

See accompanying notes to the consolidated financial statements.

 

5

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Loss

For the years ended December 31, 2024 and 2023

 

(In millions of won, except loss per share amounts)		Note				2024				2023
Revenue			17, 18, 29				26,615,347				21,330,819
Cost of sales			7, 19, 29				(24,039,928	)			(20,985,643	)
Gross profit							2,575,419				345,176
Selling expenses			19, 20				(584,692	)			(575,785	)
Administrative expenses			19, 20				(1,103,617	)			(899,902	)
Research and development expenses			19				(1,447,706	)			(1,379,653	)
Operating loss							(560,596	)			(2,510,164	)
Finance income			22				883,094				1,122,294
Finance costs			22				(1,821,912	)			(1,634,534	)
Other non-operating income			21				2,100,443				1,472,258
Other non-operating expenses			21				(2,797,981	)			(1,786,234	)
Equity in income of equity accounted investees, net							5,412				(3,061	)
Loss before income tax							(2,191,540	)			(3,339,441	)
Income tax benefit (expense)			23				(217,760	)			762,712
Loss for the period							(2,409,300	)			(2,576,729	)
Other comprehensive income (loss)
Items that will never be reclassified to profit or loss
Remeasurements of net defined benefit liabilities			13				(131,835	)			49,817
Other comprehensive income (loss) from associates			8				(85	)			170
							(131,920	)			49,987
Items that are or may be reclassified to profit or loss
Foreign currency translation differences for foreign operations			16				926,637				23,143
Other comprehensive income (loss) from associates			8, 16				3,320				(2,824	)
							929,957				20,319
Other comprehensive income for the period, net of income tax							798,037				70,306
Total comprehensive loss for the period							(1,611,263	)			(2,506,423	)
Profit (loss) attributable to:
Owners of the Parent							(2,562,606	)			(2,733,742	)
Non-controlling interests							153,306				157,013
Loss for the period							(2,409,300	)			(2,576,729	)
Total comprehensive income (loss) attributable to:
Owners of the Parent							(1,923,316	)			(2,647,407	)
Non-controlling interests							312,053				140,984
Total comprehensive loss for the period							(1,611,263	)			(2,506,423	)
Loss per share (in won)
Basic loss per share			25				(5,438	)			(7,177	)
Diluted loss per share			25				(5,438	)			(7,177	)

See accompanying notes to the consolidated financial statements.

 

6

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Consolidated Statements of Changes in Equity

For the years ended December 31, 2024 and 2023

 

				Attributable to owners of the Parent Company
(In millions of won)		Note		Share capital				Share premium				Retained earnings				Reserves				Other comprehensive income classified as held for sale				Sub-total				Non-controlling interests				Total equity
Balances at January 1, 2023					1,789,079				2,251,113				5,359,769				479,628				—				9,879,589				1,439,638				11,319,227
Total comprehensive income (loss) for the period
Profit (loss) for the period					—				—				(2,733,742	)			—				—				(2,733,742	)			157,013				(2,576,729	)
Other comprehensive income (loss)
Remeasurements of net defined benefit liabilities					—				—				49,817				—				—				49,817				—				49,817
Foreign currency translation differences					—				—				—				39,172				—				39,172				(16,029	)			23,143
Other comprehensive income (loss) from associates					—				—				170				(2,824	)			—				(2,654	)			—				(2,654	)
Total other comprehensive income (loss)					—				—				49,987				36,348				—				86,335				(16,029	)			70,306
Total comprehensive income (loss) for the period					—				—				(2,683,755	)			36,348				—				(2,647,407	)			140,984				(2,506,423	)
Transaction with owners, recognized directly in equity
Dividends to non-controlling shareholders in subsidiaries					—				—				—				—				—				—				(42,260	)			(42,260	)
Balances at December 31, 2023					1,789,079				2,251,113				2,676,014				515,976				—				7,232,182				1,538,362				8,770,544
Balances at January 1, 2024					1,789,079				2,251,113				2,676,014				515,976				—				7,232,182				1,538,362				8,770,544
Total comprehensive income (loss) for the period
Profit (loss) for the period					—				—				(2,562,606	)			—				—				(2,562,606	)			153,306				(2,409,300	)
Other comprehensive income (loss)
Remeasurements of net defined benefit liabilities					—				—				(131,835	)			—				—				(131,835	)			—				(131,835	)
Classified as held for sale					—				—								(215,788	)			215,788				—				—				—
Foreign currency translation differences					—				—				—				692,315				75,575				767,890				158,747				926,637
Other comprehensive income (loss) from associates					—				—				(85	)			3,320				—				3,235				—				3,235
Total other comprehensive income (loss)					—				—				(131,920	)			479,847				291,363				639,290				158,747				798,037
Total comprehensive income (loss) for the period					—				—				(2,694,526	)			479,847				291,363				(1,923,316	)			312,053				(1,611,263	)
Transaction with owners, recognized directly in equity
Capital increase		16			710,921				569,893				—				—				—				1,280,814				—				1,280,814
Acquisition of non-controlling shareholders’ interests in subsidiaries					—				(47,419	)			—				—				—				(47,419	)			(183,850	)			(231,269	)
Dividends to non-controlling shareholders in subsidiaries					—				—				—				—				—				—				(136,019	)			(136,019	)
Total transaction with owners, recognized directly in equity					710,921				522,474				—				—				—				1,233,395				(319,869	)			913,526
Balances at December 31, 2024					2,500,000				2,773,587				(18,512	)			995,823				291,363				6,542,261				1,530,546				8,072,807

See accompanying notes to the consolidated financial statements.

 

7

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the years ended December 31, 2024 and 2023

 

(In millions of won)		Note				2024				2023
Cash flows from (used in) operating activities:
Cash generated from operations			28				3,373,456				2,819,329
Income taxes paid							(139,782	)			(290,102	)
Interests received							93,945				144,402
Interests paid							(915,858	)			(990,881	)
Cash flows from operating activities							2,411,761				1,682,748
Cash flows from (used in) investing activities:
Dividends received							200				15,200
Increase in deposits in banks							(1,700	)			(943,166	)
Proceeds from withdrawal of deposits in banks							921,995				1,785,231
Acquisition of financial assets at fair value through profit or loss							(5,470	)			(4,615	)
Proceeds from disposal of financial asset at fair value through profit or loss							5,301				546
Acquisition of financial assets at fair value through other comprehensive income							—				(3,000	)
Proceeds from disposal of financial assets at fair value through other comprehensive income							—				2,671
Proceeds from disposal of investments in associates							17,609				—
Acquisition of property, plant and equipment							(2,129,735	)			(3,482,754	)
Proceeds from disposal of property, plant and equipment							248,460				485,659
Acquisition of intangible assets							(786,819	)			(672,076	)
Proceeds from disposal of intangible assets							6,257				6,328
Proceeds from insurance payout							49,995				—
Government grants received							2,307				7,417
Proceeds from settlement of derivatives							274,173				178,610
Increase in short-term loans							19,697				27,411
Increase in deposits							(2,036	)			(3,992	)
Decrease in deposits							2,124				4,535
Proceeds from disposal of greenhouse gas emission permits							14,394				6,659
Cash flows used in investing activities							(1,363,248	)			(2,589,336	)
Cash flows from (used in) financing activities:			28
Proceeds from short-term borrowings							5,219,941				6,729,725
Repayments of short-term borrowings							(6,285,819	)			(7,446,111	)
Proceeds from issuance of bonds							—				469,266
Repayments of bonds							(370,000	)			(433,990	)
Proceeds from long-term borrowings							2,912,552				4,765,524
Repayments of current portion of long-term borrowings							(3,638,904	)			(2,625,970	)
Payment of lease liabilities							(71,008	)			(73,483	)
Capital increase							1,292,455				—
Transaction cost from capital increase							(11,641	)			—
Acquisition of non-controlling shareholders’ interests in subsidiaries							(245,362	)			—
Dividends to non-controlling shareholders in subsidiaries							(136,519	)			(34,098	)
Cash flows from (used in) financing activities							(1,334,305	)			1,350,863
Net increase (decrease) in cash and cash equivalents							(285,792	)			444,275
Cash and cash equivalents at January 1							2,257,522				1,824,649
Effect of exchange rate fluctuations on cash held							208,325				(11,402	)
Cash and cash equivalents included in assets held for sale							(158,415	)			—
Cash and cash equivalents at December 31							2,021,640				2,257,522

See accompanying notes to the consolidated financial statements.

 

8

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024 and 2023

 

1.	Reporting Entity

 

(a)

Description of the Parent Company

LG Display Co., Ltd. (the “ Parent Company “) was incorporated in February 1985 and the Parent Company is a public corporation listed in the Korea Exchange since 2004. The main business of the Parent Company and its subsidiaries (the “Group”) is to manufacture and sell displays and its related products. As of December 31, 2024, the Group 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 Parent 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, 2024, LG Electronics Inc., a major shareholder of the Parent Company, owns 36.72% (183,593,206 shares) of the Parent Company’s common stock.

As of December 31, 2024, 500,000,000 shares of the Parent Company’s common stock are listed on Korea Exchange under the identifying code 034220, and 20,944,314 American Depository Shares (“ADSs”, 2 ADSs represent one share of common stock) are listed on the New York Stock Exchange under the symbol “LPL”.

 

9

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024 and 2023

 

1.	Reporting Entity, Continued

 

(b)

Consolidated Subsidiaries as of December 31, 2024

 

(In millions)
Subsidiaries		Location		Percentage of ownership(%)		Closing month		Date of incorporation		Business
LG Display America, Inc.		San Jose, U.S.A.		100		December		September 24, 1999		Sales of display products
LG Display Germany GmbH		Eschborn, Germany		100		December		October 15, 1999		Sales of display products
LG Display Japan Co., Ltd.		Tokyo, Japan		100		December		October 12, 1999		Sales of display products
LG Display Taiwan Co., Ltd.		Taipei, Taiwan		100		December		April 12, 1999		Sales of display products
LG Display Nanjing Co., Ltd.		Nanjing, China		100		December		July 15, 2002		Production of display products
LG Display Shanghai Co., Ltd.		Shanghai, China		100		December		January 16, 2003		Sales of display products
LG Display Guangzhou Co., Ltd.(*1)		Guangzhou, China		100		December		June 30, 2006		Production of display products
LG Display Shenzhen Co., Ltd.		Shenzhen, China		100		December		July 27, 2007		Sales of display products
LG Display Singapore Pte. Ltd.		Singapore		100		December		November 4, 2008		Sales of display products
L&T Display Technology (Fujian) Limited		Fujian, China		51		December		December 7, 2009		Production and sales of LCD module and LCD monitor sets
LG Display Yantai Co., Ltd.		Yantai, China		100		December		March 17, 2010		Production of display products
Nanumnuri Co., Ltd.		Gumi, South Korea		100		December		March 21, 2012		Business facility maintenance
LG Display (China) Co., Ltd.(*1)(*2)		Guangzhou, China		80		December		December 10, 2012		Production and sales of display products
Unified Innovative Technology, LLC		Wilmington, U.S.A.		100		December		March 12, 2014		Intellectual property management
LG Display Guangzhou Trading Co., Ltd.		Guangzhou, China		100		December		April 28, 2015		Sales of display products
Global OLED Technology, LLC		Sterling, U.S.A.		100		December		December 18, 2009		OLED intellectual property management
LG Display Vietnam Haiphong Co., Ltd.		Haiphong, Vietnam		100		December		May 5, 2016		Production and sales of display products
Suzhou Lehui Display Co., Ltd.		Suzhou, China		100		December		July 1, 2016		Production and sales of LCD module and LCD monitor sets
LG DISPLAY FUND I LLC(*3)		Wilmington, U.S.A.		100		December		May 1, 2018		Investment in venture business and technologies
LG Display High-Tech (China) Co., Ltd.		Guangzhou, China		70		December		July 11, 2018		Production and sales of display products

 

10

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024 and 2023

 

1.	Reporting Entity, Continued

 

(b)

Consolidated Subsidiaries as of December 31, 2024, Continued

 

(*1)

For the year ended December 31, 2024, the contract to sell 80% of its stake in LG Display (China) Co., Ltd. and 100% of its stake in LG Display Guangzhou Co., Ltd. was signed. As a result, the assets and liabilities held by LG Display (China) Co., Ltd. and LG Display Guangzhou Co., Ltd. are presented as assets and liabilities held for sale.

 

(*2)

For the year ended December 31, 2024, the Group acquired 10% equity interests in LG Display (China) Co., Ltd. for 245,362 million from non-controlling shareholders.

 

(*3)

For the year ended December 31, 2024, the Parent Company contributed 6,831 million in cash for the capital increase of LG DISPLAY FUND I LLC. There was no change in the Parent Company’s percentage of ownership in LG DISPLAY FUND I LLC as a result of this additional investment.

In addition to the above subsidiaries, the Parent Company has invested 140,600 million in MMT (Money Market Trust), which is controlled by the Parent Company.

 

11

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024 and 2023

 

1.	Reporting Entity, Continued

 

(c)

Summary of financial information (before the elimination of intercompany transactions) of subsidiaries as of and for the years ended December 31, 2024 and 2023 is as follows:

 

(In millions of won)		December 31, 2024												2024
Subsidiaries		Total assets				Total liabilities				Total shareholders’ equity				Sales				Net income (loss)
LG Display America, Inc.			2,433,349				2,367,143				66,206				15,218,449				12,662
LG Display Germany GmbH			571,085				535,427				35,658				1,514,282				3,555
LG Display Japan Co., Ltd.			215,670				201,213				14,457				1,045,036				2,420
LG Display Taiwan Co., Ltd.			807,931				780,043				27,888				2,569,859				2,819
LG Display Nanjing Co., Ltd.			3,188,176				2,249,586				938,590				1,841,645				103,023
LG Display Shanghai Co., Ltd.			192,973				166,757				26,216				890,982				4,286
LG Display Guangzhou Co., Ltd.(*)			2,603,086				1,984,854				618,232				2,306,421				44,772
LG Display Shenzhen Co., Ltd.			117,986				101,622				16,364				589,537				2,818
LG Display Singapore Pte. Ltd.			3,570,065				3,554,525				15,540				1,442,304				(6,018	)
L&T Display Technology (Fujian) Limited			345,309				242,376				102,933				851,228				18,251
LG Display Yantai Co., Ltd.			601,808				177,391				424,417				302,923				26,941
Nanumnuri Co., Ltd.			5,556				3,685				1,871				25,502				320
LG Display (China) Co., Ltd.(*)			2,237,053				276,308				1,960,745				1,477,381				46,621
Unified Innovative Technology, LLC			698				20				678				—				(523	)
LG Display Guangzhou Trading Co., Ltd.			3,594,526				3,462,995				131,531				400,592				39,474
Global OLED Technology, LLC			32,998				3,512				29,486				1,312				(11,966	)
LG Display Vietnam Haiphong Co., Ltd.			6,192,641				4,434,492				1,758,149				3,931,808				250,503
Suzhou Lehui Display Co., Ltd.			307,178				109,776				197,402				393,161				8,837
LG DISPLAY FUND I LLC			97,596				30				97,566				—				(3,164	)
LG Display High-Tech (China) Co., Ltd.			7,630,921				4,000,109				3,630,812				2,482,999				432,402
Total(*)			34,746,605				24,651,864				10,094,741				37,285,421				978,033

 

(*)

For the year ended December 31, 2024, the contract to sell 80% of its stake in LG Display (China) Co., Ltd. and 100% of its stake in LG Display Guangzhou Co., Ltd. was signed. As a result, the assets and liabilities held by LG Display (China) Co., Ltd. and LG Display Guangzhou Co., Ltd. are presented as assets and liabilities held for sale.

 

12

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024 and 2023

 

1.	Reporting Entity, Continued

 

(In millions of won)		December 31, 2023												2023
Subsidiaries		Total assets				Total liabilities				Total shareholders’ equity				Sales				Net income (loss)
LG Display America, Inc.			1,872,996				1,826,784				46,212				11,952,787				9,789
LG Display Germany GmbH			315,096				286,596				28,500				1,247,796				2,321
LG Display Japan Co., Ltd.			157,279				145,709				11,570				913,462				3,932
LG Display Taiwan Co., Ltd.			265,810				242,463				23,347				1,697,729				(1,744	)
LG Display Nanjing Co., Ltd.			3,731,464				2,986,076				745,388				1,764,307				85,121
LG Display Shanghai Co., Ltd.			334,278				314,805				19,473				797,516				3,822
LG Display Guangzhou Co., Ltd.			3,820,218				3,306,879				513,339				2,144,773				96,945
LG Display Shenzhen Co., Ltd.			97,514				85,518				11,996				453,174				1,735
LG Display Singapore Pte. Ltd.			760,769				741,604				19,165				1,147,311				3,689
L&T Display Technology (Fujian) Limited			309,340				221,293				88,047				960,302				25,079
LG Display Yantai Co., Ltd.			539,791				184,568				355,223				373,916				100,982
Nanumnuri Co., Ltd.			5,606				3,585				2,021				26,110				594
LG Display (China) Co., Ltd.			2,410,130				275,824				2,134,306				1,145,472				108,801
Unified Innovative Technology, LLC			1,093				—				1,093				—				(1,043	)
LG Display Guangzhou Trading Co., Ltd.			2,341,100				2,291,500				49,600				457,404				15,016
Global OLED Technology, LLC			40,786				3,576				37,210				3,861				(10,838	)
LG Display Vietnam Haiphong Co., Ltd.			5,918,634				4,614,173				1,304,461				2,773,046				159,089
Suzhou Lehui Display Co., Ltd.			284,364				115,169				169,195				414,537				7,739
LG DISPLAY FUND I LLC			82,099				14				82,085				—				(9,332	)
LG Display High-Tech (China) Co., Ltd.			6,417,671				3,565,229				2,852,442				2,432,838				374,836
Total			29,706,038				21,211,365				8,494,673				30,706,341				976,533

 

13

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024 and 2023

 

1.	Reporting Entity, Continued

 

(d)

Information of subsidiaries (before elimination of intercompany transactions) which have material non-controlling interests as of and for the years ended December 31, 2024 and 2023 are as follows:

 

(In millions of won)
		LG Display High-Tech (China) Co., Ltd.
		2024				2023
Percentage of ownership in non-controlling interests (%)			30				30
Current assets			5,666,246				3,796,310
Non-current assets			1,964,675				2,621,361
Current liabilities			2,193,788				978,596
Non-current liabilities			1,806,321				2,586,633
Net assets			3,630,812				2,852,442
Book value of non-controlling interests			1,087,857				854,346
Revenue			2,482,999				2,432,838
Profit for the year			432,402				374,836
Profit attributable to non-controlling interests			129,721				112,451
Cash flows from operating activities			1,252,886				777,354
Cash flows used in investing activities			(1,290,367	)			(979,167	)
Cash flows from (used in) financing activities			(213,400	)			365,898
Effect of exchange rate fluctuations on cash and cash equivalents			19,378				(3,571	)
Net increase (decrease) in cash and cash equivalents			(231,503	)			160,514
Cash and cash equivalents at January 1			314,075				153,561
Cash and cash equivalents at December 31			82,572				314,075

 

14

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024 and 2023

 

2.	Basis of Presenting Financial Statements

 

(a)

Application of accounting standards

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

The consolidated financial statements were authorized for issuance by the Board of Directors on January 20, 2025, which will be submitted for approval to the shareholders’ meeting to be held on March 20, 2025.

 

(b)

Basis of Measurement

The consolidated financial statements have been prepared on the historical cost basis except for the following material items in the consolidated 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

 

(c)

Functional and Presentation Currency

Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which each entity operates (the “functional currency”). The consolidated financial statements are presented in Korean won, which is the Parent Company’s functional and presentation currency.

 

(d)

Estimates and Judgments

As the resulting accounting estimates will, by definition, seldom equal the related actual results, it can contain a significant risk of causing a material adjustment.

Estimates and assumptions are continuously evaluated and taken into account future events that are reasonably predictable in light of past experiences and current situations. Changes in accounting estimates are recognized during the period which the estimates have been changed and the future periods to be affected.

 

15

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024 and 2023

 

2.	Basis of Presenting Financial Statements, Continued

 

(d)

Estimates and Judgments, Continued

 

The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below. Additional information of significant judgement and assumptions of certain items are included in relevant notes.

 

(i)

Impairment of goodwill, etc.

The recoverable amount of a cash generating unit (CGU) is determined based on value-in-use calculations (Note 10).

 

(ii)

Income Tax

The Group’s taxable income generated from these operations are subject to income taxes based on tax laws and interpretations of tax authorities in numerous jurisdictions. There are many transactions and calculations for which the ultimate tax determination is uncertain. The Group estimates the income tax effects expected to be incurred in the future as a result of its operating activities up to the end of the reporting period, and recognizes them as current and deferred income taxes. However, the actual future income tax burden may not match the recognized related assets and liabilities, and such differences may affect the current and deferred income tax assets and liabilities at the time the expected income tax effects are realized.

In addition, deferred tax assets are recognized to the extent that it is probable that taxable income will be generated during the periods when temporary differences, unused tax losses, and tax credits are realized. Significant judgments are made to determine the book value of deferred tax assets that can be recognized based on the timing and level of future taxable income.

 

(iii)

Net defined benefit liabilities (defined benefit assets)

The present value of defined benefit obligations can vary depending on various factors determined by actuarial methods. The assumptions applied to determine the net cost (profit) of retirement benefits include the discount rate, which represents the interest rate that should be applied to determine the present value of the estimated future cash outflows expected to occur upon the settlement of defined benefit obligations. An appropriate discount rate is determined by considering the yield on high-quality corporate bonds with maturities similar to the duration of the related pension liabilities, expressed in the currency in which the pension is paid. Other key assumptions related to defined benefit obligations are based on current market conditions.

 

16

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024 and 2023

 

3.	Material Accounting Policies

The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

 

(a)

Consolidation

 

(i)

Subsidiaries

Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed, or has right to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control is acquired until the date on which control is lost.

 

(ii)

Non-controlling interests

Non-controlling interests (“NCI”) are measured at their proportionate share of the acquiree’s identifiable net assets at the acquisition date. Profit or loss and other comprehensive income (loss) of subsidiaries are attributed to owners of the Controlling Company and non-controlling interests.

Changes in the Group’s interest in subsidiaries that do not result in a loss of control are accounted for as equity transactions.

 

(iii)

Loss of Control

If the Controlling Company loses control of subsidiaries, the Controlling Company derecognizes the assets and liabilities of the former subsidiaries from the consolidated statement of financial position and recognizes the gain or loss associated with the loss of control attributable to the former controlling interest. Meanwhile, the Controlling Company recognizes any investment retained in the former subsidiaries at its fair value when control is lost.

 

17

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024 and 2023

 

3.	Material Accounting Policies, Continued

 

(a)

Consolidation, Continued

 

(iv)

Associates and joint ventures (equity method investees)

Associates are those entities in which the Group has significant influence, but not control or joint control, over the financial and operating policies. A joint venture is an arrangement in which the parties have joint control, whereby the parties have rights to the net assets of the arrangement, rather than rights to its assets and obligations for its liabilities.

Investments in associates and joint ventures are initially recognized at cost and subsequently accounted for using the equity method of accounting. The carrying amount of investments in associates and joint ventures is increased or decreased to recognize the Group’s share of the profits or losses and changes in the Group’s proportionate interest of the investee after the date of acquisition. Distributions received from an investee reduce the carrying amount of the investment.

If an associate or a joint venture uses accounting policies different from those of the Controlling Company for like transactions and events in similar circumstances, appropriate adjustments are made to the consolidated financial statements. As of and during the periods presented in the consolidated financial statements, no adjustments were made in applying the equity method.

When the Group’s share of losses exceeds its interest in an equity accounted investee, the carrying amount of that interest, including any long-term investments, is reduced to nil, and the recognition of further losses is discontinued except to the extent that the Group has an obligation or has made payments on behalf of the investee.

 

(v)

Transactions eliminated on consolidation

Intra-group balances and transactions, including income and expenses and any unrealized income and expenses and balance of trade accounts and notes receivable and payable arising from intra-group transactions, are eliminated. Unrealized gains arising from transactions with equity accounted investees are eliminated against the investment to the extent of the Group’s interest in the investee. Unrealized losses are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment.

 

18

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024 and 2023

 

3.	Material Accounting Policies, Continued

 

(b)

Foreign Currency Translation

Transactions in foreign currencies are translated to the respective functional currencies of the Group entities at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated 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 translated to the functional currency at the exchange rate at the date that the fair value was determined. Foreign currency differences arising on translation 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 consolidated 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 consolidated statement of comprehensive income (loss). Foreign currency differences are presented in gross amounts in the consolidated statement of comprehensive income (loss).

If the presentation currency of the Group is different from a foreign operation’s functional currency, the financial position and financial performance of the foreign operation are translated into the presentation currency using the following methods. The assets and liabilities of foreign operations, whose functional currency is not the currency of a hyperinflationary economy are translated to the Group’s functional currency at exchange rates at the reporting date. The income and expenses of foreign operations are translated to the Group’s functional currency at exchange rates at the dates of the transactions and foreign currency differences are recognized in other comprehensive income (loss). Relevant proportionate shares of foreign currency differences are allocated to the controlling interests and non-controlling interests. When a foreign operation is disposed of in its entirety or partially such that control, significant influence or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. If the Group disposes part of its interest in a subsidiary but retains control, then the relevant proportion of the cumulative amount is reattributed to NCI. When the Group disposes of only part of an associate or joint venture while retaining significant influence or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.

Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition of that foreign operation is treated as assets and liabilities of the foreign operation. Thus, they are expressed in the functional currency of the foreign operation and translated at the at each reporting date’s exchange rate.

 

19

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024 and 2023

 

3.	Material Accounting Policies, Continued

 

(c)

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.

 

(d)

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.

 

(e)

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 Group 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: financial assets at amortized cost; financial assets at FVOCI; financial assets at FVTPL. Financial assets are not reclassified subsequent to their initial recognition unless the Group 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.

 

20

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024 and 2023

 

3.	Material Accounting Policies, Continued

 

(e)

Financial Instruments, Continued

 

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.

For investments in equity instruments that are not held for trading, this will depend on whether the Group has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income.

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 Group 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.

 

ii)

Financial assets: business model

The Group 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 Group’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 transactions 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.

 

21

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024 and 2023

 

3.	Material Accounting Policies, Continued

 

(e)

Financial Instruments, Continued

 

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 Group 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 Group 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 Group’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.

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

 

 

22

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024 and 2023

 

3.	Material Accounting Policies, Continued

 

(e)

Financial Instruments, Continued

 

Derecognition

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

(ii) Non-derivative financial liabilities

The Group 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 consolidated statement of financial position when the Group becomes a party to the contractual provisions of the instrument.

Financial liabilities at FVTPL include financial liabilities held for trading and designated as such upon initial recognition at FVTPL. After initial recognition, financial liabilities at FVOCI 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 FVOCI 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, 2024, non-derivative financial liabilities comprise borrowings, bonds, trade accounts and notes payable, other accounts payable and others.

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

 

23

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024 and 2023

 

3.	Material Accounting Policies, Continued

 

(e)

Financial Instruments, Continued

 

(iii) 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.

Hedge Accounting

If necessary, the Group 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 Group’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 Group discontinues fair value hedge accounting if the hedging instrument expires or is sold, terminated or exercised; or if the hedge no longer meets the criteria for hedge accounting.

 

24

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024 and 2023

 

3.	Material Accounting Policies, Continued

 

(e)

Financial Instruments, Continued

 

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 Group discontinues cash flow hedge accounting 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.

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.

(iv) Financial guarantee agreement

A financial guarantee agreement is a contract in which a certain amount of money must be paid to compensate for the loss incurred by the holder due to the failure of a particular debtor to pay on the due date in accordance with the terms of the original contract or the changed terms of the debt product. Financial guarantee contracts are measured at fair value at the time of initial recognition, and after initial recognition, they are measured by the higher of the following and displayed as ‘Financial Liabilities’ in the consolidated statement of financial position.

 

•

The amount determined in accordance with the expected credit loss model

 

•

The amount initially recognized less, where appropriate, the cumulative amount of income recognized in accordance with Korean IFRS 1115 Revenue from Contracts with Customers

 

(f)

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.

 

25

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024 and 2023

 

3.	Material Accounting Policies, Continued

 

(f)

Property, Plant and Equipment, Continued

 

(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 Group 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 Group. The residual value of property, plant and equipment is zero.

Typical estimated useful lives of the assets are as follows:

 

		Typical 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		(*)

 

(*)

The Group 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.

 

(g)

Borrowing Costs

The Group 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 borrowings are directly attributable to the purpose of obtaining a qualifying asset, the Group 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 Group immediately recognizes other borrowing costs as an expense.

 

26

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024 and 2023

 

3.	Material Accounting Policies, Continued

 

(h)

Government Grants

In case there is reasonable assurance that the Group 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 Group’s expenses incurred

A government grant that compensates the Group 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 Group with no compensation for expenses or losses already incurred or no future related costs is recognized as other non-operating income of the period in which it becomes receivable.

 

(i)

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 Group can demonstrate all of the following:

 

27

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024 and 2023

 

3.	Material Accounting Policies, Continued

 

(i)

Intangible Assets, Continued

 

•

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 Group 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 Group currently has a number of patent license agreements related to product production. When the amount of payments is determined, it 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.

(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.

 

28

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024 and 2023

 

3.	Material Accounting Policies, Continued

 

(i)

Intangible Assets, Continued

 

Typical estimated useful lives of the intangible assets are as follows:

 

		Typical estimated useful lives (years)
Intellectual property rights		5, 10, (*1)
Software		4, (*1)
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 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.

 

(j)

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 Group 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.

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.

 

29